A Decision Tree to Weigh Investment Decisions

Running a business sometimes requires decisions to be made about what you should invest in. Do you invest in the new equipment to create Product X more efficiently? Or do you invest in the new equipment that will allow you to build a completely new line of products (“Product Y”)? If you can only invest in one of those options right now, which one is the better option?

A decision tree is handy here. I’ll give you a simple example to show you what a decision tree looks like:

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Limiting Factors: How to Keep Small Things from Becoming Big Things

In every business there are opportunities to expand and improve and optimize and it’s easy to get excited about those elements. But there are “reins” on the growth that pull back sharply if the growth starts to happen too quickly. These are called “limiting factors”. Every business has them but few businesses take the time to figure out what they are or what to do about them.

Limiting factors are like bottle necks in the “factory” of your business. They are aspects of your business that, no matter how well you do, will keep you from doing better without some kind of drastic measure.

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Don’t Believe the Fixed Cost Lie

Everyone loves to quote fixed costs when trying to get investors to invest or when trying to predict potential profitability. That’s because fixed costs seem nice and predictable. Since they aren’t impacted by customer fluctuations, they make for easy calculation. Unfortunately, many costs that we called “fixed” aren’t actually fixed.

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Handling Credit Card Processing Fees (or PayPal Fees) in QuickBooks

There is always that never ending problem, where you just don’t get all of your income

Many merchant accounts (these are the people that permit you to accept credit cards) just take a monthly debit out of your bank account at the end of the month, these are easy to account for, you simply enter a withdrawal in your account register for the amount debited and categorize it as Merchant Processing Fees, which should be a COGS or an Expense (this varies by where you are located and your industry, check with your accountant if you are unsure).

However, what about those merchant accounts that take the percentage before you even get the money, similar to Paypal? This makes it more difficult to track, however, I do have an answer.

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