how to start a business? starting a business MUST KNOW tips
Making. Money being. Profitable, that's the goal of every business but, it's not very easy no. Matter how big or small companies. Of every size often struggle, to make a profit I'm, serious, how, can that be how. Can a company not, make a profit and still be, in business well. Before we try and answer that question you, need to first understand, the basics, of profit, profit. Is the amount of money left over after a company pays all of its bills profit. Is calculated, using this, simple formula, revenue. Minus, cost equals, profit looks. Simple, but in fact it isn't, that simple. Formula, has so, many layers let's. First, concentrate, on, revenue. Revenue. Is the amount of money a company collects, from its customers. Cost. Cost. Is the sum of all the expenses, for a company we. Need to subtract, all of the costs, from, the revenue it's, a very challenging balancing act every. Company in every industry is trying their best to. Tip that scale in the revenue direction, there. Are a couple of ways to do this, increasing. Sales can be tough as a, result, many, companies, try and control costs, by cutting employee, hours and using. Lower quality, materials, but, by doing that you, may a lien eight customers, down. Low your revenues do. You see the challenge, to. Grow quickly you, need to do things like buy more land open, facilities. Invest. In more inventory, and hire, and train lots, of new people that's. A lot of money there, cost to constantly, grow are very high and so even a few months of good sales may, not be enough to, make a growing company profitable. Startup. Companies often lose money for many years before they start making a profit soon. You'll start to see every, story in the news as a signal, of profit, try, right now go. To a reputable, news site and look, at the headlines war. On terrorism does. That mean lower, sales for Airlines does, it mean increase, sales for a military supplier, the. Price of oil how. Does that impact the cost, trucking-company, how. Does it impact the, revenue of an oil company. Child. Birth rates increase, a new, cancer, drug is approved a massive. Snowstorm is due hit your part of the country the. Government passes. A new law in each. Case think. About which companies, will see changes, in revenues, and which, companies, will face changes, in their costs, making. Money being. Profitable, that's, what businesses, try to do these. Are the big decisions, business, executives, face on a daily, basis. So, you want start business, well what kind of business I'm not talking about what you might make sell, or service, instead I'm talking, about the ownership, who. Will own and, run your business let's. Go through some of the common, forms of business ownership. Let's. Start with, a sole, proprietorship. One. Owner with, all of the management power one, owner that can claim all the profits they, carry all the risk and get. All the rewards. But. Add more. Owners then, we have a partnership, each. Owner is, a partner. Each shares, in the profit, do, all partners, run the firm not. Necessarily, a partner. That's active, in managing, the firm is a general. Partner a partner that. Invests, money but. Is otherwise not, active, in running the company there a limit, partner, perhaps. A, partnership, wants to grow but. They need more cash to expand, the. Present, owners can sell some of their shares in, the company to investors, the. Company, is now a corporation. Those. Investors, their. Stockholders. Therefore. They're. The owners and they, can easily sell their shares at any time. Corporations. Are legal, entities, in effect, they, have legal rights just like a person, which means the, corporation. Is responsible. For anything that might go wrong, the. Investors, at worst, can, only lose the value of their stock, but.
Who. Runs the company for. A corporation, the. Owners, that. Is the stock holders they. Can elect a board of directors, that, board. Can choose the top executives, in the company but, the board of directors cannot influence, day-to-day. Activities, in the company what. Does this mean well, to a certain degree in a corporation. Stockholders. Own and, managers. Manage. There. Are many other nuances in trying to choose the best ownership, model for your organization. But, hopefully, now. You know some of the basics, associated. With the most common, ownership models and hopefully. You'll, be to consider the important, issues and ask, the right questions, as you, move forward in developing your, organization. You. What, are the products you love to buy the, ones you love to shop for the ones you research, electronics. Cars. Furniture. Or maybe it's, clothes. For. People that love clothing, what. Makes for a great purchase what, would make for a great shirt, or dress. Perhaps, it's the design, of the clothing what, do you like classic. Modern. Outrageous. But, to be truly great it. Needs high, quality, fabrics, this. Is something, you'll want to wear again and again and it'll, eat to survive getting washed. Perhaps. You, value excellent, workmanship, solid. Stitching, consistent. Sizing, not. All of us have an unlimited, clothes, budget though so, the, price will also, be important, to the customer and, the. Company needs to make a profit so they'll be concerned, with their costs, for. Some of us we want something from a brand we trust or perhaps a brand that others will admire so, marketing. And branding will be important, we, can't visit every, store or online retailer, we, don't visit every fashion, blog so, the clothing company has. To get their clothing, so that we can see it so. Many things need. To go right for us to find this one special, article, of clothing and, if, they want us to buy from them again and again they'll, need to consistently. Satisfy, us in all, of these categories over. And over again it's. No wonder that the most successful and. Progressive, global companies value. Cross-functional. Teams so. While you may expect luxury, brands like Coach, Chanel. Gucci, and Prada to, be filled with dozens of great designers, a real. Business person understands. That a successful, company in an industry, where creativity, and innovation, are required, a, successful. Company needs. Cross-functional. Teams, small. Well-managed, teams made, up of very different people with very different skills, so. Not, only does a company like Chanel have great designers but, they also have people skilled in marketing. Purchasing. Manufacturing. Finance. Engineering. Strategy. And probably, a number of other areas. Each. Of those functional, experts, brings, different skills different. Problem-solving. Techniques, each, is creative, in their own way each, judges. Success, in a different way this. Is why companies like Apple, Nike. And Lexus, has such a long track record of success, each. Of these companies values, people that understand, the importance, of product, quality innovation. Design. Marketing. And of, course profit. As you. Consider your company, its, strengths. Its weaknesses. Consider. The respect, and attention paid, to all the different functions in your company, be. Sure your company gives a voice to a varied group of leaders they. Can see mistakes you wouldn't consider they. Can also expose, you to opportunities. You would have never known about, long-term. Success. Takes, a true commitment to. Cross-functional. Teams. Cost. Quality, and speed are all related, to company, flexibility, for, example when you buy a car you're given certain options, a vehicle. Color leather. Or fabric interior. Electronics. Navigation, and media options tire. Options, but. They, don't ask you the type of battery you want in your car they don't ask you what kinds of spark plugs for your engine they, also don't ask what types of oil and antifreeze to, use in your car why. Well. The company is trying to balance a number of things they. Want to give you choices so the car feels special, so, the car feels like it's yours, but. They, can't let you choose everything, because offering. The customer choices. Requires, extra, time extra inventory, and it's possible, the customer really doesn't care if the. Company offers you 10 different tire options, for one car they, would probably need to carry inventory, of all 10 tires lots. Of inventory in low, volumes, higher. Per unit prices, from the supplier plus, your, workers, now have to become more versatile, at, the same time when, companies offer lots, of options, customers. Might, be willing to pay a premium, to get exactly, what they want, also. When, a company offers more options it's possible, to attract, a wider market, of customers, now.
We Have cars for, people that like different, colors for. People that want luxurious, leather interiors, and also. For parents that would rather have cloth interiors, that are easier to maintain. We. Also have a car that appeals, to people that just want a car with basic, stereo, options, as well, as families. That want the very best media, options, for those long trips with the kids, so. As your, company develops, new products, and services consider. All of the, possible options which. Options, does, the customer value, most, for. Each feature, how, many options, will you need to offer and, are, they willing to pay the premium, for that option does. That make your market bigger while. Offering that option deliver a profit, at the. Same time which, features, are cut murrs willing to accept, s standard, standard. Features are easy to mass-produce if materials. Are needed you, can buy them in bulk for, a good price and fewer. Options might, make it easier for a customer, decide whether. Or not they, want to purchase your product or service, the. Next time you go anywhere. A restaurant. A coffee, shop the, post office, the grocery store consider. All the choices they let you make consider. The ones they don't and then. Try and think about, how the number of choices impacts. Their, cost their, quality, and their, speed. You. In business. Pretty much everything, customers, enjoy requires. Some, materials, a great. Meal required delicious, ingredients, a movie. Experience required, comfortable, seats even. Your massage was made better with fragrant, nourishing, oils. Companies. Must recognize, that every, material purchase, is an opportunity. To improve the product, or service, provided. Procurement. And materials, management are the segments of the company that fund suppliers, purchase. The materials, and then make sure that this inventory is stored, and used effectively if done. Right procurement. And materials, management can, improve, customer, satisfaction, they. Can contribute to the company's profitability and by. Partnering, with reliable. Suppliers, they, can help the company develop a stable, supply chain, that can be counted on to continuously. Deliver high, quality products. And services to, the consumer, to, illustrate. These points let's, use a cell phone as our example product, and, actually. Since, we're buying parts, for this cell phone let's consider just one part, of the cell phone the, battery, what. Does our company need to think about let's. First consider the, consumer, what. Does the consumer expect, they.
Want Value a, long-lasting. Battery at, a reasonable, price they. Probably also want a battery that is safe a small. Lightweight. Battery, that won't overheat, if. This, is what the customer values and if those are the things that we advertised. The. Battery in some way needs to fulfill the customer's expectations a. Great. Battery helps. Make our phone better a better. Phone will sell more units and thus, our revenues, go up now. That we made the customers, happy let's, remember that revenues, alone won't bring as a profit we, need to consider our company's, needs the. Company needs, to control costs, while. We're buying great batteries, for our customers, we, have to know what, the total cost of purchasing, these batteries, will be I'm. Not just talking about the per unit cost you. Must consider the total, cost of these batteries, the. Cost of storing, bad race costs. Associated, with theft, and damage the, cost of negotiating. And placing, orders from battery companies, and don't forget that, someone needs to pay for the delivery, of those batteries so. If keeping costs low is, important to your company you'll need to remember inventory. Costs, include the cost to buy hold. And order, inventory, that. Brings us to the final party, involved, in our battery purchase, the supplier, the. Battery supplier, will ultimately, dictate battery, cost and the quality of the battery, but. They also impact, our cellphone company in other ways if they, can fill orders quickly we. Can keep low inventory, levels even. If we run out of stock it won't take long to get a new shipment for. That kind of service though we'll, probably have to pay a higher price on the. Other hand a slower. Supplier, may. Have lower per unit prices but, will need to carry more inventory, since. We have to place orders, early just to be sure they'll, be able to fill them before, we run out of batteries, this. Takes care of our battery needs today but. How about the next generation, of cellphones we'll need stronger, batteries, that fit in our new phone design and we still need to control our costs in, modern. Business suppliers. Our business. Partners, when. We saw more phones they. Sell more batteries, on the, other hand if they, make batteries, better, we, may sell more phones because. Of this suppliers. And innovative, manufacturers. Must, work together to, understand, the customer, develop. New technologies. And also, to develop manufacturing. And logistics strategies.
Whether. Your company is buying cell phone batteries, tomatoes. Theater. Seats or even, massage oils, it, needs to consider the customer the, supplier, and our, company, as you. Head back to work today ask yourself. These simple questions, are. The customers, happy with, the materials, they buy or use. Do. We consider, our supplier, a partner, our. Suppliers, involved. In helping us develop better products, and services. And do. We consider, the cost of holding inventory, or just, the cost of purchasing, if, your. Answer to any of those questions is no you, are likely missing, an opportunity to. Maximize your, company's, potential. In, just the last few years the term logistics, has gotten very popular global. Companies like DHL, UPS. And FedEx are known, as logistics, companies but, what exactly is, logistics. I mean is it just getting, finished goods to a customer's, home or perhaps to, a store, where these goods can be put on a shelf ready, for purchase, yeah. That's. Logistics, but it's just a small part of what the world of logistics, and compasses, you, see logistics. Doesn't just happen in the last mile before a product gets to the hands, of the user, logistic. Happens before, a product is even made even. In the most simple, supply chains raw, materials, and components are shipped, to manufacturers, finished. Goods are shipped to, distribution centers and from their products. Make their way to, a retail, store or an online retailers, picking and packing warehouse, where finally. They can be shipped to your home all, along. The way there, are important, decisions to be made that will impact, whether the shipment was quickly, delivered, safely. On time in. The right amount and of course at a reasonable, cost, plus. We. Want to know that our logistics. Process, is flexible. Big, orders small. Orders perishable, products heavy products, dangerous, goods orders destined. For big cities and others, heading towards a farm, domestic. Orders and foreign, orders and. Nowadays. Customers. Want to be informed. Customers. Want to have the ability to track, their shipments. Marketing. And manufacturing. Are important, but. A great product that comes with a big shipping cost and then arrives late, damaged. Or to the wrong address ruins.
The Customer experience as a. Result, logistics. Specialists, are constantly. Making decisions that, must make customers, happy and keep, the company profitable, so. How can a logistics, manager, keep, the company profitable, keep. Inventories, low, move. Inventory as quickly as possible and, at, the lowest possible cost. Empty. Trucks and containers waste, fuel so keep, trucks and containers full, by planning, effectively. And don't, get caught unprepared. Stock-outs. Rush, shipments, and shipping, errors are extremely. Expensive and can mean the loss of a customer, forever, so. In the end logistics. Managers, are tasked, with making all sorts of decisions that balance, cost speed. And customer, satisfaction. What. Types of decisions, well should. We use a truck, train. Ship, or plane. What. Type of packaging, is needed to keep the items safe, they. Also consider, storage, issues like what's, better having. High levels of, long term inventory, sitting in a warehouse or, low. Levels of inventory, moving quickly through distribution, centers and if. You're shipping globally. You'll need to consider issues like import. And export laws, tariffs. And documentation. You. See logistics. Is about a lot more than delivery, oh and. Don't, forget, materials. Don't just move in the direction of the customer, reverse. Logistics deals, with returned, items, items. Requiring, the repair that need to be sent to a repair center and, reusable. And recyclable, packaging. As. Companies, look to control cost reduce. Waste and eliminate, product loss while, still getting the right good to, the right place at the right time companies. Need to consider, all of the, pieces of the logistics, puzzle, Logistics. Is beneficial. For, everyone, involved, customer. Get what they want how. They want and, when. They want it and companies. Can, make it all happen with. Minimal, cost and waste. Now. That you have a better understanding, of some of the vital pieces of the logistics, puzzle think. About which pieces your, company, may, not be considering. You. Whether, your company has customers, wants, customers, or if you're already successful. Company wants even more customers knowing. That customer, is vital, to securing sales so. As the company looks to start selling, their products and services often. One of the very key questions, they need to confront early, in the process is who. Should my company, want as customers, who is our, target market well. Your target, market, should probably include people that you're capable of satisfying while. Still earning a profit that way, they're. Happy and you're. Happy so, how. Do companies, describe. Their target markets well, target. Markets, can be described, in a number of different ways is your. Target market made up of men or women. How, old are they where do they live what. Language, do they speak what. Are their hobbies what, do they do for a living how, much money do they make or better yet how. Much money do they spend, and, is, it, possible, your target, market is not made up of people, perhaps. Your target market is made up of other companies, and it.
Doesn't Matter where, your company is today, if you're, a brand new startup, company a large, global firm with a rich history or, maybe, your, future company, is only an idea in your head, knowing. Your market is important, to being successful today. And in, the future why. Well. A company, and its, marketing, team and Salesforce have, only so much time and money they. Need to use their resources wisely. We're. Not just making sales today we're. Building a target, market, that is loyal to our brand so. Whether you want to know your customers, desires today, or tomorrow, whether. You want to use your company's, money and time wisely or if, you just want to find new customers for, your products and services. Understanding. Your target market. Is vital. To the evolution, of your company. Customers. Are interested, they're, actually, considering, making a purchase they've. Taken the step to seek out a representative, or maybe they're, at your website perhaps, they, even decided to visit your store. Now. It what. Are some of the key issues that need to be considered in making that first sale and then having, them purchase from us again at. This point typically, customers, are looking for trust. Comfort. Stability, and growth all. Play, a part in moving a customer, to make a purchase. Therefore. Your people, your. Website, and your facilities, all need, to demonstrate that you are committed, to the customer, and their needs that, the company cares that the company will be here, if you need assistance and that. The company is looking for opportunities, to get better, the. Facility. Signage. Furniture. Cleanliness. How the company, representatives. Look and act, the, words that are used documents. Customers. Are required to fill in and sign, they. All carry, messages, are. Your people, facilities. And websites sending, out messages that, drive sales or are they driving away potential customers. Let's. Consider delivery. Even. When a customer, is ready to purchase from your company they'd like to know when the product, or service will be delivered, fast. Delivery free, delivery easy. In-store, pickup, installation. It's, important, to know what, your target market, wants, and needs and it's important, to understand, what your competition, is offering, the. Final, hurdle in making a sale is processing. The sale, especially. On that first sale or with any major purchase. Before. You give your money over to any person, or company a number, of questions probably race through your head how. Many floors do I need to fill out why. Do. I need to sign a contract, what. Does the contract say what. Types of payment are acceptable, when. Will they tell me the final and full price of the transaction, before. The transaction is complete will, representatives, push me to sell additional, products and services what. Are the options, for cancelling, or changing my order what. Happens if I'm unsatisfied. With my purchase, what. Are the return policies, what, happens, if the item stops working you are.
So, Close, to closing. The deal and still. There are so many opportunities, to scare away the sale, whether. You're selling to a new customer or a return, customer consider. The importance of your sales resources. Sales, reps facilities. Website. Work. To provide competitive, delivery, options, and create, hassle-free. Business. Processes, that protect both your company, and your, customer. Customers. They're, here, they're, interested. Now, it's your job to show the customer that you are committed, to giving them what they want and, demonstrating. That the transaction, is only the first step in developing, a long term relationship. You. Whether. You're starting a new business developing. A new product or service offering, or even, if you're developing an, improvement, initiative, at your company, you. Are exploring. Unchartered. Territories, an explorer. May need food and supplies but in business you'll. Need money for our ventures the question, of course is how, much money it's. A very difficult question to answer, having, lived through some failures, and successes has its value, good. And bad remembering. The key to success, in another project or better yet knowing, what killed your project last year can, be vital to understanding, the true financial, needs of a new project and the. More daring your project, the. More unknowns, there are, so. Having, a vivid imagination can. Be useful, in developing a budget what. Will be needed if you run into design problems, what, happens, if your product catches on quickly what. Happens if there's a product recall. Truck. Accidents, warehouse. Fires a movie, star uses, your product on TV are. You ready for everything, good, and bad, even. When a company, is an overnight success it doesn't, mean the company started yesterday and then became profitable, today, they. Purchase, materials and, equipment, they, buy or lease offices. And factories they. Hire and train people and then, they. Open the business does. Your financial, budget have enough money to even get you here notice you, haven't even made a sale yet so, far it's only money going out the door now.
That Sales begin you may be saying now, we can be profitable, not so fast until. You pay for everything, you have spent up to this point you aren't making a profit it, could take months or even years, before you're actually, making a profit let's. Say it only takes six months to turn a profit, did your financial, budget account for six months of wages, rent. Materials. Energy equipment. And maintenance office. Supplies. Perhaps. You, also start to notice that, if sales continue, to grow you'll need to get more space hire, more people use, more energy, buy more machines and materials, will. You have enough money to expand. Even, when revenues are just, beginning, to blossom so. Whether, you start a new company launch, a new product or start, an improvement, initiative, you'll need to have the money to start the project support. The project before revenues, are generated and, also. Be prepared to fund growth and expansion, if success, comes quickly. Discovery. And innovation, are exciting, for any company, but they, come at a price. Be. Sure your, company, is prepared, to pay. Knowing, how much money is needed to launch a business a product, or an initiative is difficult. But, once you have a number it's time to find the funding perhaps, your company has the extra, cash lying around even. Then though you'll need to show your plan and projections. To the finance department and hope they, think that, your idea is worth investing, in if. Your idea looks like it'll get the company the best return on investment, great, but, for many of us getting. The money will not be that easy so, let's, look at some options for, borrowing, the money this. Is called debt financing, common. Types of debt financing include, loans and bonds. Alone. Is a transaction. Where a borrower, gets money from a lender and agrees, to repay, the money in a certain amount of time sometimes. Weeks sometimes. Months and sometimes, over many years the. Lender could be a bank a friend. A family member or even a credit card company, why. Does, the lender, give the money to the borrower, well the. Lender expects, to make money by getting interest. On the loan and in, the case of a secured, loan if the, borrower does not pay back the money the, lender can take assets, from the borrower, as payback if your. Company gets a loan you, are taking, on certain, risks, you. Must be ready to pay back the loan or make periodic, payments, when the loan comes due not. Paying back the loan in time could bring penalty, fees, result. In the loss of company assets, it could, hurt your credit rating and if, you're borrowing from friends and family you, risk damaging the relationship in, some, cases though companies. Could issue bonds. Bonds. Are essentially, small-scale. Loans from investors, and just. Like a bank they, will pay you interest. How. About if we don't want to borrow the money what. Can we give investors, instead of interest payments we, could give them a stake in the company big, corporations. Can issue stock, each, share of stock might be sold for, $100. The, company, gets, the hundred dollars to invest in new ventures the owner, of the stock now owns, a very, small percentage of the company how, small well some.
Companies Have millions, or even billions, of shares, but. Suppose a company sells, even just 1, million shares the. Company, might be able to raise tens, or even hundreds. Of millions of dollars very quickly. Small. Private, companies though might, look to venture. Capitalists. These. Folks will give you money but, they'll, want ownership, in return for, example you, might sell them 25, percent of the company for, a five million dollar cash investment. The. Company now has 5 million dollars in cash but. In return, the. Investor, will demand you, grow the company such. That their 25 percent stake in the company will, grow as the company grows then. Again some. Entrepreneurs, raise money by selling parts, of the company to, friends and family, again, this. Is very risky they. Now feel entitled to manage, the company or perhaps ask. For their money back if they don't agree with your management. Loans. Bonds. And equity, investments are, sort of classic, ways companies raise money but, nowadays we, also have. Crowdsourcing. Money online. Business. Competitions. Where startups, present, their ideas and judges, award funds to, one or more companies, companies. May also seek grants, or gifts, from the government, or charitable organizations, often, this. Type of financing is available to companies that are either owned by or serve. Underprivileged. Or underrepresented groups. Look. Raising. Money is not easy and often, it's, not risk-free, so. Understand. Your needs and understand. The trade-offs so, you can explore, the financing. Opportunities, that are best for, your company. Why. Do companies decide, to bring on new people perhaps they, need to grow a department, maybe, they need to replace a person that left it's. Possible. The company requires a new, type of employee to fill a modern, need, whatever. The reason to make a good hiring, decision, the company, needs to be able to describe, the position to be filled, what. Type of employee, they, want to fill that position and, also. How much it will cost to, effectively, fill that position, let's. Say we want to hire someone to redevelop, our website, and then, to, manage and grow the website in the future, how. Would you describe the positions, so that it sounds, interesting so.
That We can attract, the very best, candidates. Motivated. Professionals. But. For. A person with a bit of experience and for someone, motivated. To develop, a strong career this. Particular, web development, job sounds, exciting, they're. Interested, they, like us that's, good, but, do. We like them, let's. Tell them what we expect. Hopefully. The unqualified, have, now moved on and the best candidates, are now working on their resume look. We, can't interview, everyone, so, we need to do our best to find great candidates, and entice them to apply for the job. Communicating. A job description and job requirements, and, then being sure that the best people know about the job is only, the first phase of finding, a great person, to join our company. Now. That we have applicants, we need to figure out which candidate, is the best fit for that job, and our, company, so, how, do companies, figure out who to hire well. Let's consider what, we might want from, our web developer, they, need to talk to executives, they, need to have the ability to develop creative, content, they, need to have technical. Skills they. Have to understand, our culture and our, ethics, and they, have to be trustworthy. How. Could you see if the, candidates, have everything, it takes to be successful in this job. Interviews. Sure. How. Could you test their ability, to develop creative content. How. About asking to see some of their past work did. They have a portfolio of work how. About technical, skills perhaps, we. Can have them take a test maybe. We can give them some homework that, they could bring, to the interview are. They. Trustworthy. Nowadays. Most, companies will also do some sort of background check, with law enforcement and, perhaps also. With past employers, and, once. The interviews are over, you'll also need to consider some other issues. What happens if no one is fully qualified, will you be willing to take someone, that is mostly, qualified, also. Are your hiring practices, legal, and ethical is. Diversity. For your company, government. Mandated, or part, of a plan for corporate excellence and, who. Gets to make the final, hiring, decision their, new boss a top. Executive the. Person that interviewed, them or perhaps, someone, in human resources, and, even. When you find the best candidate, and decide. To make them an offer there, is still the question of whether or not they will accept, the offer the. Best candidates, often have lots of options to choose from. Offers. Counteroffers. Negotiations. And signing, a contract may be all part, of the hiring process, once. They accept the position you, will need to gather their personal, information for, company records and sign. Them up for a benefits, package, once. We have them in the system the new employee might, go through a corporate orientation. And then, they, might get trained on equipment, or business, processes, imagine. Going through all of that all that time, all those resources and, then finding out you, hired the wrong person, great. People, are the key to, a great work environment and excellent. Customer satisfaction. Recruiting. Evaluating. Hiring, and training employees. Is extremely expensive. Companies. That do not take these processes, seriously, waste lots of time and money and are, then stuck, with a subpar, workforce. The, best companies want. The best people they, will fight, for them and once, hired the, company is looking to get the very best that, person has to offer that. Means finding. Their strengths. Identifying. Their weaknesses, providing. Opportunities, to develop their skills and as, the, person grows putting. That person into leadership, positions. That. Will both help, the company, grow and also, keep the employee satisfied.
Bigger. Small companies. Want to measure the performance of, their employees, and the, bigger the company the. More the company will rely on data, but, which. Data, what. Should a company measure, and why, do companies, measure. Companies. Measure because. They need to know areas, of strength from. Those strong people, and groups they, can learn about success, and pass, along that knowledge, to others in the company, companies. Need to find weaknesses so, they can fire people just. Kidding firing, people is expensive. There's, no guarantee, the next person hired will be any better, so, finding. Weaknesses, helps, the company know what, types of help to give those that are struggling in a. Company we, are all part, of a corporate family and as such we need to help those in need think, of it this way you. Hired them so, they, are your responsibility. Another. Reason companies measure, is to motivate employees, think. About a time someone, said they were going to measure your individual. Output, did, you up your game didn't. You start noticing details, perhaps. You even started, getting creative, about how to solve problems. Focused. And creative, employees, companies. Love, that but. Remember. Good, measurements, will motivate good, behavior, bad, measurements. Might motivate bad, behavior, and while, the performance metrics, may motivate employees temporarily. They, won't stay motivated unless, they, are rewarded for that excellent, output. So. The, best employees, will expect, money. Promotions. Awards. Job, security, and corporate. Benefits for content you'd excellence, all. Of this is not easy though companies. Face all sorts of challenges in measuring and motivating, like, what well, coming up with good performance, metrics is difficult. Some. Things like, attitude, customer. Service, and work ethic are difficult, to measure also. Sometimes. It's difficult to evaluate individuals. When, they work in teams, even. A single, bad performer, on a team could bring the whole team down and even. If a company can identify the, best workers, it's, hard to reward them all rewards. Must be doled out in a fair, and legal manner, also. While. One employee may want more money another. May prefer a long term contract or perhaps a promotion, and let's, not forget that we also need to keep underperforming. Employees, motivated, providing. These employees, feedback, giving. Them advice and bidding, them assistance requires. Excellent, people skills if. You're too harsh they may become timid they, may avoid making decisions, and taking, risks on the other hand if a manager is too nice the employee may believe that there is no need to change their behavior, so, let's. Take a little self quiz are you, a good employee what. Are your strengths, and you prove it to me with numbers based. On your strengths, how. Can you help a company grow, how. About weaknesses, what, types of training and support would you like from your company. Finally. If you, prove yourself successful. In your job what. Would you expect in, return, for. Many of us coming, up with answers to all of those questions can be tough now. Imagine, being responsible. For coming up with answers to every, question for. Every employee in your company if, you, can do that and do. It well then. You're doing with the very best companies, in the world do. You. Money.
It's The lifeblood of the organization, it needs to flow, money. Comes in from customers, money, must, also go out to employees, and suppliers what. Happens if the flow stops. No. Revenues from customers, the. Company dies, if, we stop paying people, no, supplies no, employees. The. Company dies. So. Whose. Responsibility. Is it to keep track of the money flow finance. No. Finance. Does, deal with money but their job is not to keep track of money flows their, job is to obtain funds and also to, invest them, keeping. Track of the money flow is the job of accounting. They're. Responsible, for tracking money coming, in from customers, money. Going out to employees and suppliers and, they're. Also responsible, for keeping track of money flowing, inside, the organization, from one department to another, why. Is this important, and who benefits, from this tracking, of the money for. That let's, discuss, the two types of accounting. Managerial. Accounting and financial. Accounting. Managerial. Accounting, keeps track of where all the money goes this. Is important, to people inside, company, this, helps with budgeting, it, helps us keep track of departments, that are using money wisely and it, also tells, us where, there might be waste. Managerial. Accountants are the ones that tell us how much it costs, to make and deliver, a two thousand dollar television. To the consumer, so. Managerial. Accountants, help, managers, inside, the organization, measure, cost, of production. Marketing. And everything, else that goes on inside, the company they. Also assist, in developing budgets for next year as well as budgets for new projects. After. The fact they, can then report if people are staying within those budgets, plus. Managerial. Accountants, find, ways to help us minimize taxes. So. What, do the folks in financial, accounting do instead. Of being responsible, for reporting to folks inside the company. Accountants, are tasked, with developing reports. For, people outside of the organization, why. Is this important, it informs. People, about. Our company's, financial, status that's. Important, for anyone considering, investing. In the company and for organizations. That might consider lending, money to us, plus. Government. Agencies. Special. Interest, groups employee. Unions, law. Enforcement. And sometimes, even customers, are interested, in knowing about the, financial, activities, as well as the financial stability of, the organization.
While. Financial reports, are generated by financial, accountants throughout the year they. Work hard to develop the all-important. Annual, report, the. Annual report provides financial, data a written. Recap, of events, from the past year, and a, statement of concerns, and opportunities. For, the company in the future. This. Information. In the annual report will, influence all sorts, of actions, and behaviors, inside. And outside the company so. Financial, accountants, must carefully consider every. Word and every, number, in developing, an annual report that, abides, by the laws of commerce, and does. Not mislead, parties inside, or outside of the organization as, you. Can see having, accountants. Both managerial. And financial accountants. Helps a company learn, from its past, understand. Its present, financial health, and also. Plan, for its future growth, you. May not love accounting but. Hopefully, now you understand. Just. How important, they are for any organization. That requires, money to, survive. In, order to measure and, report that our annual profit, companies will develop an income, statement an income. Statement adds up all sales, and then subtracts, all sorts. Of costs, and taxes, one. Important thing to remember is that an income statement is an, annual, statement, so, if you do a Google, search for Starbucks. Income statement it will likely generate income statements, for the last three, to five years, it's. Also important, to remember the, company set their own beginning. And end, of their financial or fiscal year, so. Why. Don't you open up a browser window right now and find. Income, statements, for your favorite, companies. See. How they make their money and see. Where their money goes, perhaps. You'll begin to better understand. The, challenges companies. Face in actually. Making an, annual, profit. You.