Even if a business is only open for 3 or 4 months out of the year, the business will have income and expenses during that timeframe. A business owner can estimate those numbers (budgeting!) and use those numbers to determine how many jobs need performed (lawns mowed, driveways cleared of snow, etc.) in order to at least break even.
This is an excerpt from a presentation I give to business owners about managing cash flow and working effectively with banks.
In July, Michael Michalowicz, who writes books about entrepreneurship (which I have heard are very good; “The Pumpkin Plan” is on my to-read list) wrote a blog post titled “Take Your Profit First, Always.” The gist of the post is, instead of looking at profitability as “Income minus Expenses = Profit” you should flip the […]