As the year draws to a close, many small business owners are taking stock of their business, basking in their successes and trying to comprehend their mistakes. Unfortunately a big picture view does not always immediately reveal itself– a thorough understanding of your business requires at least some analysis and introspection. You may be tempted to look at cash (or lack thereof) in your bank account or your net profit , however these are not always reliable indicators of success or failure , particularly when taken in isolation. Every small business owner should identify the specific needs and constraints of their business to determine the optimal analysis required to assess its financial performance.

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Comments


Written by HeatherStone
690 days ago

Hi Ronika,

Thanks for the overview and for sharing it with the BizSugar community. I'm curious. If you operate a virtual business from your laptop, would it still be advisable to calculate the cost of a brick and mortar office so you can see profit versus expense in the event you would ever need to set one up?



Written by ronika
690 days ago

My pleasure, Heather. Yes, I think it makes sense to include the normal costs of doing business like rent,utilities, staff etc in your analysis even if you are not necessarily incurring them at them in the present. This is particularly important if you are operating virtually from a home office, however your goal is to have a more professional setup or to ultimately have the business be less dependent on you (the owner manager)



Written by bigmoneyweb
690 days ago

comprehensively written. Success, they say, is "where preparation and opportunity meet." But how do you define and measure success in your business? How do you know if your business is a success? Can you tell if you are on or off course? If you are off course, what corrective action(s) can be taken? An important part of planning your business entails knowing the key things that can tell you when you have reached your goals. Called key success factors, these are indicators or milestones that measure your business achievements and help determine how well you are progressing towards your goals and objectives. Thanks for sharing.



Written by ronika
690 days ago

Absolutely correct. It is really important to have benchmarks and measurable "success factors" which are unique to each business. These should be reviewed regularly and updated when necessary to reflect the evolving needs of your business



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