How to run a business efficiently

Ways to make your business more efficient

Running an efficient business is the key to growing it. But, despite the importance of resource management, it is not known that it leads, especially since the person focuses on sales and not on the management process.

One of the most recurring problems in microenterprises according to luminablog is the lack of efficient management, due to lack of experience or lack of knowledge about the correct management of resources.

When starting a business, the owner usually pays more attention to sales or production and forgets or gives up the topic of management strategy, which is important for planning and preventing future risks, such as running out of stock or rising commodity prices, for example. There are several options to open a business account, which will also help you succeed. These 5 tips can help you improve the management of your small business:

  • Keep track of sales

In businesses, especially small ones, it is important to keep a record of each product sold at the end of the day. At the end of each month, you need to check the total of each product sold to find out which had the highest demand, this will help bring the relationship between sales, costs, and profit.

  • Control your inventory

If you sell products such as beauty items, gifts, or cans, to name a few, you need to keep your inventory up to date, that is, the number of products you have stored in a warehouse and the ones you display for sale to the public. If you do not know the number of items you have in inventory, it can cause a shortage and therefore can cause losses by not allocating the sale.

  • Take control of your costs

If you are one of those who still believe that by lowering the cost of the supplier from your price you get your profits, it is not so, you should consider other costs, such as:

  • Fixed costs: these do not depend on sales, such as local rent, salaries, or payments for services (water, electricity, gas, telephone).
  • Variable costs: depending on the product sold, such as raw material, inputs used, among others.
  • Direct costs: they are the most obvious, it is the price that your supplier leaves you.
  • Indirect costs: most do not take them into account, such as the cost of petrol to collect or deliver the product, transport, wear and tear and repair of cars, etc.
  • Controls the use of money

For your business to survive, you need to have control over your cash flow, which you use every day to carry out your financial transactions with customers, input or raw material suppliers, and service providers.

Keep a daily record of incoming physical money and outgoing money. Remember that cash control and sales control are not the same, because a credit sale is not reflected in the physical money you have in the box.

  • Take control of your debts

It is necessary to take into account the short and long-term debts that you have to pay, such as salaries, rent, payment for services, loans, payment to suppliers, among others.

Thanks to the control you have over sales, you can determine the number of items you need to sell each month to have money to help you meet all your debts on time and in good condition.