90-Day Sprint – Develop Solutions & Goals

Step 6: “The Art of the CFO” Develop Solutions & Goals (Week 11)

You’ve Spotted Opportunities – Now What?

With your analysis complete, it’s time to unleash your creativity. This is your moment to think beyond conventional solutions and design innovative strategies to elevate your profitability.

3 P’s of Profitability

Our founder, Jim Wilkinson, distilled decades of insights into three core principles for driving profit:

1. Procurement
   Smart cost management is key. Find ways to reduce spending and secure cost-effective resources without compromising on quality.
2. Pricing
   Scrutinize your pricing strategies. Pinpoint areas where revenue is slipping or where optimization is possible. Sometimes, this might involve adjusting rates or letting go of clients who aren’t aligned with your profitability goals.
3. Productivity
   The “secret weapon” of profitability, improving productivity enables you to maximize your resources without resorting to layoffs or price increases. By carefully tracking and managing efficiency, you can unlock untapped potential within your organization.

Mastering Cash Flow: The Cash Conversion Cycle (CCC)

Focusing on the Cash Conversion Cycle (CCC) can transform your financial health:

CCC = Days Sales Outstanding (DSO) + Days Inventory Outstanding (DIO) – Days Payable Outstanding (DPO)

• DSO: How quickly you collect payments from customers.
• DIO: How effectively you manage inventory.
• DPO: How strategically you manage payments to suppliers.

By shortening your CCC, you can unlock significant cash reserves, sometimes amounting to hundreds of thousands or even millions. This liquidity provides the flexibility and resources needed to fuel growth.

Harnessing the Power of Networking

No one has all the answers, and often the solutions you need exist outside your immediate experience. This is where networking becomes indispensable.

With a handful of well-placed calls, you can:

• Gain fresh perspectives.
• Identify innovative and practical solutions.
• Build partnerships that enhance your capabilities and resources.

Leverage your network to tap into the expertise of those who’ve faced similar challenges, turning shared knowledge into actionable insights.

Executing Your Plan: From Vision to Reality

Once you’ve pinpointed a solution, the next step is execution.  Here’s how to transform ideas into results:

1. Develop the Plan
   • Clearly outline your objectives.
   • Break down your goals into actionable, measurable steps.
2. Track Progress
   • Monitor milestones to ensure alignment with your goals.
   • Be ready to adjust your approach as necessary to stay on course.
3. Communicate Effectively
   • Keep stakeholders informed of progress and key achievements.
   • Maintain transparency to foster trust and accountability.

The Path to Profitability

Achieving sustainable profitability requires a blend of creativity, strategic networking, and disciplined execution. By embracing the 3 P’s, mastering cash flow, and leveraging your network, you can turn opportunities into tangible growth. Success in today’s dynamic landscape demands vision, adaptability, and relentless perseverance.

Resources:

Flux Analysis

R-Series

Create an Action Plan

Pricing For Profit Inspection Guide

25 Ways to Improve Cash Flow