By Emy Treurniet at April 24 2019 21:26:30
2. Variable expenses are those expenses that track directly with sales. If sales stop they stop. These are expenses like supplies used to support in the making of your product or doing your service. Such things as shipping cost for raw materials for your product or service. If you have no sales then you're not going to be purchasing materials so your shipping cost for those materials will stop as well. As an example, if you have a lawn mowing business and there are no lawns to mow, then you wouldn't be buying gasoline to travel to your lawn mowing site. These kinds of things are variable expenses. If you're producing a product, it would include supplies used to produce that product like sand paper, glue, finishing materials, cutting tools, etc.
Obtain Feedback On Your Plan _ When writing a business plan you sometimes end up locking yourself away. You might have unique ideas which lead you to seek some isolation and secrecy, or if you are going to be a sole trader you may only have one person to consult namely yourself. But it is fantastic to try and get broader input on your business plan _ whether from a professional, or simply from friends and family whom you trust. I say that because of course you need to be careful with commercially sensitive ideas, as you do not want to pass your plan on to someone in the pub who then starts your idea before you across the road.
Once you have a plan in place, it's important that you follow it. If you're achieving your goals you should stick with the plan. If you are not achieving your goals then you will have go back, analyze your plan to find out what is working, what is not working and why it is not working. A plan is not etched in stone. It is subject to change. As time goes on, things change in this world and businesses like everyone else are subject to change. A good plan will reflect changes that a company has to make to keep it competitive and successful.
Then there are the moments when something seems to be going wrong, when one or more areas of the business just don't seem to be working. Cash flow is anemic or the marketing message is flat. Perhaps customers have shown a marked interest in only one particular product or service, ignoring all your other offerings. This means it's time to revisit your business plan, more precisely it's time to revisit the questioning process that helped you craft your plan.