5 ways to boost profits & maximise cashflow in your trade business

Five Ways to Boost Profits & Maximise Cash Flow

Today…1. Be Open – take notes, ask how?2. Participate – share3. Contribute & Win…4. Tools to significantly increase cash flow5. Simple Steps to increase profits 6. Link to slides – slideshare.net/trade

insights

Who is PROTRADE United?We believe in a united and collective approach to help you find an even better way to run your trade business…Trade specific solutions in…• Strategy – income, cash flow, profit, team development• Accounting – financially well organised, minimise tax, • Marketing – online & offline• System Integration – streamline IP into the cloud & protected

Why PROTRADE United?Ultimately for 3 reasons…

1. To give you the luxury of an unhurried life

2. To raise the standards of trades and related service businesses around Australia

3. Decrease the anxiety and depression related deaths amongst trades

Who’s in the room…• Builders who contract to developers• Builders - residential• Builders - commercial/industrial• Other Trades - contract services• Other Trades - independent work• Design/engineers• Manufacturing• Suppliers

Challenges…

Does it get any easier?Don’t wish it was easier. Wish you were better.

Jim Rohn…

Are you prepared to change?

Psychology vs. Skills/Ability

Adapt the ideas…

To suit your business and target customer…

To think about…• If you don’t understand your numbers you

don’t understand your business.• Understanding vs. Doing• Mange your money wisely and you will have

more money to manage.• 80/20 – Emotion vs. Mechanics• Money management is all about managing

your emotions

The Oh C&%# moment!

The Oh C&%# moment!

What are the consequences?• Stress – Loss of Sleep, Relationships• Reputation/Integrity• Staff leave• Credit rating• Insolvency/Closure• Bankruptcy

Income vs. Profit vs. Cash Flow vs. Equity

1. Understand the causes2. Create a cash flow philosophy3. Create separate buckets4. Get super profitable5. Increase money coming in6. Delay money going out7. Prepare for shortfalls

The Steps to Take…

1. Understand the causes?• Poor Awareness/Money Management • NO measurement/understanding• NO cash flow projection• Unaware of break even

• No cash reserves• Undisciplined spending/SMTHYE!

1. Understand the causes?• Declining sales• Declining profit margins• Not charging enough• Too much WIP (Work In Progress)• Poor efficiencies/inefficient team• Lack of KPI’s• Poor Productivity/Focus

1. Understand the causes?• Delays in getting money in

• Delayed invoicing• Poor payment terms• Bad choice of clients•Paying suppliers too quickly•Overheads too high•Excessive interest

• Poor business model

What is NOT the magic solution?

More income is NOT the magic solution –just the same challenges

with more zeros!

2. Philosophy…• Belief System (B.S.)• BRULES around money• Win : Win or NO deal – Fair Exchange• Philosophy• Psychology• Money flow and allocations

3. Managing the flow…buckets

What has been valuable?

4. Get Super Profitable• Get more clients/customers• Increase average job value• Increase prices/charge out• Add MASSIVE value = repeat & referrals• Increase efficiencies/productivity – track &

measure• Let go of non performers• Select better customers/sack slow payers and

difficult customers

4. Get Super ProfitableImprove efficiencies/productivity• Job Management Software• Track budget hours to actual – use of time• Use sub contractors – if legal• Role of team – Get or Keep• Implement KPI’s• Offshore non productive tasks

4. Get Super ProfitableSelect Better Clients/Customers• Sack the slow payers – they are not worth the

headaches• Check credentials with new clients before

accepting credit terms• Debtor insurance?

5. Get Money in Faster• Firm up payment/trade terms with customer• Deposit - use mobile payments/EFT• Regular progress payments • Invoice/Payment on completion - Mobile

payment/EFT • Make it easy for clients to pay• Incentivise to pay early/on time• Sell off old inventory• ASK if necessary

Invoicing System• Job Management Software • Immediately on job completion – KPI’s• Follow up – automate, where possible, • Track slow payers• Have a debt collector on hand and use them –

follow through with our word

5. Get Money in Faster

Automate…

• Take full advantage of terms – don’t pay too soon• Negotiate payment terms with suppliers• Communicate always – if there is going to be a delay• Review ALL expenses quarterly

Insurance Electricity/Phone Salary/HR – Get or Keep

6. Delay Money Going Out

7. Prepare for shortfalls• Not if, when• Apply for overdraft/credit in advance• Credit card (caution)

Get a great team around you• Book keeper• Accountant• Coach• Mentor• Peer Group• Never stop learning

What has been valuable?

What ACTION will you take?

It’s interesting you know…Most of business owners will…• Hear what we say,• Understand it intellectually,• Agree with all the principles,• Get excited about what’s possible• KNOW that it is the thing they should do, yet…

Do nothing!What gets in the way…

LIFE!

Which leads to?

Your opportunity to get clearComplimentary Strategy Session• Where you are• Where you want to

be • The Game Plan to get

your there…

Participant or Spectator…?