Measure the Profitability of Your Business

When your Profit and Loss Statement shows that you have positive profit, you need to really check if that is real profit because it may not. Positive doesn't mean the business is financially healthy. This is the case of just “paper profit”. Why does this happen? Unreal profit happens when profit that does not equate to having actual cash in the bank.

In this episode, Annette will give you some guidelines on how to ensure that you have the right cash management in your business. Some of the causes why the business is not financially solvent is when there are money leaks happening in your business operation.

Here are a few insights you’ll hear in today’s show…

What are the types of profits?
How do you know if your business is financially healthy?
What does "Profit First" do and how do you operate it?
Why is it important that you identify and assess money leaks that are happening in your business?
What are money leaks?

Resources:

Identify and eradicate money leaks: https://youtu.be/tKDmRApyrww

Understanding a profit and loss account: https://youtu.be/9R6QwNPsM7w

Understanding a balance sheet: https://youtu.be/EZ1cctAAnI0

About the Author

Annette Ferguson

Owner of Annette & Co. - Chartered Accountants & Certified Profit First Professionals. Helping online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.

Pause Global

November 24, 2021.

More than an accountant, Annette provides an invaluable FD role to entrepreneurs and small business owners.

Line Hilton

November 23, 2021.

Not your average accountant! Annette Ferguson provides more than accounting services, she also provides support and advice. Annette has helped me navigate and understand the complexities of my growing businesses. In addition Annette is highly professional, approachable and compassionate. Not my usual experience of accountants. I can highly recommend Annette & Co to any other small business owners/ entrepreneurs.

Jane Goble

November 23, 2021.

We have been working with Annette & Co for over a year and they provide an exceptional accountancy and bookkeeping service. Alongside the day to day accounting tasks, Annette is working with us on our financial growth strategy and providing expert advice. We can highly recommend Annette and her team.

Melissa King

November 23, 2021.

I have had a few accountants, but none have been as good as Annette and Co. They have taken out all the worry and work that comes with accounting. Laura is the best, I am constantly changing my mind about goals and she adapts my planning. Highly recommend

Bob Gentle

November 23, 2021.

I've been through a lot of accountants and the best I can say about them is that they kept me out of jail. Annette & Co are a completely different kind of firm. They help me plan ahead - no really! I've gone from anxiety about tax and setting targets to confidence and clarity. I actually have money. They deliver on the profit first promise. If you are planning a move to a new accountant then this is a move your future self will say 'well done' to.

simon keenlyside

September 26, 2021.

absolute legend!! Annette has changed the way i look at my accounts by helping me understand the basics and has the patients to explain things to me in layman's terms until i understand it properly. I now have a much better grasp of the numbers in my business and have implemented profit first so i know exactly where all the money in the business belongs. this is exactly what i have been looking for from my account 10/10

Liz Faulkner

September 24, 2021.

Fantastic accountants, super communicative, on top of everything, friendly, and have totally transformed the way I feel about financial planning/cash flow management. Would not hesitate to recommend…and frequently do!