Rebuild Your Business
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Title: ALWAYS HAVE A PREDICTABLE PROFIT
ALWAYS HAVE A PREDICTABLE PROFIT
Kanketa Finance Ready Reference
CHAPTER 1: ALWAYS HAVE A PREDICTABLE PROFIT Create your personal budget first (your ENDGAME) Personal net income X 4 = Net Profit needed from the business Net Profit of a business has eight parts
CHAPTER 2: KEEP FIXED COSTS FOR STABILITY Gross Profit Margin minus total payroll minus personal Net Income on your P&L = Non-People expenses 6 Fixed Non-People Categories + 1 Fixed Wages Category “People” (Managers Only) = Fixed Wages ½ of Total Wages
CHAPTER 3: SEMI-VARIABLE COSTS FOR FLEXIBILITY Balance Fixed Costs with Semi-Variable Costs
Balance “People Costs” (Manager Wages) with Non-People Costs
Make Net Profit, Fixed, and Semi-variable Costs equal
CHAPTER 4: MARGIN PROTECTS PROFIT MARGIN is all that counts! Three Thieves of Margin:
Hidden Job Costs, Cost Overruns, Owner’s Leaky Bucket The company’s Margin contains Shareholder’s Personal Net Income. Margin protects your costs and your profit
CHAPTER 5: COST OF GOODS SOLD You only have Cost of Goods if you have a job. Inventory is not Cost of Goods Sold until there is a customer
Cost of Goods Sold creates your price
CHAPTER 6: COST OF QUALITY Cost of Quality is “promotional” money that the customer gives you and expects you to return as part of the sale Cost of Quality is not part of Cost of Goods Sold You could have Cost of Quality if you do not have a Sale.
CHAPTER 7: MANAGE WITH A SCORECARD Your Scorecard is proven. Last year’s total revenue and last year’s Cost of Goods Sold = this year’s "Normal" performance
Reduce your debt to be equal to or less than ANNUAL MARGIN
(2X monthly margin)
Keep your company financially safe by observing eight key
Scorecard rules.
CHAPTER 8: CREATE SILO MARKETING 6 active CORE SILOs (enough). Monthly Margin from each Silo covers the TOTAL Margin of your business divided by 6. Identify how you help.
Pathways give you Frequency, Reach and Depth
Position - 4 Competitive Marketing Strategies
CHAPTER 9: BUILD A HOUSE OF VALUE 4 Managers will lead you to Personal Financial Freedom Manager Monthly salary this year depends on last year’s Margin Business Leader manages the System that manages the People
CHAPTER 10: FOLLOW THE MONEY MAP Touch money 4 Hours a Month. Don’t use Customer money to pay bills.
Pay every expense with your Line of Credit.
On the last day of the month, pay your Line of Credit off
(as much as possible) using your full month of Customer deposits
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