There’s a key difference between the amount of money you take and the amount of profit you retain. The difference? – The knowledge you have AND the controls you have in place to ensure you know where all of your money is going!
An old saying; Turnover is Vanity, Profit is Sanity!
Here are the five key aspects of running a financially well-controlled business:
- Understanding the business application & benefits of Profit & Loss (P&L). Accurately calculate & apply sales & expenditure to a P&L, and outline the main factors influencing your income performance.
- Calculate and analyse trading accounts, quantifying positive and adverse performance. Identify reasons and recommend appropriate action.
- Categorise, calculate and analyse business costs and expenses to quantify positive and adverse performance. Outline the impact on net profit (cash and %), providing reasons and recommending appropriate action.
- Calculate and explain the relationship between fixed costs and depreciation to business profit. Calculate and apply spend per head, volume and break-even to determine appropriate business strategies.
- Outline the budget and forecasting process, explaining the benefits and analyse relevant business information to construct appropriate P&L budgets/forecasts.
Don’t become a Busy Fool, get a grip on the financial well-being of your business, convert turnover to profit in the best possible way.