Finance workshop 2010
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This a Presentation from The Business Wealth Club Members workshop on Finance in November 2010.
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Finance workshop 2010
- 1. Financial MASTERY Workshop NOVEMBER 23rd 2010
- 2. โThe Language of Business is Finance!โ Warren Buffet โ Worlds Top Investor โIf you donโt understand the Language how do you keep Score?โ Keith Cunningham โ Creator of Keys to the Value & Tony Robins Wealth Coach
- 3. Profit Margins Up Sell/ Cross Sell Enquiries Conversion Rate Life Time Value 5 Components of Your Business Engineโข Score the pistons from 1 โ 10 (1 being lowest and 10 being highest)
- 4. What are Your Beliefs about Money ...?
- 5. 3 Critical Areas of YOUR Financial Wealth in the Business ... Net Profitability Sales & Turnover Balance Sheet Value 1 2 3
- 6. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Getting to Break-Even & Beyond ยฃ2,500,000 ยฃ2,000,000 ยฃ1,500,000 ยฃ1,000,000 ยฃ500,000 ยฃ0 (ยฃ500,000) (ยฃ100,000) Revenue Total expenses Variable costs Fixed costs Net Profit Break even Net profit Max Utilisation
- 7. What Profit Per Hour (PPH) Do you Need? ยฃ100K 2000 hrs= ยฃ50 / hr xยฃ1m 2000 hrs ยฃ500 / hr
- 8. Review Your Business Finance Dashboardโข Financials Budgets Cash flow Cash Gap Overdraft limits % Profit Margin Balance sheet Cash Flow Debtors Creditors Average Payment Days Sales pipeline warning Keep track of incoming work Cash in Bank
- 9. Your Profit Pipelineโข - Where are You Leaking? Productivity Pricing Sales Margin
- 10. Discounting vs. Increasing Prices โฆ Base Price Base Price 10% Discount 10% Discount 10% Increase 10% Increase
- 11. How and Where to Raise Your Prices ... โข Just Do it! โข Raise Periodically โ every 5 new customers ... โข Split Test Pricing Models ... โข Increase shipping or carriage charges ... โข Survey customers ... โข Demonstrate a better ROI ... โข Sell Larger Units ...
- 12. How and Where to Raise Your Prices ... โข Sell Product or Service Bundles โข Sell Higher Quality ... โข Create a New Niche & Own it ... โข Demonstrate more โProofโ ... โข Volume / Time Based Model โ Low cost Airlines ... โข Set Sales Targets Based on Margin
- 13. Your Profit Pipelineโข ... Productivity Pricing Cashflow
- 14. 0 2 0 4 0 60 80 100 120 140 Payables Receivables Cash gap Inventory Where is the cash in Avoiding The Cash Gap Crashโข Stock arrives Cash paid Stock shipped Cash received your business?
- 15. Income/Rev/Sales - COGS/COS/Variable = Gross Profit - Exp/OH/Fixed - Owner Salary = Net Profit + Equity Inflow = Cash Position 100,000 - 75,000 = 25,000 - 15,000 - 5,000 = 5,000 + 0 = 5,000 75,000 - 56,250 = 18,750 - 15,000 - 5,000 = (1,250) + 0 = 3,750 50,000 - 37,500 = 12,500 - 20,000 - 5,000 = (12,500) + 0 = (8,750) 75,000 - 56,250 = 18,750 - 15,000 - 5,000 = (1,250) + 0 = (-10,000) 100,000 - 75,000 = 25,000 - 15,000 - 5,000 = 5,000 + 5,000 = 0 100,000 - 75,000 = 25,000 - 15,000 - 5,000 = 5,000 + 0 = 5,000 JAN 10 APR 10MAR 10FEB 10 MAY 10 JUN 10 Example of a Cash Flow Statement
- 16. Strategies to Cut Your Cash Gap ... Fast! โข Offer discount for early paymentsโฆ โข Set Cash In Targets โฆ โข Improve your Credit Control Systemsโฆ โข Streamline operations to complete jobs faster โข Just in time ordering โ small and often โข Change your Terms & Conditions โข Use debt collection services โข Negotiate better terms โข Research higher pricing
- 17. Your Profit Pipelineโข ... Productivity Pricing Cashflow
- 18. What do you need to โฆ?
- 19. Time to Plan You Actions
- 20. Financial MASTERY Workshop NOVEMBER 23rd 2010
Editor's Notes
- Profit = Sales โ Variable Costs (Cost of Sales, Cost of Goods Sold) โ Fixed Costs
- See the โPrice Increase/Decreaseโ spreadsheet for other gross margins
- 2 mins