10% Net Profit is the New Breakeven
In this video, you’ll learn how the following affect net profit and cash flow:
0: 25 Business income taxes for “pass-through” entities
1:44 Loan payments – interest and principal
2:57 Replenish cash reserves
3:37 Replace old assets to maintain current sales level
4:31 Fund future growth plans
5:50 The real cash balance is NOT the money leftover to pay the owner’s salary. Your salary is a high priority and should be included in the total expenses used to calculate net profit.
6:45 Two breakeven points, so your business does not run out of money – profit breakeven and cash flow breakeven.
7:09 Compare to only 6% net profit
8:39 What if net profit is only 3%
9:19 Classic sign you are stuck in a busy but broke cycle.
10:50 Benefits of using 10% net profit as your new breakeven point.
11:04 A truly profitable business generates the cash flow needed to not only operate but also plan for emergencies and save for the future.
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