5 ways helps your small business generate profit

profit Accounting systems are not simply meant for after-the-fact reporting to prepare the year-end Federal and State tax returns. Rather, an accounting system should proactively be used as a tool to manage the business. “Failing to plan is planning to fail”.


Though one may achieve business success without adequate planning, to maximize opportunities and minimize risk, ongoing budgeting, planning, and analysis using an accounting system is a necessity for any business. The following are five ways that accounting helps your small business generate profit:

1. Apply Pareto Analysis, or the 80/20 rule

The Pareto Analysis provides that 80 percent of outcomes can be linked to 20 percent of causes. This means that 80 percent of your revenues may often be generated by 20 percent of your products or services, and that 20 percent of your customer base may command 80 percent of your business resources. The question is:

Are these the same products and/or services, and/or customers? To know which is which, who is who, and what this all means for your business, you will first need an accounting system. In this example, with clear information you can focus your time and your resources to achieve the best product mix while most effectively deploying your staff.

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2. Take advantage of trend analysis

Numerous macro or micro-economic factors affect businesses, such as a change in the price of raw materials or a shift in buying habits. Whatever your business may be, trends need to be analyzed in order to make the necessary adjustments to either minimize a potentially negative impact, or take advantage of a potential gain.

For example, in a seasonal business, perhaps it makes sense to accumulate inventory when prices are low during the off-season to serve your clients during the busy season. Accounting allows your small business to find profitable trends and capitalize on them.

3. Profit from ratio analysis

Business ratios are not just complex calculations relegated to the halls of business schools or the towering skyscrapers of Wall Street. Ratios can tell a story, and most often this story is not obvious without an accounting system. Use the data from your accounting system to compare your business ratios to your own company or other similar sized companies; oftentimes information about other companies is available online (such as the United States Census Bureau) or through various industry groups.

Is your net profit higher because you have fewer expenses, or have you simply been able to charge a higher margin than your industry average? Analyze your accounting data to determine if your small business can still maintain the healthy margin while reducing expenses to industry standard levels and benefit from a supersized profit.

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4. Make sound management decisions with an accounting system

When making a decision, your business benefits when information is not exclusively analyzed according to a Generally Accepted Accounting Principles (GAAP) or income tax reporting methodology. For example, in a scenario using GAAP reporting only, if Product A has a Gross Margin of 75 percent, and Product B has a Gross Margin of 25 percent, GAAP may indicate that you will probably need to discontinue Product B.

However, if you have a full set of financial data from your accounting system, you will be able to apply alternative costing models for management reporting to determine whether the overhead being covered by the sales of Product B justifies the smaller margin, or if Product A is being held back by a lack of funds due to the slower sales of Product B.

5.Facilitate accuracy, reliability, consistency and ease of reporting

The best spreadsheets, manual ledgers, and other financial tools cannot ensure the accuracy, reliability, and consistency of a traditional double-entry accounting system. They also cannot come close to the ease of reporting double-entry accounting facilitates.

What I recommend for small businesses is a traditional double-entry accounting system that is complete in its reporting capabilities. Whether you never intend to have more than a single customer, or if you intend to eventually go public and require a certified audit at some future date, accurate and reliable financial reporting data with consistently applied rules will remain the backbone of any successful business entity.

These 10 Tips for Starting and Growing a Business

There are tons of advanced strategies for growing a business. But for those who are just getting started or don’t have a ton of resources, those methods aren’t always attainable.


However, there are still a ton of basic tips and tricks you can consider to get started on the right foot and grow your business. Check out tips for a variety of areas from members of the online small business community below.

Find the Best Location for Your Startup

Different cities offer various benefits for businesses and entrepreneurs. As a result, picking the right location for your needs can make a huge difference. This Crowdspring post by Amanda Bowman includes a list of the best cities for entrepreneurs.

Build Your Website the Lean Way

If you’re just getting started with a new business, you may not have a ton of resources to put into creating a website. But you still need to produce something. In this Pixel Productions post, Viorel Dudau shares tips for building a website the lean way. And BizSugar members commented on the post here.

Reach More Customers and Grow Your Business Using Stories

If you want customers to feel connected to your business, there are plenty of new social media features that can help. The stories format on some of today’s most popular platforms offer a unique opportunity to make those connections. Learn more about the benefits in this UpCity post by Michelene Maguire.

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Read Up on California’s New Privacy Law

As a business owner, you’re responsible for understanding the relevant laws in each state and/or country where you operate. If you’re located in California or have any customers there, you need to know about the California Consumer Privacy Act. Get an overview in this Social Media HQ post by Christian Zilles.

Choose the Right Business Filings and Compliance Provider

To keep your business compliant, you may need a professional to help with your filings. However, not all providers offer the same level of service. In this post, Nellie Akalp of CorpNet details some considerations you need to keep in mind when making this decision.

Go International with SEO

If you want to increase your customer base around the world, your SEO strategy should reflect that. If yours is mainly tailored to the U.S. read this Search Engine Watch post by Yasmine Dehimi to get helpful tips for going international.

Find the Right Credentials for Your Next Hire

If you want to expand your business, hiring new team members can go a long way. But that’s only if you hire the right people. In this Smallbiztechnology.com post, Ramon Ray discusses what credentials you should consider and look for the next time your business brings on new team members.

Figure Out What Your Customers Really Want

If you want to serve your customers effectively, you need to learn what they want. Too many buisinesses fall into the trap of marketing to customers before listening. Jennifer Hanford explores a better strategy in this Strella Social Media post. See what other small business owners are saying about the post over in the BizSugar community.

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Learn How Featured Snippets Impact Your SEO

When you search for an answer or piece of information on Google, you may notice a small box with a snippet featuring the most relevant response. The way Google shows these snippets recently changed, so read this Bright Local post by Stephanie Newton for the details.

Make Money with Instagram Right Now

If you’re just looking to start a business, or if you want to add an extra revenue stream, Instagram may provide the answer. In this post on the Miss Millennia Magazine blog, Jasmine Watts provides tips for anyone looking to make money on Instagram right now.

6 Ways Small Businesses Can Fight Climate Change

The annual World Economic Forum at Davos is nearly here, and one topic that’s sure to get a lot of attention this year is the environment. While sustainability has been in the conversation for some time, it’s catapulted to the forefront thanks to (among other things) the U.S. government’s recent report detailing the dire and devastating effects of climate change.



Many individuals have made fighting climate change a personal tenet, but to make a lasting impact, we at Salesforce believe everyone should get involved — from companies and organizations to governments and nonprofits. And that definitely includes small businesses, which account for 99.7% of employer firms in the United States.

So in the spirit of Davos, which seeks to improve the state of the world, here are six ways small businesses everywhere can take action on climate change.

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1. Build a culture of awareness

It’s important to educate employees on the impacts every person makes on the environment. There are simple steps we can all take to reduce our ecological footprints, and if you make sustainability part of your culture, it will become the norm, both in and out of the office. A great place to start is assembling a group of environmental advocates to form a sustainability team within your organization (Here are 5 quick tips from Salesforce’s own employee green team, Earthforce). Learn more ways that you can make a positive impact and combat the effects of climate change by earning your Strategies for Positive Impact badge on Trailhead.

2. Rethink your waste

Trash and byproducts have become a major problem in today’s culture. It’s virtually impossible to eliminate all waste, but think about ways you can cut down: eliminate paper handouts, cut back on the office soda habit, and avoid too many take-out containers. It’s easy to skip the bottled water at every meeting, and you might even consider a company-wide ban on single-use water bottles. Waste reduction also makes good business sense as it reduces the costs associated with both purchasing and waste disposal. While you’re cutting back, keep in mind that recycling is a simple way to make a big impact — and it’s amazing what companies can do to give new life to old products.

3. Reduce your travel

Travel, especially air travel, wreaks havoc on the environment. Video conferencing technology has improved substantially over the past few years, making it easier than ever to connect with coworkers around the globe. So the next time a travel opportunity arises, ask yourself whether the trip is really necessary or if you could conduct your business virtually. Reducing the number of cars on the road also cuts back on gas and emissions; try subsidizing a bus pass or public transportation card. If that’s not possible, allow remote work or offer incentives for employees who carpool. Even something as simple as installing an office bike rack is a step in the right direction.

4. Choose environmentally conscious vendors

As the saying goes, it takes a village. If your small business wants to fight climate change, find other businesses and organizations that do, too. Take a look at your supply chain. Who are your providers and do your values align? Using local vendors for catering and supplies not only supports your local economy and other small businesses, it also cuts back on shipping, gas, manufacturing, and logistics. Eating seasonal items also helps to avoid less sustainable production methods.

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5. Save energy

How many of your computers and appliances remain on when no one’s around? Careful use of technology and appliances not only saves energy, it’ll also save you some coin when your monthly bills arrive. You may also consider installing smart thermostats, which allow you to set your thermostat remotely and create temperature schedules for various times in the day. Finally, LED light bulbs consume at least 75% less energy than traditional incandescents. No need to change out your fixtures — a simple light bulb swap is all it takes to make the switch.

6. Use the cloud

Cloud computing has become the norm for companies today, which is fantastic since a cloud infrastructure addresses two critical elements of a green IT approach: energy efficiency and resource efficiency. Running your small business with cloud technology — like Salesforce Essentials — not only saves space and provides flexibility, it also cuts back on hardware and manufacturing, plus the emissions that go along with both. (FYI Salesforce delivers all customers a carbon neutral cloud. In addition to avoiding and reducing our emissions, we offset emissions within our data center supply chain, such as the manufacturing of servers, production, and distribution of energy used at our data centers, and the impact of our customers using Salesforce on their personal devices.)

Why Investing in Your Business Is Important

Business If you’re running your own business, eventually a time will come when you’ll need to invest some of your profits to keep it flourishing. This situation will be critical for the further growth of your company, and for you, it may seem like you’re stepping out of your comfort zone, and taking a huge risk.

But then again, the greatest risk is not taking any risks at all, depriving yourself and your business of the opportunity to develop, the opportunity an investment could bring.

This decision will be much easier if you consider all the benefits it will bring to you and your business, so we’ll share five good reasons why investing is important.


Your business will grow

Your every investment, if done right, can make your business grow. Whether you’re considering putting some money into hiring new staff or purchasing software which will provide your customers timely and reliable customer service, you’ll be able to do more and give more quality. You can focus on growing your customer base, which is crucial for your business, and invest in thorough research of your customers.

This way, you will be able to provide them with great and personalized customer service, which will bring you more loyal customers, and more revenue. Or you can outsource some of your tasks, such as your digital marketing strategy, which will potentially attract more customers, boosting your further growth. Opportunities are endless if you take your chances.

You (and others) will take your business seriously

If your business still isn’t making the desired profits, it’s no reason to treat it as a side hustle or a hobby.  Once you begin taking your business for what it really is,a business, you will start taking it seriously, and all the others around you will get the same impression. When considering your first or a new investment, try to be highly professional about it, and put it in a business plan. This is of crucial importance if you’re thinking about financing it partly from external resources and considering affordable no security business loans. It will help you put things into the right perspective, minimize the risks attached, and be your guide when things get rough.

There are certain minimal investments you can make, which will make your business seem more professional. Just think of what all the other companies do to make a strong impression on their prospective clients. Business cards may seem like a waste of money in the days of digital communication, but your business partners and clients will consider your company more reliable and trustworthy if you have them. Same goes for having a website – social media can do wonders when reaching out for new customers, but if your prospective clients can’t find your website address when they google you, they’ll think that something is out of place.

Only when you know you’re putting your hard-earned money into developing your business, you’ll have the feeling of truly owning this process, and being responsible for its outcome.

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You will feel less stressed

Stress can be detrimental to your well-being. In fact, this is proven scientifically – a study by Harvard-trained psychologist Robert Epstein found that 25% of our happiness depends on how well we manage stress, and being proactive is a part of the solution.

Being a small business owner often leads to taking too many tasks on yourself – handling finances, sales, HR, solving various issues with equipment and operations. Your mind ends up constantly overwhelmed with worries, while too many sleepless nights can make you feel tired, anxious and less productive. Apart from learning how to take care of yourself and reduce your stress, there is a high chance your next investment will boost your happiness level as it can set you free from tasks you are not an expert in, or which you can hardly fit into your busy schedule.

You can focus on what you’re best at

A proper investment will make it possible for you to focus on tasks you know how to handle well, or take pleasure in doing. Everybody has their own field of expertise, things they are exceptionally good at. Starting your own business and having to solve by yourself all the issues which come along the way doesn’t change this fact. Studies show that small business owners spend as much as 40% of their working hours on tasks that don’t generate profit.  Just imagine the possible growth of your business if you were only able to aim your attention to crucial concerns, and delegate all the rest.

One of your first investments should be hiring more staff, who will focus on what they’re skilled in so that you can go on claiming your victories in what you are best at.

You can achieve your personal goals

Whether it’s a six-months visit to Europe, buying a house, or sending your kids to college, you’re more likely to achieve your personal financial goals if you opt for investing your surplus money in your business, instead of putting it to your savings account.

In order to make your investments work for you, you need to do a bit of personal financial planning too. This means setting your personal goals and prioritizing them, as well as creating an action plan on when and how you are likely to achieve them. Also, you need to learn how to keep track of your spending habits as well as to manage your debts in order to prevent your hard-earned money going to waste. Building your personal investment portfolio and deciding on how much money you are able to invest to make your business grow, as well as which other investment opportunities you should follow to raise the odds of living a life you desire.

You will save time

Eventually, your investments will be crucial for securing your better work and life balance. Surely, when running your own business, you are ready to put some extra hours in growing your company, but if it lasts too long, your private life is going to suffer. A study has shown that we already take our business home with us. In fact, only 74% of our work is done during our working hours, while the rest is finished during our private hours. With such statistics on your mind, just imagine how much time you spend working, and how much time you will save if you had enough staff to delegate some tasks to.

“When you invest, you are buying a day that you don’t have to work,” is a famous quote by AyaLaraya, investment advocate, and a host of a Filipino TV show “Pesos and Sense,” covering topics on achieving financial independence and investment. And it sums the point up, perfectly.