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Lou Macabasco - Yanuaria
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Posts by Lou Macabasco - Yanuaria
How to Compute Your Business Income
Jan 10th
Every person or organization engaging in business activities has the goal of earning income or profit. They provide products and/or services in exchange for a price that will gain them some sort of profit.
The existence and continuity of every business relies heavily on how well a person or company sells their products and/or services — and also how good they manage and minimize business expenses. These two factors cause the business either to earn profit or incur losses.
It’s a common mistake to think that the business is earning money if there is a sale. However, the real test of good business performance lies on business income.
To determine if the business is profiting or losing money, you need to learn how to compute your business income.
Most businesses leave the job of computing their business income to their accountants. It is a practical move because accountants are technically competent to do the job. However, it is crucial that a businessperson understand the factors in computing business income so that they can better interpret and manage the financial result of the business operation. Furthermore, it can help the business determine which product or service is earning or incurring losses. As such, they can decide which product or service they should continue to sell and which to stop selling.
In this article, I hope to share with you my knowledge in accounting to help you better manage your own business finances. You will discover tools that will help you to compute your business income and learn the factors which can help you interpret the numbers shown in an income report.
Business Income Computation
Generally, business income is computed as follows:
Business Income = Revenue – Expense
Business income is the amount of gain (in monetary value or in kind) earned from a sale of a service and/or product after deducting all incidental expenses incurred by the business.
Revenue is the amount of money received (or to be received) in exchange for the product and/or services provided and sold. Revenue includes gross receipts on sale of service — or gross sales on sale of product. For each sale of a product or service, the amount of revenue increases. Meanwhile, sales discounts and allowances given to buyers or customers for bulk orders or special promos decrease the amount of revenue. Sample sales of products includes the sale of grocery items, bags, shoes, clothes, software, electronic gadgets, books, etc. On the other hand, the sale of a service includes service fees earned from transportation, communication and sale of professional skills like freelance writing, virtual assisting, accounting, legal advice, doctor, etc.
Expense is the amount of money paid (or to be paid) in exchange for product and/or service received and purchased. Sample expenses include inventory purchases, salary and wages, transportation, advertising, electric and water bills, communication, professional fees, etc.
3 Easy Steps in Computing Business Income
- Identify all the products and/or services sold in a given period and then total the amount. The total represents your revenue.
- Identify all the costs you pay in order to operate your business in the same given period. The total represents your total expenses.
- To compute your business income, subtract your total expenses against your total revenue.
Sample Illustration and Computation
John Doe is a software developer who owns a Software Company which focuses on developing and selling online software. Additionally, he has a number of blogs that promotes other people’s products and in return, he earns commission income. (Note that the period we want to compute is for the whole year of 2011.)
Step 1 – During 2011, Joe’s revenue was as follows:
Sale of Software $200,000
Commission on sales of other people’s product 40,000
Total Revenue $240,000
Step 2 – The cost in operating Joe’s Software Company during 2011 includes the following:
Web Hosting Expenses $2,400
Domain Fees 10
Salaries Paid 60,000
Rental and Utilities Expenses 10,000
Total Expenses $72,410
Step 3 – Joe’s business income in 2011 is $167590, computed as follows:
Business Income = Total Revenue – Total Expenses
= $240,000 – $72,410
= $167,590
Based on computed business income for 2011, Joe’s Software Company is showing a good performance since the total revenue is greater than the total expenses.
Conclusion – Interpreting Business Income
1. If Revenue > Expense = Income/Profit.
When the amount of revenue earned is greater than the expenses incurred, it can mean the business operation is doing well because there is enough amount of money to pay all the business expenses. Also, it is an indicator of good business management.
2. If Revenue < Expense = Loss.
When the amount of expenses spent is greater than the revenue earned, it signals poor business performance since the amount received in selling products and/or services is not enough to pay all the expenses necessary to operate the business. Furthermore, this may indicate poor business management.
3. If Revenue = Expense, we call it “Break-Even Point”.
When the business revenue is equal to the expense, we call it break-even point. This indicates that the business is neither earning nor incurring loses. The earning is just exactly enough to pay the business operating expenses. It can still show poor business performance and management since the objective of a business is to earn profit.
(Photo credit: Accounting via Shutterstock)
Lou is a professional accountant, personal development coach, public speaker and entrepreneur. She writes and coach on positive attitude, productivity, stress management, success, personal finance and balanced life. Find out more about her works at Live Life to Fullest
How to Deal With Loneliness During Holiday Season
Dec 19th
You CAN avoid a Blue Christmas.
We’re well into the Christmas holiday season once again.
This is a time of the year when most people are busy rushing to the malls buying gifts, attending parties, gathering with friends and family, and being merry. Indeed for many, this season is the most wonderful and happiest time of the year.
However, not everyone will be celebrating this holiday season merrily.
There are some who feel lonely and unhappy during this time of the year. Their loneliness may come from loss of loved ones through death, separation by physical distance, or through breakups. Other reasons may be that person is anti-social or too busy to participate in this festive season.
If you feel lonely and unhappy during the holiday season, here are some tips on how to deal with loneliness — and how to make your Christmas holiday merrier.
1. Stop excluding yourself and go out.
If you are feeling lonely and down this Christmas holiday, instead of clinging to self-pity and seclusion (which will only worsen your loneliness), push yourself to go out and attend holiday parties and gatherings. I’m sure there are lots you can choose from, such as those held by your close friends and family, the community you live in, in school, or at work.
Attending Christmas holiday parties is a chance for you to meet different kinds of people. By being surrounded with lots of people — especially happy and positive people — you won’t feel as lonely as you do now.
2. Reach out to old friends and family.
You are given 365 days in a year, and you spend much of it minding your own life. As a result, you are so busy working that you neglect to find time to connect with family or friends. Now is the time to reach out to old friends or family you’ve neglected to give time and priority this year. Don’t be afraid to initiate.
As they say: if you want something, you just have to ask.
3. Volunteer to a cause or event.
During Christmas, there are many charitable events and causes formed by different organizations that serve to help and make this season merrier to less fortunate people such as the poor and sick. You can find one organization around you and take the initiative to join the cause.
The benefit of joining these kinds of events will give you a different sense of happiness when you are able to help and make someone else happy. Also, it’s an opportunity for you to realize that your situation isn’t as bad as you think it is. There are more people who are less fortunate and lonelier than you are. Get inspiration and strength from them.
4. Give gifts to people around you.
Gift-giving is one of the famous activities during Christmas holiday season. The act of giving is a symbol of remembering the people in your lives, as well as a way to share one’s blessings.
There’s a saying that goes:
“A sure way to be happy is to make someone else’s happy.”
Cure your loneliness by making another person happy. One way to do that is by giving gifts to those other than your friends and family. Give gifts to people like your office maintenance personnel, guards, co-workers, bus or taxi drivers — all the people that may not affect your life significantly and yet somehow they all are part of your life.
You don’t need to give an expensive gift, something even as simple as a Christmas greeting card will be fine. I’m sure you will feel happy once you see the surprised (and happy) expression on their faces once you hand them their gifts.
5. Focus your thoughts on what you have — instead of what you don’t have.
Often the reason for our loneliness and unhappiness roots from our thoughts or mindset. We focus our thoughts on what we don’t have instead of what we have – that’s why we always feel incomplete and unfulfilled.
During this joyous season, cure your loneliness by doing the opposite. Focus your thoughts on what you have instead of what you don’t have. Be grateful for all the blessings and opportunities you’ve had this year. Once you start pinpointing the things you were grateful for and blessed with this year, I’m sure you will realize that your life isn’t as bad as you think it is.
I hope you were able to pick up valuable tools on how to deal with loneliness during holiday season. Use these to make this time of the year a merry and joyous event. If you have any others to add, please do so in the comments.
(Photo credit: Lonely Santa Girl with Presents via Shutterstock)
Lou is a professional accountant, personal development coach, public speaker and entrepreneur. She writes and coach on positive attitude, productivity, stress management, success, personal finance and balanced life. Find out more about her works at Live Life to Fullest
2 Different Kinds of Stress Which Make-or-Break a Person
Nov 10th
Photo credit: itsaboyd (CC BY-NC 2.0)
When we speak of stress, oftentimes, we only think of all negative implications it brings us. However, stress is not all bad. In fact, stress can also be good. We just have to be mindful of what kind and level of stress we are in.
By definition from Merriam-Webster dictionary:
Stress is a force exerted when one body or body part presses on, pulls on, pushes, or tends to compress or twist another body or body part. It’s a constraining force or influence.
In simple terms, stress is a kind of pressure, force or influence that moves us to action, either physically, emotionally or mentally.
Stress is important because it brings meaning to our life. Life without any kind of stress will be lifeless and boring. Stress can make life worthwhile.
One of the major causes of stress is work. Imagine if we lived without working, with no challenge and pressure to attend to, or no project to accomplish. At first, we will like and enjoy it, but as days go by that we don’t do anything, eventually, we will feel like our life has no meaning and purpose.
Our mind, body and life in general are designed to do some level of work or activity to give it meaning and purpose.
The Two Different Kinds of Stress
Generally, there are two kinds of stress:
- Positive Stress
- Negative Stress
Positive Stress
Positive Stress, also referred to as Eustress, is often felt when we are confronted with demanding and challenging situation which we are capable of handling. Challenges and responsibility gives us a sense of thrill and excitement.
An example of eustress is when we are working on new projects (like a promotion or business venture) or when we are entering a competition (like a sports tournament). It brings us a feeling of enthusiasm to win and succeed in the new challenge.
Eustress is a healthy kind of stress because it motivates and inspires us in our daily life activity and work. As a result, it gives us positive feelings of fulfillment and enthusiasm.
People who are experiencing positive stress contribute outstanding performance and output. They are the ones who enjoy what they do and they become successful in their endeavors.
Positive stress is a kind of stress that is essential in winning and succeeding in life. It’s a kind of stress that can make a person live a fulfilled and successful life.
Negative Stress
Negative stress is the “most popular” kind of stress. It’s a stress that causes negative implication such as anxiety, fatigue, depression, unhappiness and other illnesses.
An example of physical negative stress is when we are working on many projects and responsibility beyond what we can do, or when we no longer have time to relax and even get enough sleep. On the other hand, a source of negative emotional stress is when we don’t have good relationships with the people around us.
When we are met with negative stress, it often blocks our happiness and success and if it is prolonged, we can become emotionally, mentally and physically sick.
People who are experiencing negative stress are the one who always complain and feel miserable about life. They tend to become a victim instead of a victor. They have low self-esteem, are hard to relate and deal with, and have less accomplishments. As such, they are often unfulfilled and unsuccessful.
Negative stress is a kind of stress that can break a person’s potential success and fulfillment in life. It is one of the main killers of winning and success.
Now that we know the two different kinds of stress, our responsibility is to be aware of the signs that shows which kind of stress dominates us and do something constructive to solve it.
Adopting the right attitude can convert a negative stress into a positive one. ~ Hans Selye
Remember to use positive stress as motivation to keep you moving and performing excellent work. At the same time, be mindful of the negative stress that may paralyze you. Know how to maintain an appropriate balance between the two.
Lou is a professional accountant, personal development coach, public speaker and entrepreneur. She writes and coach on positive attitude, productivity, stress management, success, personal finance and balanced life. Find out more about her works at Live Life to Fullest
The Benefits of Simple Productivity
Oct 6th
Simplicity is often perceived as boring, unattractive and unremarkable. Majority of people want something striking and complicated.
But as Leonardo da Vinci has said,
Simplicity is the ultimate sophistication.
Different to the common belief, simplicity is not boring, unattractive or unremarkable. In fact, simplicity represents elegance and complexity.
The Misconception of Being Productive
The common error of people who aim to succeed at something is the tendency to make the process complicated, such as over analysis and accepting responsibility beyond one’s capacity.
Take for an instance when an individual or company spends too much time planning and perfecting a product. By the time the product is completed and released in the market, competitors have already dominated it. Another example is when an individual accepts a lot of responsibility that is beyond their capacity. They think that having many work responsibilities and working long hours are marks of a productive and fulfilled life.
However, being productive neither needs too much analysis nor working long hours. If only we knew how to keep things simple.
The Benefits
Simplicity, simplicity, simplicity! I say, let your affairs be as two or three, and not a hundred or a thousand instead of a million count half a dozen, and keep your accounts on your thumb-nail. ~ Henry David Thoreau
If you want to be more productive with minimal effort and stress, learn how to simplify and stay focus. Here are the benefits of simple productivity:
1. Clarity
Simplicity aids clarity; the directness of expression and purpose. It contributes to the ability of having a clear description of what needs to be done, why it is important to accomplish, and how it will be accomplished.
2. Focus
The majority of people are incapable of staying focused. They get easily distracted and lured away from their goal. They lose attention to what is important and needs to be done. This leads to an unproductive and stressful life.
Focus is the next benefit of simplicity. By keeping things simple, it helps you keep an appropriate amount of attention on the most important task at the appropriate perspective and time. By itself, staying focus creates more output with less effort and time.
3. Elimination
A key to eliminating queasiness is to focus on the horizon. – David Allen
Diseases can be caused by stress and exhaustion. In order to succeed a person tends to abuse oneself in exchange for hard work. They have a habit of sacrificing most areas of their life such as family, social, financial, physical and emotional health.
Another benefit of simple productivity is that it allows you to leave things undone. It encourages you to say no to unimportant things and focus your whole energy to the important ones. It saves you time and energy. You no longer have to sacrifice areas in your life in exchange for work. Remember that the wisdom of life consists in elimination of the non-essentials.
4. Effectiveness
There are people who sacrifice quality in exchange for quantity. In order to accommodate and accomplish more tasks they tend to overlook some important process which leads to poor quality and error.
The next benefit of simple productivity is effectiveness in getting more things done. When you are clear and focus on what you want to achieve, you can concentrate on producing quality work. Your attention and effort is centralized; you are able to produce quality and efficient output.
5. Tranquility
A disease shared by people who desire to succeed is the inability to rest, relax and achieve peace of mind. They tend to carry the weight of their work responsibility and stress wherever they go. It becomes evident in the expression of their face, body and tone.
The benefit of simplicity is that it provides more peace in your life. Simplicity assists you in creating clear goals, focusing on your actions, and getting more done. These factors help in eliminating the clutter and stress produced by undefined goals or purpose. It provides peace and tranquility in your life.
6. Work-Life Balance
In the past, I couldn’t imagine how it was possible to achieve work-life balance. I’ve spent most of my time working long hours in the office in order to get ahead in the corporate world and achieve my definition of success. But after I learned the value of simple productivity, I learned that life is not all about work. There are other areas in our lives that are as important as career and financial success.
The last benefit of simplicity is that it helps you have more time on your hands. You are able to achieve work-life balance when you are clear about your goal and staying focused on what needs to be done. This eliminates the unnecessary activity that leads to stress and fatigue. It also gives you more time for other important areas in your life.
People who are able to enjoy life while reaping success at the same time are the ones who understand the value of simplicity in productivity.
I hope this article has somehow enlightened you to the reality that you don’t have to sacrifice so many things in your life just to be productive and successful. All you need to do is to keep things simple and try your best to avoid making it complicated.
For a final note, let me leave you this phrase from the late Steve Jobs, founder and former CEO of Apple, Inc:
That’s been one of my mantras — focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.
Lou is a professional accountant, personal development coach, public speaker and entrepreneur. She writes and coach on positive attitude, productivity, stress management, success, personal finance and balanced life. Find out more about her works at Live Life to Fullest
7 Simple Steps to Resolve Any Problem
Aug 15th
Struggles and difficulties are part of life. You cannot avoid these problems; it will always arise no matter how much you try to take control or organize the things in your life.
Most people spend more time and energy going around problems than in trying to solve them.
~ Henry Ford
Problems are not the reason why a person lives a difficult and miserable life; most of the time, it’s a matter of perspective. Because often, majority of people let problems defeat them through feelings of anger, fear and anxiety. These negative feelings paralyze a person to move forward and take a step in resolving the problem.
On the other hand, perspective is also the reason why there are people who succeed despite struggles and difficulties in life. It’s because those who succeed knows how to resolve or manage problems when it arises. They don’t let the negative emotion of anger, doubt, fear or anxiety interfere their ability to think of the solutions and take the next step.
If you get easily paralyzed and depressed by the problems in your life, take time to read and follow these seven steps in resolving problem. It can help you rise above the difficulties, move on positively and eventually achieve success in life.
Don’t dwell on what went wrong. Instead, focus on what to do next. Spend your energies on moving forward toward finding the answer. ~ Denis Waitley
1. Identify Your Problems
The first step to rising and resolving the problems of your life is to identify what your problems are. Because when you know what your problems are, only then can you be ready to face and resolve it.
Stop feeling angry, scared and anxious even for just a few minutes. Take time to reflect and start writing down what makes your life difficult. Identify one by one all the problems that’s bothering and paralyzing you to enjoy life.
2. Face Your Problems
After you’ve identified all the problems that are keeping you from being happy in your life, the next step is for you to be strong and approach your problems.
Oftentimes, we tend to avoid problems because of the discomfort and awkwardness it feels. However, avoiding doesn’t solve your problems; it will only prolong or increases the damage and difficulty when left unsolved. Be strong in facing and resolving your problems.
3. Resolve Your Problems
Once you had the courage to face your problems, you are now ready to decide on the solution or the next action step.
Remember, anger, worry or misery doesn’t change anything; it will only leave you with ill feelings. The circumstance will only change when you start to decide on the solution.
4. Move On
Once the problem is resolved, move on and let it go. Stop thinking about your problem over and over again. It will do nothing but gives you anxiety and stress.
5. Remember the Lessons Learned
You may be surprised but the truth is problems are actually good for you because it is a way for you to learn a lesson. However, if the lesson isn’t learned, there’s a huge possibility that the problem will occur again in the future.
In every problem that arises in your life, strive to learn the lesson and carry them as you move forward in life. Remember, it’s better to carry the lessons learned rather than the grudges.
6. Never Lose Your Value as a Person
It is false to believe that problems are bad karma as a consequence of your past wrong doings. Remember, problem happens even to the most saintly people on earth. Never let problems become a measurement of your value as a person. You never lose your value because of problems.
7. Be Ready for Problems
The best way to become prepared and ready with problems is to accept that it is part of life. Accept problems as part of the imperfections that makes life more meaningful and worth living for. As they say, if there’s no pain, there’s no glory. The same is true that if there’s no problems and difficulty, there will be no happiness and bliss.
Lou is a professional accountant, personal development coach, public speaker and entrepreneur. She writes and coach on positive attitude, productivity, stress management, success, personal finance and balanced life. Find out more about her works at Live Life to Fullest
6 Effective Ways to Become Persistent
Aug 4th
Persistence is probably one of the most admirable characters a person can possess. It’s the ability to be determined to do or achieve something regardless of any setbacks.
No great achievement is possible without persistent work. – Bertrand Russell
A distinguishing attributes of those who succeed in life against those who don’t is persistence.
Many has the capacity to set goals and plans toward success, yet only few succeeds, because only few stick to work on their goals and plans until it is accomplished.
Majority stops before they even start or they quit in the middle of their journey. Oftentimes, the reason for quitting is hardships, discomfort and uncertainty. They let their fears and doubts paralyze them from moving persistently toward their goals. Or perhaps, their motivation isn’t firm enough to drive them to work on it.
6 Ways to Develop Persistence
The most interesting thing about a postage stamp is the persistence with which it sticks to its job. – Napoleon Hill
Developing persistence is a master skill to success. It is easier to relax and do nothing, or just live in our comfort zone, rather than face the uncertainty and discomfort of sailing thru our goals. Plus, the idea of failure and hardship is unbearable.
But if you want to create change in your life and achieve success, now is the time to develop and master persistence. Here are six (6) ways to help you develop persistence:
1. Identify Your Wants and Desires
If you don’t know where you are going, you will probably end up somewhere else. – Lawrence J. Peter
Before you can develop persistence and eventually achieve success, you need to first identify your wants or desires. You can do this by simply writing down specifically all the things you want to have or accomplish. List down all your desires and wants, no matter how impossible they are to achieve in the moment.
2. Determine Your Motivation
Motivation comes from a deep reason why we want to achieve or have something. If you know why you’re doing what you’re doing, it gives you more energy to keep moving.
For an instance, you want to publish a book. Creating a book takes time and patience. If you don’t have enough motivation, a reason why you need to publish the book, you probably can never finish it. But if you’re motivated by the thought of influencing and teaching millions of readers thru your words, only then will you keep pushing yourself to work on finishing the book.
3. Outline Your Definite Action Step
Identifying your wants or desires speaks of what you want to achieve. Determining your motivation shows the reasons why you want to achieve what you want. Outlining your definite action step is necessary to know how you will be able to achieve what you want.
When you know how to get what you want, it makes it easier to achieve it. To know how, it pays to do some research and planning of what needs to be done on your part. Be specific on each step you need to take. Identify at least two (2) ways and plans on how you can achieve your goals.
4. Keep a Positive Mental Attitude
The road to success is not easy, in fact, it’s challenging, this is why only few succeeds. There will be countless times you will be face with defeat and failures that if you are weak, you’ll be succumbing to negative thoughts of fears and doubts.
In order to develop persistence and eventually succeed in your endeavor, always maintain a positive mental attitude, regardless of situation. Keep your thoughts focused on taking action towards your goals. Avoid negative thoughts and feelings for it will ruin your concentration and persistence.
5. Build Your Mastermind Group
Mastermind Group composes of people who can help you succeed towards your goal. Choose carefully who you will trust as part of your mastermind group. If possible, include only those who can give you unbiased judgments and who has positive mental attitude. You can’t afford wasting your time listening to cynical advices and pessimist people. These types of people won’t help you succeed; instead, they will drown your energy that can eventually lead to failure.
6. Develop Discipline and Habit
All your goal-setting and planning will go to waste if you won’t be able to develop discipline and good habit.
Discipline is the bridge between goals and accomplishment. – Jim Rohn
There will be a lot of hindrances that will stop you from moving towards your goal, and without proper discipline, it will be easy for you to sail away. Upholding discipline and good habits can help you stay in the course, even despite difficulties.
Lou is a professional accountant, personal development coach, public speaker and entrepreneur. She writes and coach on positive attitude, productivity, stress management, success, personal finance and balanced life. Find out more about her works at Live Life to Fullest