Preparing a Budget

Written by Sue and Chuck DeFiore


Continued from page 1

Another type of expense is a variable one. In budgeting, this is known as a variable “cost,” which is a cost that increases withrepparttar level of sales or income. They are variable becauserepparttar 112626 more income you generate,repparttar 112627 greaterrepparttar 112628 costs you will incur (this just meansrepparttar 112629 more you sell, you more you have to buy).

If you have others working for you, sales commissions are an example of a variable expense—the greaterrepparttar 112630 sales revenue,repparttar 112631 greaterrepparttar 112632 sales commissions.

You need to be sure to do research before starting your business to determine what comprises your fixed and variable costs.

Certain types of businesses have an established profit margin. This information may be available by simply asking other professionals in your field. Your accountant sees thousands of tax returns and may be able to give you an idea ofrepparttar 112633 average “cost of sales” or “profit margins” for your type of business. The averages for certain industries are also compiled by financial ratings organizations such as Dun & Bradstreet, Moody’s and Standard & Poor’s. For example, if you are starting a coffeehouse, you could compare your sales, gross profit ratio, and net income torepparttar 112634 averages forrepparttar 112635 retail sales/coffee industry compiled by Dun & Bradstreet.

It’s amazing how many home based and small-business owners don’t know if they’re making a profit on service, parts or sales. Others don’t know whether they’re making or losing money on a particular job. The purpose ofrepparttar 112636 accounting and budgetary process is to help you answer these questions and makerepparttar 112637 right management decisions. You can’t plugrepparttar 112638 leaks in your revenue ship if you don’t know whererepparttar 112639 holes are.

Again, using a program like Quickbooks allows you to see where time is spent for a particular project, what your costs are, how many employees were needed to completerepparttar 112640 project andrepparttar 112641 time it took them (which gives you an idea of salary differential for certain projects).

If for example you are running a consulting business, Quickbooks allows you to trackrepparttar 112642 number of hours you work on a project and what your costs are. In most consulting businesses your time is your valuable commodity. You need to be compensated forrepparttar 112643 time you spend on a particular project or with a client.

Copyright 2003 DeFiore Enterprises



Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 17 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com


Financial Freedom = Delayed Gratification

Written by Vishy Narayanan


Continued from page 1

What do you think aboutrepparttar consumer credit growing without control. Is this something that each one of us should be concerned about?

I am not saying that we should not enjoy our lives or live in total misery. Contrary to that, I like to live an excellent life and haverepparttar 112625 things that I need. But, that does not mean that I should not care about when I get what I get. I think that it is easy to get in debt, but getting out is a whole other story.

We all deserve true Financial Freedom, but only when we are willing to payrepparttar 112626 price and makerepparttar 112627 necessary sacrifices.

We should feel good in gettingrepparttar 112628 rewards that we have earned, rather than borrowing it from someone at an exhorbitant price.

Vishy Narayanan Author and Guide On Your Path to Financial Freedom http://www.TotallyFinanciallyFree.com/specials/promo18


    <Back to Page 1
 
ImproveHomeLife.com © 2005
Terms of Use