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There are many qualities that successful entrepreneurs will share says outsourced CFO. And one of those qualities is ensuring that they are paying all of their bills on time every month. In fact, this is so important, that business owners who are not putting this into practice, or actually potentially causing their business harm, and they do not even know it. Therefore, it is very important for business owners not only to learn that they should be paying their bills off every month. But also, why as well.
Often, when business owners are not paying their bills on time every month, they may not realize that they are not making their intimate says outsourced CFO. Ultimately, many businesses I that out by reading their interim financial statements regularly. However, if entrepreneurs are not making their bill payments every month, there also likely not the type of entrepreneurs who is going to be reading their interim financial statements. When business owners can realize that this can be a shortcut to ensuring that they are profitable, they can at least learn how to learn how to be profitable or not.
One of the most important things that business owners should realize, is that if they are not making enough money in their business to cover all of their bills, they have the power to change that says outsourced CFO. For example, they have a lot of tools of their disposal including being able to increase their prices. Even by a few dollars per product or service, can be enough to help a business owner remain financially viable. But, if an entrepreneur does not see that they are not able to pay all of their bills on time, might not result in a business owner making the changes that they need to.
Outsourced CFO says that another way that business owners can change what they are doing, to become more financially viable is by increasing their revenue-generating activities. Perhaps a business owner simply needs to increase the amount of money that they are spending on their online marketing. Or, a business owner simply needs to get out and do sales calls or call calls more often. Ultimately, by increasing their revenue-generating activities, business owners can impact the ability to increase the revenue in their business, which will allow them to pay all of their bills and become financially viable.
The third way that entrepreneurs can impact their business, is by cutting their overhead expenses. While there is not a lot of overhead expenses that business owners can really affect change to that will drastically improve their situation, it typically boils down to paying off or cutting the hours of their administrative staff. And while this may not be something that business owners are excited to do. By learning that this is necessary, can help entrepreneurs learn how to do the difficult things and make the hard decisions that can help them stay profitable in business.
Business owners should understand that the second most common reason why businesses in Canada fail is because they run out of money. 29% of all failed entrepreneurs say this is the reason why they fail. Which means it is very important for entrepreneurs to understand how they can avoid that scenario in their own business. One way that they can ensure that they are avoiding this, is by paying attention to their bills and putting them on time. By doing this, business owners can see if they are able to cover all of their bills, and if not, what they need to do in their business to change that.
One of the most common reasons why business owners get behind on paying their bills says outsourced CFO, is because they have unsustainable overhead. Sometimes, their overhead is so high, that a business owner could literally double their sales, and still not have the ability to pay for it. Therefore, business owners need to understand that if they have not been able to pay their bills on time every month, and no matter what they have done, they cannot affect change. They should look at their overhead as the next option.
Business owners should understand that overhead is typically made up of a lot of the very little things such as power, electricity, water bills, Internet and phone bills, office supplies and bank charges to name a few. However, all of those little bills added up together will not even equal 1% of business owners entire bottom line. However, there is to overhead costs that make up vast majority of entrepreneurs entire overhead. These things are rent or mortgage, and administrative staff. Therefore, a business owner who is unable to generate enough revenue or increase their margins in their business may have to consider making changes to their administrative staff or rent.
Outsourced CFO says that rent may be difficult to affect change to, typically because entrepreneurs are either locked into a lease or mortgage. However, the one that business owners can affect change to is the administrative staff. By going from to administrative staff to one can impact the business owners bottom line by up to fifteen or 20%. Therefore, business owners may have the greatest impact to their business by laying off a staff member. While this is not something that business owners will do lightly, by making the hard and difficult decisions that business owners have to, they will ensure that their business is viable, which is the ethically correct thing to do in the long run, because they will have a more viable business, that will be able to operate for the benefit of all of the staff.
Outsourced CFO says that when business owners are able to make the difficult decisions associated with increasing the revenue in their business, they can ensure that they are doing the right thing in their business. By ensuring that they have a viable business and the long run, can help ensure that there providing livelihood for all of their staff members.
