# General Business Category > Entrepreneurship and Business Management Forum >  10 small business ideas??

## wynn

The best entrepreneurship advice 

http://hive.slate.com/hive/10-rules-...hard-questions

What’s a nut? It’s all your expenses for the year, divided by the number of days you’re going to be open for business. That’s how much you have to bring in on an average day to keep your enterprise afloat. “Keep track of it on a daily basis,” the post recommends. “If you have a lot of days where you don't make your ‘nut,’ you need to rethink things

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## Justloadit

I have gone as far as calculating it per hour, and per employee, and in some extreme cases per minute. Why you say, going so detailed, well how else do you calculate the cost to manufacture. If you know how many minutes a part takes to make using typical labour, you can accurately calculate the cost, and from that calculate your profit and final price.

I usually break down a specific job into different tasks, and the time it takes to do each task. It is an eye opener when you realise where you lose money due to time, especially if you have to man handle a part several times in the manufacturing environment.

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## Dave A

Don't bother learning Quickbooks? They're out of their cotton picking minds  :EEK!: 

Don't bother learning book-keeping I can buy.
Delegate tedious data capture as soon as possible - sure.
Don't worry about working with live accounting data - I have my reservations.
Don't bother learning to use the easiest-to-use accounting software on the planet as a management tool? You're insane!

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Blurock (20-May-12), pmbguy (07-May-13)

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## Blurock

> I have gone as far as calculating it per hour, and per employee, and in some extreme cases per minute. Why you say, going so detailed, well how else do you calculate the cost to manufacture. If you know how many minutes a part takes to make using typical labour, you can accurately calculate the cost, and from that calculate your profit and final price.
> 
> I usually break down a specific job into different tasks, and the time it takes to do each task. It is an eye opener when you realise where you lose money due to time, especially if you have to man handle a part several times in the manufacturing environment.


More business owners should do this exercise. Costing is SO important in any business. Your input costs can determine your output cost. I have seen so many business owners who do not understand their own business and where the cost is generated. As example, you make R50 on a sale, but the cost of a free delivery is R80!!!!

Remember, the R50 markup is NOT profit. It is only the markup. You still need to allocate overheads to the sale before you get to net profit! :Huh:

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## IanF

The biggest mistake about costing that we are taught is that it just includes "book" costs. It *SHOULD* include the profit required. 
To expand on this I had a friend who ran a petrol station and he put in a mini bakery, he told me he included the profit required in his required break even which he then used to set his targets for his staff. That is what I do now when I look at new machines.

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pmbguy (07-May-13)

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## adrianh

I calculate a per second cost on the laser and then bill per minute. I also work out two surface areas to calculate the material cost. Cut cost is calculated as follows; the drawing is layered into colors that define different cut speed. My software gives me the cut length of each layer. That length in mm is then divided by the cut speed in mm/sec which gives me the number of seconds per layer. All the time is added up and converted to minutes. We generally charge R300/hr which equates to R5/min. The actual material are is calculated and the rectangular area is also measured. A call is made on how the material will be nested and billed, Perspex costs 10x as much as MDF so we tend to be careful with such materials. If there are multiple parts it may be worthwhile to nest the parts with as many edges butting up against one another as possible. I've been able cut machining time in half through proper nesting.

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## Justloadit

> I've been able cut machining time in half through proper nesting.


And who paid you for your time to nest the components in the CAD, or is this done by the customer and he simply gives you a file?

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## adrianh

> And who paid for for your time


Depends, I do a lot of inhouse stuff and it is done as a matter of course. I normally ask the customer to do it themselves . The saving isn't always passed on to the customer.  It also depends on the size of the job and material used.

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## wynn

> Don't bother learning Quickbooks? They're out of their cotton picking minds 
> 
> Don't bother learning book-keeping I can buy.
> Delegate tedious data capture as soon as possible - sure.
> Don't worry about working with live accounting data - I have my reservations.
> Don't bother learning to use the easiest-to-use accounting software on the planet as a management tool? You're insane!


Being mainly American I think he means for you to rather use a bookkeeper than waste your time doing the mundane part of accounting, just keep an eye on the bottom line though.

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## Blurock

One of the most important rules of business is NEVER to run out of cash.

You can not pay salaries or creditors with profits, you need cash to do that. You need cash to pay rent, buy stock etc. (Can also be an overdraft if you can afford it). Not having the ability to pay for essentials is the the worst mistake one can make in a business. 

So, one needs to manage your cash flow and be aware of where the money is coming from, and where it is going. How can you perform this essential management function if you do not understand the basics of accounting? You do not need to do the entries yourself (you can spend your time more effectively) but you must be able to generate reports and understand what it says to you. :Hmmm:

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## IMHO

> Don't bother learning Quickbooks? They're out of their cotton picking minds 
> 
> Don't bother learning book-keeping I can buy.
> Delegate tedious data capture as soon as possible - sure.
> Don't worry about working with live accounting data - I have my reservations.
> Don't bother learning to use the easiest-to-use accounting software on the planet as a management tool? You're insane!


I agree with Dave. Especially when your business is too small to afford a dedicated accountant. The devil is in the detail. Delegate capturing, do the general ledger posting yourself, up to trial balance. Then handover to an accountant. To do that you need a basic understanding of accounting and you need to know your computer program. I use Turbo Cash, but Quickbooks, Pastel is the same principle. First two being free!

You save on expenses (remember the nut?) and stay in touch with your business.

What do you guys/gals think of having a partner? Avoid at all cost or is it OK?  Suppose I am opening a can of worms here...

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