Simple Numbers, Straight Talk, Big Profits!: 4 Keys to Unlock Your Business Potential

You should rely on debt only in extraordinary circumstances. Do not confuse debt with capital. Capital is the cash you leave in the business to fund your receivables and inventory for normal business conditions, and debt is financing for special cases.

reports you need in your reporting rhythm and how we can keep the numbers speaking to you: Daily report: Cash balance Weekly reports: Cash flow forecast; sales and productivity Monthly reports: Profit and loss; balance sheet and where the cash goes

Maintain a minimum pretax profit of 10 percent or greater as you grow to the $5 million revenue level, and leave any profits after taxes in the business to fund the growth instead of relying on debt or outside capital. To maximize your productivity of labor, avoid labor creep, and don’t hire an employee for a function that you can do. Consider what

They’re building the business, and until they reached their target equity levels, they left that money in the business.

Find your reporting rhythm and hold your

Quick Tips About QuickBooks There are some great features in QuickBooks for producing P&L statements. You can set roll-up points for your key seven or eight lines of data we talked about earlier, then you can expand them for more detail or collapse them to see just those seven or eight lines. First look at the collapsed view across time and see

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Discover where your cash goes (or ask your accountant to help you) by using a format similar to the example at the beginning of the chapter. Set aside your taxes in a separate account on a quarterly basis regardless of when it has to be paid to the tax agencies. Calculate how much cash you need to get your line of credit to zero. Borrow term debt o

Use regularly updated forecasts instead of budgets. Budgets are a license to spend, forecasts are a license to make profit. Keep your forecast at high level. Detailed forecasts do not encourage regular updating, and they’ll take so much time to maintain that you won’t have time to evaluate them. Evaluate your key metrics to understand the movement