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How a book changed my business

5 Golden Rules for Business Success

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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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Page 1: 5 Golden Rules for Business Success

How a book changed my business

Page 2: 5 Golden Rules for Business Success

The Four Keys of this book

Greg Crabtree - http://www.seeingbeyondnumbers.com/

Page 3: 5 Golden Rules for Business Success

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

Page 4: 5 Golden Rules for Business Success

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

Page 5: 5 Golden Rules for Business Success

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

Page 6: 5 Golden Rules for Business Success

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

Page 7: 5 Golden Rules for Business Success

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

Page 8: 5 Golden Rules for Business Success

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

Page 9: 5 Golden Rules for Business Success

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