Look ate simple yet effective ways to generate greater profits, and smooth your cash flow in your trade business.

1. 11 Ways to
Maximise Profits &
Boost Cash Flow

2. Welcome
 Relax
 Enjoy – eat, drink, connect,
 Be Open – take notes, ask how?
 Phones, parking, toilets
 Participate – share
 Contribute & Win…
 Link to slides – slideshare.net/trade insights

3. Today…
Take home…
1. Tools to significantly increase gross profit &
before tax profit (EBIT)
2. Steps to keep the cash flowing
3. Game Plan to implement these tools
4. Example/case study

4. Who is PROTRADE United?
We believe in a united effort and collective
knowledge to help you find an even better way
to run your business…
Trade specific solutions in…
• Strategy – income, cash flow, profit, team development
• Accounting – financially well organised, minimise tax,
• Marketing – online & offline
• System Integration – streamline IP into the cloud & protected

5. Why PROTRADE United?
Ultimately for 3 reasons…
1. To give you the freedom of an unhurried life
2. To raise the standards of trades and related
service businesses around Australia
3. Decrease the anxiety and depression related
deaths amongst trades

6. Some of our clients…

7. Some of our clients…

8. Quick hello…

9. Breaking the Mould
How to make the transition from being a
‘tradie’ to a
professional of your trade…

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

11. Your own economy…

12. Psychology vs. Skills/Ability

13. Are you prepared to change?

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

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

16. Top 7 Key Frustrations for ManyTrade
Businesses…
1. Working too hard for little/no remuneration
2. Working under too much stress/pressure
3. Too much time in the business – missing out on family
and lifestyle
4. Staff issues
5. Inconsistent work/jobs
6. Chronic cash flow
7. Constantly chasing their tail – no let up!

17. Over the lifetime of a business…
• Only 39% are profitable
• 30% break even
• 31% lose money

18. Challenges…

19. 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

20. Income vs. Profit vs. Cash Flow
vs. Equity

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. What are the consequences?
• Stress – Loss of Sleep, Relationships
• Reputation/Integrity
• Staff leave
• Credit rating
• Insolvency/Closure
• Bankruptcy

24. The Steps…
1. Understand the causes
2. Evaluate your beliefs
3. Track, Measure, Manage
4. Improve profit per job/per X (Real Income)
5. Minimise overheads
6. Set up your money flow
7. Get money in faster
8. Delay money going out
9. Manage the risks – shortfalls/contracts
10.Get a great team around you
11.Educate yourself continuously

25. 1. Understand the causes?
• Poor Awareness/Money Management
• NO measurement/understanding
• NO cash flow projection
• Unaware of break even
• No cash reserves
• Undisciplined spending/SMTHYE!

26. 1. Understand the causes?
• Declining sales
• Declining profit margins
• Not charging enough
• Too much WIP (Work In Progress)
• Poor efficiencies/inefficient team
• Lack of KPIs
• Poor Productivity/Focus

27. 1. Understand the causes?
• Delays in getting money in
• Delayed invoicing
• Poor payment terms
• Bad choice of clients
• Paying suppliers too quickly
• Overheads too high
• Excessive interest
• Poor business model

28. Example –Pre Awareness
Day 1 - Get the job (no deposit)
Day 7 - Start the job & buy materials (50% Cash, 50% on 7 day account)
Day 11 - Complete the job & pay the team
Day 14 - Pay for materials (50%), Invoice the client – pay on 30 days
Day 44 - Receive payment from client
This equates to possibly 44 days negative cash flow

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

30. What has been valuable?

31. 2. Evaluate your beliefs - (B.S.)
• Value yourself
• Raise your standards/expectations
• Focus
• Philosophy
• Psychology
• Money flow and allocations

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

34. 4. Increase Gross Profit
(Real Income)
• Know your existing GP – review regularly
• Measure GP per X – job/project, van, employee
• Are you charging enough?
• Increase prices/charge out
• Get more clients/customers
• Increase average job value
• Add MASSIVE value

35. 4. Increase Gross Profit
(Real Income)
• Negotiate better rates with suppliers
• Review your pricing strategy/manage your mark-up
• No discounting/compete on price
• Upsell extra services/products
• Negotiate better pricing of materials
• Reduce cost of materials/packaging/freight

36. 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
• Offshore non productive tasks
4. Increase Gross Profit (Real
Income)

37. 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
4. Increase Gross Profit
(Real Income)

38. • Know your costs to run your business – day/week/month
• Evaluate every salary role , every month
• Review expenses monthly
• Negotiate better rates for power, phone, insurance, etc…
5. Minimise Overheads

39. 6. Managing the flow…

40. 6. Managing the flow…

41. 6. 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

42. 7. 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

43. 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
7. Get Money in Faster

44. Automate…

45. • 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
• Review expenses quarterly
 Insurance
 Electricity/Phone
 Salary/HR – Get or Keep
8. Delay Money Going Out

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

47. 9. Managing Risks
• Have tight contracts
• Understand the Security of Payments Acts
• Trade Credit Insurance

48. Example –Pre Awareness
Day 1 - Get the job (no deposit)
Day 7 - Start the job & buy materials (50% Cash, 50% on 7 day account)
Day 11 - Complete the job & pay the team
Day 14 - Pay for materials (50%), Invoice the client – pay on 30 days
Day 44 - Receive payment from client
This equates to possibly 44 days negative cash flow

49. Example –Post Awareness
Day 1 - Get the job and receive 10 % deposit (to secure the job in
calendar)
Day 7 - Start the job - Buy materials (50% COD, 50% on 7 day account)
request progress payment on materials arriving (part of contract)
Day 11 - Complete the job, Invoice client - (receive payment on
completion or 7 days), Pay the team
Day 14 - Pay for balance of materials (50%) – out of client payment
(Day 18) Worst Case - Receive payment from client
This equates to a +ve cash flow or just 7 days negative cash
flow (for only 50%)

50. • Book keeper
• Accountant
• Lawyer
• Coach
• Mentor
• Peer Group
10. Get a great team around you

51. • Master numbers and your money
• Note your mistakes
• Study the best
• Invest in the best
11. Never stop learning

52. What has been valuable?

53. Pricing
• Brand
• Managing Expectations
• Education
• Mark up vs. Margin

54. Discounting
Cost Of Goods Mark Up Sale Price GP Real' Income
$1,000 100% $2,000 50% $1,000
Discount Amount New price
New Real
Income Extra sales required
5% $100 $1,900 $900 11%
10% $200 $1,800 $800 25%
15% $300 $1,700 $700 43%
20% $400 $1,600 $600 67%
25% $500 $1,500 $500 100%

55. Price Increase
Cost Of
Goods Mark Up Sale Price GP Real' Income
$1,000 100% $2,000 50% $1,000
Increase Amount New price
New Real
Income Extra sales required
5% $100 $2,100 $1,100 -9%
10% $200 $2,200 $1,200 -17%
15% $300 $2,300 $1,300 -23%
20% $400 $2,400 $1,400 -29%
25% $500 $2,500 $1,500 -33%

57. What ACTION will you take?

58. 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…

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

60. Which leads to?

61. Your opportunity to get clear
Complimentary Strategy
Session
• Where you are
• Where you want to be
• The Game Plan to get
your there…

62. Participant or Spectator…?