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What We Have

These 16 drivers highlight the key financial areas that impact a business’s revenue, profit, and cash flow, providing a clear roadmap to achieving profitability.

Parts that Drive Revenue:

  1. Leads
    The number of potential customers entering your sales funnel.
  2. Conversion Rate
    The percentage of leads that turn into paying customers.
  3. Retention Rate
    The ability to keep customers coming back for repeat business.
  4. Purchase Frequency Rate
    How often customers make a purchase within a given period.
  5. Average Transaction Value
    The average amount a customer spends per transaction.
  6. Revenue
    The total income generated from sales before expenses.
  7. Profit
    The net income after all costs, taxes, and expenses have been deducted.
  8. Cash Flow
    The movement of money in and out of the business, crucial for operations.

Parts that Drive Profit:

  1. Cost of Goods (as a % of Revenue)
    The direct costs associated with producing your products or services.
  2. Marketing Expenses (as a % of Revenue)
    The costs spent on marketing efforts to attract and retain customers.
  3. Payroll Expenses
    The total cost of compensating employees, including wages, benefits, and taxes.
  4. Overhead Expenses
    Indirect costs necessary to run your business (e.g., rent, utilities).
  5. Other Income/Expense
    Non-operating income or expenses (e.g., investments, interest).

Parts that Drive Cash Flow:

  1. Days Sales Outstanding
    The average number of days it takes to collect payment from customers.
  2. Days Inventory Outstanding
    The average number of days products sit in inventory before being sold.
  3. Sale or Purchase of Assets
    Impact on cash flow from buying or selling business assets.
  4. Days Payable Outstanding
    The average number of days it takes to pay your suppliers.
  5. Using or Paying Down Debt
    The impact of repaying loans or taking on new debt.
  6. Owner Investments or Distributions
    Cash invested or withdrawn by the business owner.
Your Turn

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