Where's the Money?

Where's the Money? - was the title of session two of our Business Growth programme being delivered by Craig Rust last week. This session focussed on reviewing our financial management. Craig challenged us to think of three ways to increase our turnover and three ways to decrease our costs.
We reviewed some of the key financial ratios which can be used to measure financial health such as the current ratio, return on investment, net profit ratio. Key performance indicators or KPI's also provide a key measure of the health of your business. KPI's can be financial measures such as gross profit, bank balance, cash flow. They also include non-financial measures such as measures of customer satisfaction, productivity, re-work, debtor days, delivery time frames and stock turn days to mention a few.
As particpants, we were challenged to come up with five non-financial and five financial KPI's for our business. The key learning moment for me was that by putting effort into determining and measuring the non-financial KPI's for your business is a key way of growing your business and the financial performance.
And, want to know where your money is hiding? It's in one of these five places-
1. Increased number of debtors.
2. Increased amount of stock.
3. Increased personal drawings.
4. Rapid loan repayment (review interest only payments for the time being).
5. New toys- the three B's- the bach, the boat and the BBQ.
We all have to come up with our budget for the next two years by the next session in November.

I'll keen to measure the before and after stories at the end of our business growth year. If we all stick to the programme and complete this homework, then I know we'll be onto a winner.