business budgeting Archives | Numbers Knowhow

Know Your Numbers & Financial Ratios

Mahmood Reza — Fri, 02 Feb 2024 09:28:52 +0000

Numbers are everywhere, and for the most part, we just ignore them. That is unless we’re forced to pay attention to them when it comes time to do our monthly taxes or budget. But, for most people numbers don’t seem interesting. And this is something I’ve seen over and over again. Know your numbers I can’t emphasise enough how important it is to know your numbers. In your business, your numbers are your best friend. Once you realise that you will become less anxious about them. The enormous benefit your business numbers give you is clarity about how healthy your business is. They will help you in the good and not-so-good times. Because numbers don’t lie to you. They will always give you that reality check. They’ll wake you up from slumber and prompt you to take action. Financial ratios Your numbers can be turned into financial ratios. Consequently, they can tell you a lot about your business’s health and where it could be headed in the future. Here’s a quick guide to how to know your numbers and how to use the most essential financial ratios. Subsequently, you can start using your numbers to make smart decisions for […]

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Key Performance Indicators In Business

Mahmood Reza — Fri, 08 Dec 2023 11:24:14 +0000

You need to really get to grips with KPIs (key performance indicators) if you want your business to move forward. Introduction to key performance indicators To begin with, let’s define key performance indicators. They refer to the goals and measures that you put in place to make sure that you are on track for business success and growth. In essence, they are specific metrics that you will consult to see whether your business is achieving its goals and objectives. The clue is in the name. KEY– what is important for you PERFORMANCE– signs of health and business growth INDICATORS – things that show how you are doing and what you can act on as a result Key performance indicators can vary depending on the industry, company size, and goals, but they will typically revolve around revenue, profit margins, customer satisfaction, employee performance, and operational efficiency. If you’re in business, it’s understandable that you want to make money, have an impact, and thrive. So, you need to know what is going on with your business. As the old adage goes, you can’t manage what you don’t measure. Using KPIs, you can identify which areas they need to improve in. Do […]

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Final Steps Of A Business Plan

Mahmood Reza — Fri, 01 Dec 2023 11:51:10 +0000

Each business plan needs to be meticulously constructed in order to be effectively used in the future. This blog will discuss the final steps of a business plan and give you an overall idea of what needs to be done. The three groups that encompass these final steps are the following: Management Financial forecast Presentation Final steps of a business plan: management One of the final steps of a business plan is defining the management roles within your team. You can achieve this by outlining the strengths and weaknesses of each team member as well as describing their background and experience. Consequently, you will have a clear overview of who in your team is suitable for a certain role, and make the allocation accordingly. Furthermore, you need to clarify how you intend to cover the key areas in your business, such as production, sales, marketing, finance, and administration. Lastly, you need to maintain your management information systems in good condition. This includes the management accounts, sales, stock control, and quality control. How committed are you? Businesses often further develop and prosper thanks to partnerships and investors. So, if your goal is to attract banks or potential investors, as a […]

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Knowing Your Costs – The Key To Any Business

Mahmood Reza — Mon, 25 Sep 2023 10:46:37 +0000

Running a business means setting clear goals that you would like to achieve as a business owner. Whether that is to provide services or manufacture products, you must have a defined target and strive to reach it. Certainly, one of your goals should be making money i.e making a profit, since there is no future in a business that is repetitively not profitable. Focusing merely on the sales you are generating won’t give you the full picture. Hence, the way to success and money is through knowing your costs. In this blog, I am going to explain the different types of costs and how they behave in different circumstances. The importance of knowing your costs The sales that you make are not your profit in the business precisely because of the costs you have. Once the end customer has paid you for the product or service that you offer, the money you receive needs to cover the expenses that you encountered in the process of production. Now, these expenses are what I call costs. By knowing your costs, you will know what you are left with from the sales. In other words, you will know how much of your […]

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The Difference Between Budget & Budgeting – A Beginner’s Guide

Mahmood Reza — Fri, 19 May 2023 09:16:58 +0000

We’re all on a budget, and I bet we’ve all done budgeting in one way or another. But, before we go into comparing the two, we need to clarify what a budget is. What is a budget? It’s really a plan for spending the money you have or the money you expect to have over a certain period. When it comes to businesses, it’s usually an annual one. When we say that something is in our budget, we actually mean that we have the necessary funds and we can spend them on whatever it is we’ve planned for our business. On the other hand, if it is over it, it means that we’ve not planned for such an expense, and we can’t afford to make a certain purchase. Types of spending plans They can be personal or corporate. This means that both households and companies use them. Hence, the very first sentence of this blog. Personal When you know how much money you have and what portion of it you spend on all your monthly expenses, it will be much easier to stay on top of your finances. These calculations are usually done on a monthly basis. Following a […]

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Business Numbers – Friend Or Foe?

Mahmood Reza — Fri, 19 May 2023 09:15:33 +0000

Do you see your business numbers as a friend or foe? If you are in business, what is your attitude towards your numbers? Do you like them, dislike them, or is it somewhere in between? That is what we are going to cover in this blog. If you think that money is an icky subject, your business will remain a hobby instead of further developing and improving. Many business owners are good at what they do. They may have great skill and craftsmanship, they may excel in providing service to the customers, but they are not necessarily aware of the financial impact that affects their business. Numbers are your best friend Have you ever thought about who your best friend in business is? Spoiler alert, it is your business numbers. They are your best friend meaning they will not lie to you, nor let you down. Your numbers help you navigate your business through turbulent times as well as in times of prosperity. Sometimes, a poke in the eye may seem better than dealing with your business numbers. For some people, the flashbacks of Maths classes with Mr Calculate and Miss Take Away are far from being pleasant. Consequently, […]

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Your Business Cash Story Is A Big Deal

Mahmood Reza — Fri, 19 May 2023 09:10:23 +0000

Your business cash story is a big deal. It contributes to business continuity, survival, and growth. Profits are what it all comes down to ultimately, but cash plays its own part in this narrative. Cash is what we see appearing and disappearing from our bank accounts. Sales are vanity, profits are sanity, cash is reality. This blog shows you how to navigate those financial waters, in times of choppiness as well as prosperity. In other words, whatever size and shape your business is, whether it’s in the private or not-for-profit sector, it’s all about the cash. So, if you can handle your cash flow, you have got the key to success. Firstly, we will look at the benefits of managing your cash flow and paying attention to cash flow forecasting. And secondly, I will share the ABC framework which will help you build and use your cash story. So, CASH is the name of this pivotal game. As business people, we have to learn the rules of the game to be able to play it well. Benefits of a business cash story Your business story is merely your business plan. It’s unique to your circumstances, your path, your journey. […]

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How To Budget Your Money

Mahmood Reza — Tue, 11 Apr 2023 10:03:37 +0000

How to budget your money is vital. Especially when times are challenging, but also when times are good. What is a budget? A budget is a plan for how you will spend your money. It can help you save money and make better financial decisions. Where to start? Creating a budget can seem like a hard task, but it doesn’t have to be. This vlog will give you the tools you need to create a budget that works for you. I’m going to outline the practical steps that you can take towards building your own financial story. Building a strong understanding of how money works and feels is empowering because it helps us make better decisions about our spending habits as well as invest in things like education or retirement planning for ourselves when we need them most! It may feel daunting at first but following these easy-to-understand instructions with all their helpful tips & tricks will give anyone who puts committed effort into becoming financially savvy enough security not only now, but also down the road. Moreover, I’ll also talk about the benefits of creating and following a budget. Group your spending to budget your money An important […]

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How To Judge Your Financial Performance

Mahmood Reza — Tue, 11 Apr 2023 08:59:07 +0000

How do you assess financial performance? It’s not that straightforward, isn’t it? Knowing how to judge your financial performance can be tricky. It’s because many factors come into play. Plus, it’s not always easy to know where you stand. You can get a good idea of how you’re doing if you turn to your numbers – more specifically, your income and expenses. Take a careful look at them, and it should be much clearer where your business is at the given time. In the words of Dietrich Bonhoeffer, “Action springs not from thought, but from a readiness for responsibility.” So, to be able to lead your company to a brighter tomorrow, you need to be informed about the facts, take responsibility for the current situation and plan away based on reasonable data. Care for some tips to get you started? Read on to learn more. Know your income and expenses If you’re running your own business, it’s important to keep on top of your financial performance so you can make sure you’re making a profit. But how do you know if you’re doing well or not? Here are a few tips on how to judge your financial performance. Regardless […]

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Three Tips For Business Growth

Mahmood Reza — Tue, 11 Apr 2023 08:35:41 +0000

Are you thinking about the best ways to grow your business? Wondering if you’re doing all the right things to enable growth? Then, read on for our three tips for business growth. More specifically, we are going to look at MCP. MCP is not some new medication or drug – MCP stands for mindset, capacity, and performance. The MCP approach is great for driving forward and growing your business. MCP is also needed if you don’t want your business to stand still. Do that, and be swept away by not doing anything. Introduction to MCP As mentioned above, our tips for business growth are having the right mindset, capacity, and performance. Now, these three words can mean different things to different people. To clarify what we mean by each of them, let’s go over the basics: Mindset: It affects how we tackle anything – it’s our attitude towards everything that comes our way in business (and in life). Capacity: Capability is another way to describe this, and no one business has it all. Think about skills and time to do all that’s needed in your business. Performance: Check & manage your progress. (Pro tip: have a plan in place, […]

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Financial Planning For Small Business

Mahmood Reza — Wed, 06 Jul 2022 20:17:16 +0000

Speak to any business owner and they will tell you that long-term success is their goal. In order to get there, it takes preparation and planning which is where financial planning for small business is vital. It enables you to deal with investors, plan for growth and manage cash flow at the same time. What is a Financial Plan? A financial plan will enable you to determine whether an idea is feasible. It will then ensure you remain on track when it comes to financial health as your business grows. It will form an integral part of your business plan and consists of three financial statements. This includes a cash flow statement, income statement and balance sheet. So, if you are wondering how to create a financial plan then there are four steps that you should follow. Develop a Strategic Plan This is crucial as a strategic plan will give you an idea about what you want to achieve with your business. Before you start considering your figures, you should have a think about what is required to meet your goals. Will you need more staff? Will you need more equipment? Is your cash flow going to be affected […]

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How To Understand Your Cash Flow

maishedu — Tue, 31 May 2022 11:13:38 +0000

When you chose to start a business get to grips with How to Understand your Cash Flow. You might have thought that your idea was a direct route to success. It might well be, but one part of a business is cash flow and you cannot ignore it! Cash in, cash out, it can all become overwhelming. Furthermore, you might have big plans to grow your business but to get there, you need control of your money. Don’t dive in and hope for the best. Take a breath, take a step back and consider the bigger picture by managing your cash flow better. However, if cash flow is something new to you, what is it and what does it mean? How do you begin and take that next step in understanding your cash flow. Start with a Cash Flow Template You don’t have to venture out into the world of cash flow all alone. This is because you can use a cash flow template to get you started. This prestructured document will enable you to understand cash flows and set your business on the right path with minimal input from you! How to Manage Cash Flow Keep on top […]

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