This article contains the revolutionary secret to beating the ever growing statistics of Business’ not making it after their first couple of years. These five simple steps will change the future of you and your business forever.

Step 4 – Get a Bigger Bucket by generating repeat business

And your river has widened to a breadth that equals your happiness because you’re working every day with the customers you love.

What appears above the water line represents profit, and below the line are expenses.

You know that the majority of the iceberg is actually hidden under the water’s edge.

But the peak remains small as the entrepreneur has often moved on to the next sale before the peak of profit has a chance to develop.

Expending more and more resources, below the water’s edge, focused on new sales.

If you don’t have repeat business you probably don’t have much profit either!

What additional value would I need to add to increase HOW MUCH & HOW OFTEN?

Up next, Step 5 – Invest in Multiple Buckets, produce automatic cash flow.

Make it Rain. Fill the bucket. Attract more customers.

Step 3 – Fill the Bucket by attracting more customers!

Learn with us how to attract more of the right customers! But first let’s review what we have learnt so far:

Step 3 is about widening your river, by attracting more customers. (Or should I say more of the customer you WANT.)

You see in the early stages of business we would take on anyone with a chequebook and a heartbeat.

If they are not your ideal client and they’re referring more ‘not your ideal’ clients, it hurts cashflow.

There are just 4 numbers and 4 questions to think about for filling your bucket.

The higher each number. The wider your river.

More Customers = Number of leads x Conversion rate

Current Clients = Number of existing customers x Retention rate

NEW CLIENTS + CURRENT CLIENTS = TOTAL CLIENTS.

Make it Rain. Control the tap. Get paid faster.

Step 2 – Control the Tap & get paid faster!

Imagine a river. A river flows. From high ground to low ground. The higher the ground, the faster the flow.

Step 2 is about HOW FAST cash flows out of your pocket, through your business and back in.

1 – SELL IT

How many days does it take for me between first presenting my value and to when the client says YES?

2 – MAKE IT

How many days does it take to either produce my product / service or how long does it sit on the shelf?

3 – DELIVER IT.

How many days does it take us to deliver the final product from when the client said YES?

4 – BILL IT.

How many days does it take for us to bill the client after they say YES and then how long does it take for the money to arrive in the bank?

Cash Flow Days = SELL IT + MAKE IT + DELIVER IT + BILL IT.

If the consistent struggle and grind of living cheque to cheque wasn’t enough, think about what a cash flow day costs you?

Let’s work it out.

So a 119 day Cashflow cycle means you’re out of pocket $321,300 ($2,700 x 119). – SUPER OUCH!!

Find a smart way to reduce your cash flow days by just 15 days, and that’s an extra $40,500 in your account. BOOM!

Remember, there’s no point turning up the tap if you still have holes in your bucket!

How Inspire Can Help You – Step 1 Take Your Profit First:

Become a Cash Rich Business [Workshop] is a short course for small business owners in Cashflow Acceleration:

The next Become a Cash Rich Business [Workshop] dates –

At the Cash Rich Business workshops, we teach you how to take your profit first.

Make it Rain. Stop the leaks. Take back control of your money

Step 1 – Stop the leaks and take your profit FIRST!

If it worked you’d have more money in your account than you could poke a stick at!

But statistics (and daily emails) says tells us that cashflow is tight, and profit is a distant memory.

Parkinson’s Laws says that “an available resource will always be used up”.

So in the OLD Profit, you sell sell sell & the money (food) goes into one bank account (plate).

Then we incur all the expenses we think we need to incur in order to deliver on our promises.

So knowing that it is very, very hard to change human behavior (ever tried and failed a diet? I have!)

We simply recommend eating from a smaller plate.

Action:

Commit now that a certain percentage of EVERY DOLLAR that comes in goes into a separate bank account at a separate bank.

AND we encourage you to do a self-analysis in these 5 areas of your business. Rate yourself between 1 and 10. 10 being you are Extremely happy with where things are at, 1 being you just are in desperate need of help.

Make it Rain – 5 step plan to make your business work for you

Step 1 – Stop the leaks

Step 2 – Control The Tap

Step 3 – Fill the Bucket

Step 4 – Get a Bigger Bucket

Step 5 – Invest in Multiple Buckets

How a Baseball team used Numbers to Win

Call it coincidence, but over the past couple of days, I’ve discovered that the sporting “greats” use numbers to win.

Prefer to watch this article?

[su_youtube url=”http://www.youtube.com/watch?v=UD8fAdxrahE” width=”640″ height=”360″]

Moneyball – Focus on One Number

Moneyball is a movie based on a true story of an underdog baseball team in 2002.

The movie follows the true story that the Oakland Athletics baseball team assembled a team of undervalued players, based on player statistics.

The reason was that the coach Billy Beane, played by Brad Pitt in the movie, was handicapped with one of the lowest salary constraints in the league. He had to innovate with how he put together his team.

So instead of hiring the expensive ‘A players’, Billy hired the players in the team, ironically, based on one number. He hired them based on their ‘On Base Average’, or ‘OBA’.

After a bumpy start, the team ended up winning 20 consecutive games – and they credit this to the way that the team was formed. All based on this one number that matters in baseball.

How does baseball relate to business?

We can compare this to business, where we need to get the whole business focused on one number. A good lead indicator or key predictive indicator at that, rather than things like revenue or profit – which are made up of multiple inputs.

Examples of this one number could be customer related, sales related, cash flow, or other metrics that matter to your business. (I have gone into a bit more detail with examples in this article.)

So how do you find your “On Base Average” equivalent?

Finding what you should focus on is really a process of determining what matters in your business.

What are the biggest problems at the moment? Cash flow? Lack of leads? Your customer retention rate?

Ron Baker wrote a book in 2006 called “Measure What Matters to Customers“. He writes with the belief that if you focus on what truly matters to your customers, then the financial numbers in your business will work themselves out for the best.

An analogy in the first chapter is of a canary in a coal mine. An early warning system for the miners that carbon monoxide was in the air, and to high-tail it out of there.

What numbers really matter to your customers? (And do have a read of Ron’s book too, some brilliant ideas to help you.)

Self Managed Super Funds vs Retail Super? A Warning…

The Warning:

But for those who want a bit more excitement, those who want to really press ahead and become a self-made success, to really make the most of the opportunities, I really suggest that a self-managed super fund may well be for you.

From our perspective, if you move over, and you become engaged in your SMSF, you need to start to choose these 9 things –

So the first benefit of an SMSF is becoming engaged with your future.

One of the most important things about engagement and being a Self-Made Success is then to become knowledgeable in what is a self-managed super fund.

To learn the rest of the 8 Benefits of an SMSF, The ‘Inspire Boys’ Favourite 3 Wealth Strategies they personally use, and details of the Become a SMSF Millionaire 12 Week Online Course, go to www.smsfmillionaire.com/go

Ben Walker of Inspire SMSFS Pty Ltd (1243433) is an authorised representative of Finance Wise Global Securities Pty Ltd ABN 60 146 708 045. Finance Wise Global Securities Pty Ltd holds an Australian Financial Services License (No. 397877).

Time out – free speech

Time out!

Can we just talk for a minute… for free?

Firstly and most importantly the answer to that one is a yes.

A resounding and emphatic yes for that matter. But let’s take a step back because I’ve come in half way through the story.

Have you ever had a tradesperson over at your place getting paid by the hour to a job – yes an important job, like a plumbing task or what have you? And when that person asks you a question around your preferences, y’know, kinda engages you in conversation, you feel the tension rising in you because they’re on the clock and “why the heck aren’t you just getting on with it?!” is all you can think. If only that tradie wasn’t on the clock, you’d be able to engage properly, give some real thought to your answers and because of that you’d almost certainly get some better results as a consequence.

Let me take it a step further. With a clearer understanding of what you want from the job your tradie is doing, it is highly likely they would do an even better job than what you (and they) would have settled for. A better job, more satisfaction on both sides of the client/service provider fence, maybe some heartfelt recommendations and who knows a nice fat slice of goodwill (you know, the old “what goes around comes around dynamic” may swing into action – stranger things…).

The point is that clear, relaxed communication sometimes requires a bit of extra time to give and absorb. The trouble is, it’s hard trying to explain to say, your accountant, that your situation is unique and somewhat complicated and you need to get cash flowing in the right direction when he’s charging you by the six-minute increment. Time is money and I’m afraid that not only do many accountants know it – they absolutely love it. And that’s where the love affair with your accountant can end and suddenly it’s all business. Joyless transactional and ultimately not very satisfying.

And I’m out!

Real value through freedom of speech? I’m in!

So one of the key principles on which we as a team, built this business was “real and quantifiable value” being offered to our clients. Sounds suspiciously corporate so put another way: “we aim for the tax savings we deliver to our clients to exceed the service fee we collect.” Simple and smiles all round. To do that we need to understand the circumstances, the pressures, the business, everything. And as I explained when talking about our tradie, I simply can’t do that if my client clams up because they are getting charged for every minute we sit across from each other or spend time chatting on the phone.

Death to timesheets!

Perhaps not all of them because some are absolutely necessary in other businesses but to the ones in our industry I say, “die scum!” Sounds very harsh doesn’t it? Harsh but fair. Timesheets and more pointedly, billing according to the timesheets killed trust, potential, reputations (both individual and corporate), businesses, a sense of enterprise, the Aussie “fair go”, Phar Lap – the list goes on.

As far as we here at Inspire CA are concerned, we are here to listen carefully and carefully apply our skills expertise and enthusiasm to the success and ongoing success of your business. In short, that means when you talk, we listen… for free!

But don’t take our word for it. Why don’t you call or contact us and experience what a timesheet free, obligation free chat could do for your business and test drive a good listener (AKA Inspire CA accountant) today.

Ep. 27 How Disrupting His Industry Saw Ben Walker Become an Award-Winning Entrepreneur

What’s Your One Number to Focus on in Your Business?

Adapted from Gary Keller’s recent book, “The ONE Thing”, what is the ONE number you could focus on, such that by improving it everything else would be easier or unnecessary?

What we want to identify here is the one number in your business that will have a roll on effect to other aspects of your business making them easier or unnecessary.

Watch this Article

And to test your One Number, it needs to be a lead into other numbers. So what I mean by this for instance is that Revenue is made up of many inputs: existing clients, retention rate, leads, conversion rate, average spend, number of transactions per client etc. And you could even break these numbers down into more leading numbers.

Your One Number is likely to change every so often too, so don’t get caught up on it. At the same time, if you’ve picked a number that is having a fantastic effect on the business don’t just stop monitoring it.

Continental Airlines – the Short Version

Continental Airlines was a struggling airline in the early 2000’s when low cost airlines were popping up.

To innovate, they switched their One Number from “$ per air mile” to “% of on time arrivals” – and because the budget airlines weren’t focused on this, Continental’s business went through the roof!

But once the business was sold and new management came on board, they switched their One Number back – and that is why they are no longer around…

Get the Whole Team Involved

Your ONE Numbers will be even more effective if it is something that everyone in your business can contribute to. Let’s take ‘# days between last incident’ for accidents in the work place. Everyone can be on board this, and it would reduce administration time, costs for leave, insurances etc – but everyone can assist.

Examples For Your One Number

Customer Focused

If you’re short on Leads

If your cash flow is tight

Keep Accountable Once You’ve Got Your One Number

After you’ve decided on your One Number, be sure you document it and keep score of it visually – somewhere that you and the team responsible will see it every single day.

For instance, you could simply write it on butchers paper and stick it to the back of your office door. Or, if you’ve got some crafty talent in the office, get them to put together a fun, themed scoreboard – especially if it’s something that can create some competitive fun.

Opportunities can’t tell the time

Just be ready to say “yes”!

Opportunities are stupid. I don’t mean they are irritating to have around or generally score badly in basic arithmetic evaluations. I mean they have no sense: no sense of timing nor sense of occasion. They just appear – sometimes only fleetingly and oftentimes, never to return.

I was at the dawn of my career. Freshly qualified and ready to unleash my ambitions on a startled world. First I would learn my trade with a “big 4” company and then prove myself in a smaller business under the watchful eye of a trusted mentor. Of course from there, life would just get simpler and more organised: grow the career, raise a family, do well with money… blah blah blah and so it goes. Easy, right?

Opportunity knocks…

Wrong. I’ll use a knock-knock joke to illustrate my point and yes, it’s a true story.

Really? But it’s too soon, Christmas is right around the corner, this isn’t a good time… can you come back in, I don’t know, March?

This actually happened to me and while the details behind my (what HR types used to describe as a) “career event” are probably a blog for another day, the point is that I saw an opportunity – and it saw me.

Lesson one: the time is right whenever the big idea shows up with a bunch of friends called “a lightbulb moment”, “ambition” and “a moment of clarity”. (Lesson 1a – they rarely if ever bring a how-to guide.)

The truth is that the moment of truth, when I realised I had learned all I could from my colleague and mentor, arrived much sooner than expected. And yes the timing was a little awkward. I delivered the news right after the Christmas holidays that I would be moving on to create, establish and live the dream. A new dream. One that engendered a lot more risk, stress and demanded belief in myself, my values and my trusted inner circle. Oh and a laptop, a borrowed printer and that big idea.

What’s the big idea?

By now a lot of people already know that I was at first confused by and then dead against the idea of charging clients according to the timesheet and stopwatch. I preferred measuring success and therefore our fees on a merit-based system of saving clients’ tax dollars first, then basing our fees on their level of satisfaction.

To me and later to my clients, this became a jarringly disruptive offer. One that was welcomed with open arms and that most genuine of affirmations, “of course, why hasn’t this been done before.” Perhaps it had, somewhere, in a different form but the point is, while there may never be a perfect time to take the plunge, it’s better than whiling away years of your life asking “if not now, then when?” Or worse: “If only…”

Lesson two: Perfect timing is a retrospective quantity – you’ll only know for sure after the event. To be clear, I’m not advocating reckless behaviour. I’m just saying that when your idea, your opportunity comes knocking, go out and take action, don’t be left behind on the sidelines taking in the action. That would be a mistake.

And let’s face it, there are enough avoidable mistakes to go around for everyone but some of the avoidable ones are around tax. Find someone qualified who you can trust and test drive and accountant today. We may be able to help you out with that.

Make it Rain. Get a Bigger Bucket. Generate repeat business

Step 4 – Get a Bigger Bucket by generating repeat business

Make it Rain. Fill the bucket. Attract more customers.

Step 3 – Fill the Bucket by attracting more customers!

The higher each number. The wider your river.

More Customers = Number of leads x Conversion rate

Current Clients = Number of existing customers x Retention rate

NEW CLIENTS + CURRENT CLIENTS = TOTAL CLIENTS.

So if you want to fill your bucket, fill it with more of the right clients, but before you do that, make sure your current clients are ideal – if not, make room.

Make it Rain. Control the tap. Get paid faster.

Step 2 – Control the Tap & get paid faster!

1 – SELL IT

2 – MAKE IT

3 – DELIVER IT.

4 – BILL IT.

Cash Flow Days = SELL IT + MAKE IT + DELIVER IT + BILL IT.

Remember: What you measure you treasure.

Let’s work it out.

Remember, there’s no point turning up the tap if you still have holes in your bucket!

How Inspire Can Help You – Step 1 Take Your Profit First:

The next Become a Cash Rich Business [Workshop] dates –

Make it Rain. Stop the leaks. Take back control of your money

Step 1 – Stop the leaks and take your profit FIRST!

Sales (minus) Expenses (equals) Profit does not work.

Parkinson’s Laws says that “an available resource will always be used up”.

We simply recommend eating from a smaller plate.

The New Profit formula is Sales (minus) Profit (equals) Expenses.

Action:

Make it Rain – 5 step plan to make your business work for you

Step 1 – Stop the leaks

Step 2 – Control The Tap

Step 3 – Fill the Bucket

Step 4 – Get a Bigger Bucket

Step 5 – Invest in Multiple Buckets

How a Baseball team used Numbers to Win

Prefer to watch this article?

Moneyball – Focus on One Number

How does baseball relate to business?

So how do you find your “On Base Average” equivalent?

Self Managed Super Funds vs Retail Super? A Warning…

Many people are quite comfortable sitting in simple, plain, ‘vanilla’, industry and retail superannuation funds. Self Managed Super Funds or ‘SMSF’s’ are a lot different.

The Warning:

So the first benefit of an SMSF is becoming engaged with your future.

“Engagement with your Super is Engagement with your Future.”

Time out – free speech

Time out!

Can we just talk for a minute… for free?

Real value through freedom of speech? I’m in!

Death to timesheets!

What’s Your One Number to Focus on in Your Business?

Watch this Article

Continental Airlines – the Short Version

Get the Whole Team Involved

Examples For Your One Number

Customer Focused

If you’re short on Leads

If your cash flow is tight

Keep Accountable Once You’ve Got Your One Number

Opportunities can’t tell the time

Just be ready to say “yes”!

Opportunity knocks…

Lesson one: the time is right whenever the big idea shows up with a bunch of friends called “a lightbulb moment”, “ambition” and “a moment of clarity”. (Lesson 1a – they rarely if ever bring a how-to guide.)

What’s the big idea?

Share This