Force Multiplier (def.): A factor that enables a force to work more effectively and more efficiently.
Could your business use a force multiplier to manage cash flow better and drive more profit?
Meet the EOS 8 Cash Flow Drivers.
Today, I worked with a leadership team that dug in…deep… to all the places in the organization where more savings could happen, where more revenue could be generated, and where more cash could flow into their accounts. Nothing was a revelation. Everyone "kind of" knew that these things needed to be addressed. But, it's not very often that business leaders intentionally take the time to list it all out. Create an action plan. Drive it to conclusion.
When was the last time you sat down and listed 8 ways to save money and drive profit?
Consider this question: How many dollars in SALES does your business need to generate to equal one dollar in reduced expenses?
Incoming dollars from sales must pay for cost of goods or services sold, as well as overhead. It’s only the cash leftover that can be counted as EBITDA. Cost savings fall directly to your bottom line. If your EBITDA is 20%, it would take $5.00 in revenue to generate $1 in cash flow.
5X. 5X. 5X. 5X. 5X.
Most companies devote a ton of mind share to drive more sales. And spend little to no time figuring out how to save costs, drive more profit or improve cash flow.
Why? Sales are…sexy.
Ben Franklin knew it. “A penny saved is a penny earned.” But the thrill of the hunt takes over this simple saying. The new big account. Higher gross revenue numbers are hit. But a company can still run in the red if profitability and cash flow are not properly managed.
Saving is the new black.
Reducing costs and increasing cash flow will provide rapid and substantial change to your business. For the better.
As a Certified EOS® Implementer, I am committed to helping business owners, entrepreneurs and leadership teams become more effective in getting what they want from their business.
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