A handyman called me for some business counsel. He had one full-time employee making $30,000 a year, while he personally paid himself $9,000. He had strong demand for his services, but couldn’t understand how to make the business financially solvent. His billing rate was significantly below industry norms, because he feared upsetting his customers with increased prices. Many small business ...
The Fourth Key to Financial Success – Return on Equity A business owner should have two types of returns on the time and money they invest in their business. One is compensation for their work, and the other is a return on their financial investment. If you were investing in a mutual fund, you would want to know how much ...
The Second Key to Financial Success – Gross Profit Margin Years ago, Randy’s home remodeling business was struggling. Randy hired me to help. In construction, bidding jobs profitably is critical. You need to properly estimate your direct job costs, and add enough profit to sustain your business. The amount of profit you add to a job, compared to your total ...
The First Key to Financial Success – Revenue Growth In my book “Unconventional Business” I discuss Seven Keys to Financial Success. The first key is Revenue Growth. Knowing the pace your revenue grows from year to year is critical in assessing how well your customers appreciate your products. Unfortunately, some pursue more sales in a greedy and unethical manner. A ...
Warning sounds began to ring in my head as Billy shared about how he grew his sales to $5 million a year in only four years without any debt. Later, I discovered Billy grew his sales rapidly by pricing his products below his costs! Actually, Billy’s records were so poor he didn’t know his costs until my analysis was complete. ...
Personal debt can dramatically impact our work. Years ago, as a consultant, I was reviewing personality profiles with employees when I discovered one employee’s report had no data. Upon investigation I learned reports were not issued if it appeared they were trying to beat the system or they had current personal trauma. The employee adamantly denied either to be true, ...
As graduation season approaches, many college students may be excited about completing their education, yet anxious about the burden they now face. The Wall Street Journal claims the average college graduate is now faced with $35,000 in student loan debt! Two decades ago less than 50% of students had debt. It’s now up to 71%. Debt can crush hopes and ...
Brad, a young entrepreneur I consulted with years ago, assumed that debt was his friend until the economy declined. The burden of too much debt caused his attitude to change. He became so resolved to get debt-free that he eliminated his independent contractors and began working 80 hours a week until the debt disappeared. In less than a year Brad ...
When I was a banker, David’s construction company needed a line of credit. His business was risky so we required him to deposit all customer checks against his loan balance. When he needed money we used his line of credit to cover his checks. Unfortunately, David violated our agreement, and our trust, and kept many of his customer’s checks. This ...
While in banking, I inherited a past due loan. Foreclosure on this cattle operation seemed likely so a credit analyst and I went to inspect our customer’s livestock. Our customer drove us into a small fenced area where most of his cattle resided. My credit analyst counted thirty cows in this one pen. I also counted thirty. When the rancher ...
Equipping Others to Do Work Differently
