By Hernandez at October 04 2019 21:14:11
With this information you can actually predict not only what your sales will be, but you can see how much your fixed and variable expenses will be, what your labor cost will be, your material cost, and your profit. 1. So let's first look at what exactly are fixed expenses? They are exactly what they say they are; they are fixed. This simply means these are expenses that are ongoing whether you have a lot of sales or Ŕ" sales. They are expenses like utilities, taxes, rent, salaries other than the wages used in the making of the actual product or doing a service, business fees, telephone, etc. See how these expenses would continue on even if you have 0 sales? Any expenses that fall into this category are fixed expenses. Far too many small business owners never divide their expenses into fixed and variable. As a matter of fact, if you could have a business that had Ŕ" fixed expenses; this would be the best of all worlds, why? If you had Ŕ" sales, you would have Ŕ" expenses. So the closer you could get to this the better you would be.
The main thing to remember in this section is not to provide new data, but to explain in detail data that has already been provided and to provide the support for that data. When you sit down to compile all of the elements of your business plan, make sure you have each section able to stand on its own merits. This means you should not reference other sections sending the reader (your potential investor) back and forth between sections.