The good news is it doesn’t have to be a constant struggle. Let me explain.
Many businesses are very good at what they do, but are not so good at understanding their business fundamentals. Whilst they understand the technical side of their business, they don’t understand the management side and this often leads to disaster when the business environment is as tough as it currently is.
As an example, we saw a client recently who had a very good business and was desperately out successfully chasing more sales to assist in growing his bottom line. The trouble was, his Working Capital % was higher than his Gross Profit Margin %. This meant that for every new dollar of business he obtained, he required more working capital to fund it than margin he was making on it, and he couldn’t understand why he wasn’t seeing results.
By proactively working on his pricing and volume strategies we were able turn this equation around so that more profitable sales where achieved, so it became a question of what he was selling and at what price, not what quantity. This improved his cash flow tremendously.
It’s not enough in this environment for clients to be going to their accountant once a year to have a tax return or BAS done – they need strong financial advice and guidance.
When things are going well in business anyone can open a business and make money. However its times like these when the economic tide runs out on the beach that you can see who’s been swimming with no swimmers.
Skinner Hamilton works extensively with our valued clients to ensure that they fully understand their business fundamentals and are kept accountable to achieve, no matter what the economy.
If you would like the gift of success and being different from the others, please feel free to contact me directly to arrange an obligation-free consultation.
Jason Skinner
Director/CEO
Phone 07 5594 3434
http://www.skinnerhamilton.com.au/
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