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How to easily find the hidden profits in your business

(Business Finance) Cost overruns can happen in any business, even when the budgeting is sound, so how does it happen and how can you nip it in the bud?

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Let’s talk about cost overruns

We all know that profit is one of the many names of the game of business. However, simply making a few bucks isn’t enough to stay afloat; managing your costs is an essential part of profiting.

Cost overruns can rear their ugly head in a variety of ways, but among the most common are unrealistic budgeting, mismanaging an existing budget, or the wholly unfortunate circumstance of a misguided initial budget coupled with poor oversight.

If your budget is flawed but the management of your monetary assets is top-notch, your only hope is to make a plea for a more realistic budget. In this case, timing is key. If you wait a bit too long, it looks like you’re trying to cover your tail. On the other hand, if you jump the gun with your request, you might be sacrificing the “now” for the “soon to come,” which could be a bullet in your foot if you’re not careful.

Regardless of when you pull the trigger on asking for more, it’s imperative that you keep a meticulous record of what is going where for how much and for how long. Statistics will be in your corner when you knock on the door of the big wigs.

What if the budget is already perfected?

If your budget makes sense but you’re experiencing cost overruns, by process of elimination, the management is the source of the discrepancy. It’s time to buckle down and make sure everything is running smoothly (you don’t necessarily need to micromanage, but you catch our drift).

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If you’re coming down on your team in an effort to change the existing protocol for the greater good of your venture, some folks might see the increased supervision as overbearing. But don’t worry; you’re taking the necessary steps to come out on top. Nip it in the bud and catch it before it spirals, all the while reminding your team that change is often necessary for prosperity.

In the frightful event that you don’t have enough money to cover your costs and the money you do have is being poorly handled, the most intelligent approach would be to mend the management first. It’s tough to go around asking for change when you’ve got a beer bottle in your hand, you know? Fix the in-house issues before asking for more and you’ll be much better off.

Written By

Staff Writer, Johnny Crowder, is a hard working creative with a Bachelor's Degree in Psychology and a deep passion for writing. In his other life, he is the front man for signed metal band, Dark Sermon. He has a wicked sense of humor and might literally die if he goes a day without putting pen to paper.

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