Tracking the Numbers - You Can't Know If You're Making a Profit Until You Know How Much Your Product or Service Costs to Deliver

Business is about numbers and you can't possibly know if you're making a profit if you don't know what it's costing you to run your business. You may actually be losing money. In fact , the July,1996 issue of Inc. Magazine has a feature story, Are We Making Money Yet?", which details one women's near death transformation from salesman to CEO when she finally puts pencil to paper to discover the real cost of a bike delivery in her mushrooming, but financially challenged delivery business was not the assumed $4.46 per delivery, leaving $. 23 profit. The real cost was $ 9.24 per delivery with an actual profit of -$4.55 . That is not the kind of situation you make up by volume. And it is a lot more common than most people, including business people, realize. Fortunately, getting these numbers turned around is not really that hard if you have a clear idea of the true costs. A little creative redeployment, some adjustments, and , believe it or not, turning away business--unprofitable business-- developing a plan based on the true financials and having the discipline to stick to it usually turn the tide and put you on the road to profitability. For more on numbers, see

Entrepreneur: Focus on Numbers

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