Breaking the Cycle of Maxed-Out Credit Cards and Bank Lines

Hi there! Thanks for stopping by. I’m on a mission to help small business owners become numbers confident, leverage debt, and pay themselves competitively. Please follow me If you’d like to learn more, and don’t forget to check out my Profit Accelerator Resources at the end.?

Breaking Down the Top 3 Reasons:

I am not against debt, but if you find yourself in a debt spiral, there are ways to overcome it without increasing sales (even though growing revenue is important).? Credit cards and bank lines of credit have their place, but you can become over-dependent upon them, causing you stress due to cash flow difficulties. If that’s you, here are my top 3 tips If you want to regain financial stability in your business.

1.?? Strategic Pricing (not just raising prices)

Ever wondered if your pricing strategy could be holding you back? It's time to closely examine your pricing terms and conditions (T&C's). I teach my clients how to implement pricing options that incentivize Paid-in-Full (PIF) or upfront payments. This simple shift can boost your cash flow by 10% to 50%, alleviating the stress of meeting payroll and reducing reliance on credit. The plan is simple-- I want you to get paid quicker, and it’s easier than you might think. ?

??PRO TIP: It’s not easy to disclose your pricing methods to an outsider, but I am a big advocate of seeking out a trained professional who can help you see your business from another perspective, without prejudice or judgment. Make sure they have successfully used PIF pricing strategies in their own business.

??Hint: Try testing Paid-In-Full strategies on a new client.? You must become a believer before you become an adopter.? Once you see the power of this strategy, you’ll become more confident to implement it across your company.

? You can’t fix all your cash flow problems with this tactic alone, but it can wean you off an unhealthy reliance on credit cards and bank lines of credit.

?2.?? Balance Sheet Secrets that You Should Know

Don't overlook the power of your balance sheet. Many business owners shy away from it, but that's a big mistake because your balance sheet holds the key to understanding your working capital and cash flow needs. Especially for rapidly growing but under-funded businesses, it's crucial to assess your balance sheet and consider strategic debt leveraging with a 5-year permanent capital loan (or a strategic investor). A well-aligned balance sheet is essential for sustainable financial health.??A misaligned balance sheet is like a poor diet. ?You can't become healthy if you don't understand how a business operates at maximum efficiency.

??How much working capital do you need? If you don’t know where to start, I suggest looking at the equity section of your balance sheet.? If it’s negative (like $100K or more), that is the minimum amount you need to balance the scales.?

??Did you know that you can be profitable on paper but still go bankrupt?? The reason: You ran out of cash. Remember, it’s CASH FLOW, not Profitability, that ultimately matters.

??PRO TIP: I’ve come to learn that a Professional Bookkeeper is a key financial partner in the success of your business.? How can you measure your business without timely and accurate data?

?? Hint: Your minimum working capital should be equal to 10% of your annual revenue.?Working capital is Cash, plus A/R, plus access to your lines of credit.?For a $5 million company, that means $500K working capital. I purposely removed inventory from this equation (ask me why).

3.?? Honest Expense Control

Rather than just focusing on cutting expenses, let's talk about optimizing your expenses for maximum profitability. Low-profit margins often stem from how you manage your P&L. I coach my clients to take a deep dive into their numbers, analyzing gross profit margins and their top five expenses as a percentage of revenue. We then set a minimum Net Profit Margin benchmark to ensure you are not the last or least paid in your own business. You'll be surprised at the improvements you can make by understanding and actively managing your financial metrics.

??PRO TIP: Numbers need context.? Run your P&L as a “Percentage of Revenue” (most accounting software has this view as an option). Merely looking at P&L based on $$’s only tells you part of the story.? When you see your Gross Profit Margin and Net Profit Margin as a percentage, along with all your expenses as a percentage (especially payroll), you can begin to set and measure benchmarks, which will lead to improved profitability.??

Breaking the Debt Cycle is a Choice

I am sharing these tips based on my decades of experience in finance.? The rules of finance are like gravity: They are universally true, whether you are aware of them or not.? I singularly focused on helping entrepreneurs become numbers confident so they can run the “business side” of their business like a pro.

Ready to take control of your finances and steer your business towards success? Implement these strategies today and watch your financial health improve!

Profit Accelerator Resources: Whenever you are ready, here are three ways I can help you:

1. Financial Dashboard for Making Profitable Decisions This 30-day 1:1 workshop helps you become numbers confident and conversationally competent around the numbers in your business.?We work together to build your 12-month financial forecast, so you have a solid plan for improved profitability.
2. Business Plan Workshop If you are looking to obtain funding from a bank or investors, a well-written business plan and pitch are critical for success.?It’s a 1:1 workshop over 3-4 meetings and you’ll walk away with a professionally prepared business plan to help you raise the capital you need to grow your business.
3. Profit Finder Program I can help you uncover an additional $25K-$75K profit in 30 days or less. I have a knack for finding hidden profit locked inside your business. It may take between 3-12 months to achieve the profit lift, but you’ll have a clear-cut plan and strategy.

Remember business growth is a series of consistent small steps, not giant leaps. If your compensation is well below what you could earn in the open market, it’s time to have a conversation and see how you can run a great business AND pay yourself competitively.

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