In episode #20 of the Better Than Success Podcast, your host Nikki Purvy talks about the best money principles that will help your business. Understanding these financial principles will determine if your business succeeds or fails. These values represent 50% of the factors that determine the success of you and your business. In this episode, we cover things such as profit margin, ROI, proper banking, cost of goods sold, budgeting, business, credit, and the priority of your personal salary. We break each term down so that anyone can understand them. You don’t need to be a financial professional to comprehend the content here but you do need to understand the importance of the content to succeed.
Start with the end in mind. Set some goals based on how much you spend or project to spend.
List out…
- Salaries
- Expenses
- Cost of good sold
- Rent
- equipment
- taxes
- Profit Margin
Use these numbers to calculate 2 things:
- How much income you have to generate: per year, per month, per week,per day
- How many units you have to sell: per year, per month, per week, per day
Cost of goods sold
Beginning Inventory+Purchases–Ending Inventory=Cost of Goods Sold
ROI (Return on Investment
(Gain from investment-Cost of investment)/Cost of investment= ROI
Net Margin
Net Profit/Net Revenue=Net Margin
Net Profit
Revenue-COGS-Operating expenses-Interest&Taxes=Net Profit
