Is A Business Plan Really Necessary?

This sounds like pretty basic information, but it can be tough to find. Most companies offer more than one product; a big conglomerate might offer hundreds of different products in a range of industries. Digging into the company’s lineup can give you a better sense of the forces that will drive its results.

Don’t buy a property just because it is a “steal”. Consider all the costs of buying the property, including any needed repairs, utility bills, property insurance and taxes, and risk of vacancy. If possible, make a cash flow examples, or ask for a cash flow examples from the prior owners of the property (if it was used as a rental property). Collect as many documents as you can which detail the property’s utility and other costs.

This is a good number to scrutinize each month, and to track in terms of percentage to total sales over the course of time. The higher the better with gross margin! You need to have enough money left at this point to pay all your indirect costs and still end up with a profit.

In rehabbing houses, you or someone that works for you will need to manage the project full time. This means being on the job everyday, ordering materials, working with a designer, getting draws from the lender, paying contractors, keeping the job site locked up every night, ordering dumpsters, communicating with the neighbors, keeping the job site clean, getting bids from contractors, and much, much more.

Yes, if you do not have accountability, you have taken away your own money! According to NLP experts, 95% of the people in this world live their live below the line. They blame others for their own problems, come up with excuses and worst of all, deny what they are doing is their fault. Sounds too common? Many people blame the government, blame the economy, and blame the VAT or GST (tax) increase etc for their business woes. The remaining 5% of the people (successful people) live their live above the line. They take ownership of their situation, take responsibility for their actions, and be accountable to themselves.

In addition to growth, look at how efficiently the company makes money. Return on assets shows how well it has translated a dollar of its asset base into a dollar of profits. A company with a return on assets of 20%, for example, has produced .20 of earnings from each dollar of assets. Similarly, return on equity measures how well the firm has turned a dollar of shareholders equity into earnings.

Too many people are out to gamble with the stock market, basically turning it into a casino. This is the main reason why there are so many skeptics because they do not see it as a form of investing but as a form of gambling. They have no strategy and no knowledge about the stock market, its volatility, and the risks involved. These kind of people will certainly lose money in the long run. Don’t let this be you!

Being able to track a declining margin can give you a heads-up that you must adjust your prices or your costs. In the worst cases your gross profit and profit margin disappear altogether. At that point, you’ll be like the fellow who lost money on every sale but figured he could make it up in volume. Don’t do it.