How Is Your Business Really Doing?: A Profitability & Performance Checklist Manual for Business Owners & Influential Decision Makers

By The Forward Group Inc.

Numbers are the language of business. If you dont understand the language, you cannot communicate effectively, and there is no way for you to know what is really happening in your business and why and, perhaps more importantly, what you can do about it. Besides that, if you dont understand the language, you are forced to make uninformed decisions. Uninformed decisions lead to wasted time, wasted energy and effort, and wasted capital. If you waste enough, long enough, you cant survive in business. This book is about business owners and influential decision makers, helping them to understand, interpret, and use the numbers in their business to make better informed decisions that lead to increased profitabilityand their business surviving and thriving.

• Language: English
• Publisher: Xlibris US
• Release date: Jan 26, 2017
• ISBN: 9781524572204

Book preview

How Is Your

Business

Really Doing?

COVER.jpg

A Profitability & Performance Checklist Manual for Business Owners & Influential Decision Makers

What you need to know, do and remember

to survive & thrive in business

The Forward Group, Inc.

Copyright © 2017 by The Forward Group, Inc.

ISBN:      Softcover      978-1-5245-7221-1

                 eBook          978-1-5245-7220-4

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

Trademark Acknowledgement™

1.3.7 is a registered trademark of The Forward Group, Inc.

These educational materials are provided without any warranty whatsoever, including, but not limited to, the implied warranties of merchantability or fitness for a particular purpose.

Any people depicted in stock imagery provided by Thinkstock are models, and such images are being used for illustrative purposes only.

Certain stock imagery © Thinkstock.

Rev. date: 03/29/2017

Xlibris

1-888-795-4274

www.Xlibris.com

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Contents

TARGETS MAKE A DIFFERENCE…

3 Targeted Objectives

For Business Owners & Influential Decision Makers

SECTION ONE

BEFORE YOU BEGIN

Something to consider before you begin…

From the authors…

PREFACE…The Pareto Principle (The 80/20 Rule)

A Personal Perspective On Checklists

The Choice Only You Can Make

A Problematic Questionaire Checklist

Survive & Thrive Checklist

SECTION TWO

WHAT YOU NEED TO: KNOW

The Financial Puzzle

Financial Puzzle Pieces

The Borders of the ‘Financial Puzzle’

The Business ‘Puzzle Box Cover’ Picture

Financial Communication

Capital Consideration

Figuring Return On Investment (ROI)

Depreciation

RISK vs. REWARD

Financial Statements

Balance Sheet Format

Key Consideration Points for The Balance Sheet

Sample Balance Sheet

Income Statement Format

Key Consideration Points for the Income Statement

Sample Income Statement

Cash Flow Statement Format

Key Consideration Points for the Cash Flow Statement

Sample Cash Flow Statement (Direct)

Sample Cash Flow Statement (Indirect)

Financial Scoring

A Summary Listing of the Worksheets’ Key Concepts

Financial Intelligence

Understanding The Big Picture

‘Sea’ Management

Performance Management

Decision Making

Critical Factors Decision Makers Consider

Problem Solving

The Cash Conversion Cycle

Questions that Demand Answers

Questions that Require Some Thought

SECTION THREE

WHAT YOU NEED TO: DO

See The ‘Big Picture’

Keeping Score & Learning How to Win Insights

The 10 ‘Red Flag’ Danger Zones in Business

Keep Score & Learn How to Win

Measure Performance & Build the Value of the Business

Forecast Needs & Project Possibility Outcomes

Projected Financial Performance Strategies Worksheet Checklist

Key Numbers Worksheet Checklist

A Note On Forecasting & Projecting Financials

Know What Help is Needed & Avoid Problems

SECTION FOUR

WHAT YOU NEED TO: REMEMBER

Step One

The Right Mindset…Success Demands Its Price Be Paid

Step Two

Moving Forward

Step Three

How to Know Where You Are & How Your Business is Really Doing

Step Four

Your Number Analysis

Step Five

How It All Fits Together

Step Six

Your Targeted Objective

Step Seven

Know Your Limits…The Foundation for your Action Plan

SECTION FIVE

ADDITIONAL INFORMATION

The Forward Group Inc.

The 1.3.7 Business Matrix

Notes On Bibliography

Your Action Plan Checklist

UNINFORMED DECISIONS LEAD TO WASTED TIME, EFFORT & CAPITAL INFORMED DECISIONS LEAD TO PROFITABILITY & SUCCESS

The hidden key to business success is in knowing your numbers!

• They tell you where you are and how your business is really doing

• They tell you what to avoid and what to concentrate on

• They identify your weaknesses and your strengths

A PUBLICATION BY

THE FORWARD GROUP, INC.

UNDERSTANDING, INTERPRETING & USING THE NUMBERS IN YOUR BUSINESS TO

MAKE INFORMED DECISIONS & MOVE FORWARD

Without understanding, interpreting and using your numbers to your advantage to make informed (smart) decisions you put yourself at the mercy of…

• Changing conditions

• Marketplace fluctuations, and

• Competitor’s initiatives

Accumulating, collating, analyzing and evaluating the numbers gives owners and influential decision makers the necessary information and tools to…

• Take control of their business operations

• Change course when necessary, and

• Seize opportunities that pass others by

COMPREHENDING THE MEANING OF THE NUMBERS ENABLES YOU TO MOVE FORWARD FROM AWARENESS TO ACTION & EMPOWER THE GROWTH OF THE BUSINESS

TARGETS MAKE A DIFFERENCE…

3 Targeted Objectives

THERE ARE 3 REASONS WHY THESE THINGS ARE VITAL FOR YOU TO REMEMBER

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…IF YOU’RE AT ALL CONCERNED WITH WHERE YOU WILL END UP

A QUOTE TO REMEMBER from MARK TWAIN…It ain’t what you don’t know that gets you into trouble. It’s what you know for sure, that just ain’t so!

TARGETED OBJECTIVE #1 – TO KNOW…(FOCUS)

• WHAT IS GOING ON IN YOUR BUSINESS, AND WHY. AND PERHAPS MORE IMPORTANTLY WHAT CAN YOU DO ABOUT IT?

• WHERE YOU ARE PRECISELY AT ANY GIVEN POINT IN TIME AND HOW YOUR BUSINESS IS REALLY DOING. ARE YOU REALLY MAKING MONEY AND IF SO, HOW MUCH?

• WHEN DO YOU START MAKING A PROFIT AND IS THE VALUE OF YOUR BUSINESS GROWING. IF SO, HOW QUICKLY AND BY HOW MUCH?

TARGETED OBJECTIVE #2 – TO REMEMBER…(PRIORITIES)

• HELP YOU ANSWER THE QUESTION, AM I PRICING MY PRODUCTS and/or SERVICES PROFITABILITY?

• HELP YOU DETERMINE IF YOU ARE TURNING YOUR PROFIT INTO CASH

• SHOW YOU IF YOU ARE HEADING IN THE RIGHT DIRECTION

TARGETED OBJECTIVE #3 – TO DO…(RESPONSIBILITIES)

• GET COMPLETE FINANCIAL REPORTS ON YOUR BUSINESS AT LEAST ONCE A MONTH

• UNDERSTAND WHAT ALL THE NUMBERS ARE TELLING YOU

• INTERPRET AND USE THE INFORMATION IN THESE REPORTS TO HELP YOU MAKE INFORMED (SMART) DECISIONS ABOUT YOUR BUSINESS

A THOUGHT TO ALWAYS KEEP IN MIND…Make sure you are aiming at the right targets. If you’re aiming at the wrong targets, you’re probably better off not hitting them.

ACCOMPLISHING THESE 3 TARGETED OBJECTIVES WILL HELP YOU ACHIEVE THESE 3 MAIN BENEFITS

For Business Owners & Influential Decision Makers

DECISIONS HAVE CONSEQUENCES – Uninformed decisions lead to wasted time, wasted effort & energy and wasted capital. Informed decisions lead to doing the right thing, in the right way, at the right time and getting the right result.

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A PROFITABILITY & PERFORMANCE CHECKLIST MANUAL

SECTION ONE

BEFORE YOU BEGIN

BEFORE YOU BEGIN CHECKLIST

□ SOMETHING TO CONSIDER BEFORE YOU BEGIN

□ Are you willing to pay the price?

□ FROM THE AUTHORS

□ Are you running your business OR is your business running you ragged?

□ THE PARETO PRINCIPLE

□ Are you spending the majority of your time solving problems?

□ A PERSONAL PERSPECTIVE ON CHECKLISTS

□ Do you use checklists to keep you informed and on-track?

□ OUR EXPERIENCE HAS TAUGHT US

□ Are you growing OR just treading water?

□ THE CHOICE – THAT ONLY YOU CAN MAKE

□ Are you wasting time, wasting effort and energy & wasting capital?

□ A PROBLEMATIC QUESTIONNAIRE CHECKLIST

□ Have you asked yourself these questions?

□ SURVIVE & THRIVE CHECKLIST

□ Have you fallen prey to the 3 biggest ‘myths’ in business?

Something to consider before you begin…

We can’t tell you what to do or what you need in your business.

This checklist manual is not about advice—but rather a sharing of information based on our experience. Each owner and each business is unique. You are faced with your own particular set of circumstances, your own market conditions and your own daunting challenges. Each business can be likened to a golf swing. No two are exactly alike. Yet there are common denominators that every successful golfer has in common. It is the same in business. Successful owners and businesses are able to see the Big Picture. They are able to keep score so that they know where they are and how the business is really doing. They can measure their performance because they understand what their financial statements are really telling them. And they know what help they need. In so doing they put themselves in a position to get the results and benefits they need to survive and thrive. Specifically they understand what is going on. They know what is happening and why. And perhaps more importantly they know what they can do about it. In essence they have learned how to win. They know how to interpret and use the numbers in their business to build its value. And they have developed the ability to avoid the problems that most businesses struggle with.

What we can tell you is what we have learned and what works for us; and what has worked for those we have mentored and coached.

We can give you the tools we use and share with you the skills that you need to master if you want to avoid failure and build profit. But you have to use them. No one can do it for you. It requires an investment of time, energy & effort as well as capital. Success demands a price be paid. You can be the greatest carpenter in the world with all the latest and best tools at your disposal, but if you never use them, nothing is ever accomplished and no one benefits.

What we would like for you to be able to do can be summed up in one phrase: Survive and thrive.

Our approach:

The strategy is simple and straightforward. The execution of the plan will challenge you, because it forces you to overcome the confusion that comes with learning any new skill set. It takes you out of your comfort zone and demands patience and discipline. It can be a painstakingly slow process at first; not unlike learning to ride a bicycle. You need a little help as you begin to get your balance. Slow and shaky soon gives way to more confidence and greater speed. Then before you know it, you have developed the ability to ride and can enjoy the freedom and fun that goes with it. It takes a mindset of action, patience and persistence.

Mark Twain once penned these words: It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so. If you are to survive and thrive in the great arena we call business, then you must be certain that