Understanding and Managing Start-Up, Fixed, and Variable Costs

The Mission of AAltSys Technology

"To deliver non-proprietary, cost-effective solutions for business technology needs"

www.aaltsys.com

CEO, Gerald Lovel and his business partner Julia Lovel developed AAltSys Technology software which presents alternative solutions for the best business value. Some of their services are: office servers (for small business with no IT department), consulting, and software application development. AAltSys uses free and open source software (FOSS) making it compatable with most systems. They have a very low startup cost with a reasonable return on investment. (ROI) AAltSys offers free download of its software and makes it profit through subscription purchases by its clients. Gerald and Julie Lovel offered six things to consider in understanding and managing costs:

1. Reality check - make sure your product/service is something that is in demand.

2. Teamwork - make sure you have the right people in place to accomplish job/task.

3. Explain yourself - 4. Show me the money - is your product or service profitable

5. Value uniqueness - what is different about your product/service offered

6. Be ye not evil - always deal openly and honestly with everyone, it pays off in the long run.

Managing and understanding costs will help you better organize your business needs. It will determine the success or failure of your business. You have to have an idea of how much it will take you to start your business by considering the cost of goods sold and USAIIRD. (utilities, salaries, advertising, insurance, interest, rent, and depreciation) There are two types of costs: fixed and variable. Fixed costs are constant and variable costs vary. Also in managing your cost, good financial record keeping must be in place that you may know your cash inflows and outflows. Create financial statements to track sales, costs, debts, and balances. These statements will help to analyze the financial health of your business. Understanding and managing costs effectively is the "bedrock principle of business" and that is: "it earns a profit by selling products or services for more than they cost."