Every business owner wants to make more money and maximize profits. The problem is that many business owners don’t know how to manage the finances of their business or what levers to pull to improve overall profitability. 

One of my business owner clients put it like this:

“I never had a problem making money. Revenue was not a problem. But making good money was a new concept to me. Good money was leveraging the productivity of my people to make more gross margin dollars and managing expenses in a way to increase profitability. That was all new to me. When I got into the rhythm and cadence of a monthly financial review, I knew I needed a coach.”

To make good money you need to know how to analyze your financial statements and create metrics to measure. Specifically, those metrics are profitability, asset quality (receivables and inventory), liquidity, and leverage.

Your balance sheet is more important than your income statement. Three of the four things I just mentioned (liquidity, asset quality, and leverage) are reflected on the balance sheet.

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