Thryve Group LLC’s Post

Last week, we took a look at sales assumptions and why they are so important to your forecasting. Technically, you should have a basic assumption for every financial statement item in order to project your cash flow. If the particular expense is a steady amount, the assumption can be as simple as "same as last year" Today, we’re going to take a deeper look at 2 important expenses: • Cost of Goods: These expenses are the cost to manufacture your product or deliver your services. The total cost will often fluctuate together with sales volume. Other than the correlation with your sales assumption, consider these other questions: are raw materials or wages for production personnel increasing at a certain rate over the forecast period? is our efficiency going to improve or decline as a result of changes in the sales volume? • Payroll cost: Payroll costs includes both wages and payroll taxes. The payroll taxes would often increase in line with wages. Here are some questions to consider: Do you plan to hire any new employees over the next year? Pay raises or Bonuses? Will you choose to invest in more people or technology to meet changes in sales volume? Take the time to document your assumptions. You will then be able to understand your rationale when you compare your actual numbers vs. projection or prepare the projection in the following year. Business owners often concentrate on the operating profit impact to cash flow forecasts, but forget about the capital asset and financing changes. Next week we are going to dive into the importance of considering those assumptions in your calculations. #BusinessForecasting #FinancialPlanning #SmallBusinessGrowth #EconomicIndicators #BusinessStrategy #ThryveGroup

As a business owner or manager, do you regularly review your numbers? Do you know how it could help commercial performance? Using your financial information, a monthly check in to compare your numbers would answer these questions: 1. Why did sales fluctuate so much on a month-by-month basis? 2. Why was payroll higher in July than June? 3. Why have the sales margins changed compared to last month/year? Was it because of more sales, a change of sales price, less direct costs, or a mix? 4. What is included in the marketing cost for the year to date, and are we getting more sales as a result? 5. Are we going to achieve our targets? How do we make more money? 6. How do we attract and retain the right employees? Know your numbers for £250 + VAT per month (no ongoing commitment). To discuss how this will benefit you, contact Laura, 07495 648054, [email protected]. #knowyournumbers #financialhealth

#1 Metric — Gross Margin Dollars/Total Compensation Please ask your accountant/CFO to give you the total gross margin dollars divided by total compensation (including benefits) for 2019, 2022, 2023, and YTD (I skip the pandemic). Because of inflation, this number has been plummeting for many firms. Get this number heading in the right direction quickly. Call us if we can help.

Absolutely insightful metric to highlight! Understanding the relationship between gross margin dollars and total compensation is crucial for evaluating a company’s operational efficiency and financial health. The inflationary pressures over recent years have indeed skewed many traditional financial ratios. By analyzing this specific ratio across different periods, we can gain a nuanced understanding of how rising costs are impacting our gross profitability relative to compensation expenses. Reviewing this metric can assist with benchmarking and the ability to see and analyze trends, which are critical for future planning in a business. #Operationalefficiency #Financialhealth #grossmargin

Powerful Metric, thanks for sharing this Verne Harnish. I work with a lot of service-based businesses and most have traditionally tracked Revenue per FTE. Based on your suggestion, I have been nudging clients to move towards Gross Margin per FTE instead, which has been a game changer. Let's see what else shows up when we start tracking and reviewing Gross Margin/Compensation for 2019, 2022, 2023...

Every potential purchaser has a budget! And that means in their research they likely want to know a price. How does your price compare to their budget? How does your price compare to other options they’ve looked into? How does your pricing work, how do you come to your figure? It seems people these days want to know all this before they talk to any sales person too. Check out this clip from Marcus Sheridan’s talk at INBOUND last week referencing Baron Payroll. Scorecarding and calculation tools to soon be pre-eminent on websites. #Price #Fees #Pricing #budget #budgets #Websites #Inbound #Inbound24 #Inbound2024

Salaries and headcount forecasting has always been tricky. Not anymore. Bojan Radojicic gives you the template to dive right in and set up a dynamic forecasting model. #fpa #forecasting

FTE Forecast template for anyone who wants to start headcount planning or looking for a different approach. Simplified calculation for not so simple activity .

Great way to Salaries and Headcount forecasting

Are you constantly scrambling to cover payroll or dipping into credit just to keep things running? It’s a clear sign your business is bleeding cash. Here's how you can fix it before it's too late. 👇 The signs can creep up on you—overdue invoices, unsold inventory piling up, or falling behind on vendor payments. It’s not just frustrating, it’s a wake-up call that your business might be bleeding cash. The good news? You can fix it. Tighten your payment terms, clean up inventory, and have real conversations with your suppliers to negotiate better deals. These small shifts can make a huge difference. Cash flow isn’t just about survival—it’s about giving your business room to breathe and grow. Take action now, and you’ll thank yourself later. We’ve all faced these challenges, but with the right steps, you can turn things around. 💼 Ready to plug the leaks? Take control of your cash flow today and set your business up for long-term success. #CashFlowManagement #BusinessFinances #SmallBusinessTips #FinancialHealth #BusinessGrowth