Category: Financial Analysis
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What’s Your Neighbor Up To? (A Guide to Benchmarking)
Wouldn’t it be helpful to know the financial performance of other businesses with your exact same business model? It’s a surefire way to see if you’re leaving money on the table. “I believe in the discipline of mastering the best that other people have ever figured out.” — Charlie Munger What is benchmarking? After completing a financial review,…
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Do These 3 Things With Your Financials
Prepping the numbers This week, I gave a keynote to a group of franchisees outlining how to read and use their financial statements (a novel concept). It started with the idea of “mise en place.” If you’re not familiar with the thorough preparation phase before cooking, then let me give you some quick background: Mise…
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Building a Financial Review Routine
What’s your financial cadence? Business owners have a typical financial review process that goes something like this: Financial statement analysis is the primary tool when it comes to evaluating business performance (I’ve said this before). There’s a “what” component and a “when” component to that analysis; here’s a simple routine that should work for most…
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The Quarterly View
Taking the quarterly view It’s not too late to review 2024 annual financial statements. In fact, most public companies are still reporting Q4 and full year results. Like other business owners, I have a strong preference for monthly financial statements; but, with yearend in full swing, it felt like a good time to pitch the quarterly…
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Exit Planning Tips and Tricks
It’s a seller’s market The typical business sale goes something like this: Not all deals go that way, but the “quick exit” ones typically do. The average sale process can take 6-12 months, but the exit planning process in front of that can take 2-3 years. Earlier this week, my partner and I attended a…
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3 Things You can Learn from Netflix Q4 Results
What can you learn from Netflix Q4 results? As an SMB owner (and avid student of good investments), the public markets offer an excellent source of lessons and benchmarks for us small-time pikers. Let’s take a look at Netflix Q4 results to find some nuggets of wisdom: Beyond Netflix’s impressive quarter (massive subscriber growth, outstanding…
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Business Breakdown Part III: Projections & Planning
This is the final installment of a multi-part case study on Starbucks Corp. We previously covered the business model, profit model, unit economics, and financial statement analysis (links below). The goal for today is to create a quick-and-dirty financial projection and build an action plan for this company. Quick recap — Starbucks is a vertically integrated retailer of…
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Business Breakdown Part II: Financial Statement Analysis
Last week, we kicked off a multi-post series working through a case study, Starbucks Corp. to be precise. We covered the business model, profit model, and unit economics and today we’re moving onto financial statement analysis. The goal for today is to show you how to pick apart a set of financial statements with ease. Quick…
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A Full Business Breakdown
We’ve covered a wide range of topics this year and it feels like a good time to work through a case study for added practice. To keep things simple, we’ll break this into a multi-part series covering: My goal is to show you how to assess your (or others’) business from top to bottom. As I enjoy…
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The Easy 4-Step Process to Build a Business Scorecard
If I were to “drop in” on your business today, could you tell me how things are going this week? Most business owners don’t have a formal tool or process for monitoring early warning signs (both good warnings and bad warnings). These “tools” go by many names: KPIs, scorecard, dashboard, balanced scorecard, report card. Queue…