#bestpractical Setting Targets: Take Aim at your Overdraft

Poor cashflow is the biggest business killer. Cashflow is the oxygen of the business – without it you can’t breathe.  Having said this, getting rid of your bank overdraft is possible if you set it as a target, as we’ll see in this next story.

Kevin & Lucy’s overdraft story

Kevin & Lucy are 2nd generation farmers who have expanded into manufacturing.  Due to many reasons they landed with a large bank overdraft and loss-making operations.

They diligently record their actuals and can tell you exactly what happened last month, and the month before. The problem was that they did not know if it was good or bad, as they had nothing to compare it against. (As the saying goes, “if you aim at nothing – you will hit it ever time”!)

They basically managed the business, based on what was left in the bank account.

Setting targets against key drivers

We started working with them.  After setting a few targets against key drivers, they now have a guide for daily decisions, that will lead them into a healthy profit situation, and clear their overdraft in less than a year.

This Profit Improvement plan allows them to breathe and focus on building the business they’ve always dreamed of.

Planning for the future

Kevin went from feeling exasperated and overwhelmed, to planning for growth and expansion, as well as succession planning. Lucy feels released from carrying the burden of watching the bank overdraft.

Setting targets

Over time we all allow waste to creep into our businesses.  This often happens if we are generous, and then it becomes “unintentional charity”.  Rather have a line item in your P&L called “Charity”. Set a target against it, and you’ll find yourself channelling waste from other areas into “intentional charity”.

Profit improvement – the #bestpractical way

Setting targets is a single step in our signature “Profit Improvement” solution, where we help business leaders grow their profits in a #bestpractical way.

If you feel stuck, or frustrated with your business performance and want to talk through your thinking, then reach out to us on THIS LINK for a quick Discovery call.

Be sure to follow the CoLAB LinkedIn page, as well as the CoLAB Facebook page.

Watch this video for the full story on Setting Targets: Take Aim at your Overdraft.

 

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