Welcome to Pillar 1 of the Eight Pillars of Business Prosperity, my system for helping any type of business to increase profits.
The focus of Pillar 1 is on your Key Numbers, Measures and Performance Indicators.
Where You Are
The aim of this programme is to take you from where you are to where you want to be.
Just like a journey from one city to another, you need to know where you are and where you want to go before you can start to make any effective decisions about how to move from one to the other.
You will find the focus throughout the Eight Pillars of Business Prosperity is on movement and action.
That’s because it’s only by thinking differently and doing different things that you’ll get significantly better results in the future.
Pillar 1, Your Key Numbers and Measures is focused on knowing where you are:
- At the start of your profit improvement project so you have a clear baseline for your current performance.
- Throughout the project so you can see which changes are working well and what needs further thought and action.
Not everything you try will work first time.
I’ll tell you about techniques you can use and give you tips on how you use them, but experience will improve how effectively you apply the ideas.
Understand How Profit Can Be Increased
By the end of Pillar 1 on Your Key Numbers you will have a clear understanding of how profit can be increased in your business.
We will also look at what it means in numbers terms to double the size of your profit.
It may be less than you think.
While you will be setting your own goals, my goal is to help members of Your Profit Club to double their profit in the first year.
That will only happen if you commit to the program, learn what you can and then put the lessons into action.
Try to avoid the two killer thoughts:
- “I already know that” – every time you catch yourself thinking “I already know that”, ask yourself “But am I doing it ?” and even if you are, ask “Is it working as well as I want?”
- The second thought to be wary of is “That won’t work for my business”…because it won’t if you are not prepared to give it an honest try.
I’ll be asking you to do things you’ve probably tried in the past without success. The difference is you will be getting tips on how to do better than you did before.
I hope I’m asking you to do some things that none of your competitors are doing because that way, you’ll able to stand out. In other areas, I’ll help you to do things better than your competitors do.
Why Focus On Measures
Because the focus on measurement is such an essential part of improving your business, I have created a separate page so I can refer directly to it throughout the course.
Read it now – Why Focus On Measures – don’t skip this!
The Business Owners Uneasy Relationship With Money
You own a business because you want to make more money but how do you feel when you talk to your accountant or bank manager?
If you are like many, it’s pretty uncomfortable talking the lingo – Profit & Loss Accounts, Balance Sheets, Cash Flows, gearing, equity… – without really understanding the jargon.
Even away from the intimidating experts, facing up to money issues can be difficult.
Read The Business Owners Uneasy Relationship With Money – do it now.
The Benefits Of Financial Control
It doesn’t have to be like that if you understand the benefits of financial control and put the systems in place to give you the numbers you need to manage your business.
Read The Benefits Of Financial Control (if I start with “Read” I want you to read it because the contents is important)
As a trainee accountant in the early 1980s, computerised accounts packages were very rare in small businesses and we received records from small clients in brown paper boxes.
Some were a joy to deal with, everything recorded and analysed correctly, referenced to supporting paperwork and all the columns added up.
Others were a complete mess and took a huge amount of time and money to put right.
My advice is to get on top of your record-keeping and stay on top of it – perhaps by outsourcing the work to a local bookkeeper – because when you get behind, it gets very difficult to catch up.
Your Key Numbers And Results
What I’m promising is that by the end of Pillar 1, you will have a new way of thinking about your business and its performance.
You’ll feel much more confident about taking actions that’ll propel your business forward because you will understand the risks involved and you’ll know you are in control of your performance.
But it’s not a Finance For Non Financial Managers course.
When I give that type of training, the emphasis is different.
I think this is better because this is designed for people with profit responsibility…that’s people who can make things happen in their own business.
If you think I am selling this hard, then you are right.
Some people think I’m crazy to start my program with dry subjects like finance and performance measurement…and especially given the reluctance by some small business owners to confront the money issues.
But I believe “knowing where you are” is essential.
While I will try to make it interesting…some of the finance stuff is pretty boring unless you really buy into the objectives:
- To learn how any business generates profit and cash
- To learn how to drive more profit and cash into your own business and
- To learn how to make decisions with more confidence.
Individual Modules In Pillar 1 Your Key Numbers
So what are the individual modules we will be covering this month?
- What is profit and how much should you make? I want to challenge the way you think about your business and how much it gives back to you.
- How profit is created.I will be going through the cost volume profit relationship which is also known as the break even model and will show you how you can use these simple concepts in your decision making.
- I’ll take the famous Three Ways To Grow A Business model by one of my heroes, Jay Abraham and extend it to become more profit focused.
- We will look at the profit drivers of your own business.
- Then the importance of cash.It is a common mistake to manage for sales and profit and ignore the most critical number of all – the money you have in the bank.Businesses fail when they can no longer pay what they owe to employees and suppliers.
- Finally we will look at other performance measurement systems.You will be able to use non-financial measures for a more comprehensive understanding of your performance and how the past, present and future connect.