Controlling Your Financial Risk

A major concern in business is controlling expenditure. Every business needs to know beforehand what a service or product will cost so there are no hidden fees. This allows you to budget your work correctly to insure that what you do is profitable.

Therefore it is essential that you have control of your expenditure so there are no surprises!

If you need to sub-contract work to another business which provides you with a service of product, you must agree beforehand exactly what it will cost. By doing this you will be able to add your profit knowing that it will be a profitable deal.

Too often businesses get a verbal or rough price, and when the bill comes in it is different. Don’t let this happen to you. Get a firm price, confirmed in writing, so there will be no dispute later on. You can simply send an email agreeing the fixed price.

The method of a predetermined cost for sub-contract work is well used in the construction and building industries. Contractors get paid a fixed amount for a job irrespective of how long it takes. This is by far the best method of doing a deal, as you will know exactly what a job is going to cost and therefore cuts out the unknown factor.

A fixed fee, or price, will make every estimate spot on. If you are the middle man in a deal, you will know that there will be no hidden charges which could affect your profit. Try to do this with every vendor, especially lawyers and CPAs.

If you don’t, the charges may run away from you and get out of control.

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