If you're building a mission-driven business, there's one particular number you definitely need to check. Understanding this number will quickly pinpoint any issues in your business and determine if you're building a sustainable, profitable venture.

In this episode of Her CEO Journey, we demystify the significance of this essential metric for business vitality: Gross Margin.

Join our host Christina Sjahli as she unveils the power of this metric, teaches you how to calculate it in minutes, and explains what it tells you about your pricing, costs, and overall financial sustainability.

Access the path to informed decision-making and build a thriving business that resonates with your purpose!

Listen and move from panic to power.

Key Takeaways:

• Gross Margin Explained: It's a profitability indicator representing revenue minus the direct cost of delivering your service or product.
• Calculating Gross Margin Percentage: Revenue minus Cost of Goods Sold divided by Revenue.
• Interpreting Your Gross Margin:
  • Below 30%: Potential issues with pricing or cost of goods sold (too high or too low).
  • Too High Cost of Goods Sold: May indicate missing costs or unadjusted pricing.
  • Too Low Cost of Goods Sold: May indicate incorrect pricing not reflecting all costs.
• Resources for Further Exploration:
  • Listen to our Pricing Series (Episodes 160-163) on Her CEO Journey
  • Profit Reimagined's Fractional CFO Services

Profit Reimagined CFO services can be a game-changer when it comes to understanding and optimizing your gross margin and pricing strategy.

A fractional CFO brings deep financial expertise to the table by analyzing your financial data to pinpoint areas where your cost of goods or services sold might be inflated or where your pricing might not be fully capturing your value.

Having a fractional CFO will help you develop strategies to streamline your operations, negotiate better deals with suppliers, and implement data-driven pricing models that ensure you're covering your costs and generating healthy profits.

Episode Highlights:

• [00:54] Introduction to the importance of a single number for business health.
• [01:33] Understanding Gross Margin.
• [02:45] Calculating Gross Margin Percentage and why it is important.
• [03:25] Interpreting Your Gross Margin: What a low percentage tells you.
• [05:20] Resources for further exploration on pricing and financial solutions.

Resources:

• Connect with Christina Sjahli on LinkedIn
• Check out Profit Reimagined's Fractional CFO Services
• Turn your purpose into profit, visit our Website and LinkedIn
• Discover if our Fractional CFO Services are your perfect fit by taking this quiz.

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Each review you write helps us reach more women in business. Your insights are invaluable—share this with your friends and amplify the impact!

Connect With the Profit Reimagined

Ready to turn purpose into profit? Transform your financial strategy and embark on a journey toward a sustainable and thriving business. Schedule a chat with the team today!

Do you ever find yourself feeling anxious, even though your business is profitable?

Perhaps this unease stems from uncertainties about your cash flow – a crucial financial aspect that often confuses many mission-driven CEOs.

Fear not!

This episode of Her CEO Journey serves as your comprehensive cash flow masterclass, equipping you with the knowledge and strategies to confidently manage your business's financial health.

Join our founder, Christina Sjahli, as she delves into practical techniques for closely monitoring your operating cash flow.

Christina will walk you through the art of cash flow management, empowering you to take proactive control of your business's financial well-being.

By the end of this episode, you'll be a cash flow pro, ready to:

• Extend your runway and breathe a sigh of relief.
• Make sound decisions based on real financial data.
• Prioritize effectively and stay true to your mission.

Are you ready to become a cash flow master? Let's get started!

Bonus: We've got a Practical Guide for Busy Founders like you with even more cash flow wisdom and common forecasting mistakes to avoid. Grab it in the show notes!

Key Takeaways:

In this episode, you'll learn:

• Profitability is a crucial indicator of a healthy business, but it's not the only factor for financial stability. Efficiently managing cash inflows and outflows is the secret to maintaining healthy cash flow.

1. Profitability Matters: Profit is important, but it doesn't guarantee a business will have enough cash on hand to operate smoothly.
2. Cash Flow Management is Key: The real "core principle" is in managing cash flow effectively. This involves ensuring a steady stream of incoming cash (inflows) while minimizing unnecessary outgoing cash (outflows).

• The 3 types of cash flow every CEO should understand (investing, financing, and operating - we'll focus on the big kahuna: operating cash flow)
• How to monitor your cash flow and discover your runaway date (the day the well runs dry!)
• The power of cash flow modeling: play "what-if" with your finances and prepare for anything!

Episode Highlights

• [00:54] Cash Flow as a concept and a process
• [01:15] Big mistake: use bank balances to manage cash flow
• [02:44] The three types of Cash Flow: investing, financing and operating.
• [03:38] Three Operating Cash Flow steps
• [04:00] Monitor Cash Flow and find your runaway date
• [04:30] Manage Cash Flow
• [05:30] Model Cash Flow

Resources

• Connect with Christina Sjahli on LinkedIn
• Check out Christina’s Fractional CFO Services
• Explore Profit Reimagined and discover how you can turn purpose into profit: Website and LinkedIn

Enjoyed This Podcast?

Each review you write helps us reach more women in business. Your insights are invaluable—share this with your friends and amplify the impact!

Connect With the Profit Reimagined

Ready to turn purpose into profit? Transform your financial strategy and embark on a journey toward a sustainable and thriving business. Schedule a chat with the team today!

Imagine this: You've built a thriving business, your sales are climbing, and on paper, you're incredibly profitable.

But then, reality hits.

Payroll day arrives, and suddenly you're scrambling to find the cash to cover it. Does this scenario sound familiar?

It's what many founders experience—the profit versus cash flow paradox.

While profit might seem promising, cash flow tells the real story about your business's financial health.

In this episode, our founder and host of Her CEO Journey, Christina Sjahli will clarify the difference between profit and cash flow.

Christina will explain why profit and cash flow don't always go hand-in-hand, and equip you, a mission-driven founder, with the knowledge to use both effectively for wise and sustainable business decisions.

Ditch the financial frustration and join us as Christina reveals the secrets of true financial health for your business!

Key Takeaways:

• Profit (net income): The remaining amount after deducting all costs from revenue. It reflects the profitability of your business model, marketing strategy, pricing, and cost management.
• Cash flow: The movement of money in and out of your business. It tells you about your cash collection habits, supplier credit utilization, inventory levels, and external financing needs.
• Profit doesn't equal cash: Profit is calculated based on accrual accounting (revenue recognized at sale, even if cash hasn't been received), while cash flow reflects actual cash movement.
• Profitability and cash flow are independent: A profitable business can have negative cash flow and vice versa.
• Founders need both: Analyze both profit and cash flow to make informed decisions about your business.

Episode Highlights

• The story behind profit: How a healthy profit indicates a strong business model, effective marketing, and efficient cost management.
• The cash flow conundrum: Why founders might struggle with cash flow despite showing a profit on paper.
• Accrual accounting vs. cash accounting: Understanding the timing difference between revenue recognition and cash receipt.
• Profit vs. cash flow stories: How each metric provides valuable insights into your business health.
• Why both matter: The importance of using both profit and cash flow analysis for effective business management.

Resources

• Connect with Christina Sjahli on LinkedIn
• Check out Christina’s Fractional CFO Services
• Explore Profit Reimagined and discover how you can turn purpose into profit: Website and LinkedIn

Enjoyed This Podcast?

Each review you write helps us reach more women in business. Your insights are invaluable—share this with your friends and amplify the impact!

Connect With the Profit Reimagined

Ready to turn purpose into profit? Transform your financial strategy and embark on a journey toward a sustainable and thriving business. Schedule a chat with the team today!