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Business Exit Ready

Key 3 of 9 ยท Foundations

Money

Your numbers are your gauges. They tell you how healthy your business is.

Nine Keys wheel: 1 Strategy, 2 Administration, 3 Money, 4 Marketing, 5 Sales, 6 Service, 7 Systems, 8 Team, 9 LeadershipStrategyAdministrationMoneyMarketingSalesServiceSystemsTeamLeadership

What this Key covers

  • The profit on each type of job
  • Cash in the bank, and what's coming in and going out
  • Invoices sent on time, and money owed to you
  • A monthly profit and loss and cash report you understand

Who it matters most for

Owners who are busy but not sure where the money goes. And any owner who checks the bank balance to see how the month went.

What a buyer may ask

"Does the profit hold up once the cost of replacing your work is included?"

A buyer pays for profit they can see in the books. If the profit only holds up because you work for free, a buyer will find it.

Three questions to ask yourself

  1. 1Do I know which jobs and customers make money, and which don't?
  2. 2How much is owed to us today, and for how long?
  3. 3What will cash look like over the next few months?

Why it matters to you

Your numbers become your gauges. You see trouble coming, pick the work worth doing, and make decisions with confidence.

A practical first step

Ask for a list of unpaid invoices and how long each one has been owed. Look at it every week and agree who follows up. Talk to your accountant about any decision that depends on your situation.