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A presentation based on the 5 golden rules I got out of reading "Simple Numbers, Straight Talk, Big Profits!" by Greg Crabtree
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How a book changed my business
The Four Keys of this book
Greg Crabtree - http://www.seeingbeyondnumbers.com/
1-Owner’s Salary
• Your Salary & Distributions are fogging your view
• Market based wages for all• Your P&L is not telling the whole story• Pay back investors before distribution• Salary.com• FloridaWages.com
2-Profits: 10% is the new breakeven
• Your breakeven point is 10%• 5% net profit or less is “LIFE
SUPPORT”• 10% net profit is a good business• 15% net profits is a great business –
ready for growth• Distribution only after debt,
investors are paid off
3-Labor Productivity
• Implement a Salary Cap – like the NFL, based on a market based wage
• 15% in net profits before any raiseincluding YOU (Owner)
• Know your Labor Efficiency ratioGross Profit divided by labor costEx: $500k in GP/$250k in laboris a 2.0 ratio
4-Know your cash flow
• When will you run out of cash if you don’t sell another widget
• Your P&L is lying to you• Weekly Cash Flow• Healthy Cash flow is KEY
5-Be transparent
• Put all the salaries on the table• They think you make more than you
do• They think the same about profits• Very empowering
6-Overnight Success
Takes about 10-15 years 10%-20% growth per year 30% for 3 years in a row
is a fast growing Co. Hard to sustain 30% Do the math
Thank you
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