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Business owners who are financially struggling within their business often start believing that by minimizing their expenses they can help their business succeed says accounting outsourcing. However the expenses are not the reason why businesses fail to succeed. Industry Canada says that 50% of all businesses fail in the first five years, 42% of those failed entrepreneurs say that the reason why they failed in business was they were not able to attract enough customers. Not finding enough customers and generating enough revenue is the number one reason why businesses fail in Canada. Many business owners fall into this trap of thinking that if they continue to cut their costs in business, they will eventually find success.
Often the reason for this flawed says accounting outsourcing is that most entrepreneurs used to be employees, and they are all stuck in the employee mindset. Bad employee mindset is since employees cannot increase their own salary, in order to increase wealth they must cut expenses. In order to succeed in business, Business owners need to shift that mindset away from the employee mindset and towards the entrepreneurial mindset which is business owners have an limited opportunities to increase their income and revenue infinitely. Business owners are in the rare position of absolutely being able to change their own salary. By shifting that mindset for business owners they can see that they should be spending their time on generating revenue rather than cutting costs.
The business owner needs to be spending most of their time on those revenue increasing in revenue-generating activities says accounting outsourcing. By spending most of their time on their advertising and marketing KPIs, business owners can continue to work on attracting new customers and growing their business. The only ineffective marketing strategies are the ones that were not done on a regular basis, therefore business owners need to not only schedule their marketing time, but schedule it on a regular basis. Alas in the business owner needs to do is either stall out their business at an inopportune time, or spend twice as much time marketing inconsistently.
A business owners most valuable resources their time, so knowing exactly what to spend their time on, and how much time they should spend doing it is extremely important for business owners says accounting out sourcing. In the expense minimizing can be important in the business, as long as business owners know the most efficient way to do that. By organizing their income statement in numerically descending order, business owners can see the items at the top the list that are providing the biggest impact the businessís bottom line. By spending their time working on those items, business owners can know that they are spending their time efficiently as well as effectively.
Entrepreneurs will see that the top the list foods administrative labour as one of the highest costs says accounting out sourcing. In fact it will be the highest overhead within the business besides rent. Ensuring that there is not an access labour cost, either by reducing hours, or be tasking admin staff to billable jobs such as working on Accounts Receivable or advertising and marketing
50% of all businesses fail within the first five years of opening their doors says accounting outsourcing. And out of those failed business, 42% will say that the inability to attract new customers was the reason for their businesses failure. Business owners need to understand that most businesses fail because they are not generating revenue in their business, and not because they have high expenses in their business. However business owners that are struggling often become fixated on minimizing expenses. They get caught up trying to save cost on expenses such as bank fees, office supplies, phone bills and utilities to name a few. However none of these expenses impact the bottom line very much.
Business owners should be aware of what they can spend the time on reducing the cost that will give them the biggest impact to their bottom line in the shortest amount of time. The way they can do that says accounting outsourcing is by organizing the income statements in numerically descending order. That way they can see the top half of the list will be expenses that have the greatest impact on the businessís bottom line. Spending their time working on the top half of the list, business owners can make sure that they are spending their time efficiently reducing costs.
Entrepreneurs will see that at the top of the list second only to rent an overhead is administrative labour. By optimizing their administrative labour either by inducing hours, or re-tasking admin staff to billable tasks such as marketing or Accounts Receivable, accounting out sourcing says business owners can be sure that one of the largest expenses will be minimized or help pay for its cost.
The next item on their income statement will be there gross margin. If business owners can figure out how to optimize their supplies materials and cost of labour, that can have a great impact on their bottom line as well as making their business even more profitable says accounting out sourcing.
Once business owners are efficiently taking care of their expenses, they should know that the most important thing that we can work on in their business generating that revenue. By working on revenue increasing and generating activities, as well as increasing the business is productivity for better margins, a business owner can grow their business and hopefully eliminate the reason that 42% of those failed businesses failed. Accounting outsourcing says the only ineffective marketing strategies are the ones that are not done on a regular basis. So not only does a business owner need to work on revenue increasing and generating activities, but they need to do so regularly. By failing to continue to market their business on a regular basis, business owners risk stalling the growth of their business.
