On Wednesday 17 August, MWM Advisory hosted the third workshop of its business finance masterclass, Know Your Numbers, presented by MWM Advisory Founder James Marshall.
These free seminars are designed to help business owners achieve a better understanding of their financials – helping them fine-tune, grow and succeed while navigating the challenges of managing business finance.
In Know Your Numbers, James condenses 10 hours of content into a three-hour masterclass, answering key questions on business finance.
Below are three questions business owners seeking to better understand the language of numbers often ask.
- What does a good business budget look like?
With any business, creating an effective budgeting process is a must for building a successful and sustainable business. A budget informs you about the money you have, how much you’ve spent, and how much you’ll need in the future, and drives important business decisions like cutting down on unwanted expenses, increasing staff, or purchasing new equipment.
Despite being slightly overwhelming when starting out, it’s worth noting that successful businesses take great care in developing realistic budgets because they are an effective way of ensuring your business is on track, achieving set targets, and is risk-adjusted to allow for a margin of error, and is tied to the company’s overall strategic plan.
The key is getting started, getting the details down and aiming for approximately 80 per cent accuracy rather than 100, which is a difficult feat.
- What’s the difference between turnover and profit?
Turnover, also referred to as gross revenue or income, is the net sales generated by a business over time. In comparison, profit is the residual earnings a business pockets after the costs of doing business and is calculated by subtracting expenses from sales.
There are three main types of profit:
- Gross profit refers to a company’s revenue minus its cost of goods sold, such as direct material, labour, and shipping costs.
- Operating profit is the day-to-day expense that keeps a business running, such as rental payments and utilities.
- Net profit equates to the amount of money a business earns after deducting all operating, interest, and tax expenses over a period of time.
Simply put, while both profit and turnover measure business earnings, turnover measures them before taking out major costs and profit is the residual earnings after costs.
- What is a break-even analysis?
A break-even analysis is a financial calculation that helps determine how many products you need to sell in order to cover your total business costs and make a profit. You do this by comparing your fixed and variable costs against your profit.
A crucial indicator of your business’s financial health, a break-even analysis can show how much you can afford to spend, how much you need to sell to keep your business financially viable, and at what margins and price points you need to break even.
Because this figure is so essential and will impact how you price your products, you want to conduct your analysis before you even start selling to consumers.
Know Your Numbers masterclass returns in September
MWM Advisory will be hosting the Know Your Numbers seminar on Wednesday 21 September 2022, aimed specifically at anyone involved in a start-up, small business or growing company.
It would also be invaluable for sales managers and accounts staff responsible for preparing budgets forecasts and sales reports, graduate accountants, the spouse of a business owner or any person invested in the success of a business.
Some of the topics to be covered include:
- The importance of numbers
- If you measure it, you can manage it
- Turnover, profit and cash
- What are the key financial reports?
- Understanding profit and loss
- Understanding the balance sheet
- Is your business financially viable?
- Using budgets and forecasts effectively
- 5 ways to improve your gross profit
- 3 top strategies to grow your net profit
- And more importantly – how to create a break-even analysis!
MWM Advisory Office
Address: Level 4, 3027 The Boulevard, Carrara, QLD
Time & date: 9:00am to 12:30pm – Wednesday, 21 September 2022
Parking: Free parking is available onsite.
Includes a light lunch and refreshments.
Further details and tickets can be found here: https://www.eventbrite.com/e/know-your-numbers-with-james-marshall-tickets-409728116827
