As we continue to investigate exactly how we can manage the financial affairs of our business more effectively, you should start seeing more and more ways to become profitable. There is an old saying in business that states, "businesses don't fail, people do". No statement has ever been truer. Let's examine more ways that will make us profitable.
One of the most important things you can do in your business is to price your products and services in order to make a profit. What happens to people is that in the early stages of their business, they are so desperate to attract new customers and gain new business, that they are willing to set prices way too low. In addition, they are not confident enough to feel that higher prices are worthy of them. This is something that you must master it as quickly as possible because no business can operate at a profit margin that is too low. Another thing you must realize is that it is much harder to raise prices later after you start establishing a customer base.
Another thing that many business owners fail to realize is that their time is the most valuable asset they have. As a result, they tend to undervalue the price of their time. In fact, many of them do not even factor in the time spent into the price of a project. In regards to your time, you also have to learn to spend your time on activities that provide your business the most leverage. Most of the other things can either be delegated or temporarily set aside.
Should your business ever get to the point where you will need additional financing, then you need to ensure that you are financing and asset and not simply debt. Nothing is as crippling to the growth of a young company as applying finance charges to existing debt. In spite of this, thousands of businesses every year continue this practice. And as a result, most of them go bankrupt.
