You are here: Home / Archives for Cash Flow

How do I identify and communicate effective targets to my staff?

December 27, 2011 By Leave a Comment
How do I identify and communicate effective targets to my staff?

Communicating effective targets to your staff helps everyone work towards your 'happy day'!

Identifying and communicating effective targets to your staff is the key to making the profit that you want in your business. Accountants often talk about a ‘break-even point’, something I call your ‘happy day’. This is the day of the month when you know that for the rest of the month, you are making a profit. You have earned enough to cover all your costs and you are past the ‘break-even point’. That’s why I call it your ‘happy day’.

By working out when your ‘happy day’ is, how much you need to earn to break-even and then blast into profit, you will be able to effectively identify and communicate targets to your staff allowing you to make the profit that you want in your business.

Filed Under: Accounting, Cash Flow, Profits Tagged With: , , , , , , , ,

How do service based industries earn passive income?

December 13, 2011 By Leave a Comment
How do service based industries earn passive income?

Your knowledge can produce a passive income stream for your business

When we offer a service we are continually living in the ‘hour-for-money’ mindset. But as a service provider it is possible to generate income in other ways. As service based providers we are basically selling our knowledge and expertise. The key to service based industries earning a passive income is to package your knowledge and expertise in your specific business and turn it into a product.

Sit down, put it ‘on paper’ and develop a system that allows people to do for themselves what you essentially do for them. Make it an easy, step-by-step system that may include things like:

  • Your top 10 tips
  • The key to success in your area
  • How-to guides and workbooks

The product should be something that people can buy while you sleep. They should be able to purchase it through your website and it will enable them to do what you do on a DIY basis. The key is to make your product a content driven, quick and easy solution to their problem. Give them direction in terms of what you do in your business, the flow of what you do to help people and make it DIY.

Once you have generated that product, you can generate the passive income that you want for your service based business.

Take a look at a few of my products to see what I mean and get some ideas flowing.

Filed Under: Cash Flow, Profits Tagged With: , , , , , , , , ,

How do I overcome ‘Missing Link Syndrome’?

November 16, 2011 By 1 Comment

Every business spends money on either a bookkeeper or an accountant and in some cases, both. So, why do 87% of businesses fail because they don’t understand their numbers?  This is what I call the ‘Missing Link Syndrome’.  The missing link is you, the business owner. The information you are missing is what is happening on a monthly basis, throughout the year. In order to be successful it is your responsibility to know what is actually happening in your business.

How do you do this?

  • Review what is happening in your business on a monthly basis
  • Regularly print out your Profit and Loss Statement
  • Ask your bookkeeper or accountant specific questions in relation to your reports
  • Initiate discussions with your bookkeeper or accountant to find out how your business is really performing – in real time
  • If you don’t understand the terms they are using, ask them to speak a language you can understand

You can’t just leave it up to your accountant and bookkeeper to deliver this information; it is your responsibility to fill the missing link in your business, to find out what’s really happening and how your business is performing. Once you begin looking at your reports regularly and asking the right questions you will be able to get the correct information you need to increase profitability and cash flow.

Filed Under: Accounting, Business Financial Mangement, Cash Flow, Financial Management Tagged With: , , , , , , , , , , , ,

How do I increase profit with limited time available?

October 19, 2011 By 2 Comments

If your small business falls under the service based industry category and are charging by the hour, increasing profit can often present challenges. There are two aspects to profit: the first is your income, and the second is the expenses you deduct from that income to get your profit.

In the Service Based Industry Webinars I run, I spend a lot of time with service based industries on what I call a ‘Revenue Model’. This revenue model looks at marketing and moving people down your sales funnel, but also helps you determine your costs for each hour that you charge out. So rather than only looking at your charge out rate you need to look at your costs for each hour. For example, you need to consider staff that you have working with you – how much do they cost you per hour?

For example, I recently worked with a client who runs a gardening service. When looking at his revenue model, we considered the following:

  • Staff costs
  • Vehicle running and maintenance costs
  • Machinery running and maintenance costs

By considering these additional factors we were able to determine what his ‘true costs’ were. We then looked at his hourly rate to ensure he was making a profit and that this was the best profit for his business.

Another way you may be able to increase revenue in your service based business is to look at the information and knowledge that you can share with the outside world. Sharing this information can enable you to earn passive income. Adding information marketing to your business can add a revenue stream that can be working for you 24/7, 365 days a year!

Filed Under: Accounting, Business Financial Mangement, Cash Flow, Financial Health Check, Financial Management, Profits Tagged With: , , , , , , , , , , ,
« Older Posts