It is very easy to focus on developing products, getting new customers and making more sales and forget to watch the numbers. Many apparently successful businesses have gone broke as a result of simply running out of money!
We have a business saying here in England “You’ve got to make a margin”. This simply means that, the price you charge for your product has to cover the cost of producing and delivering it, the costs of running the business and paying taxes, the salaries of your staff and YOURSELF, enough to repay any business loans PLUS a bit left over to invest in growing the business.
You not only have to make sure that sales values exceed all costs above, but also be aware of timing. There always needs to be at least enough cash coming in to cover the amount of cash going out. YOU need to be paid on time to be sure that you can pay YOUR bills on time.
