What is 50-30-20 rule in business?

[Starmix]

You might not be acquainted with this 50-30-20 rule, which relates to your budgeting in dealing with business. In business, you need to spend additional capital on your goods and other essential things money is the answer like the bills and the salaries of your workers. Maintenance is essential when operating a business. There should be an accurate or synonymous to accuracy budgeting. It is not easy to budget if your money is just good to spend for basic and daily needs. This rule means to divide your income into three categories: spending- must be 50% on needs; 30% on wants, and 20% on savings.

If your business is the source of your earnings, then you must spend only 50 % on the needs of your business like additional goods, and at home, foods, medicine, and essential bills. See to it that the wants you would employ in your business is not more than 30%. And what are these wants? You have to list them down to guide you and to avoid overspending the budget which is 30%. Finally, never forget to set aside 20% of your total earnings from your business or even from your salary.

If you think, it is right for you, then never hesitate to try, do it.

 

[Niyi Briggs]

When it comes to savings, I don't believe in a formula. I believe people should do it at their own pace but be consistent in it.

 

[nomad]

The rule of 50/30/20 is applied in personal finance and cashflow management, I do not know how this relates to business

 

[Shavkat]

I will take note of this. If I continue my online shop, I will do this. However, I am planning to start a business offline. I just felt bad that one of my friends got my business idea of making a coffee shop.

 

[Starmix]

I will take note of this. If I continue my online shop, I will do this. However, I am planning to start a business offline. I just felt bad that one of my friends got my business idea of making a coffee shop.

You may like to apply for donuts franchising like Dunkin Donuts. It will surely click. Find the right place. It's best if inside the mall for there are always people.

 

[Suba]

Frankly, I've only heard of the 50-30-20 rule in business, because so far I've entered several big companies, none of which have implemented the 50-30-20 rule budget. Apart from that, as a business owner I don't apply the 50-30-20 rule, but I get a salary as a supervisor which can reduce profits and ultimately reduce business income taxes.

 

[nomad]

Frankly, I've only heard of the 50-30-20 rule in business, because so far I've entered several big companies, none of which have implemented the 50-30-20 rule budget. Apart from that, as a business owner I don't apply the 50-30-20 rule, but I get a salary as a supervisor which can reduce profits and ultimately reduce business income taxes.

I don't see how the rule of 50/30/20 is applied in a business. Where the business expenses like marketing cost, production cost fit into this rule. Corporate finance and personal finance are different things

 

[Suba]

I don't see how the rule of 50/30/20 is applied in a business. Where the business expenses like marketing cost, production cost fit into this rule. Corporate finance and personal finance are different things

In personal companies, the 50-30-20 rule is also impossible to apply, if we reduce employee salaries of course they will move to another company. The grouping of costs in corporate finance and personal finance is the same, but corporate finance is more complex.
In industrial businesses, these two types of businesses will calculate production costs.