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Other Peoples’ Money Magnifies Returns but can Cause a Cash Crisis

Business and investment gurus tout how you can make big profits with little money of your own. They show how using other peoples’ money can make you rich. It’s true that using other peoples’ money, known by the acronym OPM, can increase your returns. But OPM can also be like the drug opium. Its highs […]

Hidden Insights in the Sustainable Growth Rate Formula

The sustainable growth rate formula reveals the two big decisions that determine how fast your company can grow. Business owners pursue growth out of entrepreneurial instinct. Growth can mean opportunity and profits. However, your financial risk increases when you chase too little or too much growth. What are the keys to growth? The answers lie […]

Net Working Capital: Formulas, Examples, and How to Improve it

The working capital formula and working capital ratio formulas are popular and easy ways to estimate your future cash flows. Lenders use it to judge your financial health. Do you know how much net working capital you have? Is your net working capital ratio at a healthy level? How can you improve your working capital […]

Pricing Strategy Matrix of Profit Stars and Supporting Cast

These new product pricing strategies build lasting customer loyalty and value. Both current and future pricing are part of the definition of a good product pricing strategy. You’ve put in the hard work to build your new product. It’s finally ready for sale. You have one critical decision left. What is your pricing strategy? You […]

The Short Cash Cycle: How to Cut Crunches and Grab More Growth

Your business is a constant cycle of cash being invested and then received back, hopefully with a profit. This cycle is called the cash conversion cycle. Knowing how it works allows you to have less cash lost to the cycle. Most importantly, you’ll have cash available when you need it. The cash conversion cycle of […]

Excess Capacity: Hidden Profits from Untapped Revenue

Big opportunities are waiting to be found in your excess capacity. Capture additional revenue with few additional costs. New profits lie hidden unless you know where to look. What machines are quietly idle while others are a flurry of productive activity? Has an employee said they are “ready for a new challenge” or “not being […]

Easily Test Your Pricing Strategies for Maximum Profit

A quick price analysis will significantly increase the profitability of your pricing strategies. Every business owner wants to find pricing strategies that maximize their profits. Once you know the prices of your competitors, do you know how to set your price to maximize your profit? Let me show you how to estimate how your price […]

How to Use Marginal Profitability Analysis for Better Decisions

Don’t Use Historical Profitability Analysis for Forward-Looking Decisions You’ve heard for years that you needed to perform product profitability analysis to know which of your products made or lost money. Maybe you finally calculated the profitability of each of your products. Congrats! That’s a good start. Just don’t use them to decide what you should […]

How to Conquer Cash Flow Chaos with this Excel Cash Flow Projection Template

A cash flow projection is the most important financial report for your business yet so many businesses miss out on its benefits. How important is cash flow? Richard Branson said, “Never take your eyes off the cash flow because it’s the lifeblood of business.” A study by QuickBooks revealed shocking statistics about cash flow issues […]

12 Cash Flow Management Tips (And One Essential Tool)

I think you’ll agree that fluctuating cash flows are a massive source of stress for a small business owner.  One day you’re riding high on piles of cash then suddenly your holding on with white knuckles as your cash flow plunges.  It’s time to get off this wild ride by finding ways to increase your […]