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Can You Make Your Investment In Your Business Work Harder For You By Tom Shay
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Can You Make Your Investment In Your Business Work Harder For You By Tom Shay

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The amount of investment a person has made in a business should make money - just like any other investment. In this presentation, Tom Shay shows how to calculate that investment, using one of the …

The amount of investment a person has made in a business should make money - just like any other investment. In this presentation, Tom Shay shows how to calculate that investment, using one of the free calculators on the Profits Plus website, and more importantly, how to make the investment pay better. www.profitsplus.org


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  • 1. Tom Shay, CSP Certified Speaking Professional
  • 2.
    • How much of your personal money will you need?
    • How much money will you need to borrow?
    • At what interest rate?
    • How much is the current owner going to finance?
    • At what interest rate?
    Let’s buy a business today
  • 3.
    • How much does your business need to earn to repay that money?
    • Do you see anything missing from this calculation?
    • (Don’t turn the page, yet!)
    How much…
  • 4.
    • What interest rate are you expecting for your money invested in the business?
    • Have you thought about the rate you are currently earning with your business?
    A missing question?
  • 5.
    • What can we do starting today, to greatly affect your return on investment?
    • Use the FREE Return on Investment calculator at profitsplus.org
    • If not starting a business today, what about your business starting today?
    The clock starts today
  • 6.  
  • 7.
    • Total sales
    • Percentage of credit sales
    • Cost of goods sold
    • Operating expenses
    • Tax rate percentage
    • Average inventory on hand
    We need this info:
  • 8.
    • Average accounts receivable
    • Other current term assets (cash)
    • Long term assets
    • Current liabilities (<12 months)
    • Long term liabilities (>12 months)
    We need this info:
  • 9.
    • Total sales: $875,000
    • Percentage of credit sales: 12%
    • Cost of goods sold: $450,000
    • Operating expenses: $320,000
    • Tax rate: 20%
    • Average inventory on hand: $180,000
    Business one
  • 10.
    • Average accounts receivable: $11,500
    • Other current term assets: $14,000
    • Long term assets: $175,000
    • Current liabilities: $23,000
    • Long term liabilities: $125,000
    Business one
  • 11.
    • Gross margin %: 48.57%
    • Operating expense %: 36.57%
    • Net profit %: 9.60%
    • Inventory turnover: 2.50
    Our observations of #1
  • 12.
    • A/R collection days: 39.43
    • Return on assets: 22.08%
    • Financial leverage: 1.64
    • Return on investment: 36.13%
    • Are you pleased with these?
    Our observations of #1
  • 13.
    • Total sales: $875,000 (same as #1)
    • Percentage of credit sales: 12% (same)
    • Cost of goods sold: $460,000 ($450,000)
    • Operating expenses: $340,000 ($320,000)
    • Tax rate: 20% (same)
    • Average inventory on hand: $250,000 ($180,000)
    Business two
  • 14.
    • Average accounts receivable: $19,500 ($11,500)
    • Other current term assets: $14,000 ($7,000)
    • Long term assets: $175,000 (same)
    • Current liabilities: $23,000 (same)
    • Long term liabilities: $125,000 (same)
    Business two
  • 15.
    • Gross margin %: 47.43% (48.57%)
    • Operating expense %: 38.86% (36.57%)
    • Net profit %: 6.86% (9.60%)
    • Inventory turnover: 1.84 (2.50)
    Our observations of #2
  • 16.
    • A/R collection days: 42.23 (39.43)
    • Return on assets: 13.29% (22.08%)
    • Financial leverage: 1.49 (1.64)
    • Return on investment: 19.77% (36.13%)
    • Are you pleased with these?
    Our observations of #2
  • 17.
    • 36.13% vs 19.77% r.o.i.
    • $84,000 vs $50,000 profit
    • Have these two businesses differentiated themselves?
    Bottom line difference
  • 18.
    • Ever been bitten by an elephant?
    • Ever been bitten by a mosquito?
    • Ever been bitten by a no-see-em?
    • It is the little things that get you!
    • In business it is the little things that make a difference!
    Bottom line difference
  • 19. There is no business like show business. But there are several businesses like accounting. David Letterman
  • 20. Final Note
    • This presentation will be specialized to your industry and your attendees’ specific needs.
    • For more information about having Tom present for you, contact us at (727)464-2182 or visit our website: www.profitsplus.org