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Finance workshop 2010

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This a Presentation from The Business Wealth Club Members workshop on Finance in November 2010.

Published in: Economy & Finance
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Finance workshop 2010

  1. 1. Financial MASTERY Workshop NOVEMBER 23rd 2010
  2. 2. ”The Language of Business is Finance!” Warren Buffet – Worlds Top Investor “If you don’t understand the Language how do you keep Score?” Keith Cunningham – Creator of Keys to the Value & Tony Robins Wealth Coach
  3. 3. Profit Margins Up Sell/ Cross Sell Enquiries Conversion Rate Life Time Value 5 Components of Your Business Engine™ Score the pistons from 1 – 10 (1 being lowest and 10 being highest)
  4. 4. What are Your Beliefs about Money ...?
  5. 5. 3 Critical Areas of YOUR Financial Wealth in the Business ... Net Profitability Sales & Turnover Balance Sheet Value 1 2 3
  6. 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 £2,500,000 £2,000,000 £1,500,000 £1,000,000 £500,000 £0 (£500,000) (£100,000) Revenue Total expenses Variable costs Fixed costs Net Profit Break even Net profit Max Utilisation
  7. 7. What Profit Per Hour (PPH) Do you Need? £100K 2000 hrs= £50 / hr x£1m 2000 hrs £500 / hr
  8. 8. Review Your Business Finance Dashboard™ 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. 9. Your Profit Pipeline™ - Where are You Leaking? Productivity Pricing Sales Margin
  10. 10. Discounting vs. Increasing Prices … Base Price Base Price 10% Discount 10% Discount 10% Increase 10% Increase
  11. 11. How and Where to Raise Your Prices ... • Just Do it! • Raise Periodically – every 5 new customers ... • Split Test Pricing Models ... • Increase shipping or carriage charges ... • Survey customers ... • Demonstrate a better ROI ... • Sell Larger Units ...
  12. 12. How and Where to Raise Your Prices ... • Sell Product or Service Bundles • Sell Higher Quality ... • Create a New Niche & Own it ... • Demonstrate more “Proof” ... • Volume / Time Based Model – Low cost Airlines ... • Set Sales Targets Based on Margin
  13. 13. Your Profit Pipeline™ ... Productivity Pricing Cashflow
  14. 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 Crash™ Stock arrives Cash paid Stock shipped Cash received your business?
  15. 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. 16. Strategies to Cut Your Cash Gap ... Fast! • Offer discount for early payments… • Set Cash In Targets … • Improve your Credit Control Systems… • Streamline operations to complete jobs faster • Just in time ordering – small and often • Change your Terms & Conditions • Use debt collection services • Negotiate better terms • Research higher pricing
  17. 17. Your Profit Pipeline™ ... Productivity Pricing Cashflow
  18. 18. What do you need to …?
  19. 19. Time to Plan You Actions
  20. 20. Financial MASTERY Workshop NOVEMBER 23rd 2010

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