Inconsistent profits and cash flow can create stress and unnecessary pressure, resulting in reactive decisions that may have you compromising your quality of work and long term results. Careful cash flow planning and financial strategising allows you to make smarter decisions for the future. There are many simple tools a business owner can use to create consistent, sustainable revenue with a take-home profit.

1. Six Strategies for
Consistent Profit & Cash Flow
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02
03
05
04
06

2. Welcome
• Hi…I’m Jon Mailer
• Relax. Eat, drink, & connect
• Be Open – take notes, ask how?
• Link to slides – slideshare.net/tradeinsights
• Phones, parking, toilets
• Luck door prize…

3. Who is PROTRADE United?
Australia’s #1 coaching & mentoring
organisation supporting trade &
construction business owners…
To help business owners to:
• Stabilise & Streamline – creating CONSISTENCY with
income, profit & cash to give them freedom of CHOICE
• Scale – growing # projects, vans, teams, (with profit!)
• Step Out – off the tools, choose a role, sell/manage buy
out

4. Imagine if you were like…

5. Who is this for?
In this session…
• Think differently about your business
• Understand how to prepare yourself
financially for the year ahead
• Avoid the biggest financial mistakes that trade
owners make
• Implement six profit/cash flow strategies
• Shift your awareness in this area
• Fix money challenges – forever*

6. Who is this NOT for?
• If you want to be stuck in the cycle of poor
profits and virtually non-existent cash flow
• You don’t want to grow profit or free cash
flow
• You love spending most of your time
working hard
• You are happy with the status quo
• Not willing to let go of past behaviours

7. Quick hello…

8. What is Success?

9. What is Success?

10. Does it get any easier?
Don’t wish it was easier.
Wish you were better.
Work harder on you,
than in your business.
Jim Rohn

11. Internal vs. External

12. You vs. The Tools

13. Creating Your ‘Reality’
Value yourself
Tell the ‘whole’
truth
100%
Responsibility

14. Are you prepared to change?

15. Adapt the ideas…
To suit your business and
target customer…

16. My assumptions…
• You are a master of your craft
• Professional in your actions
• Value yourself and your work
• Honest with yourself
• Up for 100% responsibility

17. To think about…
• If you don’t understand your numbers you don’t
understand your business
• Understanding vs. Doing
• Mange your money wisely and you will have more
money to manage

18. Biggest Mistakes…
1. Messy and inaccurate books
2. Don’t charge enough – particularly for
labour
3. Delay’s with invoicing
4. Wrong business structure
5. Unaware of breakeven

19. Biggest Mistakes…
6. No cash reserves
7. Focus on ‘more work’ vs. ‘more
profit’
8. Don’t review financials often
enough
9. Not checking invoices
10.Not understanding the cash
cycle

20. The Fundamentals
Gross/total income (sales) - VANITY
- Direct Costs/C.O.G.S. (Materials/Labour, etc.)
= Gross Profit ($/margin) – REALITY
- Fixed Costs/Overheads/Operating Expenses
= Net/Pre Tax Profit (EBIT) - SANITY

21. The Oh C&%# moment!
PROFIT & LOSS STATEMENT
Income $100,000
Less:
COGS $45,000
Gross Profit $55,000
Less:
Overheads $45,000
Balance $10,000 PROFIT

22. The Oh C&%# moment!
PROFIT & LOSS STATEMENT CASHFLOW STATEMENT
Income $100,000 Cash Received $100,000
Less: Less:
COGS $45,000 COGS $45,000
Gross Profit $55,000
Less: Less other outflows:
Overheads $45,000 Overheads $45,000
Repay Loan $5,000
BAS (previous quarter) $15,000
Total $65,000
Balance $10,000 PROFIT Balance -$10,000 CASH

23. Got a Cashflow Challenge?
Either…
1. Not enough income to cover outgoings
2. Enough income, yet not enough profit after
outgoings (just breakeven)
3. Enough profit, yet not coming in promptly
4. All of the above!

24. What is NOT the magic solution?
More income is NOT the magic solution
– sometimes just the same challenges
with more zeros!

25. What is NOT the magic solution?

26. Michael – Livable Landscapes

27. Where to start?

28. The Six Strategies
1. Track, Measure, Manage
6. Prepare for Corrections
5. Collect Money Faster
2. Set Profit Targets
3. Increase Gross Profit
4. Manage Overheads
01
02
03
05
04
06

29. 1. Track, Measure, Manage
• Break Even
• Gross Profit, Net Profit
• Scorecard/Dashboard
• Lagging vs. Leading
• Income/cash flow forecast
• Worst Case Scenario (WCS)
• Understand the cash cycle in your business
• Review at least monthly

30. 2. Set profit targets
• Work backwards from your profit goal
• Input overheads & COGS
• Create your required income and job #

31. GROSS PROFIT REQUIRED
$450,000
OVERHEADS $300,000
NET PROFIT TARGET $150,000
GP % 45%
SALES INCOME REQUIRED
$1,000,000
# JOBS REQUIRED 100
AV. JOB VALUE $10,000

32. GROSS PROFIT REQUIRED
$430,000
OVERHEADS $280,000
NET PROFIT TARGET $150,000
GP % 48%
SALES INCOME REQUIRED
$896,000
# JOBS REQUIRED 86
AV. JOB VALUE $10,400

33. 3. Increase Gross Profit
Know your existing GP – review regularly
• Measure GP per X – job/project, van, employee
• Are you charging enough?
• Do you know your TRUE costs to employ?
• Do you know Mark Up vs. Margin
• Increase average job value

34. Improve efficiencies/productivity
• Track budget hours to actual – use of time
• Educate the team on $$$/profitability
• Reduce overtime
• Reduce faulty work
3. Increase Gross Profit

35. Glen – Stilus Design &
Constructions

36. Know your costs to run your business –
day/week/month
• Separate non billable and billable labour
• Evaluate every salary role, every month
• Review expenses monthly
• Negotiate better rates for power, phone, insurance, bank,
etc… - every quarter
• Assign a P&L line item to a role
4. Manage Overheads

37. 5. Get Money in Faster
• Firm up/agree on payment/trade terms with customer –
before starting
• Deposit - use mobile payments/EFT/phone
• Progress payments – break them up
• Invoice/Payment asap/on completion
• Make it easy for clients to pay - options
• ASK if necessary

38. Invoicing System
• Immediately on job completion – KPI’s
• Follow up – automate, where possible,
• Track slow payers
• Have a debt collector on hand and use them – follow
through with our word
5. Get Money in Faster

39. Jay & Krista – Fully Wired Electrical

40. Automate…

41. 6. Prepare for Shortfalls/Corrections
• Create a cash flow projection
• Shortfalls - Not if, when
• Start building cash surplus/cushion asap (PPF)
• Apply for invoice/debtor funding
• Apply for overdraft/credit in advance
• Credit card*
• Have tight contracts
• Understand the BIF/Security of Payments Act
(BCIPA)
• Trade Credit Insurance

42. Managing the flow…

43. Managing the flow…
A suggestion…
Gross Profit
Pay Your Profits 5- 10%
Group Tax, Super, GST
Training – You/Team 5%
Team Wages – including you
Essential Running Expenses
Non-essential Suppliers
Cash Surplus

45. 4 x Actions
#1
#2
#3
#4

46. It’s interesting you know…
Most of business owners will…
• Hear what we say,
• Understand it intellectually,
• Agree with all the principles,
• Get excited about what’s possible
• KNOW that it is the thing they should
do, yet…

47. Do nothing!
What gets in the way…
LIFE

48. Which leads to?

49. Complimentary Strategy Session
Where are you NOW
WHERE you
want to move
towards