Financial MASTERY Workshop

NOVEMBER 23rd 2010

”The Language of Business is Finance!” Warren Buffet – Worlds Top Investor

“If you don’t understand the Language how do you keep Score?”Keith Cunningham – Creator of Keys to the Value & Tony Robins Wealth Coach

Profit Margins

Up Sell/Cross Sell

Enquiries ConversionRate

Life TimeValue

5 Components of Your Business Engine™

Score the pistons from 1 – 10 (1 being lowest and 10 being highest)

What are Your Beliefs about Money ...?

3 Critical Areas of YOUR Financial Wealth in the Business ...

Net Profitability

Sales & Turnover

Balance Sheet Value

1

2

3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Getting to Break-Even & Beyond

£2,500,000

£2,000,000

£1,500,000

£1,000,000

£500,000

£0

(£500,000)

(£100,000)

Revenue

Total expenses

Variable costs

Fixed costs

Net Profit

Break even

Net profit

Max Utilisation

What Profit Per Hour (PPH) Do you Need?

£100K2000 hrs= £50 / hrx£1m

2000 hrs

£500 / hr

Review Your Business Finance Dashboard™

FinancialsBudgetsCash flowCash GapOverdraft limits

% Profit Margin

Balance sheet

Cash FlowDebtors CreditorsAverage Payment Days

Sales pipeline warning Keep track of incoming work

Cash in Bank

Your Profit Pipeline™ - Where are You Leaking?

Productivity Pricing

SalesMargin

Discounting vs. Increasing Prices …

Base PriceBase Price 10%

Discount10%

Discount 10%

Increase10%

Increase

How and Where to Raise Your Prices ...

• Just Do it!• Raise Periodically – every 5 new

customers ...• Split Test Pricing Models ...• Increase shipping or carriage charges ...• Survey customers ...• Demonstrate a better ROI ...• Sell Larger Units ...

How and Where to Raise Your Prices ...

• Sell Product or Service Bundles• Sell Higher Quality ... • Create a New Niche & Own it ...• Demonstrate more “Proof” ...• Volume / Time Based Model – Low

cost Airlines ...• Set Sales Targets Based on Margin

Your Profit Pipeline™ ...

Productivity Pricing Cashflow

0 20

40

60 80 100 120 140

Payables

Receivables

Cash gap

Inventory

Where is the cash in

Avoiding The Cash Gap Crash™

Stock arrives

Cashpaid

Stock shipped

Cashreceived

your business?

Income/Rev/Sales-

COGS/COS/Variable=

Gross Profit-

Exp/OH/Fixed-

Owner Salary=

Net Profit+

Equity Inflow =

Cash Position

100,000-

75,000=

25,000-

15,000-

5,000=

5,000+0 =

5,000

75,000-

56,250=

18,750-

15,000-

5,000=

(1,250)+0 =

3,750

50,000-

37,500=

12,500-

20,000-

5,000=

(12,500)+0 =

(8,750)

75,000-

56,250=

18,750-

15,000-

5,000=

(1,250)+0 =(-10,000)

100,000-

75,000=

25,000-

15,000-

5,000=

5,000+

5,000=0

100,000-

75,000=

25,000-

15,000-

5,000=

5,000+0 =

5,000

JAN 10 APR 10MAR 10FEB 10 MAY 10 JUN 10

Example of a Cash Flow Statement

Strategies to Cut Your Cash Gap ... Fast!

• Offer discount for early payments…• Set Cash In Targets …• Improve your Credit Control Systems…• Streamline operations to complete jobs faster• Just in time ordering – small and often• Change your Terms & Conditions• Use debt collection services• Negotiate better terms• Research higher pricing

Your Profit Pipeline™ ...

Productivity Pricing Cashflow

What do you need to …?

Time to Plan You Actions

Financial MASTERY Workshop

NOVEMBER 23rd 2010