6 Keys to a Successful Business

There’s a big difference between wanting to start a business and doing it successfully. Here are 6 keys to a successful business for 2022.

Millions of people dream about starting their own business, but only a few go further than their thoughts. Many people are unsure of the keys to a successful business, especially when today’s business world is full of unknowns, twists, and turns. 

While there are always procedures you need to follow in your business and industry, there are also certain keys to a successful business that apply to any venture.

Let’s find out what they are! 

Keep on reading!

A Beginner’s Guide to Business Automation: Definition, Benefits, and Examples

Over the past decades, automation has significantly impacted almost every industry — from IT, engineering, and finance to customer services, sales, and marketing. Business automation tools free up employees to focus on more strategic projects, minimizing costs, increasing efficiency, streamlining processes, and so much more. 

This article will walk you through the term business automation, from its definition to its basic types, and why it matters to your business. 

What is business automation?

Business automation is a term for using technology applications to execute recurring tasks or processes, which frees up employees for higher-value work. Business automation usually includes business process automation, robotic process automation, and AI-powered automation.

Why is business automation important to your business?

Whether you’re a small business owner or running a large enterprise, automation is an excellent way to streamline operations and drive business growth. Business automation tools are designed to replace manual processes with machines so you can put human resources to work elsewhere in the business.

Additionally, business automation is critical for a rapidly changing world. For example, with the help of business automation tools, you can collect and analyze data to predict post-pandemic customer behaviors — from wildly fluctuating demand to heightened health and safety precautions. Automation, especially when combined with AI, can help you fix or refine these data analytics and reports, resulting in higher revenue, better use of resources, and greater customer satisfaction.

There are some other compelling reasons to automate your business processes, which are the following: 

  • Improve efficiency: Business automation tools pinpoint inefficiencies or hotspots in your operations to help determine where automated processes can provide the greatest impact. This involves process mining and modeling.
  • Apply intelligence: The data from automating your operations, together with machine learning and AI, can recommend actions and allow people to focus more on strategic tasks.
  • Automate core operations: Apply core automation capabilities — document processing, workflow orchestration, decision management, and content services — to key operational areas to meet business needs.
  • Smarter management: An automation tool makes process management much easier. You can make changes and improvements without introducing all the changes to your team. The information under a system is saved somewhere in a database, so you won’t need to repeat to team members how things should be done on specific processes.
  • Streamlined processes: Streamlined processes are one of the great outcomes of a process automation system. Clear accountability, customizable notifications, valuable insights, and faster turnaround times make eliminating wasteful activities easier and focusing on enhancing core-valued tasks.
  • Increased customer satisfaction: Customer satisfaction is a key differentiator in any industry. Focusing on process and operational excellence helps you exceed customer expectations with ease. When you consistently meet promised standards, customers are more likely to develop a preference for your company.

Four common uses of business automation

1. Marketing automation

Marketing automation is a powerful tool for businesses of all sizes. Through marketing automation tools (which are usually in the form of software), companies can generate higher qualified leads that are ready for sales engagement. Companies can also use these tools to track and measure a prospect’s activity, better identify target customers by automated messages via social media and deliver leads to sales as soon as they meet predefined criteria.

With email marketing automation tools, companies can send out emails to a client distribution list on a predefined schedule, which reduces the costs of running the campaigns manually. Some tools can provide a framework for teams to target, build, implement and measure the success of marketing campaigns, taking the complexity out of lead qualification and conversion. 

2. Financial and accounting automation

For businesses of all sizes, accounting is time-consuming and includes many manual steps. By automating their accounting and bookkeeping tasks, companies can save considerable time on accounts receivable, accounts payable, billing, collections, credit card applications, data backup, and other financial processes that are managed regularly. 

Companies can also apply automation to core processes like closing their books, general ledger management, and bank account management. Automation makes a complex process more manageable by removing manual elements from the accounting team’s work and handling the number-crunching and transactional work. Businesses can focus on important tasks like analysis, strategy and improve their core values. 

For example, an automated system for accounts payable management saves businesses money and time as data entry is automated, invoices are automatically matched to documents, and approvals are electronically routed. It reduces data errors and helps prevent fraud through a system of “touchless” controls that happen behind the scenes. Accounts payable automation software also frees up cash flow. Any team member can submit invoices, manage approvals, and process payments through a single platform with swift approvals, better visibility, and greater control over important financial processes and data.

The Shoeboxed app this a typical example of an accounting automation tool. Shoeboxed helps freelancers, accountants, and small business owners scan their receipts, track and manage their expenses, and easily generate expense reports. 

What’s more, Shoeboxed offers OCR (Optical Character Recognition) function, and a human-verified data feature to ensure that your receipts are legibly scanned, clearly organized, and accepted by both the Internal Revenue Service and the Canada Revenue Service. Trusted and recommended by thousands of users worldwide, Shoeboxed is your go-to option when it comes to automating your business’s financial and accounting processes. 

3. Sales automation

Sales automation tools enable sales teams to spend less time logging their deal-related activity and more time meeting clients, making phone calls, and closing deals. The tools can automate repetitive tasks throughout the sales process, whether qualifying leads based on their buyer journey, assigning prospects to the right rep, or creating data-backed sales forecasts. 

Companies that sell physical products can also benefit from these sales automation tools. Using these tools, sales reps can track stock from anywhere, at any time while consulting with their customers. They can also log order information to the system, making it easier to track every step. Should any problem arise, the sales team can find where it’s at and solve it quickly. 

Other sales tasks that software can perform are the following: 

  • Automated order entry
  • Automated batch processing
  • Automated report generation and distribution

4. Human resource management automation

Human resource management systems can handle various HR tasks, including processing job applications, scheduling interviews, sending offers, onboarding, managing payroll, and benefits administration. Since these systems automate all aspects of human resources management, it provides complete analytics across these processes, bringing accurate insights into the company’s workforce productivity and efficiency. For example, if a company is experiencing a high employee turnover rate, the business owners can use an HR management tool to pinpoint the specific problem and solve it.

There are other tasks that human resource management automation tools can handle, including: 

  • Recording employees’ retention and retrieval
  • Reviewing job applications submitted online
  • Generating work contracts, confidentiality agreements, waivers, and other new-employee documentation.
  • Calculating employee taxes
  • Providing training documents for new employees

The bottom line

Automation tools are transforming business operations and processes, making it possible to control and scale up your businesses with ease. No matter what kind of business you’re running, you can always find the perfect automating solution. If you’d like to take your business to the next level, start today with Shoeboxed
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What Is Gross Profit and How Do You Calculate Gross Profit for Your Business?

The gross profit metric shows a business’s profit based on its revenue and cost of goods sold. By knowing the exact figure of your business’s gross profit, you will gain a deep insight into your operational efficiency and financial performance, allowing you to take immediate action to improve. 

This article will give you a simple explanation of what gross profit means and a quick guide on how to calculate it correctly. 

What is Gross Profit?

A business’s gross profit is the difference between its sales revenue and the cost of goods sold (COGS). Gross profit reflects how much the company actually earns from selling its products and/or services. 

Gross profit appears on the company’s income statement and it can also be referred to as gross income or sales profit. 

How to Calculate Gross Profit 

To calculate gross profit, subtract the cost of goods sold (COGS) from the total amount brought in from sales. 

The formula for Gross Profit 

Gross profit = Revenue – COGS 

Now, let’s take a closer look into the two factors that make up gross profit: 

  • Revenue: the money generated from the total sales of your products or services. Revenue represents your gross income before deducting any expenses and taxes. Note, some companies may substitute net sales for total revenue when computing gross profit. Essentially, net sales are the same as total revenue, except it deducts the price of refunded or returned sales, allowances, and discounts, if any. 

See also: Revenue Vs. Profit: What’s the Difference?

  • Cost of Goods Sold (COGS): includes all of the direct costs and expenses involved in producing, selling, or delivering your goods and services. Here are some typical examples of COGS:
  • Raw materials 
  • Direct labor costs in production 
  • Shipping fees 
  • Utilities in production    
  • Product packaging fees 

COGS excludes indirect costs and fixed costs, such as rent, office expenses, salaries for administration staff, depreciation, advertising, etc. 

Example of How to Calculate Gross Profit 

Below is the income statement of ABC Inc: 

Revenues$ (million) 
Sales 120,000
Financial services10,000
    Total revenues130,000
Cost of sales95,000
Administrative and other expenses10,000
Financial services operating and other expenses8,000
    Total expenses113,00

To calculate the company’s gross profit, we first have to determine the cost of goods sold, which is $95,000 in this example. Remember, do not include administrative, operating, or other expenses as they are not directly involved in making the products. Next, we calculate how much our total revenue is, which comes to $130,000 in the example. 

Based on those figures, we subtract the cost of goods sold from revenue to work out the gross profit: $130,000 – $95,000 = $ 35,000.

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How Can the Gross Profit Metric Help Your Business? 

Gross profit is one of many basic accounting and financial tools available for small businesses. It focuses on one simple fact: the higher your revenue and the lower your production costs are, the greater your gross profit is. By knowing the exact number of your business’s gross profit, you will have a sound idea of whether the production process could or should be more cost-efficient. 

You can then look for effective solutions and take immediate measures to maximize your gross income. For example, if you notice that manufacturing costs are too close to or exceed your revenue, try different cost-effective methods to lower COGS by switching to a cheaper supplier or reducing your packaging weights. Alternatively, you can also try to boost sales by stepping up your marketing campaigns. 

The Limitations of Gross Profit

The gross profit metric’s major flaw is that it doesn’t account for all of a company’s expenses and income sources, so it’s not really useful when it comes to analyzing real profitability. 

Another point is that the gross profit metric is a fixed number unique to your company – you can’t use it to compare with your competitors. For example, it wouldn’t make sense or bring any useful insights if you compared the gross profit figures of a newly established startup with an established company in the industry. 

Instead, to compare, you should compute the gross profit margin – a financial ratio that shows how well a company makes income relative to how well it manages its manufacturing costs. You can then use this ratio to compare against other companies as gross margin percentages are all depressed in proportion to the magnitude of each company’s sales and COGS. 

Formula for gross profit margin (GPM):  

GPM = Gross Profit/Revenue

Final thoughts 

Gross profit is a useful and easy-to-calculate metric that allows businesses to understand their financial performance on a deeper level, resulting in greater profits. However, to see the broader picture of your business’s efficiency, it’s best to analyze and use the gross profit metric with other financial ratios as well. 

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Shoeboxed is an application that lets you digitize all your paper receipts in just a few seconds. It automatically extracts and categorizes important data from your receipts which then gets human verification. Quick, reliable, and trustworthy, Shoeboxed promises to organize your piles of documents in the best way possible! 

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