1. OPEN SOURCE MANAGEMENT
Financial Management 1

2. Questions? On money On break even Regarding profits and profitability
What would you like to know regarding money and company management?
Did you read article we sent you?

3. THE MONEY YOU HAVE TODAY DEPENDS ON THE VALUE YOU HAVE GIVEN TO THE MARKET IN THE PAST

4. On what it does not depend to become wealthy

5. To think big/try 
Be a great salesperson 
To train in a unique, extraordinary technology 
Overzealous financial control 
Tax Planning 
To associate oneself with strong (and ethical) partners 
Persist 
Having the right idea 
To be a good person 
To promote one’s company
Be ethical 
Give a good service 
Be positive 
Attend training 

6. 2. Innovate the Business Model and not the Product
1. Desire and not passion
2. Innovate the Business Model and not the Product
3. What do you know that others don’t?
4. Money are not important. What is your GRAND project to change the world?
5. Desire to be the number 1 in one’s industry
6. OVERZEALOUS financial control on the numbers and on the financial aspects
7. Success begins at home

7. 8. Surround yourself with great minds and get away IMMEDIATELY from people who criticize or who do not believe in you.
9. Take decision FAST: ready, fire, aim. Dont be afraid
10. Integrity and personal value. Faith.
11. Be willing to acquire at any cost extremely valuable knowledge
12. Build a network of allies
13. Predict the future of your industry

8. 1) They bring you the quarterly numbers and the P&L is not so good… What do you do?
a) Nothing, we dont keep track of numbers in our center…
b) We like to see the bright side of things. We will fix the numbers in the future…
c) Wow, numbers are REALLY bad…

9. 2) You need 70. 000 Leva but you realize that you have 70
2) You need Leva but you realize that you have Leva to collect from clients in the next three months. What do you do?
a) Fantastic. This takes care of it. Now I just have to find some bank to give me a cash advance.
b) I get immediately my secretary to collect them all.
c) I realize I have a problem because money will not be enough.

10. 3) The montly financial numbers show a small loss …
A) You dont have to worry. If you work well money will arrive…
B) We have to keep our cool. We will find a way to fix the scene and make money…
C) We need to get mad and as needed change everything.

11. GOOD AND BAD BUSINESS OWNERS
A) They convince themselves of the fact the numbers are still not good, even though they maybe are ok
B) They plan for the unexpected
C) They overdramatize the numbers when they are so-so. They say «they are terrible»
A) They convince themselves that all in all numbers are good, even when they are bad
B) They dont consider «the unexpected» when planning, but they hope lucky strikes will happen
C) They try to see the positive sides in numbers that are, truly, terrible

12. Creative and Positive Attitude + Overzealous Control

13. OPEN SOURCE MANAGEMENT
THE GOAL 13

14. Passive (Automatic) Income
Royalties (books, franchises, licenses)
Bond coupons
Pensions
Rental income (apartments or companies)
Interests
Company Profits (Dividends)

15. Passive Income > Life Style

16. Exercise

17. a) Pay profit sharing (dividend)
Make company flourish!
a) Pay profit sharing (dividend)
a1) Invest part of the capital outside the center
b) Build a system that can be duplicated
b1) Build passive income for the company

18. A company generates only the money it thinks it may need

19. BUSINESS OWNER MONEY MANAGEMENT
OPEN SOURCE MANAGEMENT
BUSINESS OWNER MONEY MANAGEMENT 19

20. People Service Money

23. What didn’t work?

24. 0) When cash decreases two months in a row there is ALWAYS a problem…

25. RULE 1 MEASURE MEASURE MEASURE

26. Delegate everything except Command

27. It is not your external accountant or a Financial Director that will help you make great profits.
You need to have a strong internal person in accounting.
In our company a part time person manages three companies

28. Measure sales every month

29. Every month measure Profit

30. Every month measure cash flow (liquidity on hand)

31. RULE 2 Look at the brutal facts about costs Know the ratio fixed costs/total income

32. COSTS = BRUTAL FACTS
1) Make a full list of the monthly fixed costs of your company.
2) Establish the incidence they have on the average monthly income of the last four months (VAT excluded).
3) Every good financial strategy begins there.

33. Definition of “Fixed Cost”
Fixed Costs are all those costs your company has whether it works or not.

34. Study the attacched list of fixed costs for a company and ask any question you may have

35. Exercise: lets make together the full list of fixed costs for our companies or for a beauty center

36. Pay back Debts
You have to add to your fixed costs a monthly amount to pay back debts you have with vendors, financial institutions, back taxes, etc.
In how long time would you like to pay back your debts?

37. Exercise 1: company sells paint
Calculate the percentage of fixed cost on the revenue for company number 1
Make an analysis of its financial health

38. COMPANY 1
Company buys at 50 and sells at 100.
Sales Commission 10%
euro owed to banks
euro bills overdue to vendors

39. How to calculate the ratio of fixed costs on the average monthly income
(Average monthly Fixed Costs/Average montly Income) x 100= ratio of fixed costs on the income

40. Fixed Costs = ( / ) x 100= 37,16%
Bills = euros – pay back in 10 years = yearly
In 8 months = euro
New fixed costs = 40,42%

41. ANALISYS (buys at 50 resell at 100)
Sales Price = 100
Fixed Costs = 40,42
Sales Commission = 10
Cost of Product = 50
=======================
Total = 100,42
Every product sold the company loses 0,42%

42. ANALISYS (buys at 50 resell at 120)
Sales Price = 120
Fixed Costs (40,42%)= 48,50
Sales Commission = 12
Cost of Product = 50
=======================
Total = 110,50
Every product sold the company makes a 9,50% profit

43. HEALTH CLINIC OR BEAUTY CENTER
Sales
Minus Fixed Costs
Minus Variable Costs
Commissions
Bonuses
Costs of Dispensable products
Cost of external specialist paid on commissions
= Profits /Loss

44. BOOKS OF AUTHOR JONES 
SALES PRICE EURO
FIXED COSTS (45% OF SALES) EURO
COST OF PRODUCT 11 EURO
COMMISSIONS (10%) 2 EURO
=====================
FINAL RESULT EURO (today everytime the company sells a book of this author, it loses 2 euro)

45. DICTIONARY BUTTERWORTH
SALES PRICE EURO
FIXED COSTS (45% OF THE SALES) ,65 EURO
COST OF PRODUCT 7 EURO
COMMISSIONS (10%) 1,7 EUR
=====================
FINAL RESULT ,65 EURO (today everytime the company sells a book of this author, the company makes 0,65 euro)

46. AUDIO BOOKS JONES:
SALES PRICE EURO
FIXED COSTS (45% OF THE SALES) ,75 EURO
COST OF PRODUCT 5 EURO
COMMISSIONS (10%) 1,5 EURO
=====================
FINAL RESULT ,75 EURO (today everytime the company sells a book of this author, company makes 1,75 euro).

47. BOOKS OF AUTHOR GREEN
SALES PRICE EURO
FIXED COSTS (45% OF THE SALES) ,1 EURO
COST OF PRODUCT 6 EURO
COMMISSIONS (10%) 1,8 EURO
====================
FINAL RESULT ,1 EURO (today everytime the company sells a book of this author, the company makes 2,1 euro)

48. RULE 3 TAX PLANNING (Predict how much taxes you will have to pay)

49. RULE 4 TREAT ALL EXPENSES LIKE AN INVESTMENT

50. BEANS THEORY
Treat any expense like it is an investment. What are you buying with it?
Dont buy people’s time, buy results

51. LIST OF MONTLY COSTS Receptionist 1,000 Leva per month
Marketing Expert: 2,000 Leva per month
Accountant 470 Leva per month
What are you buying with it? Is is the right price? Is this a good deal?

52. No fixed salaries but fixed plus commissions
Bonuses
Is there a person in the company that would have the potential to make you a lot of money?
No fixed salaries but fixed plus commissions

53. Boss we need more money for marketing …

54. 5) Invest NOW in high return items

55. Coins
Knowledge
Human Resources
Investments that generate passive income

56. 6) RELATIONSHIP WITH MONEY

57. Invest in the Universe Bank Account

58. You need to have a great goal
Proverbs 3:9-10 New International Version (NIV)
9 Honor the Lord with your wealth,     with the first fruits of all your crops; 10 then your barns will be filled to overflowing,     and your vats will brim over with new wine.

59. 2. Innovate the Business Model and not the Product
1. Desire and not passion
2. Innovate the Business Model and not the Product
3. What do you know that others don’t?
4. Money are not important. What is your GRAND project to change the world?
5. Desire to be the number 1 in one’s industry
6. OVERZEALOUS financial control on the numbers and on the financial aspects
7. Success begins at home

60. 8. Surround yourself with great minds and get away IMMEDIATELY from people who criticize or who do not believe in you.
9. Take decision FAST: ready, fire, aim. Dont be afraid
10. Integrity and personal value. Faith.
11. Be willing to acquire at any cost extremely valuable knowledge
12. Build a network of allies
13. Predict the future of your industry