Tag Archives | profitability

Defend the Bottom Line!

During a downturn in the economy the overriding goal of the Chief Financial Officer and management team is to defend the bottom line or profitability of the company. At a minimum you should achieve break even. The economy ebbs and flows like the tide. During the good times a company should generate profits and pay down debt. During a slow economy they should do everything they can not to give up the profits they have earned.

How to Defend the Bottom Line

So once you find yourself in an economic downturn what should you do? You should first recognize that you can’t save your way to profitability. Cutting costs though a useful tool will not get you to your goal.

The first step you should take is to get a good handle on cash and cash flow. You should prepare a daily cash report and a twelve month cash flow projection. You cannot run out of cash! Most managers fail to shift their focus to cash management until they have run out of it. By then it may be too late.

The next step may seem counter intuitive but is key to prospering in a downturn. You should increase your marketing expenditures and efforts. Most companies do the opposite! They slash advertising expenses and lay off salesmen to cut costs. If anything you should be doubling up on your sales effort! In a downturn there are still sales transactions taking place. There are just fewer of them. To maintain your revenue stream you need to get a larger percentage of the market. That takes more effort, not less!

Finally, to survive a downturn remember rule number one: Don’t lose money! So restructure your costs to achieve break even with the revenue stream you are generating. The goal is to survive to fight another day! Improve your pricing – and your profits– by downloading the free Pricing for Profit Inspection Guide.

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Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits.

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Creating a Flash Report

Creating a flash report is an essential part of being a financial leader. Managers and ownership often ask CFOs and controllers, “how are we doing?” While this seems like a simple enough question, there lie many devils in the details. The key is to be able to communicate above the details while being neck-deep in them. A way to accomplish this is by creating a simple one or two page flash report to easily communicate the myriad details of your company so that an informed user can see the true picture of the company’s performance and its position in the marketplace.


Start your Flash Report today with our Flash Report Tool – available for only $9! Learn more about how you can access it here.


Creating a Flash Report

Liquidity, productivity, and profitability are indeed what a CFO should think about on a daily basis.

Liquidity covers the basic responsibility of a company’s finance department: do we have enough cash to be open tomorrow?

Productivity ties the performance of a firm’s operations to its financial performance.

Profitability provides an indication of how much money the company has made.

To learn more financial leadership skills, download the free 7 Habits of Highly Effective CFOs. Find out how you can become a more valuable financial leader.

Creating a Flash Report

Strategic CFO Lab Member Extra

Access your Flash Report Execution Plan in SCFO Lab. The step-by-step plan to manage your company before you prepare your financial statements.

Click here to access your Execution Plan. Not a Lab Member?

Click here to learn more about SCFO Labs

Creating a Flash Report

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