Synopsis
If your business isn’t making money and, worse yet, it is controlling more of your time and your life, there are five proven steps to solve this. The answer lies in learning how to manage the relationship between cash flow and profits through action-driven reporting to make more money.
Adopt a Management System to Build Sustainable Cash Reserves from Higher Profits
A management team’s ability to make more money is proportionate to how well they manage the relationship between cash flow and profits through action-driven reporting.
The surest way for a business to make more money lies in management’s ability to proactively manage the relationship between cash, profits, and reporting. The BusinessCPR™ Management System (B-CPR) is designed to help you learn how to consistently improve your cash flow from profits. B-CPR is a proven, easy-to-apply five-step business management system with the power to revive a flatlined business and help a stuck business achieve higher levels of financial success.
BusinessCPR™ is a five-step management system for improving cash flow from profits.
Owning a business that performs how you want it to versus controlling your time and life requires discipline and effort. Developing a clear understanding of the relationship between cash flow, profits, and results reporting is the only way to effectively manage your business and achieve your desired result.
Consistent application of the timeless management principles of the BusinessCPR™ Management System shown in the following model is the proven way to hold onto cash from profits:
If you don’t like feeling out of control or, worse, battling the stressors of running out of money, take the necessary action today to begin doing things differently. Each step in the BusinessCPR™ Management System and their order came from extensive research grounded in how best to help business owners be more decisive in managing their business assets.
Step 1—Increase the Velocity of Your Operating Cash Flow Today
Nothing in your business happens without cash. To prevent cash outflows from exceeding cash inflows, maintain a four-week rolling cash forecast to confirm how much money you are holding onto from operations. Failure to do this, you fail your business by not projecting your cash flow for any of the weeks ahead.
Many have found that making these projections every Monday helps them prioritize where they need to exert more effort each week. The goal is to make sure your projected cash outflows never exceed your available cash. Click here to learn how to calculate your cash projections easily.
Step 2—Build Your Twenty-Four-Month Profit Plan to Guide Your Decision-Making
Without knowing your sales and profit targets to be realized each month, it’s impossible to see if you made a profit, let alone accomplish your goals. Ideally, your Profit Plan is finalized in month eleven of each year, so you’ll know your goals for month one of the upcoming year. Click here to learn the core steps to follow in building an achievable profit plan.
Step 3—Confirm the Quality of Your Profits Through Leading and Lagging Metrics
To confirm how your business is doing while identifying where you are performing better or worse than your desired plan, utilize the following three reporting tools:
KPI Scorecard: This tool comprises your leading metrics or key performance indicators (KPIs), which should be captured and discussed in your weekly management team meetings. Using a KPI Scorecard helps you confirm that your daily and weekly actions are on track to produce your planned monthly and annual results.
Monthly Scoreboards: How you play the game is shaped by the score and time remaining in the game. No stadium experience would be complete without a scoreboard to help us track the score in a game, time remaining, and key game statistics. Just as stadiums deploy giant scoreboards to improve the in-person experience of being at the game, those in your employ need to see the monthly score of your business to understand whether you are winning or losing each month.
Variance Reports: These lagging metrics are pulled from your monthly P&L Statement and Balance Sheet. They should be used during the second management meeting of each month to confirm whether or not you realized your planned results for that month.
The information used in these management reports comes from data being generated and recorded through every transaction. If you capture this information accurately and on a timely basis, you will identify the needed actions you must take to position your business to make more money. Click here to learn how to confirm the quality of your profits in greater detail.
Step 4—Stop the Losses That Keep Your Business at Risk
All wasted or lost cash costs you both cash reserves and profits. Every profit failure drains your bank accounts and puts your business at increased risk when you fail to make money on a sale. Profit Losses are best identified through the leading and lagging metric “misses” monitored in Step 3.
It’s imperative to your business’s survival to stop any loss that significantly impacts your cash quality and velocity. Click here to be introduced to a business “change” methodology you can use to stop cash from draining the life out of your business.
Step 5—Be Accountable for Your Results
You control your business through disciplined actions. There are always more smart actions in every business than the time available to act on them. The hard reality is that not every activity you complete will produce the results you lay out in your Profit Plan.
The key to long-term success lies in having a high bias for action and a passion for results. If your disciplined actions aren’t creating the intended results, change your actions to ensure that you realize your desired results. Click here to learn the process of working smarter, not harder, by consistently following the principles of B-CPR.
Steps 1 through 4 of the BusinessCPR™ Management System better ensure that your Step 5 hard work produces the desired results. By mastering the ins and outs of your profit plan, you’ll be able to determine the critical few things to do among the noise of the relevant many you could do. This is how you consistently produce the desired results that you hold yourself and others accountable for generating.
The true success of any business is not measured by the money made. It is measured by the difference between the money made and the money that should have been made but wasn’t. When the gap between what you actually earned and what you should have earned is close to each other, you know you own a well-managed business.
If the gap between what you made and what you should of is extensive, you have management problems. The most common cause of making less than you should be is a business owner failing their business. Money is being lost, and cash is being mismanaged. Profits aren’t being earned. All because an owner and their management team aren’t putting their energies where they are needed most.
Even if your business made a profit last year, it doesn’t mean you won’t become one of the many businesses going out of business this year. Anytime you find yourself drowning in never-ending problems, overdosing on debt, or choking on costly mistakes, your business is at increased risk of failure.
Which of the five proven steps to making more money is your business struggling most to manage?
Click here to have a BusinessCPR™ Certified Business Scientist at no charge tell you which BusinessCPR™ Management System step your business is struggling the most to perform. Within forty-eight hours of receipt of your core financial statements by month, you will receive back by email your free review of the most crucial area of action for you to take to make more money.
Where is your management struggling most to make more money?
Click the link below to have a BusinessCPR™ Certified Business Scientist at no charge tell you which BusinessCPR™ Management System step your business is struggling the most to perform. Within forty-eight hours of receipt of your core financial statements by month, you will receive back by email your free review of the most crucial area of action for you to take to make more money.
FREE BUSINESS REVIEW