Keeping your business profitable beyond JobKeeper
If managing your business’ profitability has traditionally been an area you have “left to someone else to do”, you’re not alone. It can seem complicated and therefore easier to trust an expert to tell you what the numbers are saying than spend valuable time trying to interpret something you don’t fully understand.
How all that has changed! Many business owners I am working with are desperate to understand their financial state and trajectory and the next 3 – 9 months will be make or break. Added to that, a number of businesses will just survive through this period rather than reach their full potential and actually thrive. At the heart of this success will be financial control. Every decision you, the owner of the business, make has a consequence in dollars. Now more than ever you need to understand what each decision will do to or for your business.
If you are leaving the numbers to someone else there are three considerations:
1) it is costing you money
2) no-one has the same vested interest in your business as you do, and
3) only you, the person operating the business, can truly make that plan come to life.
Seek professional support by all means but understand the fundamentals to ensure you get the most out of that support. You will then know where to look and which questions to ask.
With a little guidance, managing the numbers can be easy, inexpensive to learn and will help you generate more cash and more profit. Don’t be overwhelmed by the world of finance. Finance professionals frequently use technical terms (often with a simple meaning) and multiple terms to describe the same thing. Q: What is the difference between leverage, debt-to-worth, risk ratio and gearing? The answer = nothing! It is simply the measure of how much money you have invested in the business compared with how much money you have borrowed from banks and other suppliers to build and grow your business.
Put tax returns and borrowing money to one side – the financial statements, if understood properly are the most powerful management tools I know of.
This isn’t about taking hours to complete complicated three-way forecasts that reinforce you won’t have enough cash in 18 months. It is about preparing you and your business for an end to subsidies and support, such as JobKeeper. To do this, you need to understand the financial landscape in your business, assess cash weekly for each 13-week period, use break-even to guide decision making and take action.
Control your finances like never before and thrive in FY2021 – let me help you take the mystery out of the numbers and make your business profitable, or indeed, more profitable. To hear all of this in plain English, using real life case studies and simple to use tools you will talk away with, join me at my live workshop in Perth on the 21st of July (socially distanced of course).
Click here for full details and to register.
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This workshop is also a must for anyone advising business owners.