7 Proven Steps to Superior Cash Flow – In Just 7 Minutes with Jeff Prager

Resources/Links:

• Checkout Jeff’s Freebie: Email Jeff at jkprager@gmail.com, and he’ll get you your cash flow calculator.

Summary

Would you like more cash in your bank tomorrow than you have today?

Jeff Prager is the founder of Cash Flow Engineering, LLC. He is a retired CPA, author, speaker and former CEO/CFO, founder, and owner of several successful multimillion-dollar companies. He was one of the founders of Ashworth Golf Clothing, the CFO/partner of a large land development company and the owner of Strauss Homes, which was once rated as the second largest privately-owned home builder in Colorado and in the top 100 privately-owned companies of Colorado (2003).

In this episode, Jeff shares how to develop a system for always staying cash flow positive.

Check out these episode highlights:

• 01:54 – Jeff’s ideal client: “I work best with companies and businesses or organizations that want to generate more cash flow, booster cash reserves, fund their growth and build the cash cow, and possibly even make their company attractive to a buyer.”
• 02:15 – Problem Jeff helps solve: “The problems we solve are generating a cash plan so you can finally get control over your cash and damn near guarantee that you’ll have more cash tomorrow than you do today.”
• 03:24 – Typical symptoms that clients do before reaching out to Jeff: “When it comes to cash flow, business owners almost exclusively focus on symptoms and not solutions. For instance, they’re always chasing cash. And at the end of the month, there’s less cash in the bank than they had the last month, or they have one good month and it’s followed by three bad months because they don’t have any momentum.”
• 04:59 – Common mistakes that people make before they find Jeff’s solution: “They mistake revenue and/or profit for cash flow. Think about it, when you sell a deal, the money isn’t yours until you collected it.”
• 06:57 – Jeff’s Valuable Free Action(VFA): “There are seven key numbers that can massively change the direction of your company. They are your number of leads, your conversion rate, your customer retention rate, the number of transactions per customer, the average price per transaction. The first five numbers generate top-line growth. But then you got to control cost, your variable cost, as a percentage of gross revenue, and your fixed costs which are nothing more than salaries, marketing costs and overhead. So, your first step is to triangulate on your seven key numbers over the next 90 days, because once you focus on these numbers, the magic happens. Unequivocally, just starting this process can be the best thing you ever did for yourself. And don’t worry if it’s not perfect, it will never be perfect.”
• 05:17 – Jeff’s Valuable Free Resource (VFR): Checkout Jeff’s’s Freebie: Email Jeff at jkprager@gmail.com, and he’ll get you your cash flow calculator.
• 08:30 – Q: What’s the simplest way to manage your business? A: Ask yourself,’Am I hitting my goal?’

Tweetable Takeaways from this Episode:

“When you sell a deal, the money isn't yours until you collected it.” -Jeff Prager Click To Tweet

Transcript
(Note, this was transcribed using a transcription software and may not reflect the exact words used in the podcast)

Tom Poland: 0:09

Hello everyone and a very warm welcome to another edition of Marketing The Invisible. My name is Tom Poland, joined today by Jeff Prager. Jeff, a very warm welcome, sir. Where are you hanging out?

Jeff Prager 0:20
I’m hanging out outside of Denver, Colorado, in the USA.

Tom Poland: 0:23
Sounds beautiful. Sounds beautiful. Cold winter there?

Jeff Prager 0:26
No, it’s been a little snowy, but it’s kind of mild.

Tom Poland: 0:30
Mild, probably global warming. Well, we’ve better not get into politics and climate change. I’ll go straight into your bio, Jeff.

Tom Poland:0:37
For those of you don’t know Jeff, he’s the founder of Cash Flow Engineering. And Jeff is one of those people that has the ability, and I’m not reading from his bio now, just one of those rare people that has the ability to take something that’s extraordinarily complex, and distill it into something that’s simple, but still incredibly effective. And it’s probably because he’s spent 40 or 50 years as a CPA, accountant, for those of you in Australia, New Zealand. Author, speaker, and former CEO and Chief Financial Officer, founder and owner of several successful multimillion-dollar companies.

Tom Poland: 1:10
So, you’re going to be listening to someone who’s a genuinely successful entrepreneur, the rich voice of experience. He was one of the founders of Ashworth Golf Clothing, a very large company, and the CFO/partner of a land development company, the owner Strauss Homes, which was once rated as the second largest privately owned home builder in Colorado and in the top 100 privately owned companies of Colorado.

Tom Poland: 1:37
So pretty extraordinary entrepreneurial journey you’ve had, Jeff. Our subject today is, “7 Proven Steps to Superior Cash Flow.” Jeff’s going to show us how to do that in just seven minutes. Your time starts now, sir. Question number one is, who is your ideal client?

Jeff Prager 1:54
Well, Tom, thanks. I work best with companies and businesses or organizations that want to generate more cash flow, booster cash reserves, fund their growth and build the cash cow, and possibly even make their company attractive to a buyer.

Tom Poland: 2:10
Thank you, sir. Question number two, six and a half minutes left, what’s the problem you solve?

Jeff Prager 2:15
Well, first, let me give you a mindset. Imagine if you could wake up every Monday morning, and while sipping a cup of coffee, open your cash flow report and feel a smile spread across your face as you see your cash balances well. So, in answer to your question, the problems we solve are generating a cash plan so you can finally get control over your cash and damn near guarantee that you’ll have more cash tomorrow than you do today.

Jeff Prager 2:41
Number two, understanding your key numbers in the simplest way possible, so that you can manage your company in less than 30 minutes a week. But as to solve these cash problems, you’re going to isolate your most important numbers so you know exactly which numbers to look at, when to look at them, how to interpret them, and what to do with them. And also, at the same time, get your management team aligned so that you finally have the time back to do the things that really matter to you and your wife, and you become confident that your business can run without you.

Tom Poland: 3:13
Thank you, sir. Question number three, five and a half minutes left, so if someone’s hasn’t got a handle on the cash flow, what are some of the symptoms they are going to be experiencing? And how do they know they need something like this?

Jeff Prager 3:24
Oh, this is a great question. Because when it comes to cash flow, business owners almost exclusively focus on symptoms and not solutions. For instance, they’re always chasing cash. And at the end of the month, there’s less cash in the bank than they had the last month, or they have one good month and it’s followed by three bad months because they don’t have any momentum.

Jeff Prager 3:45
They don’t look at their financial statements or their key performance indicators. And that’s because there’s a bunch of mindset crap going on related to the numbers and math that get in the way. But let’s face it, financials. statements and KPIs might as well be written in Greek, and this is what I learned as a CPA, to compound that. For most people, numbers give them a headache. And frankly, this is true because financial statements are written in a language we, as business owners, understand.

Jeff Prager 4:18
Then companies haven’t been taught how to look at their whole business funnel, and end up focusing on just parts of it. And their businesses are moving along cash isn’t keeping up and they keep grasping for straws. Deep down, they know if they keep running the business the same way, they can lose everything. And finally, they spent so much time focused in the business, that they’ve neglected the things that really matter. And let’s face it, until you have a cash cow, running a business isn’t as much fun as it could be.

Tom Poland: 4:49
Thank you, sir. Question number four, and four minutes left, we’re in neat and tidy. What are some of the current mistakes that people make when they’re trying to solve their cash flow problem before they find your solution?

Jeff Prager 4:59
I love this question. They mistake revenue and/or profit for cash flow. Think about it, when you sell a deal, the money isn’t yours until you collected it. Have you ever gone to the grocery store and tried to pay with your accounts receivable? Same thing about running a business. Or they hop on buzzwords like rolling revenue, top line growth, boosting profit, and end up looking at the tip of the iceberg instead of what’s underneath the water.

Jeff Prager5:27
And they aren’t aware that there are five things that never show up on your profit loss statement that can suck the cash right out of your business. First of all, how much individual taxes they’re paying related to the business. Second, the purchase of assets, the increase in inventory or equipment. Three, repayment of debt does not show up on your P&L. Your owner’s withdrawals don’t show there. And whatever cash you need to fund the growth of the business isn’t showing up.

Jeff Prager 5:57
And then they deceive themselves by saying their accountants are going to help them, tell them what’s going on. The problem is most accountants have never even run a real business themselves. To compound the problem, they focus on saving new taxes without regard to helping you make more money.

Jeff Prager 6:15
The fifth problem I see is that owners blindly create systems, which is another buzzword, without having specific measurable goals for these systems. And let’s face it, systems created without context are anemic. So, here’s something I learned the hard way, growth doesn’t solve cashflow problems, cash solves growth problems. And by focusing on anything but cash, you’re really setting yourself up for failure.

Tom Poland: 6:48
Right. Thank you, Jeff. Three questions left, two minutes left. What would be one valuable free action that someone could take that’s going to take them a step in the right direction?

Jeff Prager 6:57
There are seven key numbers that can massively change the direction of your company. They are your number of leads, your conversion rate, your customer retention rate, the number of transactions per customer, the average price per transaction. The first five numbers generate top line growth.

Jeff Prager 7:15
But then you got to control cost, your variable cost, as a percentage of gross revenue, and your fixed costs which are nothing more than salaries, marketing costs and overhead. So, your first step is to triangulate on your seven key numbers over the next 90 days, because once you focus on these numbers, the magic happens. Unequivocally, just starting this process can be the best thing you ever did for yourself. And don’t worry if it’s not perfect, it will never be perfect.

Tom Poland: 7:44
Thank you, sir. One minute, two questions left, can we direct people to a landing page?

Jeff Prager7:49
I’m going to do better because a lot of people get confused with the address. Download my seven key number calculator now and focus on the one number that could create the most massive change in your cash flow. And then you focus on other numbers. So, email me directly, I’m going to give you my easiest email, J-K-P-R-A-G-E-R, jkprager@gmail.com, and I’ll get you your cash flow calculator.

Tom Poland: 8:18
I’ve had a look at this, it’s fabulous. Thank you. So, jkprager@gmail.com, and you’ll get the seven key numbers. 15 seconds left, the one question I should have asked you but didn’t? And the answer very quickly, please.

Jeff Prager 8:30
At one point, I managed 156 companies at the same time and did it in less than 10 hours a week. So, the one question you should have asked is, what’s the simplest way to manage your business?

Tom Poland: 8:39
You got 2, 3 seconds to answer it.

Jeff Prager 8:41
Am I hitting my goal? Thumbs up, thumbs down.

Tom Poland: 8:45
Thank you, Jeff Prager.

Tom Poland: 8:46
Thanks for checking out our Marketing The Invisible podcast. If you like what we’re doing here please head over to iTunes to subscribe, rate us, and leave us a review. It’s very much appreciated. And if you want to generate five fresh leads in just five hours then check out www.fivehourchallenge.com.