Practical articles about business money - in plain language.
The customer with the biggest revenue and the customer with the biggest profit are often two different people. Revenue shows how much money passed through the…
Your rate is calculated from two things: how much you need to earn in a year, and how many hours of that year are actually billable. The second number usually…
A financial model is a forward-looking calculation of your business, built so that any assumption can be changed and the result updates instantly. Raise a…
Profitability is profit expressed as a percentage. It shows how many cents of profit come out of every dollar of revenue, capital invested, or assets. That's…
Working capital is the money that's constantly tied up in the day-to-day running of a business: sitting in inventory, waiting to be paid by customers, and…
A payment calendar is a day-by-day forecast of your cash: when and how much comes in, when and how much goes out, and how much is left in the account on any…
A business that's ready to raise investment is one where the economics of a single customer are visible, there are multi-year performance figures broken down…
A business is ready to grow when every new customer brings in more than it costs to acquire them, and the processes run without the owner's constant…
An employee costs the business noticeably more than their salary. The difference comes from taxes and contributions, the workspace, and paid time when no work…
The short answer: start with what your work would cost if you hired someone else to do it. Then, separately, take profit if the business actually generates it…
Gross profit is the difference between revenue and the direct costs of what you sold. Put simply, it is what remains after paying for the product or the work…
Financial accounting is maintained for external authorities: according to established rules, within fixed deadlines, so that taxes are calculated correctly and…