Power of Profitability

No one wants to hear how good you are at Quickbooks. They want to know how you’re going to help them run their business better.

Do you want to start providing this kind of value to your clients? No time like the present! Get started with this one tool and see what kind of impact you can make.  Make sure to grab as many resources as you want at powerofprofitability.com and take a look at our courses available at The CFO School.

Go to powerofprofitability.com and get your free copy of the Profit Leaks Checklist and start plugging the leaks!

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While there are plenty of variables, the important thing about a snapshot is to balance the revenue with key cost drivers. It’s easy to get hung up on one or the other.

Some other things to consider adding to your snapshot:

• Types of revenue
• Key expenses, such as labor or marketing
• Tech costs
• Facilities costs
• Insurance
• Counting metrics, like number of repeat customers or hours worked for your employees or contractors

But first, have the conversation with your client first about what metrics they are watching and why. No matter how good you are, you can’t read their minds just yet.

Go to powerofprofitability.com and get your free copy of the Profit Leaks Checklist and start plugging the leaks!

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What if you were able to create a weekly or monthly snapshot of 3 key profit drivers that caught the CEO’s attention and allowed them to make business decisions with confidence?

Three key things that should be true of the drivers in your business snapshot:

1. It should be easy to understand.
2. It should be foundational to the business’ success, regardless of season or cycle your client is on.
3. The driver can be measured consistently in any period of time.

I always start with revenue with context and a little analysis and a projection of what the month is projected to look like. What other areas is the client watching?

Go to powerofprofitability.com and get your free copy of the Profit Leaks Checklist and start plugging the leaks!

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The simple definition of profit that I find the most useful is this: the income statement calculation of revenue, minus expenses. It can certainly be more complicated than that, but the important thing is that it’s not the same thing as cash flow.  Now, how do we apply this to the different kinds of businesses you’re working with?

100% Service based businesses like accountants, attorneys, and graphic designers are largely selling time.  Their primary expense is payroll or contractor payments, and the amount of service they’re provided doesn’t change from month to month. Their profit will be measured at the net profit level, which is revenue minus all expenses.

100% Product based businesses like retail have some sort of storefront, brick and mortar or online.  They often have inventory, they may or may not have employees, and they may ship to customers.  Their profit will be measured at the gross profit level, which is sales minus the cost of buying or manufacturing the item then shipping it.  It’s important here to separate direct costs from indirect costs.

What about companies that do both? First, track the product revenue separate from the service revenue.  Be patient with the process - none of this is a quick fix!

Go to powerofprofitability.com and get your free copy of the Profit Leaks Checklist and start plugging the leaks!

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A Podcast Launch Bestie production

If you get hyperfocused on the accuracy of the numbers for your clients, it's easy to miss the big picture.  I know you want to provide more value for your clients.

Being profit-focused is about reorganizing the work you do so you can get your clients off of the revenue rollercoaster.  The biggest shift will be in how you process and analyze the data you already have.

What’s one step you can take, even in your own business, to start communicating in a different way?

Go to powerofprofitability.com and get your free copy of the Profit Leaks Checklist and start plugging the leaks!

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A Podcast Launch Bestie production

Profitability is the engine that powers business. Lack of profitability can certainly kill a business.  But, revenue and profit aren’t the same thing!  A million-dollar business gets a million in revenue, but is the business actually making money or is that whole million going right back into bills?  That’s where bookkeepers and accounting professionals come in.

It’s really easy to get stuck on “revenue” and vanity metrics such as likes and subscribers as a way to measure a business’ success.  But really, nothing can replace profit in the long term.  Clients want a short list of actionable items and The CFO School can provide the training and certifications that can help small businesses thrive.

Go to powerofprofitability.com and get your free copy of the Profit Leaks Checklist and start plugging the leaks!

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A Podcast Launch Bestie production

How to use the power of profit to build your business, scale more easily and create a business legacy.