Here's how you can effectively manage your finances and ensure profitability as an entrepreneur.

It’s important to recognize that the terms “fixed” and “variable” can have some nuances. For example, rent expense is considered a fixed cost, but it’s common for the base rent to increase each year, and for a triple net lease, the CAM will definitely change. Some leases have a variable component based on the lessee’s revenue as well. Variable costs can have an unchanging base component, or can need careful management in order to reduce costs as needed. A great example is labor. You will need to watch staffing levels carefully to align with changing business needs, and it can take weeks to make appropriate adjustments.

Je vois la construction budgétaire en 4 étapes : 1. La modélisation (revenu et coûts) de l’activité récurrente ou base business. 2. Déterminer les initiatives de croissances et d’optimisation des coûts, les identifier une par une et challenger les hypothèses sous-jacentes pour qu’elles servent l’ambition de l’organisation et qu’elles soient à la fois réalistes. 3. Vérifier par itérations la cohérence entre l’ambition globale (budget top down) et le budget détaillé et opérationnel. 4. Documenter formellement l’ensemble des hypothèses clefs et tous les détails afin de pouvoir comprendre tout au long de l’exercice les écarts entre réalisé et budget.

Hoy día donde el Mercado empresarial están variable, debemos minuciosamente establecer y crear estrategias financieras sólidas, monitoreo constante y una mentalidad proactiva. Para eso te dejo algunos pasos clave 1. Planificación financiera - Presupuesto anual - Metas financieras 2. Control de costos - Análisis de costos - Negociación con proveedores 3. Gestión de flujo de caja - Proyección de flujo - Cobro eficiente 4. Inversión inteligente - Reinversión de ganancias - Diversificación de inversiones 5. Uso de tecnología - Automatización 6. Monitoreo y Análisis - Indicadores financieros - Reinversión regular 7. Asesoría profesional - Contador y Asesor financiero - Capacitacion continúa

Periodic variance analysis (Budget vs Actuals)is as much important as making a budget. If you never do a variance analysis and review the findings, there will be no use of the budget. Apart from Fixed and Variable costs there are semi variable costs in between. These are fixed up to some level of activities and vary after crossing that level.

Il me semble important de mettre en place des processus normés pour être en mesure de mieux comprendre les flux de cash et les prévoir. Côté encaissements, le processus de facturation est clef (terme échu ou à échoir, facturation par lot, conditions de paiement standards si possible etc.). Comme pour le revenu, une analyse des encaissements prévisionnels entre safe, likely et uncertain permet de cadrer les risques futurs. Pour les décaissements, la mise en place d'échéances fixes de paiement des fournisseurs donne une meilleure visibilité. Et globalement, une excellente connaissance des postes du bilan est indispensable.

As an entrepreneur, managing cash flow is crucial for maintaining financial stability and ensuring profitability, so by closely monitoring incoming and outgoing funds, you can anticipate and address potential shortfalls, make informed investment decisions, and ensure that you have the necessary resources to cover expenses and seize growth opportunities. Effective cash flow management allows you to sustain operations, plan for future growth, and achieve long-term business success.

A couple of entrepreneurs starting out from my experience only look at their gross profit and believe that's their true profit, without factoring in other costs. For example, they'll buy goods for resale and think the purchase price of the goods is the only cost and their profit is sales minus purchases. They don't factor in other costs such as transport/fuel to acquire and deliver the goods, data/airtime to communicate with clients and the cost of the chips you eat whilst waiting for the goods from the supplier. You'd wonder why you're losing cash when you're "profitable" but realise your goods are not at the correct price to also cover these other expenses that go into you making the sale. A simple financial management course can help.

La compréhension de la profitabilité nécessite un système d'informations au top, avec des processus opérationnels clairs, des axes d'analyse bien réfléchis et la meilleure qualité possible des données. Ce système analytique doit permettre différentes vues, par type d'activités, par segment de marché, par produits, par zone zone géographique, par canal de commercialisation etc. Une logique de "reforecast" financier chaque mois doit aider à anticiper les changements de l'équilibre économique global. Côté revenus, le lien avec les ventes, et côté coûts, le lien avec les engagements, sont clefs. Une attention particulière sera portée aux frais de personnel. Enfin, des indicateurs opérationnels doivent venir compléter la vision financière.

Periodically financial reviews (business performance) must be done as a team, where each owner must evaluate the current performance status versus the established goals and updated the future tasks to successfully achieve the desired outcome. As an example, operations and merchandising have their specific goals and are responsible for ensuring the success of their business unit performance. Finance department should be taking the role of the moderator to facilitate the communication between these two departments, making sure that the each department contribution to success is aligned with overall team performance.

Use accounting software to track all financial transactions. This will help you maintain accurate records and facilitate the preparation of tax returns. Identify areas where you can reduce costs without compromising the quality of products or services. Regularly evaluate suppliers and negotiate better contractual terms.

I will add to make sure to save some money from the operations and plan for it in the cash flow budget. Compare it profit margin with the other average competitors in the market. Revise if the interest rate on loans are lower than the profit margin of the business.