Discover the two concrete actions that will help you achieve it
The most difficult thing for an independent entrepreneur, be it a small or medium business, is to create an efficient financial plan.
It is common to think that profits have to be used to grow the company, but an investment in the personal sphere should also be considered.
There must be proper money management to maintain the business and at the same time make an equity.
If at the end of the month the accounts are fair and there are no earnings to meet your personal goals, you may need to learn to manage money.
The most essential step in a management strategy is knowing what the revenue is, where it comes from, and what has been done with it.
Take stock of your situation
Identifying the balance sheet will give you a general and timely overview of finances and you can make adjustments to save a percentage to buy your house.
How to start the balance sheet? Every time you buy something for the business, you must write it down in a small table where it is expressed where the money comes from and what it is being used for.
The specialists recommend carrying out the balance sheet of your company four times a year.
The balance sheet is formed by the assets, liabilities and equity net; Assets being all accounts, goods or elements that have the potential to bring money to the company, either through their use, sale or exchange.
In the opposite case, the liabilities are all the debts and economic obligations that the company has.
The net worth is the company’s own funds, for example, the money contributed by the partners or the money that was accumulated in previous years as well as the reserves of the companies.
When making the balance you must locate two columns, on the left side are the assets and on the right side the liabilities and net worth.
It would be as follows:
** This is an example only to illustrate a healthy company. These data should not be considered as exact references, since each company will have different data.
With the balance it is known if the company is financially healthy, if its level of indebtedness is adequate and if it has sufficient liquidity to face short-term debts.
The balance sheet serves to record two things:
1. The money that is invested in the business (from savings, loans or other sources).
2. What has been done with the money (was it used to buy something, deposited in the bank or other destinations).
It’s called balance because both columns must add up to the same amount, since you can’t use more money than you have.
Own business specialists say it is important to do so when a large amount of money is coming in or going out.
Learn to calculate your profit and loss statement
As you may have already noticed, the balance sheet is an overview of your business – this is the first step in putting together a financial strategy.
The second step is to know the profit and loss statement, this in order to know if the money that was invested has increased or, in the opposite case, has decreased.
Let’s take an example and from there we will start to understand how to carry out this financial resource:
An entrepreneur decides to start a business with an investment of 100,000 pesos. He put himself on a trial period of three months to see if said business is profitable or not.
At the end of this process, he realizes that he has a final balance of 110 thousand pesos, so he deduces that his profit was only 10 thousand pesos and since the results are not what he expected, he decides to retire.
What was the reason you made so little profit?
If you do not make a profit and loss statement it is impossible to know if your business was profitable or not.
Perhaps the reason that his profit was only 10 thousand pesos was not due to the volume of sales but to administrative expenses or an excessive payment of taxes.
For this entrepreneur to know the truth about his business, he must first identify the following elements:
- Sales or income: are the income that the company has, either in cash or on credit. Represents the turnover of the company in a period of time.
- Operating or variable expenses : these are expenses that go up or down depending on the volume of sales.
- Gross profit: these are sales minus operating expenses.
- General expenses: are the payments that a company needs to make for its operation and performance such as salaries, service payments, taxes, among others.
- Income from operations: is the gross profit minus general expenses.
- Taxes: it is the payment that a company must make to the State.
- Net profit: it is the profit from operations less taxes; the amount to be calculated is the company’s profit amount.
As you may have realized, the losses in a business do not come directly from the lack of sales or income, the main factors that determine low profits are operating expenses, general expenses and taxes.
Returning to the example of the entrepreneur, perhaps his net profits were not what they expected because his operating or general expenses were too high.
It is likely that if you reduce them, your business will become highly profitable and your net income will be more attractive.
If you carry out these two financial exercises for your business, the balance sheet and the profit and loss statement, you will have a better understanding of the money you invest and generate, as well as the leakage points that you must patch.
Go for your wish and start your heritage
Once you have done the math (the difficult part) now you just have to follow some tips that will help you complete your greatest wish: to buy a house.
The first of them is to set goals, it seems very obvious but it is incredible to realize that many times we lose sight of them.
You, for example, had forgotten that you started your own business to get your wealth. This tip is so that you always keep in mind what your priorities are as well as your specific and realistic goals.
The second and last tip is that you always keep your eyes wide open to new opportunities, evaluate them and act in favor of your goals.
If your desire was always to have a house, why don’t you have it yet? If you already have the capital, what do you need?
It is likely that being an independent entrepreneur you have run into some difficulties when applying for a mortgage loan and your spirits faded.
Today we want to tell you that at ION Financiera recognizes your effort and offers credits according to your situation, with which you can make your desire for a home come true or give your business that boost to make it grow.
Banks can be very strict when it comes to verifying income and if you do not have the necessary papers, despite having the capital in cash, they will not give you credit for your house.
With us it is different to carry out a check of income to your measure. In this way you can apply for a mortgage loan and get the house you want.
Learn about the support that ION Financiera offers you by being an independent entrepreneur and get your home today.