Making profit Archives | Numbers Knowhow

Take Business Seriously To Succeed

Mahmood Reza — Fri, 19 May 2023 09:14:29 +0000

There is no magic bullet to make your business successful. However, if you treat it as a hobby, then you’re bound to fail. That’s why you need to run it, deal with it, and approach it as it deserves. Firstly, what’s a business? One official definition of a business is the activity of making one’s living or making money by producing or buying and selling products. What it involves is a plethora of activities. These are: creating a product or service, promoting it, managing finances and resources, and building relationships with customers, and suppliers. A business can take many forms. It can be a sole proprietorship, a partnership, or a corporation. The goal of a business is typically to generate revenue, increase profits, and create value for stakeholders. And in order to be able to do this, you must take business seriously i.e. put in the hours. What’s a hobby? A hobby, on the other hand, is a regular activity done for enjoyment, typically during one’s leisure time, not professionally. And most importantly not for pay. And although a business too should bring you joy, doing it just to entertain yourself and fill your spare time will never take […]

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What Is Operating Profit?

Mahmood Reza — Fri, 28 Apr 2023 10:13:25 +0000

Business is all about making a profit, isn’t it? But in accounting, there are several terms used to express different kinds of profit. Ultimately, what should interest you is your operating profit. There are multiple names for operating profit. You might hear people refer to it as EBIT which is the acronym for earnings before interest and tax. It can also be called PBIT which stands for profit before interest and tax. Another name for it is net profit. Definition Operating profit is the profit you make after you’ve deducted your costs for making the goods you sell and also the costs for running your business. Furthermore, it’s your total revenue minus costs of sales along with operating costs. How to calculate operating profit The easiest way to show you how to calculate your operating profit is to use an example. That way you can translate it to your business and make your own calculations. Let’s take an artist as our example. Say you’re an independent artist who sells their art and you’ve got your own company. The moment you sell a piece, you’ve made revenue. As per our definition of operating profit, you now need to deduct the costs for creating that artwork. […]

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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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Why A Business Must Make A Profit

Mahmood Reza — Tue, 21 Feb 2023 10:33:27 +0000

Making profit must be at the top of your business goals – ignore that at your peril. Firstly, I am going to tell you why making profit is vital for you and your business. Secondly, I will tell you how you go about making profit. But before we go into that, let’s think about another very important question: Why are you in business? We all have our reasons for being our own boss. It could be financial independence, being more in control, helping others, freedom and flexibility. Maybe it’s life circumstances, a change of scenery, grabbing opportunities – and making money! For myself, I went into business over 28 years ago, started from my own back bedroom, because I wanted more control. I wanted to help people, I wanted to make an impact on their lives, I wanted to have that independence, make my own decisions, and make money. Why a business must make a profit – overview Making a profit is vital for your business. It is the fuel that keeps it going and helps you to grow. Without a profit, your business will eventually fail. And if you’re not making enough of one, then it’s time to […]

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