Planning a Real Business

The art of business is similar to running an average middle-class home. Wisdom gained by balancing a checkbook, buying food and fixing the house are extensions of business planning. When planning a budget and retirement there is a finite amount of leeway. In business where everything is dependent on customers, successful business owners reduce costs or find additional income through loans or trading stocks.

In college, one of our assignments was to present a reasonable business profile. At the time, I thought of owning a coffee shop. Plugging in all the hypothetical numbers for utilities, computers, furniture, dishes, personnel, mortgage and then number of chairs in the limiting space of a dining area; even if every seat was full of people buying cups of coffee I wouldn't be able to pay bills. Expanding, I could sell t-shirts, gifts, bags of coffee, coffee grinders, coffee makers, pots, pans and tea to breakeven. The plan almost works. I would hypothetically breakeven. However, there is hardly any profit and hardly anyway to identify when the coffee shop became popular. It went bankrupt after a hypothetical three years, but I smudged the numbers for the presentation.

In the end, I realized investing in the stock market was a way to make additional money; however, any additional money was the only way to make money for myself. Wealthy flaunt being a spokesperson or endorsing a product, yet even providing a place for advertisements on a wall is helpful, yet everything is relative to value. I would pay when guaranteed several people will see my advertisement. Getting a part-time job is also income.

The hypothetical coffee shop was never realized. It would take a considerable amount of business loans to get started. Even though they are factored into the budget, though people say I should open a restaurant, it is not really at the top of my list of contributions to the world. There are already several coffee shops in every city across the country. Yet, when considering any business these are the primary factors to consider.

Realistically, as long as a person has more assets than debt, they are still in business. The formula is easy. Divide assets by debts. A person is in serious trouble if they have less than or around ten percent assets compared to debt. Don't be scared. Most successful companies and corporations operate at about a fifty percent asset-to-debt ratio. The mathematical formula uses dollars. Skills, vision and value of the product are assets totaling potential greater than an existing debt. Skills and utilization of physical property is how businesses make money.

There are general issues a business owner, student, entrepreneur or philanthropist faces everyday. It seems busy and complex; however, as a child we begin learning basic concepts of business with our first allowance. We receive so much money from our guardians and then decide what is the most important to us. This creates the paradox between business owners and consumers because business owners are consumers wanting to sell important products and services. Few kids bought candy and charged a delivery fee.

As teens demand compared to supply becomes limited since parents want us to become, "more independent." We make choices and one of the best ways to cut costs is to decide what we can do ourselves. Everyone understands the importance of belonging to a bigger group. Frequently, the ability to buy-your-way-in is limited. We have to do part of it ourselves, so we learn skills to fit into the club.

As an adult, I wonder if anyone is truly independent, yet our contribution to society begin to be measured. Everyone starts in an entry level job. Balancing our own life becomes an evaluation of necessity verses how much it costs. Many single mothers are having difficulty, because babysitters charge ten dollars, while the single mother only makes twelve dollars an hour. This is inconvenient. How important is working when a person makes nothing? Perhaps this job offers promotions or an invitation of marriage. If promoted, there is hope of making money. If married they tend to children while their significant other goes to work. Essentially, goals or incentives inspire work.

Other ways of cutting costs is to do it yourself; however, time is money. Make your time worth money. An established household could afford a cleaning service, because they make a higher hourly wage during four hours than someone cleaning their home for four hours. Not everyone's time is this expensive.

The Creating Confidence blog features tips on home improvement. The act of learning a skill makes a person more marketable. People save hundreds or thousands of dollars on home renovations. This helps protect their bottom-line, yet why bother fixing up the house? There are many incentives related to one activity. Living in a nice home increases confidence. Showing people you live in a nice home increases faith in your abilities. This produces better job offers, reputations, opportunities and respect. Capabilities are verified; therefore, people believe you will fulfill obligations.

So what does this have to do with business? Beyond making a great product there are several years of development before making a profit. This means staying focused on the incentive and earning a respect until it pays off. Therefore, the more options a person has to make money, the more time they have to build something worthwhile to someone else.

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