What Is The Difference Between Margin And Markup In Finance?
When talking about finance and accounting, there are a variety of terms to keep in mind. One of those is the difference between margin and
The small business financing landscape is one that changes continuously. Business owners are thrown curve balls especially as they gear up to expand their small business. A range of financial challenges plague the minds of modern entrepreneurs, keeping them from efficiently reorganizing their business for growth.
Let’s take a look at three such financial challenges, and how small businesses can overcome them.
The results of a recent Small Business Pulse Survey revealed that 80% of small businesses are still affected by late payments from clients. This behavior can put even profitable businesses under considerable stress, hampering their growth.
If your clients are not paying on time, you need to set up or modify your policies and processes. Here are some things you can do to address the problem immediately:
The intangible nature of the services-based industry often makes things unpredictable. Many entrepreneurs, even those who have moved past their ‘2-person startup’ phase, lose sleep over their inability to accurately project revenues and expenses.
The key is to realize that revenues will largely remain unpredictable, and that you need to focus more on expenses. The mindset of an entrepreneur is crucial; you need to stop making impulsive decisions. Rather, cultivate a habit of making well-thought-out decisions and informed choices.
Communicate the importance of your budget to every person in your expanding workforce. By controlling expenses this way, you will actually lower your stress and get more time for anticipating and maximizing your revenue.
When you started out, whether as a one-man show or a two-person crew, you probably knew where every cent of your money was. That may or may not be the case a few years on when your headcount is in double digits and your revenue in triple digits (even beyond). This diminished understanding of your company’s overall finances can hamper financial reorganization and growth.
Make a date with your CFO (or whatever the designation of your top finance person is). Your CFO should be your right-hand executive and a strategic partner. Sit down and first ask him/her to give you a “big picture”, explaining the business’ finances in 60 seconds.
Next, talk about what are your CFO’s top concerns. Last but not the least, decide on a new and improved protocol to stay connected with your CFO so you’re on top of your company’s finances.
If you think you’ve grown beyond these “tips”, think again. Professionals at the top of their game, whether entrepreneurs or athletes, spend considerable time brushing up their fundamentals. You should do the same.
Fatima Mansoor is a writer at Aepiphanni, a small business operations and strategy consultancy that exists to help small business owners CREATE | DESIGN | BUILD extraordinary businesses. She is a freelance blogger, specializing in business & entrepreneurship, digital marketing, and health & fitness. Her focus is on creating compelling web content for small and medium businesses form diverse industries. She mostly writes for entrepreneurs and marketing agencies across the US, Australia and UK.
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