Think Daily for Businesspeople Messages

July 29, 2016

BE = FC/GPM

Larry Janesky: Think Daily

Breakeven = Fixed Costs /Gross Profit Margin

So if I had to pay $20,000 a month in fixed cost whether I sold anything or not, and my gross profit margin (income less direct costs of delivering the product or service) was 40%, then –

Breakeven = Fixed Costs / Gross Profit Margin

Breakeven = $20,000 / .40

Breakeven = $50,000

I have to sell and deliver (and collect on) $50,000 a month, and I make zero.  I broke even.

Let’s say I lower my fixed costs to $17,000, and I increase my gross margin to 42% – what is my breakeven now?

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July 28, 2016

The Diamond Cutter

Larry Janesky: Think Daily

The Diamond Cutter takes a rough stone and turns it into a multi-faceted gem.  She makes things more valuable by taking bits away.

If you are not making any money in your business, you need to be a diamond cutter.  If you are breaking even, you are spending 100% of your income in the operation of your business.  Spend less.

Analyze your expenses, and shave bits away – until the diamond emerges.

You can do this.  Get to work.

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July 27, 2016

Net Margin

Larry Janesky: Think Daily

Net Margin is your Gross Profit less costs you’d have to pay whether you sold anything or not – aka “Fixed Costs”.  Office labor, rent, utilities, insurances, preperty taxes, marketing, vehicles, equipment, etc.

If you are the owner and you work at the company, pay yourself what you’d have to pay someone else to do what you do.  Your salary is a fixed cost.  

Net profit is any dollars left over after everything is paid.  (You can pay this money out to yourself later as a “Distribution to shareholder”.)  Net margin is the percentage that the net profit is of the total sales.

What was your net margin last month?

How does this compare to your net margin last year?

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July 26, 2016

Gross Margin

Larry Janesky: Think Daily

Gross Profit Margin is your revenue (income) less the direct cost of providing your product or service.  So for me in my local service business, it’s income less materials, labor and sales commission.

What was your gross profit margin last month?

Is that better or worse that it was last year?

 

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July 25, 2016

Say no to say yes better

Larry Janesky: Think Daily

There are way to many things to do in this modern world.  So many interesting and worthy things that the challenge is not finding things to say yes to, it’s saying no.  When we say yes, we commit time that we can never get back.  When we say no, we are preserving some of our most precious and absolutely limited resource to do the things we said yes to better.

Better to have a few seconds of regret saying no to someone, than hours, days or weeks of regret saying yes.

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July 22, 2016

The right people at the right price

Larry Janesky: Think Daily

We all want to get the right people in the right seats.  That would be easy if we overpaid them.  But competitive forces prevent us from overpaying people, and raising our prices to afford it.

We need to get the right people at the right prices in the right seats.  Right?

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July 21, 2016

Pain enough?

Larry Janesky: Think Daily

As much as we say we want our goals to come true, it’s not going to happen by wish or hope, and some of us are just too comfortable with how it is now.

For some of us, we have to get mad enough, disgusted enough, tired enough, and down enough to make the change happen. Pain can be useful – when we have enough of it.

If you do, make it work for you.  Change.

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July 20, 2016

Watch the money!

Larry Janesky: Think Daily

You are the steward of $__________ that comes through your business each year.

What did you spend it all on?  It’s your job to spend less than you take in and make a profit.

If you don’t make a profit, and spend more than you take in – it’s over!

Dont mess around!  Look at what you are spending money on and make sure you are not wasting money or spending on things you don’t need!

Look.

Look!

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July 19, 2016

Blueprint

Larry Janesky: Think Daily

Like a blueprint is used to build a building, goals are used to build a business.

What is the medium term (2-3 year) outcome you are going for?

What is the plan for this month to get there?  

What are the steps you need to take now?

What is the very next step?

What do you need to do RIGHT NOW then?

 

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July 18, 2016

What direction are your taking this?

Larry Janesky: Think Daily

Your leadership ability should be improving as you get more experience.  

You can look at where your organization is to see your past results.

You can look at what direction your organization is moving, to see your future results.

What direction is your organization moving?

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