Running a Profitable Business
Behind every thriving small business are a few numbers managed well: what things cost, what you charge, what customers owe you, and what you keep. You don't need to be a finance expert — you need to know your key numbers and review them regularly.
Price for Profit, Not Just Competition
Two common pricing mistakes are undercharging and confusing markup with margin. Markup is profit as a percentage of your cost; margin is profit as a percentage of your selling price. Knowing both — and setting prices that keep a healthy margin after all costs — is the difference between busy and profitable.
Cash Flow Is King
Profit is an accounting concept; cash is reality. A business can look profitable on paper and still fail because customers pay late. Track what you're owed, chase invoices, keep a cash buffer, and distinguish one-time costs from recurring ones.
Know Your Break-Even Point
Break-even is the sales level at which revenue exactly covers all costs — fixed costs like rent and salaries, plus variable costs like materials. Above it, every sale contributes profit. Knowing this number tells you how much you must sell to survive, and what a discount or a price rise really does to your bottom line.
Stay Tax-Aware
Taxes like GST/VAT affect your pricing, invoicing, and record keeping. Know your registration requirements, keep clear records of income and expenses, issue proper invoices, and set aside money for tax obligations so they never surprise you.
This article is general information, not accounting or legal advice. Tax and regulatory rules differ by jurisdiction and change over time — please consult a qualified professional.