Tonya is in the education consulting business and has a staff of 10. Her goal at the top of the year was to grow to $1.5 million and generate more than 15% profits.. She’s on track to do that, but high costs and the overall economic slowdown will make it a struggle to get there.

So we are doing a mid year business performance review to figure out what can be tweaked and adjusted, so Tonya can finish the year strong and meet both the revenue and profit goals.

Here are some of the metrics we’ve been looking at, which you should be looking at also. 

Monthly cash burn – Review your bank statements and tabulate how much cash was used to operate the business, pay yourself, repay debt, and other items for the first six months of the year. That will provide a good indication of how cash will be used in the second half of the year so you can forecast the revenue needed to cover the costs.

Monthly revenue – Observe monthly revenue by income stream and customer. See what the highest revenue generating services or products are and focus your marketing efforts on promoting them for the rest of the year. Diversify your customer base if you notice much of your revenue comes from a few of the same customers. Investigate which old customers have not yet made a purchase this year and reach out to them directly. Adjust your 2023 revenue forecast if economic and market conditions have changed from the beginning of the year so you know how much funds you have to spend and invest in the business.

Subscription costs & auto-renewed expenses – Those are sneaky expenses that if left unchecked can add up on your business credit card or reduce your cash flow.  Look back at the last six months at subscriptions, insurance costs, utility bills and those other fees that are automatically incurred and see if there are any expenses you can remove, reduce or correct.

Accounts Receivable # of days – If you have outstanding unpaid invoices or need to invoice more clients, pay attention to how long it takes certain clients to pay so you can control how you spend your cash. If customers tend to pay beyond 60 days, include terms in the contract that allows you to apply a late fee. Conversely offer payment plans or discounts for early payment.

Debt repayments – If you are using debt (merchant cash advances, bridge loans, traditional loans, credit card) to fund your business, be thoughtful about how much cash is leaking out of your business to repay debt.  Speak to your lenders and ask for options to stagger payments or reduce the regular payments but extend the repayment period.

Contractor payments – Review contractor bills over the past few months and make sure the fee is correct for services requested and rendered.

Physical inventory numbers – If you have products or inventory, do a mid-year physical inventory count to understand the value of what you have and identify items to be sold to generate cash.

Estimated quarterly taxes – Now that you are halfway through the year and have some idea of how much you’ll make by year end, have your CPA re-calculate the next two estimated quarterly tax payments.

These are just some of the metrics we used to assess Tonya’s performance first half of the year. Now she knows what adjustments to make in the second half.

You can do the same!

If you need support diving into your numbers so you can meet your revenue and profit goals, our team at FinCore is here to support you.

Click Here to Schedule a Financial Strategy Call

Tricia Taitt is the CEO and Chief Financial Choreographer of FinCore. She holds an M.B.A from The Fuqua School of Business of Duke University, and a BS in Economics with a Finance concentration from The Wharton School at the University of Pennsylvania. For over 20 years, she’s been a finance professional. Half of the time was spent working on Wall Street while the other half was spent in the trenches side by side with small business owners. As a result of working with FinCore, clients have been able to take control of their numbers and feel more confident in their ability to make decisions, while increasing profits by 10% and building a cash stash to invest in growth. Follow Tricia on LinkedIn and Instagram.