Diagnostic Tool List

D10 Performance Analytics How to Use Performance Analytics Any successful business leader needs to understand the basics of measuring performance so they can set up appropriate measurements and monitoring systems for the business.   Also necessary is a background on financing business operations. Benefit from Business Benchmark Resources Change your Accounting Mindset with Throughput Accounting ChangeBoard […]

How the Profit Flywheel Accelerates Your Business

This is the 12Faces structured roadmap to growing your business. We use the flywheel to explain the structure of the material. It is one of many possible roadmaps to growth. Use it as a suggestion tool to incorporate into your business planning. Yellow Belt

How to Boost Your Accounts Receivable

Accounts Receivable: “The process of collecting money your customers owe you.”  Failure to have this process working well leads to insufficient cashflow and is a major contributor to business failure.  Ignore it at your peril!  Yellow Belt 

SM6.6 Profit Autopilot “Piggy Banks” Video

We have a 15 minute video on the use of Profit Piggy Banks as part of the Profit Autopilot  series.  

The Video gives you a speedy introduction to how the Piggy Banks work and why they will reduce your stress over bill paying.

They help to ensure you have money available when needed to pay bills as they fall due.

Watch this 15 minute video on the link below

SM6.5 Profit Autopilot “Piggy Banks”

By the time you have reached this point in this 4 part series on Profit Autopilot, you have learned how:

  • To be reasonably confident of making a predicted Profit and paying yourself a Salary.
  • To be confident that you will have sufficient money to pay your Tax and at least break even at the end of the year.

This assumes that you have amazing willpower and do not spend the money that is ear-marked for Profit on something else.

The next step is to make sure that you get this willpower automatically and that is where the Autopilot part of the Profit Autopilot comes into play.

NOTE:  

There is a 15 minute video available: SM6.6 Profit Autopilot “Piggy Banks” Video

Listen to the recording below, or, head straight into the written document.

SM6.1 Profit Autopilot – Background Information

Among the largest contributors to the failure of both small and larger businesses, are either, they fail to make a Profit or they incorrectly account for their cash and run out of money to pay their debts and tax liability.

This is particularly acute in small businesses where the owner/operators do not necessarily have much experience in financial matters and find themselves in an unexpected cashflow crisis.

The Profit Autopilot Skills Module turns conventional accounting on its head by starting with a focus on Profit first.  It also introduces a simple set of “Piggy Banks” that give you a “set and forget” approach so that when tax and other expenses become due, you have sufficient funds to pay.  And, along the way, you have also taken out not only a Wage but a Profit as well. 

How to Reduce Variable Costs for Better profit

Summary

Especially in a manufacturing business, the variable cost of parts, resources and energy etc are likely to be a substantial part of your overall costs. This 12Faces Menu is a collection of distilled business wisdom relating to managing and reducing these costs.

Variable costs are those that are directly tied to your level of production.  If you produce more of an item, more inputs are required.  If you produce less, you will have less variable costs.  They might be physical inputs to production, goods purchased at wholesale for retail resale or services purchased from others and sold by you on a commission basis.  

They are also often referred to as “Cost of Goods Sold”

By and large, you can’t remove a variable cost because it is, by definition, a necessary part of your production system otherwise it would not be there but you can often reduce them.

This is a collection of short  topics relating to variable cost reduction.  Its purpose is to raise possibilities and processes in your mind to assist you with your management of this class of costs. Labour is not really a variable cost (unless you have a lot of piece workers) so this material will not focus on reducing labour costs

Read this if: you have substantial variable costs in your operation.  The more you have and/or the larger they are as a proportion of your sales income, the more opportunity you will have to reduce them.  .

Related to: 80/20 Rule, accounts payable 

Degree of Difficulty: Yellow (entry level) Belt

How to Measure Net Cashflow

Cashflow is the lifeblood of any businessIf the speed you collect cash owing to you is slower than the rate you pay it out to your suppliers, you are going to find it increasingly difficult to find the money to pay your suppliers.  Unless this is rectified, you stand a good chance of going bust. Positive cashflow also gives you money to fund your business’s growth from your own operations without borrowing.  Knowing your cashflow allows you to plan affordable growth. This article introduces Net Cashflow and Marginal Cashflow / Current Ratio concepts for measuring Cashflow health.  Periodically measuring your Cashflow situation can make you aware of any looming problems in time to rectify them. Yellow and Blue Belt level

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