Profits | Confident Cashflows

understanding of the numbers for business is very evident…

October 22, 2011 By Tracey Loubser Leave a Comment

I found your attitude to be infectious and enjoyable. Your understanding of the numbers for business is very evident and I had some ‘a ha’ moments. Thanks for a revealing workshop.

Regards Ray Briene – Craig’s Homestyle Furniture La-z-Boy Gallery Rockingham

Filed Under: Profits, Testimonials Tagged With: accounting software, bookkeeping services, business financial plan, financial risk management

How do I increase profit with limited time available?

October 19, 2011 By Tracey Loubser 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: accountant, Australia, bookkeeper, Business, business plan, Business Services, financial education, finanical understanding, money, Perth, Small business, Tracey Loubser

Do you know what your financial position is going to be like in three months’ time?

October 4, 2011 By Tracey Loubser 1 Comment

Most business owners do not know what their financial position will be next month let alone three, six or twelve months in advance. What impact would knowing where your business will be financially in say, three months’ time have on your business?

Here are five steps to get you on the road to foretelling the future in your business.

Set a budget
Plan your goals and set yourself targets in terms of your turnover as well as related costs. Consider what you want to happen in your business. What do you want to achieve in terms of revenue based over the whole year and then broken down on a monthly basis?
Track your progress
Track what you plan against what actually happens and compare the two outcomes. Measure and track, measure and track, measure and track. That is the only way that you are going to be able to forecast what your financial position will be in three, or six, or even twelve months’ time.
Tweak your plan
Adjust your plan to help you reach your goals. This is where you tweak your budget as the months go by. You want to make sure that the variance between what you plan to happen and what actually happens gets smaller and smaller each month giving you the ability to accurately forecast income and expenses for your business.
Analyse the difference
Find out why differences occur and what has happened to take you off track. This will enable you to narrow the difference between what you want to happen and what actually happens. The more you do this, the more accurately you will be able to forecast what will happen in coming months.
Recognise the difference
Now that you are forecasting pretty accurately in terms of the performance of your business, the performance of your revenue and the performance of your expenses, you need to consider off Profit and Loss payments – outgoings that are going out of your bank account which do not appear on your Profit and Loss Statement. These include payments you make to the tax office, loan repayments, hire-purchase agreements and business owner drawings that are not part of a wage or salary.

By encompassing what has happened in steps one, two, three and four, your Profit and Loss Statement, and then bringing in step five, your bank account, you are now able to see what the true financial position of your business will be in three months’ time.