How to structure your business to strengthen the cashflow and increase its profits? It all starts with the understanding of the structure of your business and how the segments can impact your cashflow.
With ASIC showing a study that almost 60% of Businesses closing within the first 3 years of operation, 40% of those is due to poor cash flow and excessive cash use.
In every Business, there’s a cash flow leak or what I like to call it, a CASHFLOW DRAIN. It’s not always easy to find but it is incredibly profitable when you do and when you plug it up.
The Cashflow drain is a part of your business which is using excessive cash when it doesn’t need to. This is the part that causes your business the most stress and strain.
So how do we go about identifying this drain and fixing it? The most important step is to really list out your structure and be as SPECIFIC as possible. And you do this by:
1. Break your structure into 3 Main components:
– Who (are the people within the business)
– What (do you do eg. product or service or both)
– How (do you facilitate that structure, what equipment etc. do you use)
2. Once you do that effectively, you can now:
– Add a dollar value to each section of your business structure
– Identify what gaps need to be filled
– Remove or reduce the ineffective parts
Want to know how you can restructure your business to increase cashflow and create better profits? Book in a Strategy & Vision Coaching session and we can look at specific ways to do this for your current business.
Book through the link below and we can get you started and back on track.
When you achieve this, it will give you the confidence to take on bigger and better business opportunities knowing that your business can deliver.