Finance and Economics
Financial model, break-even point, profitability and costs. Profit is the result of calculated decisions.
Common requests:Revenue is growing, It's unclear which products, The report shows a profit
Services in this area
4 services
01Finance and Economics · 01
Financial Model
A scenario model of revenue, costs and cash flow. It shows the price of decisions before they're made.
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02Finance and Economics · 02
Break-even Analysis
The threshold below which the business loses money, and the safety margin above it. In units and in money.
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03Finance and Economics · 03
Profitability Analysis
Which products, customers and channels create profit and which eat it. Average profitability hides loss-making segments.
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04Finance and Economics · 04
Cost Optimization
Cutting what's unnecessary without destroying the ability to earn: costs judged by reversibility and their link to results.
Learn moreWhat people come with
Does this sound familiar?
- Revenue is growing, but there is no more free cash.Situation 01Profit is the result of calculated decisions.
- It's unclear which products, channels or customers are loss-making.Situation 02Profit is the result of calculated decisions.
- Discounts and expenses are approved without calculating the consequences.Situation 03Profit is the result of calculated decisions.
- The report shows a profit, yet cash gaps happen regularly.Situation 04Profit is the result of calculated decisions.
The core idea of this area
Profit is the result of calculated decisions.
The self-assessment for this area checks three things: whether the numbers can be trusted, whether you know the economics of a single customer and whether you can see cash beyond the current month.
- 01Unit economics
- 02Reliable records
- 03Cash cycle
- 04Price and margin
- 05Management data
How we see it
The economics of a single customer decide whether you can grow at all: if a customer doesn't pay back, scale multiplies the loss. The second question is the cash horizon.
Profit and cash live on different timelines, and a profitable company can stall because of a cash gap. That's why we start with seven numbers and a 13-week payment calendar, and build complex models later.
When this area won't help
- This isn't bookkeeping. Bookkeeping is handled by a separate area, Accounting and Financial Records.
- We don't give investment advice and don't forecast the market.
- We don't build a model on numbers that can't be trusted. We check the records first.
Questions
Where do we start if there is no management accounting?
With the seven numbers of single-customer economics and a weekly payment calendar 13 weeks ahead. That's enough to stop making decisions blind.
Why does a profitable business have cash gaps?
Because profit and cash are recognized at different moments: payment terms for customers, inventory, loan repayments and investments pull them apart in time. Both need managing.
What does a financial model give us?
A way to calculate a decision before it's made: what happens if demand falls, if you hire, if the price changes. Its main value is that it shows what the business is sensitive to.
How are you different from an accountant?
Bookkeeping answers to the state and follows its rules. We work with management numbers that answer to your decisions. These numbers can differ, and that's normal.
Related articles and case analyses
Unit economics for owners: seven numbers
You don't need a forty-tab financial model to tell whether a business is making money or imitating growth. You need seven numbers and honesty when you fill them in.
How much money will be in the account six weeks from now?
If the answer doesn't come within a minute, that's where to start. The first meeting is free.