Tips for Great Cash Flow

1. On having
GREAT Cash Flow
5 HOT Tips
In Tough Financial Times

2. How is Business for YOU?
Business A Business B
Know the Numbers – then you can manage it

3. How is Business for YOU?
Business A
Know the Numbers – then you can manage it
Work to get RESULTSWork to get RESULTSWork to get RESULTSWork to get RESULTS ----
1. Price Discount or Increase
2. Sales and Profit Growth
3. Sell 20% more
4. Change 3 Areas
5. Manage Debtors

4. 1. Price Discount or Increase
If You need to
DOUBLE Sales for same
$ Gross Margin result
- would it be worth the
effort?

5. 1. Price Discount
Eg If you Discount 10%
and your Gross Margin is 20%
You need to
DOUBLE Sales for same
$Gross Margin $ result!!!

6. 1. Price Discount

7. 1. Price Discount or Increase
Can you LOSE Sales
And still get
the same $ result
- How can that work ?

8. 1. Price Increase
Increase 10% Prices
You can
LOSE 20% Sales
And still get the
same $ result!!

9. 1. Price Increase

10. 1. Price Increase
• Do you know your Gross Margins?
• Do you have a copy of Discount Tables when
deciding sales and pricing
• Have you checked your Costings in last 6-12
months?
• Where can you easily find Gross Margin in
MYOB, Reckon, Quickbooks?? – see next…

11. MYOB
To Get Report –
(> means click)
>Reports
>Index to Reports
>Accounts
>Profit & Loss +
YTD Year to Date
>Customise Dates

12. Quickbooks
To Get Report –
(> means click)
>Reports
>Company & Financial
>Display
>Modify Report top LHS
>Dates
>Tick % of Sales
>Tick YTD if desired
>Ok

13. 2. Leads & Conversion Growth
Step Regular Increase 10% Notes / Result
Leads
Conversion
= Customers
X Num.
Transactions
X Aveg Dollar Sale
= Turnover
X Margin
= Gross Profit

14. 2. Leads & Conversion Growth
Step Regular
Leads 4000
Conversion 25%
= Customers 1000
X Num.
Transactions
2
X Aveg Dollar Sale $100
= Turnover $200,000
X Margin 25%
= Gross Profit $50,000

15. 2. Leads & Conversion Growth
Step Regular Increase 10% Notes / Result
Leads 4000 4400
Conversion 25% 27.5%
= Customers 1000 1210
X Num.
Transactions
2 2.2
X Aveg Dollar Sale $100 $110
= Turnover $200,000 $292,820
X Margin 25% 27.5%
= Gross Profit $50,000 $80,525

16. 2. Leads & Conversion Growth
Step Regular Increase 10% Notes / Result
Leads 4000 4400 Most Costs Here
Conversion 25% 27.5% Sell – Listen
= Customers 1000 1210 21% increase
X Num.
Transactions
2 2.2 Encourage Return
X Aveg Dollar Sale $100 $110 Upsell other items
= Turnover $200,000 $292,820 46% increase
X Margin 25% 27.5% Increase Price 10%
= Gross Profit $50,000 $80,525 61% increase !!!

17. 3. Sales Growth
Sell 20% more to
EXISTING customers
& you can DOUBLE
Turnover in 4 years…

18. 3. Sales Growth
How to Sell 20% more – ideas –
• Bundle Services or Products to increase
– perceived value
• Encourage frequent return to purchase eg loyalty cards, set
price maintenance, want brushes with that paint?
• Pre-sell eg place a deposit for Christmas and secure your item
before the rush
• Offer a low-cost but high perceived value item eg Books of
Tips and Tricks (create once, sell/offer 100s times)

19. 4. Change 3 areas 5% = Profit 61% up!
Change 3 areas Gives Result
Sales 100,000
Cost of Sales 40,000
Gross Profit 60,000
Expenses 45,000
Operating
Profit
15,000

20. 4. Change 3 areas 5% = Profit 61% up!
Change 3 areas Gives Result
Sales 100,000 Up 5%
Cost of Sales 40,000 Down 5%
Gross Profit 60,000
Expenses 45,000 Down 5%
Operating
Profit
15,000

21. 4. Change 3 areas 5% = Profit 61% up!
Change 3 areas Gives Result
Sales 100,000 Up 5% 105,000
Cost of Sales 40,000 Down 5% 38,000
Gross Profit 60,000 67,000
Expenses 45,000 Down 5% 42,750
Operating
Profit
15,000 24,250

22. 4. Change 3 areas 5% = Profit 61% up!
Change 3 areas Gives Result
Sales 100,000 Up 5% 105,000
Cost of Sales 40,000 Down 5% 38,000
Gross Profit 60,000 67,000
Expenses 45,000 Down 5% 42,750
Operating
Profit
15,000 24,250 61.66%
increase!

23. 5. Debtors – Remember to Monitor
Are those who owe you money
increasing?
• Profit is not cash until you are paid
• Statistics show : chance of collection
– A debt that is 3 months old
– it has has 72% chance of collection
– Or 6 months old - 56%
– 9 months 43%
– 12 months 28%

24. How is Business for YOU?
Become Business A !
Know the Numbers – then you can manage it
Work to get RESULTSWork to get RESULTSWork to get RESULTSWork to get RESULTS ----
1. Price Discount or Increase
2. Sales and Profit Growth
3. Sell 20% more
4. Change 3 Areas
5. Manage Debtors

25. ACTION LIST
Need to Get Discount Table
Need to Get Price Rise Table
Need to review our Gross Margins
Need to review Sales & Profit
Need to aim to sell 10-20% more to Current
Customers
Need to check Costings
Need to Review Debtors
Need to meet with…………………………….