You’re irreplaceable, indispensable and unique. You’re also one of the most stressful parts of your business. As the owner, you make all the critical decisions and bear all the risks. Here are some helpful tips for reducing your business’ dependence on yourself so it remains healthy and sustainable even in times of duress. 

In previous articles in this series, the key concepts and structures of developing a cost model were discussed. Important ideas to review are granularity, processes, level and special process cases.

You are ready to begin building your cost model, or perhaps you are in the process of electing/upgrading your ERP software and want to plan through how it will support your cost model. 

In prior articles (December 2021 FORGE and February 2022 Industrial Heating), we discussed the reasons behind the importance of understanding margins (price minus cost) for the seller of any product or service. Your Cost Model is the framework for calculating costs.

The goal of most businesses is to make money. Doing so is simple if you sell your offerings for more than it costs you to acquire, make or provide them.

In a business, every time a product (defined as a product or service or both) is delivered to a customer there is a cost for that product.

As a business owner, you have limited options when seeking capital to start or grow your company. Essentially, there are three sources of cash: your own cash investment or that of other investors, your bank and cash from the daily operations of the company.

Here are some key areas to enhance your relationship with your bank.

A strategic plan is a roadmap for the managed growth of a company. This process can be managed by an experienced CFO or other outside facilitator.

To illustrate this situation, we will discuss the actual story of a small automotive repair and towing business. The business had a regional towing contract with AAA Auto Club, which gave the business top priority on all service calls.