Manage profit in business is part of 3 important skills of a successful entrepreneur. As a business owner, you should be able to manage business profits wisely and think with a long vision. How to manage business profits correctly is very important to always maintain the existence of a business or business.
Every business, of course, must grow and develop. If not, then the business will extinct. Not to mention that there are various business competitors with high competitiveness that can make your business over.
One of the characteristics of a business experiencing good growth and development is the presence of business profits that continue to increase.
Many business people think that in order to increase business profits, a substantial increase in sales is required.
Read: How to Increase Sales Revenue?
Increasing the number of sales does make it possible to generate more profits.
But this is often difficult to achieve, especially in the short term. The important thing that can be done is by managing business profits properly. Every business that is managed properly and correctly, will generate profit or profit.
Even though the business profits are not many in number, if managed professionally, it will be a tremendous potential to develop the business in the long run.
Here are how to manage profit in business.
1. Separate personal from company finances.
It is highly recommended that you do not combine personal accounts with company accounts. Combining the two will be very risky and can make you feel confused in calculating, and doing the company’s financial record correctly.
2. Use approximately 10% of profits for business development.
After you record a number of company profits, then you will begin to separate them for various business interests.
Business development is certainly one of the most important things that must be prioritized. For this reason, immediately separate at least 10% of the profits to be allocated as funds for business development that is being carried out.
Read: Why Core Values and Business Planning Must be Integrated
3. Place at least 20% as investment fund.
Separating the business profit of 20% to be invested as a reserve fund is an important thing to do. With an investment fund, you can feel safe and remain relieved if something happens to your ongoing business.
4. Set aside 10% net profit for rewards.
You can use at least 10% of net income to be used for personal or family things.
This can be considered as a token of appreciation for your hard work to build and advance the business. However, you should still record the use of this advantage properly and in detail, so that you know for sure where the money spent is going.
Read: Business Planning Example
5. Using 10% for social funds.
At least use 10% of the net profit earned for social reason. This is a manifestation of your social responsibility and concern for others. The business that is run does not only provide material benefits, but also gets blessings in running the business.
6. Using 50% for capital revolving.
You can use this 50% for revolving capital, business operations, or stock of goods.
As simple as it is. Now you understand on how to manage profit in business. Take note, and bookmarked it. You need to be consistent in doing this. You may feel bored or feels no body support you in the family implementing profit management. Just remember one thing, if you want to success, you need to be determined. Wish you all the best with your profit management in business.
