Today we’re putting these 3 forecasts together: sales/revenue, variable costs, and fixed costs. Once you are able to fairly accurately forecast these on a monthly basis, you can put it all together.
Profit = Sales – Expenses
If you put your forecasts together, and the profit results aren’t where they should be or where you want them to be, I have GREAT NEWS!! Acting now on this information will change the outcome. If you wait to look back on what happened? You can’t change it.
All the mission statements, do goodery, and positive culture mean nothing if all of this doesn’t come together in a profitable way. Don’t get me wrong, I absolutely love to work with businesses with strong mission statements and positive cultures that are doing real good in our communities. But if they get the answers wrong on the above arithmetic, they won’t be working towards that mission, doing good in our communities, and providing a positive work culture for their employees for long.
Get the math right looking forward instead of solving the equation with a bankruptcy attorney later. This is the reality of business.