Shark Accounting - Building a Business by the Numbers!

Vince explains how a business works by using the analogy of a chicken dinner. You will understand at the end of this lecture why every business is a chicken dinner! Based on this chicken dinner example, you will have the template to analyze any business that you are considering starting. And you will be able to use this analogy to better manage the business that you are in.

Forget sales! Concentrate on contribution margin! This is the key to making business decisions. If a business just tries to increase sales, they may be frustrated that profit does not go up proportionately. This lecture will change your focus as a business person. With this knowledge you can better develop your business strategies.

This is how a business works. You will have a new insight to how you make a profit. This insight makes you a true entrepreneur. Otherwise you are just another worker with what you think is a good idea.

Don't be a worker in your business! Be the owner that you are! Most small businesses are really not businesses. They are simply the place where the "owner" works. If you do not account for your time, your financial statements will be misleading and your decision making will be flawed.

Explore the four ways to increase your profit. Which strategy should you choose? What are the risks of each? Should you increase your prices? How about reducing variable costs? Could your reduce fixed costs? And why not just get more customers?

If your customers are not complaining about your proces, then you are not charging enough! This is a tough lesson. As a startup company you cannot afford to be the low cost leader. Consider you price structure when developing your business plan. This lecture will show you the enormous effect of increasing your prices by a very small percent.

How we make a profit can give you the tools for managing your business. A business is a dynamic entity and requires that you understand how costs behave and how profit is made. Business followed different strategies during the recent recession. Those who understood the consequences of those strategies have profited handsomely.

Post this one page example above your desk! Refer to it often!

Accountants are often not familiar with concepts covered in this course. You need accountants for some things. What do you need them for and when should you look for other advisers? Accountants can summarize numbers, attest to statements and prepare tax returns. But if they are not familiar with how a company becomes profitable, they may not be able to give you the advice that you need.

Cash if the oxygen of business. Don't run out! Financial statements can be confusing. And they do not give a clear picture of what is going on with cash. This lecture will show you that being profitable is not enough. You need to know how to watch your cash balance.

Now you are prepared not only to face the sharks, but now you understand how to design a successful business!

Enjoy this ebook!