Can The Statement Of Cash Flows Tell Change In Capital Small Business Owners: The Building Blocks to Increase Profits

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Small Business Owners: The Building Blocks to Increase Profits

The fundamental building blocks of any business are processes (procedures/policies), people (employees), customers and resources (ideas/capital). Leaders who strengthen and understand each of these building blocks build their business. Those who weaken or neglect these building blocks find themselves with drops in both the top and bottom lines.

Believe it or not, organizations can sometimes forget that creating and delivering great products and providing great service is their primary goal. Organizations keep inefficient processes in place because it is comfortable, safe and familiar. Managers must regularly take time to define and redefine their processes, monitor errors and poor service, and make improvements to solidify these (5) main building blocks.

The mindset of the owner

You have to make a mental shift from running your business as a self-employed job/good employee to building a business that you can one day sell, grow or passively own to fund your retirement.

This means that you are constantly reminded that you are only a temporary producer and that your business must eventually replace you from day-to-day operations.

Be clear about your mission

There’s a reason you started a business and quit your job (or didn’t try to find a new one). Why are you doing this? Keep in mind that your personal mission and your company’s mission can be different, as long as they are aligned and can co-exist. You’ve written your mission statement in your business plan and it’s gathering dust on the bookshelf.

Network and get a mentor

Get a business consultant or coach. It doesn’t have to be someone professional, just someone who can share experiences, bounce ideas off of and tell you when you’re wasting teams, money and mindsets.

Get your business off the road to nowhere

When the money runs out and the momentum fades, you’re left with the day-to-day running of the business, that’s when you learn how to make your business run smoothly. It can get difficult because sales are slow and you’re learning how the business actually works, acquiring customers, marketing products, understanding how changing processes and products affect your finances, and every idea you have doesn’t automatically work as you imagine it would increase. Profit.

At some point in running your business, you will likely experience feelings of burnout or uninspired. Work-life balance is important; there is a truth that you work hard and play hard to relax. Reading a daily devotional and taking a 30-minute walk each day can help relax the mind, etc.


Customer acquisition is expensive, in order to acquire new customers companies must effectively target, market and convince customers to try their product or service.

Many business owners don’t take the time to figure out who their target customers are. What are the likes, dislikes, needs and wants of their target customers? What types of media do they use? What is the cheapest way to get to them? How much is the target customer willing to pay for their products or services? Where and how should we sell our products?

Remember that it is cheaper to keep a customer than to acquire new ones.

Master the art of collaboration

Being engaging is important in every part of your business, whether it’s communicating through email marketing, social media, blogs, videos, and other commercial formats.

Get social media attention

A social media marketing plan should include Instagram, Facebook, Twitter and a company website to communicate with the customer. Use the same theme, images (banners) and similar products.

Understand the importance of business logos

It’s the first thing potential customers will notice about your brand, make sure it’s presentable, professional and polished. Make sure the logo meets the needs and wants of your customers.

Create an experience for your brand

Create a fun and informative environment to solve your customers’ problems

The right customers are more important than most customers

Most business strategies are about getting money by any means necessary to get the most customers. The problem is that you achieve all this at the expense of quality, profit and sanity. The right customers will make your company work better, build a better reputation, generate more profit and retain better employees.

Focus on your goal, objectives, theme, and above all profitability

Don’t try to be all things to all customers. Specialize in solving the problems of your ‘target audience’ and have fun doing it. Even the biggest companies do their best when they focus on keeping it ‘main main’.



They are the actions and applications that managers and teams perform to achieve desired results.

Managers need to take a step back to review their processes—individually or in cross-functional teams—to eliminate inefficiencies and optimize performance, either annually or as the market changes.


Systems are reliable processes and procedures that enable your business to consistently produce great results for your customer and profitability for you.

Documenting automated processes can increase your company’s efficiency and reduce costly errors; checklists that your employees follow to ensure that all orders are shipped correctly; an onboarding process for all new customers when you join; and standardized contracts that you use with all new hires and vendors.


Controls are processes, procedures and safeguards that protect your business from uninformed or inappropriate decisions or actions by any team member. They are also your company’s way of ensuring that critical work is done on time and in the right way.

There are (4) main types of business controls:

  1. Checklists/Visual controls of business processes

  2. Indicator metrics/business performance measures by function (KPI)

  3. Built-in internal quality control — product/process quality check

  4. Policy and Procedures — written/measured

Scalable solutions

The systems (using excel and quickbooks), processes and procedures that worked for a $1M/year business are not sufficient for a $10M or $25M business.

Scaling your business requires building it in such a way that your business model and systems can be deployed and replicated on a much larger playing field based on increased sales of ordered/processed products.

For example, choosing a database solution or third-party fulfillment should be based on actual growth rates, not potential or forecasted sales.


Cash flow and financial statements are your ‘lifeline’.

  • Learn how to make and lose money. Understand income statements and what processes and procedures you associate with improving the ‘bottom line’ of your business.


Company financials in addition to the measurement tools needed to manage and track finances and assets. Do you have the knowledge, competence and skills necessary to use these tools to increase your profits?

SMEs need to master the ability to manage their working capital and cash flow. Every company has access to the profit and loss, balance sheet and cash flow statement. Management either uses accounting software or someone prepares reports for management.

How well does senior management understand the company’s finances and how they relate to their strategy? Do these managers understand which parts of the business need investment, where they can be cut, and why?

Managers must take the time to learn the relationships and interdependencies between their tools and the reports they use to maximize their resources.

Teamwork is created by DreamWorks

You can’t do it alone. It is crucial to ensure that your business does not depend on the presence of one individual.

Even Steve Jobs and Bill Gates needed a great team to help them execute, deliver and do everything behind the scenes to bring their vision to customers.

Surround yourself with the best people you can find. Hire people who are smarter than you, then step back and let them do their work. Remember, championships are won by teams, not athletes. Employees are hired either to increase revenue or to reduce costs in order to improve profits, for no other reason.


People are not your greatest asset; they are real people. The wrong people are your biggest disaster. Average people are your biggest drain on resources.

Leaders must strive to create learning organizations in which the organization is always striving for improvement. An organization where employees feel valued and contribute according to their abilities.

Effective leadership will create an organization where personal growth is expected and rewarded, and employees are challenged and satisfied.

Employees who are motivated by the company’s vision and mission will create profitability, while disillusioned employees will cause losses.

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