Unlocked success defines business as the provision of solutions for a problem, for one to run a successful management of business then one needs to know the numbers. Customer needs at the end of the day must amount to figures. Figures come in different forms that one has to know as a business.
In this section we shall talk about operating costs and not cost of goods sold.
Remember operating costs are those costs that you need to pay in order to keep your business functional. They include such things as
- Business premise rentals
- Employee costs
- Shop license
- Marketing costs
- Audit fees
- Stationary costs
- Transport costs
- Communication and internet costs
- Maintainence and repairs costs
Your business is based on a foundation of costs that must enable the revenue. Each business consists of a business model which has a cost structure and that cost structure is very important to understand.
A consultant‘s operating cost structure is dominated by employee salary, rentals and marketing. On the other hand the telecommunications model is dominated by rentals, marketing and licensing depending on the maturity of the company.
At any point in time the business manager must know their costs and the numbers that come with it.
If the sales is at $50,000 and the costs are running at $60,000 if becomes easier to adjust sales effort to cover the costs. However if the manager is not aware of their costs then the manager may fail to react to be able to cover the costs.
Some costs are not necessary to the business and could be as a result of wastage, if one does not know then that wastage cannot be stopped or prevented.
If a business manager is not aware of their costs they might fail to recognize opportunities for alternative suppliers for cost saving.
The success of the business is also dependent on the number of clients and products sold. One has to know the sales that are occurring. Deviances in sales must be known.
Products and service
One has to know the number of products that are being sold. That means the products must be known how they sell at any point in time. Once the product deviates the business manager must be able to adjust the sales effort
Figures from the market are critical, knowing how many clients one has and the pattern of sales is important. If the trend changes the business manager must be able to figure out where the change is happening and why.
If you are running a business then you must be aware of what figures that you are dealing with. Knowing your figures at the end of the month is no longer prudent, figures must be known in real time within 24 hours as they are important in this competitive world. Reacting late can cost you a market share very fast. Learn your market and the figures that come with it.