really high-quality product
Structural and analytical management method (continued)
So, we said that at the start of a business, while the revenue side is still not too large, current expenses usually exceed 20% and can reach 1/3. But by no means no more! Then, as revenue increases, the share of current expenses decreases and in some cases it can be 10%, which I have met in my practice, but very rarely. Most often, a stable business has a structural value of current expenses of 12.5-15%. And we settled on the fact that in this situation, there is very little left for development, with the desired share? of this wallet at 20%, we can afford only about 7% or 1/15 of the created value.
This, of course, is not enough. With this wallet size, we will return our investment 10-15 years. And this is the prerogative of large business and large investment projects. In a small business, the invested funds must pay off in no more than three years. Otherwise, the project should be recognized as ineffective and abandoned. A lot of entrepreneurial undertakings fell apart precisely because of neglect of this requirement (payback period). So what can you do to make the project pay off in a short period of time if there are not enough funds in your wallet? Continue reading