{"id":27900,"date":"2022-10-27T15:10:08","date_gmt":"2022-10-27T20:10:08","guid":{"rendered":"https:\/\/salesv4.aligntoday.com\/blog\/webinar-recap-where-is-my-money-and-how-to-use-it-to-grow-my-business\/"},"modified":"2023-09-08T07:13:40","modified_gmt":"2023-09-08T12:13:40","slug":"webinar-recap-where-is-my-money-and-how-to-use-it-to-grow-my-business","status":"publish","type":"post","link":"https:\/\/aligntoday.com\/blog\/webinar-recap-where-is-my-money-and-how-to-use-it-to-grow-my-business\/","title":{"rendered":"Webinar Recap: Where is My Money & How to Use it to Grow My Business"},"content":{"rendered":"

Scaling Up Coach Jonathan Mond led a presentation outlining the simple yet necessary steps to turn your financials into a scalable business strategy.<\/span>\u00a0<\/span><\/p>\n

Jonathan employs the Power of One methodology which upholds the principle that even the slightest changes to certain economic drivers can have a significant impact in moving your business forward.\u00a0\u00a0<\/span><\/p>\n

Starting with the basics, business leaders need to understand the 7 drivers of cash and profit:<\/span><\/p>\n

Price
\n<\/span><\/i>Volume
\n<\/span><\/i>Cost of Goods Sold
\n<\/span><\/i>Overheads<\/span><\/i><\/p>\n

<\/i>Receivable Days
\n<\/span><\/i>Inventory\/WIP Days
\n<\/span><\/i>Payable Days<\/span><\/i><\/p>\n

Understanding these drivers and their impact on cash flow is critical to sustaining business health, and the Power of One is a way that leaders can break it down simply.<\/span><\/p>\n

For example, using the Power of One can help you identify whether increasing price or <\/span>volume, or decreasing the cost of goods sold or overheads by just 1% will have a significant impact on your cash, profitability, and valuation. Similarly, it can show a company how adjusting the number of days for accounts receivable, inventory or accounts payable by just 1 day can improve your cash flow sustainability.<\/span> This is why the drivers above are the most telling factors of your financial success, and understanding how to influence them to any extent possible is crucial.<\/span><\/p>\n

According to Jonathan, it\u2019s also critical for successful business leaders to know how to conduct a proper health check. Leaders must always be aware of metrics like revenue, gross margin, operating profit %, revenue growth vs. cost of goods growth, revenue growth vs overheads, etc\u2026 and understand how to track them properly.<\/span><\/p>\n

Another important part of a business health check is working capital. Working capital helps you identify patterns and understand <\/span>where<\/span><\/i> your cash is and how it can be used to drive sustainability.<\/span><\/p>\n

Working capital = (Accounts Receivable + Inventory) – Accounts Payable<\/strong><\/p>\n

Ultimately, identifying how the seven drivers can impact your business should then lead each company to the creation of its strategic priorities and the action items needed to make that happen.<\/span><\/p>\n