Category Archives for "Business"
Is your business giving you £100k + profit? If not, why not?
Many small business owners set an initial target for themselves of generating a net return of £100,000 profit after all tax is taken care of. We therefore use this as a useful reference when we look at examples of how to structure your business to make more. If its £1 million we can just add a zero and of course we can also address any variations in between.
What we do know is that once a business owner has their number fixed in their mind they achieve it much quicker. Nearly every person who attends our workshops ends up making more from less, using strategies that include pricing, packages, leverage and automation. That journey starts with identifying what you want to earn with all business costs and tax paid for, so what is your number?
And, as we have already explored in earlier blogs, the next step is seeing where you are now and identifying the gap. Then the clever part is finding the quickest and easiest way to bridge the gap.
Take a business that has income of £150,000 and profits of just £50,000. To double their profits they have a number of options:
There are so many different ideas we can apply to a business to achieve the end result but in reality they all boil down to 3 ways to grow:
You can also look at reducing costs but in our example, even if you reduce your costs to nil, the most you can ever earn is capped at £150,000. Looking at ways to grow your potential earnings are uncapped.
So when we look at finding hidden profits in your business we look at these 3 areas to grow and see how they can be achieved in your business. This usually generates a pool of ideas that we can then drill down to see which one is likely to impact quickest.
Here at the business growth academy we feel business is simple and its simple tools like this that achieve great results for our customers.
If you are running a business that deserves to make at least £100,000 in profit year-on-year, The Business Growth Academy will show you how you can make more money, work smarter and gain control of your time and your business. By measuring results we focus on what works best and accelerate results by finding ways to leverage what works for your business. We also recognise your business is unique so what works for someone else may not work for you.
Profits are hidden in your business right now. We just need to ask the right questions in the right way to help you unlock them.
Come along to one of our introductory sessions http://business-growth-academy.co.uk/register-your-interest-form/and find out how to extract the profit from you business.
On paper, your business is looking very healthy. Your accountant assures you have made a profit; your turnover is beyond your wildest dreams, and you’re doing so well you have tax to pay!
But why so gloomy? Have you spent the HMRC money you had planned to put by each month? Are you struggling to remember when you last paid yourself? Is pay day for you the day you transfer money from your savings INTO the business account? It doesn’t have to be this way. There is money in your business; your accountant has shown you that; what you need now is for someone to show you how to release some of that money so that you can start living the life you should be living.
If a crisis occurred in your company, how many months could you survive? If one customer doesn’t pay, how much does it affect you?
All the business I work with have a minimum 3 month cashflow forecast so they know they have the next quarter including VAT covered and if there is a shortfall they have plenty of time to address it. What’s more they save the tax money as they go and work towards having 3 months of overhead on deposit for a ‘rainy day’.
We know as business owners that with notice we can find a new customer, a new product or a new solution given time to address any downturn in business. So it’s important, as part of our business strategy, that we plan to have enough cash reserve to give us that time when it does arise.
More growing businesses fail due to lack of cash than any other reason. So knowing how to plan your cashflow to ensure you always plug the gaps is an essential business skill.
Other steps you can take to de risk your cashflow are:
With planning any business can release cashflow and at the same time grow.
If cashflow worries keep you awake, despite your accountant’s assurances that your turnover is high and profits have been made, you need to be booking yourself a place on the Business Growth Academy Introductory course http://business-growth-academy.co.uk/register-your-interest-form/. We’ll help you to find that hidden profit, we’ll show you how you can release funds, and we’ll guide you to making decisions and taking actions that change your business forever.
One of our clients had HMRC arrears of over £100,000 – now they have money in bank to cover three months overheads, they can pay their invoices on time and in some cases in advance, outstanding bad debts are down, money owed is paid in less than 15 days – want to know how?
Join the Business Growth Academy and start extracting the profit DNA from your business.
At the BGA we often talk about making your business work for you. Well today I want to explore what that means in a little more detail.
So many business owners set up business wanting more freedom in terms of what they do, when they do it and what they get paid for doing it. And they find out that they earn less, work more and have less time doing what they love. Does this sound like you?
When you run a business you invest your time and your money and we want to make sure you are getting a good return on both. After all, if you could earn more by having your money sitting in a bank, while you enjoy your time following your favourite hobbies why would you choose not to do just that?
And even if your business does generate a healthy income and what appears to be a healthy yield on your investment, we are confident that there are hidden profits in your business waiting to be unlocked.
So the question becomes, do you know what each part of your business really contributes to your profits? And is this adequate compensation for the time you spend in your business to make it. We are talking about value for money, a genuine return on your investment of time and money spent in your business.
It’s a sad fact that every time we run our group training sessions at least one business owner is earning less than minimum wage from their business. The lowest we recorded was as little as 80p per hour! Most would earn more if they were employed by someone else. And many pay their team more than they pay themselves. And in nearly all cases the business owners don’t realise they are doing so.
To ensure you don’t fall into this trap apply our simple business rules to your business now:
1. Pay yourself first – work out what you want to earn from your business and make sure this gets paid to you after all tax has been provided BEFORE any other business bills. Set it up so this comes out to you by standing order and split the payment over the month so you make sure you can cashflow the amount.
2. Work out what your hourly return is. Keep a timesheet and look at your net return per hour. If this is particularly low how can you change your business model to increase this?
3. Analyse what parts of your business generate the best profits and see what resources are used to generate these. We have often found that some parts of the business are actually making a loss and by improving or even closing these, the return on investment improves.
4. And its not just separate products or services. It can come down to individuals within a team performing at different levels. We won’t dwell on staffing for too long as your workforce warrants a later blog, all to itself! But does every member of your team represent value for money? Have you invested enough in the development of the career seekers or are you at risk of losing them to a competitor? Sometimes you need to spend more to reap the long-term financial rewards, and this is particularly pertinent when it comes to staff investment.
5. Review your assets. Do you rent equipment that you should maybe consider purchasing? Yes, the initial outlay may be high, but do your sums to see which option is best for you long term.
6. Know your marketing numbers. What do you spend on your marketing? Do you test and measure its efficiency regularly? How do you generate sales? Could you be more proactive and achieve results by changing your sales tactics, or by investing in a sales course for your team?
7. Leverage your time and the time of those whop generate revenue for you. Who does your admin? Would it be cheaper to outsource certain tasks or the whole thing? Or would investment in the latest software make your own admin team cost effective.
With so many suggestions, you may be feeling too daunted to tackle the task of analysing your business, but you don’t have to do it alone. Come along to one of the Business Growth Academy Introductory Events http://business-growth-academy.co.uk/register-your-interest-form/and we will show you how we can work with you to find the hidden profits in your business and improve the return on your investment. Let’s get your business working for you; it’s been the other way around for far too long.
Call the Business Growth Academy on 0845 678 8825 for details of our courses.
You know where you want your life and your business to go long-term, and you have calculated how much additional income you need to fund your vision. You want an extra £120,000 a year. Your service earns you, on average, £1000 a month each month (retainer). So you need just ten new customers, and you will have met your goal. Sounds simple, doesn’t it? But how can you guarantee you get those customers? And how much are you prepared to pay to get them?
We’ve reached the 3rd step on our business growth journey with clients when we start looking at their marketing plan. And to do that we need to know – who is that ideal customer? Why do they really buy from us and where on earth are they going to easily find us?
And yes you guessed it, every question has an answer that can be measured and tracked so we can get the best return for your time, energy and money. And avoid over dependency on any one solution. We have some great tools that we introduce you to in our introductory day that help you create a robust and targeted approach to plugging your customer gap.
That’s where the Business Growth Academy comes in. We will show you how to focus, test and measure your marketing and use leads and conversions to the best effect. Together we will create a measurable marketing plan that will achieve the results you seek. As you progress through our course you will see that your marketing plan is not set in stone; it is a flexible strategy that you can change based on actual results.
Because one of the core missions of the Business Growth Academy is to get you analysing the numbers that make up your business (don’t panic-we’ll show you how and hand-hold you through the process), it will soon become second nature for you to think of every aspect of your business in terms of digits, and how you can unlock the hidden profits. Marketing is no different, seeing what works and counting the cost, will save you money long-term and increase your sales immediately.
Come along to our introductory session and see just how passionate about profit we really are. Your business growth is our business goal. Register your interest here now.
Many business strategists focus on helping you build turnover, but turnover counts for nothing if your profit is minimal. Unless you get your business structure right and make sure you know the right numbers to focus on, you could be working all hours for very little reward. In fact 25% of business owners we worked with were earning less than minimum wage before working with us!
It doesn’t matter how ostentatious your marketing plan is, or if you have a fabulous brand that appeals to your market; if at the end of the day YOU also get to pay yourself less than the minimum wage!
Here at the Business Growth Academy we have had clients come to us with a turnover exceeding £200,000, who are earning just £3.40 an hour. And they didn’t even realise it. So how do we go about working out what your numbers are and shaping your business to fit your lifestyle?
First we get clear on what you want the business to do for you and why. And then we wrap it up in numbers. And the numbers will be different for each and every business. That’s why we keep our group programmes small so we make sure every business owner gets to know which numbers are driving their results.
We look at your company as a whole, analysing all the numbers, not just turnover, and work with you to decide on a strategy for growth that will suit your goals, vision and lifestyle and deliver you the profit to fund that life. After creating a model of what it could look like we then find the figures that demonstrate why your business is not paying you the income you deserve, and we plan the required changes with you. With previous clients we have even reduced turnover to increase profits (for example – shutting loss making divisions, and stopping loss leading products and services).
If you want to see what the Business Growth academy can do to help you unlock your hidden profits, why don’t you join us at one of our Introductory Events? Register your interest online or give us a call on 0845 678 8825.