It can be
extremely difficult to predict where your revenue comes from on a regular
basis. Income can swing depending upon the time of year and the economy. What
is important is for you to have a plan that will help you survive any bad
times.
It is to
your benefit to work out different plans that cover several scenarios. This
means being able to keep money coming in so that you can pay your expenses and
your staff.
If you
don't do this when you hit a rough patch it will be much harder for you to get
through it. The same actually applies to unexpected growth. When your business
flourishes you should have a plan in place so that you can take advantage of
this.
The best
way to handle different situations is to have a good business plan drawn up. In
this plan you should cover different scenarios such as slumps in the economy or
slowdowns due to the time of year.
Research has
shown that 64% of business owners who had a solid plan in place experienced
growth. While only 43% of business owners who didn't have a plan could say the
same.
You want to
create a break even plan that shows you the minimum amount of revenue that you
need to continue running your business. This breakeven point covers all of your
expenses without having you dipping into any type of loan or savings.
As your
business grows you will need to adjust your break even plan and your business
plan accordingly. This will help keep your business out of the red and in
profit, even a small profit is better than no profit at all.
By putting
plans into place for your business you will have a solid path to follow if
things turn a little sour. You will know exactly what you have to do to keep
your business running and paying your bills. You won't have to worry about
laying off staff or stocking less inventory. You can easily make adjustments to
survive slower periods.
If you
truly want to create a profitable business then take the time to create a good
business plan, which includes a break even plan. Then monitor your progress
each month so you can ensure that you are reaching this point comfortably. If
not, then you will need to adjust your plan so that you can break even each
month with no problems.
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