It is important to distinguish between income and revenue in order to know the profit and loss of your business and how it operates. If you understand that income and revenue are different, how the business operates, Sales I can distinguish income well and how successful I am. advantage We can clearly see the weaknesses. If you want to know this, you can use simple and easy methods to get a better understanding of the business’s financial situation. Here I will give an example about the business of planting flowers.
1. Accurately recording costs
The cost is within one year of entering into your business. in six months The total amount contributed in one season. Investment money from this cost, It can also be separated into labor and other costs. Depending on the business, there will be differences in costs, and it is most important to note that it is registered according to the relevant sector. Then we will write down the expenses for the flower growing business.
A – Business input cost
– Fertilizer cost
– Seed cost
– Land repair costs
– Pesticide cost
B – Labor and other costs
Water cost + materials
Then you can easily find out the added income and other costs for the business.
2. Recording daily expenses
When writing this down, it’s best to write down exactly what you’re spending. Daily allowance for each day Fertilizer cost If you keep it as water cost, you will be able to know how much it costs for which content at the end of the set period. You will clearly see what is needed. Then, you will be able to reorganize as necessary and make the expenditure compact.
3. The gross profit of the business
Since the costs are written down precisely, the income that will be generated from the sale must also be written down when the lottery comes. Then you can calculate the gross profit of the business by separating the cost and the income. If the total cost of growing flowers is 120,000 and the sales are 250,000, the gross profit will be 130,000.
In this way, one hundred songs, one month Each year can be calculated so you can see how the business is progressing. Optimum operating time; You will be able to identify the weakest areas and manage them as needed, which will definitely improve the business. He will have to know exactly the financial situation that will be in his hands, so he can invest again. If necessary, it will have an effect until the implementation of obtaining a bank loan.
Costs per day by month It is important to keep a list because you will know the income and revenue of your business after making a yearly list. If you don’t keep track of your expenses, you won’t be able to accurately determine your business’s profit. Then to expand the business for the coming years. You will be able to work to fulfill what you need and eliminate what you don’t need. We would like to note that the net profit obtained by calculating the estimated cost is less accurate and hinders the development of the business.