PROFIT MODEL

The profitability model describes the components of your business and how they combine to create a profitable organisation. This enables you to create a framework which you can add to over time. It’s a living document that you will refer to and update as your business evolves and grows.

Your business’s profitability model will allow you to understand how to forecast your profit and learn tools and techniques to improve your profits. During the workshop, we provide templates and will help you model your profitability.

We also look at the differences between profit and cashflow and create a simple cashflow forecast. We review some of the common pitfalls that can cause profitable businesses to fail through lack of cash.

At the end of the workshop you will have a set of easy to use tools to measure and manage your business’s profitability and cashflow over time.ow.

PROFIT MODEL WORKSHOP

In this two-hour workshop you will learn the tools and techniques to ensure that your business’s profitability stays on track.

1. Business Components

Using the information from your One Page Business Plan, we map out the main components of your business that determine your income, costs and profitability.

2. Income and Cost Drivers

We demonstrate a simple model to create a forecast profit for your business for the coming year and years 2-5.

3. Income Assumptions

We work with you to create a model to allow you to forecast your business’s income over time, based on a number of assumptions that can be adjusted as your business evolves.

4. Detailed Cost Analysis

In this session, we identify and categorise the costs of your business (fixed, variable, investment, financing) that will be critical in working out your overall profitability.

5. Increasing Profitability

We look at some of the tools to maximise the amount of profit available for distribution, including company structure, ownership, taxation, and dividend policy.

6. Cashflow

Many profitable businesses fail because they run out of money. We review the key differences between profitability and cashflow and show you how to create a simple cashflow forecast tool for your business. We cover tips to improve your positive cashflow and what to do if your forecast shows a cash deficit.