Inconsistent cash flow can create stress and unnecessary pressure, resulting in reactive decisions that may have you compromising your profits in order to cover debts. Careful cash flow planning and financial strategising allows you to make smarter decisions for the future. There are many simple tools a business owner can use to create consistent, sustainable revenue with a take-home profit. This workshop provides you with trade-specific street smart tools and skills to help improve cash flow in your business.

1. 10 Creative Strategies
for Consistent Cash Flow &
Profits

2. Welcome
• Hi…I’m Jon Mailer
• Relax
• Enjoy – eat, drink, connect,
• Be Open – take notes, ask how?
• Link to slides – slideshare.net/tradeinsights
• Phones, parking, toilets
• Participate – share
• Contribute & Win…

3. Who is PROTRADE United?
Australia’s #1 coaching & mentoring organisation
supporting trade & construction business owners…
To help business owners to:
• Stabilise & Streamline – creating CONSISTENCY with income, profit
& cash to give them freedom of CHOICE
• Scale – growing # projects, vans, teams, (with profit!)
• Step Out – off the tools, choose a role, sell/manage buy out

4. Who is this for?
In this session…
• Think differently about your business
• Understand how to prepare yourself financially for
the year ahead
• Avoid the biggest financial mistakes that trade
owners make
• Implement 10 creative cash flow strategies
• Discover simple ways to improve gross profit and
reduce overheads
• Fix money challenges – forever*

5. Who is this NOT for?
• If you want to be stuck in the cycle of poor profits and
virtually non-existent cash flow
• You don’t want to grow profit or free cash flow
• You love spending most of your time working hard
• You are happy with the status quo

6. Imagine if you were like…

7. Quick hello…

8. Challenges…

9. Does it get any easier?
Don’t wish it was easier.
Wish you were better.
Jim Rohn…

10. Your own economy…

11. Psychology vs. Skills/Ability

12. Are you prepared to change?

13. Earning potential with your
hands?
$000’s

14. Earning potential with your
head?
$000,000’s

15. Adapt the ideas…
To suit your business and
target customer…

16. My assumptions…
• You are a master of your craft
• Professional
• Add value
• Value yourself
• Under promise and over deliver
• Open to change

17. To think about…
• If you don’t understand your numbers you don’t
understand your business.
• Understanding vs. Doing
• Mange your money wisely and you will have more
money to manage.
• 80/20 – Emotion vs. Mechanics

18. Biggest Mistakes…
1. Messy and inaccurate books
2. Don’t charge enough – particularly for labour
3. Delay’s with invoicing
4. Wrong business structure
5. Unaware of breakeven
6. No cash reserves
7. Focus on more work vs. more profit
8. Don’t review financials often enough
9. Not checking invoices
10.Not understanding the cash cycle

19. What is NOT the magic solution?
More income is NOT the magic solution
– sometimes just the same challenges
with more zeros!

20. The Fundamentals
Gross/total income (sales)
- Direct Costs – C.O.G.S.
= Gross Profit (margin)
- Fixed Costs/Overheads/Operating Expenses
= Net/Pre Tax Profit (EBIT)
• Break Even
• Your Cash Cycle
• Projections/Forecasts

21. The Oh C&%# moment!
PROFIT & LOSS STATEMENT
Income $100,000
Less:
COGS $45,000
Gross Profit $55,000
Less:
Overheads $45,000
Balance $10,000 PROFIT

22. The Oh C&%# moment!
PROFIT & LOSS STATEMENT CASHFLOW STATEMENT
Income $100,000 Cash Received $100,000
Less: Less:
COGS $45,000 COGS $45,000
Gross Profit $55,000
Less: Less other outflows:
Overheads $45,000 Overheads $45,000
Repay Loan $5,000
BAS (previous quarter) $15,000
Total $65,000
Balance $10,000 PROFIT Balance -$10,000 CASH

23. Prepare financially…
1. Projections/forecasts
2. Scorecard – measure what matters
3. Correct banking/money flow structure
4. Understand your money mindset/philosophy/BS
5. Understand the causes of poor profits & cash flow
6. Money management systems – reporting etc.
7. Manage the risks – shortfalls/contracts
8. Educate yourself & build your team

24. What has been valuable?

25. Creative profits strategies
1. Develop your money mindset
2. Track, Measure, Manage
3. Profitable Pricing – away from hourly rate to fixed rate
4. Set profit targets – NOT revenue targets (work
backwards)
5. Improve GP (real Income)
6. Improve NP (reality)
7. Set up your money flow
8. Get money in faster
9. Delay money going out
10. Manage the risks – shortfalls/contracts

26. 1. Develop your $$$ mindset
• Become a money master
• Value yourself
• Raise your standards/expectations
• Focus
• Philosophy – spend/save
• Psychology
• Money flow and allocations

27. 2. Track, Measure, Manage
• Scorecard/Dashboard
• Break Even
• Gross Profit, Net Profit
• Lagging vs. Leading
• Income/cash flow forecast
• Worst Case Scenario (WCS)
• Software
• Understand the cash cycle in your business
• Review at least monthly

28. 3. Profitable Pricing
• Know the true costs of to employ
• Work on flat rate vs. hourly rate
(service/maintenance)
• Educate on value
• Allow for inefficiencies
• Mark up vs. Margin
• Never discount*
• Reflection on brand

29. Glen – Stilus Design &
Constructions

30. 4. Set profit targets
• Work backwards from your profit goal
• Input overheads & COGS
• Create your required income and job #

31. 5. Increase Gross Profit
• Know your existing GP – review regularly
• Measure GP per X – job/project, van, employee
• Are you charging enough?
• Do you know your TRUE costs to employ?
• Increase prices/charge out
• Do you know Mark Up vs. Margin
• Get more clients/customers
• Increase average job value
• Add MASSIVE value

32. Improve efficiencies/productivity
• Job Management Software
• Track budget hours to actual – use of time
• Evaluate employment model
• Role of team – Get or Keep
• Reduce overtime
• Reduce faults
• Implement KPI’s
5. Increase Gross Profit

33. Select Better Clients/Customers
• Sack the slow payers – they are not worth the
headaches
• Check credentials with new clients before accepting
credit terms
• Trade Debt Insurance
5. Increase Gross Profit

34. Michael – Livable Landscapes

35. What has been valuable?

36. • Know your costs to run your business – day/week/month
• Separate non billable and billable labour
• What is the overhead cost per employee?
• Evaluate every salary role, every month
• Review expenses monthly
• Negotiate better rates for power, phone, insurance, bank,
etc… - every quarter
• Assign a P&L line item to a role
6. Increase Net/pre-tax Profit

37. 7. Managing the flow…

38. 7. Managing the flow…
A suggestion…
Gross Profit
Pay Your Profits 5- 10%
Group Tax, Super, GST
Training – You/Team 5%
Team Wages – including you
Essential Running Expenses
Non-essential Suppliers
Cash Surplus

39. Gio – Inspired Constructions

40. 8. Get Money in Faster
• Firm up payment/trade terms with customer
• Deposit - use mobile payments/EFT
• Progress payments
• Invoice/Payment on completion - Mobile payment/EFT
• Make it easy for clients to pay
• Incentivise to pay early/on time
• Sell off old inventory
• ASK if necessary

41. Invoicing System
• Job Management Software
• Immediately on job completion – KPI’s
• Follow up – automate, where possible,
• Track slow payers
• Have a debt collector on hand and use them – follow
through with our word
8. Get Money in Faster

42. Jay & Krista – Fully Wired Electrical

43. Automate…

44. • Take full advantage of terms – don’t pay too soon
• Negotiate payment terms with suppliers
• Communicate always – if there is going to be a delay
9. Delay Money Going Out

45. 10. Managing Risks
Shortfalls - Not if, when
• Start building cash surplus/cushion asap (PPF)
• Apply for invoice/debtor funding
• Apply for overdraft/credit in advance
• Credit card*

46. 10. Managing Risks
• Have tight contracts
• Understand the Security of Payments Act
(BCIPA)
• Trade Credit Insurance

47. Aidan – Platinum Plastering

48. • Study & invest in the best
• Master numbers and your money
• Note your mistakes
• Lack of knowledge is NO excuses
• Book keeper/Accountant
• Lawyer
• Coach
• Mentor
• Peer Group
11. Educate and build your team

49. What has been valuable?

50. What does financially well
organised look like?
1. Correct company structure
2. Clear on monthly/weekly/daily running costs and
breakeven
3. Has cash reserves (3 months)
4. Charge/price with target GP%
5. Measure & review each van/project
6. Review pricing every 90-days
7. Quality bookkeeping
8. Review financials at least monthly
9. Check invoices regularly
10. Use job management and accounting software

51. What has been valuable?

53. What ACTION will you take?

54. It’s interesting you know…
Most of business owners will…
• Hear what we say,
• Understand it intellectually,
• Agree with all the principles,
• Get excited about what’s possible
• KNOW that it is the thing they should
do, yet…

55. Do nothing!
What gets in the way…
LIFE
!

56. Which leads to?

57. Your opportunity to get clear
Complimentary - ‘Strategy’ Session
• Where you WANT TO BE
• Where are you NOW
• Create a ROAD MAP to get you there…

58. Participant or Spectator…?

59. Discounting
Cost Of Goods Mark Up Sale Price GP Real' Income
$1,000 50% $1500 33% $500
Discount Amount New price
New Real
Income Extra sales required
5% $75 $1,425 $425 16%
10% $150 $1,350 $350 45%
15% $225 $1,275 $275 75%
20% $300 $1200 $200 150%
25% $375 $1,125 $125 400%

60. Price Increase
Cost Of
Goods Mark Up Sale Price GP Real' Income
$1,000 50% $1500 33% $500
Increase Amount New price
New Real
Income Less sales required
5% $75 $1,575 $575 -12%
10% $150 $1,650 $650 -23%
15% $225 $1,725 $725 -32%
20% $300 $1,800 $800 -38%
25% $375 $1,875 $875 -44%