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Showing posts with the label Calculations

Cashflow Simplified: This is probably the easiest way to write a Cashflow statement

When starting a business or applying for funding, you will be required to prepare a cashflow statement. This is basically a simple projection of your cash inflows and outflows. It's main purpose is:  • to ensure that your business doesn't run out of money. So the document will show you any potential pitfalls, and that way, you can plan ahead e.g. proactively request a loan, defer payments etc. While business is unpredictable, most financial institutions(including investors) will need to be convinced that you've done your best to anticipate any possible events that could occur within your budgeting period. A Cashflow statement is a great tool to achieve that. HOW SMALL BUSINESSES RUN OUT OF MONEY: • You get a tender You have a small profitable business but you think a tender is what you need to take your business to the next level. You apply for one and that uncle of yours helps you get the deal. You get the tender but you don't have the money. So you borrow from friend

Avoid making this mistake when setting prices

When it comes to setting prices one thing we all seem to understand is that we need to add a markup to our cost. While this may seem easy, many small business owners take it at face value. e.g. I bought this for $5 so if I sell it at $10 I'm making 100% profit.  While that's a good start, it is not the end. They are making one critical mistake:  ignoring their fixed costs - and as a result, they undercharge. That's because most small business owners will tell you they don't take a salary or they understate their fixed costs. I work from home so I don't pay rent but at the end of the day, you still need to live, don't you?  Examples of costs that small business owners ignore How much do you deduct from your business for: • lunch • airtime • the electricity you use to bake • water • transport • the money you gave your helpers to 'buy a drink' and so on.  These amounts may seem inconsequential but over time they become significant... and they need to be fac

The key to setting profitable prices for your products and services

One thing I've learnt over time is to never leave anything to chance, especially in business. It's important to make data driven decisions. This means collecting and using the information around you to choose those options which give you the best outcomes. While you will not always get it right all the time, it's important to err on the side of caution. So with that said, many small businesses seem to be unknowingly undercharging for their goods in an effort to be competitive. They set prices based on the markets and totally ignore their internal cost structure. Some industries (like retail) are about moving volumes. The profit margins are often quite small and so the only way to be profitable is to sell as many units as you can, while minimizing your costs. However, you can only manage your costs effectively, if you understand them. How to set a good price There are 3 factors to consider when setting prices: a.) Your costs b.) Your competitors c.) How much your customers

How to calculate costs for beginners

How to calculate costs for beginners When starting a business, many small business owners make the critical mistake of failing to charge competitive prices. This is often due to a failure to differentiate between revenue and profit, but more importantly, because they ignore “fixed” costs. This article will cover basic costing for beginners. You will get the answers to what is costing? What are fixed costs? What are variable costs and how to calculate costs for beginners? Ready? Great. Let's start by understanding costs. What are costs? Costs : are all the money you spend to produce or sell your product or service. For example- if you are producing shirts, your costs will include the money you use to buy material i.e. cloth, buttons etc., labour and advertising expenses to promote the shirts. What is costing? Costing (or Break even  analysis) refers to the way in which you calculate the costs of producing your product or delivering your service so as to determine the profitability

How to do calculations in Sketchware

As explained in the previous tutorial, the number variables are useful for making calculations. In today's example we will create a simple app that adds two numbers. This will cover: 1. How to convert a string to a number variable 2. How to add 2 numbers and the logic behind it I will start by creating a new project. In my layout, I have 2 edittexts where a user enters a number and then a Textview to display the answer. It will therefore look like this: Fo us to do a calculation, we will need to start by converting the contents of our edittext to a number variable. Once it has been converted we can then use the green Operator blocks to calculate. So I will place the logic onTextChanged. The image below shows how to add an onTextChanged event Once I've added my event, I will then create a number variable with the name "firstnumber" - you can give it any name that makes sense to you e.g. dailysales, subject1, score etc. Once you've created the variable, place the