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Thinking Business
a blog by Chris Barrow

Unlocking marginal gains: How financial modelling can add 33% profit without radical change


The Hidden Profit in Your Practice: How 6 Months of Financial Focus Could Add £100k to Your Bottom Line
The Hidden Profit in Your Practice: How 6 Months of Financial Focus Could Add £100k to Your Bottom Line

I've found that, when I'm working with a new client who has little or limited financial modelling data, it can take between 3 and 6 months to:


  • Train, consult with a coach the client, their senior team (and sometimes their bookkeeper/accountant) to ask the right questions and look for the correct data;

  • Then to collect, collate and present that data in a format that allows us.....

  • To begin navigating, and making the course corrections necessary to maintain and grow profits.


Why all of that work?


During a recent meting with a client 6 months in to that process, we were able to identify a series of marginal gains which, when accumulated, can increase existing profits by 33% in the next 12 months.


That will represent an extra £100,000 per-tax on the bottom line (or, to put it another way, will increase the goodwill value of the business by a possible £750,000).


That's not by igniting a revolution - it's by a combination of tweaking existing systems/people and introducing some subtle but important new workflows.


I hope you would agree with me that the ends justify the means.


It makes me wonder how many of you reading this post have profit within your business that hasn't been released because (as Michael Gerber would say) you are too busy "doing it, doing it, doing it?"


  1. Hire a coach;

  2. Learn financial modelling;

  3. Figure out where the marginal gains are;

  4. Take action.


    What difference would an extra 33% net profit before tax make for you?





 
 
 

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