Friday, May 9, 2008

entrepeneurial spirit

Today I had a talk with my friend. She is around 50 and she is an owner of small beauty salon close to my appartment in Ryazan. This lady is a very active person, she's about to open her own kid's store here, in Ryazan (they're remaking an appartment at ground floor to a shop now) and also is an active member of one of the churches (she coordinates also a rehab center project for ex-prisoners).

Yep, she has a typical entrepreneurial soul with a lot of personal time devoted to her business activities. She understands the necessity of establishing the contact with her clients, she has a high percentage of clients who visited her salon more than 1 time. She has a bit higher prices than most of the hairdressers close by, but still, she has her clients. She loves her staff, her girls treat her as a close elder friend. She has a great inner ennergy sourse, that helps her to make actions even if she doesn't know how to act.

Well, she does a lot of things successful entrepreneurs do. But she doesn't know her profit. Yes, she has all the figures for taxation purporses, but she never counts the difference between revenues and costs. She operates on a basis of cashflow - if she has enough cash to pay her rent and public utilities, she's happy. Sometimes she knows that she hasn't earn enough money to cover them in curret period, but she has some money left from previous one.

I asked her to provide me with all data about receips and expenditures to understand her profit picture. I hope understanding inflows and otflows of cash will help her to understand her situation better and improve profit. I also asked her to make minutes about all the small expenses left unaccounted - at least this will give me a full picture to start my recommendations for improvements.

I will keep an eye on this company.

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