by James Himm Mitchell
It can be extremely difficult to predict where your revenue comes from on a regular basis. Income can swing depending upon the time of year and the economy. What is important is for you to have a plan that will help you survive any bad times.
It is to your benefit to work out different plans that cover several scenarios. This means being able to keep money coming in so that you can pay your expenses and your staff.
If you don't do this when you hit a rough patch it will be much harder for you to get through it. The same actually applies to unexpected growth. When your business flourishes you should have a plan in place so that you can take advantage of this.
The best way to handle different situations is to have a good business plan drawn up. In this plan you should cover different scenarios such as slumps in the economy or slowdowns due to the time of year.
Research has shown that 64% of business owners who had a solid plan in place experienced growth. While only 43% of business owners who didn't have a plan could say the same.
You want to create a break even plan that shows you the minimum amount of revenue that you need to continue running your business. This breakeven point covers all of your expenses without having you dipping into any type of loan or savings.
As your business grows you will need to adjust your break even plan and your business plan accordingly. This will help keep your business out of the red and in profit, even a small profit is better than no profit at all.
By putting plans into place for your business you will have a solid path to follow if things turn a little sour.
You will know exactly what you have to do to keep your business running and paying your bills. You won't have to worry about laying off staff or stocking less inventory. You can easily make adjustments to survive slower periods.
If you truly want to create a profitable business then take the time to create a good business plan, which includes a break even plan. Then monitor your progress each month so you can ensure that you are reaching this point comfortably. If not, then you will need to adjust your plan so that you can break even each month with no problems.