Cash Flow and Profitability Solutions
While working with hundreds of businesses, the root cause of cash flow challenges was identified as a surprising insight.
There are actually three main ways to solve cash flow challenges in business…
- Increase sales
- Receive payment from sales sooner
- Increase profitability
Of these three options, one has the biggest impact by far of these, yet it is rarely the first solution used.
Increasing sales increases cash, however it won’t last beyond the next shortage of sales so its a temporary solution.
Receiving payments or deposits sooner in your buying process is an excellent strategy, so do that if you can. However few businesses have that luxury.
By assisting business owners with all three solutions over decades, the best, permanent solution to cash flow challenges is the third way – increasing profitability.
With profitability being the percentage of Net Profit, if a business has 5% net profit of its revenue then 95% of the cash received for a sale flows back out of the bank account again due to costs and overheads of the sale.
Low profitability percentages such as under 15% will hinder available cash and cash flow.
The Number One Solution to Cash Flow
Another way of saying profitability is Net Profit Margin, which is the percentage of Net Profit on Revenue that a business operates with.
Our primary aim is to increase client businesses’ Net Profit Margin to 15% as that figure is where there is plenty of surplus cash.
Surplus cash can be saved to fund the growth of the business, or an employee to almost completely free up the owners’ time.
There are numerous ways to increase the Net Profit Margin with different businesses having different options to do so.
After decades of research and testing, effective strategies have been identified for all different businesses and industries to rapidly increase their cash in the bank.
Clients have often been amazed at how fast their cash in the bank increases and some clients years later reporting having more than $1,000,000 in an ‘overflow account’ and building.
You can resolve your cash flow challenges with a number of methods using one or all three of the ways listed above.
Be prepared for some very different methods because to achieve a radical improvement requires a radical way of doing things, but all are virtually risk free.
Put us to the test. Book in for an in-depth ‘Breakthrough Meeting‘ discussion about your business, challenges and goals.
You’re guaranteed to learn new strategies from that meeting at the very least. Accounting firms recommend our business mentoring purely because their clients achieve results they see in their financial Statements.
What’s the potential cash in the bank increase of your business?
Find out with a phone call to our office: +61 7 3194 0477
Here’s a video of Milton, a plumbing company owner talking about his profit and cash in the bank increases, achieved in months.