Measuring Return On Investment
ROI is an indicator of the amount of money returned on an investment. Many business owners use ROI to determine the worth of a particular project. However, it is not always a useful measure. Some projects and initiatives do not generate an ROI at all. For example, a project involving the development of new products or processes may not yield a high ROI.
Managing Relationships With Banks And Creditors
A well-managed credit and debt portfolio is essential for smooth running of a business, and it can be the difference between a business surviving and failing. It is critical to maintain an accurate record of outstanding debt, which can allow you to plan your cash flow over the course of several months. This will help you make timely payments on the debt and keep your business afloat, especially if you have seasonal or fluctuating revenue.
Flexible Business Model
Developing a flexible business model is essential to maintaining financial security in any business. A flexible business model provides the ability to change its structure as needed and to adapt to industry changes. These types of businesses tend to experience greater long-term success and increased financial security. In addition, a flexible business model allows room for growth and reinvention.