Now is the BEST time to be in business for ourselves! Many people are getting laid off and those that aren’t are concerned they might be. There IS more security in being a small business owner because we have many clients, not just one employer. Here are some ideas for increasing your services sales during this recession.

You’ll be increasing services sales during this recession if you:

1. Improve your product. Add an extra feature; something people have been asking for. Make sure your clients know you have it by mentioning it, sending out postcards, or putting up a sign. You’ll need to mention it to everyone you see especially if someone seems like they need your product. Selling the product increases the services sales that go with it.
2. Improve the services. Make a checklist of complete delivery, all listed deliverables. Make sure every client gets the complete list of services. Contact clients after they purchase and offer them more service. Give them something more than you’ve ever offered before, and give it happily. Add a training component to your services, so your customers receive more bang for their buck.
3. Add an ‘extra’ feature. Give the customer “something extra”. Throw in a free add on.
4. Give a discount. But let them know you’re doing it. Everyone wants a discount. Try a 10% discount for signing up this month.
5. Think what others need. Help others survive the economic recession, and make money at the same time. Figure out what your clients need and give it to them. People still spend money during a recession, they are just more careful about it. Win the contract by meeting the other person’s needs and following up on each and every contact.
6. Think residuals. Develop and maximize residual income streams and passive income possibilities. Add a maintenance contract, a 6-month checkup or a yearly service that people need. That way you’ll be able to keep in touch and propose other services they might need.
7. Advertise. Promote bargains or discounts without undermining the value of what you represent.
8. Maintain professional and personal relationships. Have coffee with people who can be a center of influence or be an ongoing source of referrals. Send a thank you note or email after the meeting to leave them with a good impression. Find out what they think people need or what their clients need in your market. Make suggestions and offer to help.
9. Be Creative. Analyze your business, products, and services. Consider how they can be tweaked to receive more demand in an economic recession. You can make money if you find a way to offer more value to your products or services.
10. The law of reciprocity. People want to help others who have helped them. If there is someone you want to do business with, buy something from them first.
11. Don’t fall prey to large free trials. Seldom do clients who were given free service become a paying client. Give them only a taste, a short analysis or a free consultation, but not the answers themselves.
12. Ask for referrals. People who are happy with your service may know others like themselves. Ask for referrals on a regular basis. Have a referral card, a page after your invoice, or a question you ask at the end of each meeting. Let people know that you get a lot of referrals and it will become true.

Times are tough, but by thinking creatively you can generate more services sales in this recession and become even stronger after the recession is over.  Tell me how it’s going using the comments below.

Now stop reading about increasing services sales and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

“Seek new clients, seize better income, capture more profit”

If your clients pay slowly, here’s how to collect client pay faster and with less effort.

There is a growing trend among companies to pay later and later. What was 30 days to pay is now becoming 45. Those previously at 45 are going to 60. Worse, small companies are typically targeted first. Here’s what you can do to speed up clients who pay slow:

1. Get paid at time of service. If your service is completed on the same day you show up, request payment immediately. You’ll need to ensure the client is there to pay you or get credit card authorization before you start. This works well when dealing with individuals as clients, but is a little harder when working with a business.
2. Invoice early and often. For longer projects, you will want to have progress payments. Make sure your project is broken down into small enough segments so you can bill about every 2 weeks.  So even if your clients pay slow, you’ll have started the pipeline earlier.
3. Begin charging a down payment on start of project. You can typically charge up to 30% to start the project, especially if you have materials to buy for the client.
4. Reduce the amount of credit you extend. If a client’s receivables become too large, request payment before signing up for any new projects. Be respectful, this is probably one of your larger clients and you value the relationship.
5. Keep better records of shipments and deliveries. Companies strapped for cash will claim they didn’t receive shipments or give spurious complaints to delay the time to pay. Make sure you are keeping delivery receipts, service authorization records, and correspondence about the project.
6. Start a credit and collections activity system. If you are not getting an Accounts Receivable report from your accounting system, start immediately. There’s not a lot of time involved if you systematically follow up with clients after 45 days, 60 days, 75 days. Call them with a friendly reminder, ask about the payment. Specifically, ask them when you can expect payment.
7. Have a credit policy. Specify your payment terms, how they can pay you, and what will happen if they don’t pay on time. Write these down. You can include them in your statement of work, your original proposal or even summarize verbally. You don’t want to appear heavy handed, just business like, so don’t make a big issue out of it.

Systematically working through these ideas will dramatically reduce your slow paying clients.  Collect your client pay sooner following these hints and turn your slow paying clients into fast paying clients. While there’s no quick fix, you’ll see results in just a few weeks.

Now stop reading about slow paying clients and start doing! Let’s create your personal profit strategies for growing profit today. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at 888-920-2030 or by email at merralee@captureprofits.com.

“Seek new clients, seize better income, capture more profit”

Let’s talk about better cash flow – how to hold onto and conserve the cash you have on hand. This is not about cutting expenses; see Cutting Costs Now: 9 Hot Areas for Creative Small Business Owners. This is about holding onto your cash for as long as possible. For ways to collect cash faster, see 14 Ways to Collect Cash Faster.

Better cash flow can be achieved if you:

1. Barter. Small businesses find that trading for goods and services will not only conserve cash; but also can substitute for borrowing and rack up savings. You don’t have to find a company to trade directly with; just join a barter network. Joining a group such as Corporate Barter Network gives you hundreds of local businesses and thousands nationally. In addition, they open your account with a credit so you can get started if there is something you need before someone else buys from you.
2. Ask for credit terms. Many bills can be paid in 30 days. But be sure you pay on time or your credit agreement could be removed. You want to keep that relationship on an even keel as well as avoid late payment charges.
3. Pay when bills are due, and not before. To save time, you can write your checks every week, but don’t mail them until two or three days before they are due. The time frame depends on the mail delay.
4. Create a forecast of incoming and outgoing cash expected for the next three months. Continue to forecast your cash flow monthly to ensure that expenses and planned expenditures are in line with accounts receivable. Avoid using your credit line if you can.
5. Create a 30-day wish list before committing any new spending. If there is something you think your business needs and it is NOT directly related to delivery for a customer, pause before buying. You’ll get better cash flow by slowing your spending decisions.
6. Remove discretionary spending authority. If anyone besides you makes purchase decisions, say your spouse or your assistant or a partner, agree that nothing will be purchased before specifically discussing it. This may seem like a small thing especially if we’re talking about postage or office supplies, but can conserve cash and possibly reduce spending.
7. Create a self-imposed moratorium on new spending.  Unless you can find something else of equal value to remove or suspend. This exercise will help you rethink if the new item is going to provide enough value to supplant something else. For example, if you want to add a marketing campaign which costs $100 a month you might find a way to cut your telecom costs by $100 a month.
8. Cut Inventory. Think you don’t have any inventory if you are a service business; what about office supplies? Buying just what you need for the moment, conserves cash and keeps the employees and yourself from taking them home for needs there.
9. Buy Used. Furniture Soup here in Reading sells previously enjoyed furniture at dramatically discounted prices. Other items typically available used include books.
10. Re-negotiate with your suppliers, lenders, and landlord. You value these relationships and so do they. Ask if there is anything you can do to pay on a slower schedule, remove travel charges (hey, gas is down 50%), or reduce shipping charges.
11. Implement a cost cutting program with a top 3 list. For a simple system, see A Cunning Cost Cutting System for the Busy Business Owner. This way you’ll consistently cut costs without losing focus on building your customer base and keeping up revenues.

So summing up, better cash flow comes from spending less, spending slower and speeding income.  See Does Your Client Pay Slow? for more on speeding income. Give me comments below. What’s happening with your cash flow?

Now stop reading about better cash flow and start doing! Let’s create your personal profit strategies for growing profit today. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at 888-920-2030 or by email at merralee@captureprofits.com.

“Seek new clients, seize better income, capture more profit”

Smart small business owners are finding ways of cost cutting in their businesses. You don’t have to be struggling to think cost cutting is a good idea in this recession. If you want to thrive not just survive, here’s a system for cutting costs with just a little time.

These days it’s cool to be a cost cutter. Profitable business owners are cutting costs as prevention against possible decreases in sales so they can preserve cash. Struggling business owners, already seeing sales decreases, are cutting costs to keep going. Either way, here’s an easy, foolproof system.

Spend just 10 minutes a day and contribute thousands to your bottom line.

1. Create an excel spreadsheet of all known recurring and expected one-time costs. Separate out monthly, quarterly/yearly, and emergency spending expectations. Don’t try t make it a budget; just write down recurring items and their approximate monthly cost.
2. Write a goal. Here’s an example. “I want to cut $2,000 a month from my operating costs by Jan 31.”
3. Think of 3 specific items you believe have immediate cost cutting potential. Write them down on ‘My Cost Cutting Success List’. This will be your focus list. Write them as an action verb and cost cutting target amount. Example: “Install thermostatic timers in warehouse to save $150/month. “
4. Create a list of 10 items you are thinking about cutting after your initial focus list. Do not number or prioritize this list, just put down your ideas.
5. Post your ‘My Cost Cutting Success List’ where you’ll see it every day. Put it on your desktop, on your refrigerator, in your day timer.
6. Put time on your calendar to make it happen. Schedule yourself a half-hour twice a week to take action.
7. Work on one item on your focus list at a time. Make the phone calls, research lower cost alternatives, make a decision. Drive an item to completion.
8. Delegate where you can. Maybe an employee can research alternative credit card processors and send you the links or make a file. Perhaps a spouse can call and cancel an ineffective advertising service.
9. If you get stalled, work on the second item. Sometimes you have to send in something by mail or wait a week for a response. Don’t get stalled; that’s why there are 3 items on your focus list.
10. When you finish an item, put a checkmark next to your completed item. Update the amount saved if different from your initial projection.
11. Relish the accomplishment for a day or more. Don’t take the item off the list for a little while. Reward yourself with a feeling of accomplishment by seeing your success the next few times you look at your list.
12. After a few days, Move the Completed cost cutting item down to the Cost Cutting Success List. This is important; you’ll see your efforts pile up so your small efforts will result in big results.
13. Pull an item from your wish list that you think has the biggest, easiest to implement cost cutter. Write it on your focus list.
14. Add items to your wish list as you read, talk to friends, think about your cost cutting progress. Now that you are in action on cost cutting, you’ll have ideas showing up in your life. Just jot them down on your ‘My Cost Cutting Success List.’
15. Get a partner. Most exercise programs are more successful with a partner. Find someone to bounce ideas with, share your success, and get inspiration. Call them and share a success or get encouragement.

In just 10 minutes a day, you can cut your business costs by thousands of dollars. This system is foolproof! Call me if you want help getting started or for a copy of your ‘My Cost Cutting Success List’ Worksheet.

 Merra Lee Moffitt, AWMA, CMFC, CFP® spends all day, everyday helping business owners reach their financial dreams and goals by capturing business profits. She can be found at, 888-920-2030 or by email at merralee@captureprofits.com.

In this new era of difficult credit, cash is the life blood of your business. In this series of articles, we’ll look at bringing in cash faster, keeping cash longer, and increasing cash holdings.

Bringing in Cash Faster 

1. Have orders faxed to you, that way you’ll deliver and bill sooner.
2. Send your invoice the same day the product is shipped or the service is delivered. You can prepare it ahead of time. Just date it and mail it on that date if you want to batch your invoices to save time.
3. You can also email rather than mail your invoices. That will speed collections. But beware that many business owners are trained to handle the mail. An email invoice could be missed because it’s not part of the normal flow.
4. Indicate clearly on the invoice when the payment is due. You can indicate when the payment is considered late and state what the late interest is. But make sure you can back that up.
5. Know how the customer pays. When you began working with this customer, you can ask them what their normal pay cycle is. Some pay once a week, others on a certain day of the month. If you note that in the file, you’ll have a better expectation.
6. Don’t let invoices get too old. If you’ve forgotten about an invoice, chances are the client has too. When sending a second invoice, include the note, “courtesy copy. This invoice is past due. Please pay promptly if you haven’t already.”
7. Establish a regular procedure. Mail invoice copies at 30 days, 60 days, and 90 days. Call at 45 days, 65 days and one last time at 90 days before going to collections.
8. Check customer satisfaction. Make sure they are happy with your work. If you do this early in the payment process, they’ll be more likely to remember that 99% of the work was satisfactory rather than dwell on that minute item.
9. Put their phone number on the invoice. Statistically, that has improved the collection rate and speed.
10. Follow up with a phone call. Call after 45 days. Find out if the payment was missed, by them, lost in the mail, or maybe even by you. When possible, give them the benefit of the doubt.
11. Take a portion at the start of the project. Invoicing for part of the project at the start will cover the cost of materials as well as make cash come in faster.
12. Accept credit cards. If you don’t already, begin taking credit cards. You generally get your money in 24 hours at a nominal cost of about 2%.
13. Keep your Accounts Receivable report up to date and review it weekly. QuickBooks produces these with a few clicks.
14. Beware of subcontracting. Sometimes working for someone who works for someone just seems too remote. Review their payment terms and yours at the start of the relationship and again at any time there seems to be a delay. Just letting them know you are on top of it can be the key to having your work paid on time.

Creating a system, watching the details, and maintaining good relationships with your customers will help collect cash faster, speed dollars to you, and improve overall cash flow.

A very good article for improving cash flow for contractors can be found at:http://www.contractingbusiness.com/25/Issue/Article/False/8882/Issue

Merra Lee Moffitt, AWMA, CMFC, CFP® spends all day, everyday helping business owners reach their financial dreams and goals by capturing business profits. She can be found at, 888-920-2030 or by email at merralee@captureprofits.com.

 In good times and bad, it is always a good idea to look over your business costs. Keeping an eye on the bottom line means watching both the income and the expenses. Here are the hottest ideas my clients are implementing right now.

1. Get rid of your long distance provider. VoIP has come of age; the reception is clearer and reliability is greater than even a couple years ago. A number of my clients have removed their home/business land-line phones in favor of VoIP phones and cell phones. The VoIP phone works fine as long as your Internet is up. Check out Skype or Broadvoice. We use BroadVoice Unlimited World Plus at www.broadvoice.com.
2. Put in a thermostatic timer. Heat your house/office/home office to 62 at night and your home office to 68 only during the morning and evening hours when you are using the whole house. If you sit in an office during the day, just run a small electric heater in that room with the door mostly closed. The cost of running a portable 1500 watt space heater for about 5 hours daily during a 30-day month is $9 (at a typical 10 cents Kw/Hr). A heat pump covering the whole house can be 10 times that much. See http://home.howstuffworks.com/question272.htm.
3. Check your credit card processor. Generally, a 2% fee is pretty good. If you are paying substantially over that, you may be paying too much. A good, quick explanation of fees can be found at: http://transfs.com/blog/2008/11/06/nytimes-covers-credit-card-fees-impact-on-small-business/
4. Save on Gas. The website below shows the daily price for fuel in your area by zip code. http://autos.msn.com/everyday/GasStationsBeta.aspx. The difference in our area between the highest and lowest was 29 cents a gallon, about $5.80 per fill up if you have a 20 gallon tank such as a business Small van or SUV.
5. Avoid new debt. Companies that fail to control costs often increase debt. The interest cost and monthly payment on that debt then becomes another cost, which cuts further into profits. Catch the trend early by watching your business dashboard. See my article on business dashboards at http://www.captureprofits.com/your_business_dashboard.html.
6. Barter. It not only helps you conserve your cash, but can help sell more of your products or services. Join a barter network, such as Corporate Barter Network at http://corporatebarteronline.com/ and you have thousands of businesses that trade between each other.
7. Ask your employees. Your employees know the ins and outs of your business and are often willing to share. You don’t have to pay a lot for their ideas. Simple gifts like a box of cookies with public recognition will help your employees feel appreciated. Don’t be afraid to ask them for fear of spreading concern; a good business owner is always looking to be more profitable. A suggestion box with forms nearby will make it convenient. It may take a couple months for them to supply you with ideas, but keep reinforcing it and they’ll catch on if the spirit is positive.
8. Track your costs. Set aside time each month to look at costs with an eye to finding some area, no matter how small, along with a willingness to keep an open mind. You’ll be surprised at what you’ll find each month.
9. One step at a time. Pick one thing to do each month. Small business owners already had a full time job before taking on cost cutting. Also, while very important, you don’t want to take so much time that sales suffer.

It has become very trendy to be a cost cutting business owner. Join the trend and see your business profits improve even if your sales are not.

Merra Lee Moffitt, AWMA, CMFC, CFP® spends all day, everyday business owners reach their financial dreams and goals by capturing small business profits. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

Your money might go a little farther this year, thanks to new raised limitations of several common IRS deductions. Use this information to plan your savings and contributions and to take advantage of what good news there is going into 2009.

1. The maximum earnings subject to Social Security tax is now $106,800. The Social Security tax rate remains at 15.3%.

2. The maximum annual wage that someone under the normal retirement age can earn without a reduction of Social Security benefits is raised to $14,160.

3. The SSI COLA is 5.8% for payments beginning January 2009. Welcome relief in Medicare premiums is that these premiums will remain the same in 2009, now at $98.60.

4. The 15% marginal income tax rate begins at $16,700 taxable income for Married Filing Joint (MFJ) and $8,350 for single. The 25% marginal bracket begins at $67,900 MFJ and $33,950 single. The 28% marginal bracket begins at $137,050 MFJ and $82,250 single.

5. The personal exemption for 2004 is now $3,650. The standard deduction for Married Filing Joint (MFJ) is now $11,400 and $5,700 for single filers.

6. The business auto mileage deduction is now .58 cents per mile. In fact, that rate began July 1, 2008.

7. The child tax credit remains $1000 per child.

8. The long-term capital gains tax rate remains 15% if your marginal tax bracket is higher than 15%. It is 5% if your marginal tax bracket is 15% or lower. Qualifying dividends are now generally taxed at the same rate as long-term capital gains.

9. The Traditional IRA deductibility phase-out for MFJ has been raised to $65,000 to $75,000 and to $45,000 to $55,000 for Singles.

10. Eligibility phase out for Roth contribution begins at $105,000 for singles and for MFJ at $166,000. The Traditional and Roth IRA deduction maximums remain at $5000 with $1000 catch-up provision for age 50 and over.

11. The SIMPLE IRA deduction is now $11,500 with a catch-up provision of $2,500 for those 50 and over.

12. The 401K, 457,403(b) and SARSEP maximum contributions are now $16,500 with a catch-up increased from $5,500 to inflation-indexed if you are 50 or over.

13. The SEP IRA and Defined Contribution limits are now $49,000. The maximum salary that can be considered is $245,000.

14. Health Savings account maximum contributions for 2009 are now $5,950 for families and $2,300 for individual plans. Anyone age 55 or older can add an additional catch-up of $1000.

Merra Lee Moffitt, AWMA, CMFC, CFP® spends all day, everyday helping families and business owners reach their financial dreams and goals. She can be found at, 888-920-2030 or by email at merralee@moffitt.com.

Welcome to the CaptureProfits blog. A Blog (a contraction of the term “Web log”) is a Web site, usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in reverse-chronological order.

Here’s what’s great about blogging:

1. Anyone can blog - No technical skills are required.
2. Blogs are a very inexpensive way to publish to the web – You don’t need to pay a programmer, webmaster, intern, printer, or employee to publish. Once you’ve written, just cut and paste into your blog site. Most blog software packages are free.
3. Blogging is fast – You simply type and submit. New ideas can make it online just as soon as you can create them, in seconds.
4. Blogs get your site rapid notice by search engines – Right now search engines favor blog entries. Search engines currently index new blogs in hours where traditional site pages sometimes take weeks.
5. Blogs allow a broad list of topics – You can write a short bit of information without being wordy, exhaustive, or spending enormous amounts of time writing. That way you can share a long list of topics.
6. You can have multiple blogs – Once you’ve set up your first blog, it’s very simple to add a new one on a different topic. This is great for trying out new business ideas, new marketing ideas, or even prospecting into a new community.
7. Blogs allow you to create your brand in the eyes of your customers, industry, and press – Your blog can be used to demonstrate your expertise, your quality, your innovation, your community involvement, or whatever your company and products stand for.
8. Blogs are a great way to build internet traffic – When you have an interesting topic, people will come back for more, generating more visits.
9. Blogs get people to stay on your site longer -The average length of visit for a blog site is currently 96 seconds. This is informal research done by How Long Do Your Readers Stay at Your Blog – Length of Stay . While that may seem like a short time, it is two or three times the length of a commercial.
10. Blogs convert visitors into prospects into customers into profits – Using blogs as part of your marketing program brings more visitors to your website. If your website was effective before at getting those people interested in your product and becoming customers, the trend will increase.

 So, welcome to the Capture Profits blog.  I’ll share about what my small business owners are doing right now to capture profits in their businesses. Let me know what you want me to write about by sending me comments.

Profitability coach Merra Lee Moffitt, CFP®, can help you blog for profit.  She spends all day, everyday helping business owners reach their financial dreams and goals by capturing business profits. She can be found at, 888-920-2030 or by email at merralee@captureprofits.com.

Thank your CPA next time you even suspect she worked longer than your invoice showed. But ask yourself: Can your business afford to miss billing for ALL your project consulting time at this point in its development? How much are you missing each month by not billing for all your entitled time? Today, we’ll talk about taking action.

After reading my April newsletter, a CPA friend of mine made the remark that “Every CPA should hire you; they are the worst at billing for all their consulting time”. My point is not to disparage a well deserved, respected industry, but to state – there’s KNOWING what you should do and there’s DOING what you should do. Morpheus says it best in my favorite movie, The Matrix, “There’s a difference between knowing the path and walking the path.”

If you don’t have all your processes in place to achieve maximum billings each week, don’t berate yourself. Unless you were trained in savvy business methods, attained a business degree, and practice business process reengineering daily; how could you expect perfection?

Time is the Enemy

Change takes time. Changing your method of accounting for hours in your business will take time to redesign. You may need to design new daily/weekly tracking forms. You may need to rethink which day of the week works best for consistently setting aside time for invoicing. You’ll need to mentally walk through the new procedure to ensure it introduces no other gaps. Putting your self in your customer’s place is also necessary to ensure easy acceptance. The best processes have a cross-check so that when something does get missed, it’s identified by some other telltale signal. Finally, putting any new system into place takes reinforcement, repetition, and resolve until it finally becomes ingrained.

It’s too easy to put changes into the background of good intentions. After all, you already had a full-time job before undertaking this change. But if you’re serious about becoming a true success at your business, this is the point to make headway. Find a way to change your business while you run your business. Dogged determination works for a while. Most entrepreneurs believe that getting help will yield faster, more reliable, and happier results. Think about using a business coach, a business consultant, or an accountability partner to help you move forward.

Finding an accountability partner

An accountability partner is someone who helps you focus on the short list of things you want to hold yourself accountable to accomplish. By meeting regularly and focusing on a short list of small measurable action items, those items are highly likely to be completed. Replacing completed items with the next steps in the series helps propel you to consistent progress. Natural prioritization results because you focus on actions you “promise” your accountability partner.

How do you find one? You can hire one. Many business coaches serve that purpose well, business consultants too. You can also find another business owner and support each other. Make sure they understand billing and consulting time and agree you should get paid what you’re worth. But don’t do this with a good friend because it’s too easy to tell stories why something didn’t happen. You’re more likely to follow through with someone who’s not a close friend.
 
That’s one more tool in your arsenal against talking about it versus getting it done. Find an accountability partner to help keep you on track along with a well designed series of stepwise improvements and you could not only be walking the walk but positively running!

For a free no-obligation chat on charging for billing and consulting time and getting paid for every hour you work, call Merra Lee Moffitt, profitability coach and CFP®. She spends all day, everyday guiding business owners reaching their financial dreams and goals by capturing small business profits. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

Quick! Without taking your eyes off the running of your business, what metrics do YOU measure regularly to see if you are making your profitability targets? I’m talking about those calculations for your business that tell you current essential activity about where your profit levels are headed. Numbers that speak to you and not just reports that your accounting software prints out. What is your business dashboard? Like the dashboard on your car, you can develop simple dials for your business, a business dashboard, that tell you whether you are running efficiently or headed for major breakdown and repair. For example: low on gas (not enough sales activity), low on oil (running on a profit deficit that will eventually grind you to a halt), draining battery (not enough response from your market), or overheating (heavy activity that may need extra workforce). Put together as a simple business dashboard in excel, for example, and you’ll be able to quickly monitor your business progress.

Here are some business dashboard examples from my clients:

An Activity Measure. This is a simple count of actions easily collected. For example, make 10 appointments per week with new prospects or existing clients to review accounts and needs. Did you do it or not? Over time, of course, you learn whether 10 appointments achieve the bottom line profit you seek or needs to increase. Such an activity measure is unique to your business, methods, and products. Only experience produces this answer.

A Breakeven Measure. By adding up all the fixed monthly costs and averaging the variable costs over three to six months, you can determine your breakeven point. This is the amount of revenue (sales) you must bring in before you make your first dollar of profit each month. Knowing your breakeven point month to month focuses your actions on attaining profitability earlier in the month. Also it helps you attune yourself to seasonal variations so you can make adjustments.

A Response Measure. How many people have shown interest this week/month in your product or service? This could be a count of proposals made, verbal commitments, new inquiries, or even people asking for your business card. It is an indication of future activity and potential sales. Notice I did not say ‘new’ people. Including existing clients in this measure ensures that we continue to focus on repeat business from our already loyal followers.

A Sales Measure. What new sales dollars came in during the week/month? Was it enough to cover your breakeven and profit target? If you’ve set a sales target, did the sales reach that? Although this sounds easy to measure, it may not be self evident. Are you just measuring cash received, or dollars in signed contracts, purchase orders, letters of intent? Think about what items should be included, then remain consistent.

A Units Sold Measure. If you are a service business, you’re selling hours. You’re units sold are hours contracted. With product sales, your units sold are the number of items sold. When you have a limited number of similar cost items, this measure has more meaning than when you have dozens or hundreds of widely variant priced items.

An Average Selling Price (ASP) Measure. What is the ASP for your units sold? For your labor hours, this would be the weighted average of hours delivered at their actual billed rate. Example: You may have 16 hours delivered at $75/hr, 12 at $72.50, and 9 at $82, for an ASP of $76.89. Since some portion of your product might be sold at larger discount than other parts due to volume purchases, this measure is useful in tracking whether your profit margin is increasing overall.

A Slippage Measure. This is a measure of “lost product”. This would include hours that can’t be billed to a client but should have been. It includes product that won’t be sold due to quality issues or those given away in excess of planned sample allowance. An area of slippage for service businesses is excess hours on fixed bid contracts beyond the original estimated allowance.

A Profit Measure. How many dollars of profit were made? This is the number we’ve all been waiting for and the reason we’re in business. When the profit number is not what we seek, all the other measures are there to help us diagnose what we should be adjusting.

The measures that make up your unique business dashboard need not take huge amounts of time to compile. Generally they can be extracted from your accounting reports or collected by other simple consistent methods.

Your ability to create a business dashboard telling at a glance your direction, speed, and resources can immensely help you control your business. Not happy with your profits? A small change in the ASP or the activity measure can help boost your bottom line profits. Your business dashboard can help you see if you are hitting your targets for activity, slippage, ASP, units sold, breakeven, or whatever you need to measure. Your gages tell you what you’re looking for when you open up the hood and take out the wrench.

So, tell me what’s on your business dashboard?

For a free no-obligation chat on building a business dashboard you can’t live without, call Merra Lee Moffitt, profitability coach and CFP®. She spends all day, everyday guiding business owners reaching their financial dreams and goals by capturing small business profits. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.