Sometimes it is the little things that can make a huge difference.
What would happen if you could just lose one pound per month? In just 3 years you could go from 200 pounds to 165 pounds, without any major diet or crazy lifestyle change. Just some focus and a few minor tweaks to eating habits.
What would happen if you just saved $1 per day starting upon graduation? Using a historical stock market investment growth rate of 10% in your investment portfolio over the next 43 years, you would have over $200,000 by the time you were 65. That’s with just $1 per day saved.
What would the impact be on your earnings before Interest and Taxes, as well as, Cash Flow be if...?
- Revenue went up by just 1%
- You raised Prices by just 1%
- Costs of Goods Sold went down by 1%
- Overhead was reduced by 1%
- Accounts Receivable improved by 1 Day
- Accounts Payable was 1 Day longer
- Inventory Days went down by 1
If your company is like most, the result of those 1% changes listed above could be worth over $100,000 or even $1,000,000 depending on your current revenue level.
What would it take to make any of those things happen and whom would you hold accountable for each one?
What would it take to make all of those things happen and whom would you hold for making each one happen?
What would you do with all of that extra profit and cash flow?
Listed below is an example of a manufacturing firm that does $15,000,000 in revenue currently and the annual impact 1% and 1 Day would have on them.
The manufacturing firm would see an improvement in their Cash Flow of $578,000, and an improvement of the Earnings Before Interest and Taxes of $678,000.
Listed below is an example of a service firm that does $15,000,000 in revenue currently and the annual impact 1% and 1 Day would have on them.
The service firm would see an improvement in their Cash Flow of $330,000, and an improvement of the Earnings Before Interest and taxes of $620,000.
Of course, both of these examples are based on real companies and their current P&L’s. I should tell you that both are pretty well-run organizations that have been growing for the past few years and have a good record of profitable growth.
If your firm does more or does less in revenue adjust accordingly. But you get the picture.
What is the impact of 1% and 1Day for those 7 levers and what do you have to do to achieve those goals?
Who will be accountable within your organization to deliver those results?
Every company has a Cash Flow Story, what is yours telling you and what is you Power of One?
If you would like assistance in calculating these numbers please let me know. It will require that you complete a simple form with just 19 numbers from your 2018 and 2019 P&L and Balance Sheet. That’s all, just 19 numbers for each year.
You can call me at (312) 345-0134, if you are interested in speaking with me about this service.
What would you do with any extra $100,000?
Dave Baney is the founder and CEO of 55 Questions, LLC. “ We work with successful top executives with a driving ambition to crush their competition.” We help CEOs and Entrepreneurs improve alignment, communication and accountability throughout their organization. www.55Questions.com
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