Think Like A CFO Podcast

How To Earn More Profit Without More Sales

October 19, 2020 Melissa Houston Episode 5
Think Like A CFO Podcast
How To Earn More Profit Without More Sales
Chapters
Think Like A CFO Podcast
How To Earn More Profit Without More Sales
Oct 19, 2020 Episode 5
Melissa Houston

What does it take to build a successful, sustainable business?

The answer isn’t as simple as “more sales.”

The truth is that your revenue numbers, no matter how high, do not determine how profitable and successful your business is. Your revenue is only one part of your overall financial picture — and six- or seven-figure revenues mean very little if you aren’t actively working to control your costs. Unfortunately, high revenues can be easily negated if your costs are spiralling out of control. This means that your business can be unsuccessful even when you're pulling in record-breaking sales!

Your level of profit is your bottom line and this is the #1 most important number when it comes to determining the success of your business. Profit is determined not just by your sales, but by your expenses. Plugging all money leaks and keeping a steady eye on your cash flow is just as crucial as closing more deals if you want your business to last for the long haul.

Maintaining up-to-date records and reviewing your numbers regularly makes it a lot easier to stay on top of things and make necessary changes as they arise, whether it’s cancelling a recurring charge that no longer serves your business, or remembering to invoice or follow up with a client who hasn’t yet paid.

When working with clients as a CPA, I always recommend five key ways to boost a business’s profits aside from increasing revenues. I’m excited to be able to share them with you in my latest podcast episode!

“The reality is: what makes your business successful lies in the profit.”

- Melissa Houston

In this episode, we’ll explore:

  • Five tips to make your business more profitable — without bringing in an additional sale!
  • How to identify and plug all money leaks currently affecting your business
  • Why having an organized internal accounting structure will help you save money

Highlights:

  • 01:08  Why I’m not interested in your revenues — and what really gets my attention!  
  • 02:01  Calculating your profit
  • 03:22  Case study: Rosie’s Company (6-figure influencer & coach)
  • 05:54  Setting up a system to review your financial reports
  • 06:24  What does your current accounting structure look like?
  • 07:01  Five tips for keeping profit in your business without bringing in an additional sale
  • 07:35  “82% of business failure is caused by poor cash management”
  • 08:19  2 reasons to invoice your clients immediately  
  • 10:43  “1 in 10 invoices are paid late” — don’t be that 1!
  • 11:12  What to do when a supplier changes their pricing?
  • 11:51  Plug those money leaks!
  • 13:58  The CFO Money Method framework

Links:

https://www.preferredcfo.com/cash-flow-reason-small-businesses-fail/

The 4-Step Roadmap to Biz Finance Freedom

https://melissahoustoncpa.lpages.co/4-step-biz-finance-roadmap

Work with me

https://www.melissahoustoncpa.com/work-with-me

Want more tips and inspiration? Follow me on Twitter @melissahcpa and Pinterest @melissahoustoncpacga and visit my website: https://www.melissahoustoncpa.com.

Show Notes

What does it take to build a successful, sustainable business?

The answer isn’t as simple as “more sales.”

The truth is that your revenue numbers, no matter how high, do not determine how profitable and successful your business is. Your revenue is only one part of your overall financial picture — and six- or seven-figure revenues mean very little if you aren’t actively working to control your costs. Unfortunately, high revenues can be easily negated if your costs are spiralling out of control. This means that your business can be unsuccessful even when you're pulling in record-breaking sales!

Your level of profit is your bottom line and this is the #1 most important number when it comes to determining the success of your business. Profit is determined not just by your sales, but by your expenses. Plugging all money leaks and keeping a steady eye on your cash flow is just as crucial as closing more deals if you want your business to last for the long haul.

Maintaining up-to-date records and reviewing your numbers regularly makes it a lot easier to stay on top of things and make necessary changes as they arise, whether it’s cancelling a recurring charge that no longer serves your business, or remembering to invoice or follow up with a client who hasn’t yet paid.

When working with clients as a CPA, I always recommend five key ways to boost a business’s profits aside from increasing revenues. I’m excited to be able to share them with you in my latest podcast episode!

“The reality is: what makes your business successful lies in the profit.”

- Melissa Houston

In this episode, we’ll explore:

  • Five tips to make your business more profitable — without bringing in an additional sale!
  • How to identify and plug all money leaks currently affecting your business
  • Why having an organized internal accounting structure will help you save money

Highlights:

  • 01:08  Why I’m not interested in your revenues — and what really gets my attention!  
  • 02:01  Calculating your profit
  • 03:22  Case study: Rosie’s Company (6-figure influencer & coach)
  • 05:54  Setting up a system to review your financial reports
  • 06:24  What does your current accounting structure look like?
  • 07:01  Five tips for keeping profit in your business without bringing in an additional sale
  • 07:35  “82% of business failure is caused by poor cash management”
  • 08:19  2 reasons to invoice your clients immediately  
  • 10:43  “1 in 10 invoices are paid late” — don’t be that 1!
  • 11:12  What to do when a supplier changes their pricing?
  • 11:51  Plug those money leaks!
  • 13:58  The CFO Money Method framework

Links:

https://www.preferredcfo.com/cash-flow-reason-small-businesses-fail/

The 4-Step Roadmap to Biz Finance Freedom

https://melissahoustoncpa.lpages.co/4-step-biz-finance-roadmap

Work with me

https://www.melissahoustoncpa.com/work-with-me

Want more tips and inspiration? Follow me on Twitter @melissahcpa and Pinterest @melissahoustoncpacga and visit my website: https://www.melissahoustoncpa.com.