How to predict the future of your small business?
Small business is having a specific nature which makes it unique not because it is the backbone of the economy only but also because of the risk.
Small businesses most properly are running with one man/women and with the same strategy and idea which can lead to the success of the flier.
How does the new business start?
– Good idea, Motivation, Good business plan, Owned money or finance form any financial institution, Location to start (depend on the nature of the business),…..etc.
Why 80% of new small business fail in the first 2 years?
– Poor management, high competition in the market, the financial plan wasn’t clear enough and insufficient capital due to owner spending or high unnecessary cost, Bad location, Poor marketing (No Website and No Social Media Presence), Believing you can do everything yourself, Overdependence on a single customer, Failure to clearly define and understand your market, your customers.
To predict the future of your business tries to maintain a good accounting system because it is one of the most successful tools you have; by organizing your financial Input, output, inventory, purchase, payables, receivables,…etc you can present the future of your business! Also saving lots of money too.
Based on a strong accounting system you can analyze the business by answering this question:
1- What is the business liquidity ratio?
2- Profitability ratio?
3- Debt ratio?
4- Operation performance ratio?
5- Investment valuation ratio?
6- Do you calculate the payable and receivable days correctly?
7- Is your inventory managed efficiently?
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