BIG BLOG

Scale Your Cash! (Part 1)

BY JEFF REDMON/BREAKTHROUGH IMPACT GROUP

Could your company use cash?

Does your company have enough cash to take full advantage of opportunities as they come up? How about when sales are light? In this series on cash, I will share easy practical ways to:
· Reduce Debt
· Increase Cash Reserves
· Consistently Fund Payroll, and
· Create Cash to Invest in Expansion

“I want to be there when they tear down our building, I’m sure $250,000 fell through the cracks,” says business owner.

Cash is not about finance, it is an operational issue. You cannot effectively find cash from the executive offices, rather the nickels and dimes are found on the front lines. Cash is the fuel necessary to reduce debt, increase reserves, consistently fund payroll, weather hard times, take advantage of opportunities and expand.

1+1+1=19 demonstrates the Power of One, how slight improvements in key financial levers can drop cash to your bottom line. I have prepared a very typical Profit and Loss Statement that shows by increasing price by 1%, reducing cost of goods (COGS) sold by 1% and decreasing S,G &A (Overhead) expenses by 1% that company would show a 19% increase in their bottom line. 1+1+1=19!

I would challenge you to take a look at your P&L and apply those same 1% changes. Having worked with hundreds of companies, I’ve never seen anything less than 10% and as high as 80% increase to the bottom line.

These 1% changes are not about reducing quality or slashing with an axe. It is the rare company that can’t within the next six months raise their prices by 1% or more. COGS and Overhead expenses requires an evaluation of every single line item on the P&L. One new executive challenged his team to look at insurance costs. No need the team said, we’ve had the same agent for years and it’s shopped each year. No matter, please do it again. In 22 hours of work, they saved $35,000 which was a 20% savings. $35,000 they could now use for other purposes without any reduction in quality or insurance protection.

In the next part of the series, we’ll share some tried and tested methods to find those 1%’s and more.

Jeff Redmon helps his clients create lives they love. For additional materials and help with your cash, just reach out to Jeff.

Through Gravitas Impact, Jeff published his Monograph, CASH, The Fuel for Your Economic Engine – How 1+1+1=19. Available on Amazon.