At the beginning of your business it is important to avoid that expenses “eat” your first profits, so that you can quickly recover your investment. Experts suggest making a sales and expense projection .
The projection must be monthly and must include the fixed and variable expenses of production, operation and administration. With this information you will shape your financial plan and you will be able to set your sales goals, the price of your product or service and the strategy to achieve them.
The plan must be reviewed every day or week during the first five months of the business, to adjust expenses. You must consider terms of 3, 6, 9 and 12 months.
Take into account the following tips:
1. Determine the costs of production.
Take into account how much it costs to buy, store and process your supplies. It includes the costs of electricity, refrigeration, warehouses, distribution.
2. Don’t forget the administrative costs.
Consider the salaries of your employees and yours, as well as the rent of the office or premises. Evaluate if you need permanent employees or can outsource services (for example, lawyer or accountant). If you decide to join associations or chambers, include membership costs here.
3. Evaluate the cost of financing.
If you asked for credit from third parties, suppliers or a financial institution to start your business , consider the interest and capital that you will have to pay each month.
4. Set the price of your product.
The formula is to increase the profit percentage to the cost of your product. This percentage depends on how much the customer is willing to pay and the prices of the competition. Take a poll.
5. Locate your customers.
This will help you know how much you need to sell and how much you could earn. Research the market, be realistic and define it so that you reach your goals in the short term .
6. Set your balance point.
It is the point where you have no profits but no losses. It is ideal to achieve it in the first six months of operation. It is recommended that at the beginning you do not depend on the business to live.
7. Take into account macroeconomic variables.
Analyze GDP, interest rates, inflation, etc. So you can know if your supplies and costs will increase and how it will impact prices.
8. Consider an investment in promotion.
Since the company was born, promotion is needed to get customers, such as printed material, social networks, radio, etc. It is advisable to implement 10 strategies and monitor them to see which one brings customers to increase investment in that one.
