Financial Mastery…

Neale Lewis

A Commercial, Profitable, Enterprise

That Works Without

YOU!

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M A S S I V E

R E S U L T S

Results Synergy Team

Leverage Niche

Mastery Eliminate Chaos

Predictable Cash Flow

Efficiency

Structure for Growth

A Well Oiled Machine

Owner’s Personal Growth and /or New Businesses

Commercial

Profitable

That Works

WITHOUT YOU!!!!

Understanding The Numbers… Leads to:

  Greater confidence in decisions

  Better business decisions

  Logic-based implications of choices

  Greater awareness of abilities

  Proper examination of issues

  Effective billing, collecting & paying

Improved Cash Flow

BALANCE SHEET

The Balance Sheet

Assets are what you own

Liabilities are what you owe

ASSETS – reflect what you pay for something!

•  Current Assets are things that are easily converted to CASH, and

include things like Bank Accounts, Debtors etc.

•  Fixed Assets are all the things that have a longer life span and

are not easily converted to CASH, like machinery, Vehicles etc.

R - E = P Revenue (Sales)

Expenses Profit (Income)

The Income Statement…

Measures the financial performance of the business over a certain period of time

Here’s how it works… Total Income/Sales

- Cost of Sales

= Gross Profit

- Overheads

= Net Profit / (loss)

What is COS or COGS? • Cost of Sales OR Cost of Goods Sold

• These costs are ONLY incurred when you make a sale…

• This could be the cost of a Product, Delivery, Installation

• For example, if you use contractors that ONLY get paid when installing your widgets, then this would be a COS.

The Different Margins ...

Some Products/Services May Be Impacting Gross Margin – Make Sure These Are Right First

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Choose the profit you wish to create in your business, then set a

revenue goal based on your margins …

Setting Revenue Goals …

Budgeting for Profit…

What is a BUDGET?

•  A budget is essentially a Target/Goal for the Business

•  Usually people will aim for a certain Revenue figure, and not

really know why

•  Effective budgeting is about making sure you make the amount

of PROFIT from your business you need/want

What would be in a BUDGET?

•  You need to budget for Sales, COGS, Overheads and PROFIT

•  Usually you would budget for the Year and break it down into the

months

Profit vs Cash Flow

  Profit does not equal cash – Why?

  Debtor Days

  Buying stock

  Vat & Provision for Tax

Manage the cash gap

  Collect Cash majority of time

  Change trading terms

  Have efficient invoice system in place

  Monitor debtors/creditors

  Consistent follow up

  Pay your bills on last day of terms

  Revenue – are Sales increasing?

  Profits – are they making money?

  Flow – do they have enough cash in the business?

  Equity – is the business gaining or losing value?

  There are other measurements in tracking “Vital Signs”

  The nature of your client’s business will determine which factors should be monitored…

•  A retailer or wholesaler is concerned with stock turnover and product sales

•  A legal firm is interested in billable hours per employee/partner per month

•  A manufacturer is concerned with units produced, gross profit per unit sold

  Your books are up to date (including your budget) Everything is entered into your accounting software and reconciled each month

  You look at your P&L on a MONTHLY basis You need to be reviewing your P&L on a monthly basis

  You have your Accountant or Bookkeeper check your

numbers

It’s a good idea to have your numbers checked & Verified

Use an Accountancy software package: Sage Line 50 / Quickbooks

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  Pay by Standing Order

  Introduce new payment terms

  Stagger Payments

  Allow Customer to Pay up front   Embrace PayPal as another option

to make payment very easy

  Introduce early Settlement Discounts

  Ensure that you have Prompt Billing

  Systems in place to chase down Debtors

  Debtors

  Pay suppliers later

  Keep Cashflow forecasts up to date

  Understand the company’s cashflow position and cashflow forecast

  Reduce overheads in the business

  Dump “D” Clients

  Run a credit check on all new clients

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BusinessRICH Intensive two-day workshop for serious business owners

•  Successful entrepreneurship and wealth creation •  Managing cash-flow to accelerate growth •  The '5 Ways' to increase business profits •  Writing successful ads that make you money •  Selling made simple •  Building a referral based business •  Strategic and loyalty marketing that works •  Making customer service profitable •  Understanding your financial statements to make sound business decisions •  Creating and leading championship teams •  Building your business to run without you •  Managing your time to make more money •  And so much more!

13th and 14th June 2009