Unfortunately, many new entrepreneurs don't see the need to determine their cost of goods sold through cost accounting. Most of us want to be popular in our communities. Unfortunately, if we try to win approval of neighbors by giving constant discounts, we may be quite unpopular with ourselves and our families when we come home broke. Resist the temptation of running up large credit card bills. Even if you have a terrific hunch your business is going to bring you a fortune any day, wait until financial records indicate that you have made that fortune after meeting all expenses.
Some businesses become very successful because they are run by two or more diligent family members.
But a family member is only a valuable associate or employee if he is loyal and serious about working hard. It does neither you nor the employee any good to retain a lackadaisical worker. Your business is suffering and atrophy of character is setting in on the employee. Determining through your operating report exactly which sales are resulting in healthy profits is one of the most important steps you can take. After you've determined which customers, products, and services yield the best profits, focus on them.