Issue link: http://cp.revolio.com/i/15024
• Variable expenses. These costs fluctuate based on the increases and decreases in the income generated by your business. The more you make, the more you need to spend on such things as payroll, benefits, resale products, legal and accounting services, advertising, and taxes. FINANCIAL TOOLS There are many financial tools are necessary in order to run your operation effectively, manage team members, and establish credibility within the business community. Some examples follow: • Balance sheet. This is a detailed record of the financial state of your business at yearly intervals. • Budget. This document should serve as a framework for your financial performance, focusing on your goals and creating an awareness of your costs of doing business. • Cash flow statement. This is a complete account of where your cash comes from and how it is spent. • Net income. This is the amount that remains after all of your expenses have been deducted. • Profit and loss statement. Also referred to as an income statement, this illustrates the revenue and expenses of your business over a specific period of time. THE BOTTOM LINE When your business hits the break-even point, where your income supports your expenses, you are on your way toward achieving financial success. Any revenue beyond this stage provides your business with future viability, as well as the opportunity to set and achieve even greater goals. It is important to realize there are two components of profitability—the return on the sales generated from the daily services you provide and the products you sell, and the return in relation to your investment in your enterprise. After you deduct expenses, your profit is what remains. You may need to use a portion of it to pay back lenders who have supported your venture. You also may want to reinvest some of that profit into improvements to your facility. A crucial aspect of your business plan is to understand that the process never ends. The financial highs and lows that occur as part of the normal evolution and fluctuations of a business require regular evaluation and alteration of your original plan. In order to remain profitable, you must be both reactive and proactive to current market trends, as well as develop the ability to anticipate future ones. This will enable you to exert greater direct control to drive your business toward consistent financial success. q Amy Kamin graduated from Chatham College in Pittsburgh with majors in communications and business. She started her career in the 1980s in the retail industry and held executive positions with Gimbels Department Store, Lord & Taylor, and Macy’s. In 1989, Kamin entered the medical esthetic field and became the administrator of the Neal Sadick, MD, dermatology practice in New York City, and also founded ARK Industries, Inc. In 2002, she founded Medical Aesthetic Ventures, LLC, which establishes partnerships with physicians to provide cosmetic skin care services to complement their practices. Kamin has written for and has been featured in a broad selection of industry journals. www.ascpskincare.com successful business handbook 75