CLOSELY MONITOR YOUR COSTS OF GOODS SOLD POWERFUL TIP REVEALEDPOWERFUL TIPS TO KEEP SMALL BUSINESS PROFITABLE Product distribution costs and employee expenses are the biggest issues. Most small business owners know this already. They've been to business school or learned the consequences of not knowing how to accurately calculate these factors on a consistent basis. Most of us know the importance of monitoring these costs, but why do so many small business owners overlook it? First, what are costs of goods sold? Cost of goods sold (COGS) are the direct costs attributable to the production of the goods sold by a company. This amount includes the cost of the materials used in creating the goods along with the direct labor costs used to produce the goods ... Also referred to as "cost of sales.” This is a key component in any expertly prepared strategic business map. The most challenging issue in calculating costs for small business owner’s, is staff turnover. The average employee today stays at any given job for 22 months. The rising costs of having employee turnover, change the product delivery costs. Because of the constant change in the economy, it can become very difficult for suppliers to maintain a consistent wholesale product cost. This of course is passed down to the small business owner who is then left to either absorb the price change or pass it to their customer. I have several CPA friends. I hear consistently from each of them that costs of goods sold are not closely monitored. In the daily grind of running a small business, this very important task isn’t prioritized. FOLLOW THESE STEPS 1. Use an accounting, inventory management software that gives you hard costs for doing business. 2. Regularly negotiate product costs from suppliers. 3. Determine the best mix of business that will maximize small business profitability. The frequency will be different depending on your business model. RECALIBRATE >> RESTART >> THRIVE |
CategoriesAll Business Coach Leadership Personal Development
|
