So, you're knee-deep in your own business escapade, juggling cash, facing challenges, and embracing risks. We're here to ensure your venture is more like a passion-powered mission rather than a charity (because that deductible gift recipient status hasn't come through yet 😉).
Profits and cash? They're not just digits; they're the heartbeat of your journey. "Revenue's cool, but profits rule!" In this escapade, your business, filled with skills, cash, and a sprinkle of risk, deserves applause and ALL IN rewards so buckle up and come with us on this choose your own adventure journey ...
Ever heard the saying Revenue is vanity, Profit is sanity? It's the truth! So, the first stop on our accounting adventure is the profit and loss statement where we want to:
1. Elevate Revenue to SkyRocket
Rev up your revenue by trying any or all of the these:
💡Increase your prices and stop discounting (easy to say, hard to do, we know)
💡Introduce new products or services (new revenue streams anyone?!)
💡Explore an online presence for a broader audience
💡Spark innovation, bring something new
💡Partner with others to bring a holistic offering
💡Tell your unique story on social media
Pro Tip: Be brave and regularly review and adjust your prices, value your time - assign yourself an hourly rate and STOP discounting.
2. Streamline Expenses, Amplify Savings:
Navigate expenses with a strategic eye:
💸Focus on your top 5 biggest costs as it will deliver you the biggest return. Tinkering with smaller expenses might make you feel good but it won't deliver real improvements in profit or cashflow.
💸Only purchase what you need and can afford (simple yet effective)
💸Negotiate with suppliers for better deals
💸Outsource or purchase online for savings
💸Ensure your workforce is fully productive and paid correctly (this can be a game changer)
💸Go online with your systems to create efficiencies (think integrated Xero, Dext, cloud CRM, POS, HR, etc)
Pro Tip: Don't tinker, go big ticket. Maintain quality and if you fail, do it quickly and cheaply.
3. Optimize Assets, the Smart Way:
Assets are your business backbone and you need to make them work (for their living):
🏦Collect outstanding payments (ie, debtors within payment terms, automate reminders and follow up)
🏦Turn over inventory regularly (you are literally sitting on cash)
🏦Fully utilise plant & equipment and land & buildings (could you hire out assets you aren't utilising or lease free space)
🏦Optimise your intellectual property by putting processes and systems in place (this one adds value on exit)
🏦Invest surplus cash (think interest bearing deposits)
Pro Tip: Invest wisely, let your assets work for you, develop systems & processes and ensure you're not acting as your customer's bank.
4. Navigate Liabilities with Ease:
Liabilities need a proactive approach. Decrease liabilities by:
📊Consolidate finance, ensure debt is classified correctly (If it's really long term debt but it's on credit cards or overdrafts negotiate with your bank to reclassify it, as it has a cheaper interest rate)
📊Don't pay more than your fair share of tax (make sure you have the best tax structure for you)
📊Take up pay on time discounts, renegotiate terms with suppliers or push out creditors to their limits
📊Stay on top of employee entitlements, and have a clear plan in place (Don't let them blow out)
Pro Tip: Don't overcomplicate, understand your liabilities and manage them efficiently, don't ignore them, invest time and don't be complacent.
5. Cash Flow Management Magic:
Did you know the movement in your profit and loss statement AND your balance sheet is your Cash flow! (shock horror we know, it's not just the profit in your biz or what's sitting in your bank account). Read this blog if you want to get your mind blown and find out more.
So it isn't in fact rocket science; it's about implementing the strategies above in your profit and loss and balance sheet which will help to improve cashflow🤯. In summary:
💰Increase income and assets
💰Decrease expenses and liabilities
Pro Tip: Cash is the biggest pain point in biz. Build your war chest of cash. With the three way ... of reports (😉) it all comes together like magic (profit and loss, balance sheet & cash flow)
AND FINALLY BUT DEFINITELY NOT THE LEAST
6. Consistency: The Silent Superpower
Consistency is your silent superpower. Whether it's pricing, expense management, or overall strategy, a consistent approach ensures stability and delivers results in the long term. It's not about elaborate tricks; it's about delivering steadily on promises and expectations.
Which leads us to the Grand Finale: Unleashing Business Brilliance!
Envision the magic of all of these strategies working together – increased revenue, controlled expenses, optimised assets, managed liabilities, healthy cash flow, and the rhythm of unwavering consistency. No complex spells needed; it's the simplicity of business brilliance. Your business becomes a force to be reckoned with, geared for enduring success. As you embrace these strategies, may your journey be marked by increased profit, optimised cash flow, and the joy of building a thriving biz. Now go get em!
Still have questions? That's OK, feel free to make contact with one of our oh so cool not nerdy at all team members today.
Disclaimer: The information provided is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice