Business Fitness

At the beginning of a new year,

many people make their new years

resolution. These resolutions are

usually something to do with their

health and fitness. Your business

can benefit from a health and fitness

new years resolution also. By

understanding how the different

parts of your financial information

work towards making your business

fit, you can set goals for the year

ahead and get both you and your

business fit and healthy.

The sales in your business can be likened to the exercise or growth you need to complete in order to meet your fitness goal. By increasing the price of goods and services, the volume of sales or the average sale amount, you are increasing your businesses exercise regime. Just like yourself, you cannot expect great results overnight. The same with your business, by working hard you can reach your sales goals.

Sales

The cost of goods in your business is the nutrition and protein in your fitness journey. Without giving your business good quality, ‘nutritious’ goods/service how can you expect to meet your exercise/growth goals? How is the supply of your stock affecting your businesses ability to grow and increase its sales?

Cost of Goods

Your expenses are the other foods/snack that you eat to keep you going. You want to make sure you are getting bang for your buck out of these foods. By reviewing these foods (expenses) and understanding how they are delaying (consuming) your growth (sales) you can make better choices and swap your Kraft peanut butter to a wholefood natural alternative.

Expenses

The wages cost in your business is the energy and effort you are putting into your growth goals. Are they targeted to the right aspect of your journey (i.e. Gym sessions rather than shopping for gym wear). Making sure the effort and energy that is driving your business is effective and review it against your growth goals (% of sales).

Wages

Your profit is the fitness of your business. Are the results you’re achieving helping you live a long and prosperous life, or are you becoming a couch potato? By reviewing your profit as a percentage of sales and comparing year on year you can better understand how your business exercise is working towards achieving your fitness goals.

Profit

Your assets, whether they be machinery, knowledge or skills are your muscles in your fitness journey. You won’t see results unless they are working to their full capacity (sweating). Understanding your Return on Equity is critical in understanding whether your assets are working at full capacity.

Assets

Just as you may use a physiotherapist or osteopath to help your muscles along your fitness journey, your liabilities are there to help you too. Are they the best structure for your business? Is the cost of repayments beneficial for your business? If your physio wasn’t giving you the relief you were chasing, you would find a different/better physio, wouldn’t you? Same for your business.

Liabilities

Stock on hand refers to the weight you are lifting in the gym. If it’s too heavy (oversupply of stock) you risk hurting yourself, but if it’s too light (not enough stock) you delay your fitness results. Finding the right balance between increasing your weight and ensuring you don’t hurt your business by holding too much is important to achieving your business fitness goals.

Stock on Hand

You wouldn’t stop trying to achieve your personal fitness goals to help someone else achieve theirs. By allowing customers to extend their debtor days, ultimately getting you to fund their business is putting your business goals on hold. By holding debtors to their terms of account you are working out together, rather than allowing them to sabotage your fitness journey.

Debtor Days

Creditor days are your pre-workout supplements. They give you short spurts of energy to workout but are they helping you in the long run? Are your energy highs, hurting you when you hit your energy low (interest on creditor days)? Are your creditor days draining your cashflow (ability to exercise without reliance on pre-workout supplements)?

Creditor Days

Just as you may need help achieving your personal fitness goals with a little help from a PT, a business advisor works the same way. 1 hour per month with a qualified business advisor is the same for your business as spending the recommended 30 minutes a day with your PT.

Business Advisory

As with your health and fitness, the key ingredient to achieving your business fitness goals, is knowing your numbers. Counting your calories/macros, weights and reps allows you to monitor and track your fitness journey. Same with your business, knowing the cost of your goods compared to your sales, your wages and debtor days allows you to monitor your business fitness journey. By having all the information at hand (up to date accounting data) you can make informed decisions to build your business.

Key Ingredient

Complete our Business Health Check

for your business

www.ibsnq.com.au/business-health-check

Not sure if your Business is Fit?

www.ibsnq.com.au

admin@ibsnq.com.au

Level 1, 205 Ingham Road, West End 4810

07 4404 7241