1 / 60

Financial Management: Effective Strategies for Wealth Creation

Learn how to manage finances effectively, generate passive income, and make impactful business decisions for long-term success. Explore key concepts in financial management and discover ways to boost profitability. Join us for open-source management insights!

johnphernandez
Download Presentation

Financial Management: Effective Strategies for Wealth Creation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Financial Management OPEN SOURCE MANAGEMENT www.opensourcemanagement.it

  2. Questions? • On money • On break even • Regarding profits and profitability • What would you like to know regarding money and company management? • Did you read article we sent you?

  3. THE MONEY YOU HAVE TODAY DEPENDS ON THE VALUE YOU HAVE GIVEN TO THE MARKET IN THE PAST

  4. On what it does not depend to become wealthy

  5. Having the right idea  • To be a good person  • To promote one’s company • Be ethical  • Give a good service  • Be positive  • Attend training  • To think big/try • Be a greatsalesperson • To train in a unique, extraordinarytechnology • Overzealousfinancial control  • Tax Planning  • To associate oneself with strong (and ethical) partners  • Persist

  6. 1. Desire and not passion • 2. Innovate the Business Model and not the Product • 3. What do you know that others don’t? • 4. Money are not important. What is your GRAND project to change the world? • 5. Desire to be the number 1 in one’s industry • 6. OVERZEALOUS financial control on the numbers and on the financial aspects • 7. Success begins at home

  7. 8. Surround yourself with great minds and get away IMMEDIATELY from people who criticize or who do not believe in you. • 9. Take decision FAST: ready, fire, aim. Dont be afraid • 10. Integrity and personal value. Faith. • 11. Be willing to acquire at any cost extremely valuable knowledge • 12. Build a network of allies • 13. Predict the future of your industry

  8. 1) They bring you the quarterly numbers and the P&L is not so good… What do you do? • a) Nothing, we dont keep track of numbers in our center… • b) We like to see the bright side of things. We will fix the numbers in the future… • c) Wow, numbers are REALLY bad…

  9. 2) You need 70.000 Leva but you realize that you have 70.000 Leva to collect from clients in the next three months. What do you do? • a) Fantastic. This takes care of it. Now I just have to find some bank to give me a cash advance. • b) I get immediately my secretary to collect them all. • c) I realize I have a problem because money will not be enough.

  10. 3) The montly financial numbers show a small loss … • A) You dont have to worry. If you work well money will arrive… • B) We have to keep our cool. We will find a way to fix the scene and make money… • C) We need to get mad and as needed change everything.

  11. A) They convince themselves of the fact the numbers are stillnot good, eventhoughtheymaybe are ok B) They plan for the unexpected C) Theyoverdramatize the numberswhenthey are so-so. Theysay «they are terrible» A) They convince themselvesthatall in allnumbers are good, evenwhenthey are bad B) They dont consider «the unexpected» when planning, buttheyhopelucky strikes willhappen C) Theytry to see the positive sides in numbersthat are, truly, terrible GOOD AND BAD BUSINESS OWNERS

  12. Creative and Positive Attitude+ Overzealous Control

  13. THE GOAL OPEN SOURCE MANAGEMENT www.osmconsultgroup.com

  14. Passive (Automatic) Income • Royalties (books, franchises, licenses) • Bond coupons • Pensions • Rental income (apartments or companies) • Interests • Company Profits (Dividends)

  15. Passive Income > Life Style

  16. Exercise

  17. A company generates only the money it thinks it may need

  18. BUSINESS OWNER MONEY MANAGEMENT OPEN SOURCE MANAGEMENT www.opensourcemanagement.it

  19. People ServiceMoney

  20. What didn’t work?

  21. 0) When cash decreases two months in a row there is ALWAYS a problem…

  22. RULE 1MEASURE MEASURE MEASURE

  23. Delegate everything except Command

  24. It is not your external accountant or a Financial Director that will help you make great profits. • You need to have a strong internal person in accounting. • In our company a part time person manages three companies

  25. Measure sales every month

  26. Every month measure Profit

  27. Every month measure cash flow (liquidity on hand)

  28. RULE 2 Look at the brutal facts about costs Know the ratio fixed costs/total income

  29. COSTS = BRUTAL FACTS • 1) Make a full list of the monthly fixed costs of your company. • 2) Establish the incidence they have on the average monthly income of the last four months (VAT excluded). • 3) Every good financial strategy begins there.

  30. Definition of “Fixed Cost” • Fixed Costs are all those costs your company has whether it works or not.

  31. Study the attacched list of fixed costs for a company and ask any question you may have

  32. Exercise: lets make together the full list of fixed costs for our companies or for a beauty center

  33. Pay back Debts • You have to add to your fixed costs a monthly amount to pay back debts you have with vendors, financial institutions, back taxes, etc. • In how long time would you like to pay back your debts?

  34. Exercise 1: company sells paint • Calculate the percentage of fixed cost on the revenue for company number 1 • Make an analysis of its financial health

  35. COMPANY 1 • Company buys at 50 and sells at 100. • Sales Commission 10% • 500.000 euro owed to banks • 400.000 euro bills overdue to vendors

  36. How to calculate the ratio of fixed costs on the average monthly income • (Average monthly Fixed Costs/Average montly Income) x 100= ratio of fixed costs on the income

  37. Fixed Costs = (682.715/1.837.191) x 100= 37,16% • Bills = 900.000 euros– pay back in 10 years = 90.000 yearly • In 8 months = 60.000 euro • New fixed costs = 40,42%

  38. ANALISYS (buys at 50 resell at 100) • Sales Price = 100 • Fixed Costs = 40,42 • Sales Commission = 10 • Cost of Product = 50 • ======================= • Total = 100,42 • Every product sold the company loses 0,42%

  39. ANALISYS (buys at 50 resell at 120) • Sales Price = 120 • Fixed Costs (40,42%)= 48,50 • Sales Commission = 12 • Cost of Product = 50 • ======================= • Total = 110,50 • Every product sold the company makes a 9,50% profit

  40. HEALTH CLINIC OR BEAUTY CENTER • Sales • Minus Fixed Costs • Minus Variable Costs • Commissions • Bonuses • Costs of Dispensable products • Cost of external specialist paid on commissions • = Profits /Loss

  41. BOOKS OF AUTHOR JONES • SALES PRICE 20 EURO • FIXED COSTS (45% OF SALES) 9 EURO • COST OF PRODUCT 11 EURO • COMMISSIONS (10%) 2 EURO • ===================== • FINAL RESULT - 2 EURO (todayeverytime the company sells a book of thisauthor, itloses 2 euro)

  42. DICTIONARY BUTTERWORTH • SALES PRICE 17 EURO • FIXED COSTS (45% OF THE SALES) 7,65 EURO • COST OF PRODUCT 7 EURO • COMMISSIONS (10%) 1,7 EUR • ===================== • FINAL RESULT + 0,65 EURO (today everytime the company sells a book of this author, the company makes 0,65 euro)

  43. AUDIO BOOKS JONES: • SALES PRICE 15 EURO • FIXED COSTS (45% OF THE SALES) 6,75 EURO • COST OF PRODUCT 5 EURO • COMMISSIONS (10%) 1,5 EURO • ===================== • FINAL RESULT + 1,75 EURO (today everytime the company sells a book of this author, company makes 1,75 euro).

  44. BOOKS OF AUTHOR GREEN • SALES PRICE 18 EURO • FIXED COSTS (45% OF THE SALES) 8,1 EURO • COST OF PRODUCT 6 EURO • COMMISSIONS (10%) 1,8 EURO • ==================== • FINAL RESULT + 2,1 EURO (today everytime the company sells a book of this author, the company makes 2,1 euro)

  45. RULE 3 TAX PLANNING(Predict how much taxes you will have to pay)

  46. RULE 4 TREAT ALL EXPENSES LIKE AN INVESTMENT

  47. BEANS THEORY • Treat any expense like it is an investment. What are you buying with it? • Dont buy people’s time, buy results

More Related