Raise The Income And Lower The Costs. simple rules for financial health

[inea 0]

Lets suppose a person is the manager of a company. Or maybe the person is the owner. It happens that a manager sees that the company got in a situation where it has big debts. And the profits are not high enough to solve the debts. So the solution to get out of this situation looks like this:

 

Increase the income and decrease the costs.

 

The increase of income helps for several reasons. First it helps to pay the usually and necessary costs. Second more income provides space to pay the interests of the debts. And third it provides the possibility to pay off the debts.

 

The decrease of costs helps to improve the situation too. Less costs make it more easy to run the company with the income the company earns. Less costs make it possible to find money to solve the issue with the banks, that provided the debts.

 

If it seems that it is not possible to increase the income and to lower the costs the result might be that the company has in the long term no reason and no economical stable base to exist.

Edited September 27, 2010 by inea (see edit history)