You Need Meat and Gravy

Sydney Outsourced CFO Thomas Taylor - Sunday, June 03, 2018

These days, for most businesses, it's all about recurring revenue.

A lot of Real estate agents aim to fund their basic operating expenses from "Rent Roll", commission on property management. Property sales are money on top. A lot of recruitment agencies aim to pay the bills with fees from ongoing temp placements. PR, marketing and digital agencies love retainers and ongoing contracts for the same reason. That lovely feeling of knowing there is enough cash coming in each month to pay the bills before you sell anything new.   

The most valuable and successful businesses I've seen have been built this way.

Having said that, make sure you have some potential for upside sales. One off pieces of work to boost returns for all the stakeholders, and you should share it around. Makes working life a bit more fun as well.

Try to take measured risks - skew towards this type of work when times are good, and step it back when things are tight. Back to your basics.

You should track revenue and direct costs separately in your operational reports and P&L.

Life ain't all gravy, but it's nice sometimes.  

 

 

Photo by John Cameron on Unsplash


 

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