Here’s 7 Strategies from leading Australian Entrpreneur, Brad Sugars.
Seven suggestions to get you started:
- Work out your margins on every product and service in your business. Include a portion of the cost to run the business as well as the cost to sell each item. As you sell products to cover costs and make money, most of you will put your prices up after this exercise.
- If your business is not a cash business, set up a cashflow statement.This way you know exactly where your money goes. (NB: P & L’s don’t show a true picture of where your money is right now) Discover what it means to proactively run your financials in your business.
- Investigate and truly ‘know’ your costs. After reviewing how to cut down these costs, devise a budget, set your targets then adhere to your budget. Avoid the ‘if I have money I will spend it’ theory. This proactive step saves lots of money. NB: Your key focus should be on your net profit, not Turnover.
- Learn to understand your financials. Get someone to teach you. Don’t just leave it to your accountant. As a Business Owner it is your responsibility to understand these. Trust me; once you understand them you will love them!
- Identify the top components of your business that need to be measured. Liken their function to that of the gauges in a car’s dashboard. This identification and measuring process will enable you to keep your business running at maximum efficiency and highlight challenges before they slow it down. Work with your coach to pinpoint what these components should be.
- Graph your figures. This is a great way to see trends, actual figures vs last year’s budget. Pictures are often easier to understand than figures. They are also a great way to get the team fired up about doing better each month.
- Produce a management report each month – maximum one- two pages. Get yourself into a routine of analyzing your figures (financial measures) each month. Produce a skeleton report that is easy to fill out and covers all essential areas of your business. If you need some help to get you started in each of these areas, talk to your local business coach – they will take you through some easy steps to make this happen in your business.
Take some time with your Business Coach (and if you don’t have one, give me a call to get you going in the right direction) to identify what key areas of the financial side of your business you should be focusing.
With this greater financial understanding and implementation of management systems you will achieve greater profits and greater peace of mind in your business.