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Budget of Small Business

Sunday, January 27, 2008
There are some important things to know if you want to begin small business.

1. Total Capital Sufficiency
2. Capital Source
3. Capital Source Alternative
4. Financial Alocation
5. Expenses capital Efficiency

The above are important to considered because each possessess risk which must be anticipated so that it can be rightly managed. or it can be furthered explain as follows:
1. Total Capital Sufficiency
Total Capital Sufficiency is total money which is used for financing the bussines. There are 2 type of it, Fixed Budget and Non-Fixed budget. Fixed Budget is expenditure which used once. Usually the rate is decreasing caused depressiations rate, example: producing machine, sell equipment, etc. While non-fixed budget is expenditure which used not once.
Its usually count as variabel expenses and its depend per unit products, such as: packing budget, selling budget etc.
In such away all of the budget should be calculated early so we know exactly how much budget needed. But this budget unecessary when we start to begin a bussines, because this budget often can not be modified.
To optimizing and efficiency, so the budget needed should complifying with the available money. The higher budget rarely bring to wasteful habit, while the least budget rarely make the bussines not running well. So total capital efficiency must reached.For the further tips, wait the next posting....
2. Capital Source
Capital source is money sources for bussines capital. It have 3 types:
a. Self Budget
Self Budget can coming from the personal money, such as account in a bank or money which is planned to build a bussines.
b. Group Budget
It can coming from collected budget from the members of the group who want to build a business.
c. Loan
It can interpersonal loan, bank loan and the other finances institutions


3. Alternative Capital Cost Source
Although we have decided the source of the budget when we started a business, for preparation we need collected another cost source. In recent, we get this capital source with higher costs. But its important to prepared, because it can solves a problem that appears in the future. Especially to improve the business!
4. Budget Alocation
We should specify the using of capital cost which we have. Is it all used for business or we used some from it for stock. So, on the alocation of business, an entrepreneurs should have a capacities to identify all of the business activities and how much cost to do that! Dicipline work is a hint of this part!

5. Capital Cost Efficiency
To know the capital cost efficiency, the entrepreneurs should to know many costs which is used to increases capital cost. The capital costs are
a. Interest Cost
b. Administration COst
c. The cost used to get some money
In the other words, capital cost is all of the sacrificed which is used to get a capital budget. To eficience the capital cost, the lowest cost above is better to used.

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