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E-Myth – “Why most small businesses don’t work & what to do about it”

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Accounting Outsourcing | The Answer Is Not Decreasing Costs

Struggling business owners often become fixated with minimizing expenses, even though demising expenses will not allow them to succeed says accounting outsourcing. Often most business owners are stuck in the mindset of employees. That is since employees cannot change their own salary, in order to increase their wealth they must cut their expenses. Business owners need to shift their mindset away from not being able to change their salary because as an entrepreneur they have unlimited opportunity to increase their revenue thereby increasing their wealth. Very sobering business statistic Canada says that 50% of all businesses will fail within the first five years and out of those failed businesses, 42% of them will say that the inability to attract enough customers was the reason for their business failure. Itís very easy to see that the problem in businesses today is not that they are spending too much in their business, it is that they are not generating enough revenue in their business.

Once business owners have shifted that mindset away from minimizing expenses and towards a new generation, they can start to organize the time they spend in their business in a way that can really impact their business says accounting outsourcing. Since time is a business owners most valuable resource and that resource is limited, knowing what areas they should spend their time in is extremely important. The number one activity that business owners should do in their business is in revenue increasing and generating activities. Working on their advertising and marketing KPIís is extremely important. Accounting out sourcing says that the only effective marketing strategies are the ones that are not done on a regular basis. Therefore, business owners need to not only spend time doing their marketing, they need to spend time on a regular basis in them. Growing the business and increasing revenue should be their number one goal.

Once business owners are working on increasing the revenue, they can focus on minimizing expenses in their business, but they need to know how to efficiently and effectively minimize those expenses in the least amount of time. By organizing their income statements in numerically descending order, this will be able to see that the top half of the list has heist expenses in their business, bottom half is the lowest expenses. By knowing that they should spend their time minimizing the expenses on the top of the list, business owners can make efficient use of their time. On the top of the list will be administration wages as well as gross margins. By ensuring that administrative wages are as low as possible, business owners can be sure to either reduce hours of those staff members whenever necessary, or we tasking those staff members to billable tasks, they can offset their wages. Business owners can spend the time they have minimizing those expenses is accounting outsourcing knowing that the time they spent on these items will give them a good rate of return they will be able to affect their bottom line the greatest amount by spending the least amount of time.

50% of all businesses will fail within the first five years, and 42% of those failed businesses will save the inability to attract enough customers was the reason for their failure is accounting outsourcing. Many business owners are stuck in an employee mindset even after they open their business, where employees know that since they canít change their salary, that if they want to increase their wealth, they must reduce their expenses. Business owners get stuck in this mindset as well, and failed to realize that they have unlimited potential to increase their revenue in their business, and get stuck thinking that minimizing their own expenses as a way to make their business succeed. Favourite quote from Peter Drucker, the author who wrote 39 business books says nothing happens until someone sells something. Generating sales and increasing revenue business is truly the way that they will succeed.

Business owners most valuable assets is their time, the such a limited amount of time and they never have enough of it to be able to do everything, or to do everything perfectly says accounting outsourcing. Therefore business owners need to know what are the most important aspects of their business to spend their time on, as well as how much time should be spent on those things. Since increasing revenue and productivity in business is one of the most important tasks in a business in order to grow it, entrepreneurs need to know that this is one of the most important areas spend most of their time. The only ineffective marketing strategies are the ones that are not done on a regular basis, some only is extremely important for business owners to spend time in the advertising and marketing, but they also need to spend their time on it regularly. Business owners who donít spend time on their marketing consistently, wind up spending even more time on it because it will be ineffective, therefore they must spend more time doing it. By making regular part of their schedule, business owners can know that the time theyíre spending on it is effective.

Once a business owner has their schedule planned around revenue-generating activities like marketing, they should also know that minimizing some expenses is an important part of running their business. Accounting outsourcing says that by knowing what expenses will have the greatest effect to the bottom line by minimizing, business owners can spend a small amount of time affecting their bottom line in the largest way. By organizing their statements in a numerically descending order, businesses can see the most impactful costs at the top of the list and the least impactful at the bottom. By spending their time in the top half of the list, business owners can have the greatest impact on their expenses in the least amount of time.