How to prepare to make money with your business and go from zero to zero

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A common mistake many companies make, especially those just starting out, is to think that with good revenue, their company is guaranteed a long life. And then, when the end of the month comes, they realize that there is nothing left in the cash register to pay the bills.

Making money from your business goes far beyond the amount of sales and money coming into the business. You need to have an overview of the business and all the income and expenses to identify where the money is going.

Check out the article and understand more about revenue, profit and how to ensure that your company is sustainable and goes from zero to zero.

Profit vs. revenue
The difference between profit and revenue is quite simple, but the impact these concepts can have on your business is enormous. Revenue is everything that enters the company's cash register, it is the result of the sales of products and services. If you have an e-commerce, for example, and you sold 500 products at R$100 each, in one month your revenue was R$50,000.

Profit refers to the amount of money left in the turkey phone number lead company's cash register after paying all bills and taxes. So, if the company earned R$50,000 in a month, but had operating costs of R$30,000, the profit for that period was R$20,000.

Positive profit = sustainable company
Knowing how to distinguish between these two concepts is essential to understanding and projecting when your company will start to make a profit. A business can earn R$1 million per month, but if the operating costs cost R$1 million, it will break even.

To make money from your business, it needs to have a positive profit. Many companies focus their efforts on increasing revenue at any cost, increasing operating costs, marketing campaign costs, and other company expenses.

This means that profits never increase. Or worse, they become negative, forcing business owners to have to invest money to sustain the company. At first, this may be a necessary measure until the business can “stand on its own two feet”, but if there is no plan to increase sales and reduce costs, the company will remain at zero or in the red forever.

make money with your business
How to prepare to make money with your business
Do a feasibility study
Before you think about making money with your company, conduct a feasibility study. This study determines the chances of success and failure of a business by analyzing the financial and market conditions. This tool also helps you understand how much investment the business will require and what the expected profit is.

The feasibility study is produced based on 4 pillars:

Revenue projection: how much revenue the company will be able to generate in negative, realistic and optimistic scenarios;
Projection of costs, expenses and investment: what will be the operating cost of the business, which, deducted from revenue, gives the expected profit;
Cash flow projection: the money that will enter and leave the company's cash register;
Analysis of indicators: opportunity cost, business risk and some other indicators that should be analyzed.
We delve deeper into this subject in the article Feasibility study: get to know the 4 pillars of the tool and learn how to do yours .

Make adjustments over time
No matter how well-done and in-depth your feasibility study is, it will not be as accurate as it seems. There are several factors, both internal and external to the company, that will define the real values. And the only way to find them is to get involved and get your hands dirty .

If your company is demanding higher operating costs than you expected, for example, you need to review your plans and see what needs to be adjusted. Is there room for savings in any area of ​​the company? Can you negotiate better with suppliers? What are the bottlenecks that take up most of the company's revenue?

If the problem is sales, what can be done to increase revenue? Are prices in line with the market? How can communication help? There are many details that influence the increase in a company's profits.