- Increasing Profitability
When you increase your business’s profitability, you increase the viability of your business and its ultimate value. Increases to profits leads to improvements in the flow of money to you, the owners, … the ultimate reason for a business’s existence.
Some business people don’t like building profits as this increases tax liability; generally, this “fear” is more based on the concern of cash flow, the ability to pay the tax debts. This is resolved by working together to create a sustainable marketing plan, and strategic growth to improve your cash flow.
Ultimately the objective of ‘Increasing Profitability’ is to:
1) create increased income for you, the owner
2) increase the value of the business
3) take greater control of your business’s ongoing viability.
2. Growing Your Cash Flow
With the improvement of profitability comes an increase in cash flow. Occasionally, it happens where a business is profitable and still has negative cash flow. This is why we never enter into an engagement with a client or build a growth plan without fully understanding the cash flow of the business in conjunction with the profitability.
There are 6 key areas for improving cash flow. Together we assess these 6 key areas, create a plan to improve each area, make the necessary changes to build cash flow and then work as a team to monitor your ongoing KPI’s and success factors.
Long term profitability with positive cash flow supports the business to pay its shareholders and business owners, take market place opportunities and create something of high value.
3. Strategic Growth and Prosperity
Establishing and solidifying your personal objectives for the business is instrumental in creating a plan to achieve it. Every business has the same potential, however, what the business becomes and how it performs is crafted by the individual owner’s desires.
The creation and review of your growth plan and your objectives is a collaborative process of working together to define where you want to take the business, and more importantly what you want the business to do for you. Ultimately, businesses are merely vehicles that we use to achieve the lifestyle we want in life.
Once the objectives are defined and agreed to, we then work backwards from there to build the foundational building blocks of the business. As we develop, we monitor the critical success factors, to build the business toward that direction and gain your outcomes for the business and for owners/shareholders.
Growth leading to prosperity for both the business and prosperity for the owners and shareholders is the ultimate aim of working together.
4. Funding Shortfalls and Growth
Creation of live business plans for use in defining the right business model (profits, cash flow, equity growth, product/service mix, right people and proper systems) is the core of how we work together.
By defining the right business model and associated financial health leads to a greater ability for funders (banks, lenders, investors, angel investors) to see the value of lending or investing in the business.
A plan linked to a robust business model makes it easier to find funders/investors. It also makes it more viable to pay these people back when the time comes.
The ultimate aim is the improved viability of the business, a greater understanding of what makes the business financially capable, a robust business plan for review by funders, and ability to pay back.
Working together to ensure your Bookkeeping is up to date. This includes the creation and/or maintenance of your financial records.
Via Xero, or QuickBooks online. We enter your transaction, maintain a correct set of electronic books and report back to you on key financial areas.
More importantly, though is the use of your historical data and record keeping, to establish a dashboard of leading indicators that monitor and predict the future performance of your business. Accurate and up to date financials are required and a must for every business, knowing where your business has been and how it has performed is instrumental in creating and executing the plan going forward.
Lastly, the use of a scoreboard in your business is critical, in all my years I have yet to teach a strategy more effective and more straightforward than an effective scoreboard. By far and away most business owners are competitive, and they generally hire competitive people. Unfortunately, we often forget to help our competitive employees keep score; as a result, their competitiveness wanes. They want and crave feedback, they want to win, they want to see progress towards a common goal. Don’t take that away from them, work with them and empower them to achieve results together, do that by keeping score.
You still use your accountant to lodge your tax reporting, BUT we make sure the information in your online books is correct. As well, we work with you to pinpoint areas which can be improved, e.g. profits drivers, cash flow drivers, equity growth, the collection of debts owed to your business and overdue creditors.
We use our bookkeepers to maintain your books.
6. Diagnosing Improvements
A solid diagnostic is critical before any engagement and the establishment of strategic plans going forward. The adage of “more revenue and more clients” isn’t always the answer to what ails business owners. Many times, and more often than not business challenges are solved with what already lies within the business. Just reconnecting with past clients or a simple price strategy change, or oddly enough improved receivable management is enough to move the needle and improve the business results. So, by working together with the business owner and leadership team, we ensure the correct diagnosis is achieved, and the best strategies are chosen to achieve the desired business objectives.
Sometimes people think an area of their business needs to be improved, e.g. “get more clients and all will be good” as an example. But when we investigate, we find that this potential solution would have created a more negative cash flow situation for the business … firstly we needed to change how the business charged, how they collected money and what their pricing structure was. An incorrect diagnostic by the business owner can lead to catastrophic failure of the business.
Working together ensures the right diagnosis is achieved, the proper processes for improvement set up and ongoing improvement completed.
A solid diagnostic can be a real catalyst toward improvement in all areas of your business, e.g. lead flow, conversion, the average value of spend bus customers, profit, cash flow, direction, increased customer interaction and much more.
7. Learning & Personal Growth
Simply put, we can’t solve the problem with the same thinking that created the problem. So LEARNING and personal growth are critical for success and moving your business to the next level. Whether it be Attendance at one of our strategic workshops, reading books, hiring a business coach, these all with have a dramatic impact on the direction and speed at which you achieve results, today, tomorrow, this year and three years from now. I have yet to meet or spend time with a business owner who has made consistent profit and growth that was not a student, learner or spent time learning from people who had achieved what they had not.
Have you been defining the direction for your business over the next 12 months, 3 years and 5 years? Building a business model which delivers profits, cash flow and business equity growth is a crucial outcome of attendance at one of our workshops.
You develop strategies for improvement from over 1,000 samples, create a live business plan which can be adjusted and printed at any time, financial modelling to develop the best results for your business, what if processes and a greater understanding of what drives your business.
Business & Leadership Coach
403.690.8363 or email@example.com