Module 4 Lesson 3 Your Instant Assessment Instant Assessment - PowerPoint PPT Presentation

Module 4 Lesson 3

Your Instant Assessment Instant Assessment Actual Actual % PF% PF$ (Bleed) (Fix) Top Line Revenue $548,303 Materials & Subcontractors $147,545 Real Revenue $400,758 100% 100% Profit $0 0% 10% $40,076 -$40,076INCREASE Owner's Pay $133,799 33% 35% $140,265 -$6,466INCREASE Tax $0 0% 15% $60,114 -$60,114INCREASE Operating Expenses $263,894 66% 40% $160,303 $103,591DECREASE More than 80% have this action item 2

Two Types of Expenses Just like not all debt is created equal, not all expenses are created equal. Not Variable Fixed Productive Productive Expenses that Expenses that are Expenses that allow Expenses that don’t change or vary the same amount you to produce add to your ability to based on how much regardless of value produce value. revenue. i.e. The income or i.e. Box i.e. Eating Out more classes you production. i.e. Rent Programming, have the higher your or ZenPlanner Mentors, Online coaches expense Training 3

Productive Expenses Anything Absolutely Generates Necessary to Keep the Immediate Income Business Open Productive Expenses Saves Time ( If you Serves Clients can afford to leverage money for time ) Supports Systems that Serve Clients 4

Analyze Expenses The Magic Process 01 02 03 04 05 Gather Bank Draw a Box Highlight All Circle Add Up All and Credit Around Any Productive Repeating Highlighted, Card Labor Costs Expenses Expenses Boxed, and Statements that will Circled Salaries, Refer to Previous for Last 12 Continue Expenses Commissions, Slide, but basically Bonuses, if it generates Months Monthly, Quarterly, Then divide that Payments to immediate revenue Annually. number by 12. Coaches, DO NOT or is absolutely This is the amount include payments necessary to keep you decided is your to owners the business open *some expenses monthly nut. How will be circled, and does that compare highlighted, and to the instant boxed assessment? 5

Still Analyzing Expenses 06 07 08 Look to Cut Stop All Call Credit Down or Automatic Card Eliminate Withdrawals Company and Completely from Your Reissue a any Bank Account New Card Commissions with a New Except for the ones and Bonuses Number you highlighted or marked as keepers 6

Analyzing Labor Expenses 7 Steps to Reduce Labor Costs 01 Identify any that aren’t “A” players If you have to cut expenses, you can’t afford to have any team members that aren’t “A” players. 02 Re-evaluate Your Involvement If you are overstaffed, then means you are the most underused employee 03 Evaluate each Role Is each role mandatory for operations to continue (not the person, but the role) 04 In-house or Outsource Which roles must stay in house no matter what, which roles could be outsourced, and which ones can your box survive without 7

Still Analyzing Labor Expenses 05 Be Involved What roles can and should you take on 06 Place “A” Players Starting with your best team members, which remaining roles can they cover 07 Plan the Layoffs Don’t do pay cuts. Layoffs are better. Then tell the remaining team what you have done and why 8

Cutting Expenses Simple Questions that Need to Be Asked Is there another way to 2 achieve the same 1 Are you getting value outcome without from the payment? spending money? 3 Is there another way to get the same result by spending less money? 4 Does the expense serve your top clients or top services? 9

Still Analyzing Expenses 06 07 08 09 10 Look to Cut Stop All Call Credit Go Through Go Through Down or Automatic Card All Circled All Other Eliminate Withdrawals Company and Expenses and Expenses Completely from Your Reissue a See if You that Haven’t any Bank Account New Card Can Get Rid Been Marked Commissions with a New of It and at All and Cut Except for the ones and Bonuses Number Renegotiate Them you highlighted or marked as keepers Everything Else *Start with Smallest 10