Hi everyone, Francis Hooke here from We Grow Businesses. This is our final video on the fundamentals of business growth. So far we’ve talked about winning more work, delivering more work, and now finally it’s time to give an introduction to banking more money. We’re going to break this down into three main points.
The first is cash. Cash is all about the points in time when money comes into a business, and when it goes out of a business. As the old saying goes, cash is king. So it’s important we understand what’s due in, what’s due out and when. As anybody who has ever raised an invoice will know, the point in time when you raise an invoice is very rarely the point in time when it actually gets paid.
The next thing that we look at is margins. Margins is all about the amount of money you’re making on the product or service that you’re selling. We can measure this in percentage terms which allows us to compare one business with another business and take a view on what’s good and what’s not so good, and how to improve it.
The third point is accounting systems. Accounting systems are absolutely key for us to be able to do this kind of analysis. The system that we recommend to our clients in Xero (spelt with an ‘X’). We think that this is a great system for people who aren’t accountants who just want to know a bit more about how to run their business better.
I hope this introduction to banking more money is useful and we’ll catch you again next time.