The full title of this book by Dan Bradbury is
Turnover Is Vanity, Profit Is Sanity: 9 1/2 Steps to Improving Your Profits & Cashflow
In my review posted on Amazon.co.uk, I gave the book a 4 Stars rating. This means it is Good to Very Good.
Here is my book review.
A thoughtful guide to managing your business for more profit
There are two versions of the banker’s mantra this book is named after. Turnover is vanity, profit is sanity and
1) cash flow is king (as quoted in the book)
2) cash flow is reality (my preferred version).
It’s a saying I’ve used regularly as a financial director and as a business coach.
Cash flow often comes second to profit in good times yet in bad times, it is the only thing that matters and consumes a huge amount of management time.
It doesn’t take something as extraordinary as the Covid lockdown to bring a good business down. A few poor decisions, a bit of bad luck or a major customer insolvency and suddenly the business can be at risk.
There are four elements of cash flow
1) your profitability
2) your working capital management (stock, debtors, creditors)
3) compulsory payments like corporation tax, and loan interest and repayments
4) what happens to the the cash surplus. You could keep it safely in the business, it could be reinvested in the business with capital expenditure and even acquisitions or you could take it out as extra money to fund your personal lifestyle.
The Covid crisis has revealed that many businesses (and families) don’t have enough rainy day money saved for unexpected times.
Part 1 looks at how you defend your business and don’t cause problems for yourself.
The first chapter is about identifying and reducing risks that threaten the viability of the business. You need to be aware of what could go wrong and think about how you can reduce the impact and likelihood of a major problem.
The second chapter looks at the link between your overheads and your sales revenue. More accurately, this should be the margin from those sales. I can’t emphasise enough how easy it is to be fooled by focusing purely on sales numbers.
The third chapter looks at the issue of customer retention. As it costs more to attract new customers, you’ll want to make sure you lose fewer out of “a leaky bucket”.
The second part looks at how you develop your business by increasing revenue and profit from your existing customers.
Chapter 4 is about encouraging customers to buy more often.
Chapter 5 gives you ideas on how to increase the average order value including increasing prices.
Chapter 6 focuses on improving lead conversion rates.
Part 3 of the book is called Disrupt and I was expecting the book to switch from tactics to strategy. It doesn’t.
Chapter 7 looks at defining your ideal clients based on Pareto 80/20 principle doubled ( the top 20% of your top 20%).
Chapter 8 talks about referral systems. Chapter 9 is called Rolling Up.
Criticisms
1) I read the kindle version and the table of contents is not well formatted with just the chapter numbers.
2) The book includes some bad language so, of you’re offended by the f-word, you either need to pass or steel yourself. It appears much too often and is unnecessary in my opinion.
3) It’s quite promotional for the author’s mastermind programme. The author may think he’s been very subtle building in regular references to it, but if you’re sensitive to promotions, it may irritate. With this in mind, I should warn you it is quite a short book and is very much a taster rather than a definitive guide. Amazon say the paperback is 158 pages long and the kindle version 115 pages. That said, the author has priced it very fairly with the kindle version just £2.99 at the time of my review.
At the end of the day, this book is “old wine in a new bottle”. It’s another example of “Jay Abraham style marketing”. Abraham is the legendary American marketer who first publicised the three ways to grow a business (more customers, more transactions, higher average values) back in the late 1970s. He made the point that nearly everyone concentrates too much on getting more customers and not enough on increasing the lifetime value of the existing customers.
I’m not criticising the author for this. It is the logical way to grow a business and many, many people have done the same, including me in my free ebook, The Six Step Profit Formula. It just means that you may well have come across the main messages before.
As always, the questions are 1) are you doing it and 2) are you continually looking to improve the weakest element?
My biggest disappointment is that having used the first two parts of the banking mantra as the title of the book, the third part “cash is reality” is ignored. Cash flow is even mentioned in the subtitle of the book but its focus is on increasing sales revenue and profit.
This is a shame and what I hoped was a book perfectly timed for the Covid crisis neglects the most important issue.
My rating is a little difficult. Without my expectation of cash flow considerations and the unnecessary bad language, I think I’d give it five stars. Four stars feels a little mean because the book is easy to read and has plenty of good ideas but Amazon won’t let me go in-between.
You can buy the book from Amazon.co.uk or Amazon.com
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