Good morning brothers and sisters , i woke up as early as 2:30Am this morning and i was unable to get back to sleep so i decided to put on my P.C and pen-down 5 keys that will help set up businesses for the long term success.
Note: i will be using the term “financial business model” which i believe may not be clear to some of us. so below is a basic explanation of what it is according to “financial times”
This describes the method or means by which a company tries to capture value from its business. A business model may be based on many different aspects of a company, such as how it makes, distributes, prices or advertises its products.
The business model concentrates on value creation. It describes a company’s or organization’s core strategy to generate economic value, normally in the form of revenue. -financial times
so i believe if i use the concept of “financial business model” subsequently it should not seem new.
Why do so many businesses fail to make profits and achieve their financial goals? The answer is simple because many business owners simply ignore one or more of the 5 keys to financial success. Many businesses are making sales but are not profitable. Learn how to fortify your business and set your company up for success. Developing a financial business model provides a clear picture of your company’s financial history as well as your company’s financial future. Working from a financial business model will help to prepare your company to make better decisions for the company in the future. And analyzing your finances on a regular basis will provide you with the financial success you are seeking to achieve. Get ready to gain more flexibility and financial freedom in your company with the keys to success wink.
Key #1) Have A Manager/s
Mismanagement of finances is not reserved for start-up companies but for all businesses. Many business owners are able to produce and sell their products and services but are not able to manage their finances. If you are not able to determine where you have been you will not know where you are going. Accountants and bookkeepers are able to assist your company with establishing a financial foundation and making predictions surrounding your financial future. if you are grounded in the management and accounting skill, apply them to your business wink. i still remembered a prediction that the Britain made long ago while they were studying Nigerian businesses. they predicted that Alhassan Dantata’s business and a very little other businesses will be able to stand time and succeed. their base was grossly on the amount of information and world standard records Dantata kept about his business. The outcome of the prediction was that “dantata died in august 17th 1955 as the richest and most successful business man in Africa” Dantata was Dangote’s maternal grandfather.
Key #2) Review Historical Data
By developing a financial history of your company’s finances, it will provide you with valuable lessons for the present that will guide you into a more profitable future. Reviewing financial history helps you to know what to do and what not to do in your business. Compiling historical financial data can help your bookkeeper or accountant to assess the reasons for your success or failure.
Key #3) Project Sales and Costs
Once you have completed the second key it will set you on the trajectory to be able to project the sales and costs. Projecting sales and costs without historical data can be challenging but not impossible. Projections for your company are not a process that begins at the start-up phase, it is an on-going process to help determine areas of growth and change. Costs are always easier to project than sales. However, sales should not be your main focus but rather on the company being profitable!
Key #4) Develop Financial Statements
Financial statements are the framework for the accounting cycle. In other words, the income statement, the balance sheet, and the statement of cash flows provide a picture of how well your company is doing financially. Financial statements structure all financial data in a manner that is easy to understand and should be prepared with accuracy. These statements assist you with assessing financial performance and determining key business decisions.
Key #5) Assess and Implementation of Changes
This is the final piece in the financial business model. Once all of the first four keys have been established, you will be able to assess your company’s financial position and implement changes where it is necessary to ensure financial growth and success. Tying it all together the financial statements will reflect your company’s historic information and decisions can be made about the future from that data.
Applying these five keys to your offline or online business will set your company on the path to achieving your goals and Earning profits!