TechsPlace | Starting a business can be quite a stressful experience. There are many things that you need to worry about and care for, that you might get lost in the endless seas of paperwork and bureaucracy. What’s more, you might be worried that taking some wrong step will end up with you losing your business or wasting your prospects and going bankrupt! Luckily, this doesn’t need to be so gloomy! There are some easy things that you can do which will make running your startup more efficiently! In this article, we give you the three most important things you need to keep in mind!
Create a good one-page business plan!
The first thing you need to do when starting your business is to have a business plan. Many people think that starting a business from scratch will give you time to improvise and change your goal, but running your startup more efficiently requires you to plan things ahead. Simply put, you need a business plan that will tell you what you want to achieve. You will write down where you want to go with your business, and ways in which you want it to grow.
This doesn’t have to be something too spectacular, so don’t worry about its design! It can be a simple one-page outline with goals and resources! A lot of entrepreneurs don’t even print out their business plans! Instead, they keep them online. This way, they can come back to them often, to change things up, add or subtract when they need, or generally work on their business plan as they see fit.
This is where the most important trait of a business plan comes into play. If you are looking into running your startup more efficiently, you will need to have a business plan that is highly dynamic. The business market can be a volatile place, and change from day today. This is why it is very important for you to be able to do the same! So, don’t set things in stone. Instead, visit your business plan each month, see how far you have come and whether you are meeting your goals. Based on that, adjust them further. Maybe you are developing well and you will aim higher. Conversely, if you are not meeting the exact numbers, you might want to lower your expectations.
Break-even figure is a necessity for running your startup more efficiently
The next thing that you always need to be aware of when you want your startup to succeed is your break-even figure. This is where a lot of people get anxious – because, believe it or not, to run a successful startup, you will need to do some mathematics! Luckily, it is fairly simple! All you need to work with are three magic numbers!
The first one is called the gross profit percentage. You get this number by subtracting the cost of sales with the sales price and then dividing this by the sales. So, if you are selling your product for $300, and this process costs you $225, then your gross profit percentage is (300 – 225) / 300 = 25%.
The second number you need to remember is overheads – this is the total of all your expenses during each month. Include salaries, the rent for space as well as things such as fuel and the internet costs in this number. In our example, say this is $50,000 per month. The final number is the profit target – and this is the easy one. It’s how much you would like to earn each month – and let us say it is $100,000.
Now all you need to calculate your break-even figure is to add the second and the third number and divide them by the first. So, in our case, it would be ($50,000 + $100,000) / 25% = $600,000. You will need to earn $600,000 each month in order to make your $100,000. If you are meeting this number, then you can work on improving your target income. If not, then you might want to reduce your overheads, your goal, or your gross profit percentage in some way.
Asking for help is normal when running your startup more efficiently
Finally, you should also not be afraid to ask for help when trying to get your business up. Running a startup is hard. There is a lot of planning to do, and a lot that needs to know. When you are doing it for the first time, it can be quite frightening. A lot of people, however, refuse to ask for help even when they really, really need it. Learning when to ask for it, and who to ask for it from, is an important lesson you need to know.
So, surround yourself with experts. If you think running the finance is not something you can do effectively, then find someone who can. Running your startup more efficiently doesn’t mean you need to do it alone. Having a good team will only mean you have more people to delegate chores too. What’s more, they can dedicate more time to their tasks and do them more thoroughly.
Finally, there are many tools that you can use that can help you. For example, you can use business planning tools that can help you plan out your startup in detail, from the initial idea to the initial investments you need to have in order to get started.
To conclude, running your startup more efficiently can be aided by three separate things you will need to remember. First, having a business plan can boost your productivity, because you will know exactly what steps you should be taking and how fast you should be developing. Based on that, you will know exactly how and in which way to move your business.
Then, your break-even figure will give you great information about how successful your business is. If it is lower than the actual income, then you are doing well and might want to aim for more! If it is higher than what your startup is making, then you will know to adjust your expectations.
Finally, asking for help is an important thing to keep in mind. After all, we are all human – and getting help is something natural. It will create an environment where you can prospect and your business can thrive!