About the Book
About the Book
Attention entrepreneurs: Your data is lying to you!
Think of business profit in terms of physics: You can spend more than you make only for a limited time before gravity takes over and you find yourself in a crater of debt. While this analysis seems like common sense, many business owners continue to confuse revenue with profit; and, after market based wages are paid, investors are paid off, and taxes are accounted for, among other expenses, their expected profit is often not enough to cover their own salary— much less a return on investment for themselves.
Greg Crabtree, entrepreneur and founder of Crabtree, Rowe, and Berger, PC, is dedicated to helping entrepreneurs fine tune the economic engine of their business for maximum, true profitability. In his new book, Simple Numbers, Straight Talk, Big Profits, Crabtree explains how entrepreneurs can generate profit by first identifying the solutions to the four most common misconceptions—owner’s salary, profit targets, labor productivity, and business physics—then incorporating the learned tactics into their companies’ financial practices.
“Many business owners can’t comprehend that the only way you can grow a business without profits is to have a streamline of cash to fund it,” says Crabtree. “Since this is not the case with most entrepreneurs, it’s crucial to execute methods to initiate and strengthen business profit.”
Simple Numbers, Straight Talk, Big Profits is broken up into clear, easy-to-follow sections. The first section of the book analyzes the solutions to the main problems that Crabtree has encountered in working with entrepreneurs. In the second section, Crabtree builds upon these solutions to provide entrepreneurs with the ‘action plan’ of how to build their profit by following the 4 forces of cash flow: taxes, debt, core capital, and distributions.
“Once profitability is established, entrepreneurs can easily use the ‘4 forces of cash flow’ to account for all expenses before reinvesting money back into their company,” Crabtree adds.
Entrepreneurs and business owners will learn:
- Why their numbers are lying to them – revenue doesn’t translate into gross profit!
- The 4 forces of cash flow and why each step is dependent on the last
- Why the owner’s salary should be derived from market-based wages, not from ‘leftover profit’ taken as distributions
- That 10% pretax profit is the new breakeven point, not 0%
- Why labor productivity is the key to profitability and how to weed out the ‘weak links’ in the company
- Tax management advice – from how taxes are the truest indicator of wealth creation to which tax payment method is best for you to prevent the April ‘tax surprise’