There are five areas of the business where we can make improvements that can improve financial results: Cash Flow, Sales & Marketing, Overhead / People, Operations / R&D, and Raising Money.
Four Rules of Profitability:
Guiding Questions (fill in the blank with tactic):
- If you were going to _________ right now, where would you start?
- How have you found ways to _________ in the past?
- Who in a business/industry similar to yours would you be able to ask about _________?
- How could we inexpensively and quickly test _________?
- When can you commit to testing _________, and how will we know if it’s working?
- What are the symptoms being experienced? (Capacity Guidance section?)
- Which area of the business is having issues?
- What levers do we have to improve the cash health of that area?
- What action steps can be committed to that should improve results?
Tensions in Maximizing Cash:
- Increasing Cost of Sales to increase Throughput
- Timeline to breaking even on a decision
- Minimizing Fixed Period Costs at risk of burning out team or exhausting capacities
- Increasing price at the risk of decreasing Throughput (supply + demand at work)