SLC | S21W1 | Costs for entrepreneurs - Introduction to cost.
| What is the cost and how important is it for entrepreneurs? |
|---|
The cost of goods or services are the working capital we spend in buying the raw material required to manufacture, the labour, electricity and variable expenditures and depreciation of capital goods. So it is very important to know the cost of goods or service in order to decide the price so that one can make profit margin instead of losses. It is very important for the bottom line of the profit and lose account of an entrepreneur.
| Establish the difference between costs and expenses, giving examples of this through a real case. |
|---|
In case of a printing press one has to take care of the purchase items like paper, printing ink, blocks and dice, operator and electricity.
Expenses are investments in building, printing machines, marketing, salary of office staff and expenses of fixed nature. Income tax and other taxes.
| What are the benefits of performing a good cost determination? |
|---|
In order to run a business profitably cost determination is one of most important financial activities. Cost determination helps in deciding profitable pricing of goods or services. It can help control and analyse the cost of product. Without exact knowledge of cost of goods the fate of business become dicy. Cash flow is unmanageable if cost of goods are not specified. Business forecast and financial planning is not possible without cost determination.
| How do you determine the costs of your business? If you are not an entrepreneur, how would you do it? |
|---|
If I'm not a entrepreneur, my business is managing home finance and my financial strategies will be as follows:
| Financial Strategy | Description |
|---|---|
| Create a Family Budget | Track income and expenses to manage spending and savings. |
| Emergency Fund | Save 3-6 months of expenses for emergencies. |
| Automate Savings | Automatically transfer money to savings. |
| Pay Down Debt | Focus on reducing high-interest debt. |
| Diversify Investments | Invest in different assets to reduce risk. |
| Life Insurance | Ensure you have adequate life insurance. |
| Retirement Savings | Maximize contributions to retirement accounts. |
| Teach Fina Literacy | Educate family on budgeting and saving. |
| Tax Planning | Use strategies to minimize tax liability. |
| Plan for Maj Expenses | Save for big expenses like education and home buying. |
| Track Net Worth | Regularly assess your net worth. |
| Cut Unnecessary Expenses | Eliminate non-essential spending. |
| Review Financial Goals | Regularly assess financial goals |
Thank you for reading my post.
I would like to invite three fellow Steemians to participate in the contest
@anjinoor
@eveetim
@georgitsachev
Greetings @impersonal
1.- You have defined what costs are and how important is their correct management to obtain profitability. Costs are investments in the production of goods or provision of services.
2.- You have given some examples of costs and expenses in a printing company, but you have not detailed the difference between these concepts. You could have been a little more explanatory on this subject.
3.- You have shared with us the importance of costs for the profitability of a business, and how a good management of them can help to have a solid business.
4.- You have explained how you manage your family finances. We would have liked an example in which you calculated the cost of production of a product.
Thanks for joining the contest
Thank you for evaluation of my post and valuable feedback.
Thank you so much for mentioning me dear friend