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Business Basics for Owners: Cash, Costs, Strategy and Sales
Read your numbers, protect cash, price with confidence, set a clear one-page plan and build a sales pipeline that delivers.
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About this course
A practical course for owners and new managers of small and mid-sized businesses. You will learn to read the three financial statements, manage cash and working capital, understand margin, markup and break-even, build a budget and a 13-week cash forecast, choose KPIs and work with lenders and advisers. You will then set strategy with a one-page plan and a management rhythm, and build sales and marketing on a clear customer profile, value proposition and pipeline. It is general business education, not accounting, tax or legal advice.
Who it is for
- Owners and founders of small and mid-sized businesses
- New general managers and managers stepping into business leadership
- Technical professionals, such as engineers and tradespeople, running their own firm
- Successors preparing to take over a family business
What you will be able to do
- Read income statements, balance sheets and cash flow statements and spot what matters
- Calculate margin, markup, contribution margin, break-even and the cash conversion cycle
- Build a budget, a 13-week cash forecast and a monthly KPI dashboard
- Set strategy with a SWOT, a one-page plan and quarterly priorities
- Define your ideal customer and value proposition and build a sales pipeline
- Run a 90-day plan to strengthen finances, focus and sales
Course structure
- Module 1: Know Your Numbers (4 lessons). The three financial statements, profit versus cash, margin, markup and contribution margin, and break-even and pricing.
- Module 2: Plan and Control (4 lessons). Budgets and 13-week cash forecasts, working capital, KPIs and dashboards, and financing and advisers.
- Module 3: Strategy (4 lessons). Vision and focus, SWOT and market insight, a one-page plan with annual priorities and a management rhythm.
- Module 4: Customers and Sales (4 lessons). Ideal customer profile and value proposition, marketing basics, sales pipeline and CRM, and a 90-day owner's plan.
Interactive labs
- Which statement shows it?: Match twelve items to the financial statement where you would find them, then check your answers.
- Break-even and target profit calculator: Enter your monthly fixed costs, average price and variable cost per unit to see contribution margin, break-even and the sales needed for a target profit.
- Business health check: Rate your business on eight areas covered in this course. The radar chart shows strengths and gaps, with a next step for each. Retake it after your 90-day plan.
How it works
- Work through 16 short lessons at your own pace. Each has key takeaways, an exercise for your own workplace and a quick knowledge check.
- Try the three interactive labs as you reach them in the course.
- Pass the 20-question final exam (70% or higher, unlimited retakes) to unlock your Chmltech certificate of completion.
- Free, with no sign-up. Your progress is saved in this browser.
Reading the three financial statements
Every business produces three core financial statements. Each answers a different question, and an owner who can read all three makes better decisions.
| Statement | Question it answers | Key lines |
|---|---|---|
| Income statement (profit and loss) | Did we make a profit over a period? | Revenue, cost of goods sold, gross profit, operating expenses, net income |
| Balance sheet | What do we own and owe at a point in time? | Assets (cash, receivables, inventory, equipment), liabilities (payables, loans), owner's equity |
| Cash flow statement | Where did cash come from and go over a period? | Cash from operations, investing and financing |
How they connect
Net income from the income statement flows into owner's equity on the balance sheet. The cash flow statement explains why cash on the balance sheet changed between two dates. A profitable business can still run short of cash if money is tied up in receivables or inventory, or spent on equipment and loan repayments. That is why owners need all three.
A monthly habit
Ask your bookkeeper or accountant for monthly statements within two to three weeks of month-end. Compare each month with the same month last year and with your budget. Look first at revenue, gross margin percentage, operating expenses, net income, cash balance, receivables and inventory. Ask about any line that moved more than you expected.
The balance sheet equation always holds: assets = liabilities + owner's equity. If you borrow $50,000, cash (an asset) and loans (a liability) both rise by $50,000, and equity is unchanged.
The lab after this lesson asks you to match items to the statement where they appear. This course is general business education; for tax, accounting and legal decisions, work with your accountant and other qualified advisers.
Key takeaways
- The income statement shows profit, the balance sheet shows position, the cash flow statement shows cash movement.
- Profit and cash are different; you need all three statements.
- Review monthly statements against last year and budget.
Apply it at work
Ask for last month's three statements and write one sentence on what each tells you about the business.
Profit is not cash
Many profitable businesses get into trouble because they run out of cash. Profit is an accounting measure of whether revenue exceeds costs over a period. Cash is the money in the bank that pays wages, suppliers and the bank.
Why they differ
- Customers pay later: a sale counts as revenue when invoiced, but cash arrives 30, 60 or 90 days later.
- Inventory ties up cash: you pay for stock before you sell it.
- Equipment purchases use cash at once but are expensed gradually as depreciation.
- Loan repayments use cash but only the interest is an expense.
- Growth needs cash: more sales mean more receivables and inventory before customers pay.
The cash conversion cycle
The cash conversion cycle (CCC) measures how many days cash is tied up between paying suppliers and collecting from customers:
CCC = days sales outstanding (DSO) + days inventory outstanding (DIO) − days payables outstanding (DPO)
If customers pay in 45 days, inventory sits for 60 days and you pay suppliers in 30 days, the cycle is 45 + 60 − 30 = 75 days. Every day you cut from the cycle frees cash. For a business with $3 million of annual cost of sales, one day is worth roughly $8,000 of cash (3,000,000 ÷ 365).
Growing broke
Fast growth with a long cash cycle can drain the bank account even when every sale is profitable. Before chasing a large new contract, estimate how much extra receivables and inventory it will require and how you will fund them.
- Buy: Purchase materials or goods; supplier terms give you time to pay (DPO).
- Hold: Inventory waits to be used or sold (DIO).
- Sell: Deliver to the customer and invoice.
- Collect: Customer pays after their terms (DSO).
- Reinvest: Cash pays suppliers, wages and the next purchase.
Key takeaways
- Profit is an accounting measure; cash pays the bills.
- CCC = DSO + DIO − DPO; shorter frees cash.
- Fast growth can drain cash even when sales are profitable.
Apply it at work
Estimate your DSO, DIO and DPO from your last balance sheet and income statement, and calculate your cash conversion cycle.
Margin, markup and contribution margin
Three terms are often confused, and the confusion can cost money when setting prices.
| Term | Formula | Example: cost $60, price $100 |
|---|---|---|
| Gross margin | (price − cost) ÷ price | $40 ÷ $100 = 40% |
| Markup | (price − cost) ÷ cost | $40 ÷ $60 = 66.7% |
| Contribution margin | price − all variable costs | If freight and commission add $8: $100 − $68 = $32 |
A 40% markup is not a 40% margin. If you want a 40% gross margin on an item costing $60, the price must be $60 ÷ (1 − 0.40) = $100, not $60 × 1.40 = $84.
Why contribution margin matters
Variable costs change with each unit sold: materials, direct labour paid by the piece, freight, commissions, card fees. Fixed costs stay roughly the same whatever the volume over a period: rent, salaries, insurance, software subscriptions. Contribution margin is what each sale contributes toward fixed costs and then profit. It is the right number for decisions about discounts, special orders and which products to push.
Margin by product and customer
Average margins hide winners and losers. Calculate gross or contribution margin by product line and by major customer at least twice a year. Many businesses find a few products or customers earn most of the profit while others barely cover their costs once discounts, freight and service time are counted.
Key takeaways
- Margin is profit over price; markup is profit over cost.
- Price = cost ÷ (1 − target margin).
- Use contribution margin for discount and product decisions, and review it by product and customer.
Apply it at work
Pick five products or services and calculate gross margin and markup for each. Check whether your price list uses margin or markup and whether staff know the difference.
Break-even and pricing
The break-even point is the sales level at which the business covers all its costs and makes zero profit. Above it, each sale's contribution margin becomes profit.
Break-even units = fixed costs ÷ contribution margin per unit
Example: fixed costs are $40,000 a month, the average price is $120 and variable cost is $72. Contribution margin is $48 per unit, so break-even is 40,000 ÷ 48 ≈ 834 units a month, or about $100,000 of revenue. To earn $10,000 profit a month, you need (40,000 + 10,000) ÷ 48 ≈ 1,042 units.
What break-even tells you
- How far current sales are above or below break-even: your safety margin.
- How much extra volume a new fixed cost, such as a hire or a lease, requires.
- What a discount really costs: a 10% price cut on the example above cuts contribution from $48 to $36, so break-even rises to about 1,112 units, a third more volume.
Pricing approaches
| Approach | How it works | Watch out for |
|---|---|---|
| Cost-plus | Cost plus a target margin | Ignores what customers value and what competitors charge |
| Competitive | Priced against alternatives | Can start a race to the bottom |
| Value-based | Priced on the value delivered to the customer | Needs a clear understanding of the customer's gains |
Most SMEs use cost to set a floor and value and competition to set the price. Review prices at least yearly and when costs change. Small, regular increases are usually easier for customers to accept than rare large ones. The lab after this lesson calculates break-even for your own numbers.
Key takeaways
- Break-even units = fixed costs ÷ contribution margin per unit.
- Discounts raise break-even volume sharply.
- Use cost as a floor; set price with value and competition in mind.
Apply it at work
Estimate your monthly fixed costs and average contribution margin, and calculate break-even. How far above or below it were you last month?
Budgets and a 13-week cash flow forecast
A budget is your financial plan for the year: expected revenue, costs and profit by month. A cash flow forecast predicts the bank balance week by week. Together they let you see problems coming instead of discovering them in the bank account.
Building a simple annual budget
- Start with a sales forecast by month, by product line or customer group, using last year, known contracts and realistic growth.
- Apply expected gross margins to get cost of sales.
- List operating expenses line by line: wages, rent, marketing, software, insurance, professional fees.
- Add planned hires and investments in the months they start.
- Review the result: does the profit meet your goals? If not, adjust plans, not just numbers.
The 13-week cash flow forecast
A rolling 13-week forecast shows the next quarter week by week. For each week list opening cash, expected receipts (based on when customers actually pay, not when you invoice), expected payments (payroll, suppliers, rent, loan payments, taxes) and closing cash. Update it every week, replacing forecasts with actuals.
| Week 1 | Week 2 | Week 3 | |
|---|---|---|---|
| Opening cash | $80,000 | $62,000 | $71,000 |
| Customer receipts | $45,000 | $60,000 | $38,000 |
| Payroll | $35,000 | $0 | $35,000 |
| Suppliers and other | $28,000 | $51,000 | $30,000 |
| Closing cash | $62,000 | $71,000 | $44,000 |
When the forecast shows a low point weeks ahead, you have time to act: chase receivables, delay a purchase, agree terms with a supplier or arrange credit before you need it. Banks are far more helpful when you ask early with a forecast in hand.
Key takeaways
- A budget plans the year; a cash forecast predicts the bank balance.
- Forecast receipts by when customers actually pay.
- Update a rolling 13-week forecast weekly to see low points early.
Apply it at work
Build a 13-week cash forecast in a spreadsheet using your expected receipts and payments. Mark the lowest week and what you would do about it.
Managing working capital
Working capital is current assets (cash, receivables, inventory) minus current liabilities (payables, short-term debt). Managing it well frees cash without selling more.
Receivables: get paid sooner
- Invoice promptly and accurately; errors are a common reason for late payment.
- Set clear terms and check new customers' credit.
- Offer easy payment methods, such as electronic funds transfer.
- Follow up systematically: a reminder before the due date, a call when overdue.
- Consider deposits or progress billing on large or custom jobs.
- Review an aged receivables report every week.
Inventory: hold what you need
Classify items by value, set reorder points and safety stock by item, and act on slow-moving stock. The Inventory Management for SMEs course covers this in depth.
Payables: pay on time, not early
Pay suppliers on the agreed due date, not before, unless an early-payment discount is worth more than the cash. Negotiate terms that match your cash cycle, and keep good relationships: suppliers who trust you are more flexible when you need help.
Early-payment discounts
A term of "2/10 net 30" means a 2% discount if you pay in 10 days instead of 30. Giving up the discount to keep the cash for 20 more days costs about 2% for 20 days, which works out to well over 30% a year. Taking such discounts is usually worth it if you have the cash or cheap credit.
- Days sales outstanding (DSO): 45 days
- Days inventory outstanding (DIO): 60 days
- Days payables outstanding (DPO): 30 days
- Cash conversion cycle: 75 days
Key takeaways
- Working capital = current assets − current liabilities.
- Invoice promptly, follow up systematically and review aged receivables weekly.
- Pay on the due date, and take early-payment discounts when they are worth it.
Apply it at work
Review your aged receivables report. List every invoice over 60 days, the reason it is late and the next action.
KPIs and a monthly management dashboard
Financial statements arrive weeks after month-end and describe the past. Key performance indicators (KPIs) give earlier and more specific signals. A one-page monthly dashboard of 8 to 12 KPIs keeps the owner and managers focused on what matters.
Choosing KPIs
| Area | Example KPIs |
|---|---|
| Sales | New orders, quotes sent, quote win rate, sales by segment |
| Profitability | Gross margin %, operating expenses as % of revenue |
| Cash | Cash balance, DSO, overdue receivables, inventory days |
| Operations | On-time delivery, quality or return rate, productivity |
| Customers | Retention, complaints, satisfaction or referral score |
| People | Staff turnover, overtime, open positions |
Leading and lagging
Lagging indicators, such as revenue and profit, report results. Leading indicators, such as quotes sent, pipeline value and on-time delivery, predict them. A good dashboard includes both, so you can act before results suffer.
Making KPIs useful
- Give each KPI an owner, a definition and a target.
- Show trends over 12 months, not just this month's number.
- Use simple colour coding: on target, watch, off target.
- Review the dashboard in a monthly management meeting and agree actions for anything off target.
The Data and Dashboards for SMEs course shows how to build and automate these dashboards.
Key takeaways
- Use 8 to 12 KPIs on one page across sales, profit, cash, operations, customers and people.
- Include leading indicators that predict results.
- Give each KPI an owner, definition, target and trend.
Apply it at work
Draft your one-page dashboard: pick 8 to 12 KPIs, assign an owner and target to each, and note where the data comes from.
Financing, advisers and your accountant
Most businesses need outside money at some point: to buy equipment, fund growth or bridge a seasonal low. Matching the financing to the purpose avoids expensive mistakes.
| Need | Common financing |
|---|---|
| Seasonal or working capital swings | Operating line of credit |
| Equipment and vehicles | Term loan or lease over the asset's useful life |
| Real estate | Commercial mortgage |
| Growth projects, technology | Term loan; some government programs; in some cases equity |
| Receivables tied up | Receivable financing or factoring (usually costly) |
A key rule: do not fund long-term assets with short-term money. Using the operating line to buy a machine leaves no room for the next cash squeeze.
Debt versus equity
Debt must be repaid with interest but leaves ownership with you. Equity brings in money and often expertise but gives up part of the ownership and future profits. Many owners prefer debt for predictable needs and consider equity for large, risky growth.
Preparing to ask
Lenders, including banks, credit unions and development lenders, look for repayment ability, a credible plan and the owner's commitment. Bring recent financial statements, a budget and cash forecast, a clear use of funds and how the loan will be repaid. Check the Funding page on this site for programs that support SMEs, and confirm eligibility directly with each.
Your advisory team
An accountant does more than file taxes: they can help with budgets, cost analysis, tax planning, structure and succession. Meet them at least twice a year to discuss the business, not just at year-end. Add a lawyer for contracts and agreements, an insurance broker and, as you grow, a banker who understands your industry.
- Debt: Must be repaid with interest; Owner keeps full ownership; Needs repayment ability and often security; Suits predictable needs such as equipment
- Equity: No fixed repayment; Gives up part of ownership and future profits; Investor may add expertise and contacts; Suits large, riskier growth
Key takeaways
- Match financing to the purpose; don't fund long-term assets with short-term credit.
- Weigh debt, which must be repaid, against equity, which shares ownership.
- Bring statements, forecasts and a clear plan to lenders, and meet your accountant regularly.
Apply it at work
List your expected financing needs for the next two years by purpose, and match each to a suitable type of financing.
Vision, focus and where you compete
Strategy is about choices: what the business will do, for whom, and what it will not do. Without clear choices, owners spread time and money across too many opportunities and do none of them well.
Core elements
- Purpose: why the business exists beyond making money.
- Vision: what the business will look like in three to five years: size, markets, reputation.
- Core values: a few behaviours you hire, reward and correct for.
- Target customers: the segments you serve best and most profitably.
- Value proposition: why those customers choose you over alternatives.
Where to compete and how to win
Two questions sharpen strategy:
- Where will we play? Which customers, products, regions and channels.
- How will we win there? Lower cost, better quality, faster service, specialist expertise, a stronger relationship, a unique product.
Small businesses rarely win on price against larger competitors. They win by specializing: a niche, a region, a service level or an expertise that larger firms cannot or will not match.
Saying no
Strategy shows in what you decline: customers who are unprofitable or a poor fit, products that distract, projects outside your strengths. Write down three things the business will stop doing or not start this year. It is often the most valuable part of a strategy session.
Key takeaways
- Strategy is a set of choices about where to play and how to win.
- SMEs usually win by specializing, not on price.
- Decide what to stop or decline, not only what to add.
Apply it at work
Write one paragraph describing your target customers and why they choose you. Then list three things you will stop doing or not start.
SWOT and understanding your market
Good strategy rests on an honest view of the business and its environment. Two simple tools help.
SWOT
| Helpful | Harmful | |
|---|---|---|
| Internal | Strengths: skills, reputation, relationships, assets | Weaknesses: gaps in skills, systems, capacity or finances |
| External | Opportunities: market growth, new customer needs, technology, competitors' gaps | Threats: new competitors, cost increases, regulation, economic changes |
Make it specific and evidence-based. "Good customer service" is weak; "on-time delivery of 97% and two-hour quote turnaround, both better than our main competitors" is strong. Then ask: how do we use strengths to seize opportunities, and which weaknesses expose us to threats?
Talk to customers
The best market insight comes from customers. Interview five to ten good customers and a few lost ones each year. Ask why they chose you, what nearly made them switch, what problems they face that you could solve and how they compare you with alternatives. Listen more than you talk.
Watch competitors and trends
Track your main competitors' offers, prices, hiring and marketing. Keep an eye on changes in your customers' industries, regulation, technology and costs. Many opportunities and threats are visible early to owners who look.
Key takeaways
- Use SWOT with specific, evidence-based points.
- Interview good and lost customers every year.
- Watch competitors, customer industries, technology and regulation.
Apply it at work
Run a one-hour SWOT with your leadership team. Then schedule interviews with five customers, including at least one you lost.
A one-page plan and annual priorities
A strategy that lives in the owner's head cannot guide the team. Capturing it on one page makes it easy to share, review and act on.
What the one-page plan includes
- Purpose, vision and core values.
- Target customers and value proposition.
- Three-year targets: revenue, profit and a few key measures.
- This year's targets.
- Three to five annual priorities: the projects that move the business toward the vision.
- Key measures to track progress.
Good priorities
Priorities are specific, measurable, owned and limited. "Grow sales" is a wish. "Win five new customers in the food-processing segment by December, owned by the sales manager" is a priority. Fewer is better: three priorities done well beat ten started.
Breaking priorities into quarters
Each annual priority is split into quarterly milestones with owners. Quarterly steps are close enough to feel urgent and long enough to achieve something meaningful. At the end of each quarter, review results, learn and set the next quarter's milestones.
Share it
Present the plan to the whole team. People who understand where the business is going make better decisions in their own work and are more likely to bring forward useful ideas.
- Purpose and values: Why the business exists and the behaviours you expect.
- Vision and targets: Where the business will be in three years, in numbers.
- Customers and value: Who you serve and why they choose you.
- Annual priorities: Three to five owned projects that move you toward the vision.
- Quarterly milestones: The steps each owner will finish this quarter.
Key takeaways
- Put strategy on one page: purpose, vision, values, customers, targets, priorities, measures.
- Choose three to five specific, owned annual priorities.
- Break priorities into quarterly milestones and share the plan with the team.
Apply it at work
Draft your one-page plan. Limit yourself to five annual priorities, each with an owner and a measurable result.
A management rhythm that keeps plans on track
Plans fail without a regular rhythm of review. A simple meeting cadence keeps priorities moving and problems visible.
| Meeting | Who | Length | Focus |
|---|---|---|---|
| Daily huddle | Each team | 10–15 minutes | Today's work, issues, help needed |
| Weekly leadership meeting | Owner and managers | 60–90 minutes | KPIs, priority progress, issues, decisions |
| Monthly review | Leadership | 2–3 hours | Financials, dashboard, customers, people |
| Quarterly planning | Leadership | Half to one day | Review the quarter, set next quarter's milestones |
| Annual planning | Leadership | One to two days | Update the one-page plan, budget and priorities |
Running a good weekly meeting
- Same day, same time, start and end on time.
- Review KPIs and priority milestones quickly: on track or off track.
- Spend most of the time solving the most important issues, one at a time.
- End with a list of actions, owners and dates, and review it next week.
Accountability without blame
Accountability means each priority, KPI and action has one owner who reports progress honestly. When something is off track, the question is "what do you need?" rather than "whose fault is it?". Owners who model this get earlier warnings and better ideas from their teams.
Start small: a consistent weekly meeting and a quarterly planning session make a big difference in most SMEs.
Key takeaways
- Use a rhythm of daily, weekly, monthly, quarterly and annual reviews.
- Run weekly meetings to a fixed agenda that ends with owned actions.
- Hold people accountable by asking what they need, not who is to blame.
Apply it at work
Set a fixed day and time for a weekly leadership meeting and draft its agenda. Book your next quarterly planning session.
Know your customer and your value proposition
Sales and marketing start with a clear answer to two questions: who is the ideal customer, and why should they buy from you?
The ideal customer profile
Look at your best customers: profitable, easy to work with, loyal and likely to refer others. What do they have in common? Industry, size, location, the problem they need solved, who makes the buying decision and how they buy. Write this down as an ideal customer profile. It guides where to spend marketing money and which leads to chase.
The value proposition
A value proposition states the specific result you deliver for your ideal customer and why you are a better choice than the alternatives, including doing nothing. A simple format:
For [target customer] who [need or problem], we provide [offering] that [key benefit], unlike [alternative], because [proof].
Example: "For food processors in Western Canada who cannot afford unplanned downtime, we provide 24-hour emergency repair of packaging equipment, unlike national service firms with multi-day response times, because our technicians are based within two hours of most plants."
Benefits over features
Customers buy outcomes, not features. "Stainless steel construction" is a feature; "passes food-safety inspections and lasts twice as long in wash-down areas" is a benefit. Translate each feature into what it means for the customer's business: less downtime, lower cost, less risk, more revenue, less hassle.
Key takeaways
- Define an ideal customer profile from your best existing customers.
- Write a value proposition: who, what problem, what result, why you.
- Sell outcomes and benefits, not features.
Apply it at work
Write your ideal customer profile and a value proposition using the format in this lesson. Test it on two customers and one staff member.
Marketing basics for SMEs
Marketing makes the right customers aware of you and willing to talk. For most SMEs, a few channels done consistently beat many done occasionally.
| Channel | Good for | Basics |
|---|---|---|
| Website | Credibility and enquiries | Clear statement of what you do and for whom, proof (projects, testimonials), easy contact, fast on phones |
| Search (SEO) | Being found when people look | Pages for each service and location, useful articles answering customer questions, a complete business profile on search and map listings |
| Referrals and reviews | Trust | Ask happy customers for referrals and reviews; make it easy |
| Email and newsletters | Staying in touch | Useful content monthly or quarterly to customers and prospects who opted in |
| LinkedIn and social media | B2B visibility | Regular posts from the owner and team sharing expertise and projects |
| Trade shows and associations | Industry relationships | Pick a few events where ideal customers gather; follow up quickly |
| Paid ads | Fast, targeted reach | Start small, track cost per lead, stop what does not work |
Content that helps
Useful content, such as guides, checklists, calculators and case studies that answer your customers' real questions, builds trust and attracts people searching for answers. It also gives your sales team something valuable to share.
Measure what matters
Track where enquiries come from, the cost per lead by channel, and which channels produce customers, not just clicks. Ask every new enquiry how they heard of you. Shift budget toward what works.
When collecting contact details and sending marketing email, follow Canada's anti-spam legislation (CASL): get consent, identify yourself and offer an easy way to unsubscribe.
Key takeaways
- Do a few channels consistently: website, search, referrals and one or two others.
- Create useful content that answers customers' questions.
- Track leads and customers by channel and follow CASL for email.
Apply it at work
Ask your last 20 new customers how they found you. Rank the channels and decide where to put more effort.
A sales pipeline and CRM basics
A sales pipeline shows every opportunity and the stage it has reached. Managing it turns sales from a hopeful activity into a predictable process.
Typical B2B pipeline stages
| Stage | Exit criterion |
|---|---|
| Lead | Contact identified as a possible fit |
| Qualified | Need, budget, decision-maker and timing confirmed |
| Proposal | Quote or proposal sent |
| Negotiation | Terms being discussed; verbal interest |
| Won or lost | Order received or opportunity closed, with the reason recorded |
Pipeline numbers
Track the number and value of opportunities at each stage, the conversion rate between stages and the average time to close. If 25% of proposals become orders, the average order is $20,000 and you need $100,000 of new orders a month, you need about $400,000 of proposals out each month. Working backwards like this shows how much activity the goal really requires.
A CRM system
A customer relationship management (CRM) system records contacts, opportunities, activities and follow-ups in one place, instead of in individual inboxes and spreadsheets. Even a simple, affordable CRM helps: nothing falls through the cracks, managers see the pipeline, and customer history stays when a salesperson leaves. The key is discipline: every opportunity and follow-up goes into the CRM.
Follow up
Many opportunities are lost simply because nobody followed up. Set a rule: every proposal gets a follow-up within a few days, and every opportunity has a next step and a date.
- Lead: A contact identified as a possible fit.
- Qualified: Need, budget, decision-maker and timing confirmed.
- Proposal: Quote or proposal sent, with a follow-up date.
- Negotiation: Terms discussed; verbal interest.
- Won or lost: Order received, or closed with the reason recorded.
Key takeaways
- Define pipeline stages with clear exit criteria.
- Use conversion rates to work out how much activity a sales goal needs.
- Keep every opportunity and follow-up in a CRM with a next step and date.
Apply it at work
List your current open opportunities by stage with values. Calculate your proposal win rate for the last six months and what pipeline you need for next quarter's goal.
Your 90-day owner's plan
Bring the course together in a 90-day plan that strengthens the business's finances, focus and sales.
| Days | Focus | Actions |
|---|---|---|
| 1–30 | Know your numbers | Monthly statements and review routine; cash conversion cycle; margins by product and customer; break-even; start a 13-week cash forecast |
| 31–60 | Set direction | SWOT and customer interviews; ideal customer profile and value proposition; one-page plan with three to five priorities; weekly leadership meeting |
| 61–90 | Build the engine | Monthly KPI dashboard; pipeline stages and CRM discipline; marketing channel review; receivables and pricing actions; first quarterly planning session |
Signs of progress
- You know your cash position for the next 13 weeks.
- Your team can describe the target customer and this year's priorities.
- Weekly meetings end with owned actions that get done.
- You can see the sales pipeline and where new customers come from.
Where to go next
The Data and Dashboards course helps automate your KPIs; Sales and Operations Planning aligns sales, operations and finance; Inventory Management frees cash tied up in stock; and the Digital Automation course helps you plan technology investments.
Use the self-assessment lab after this lesson to see where the business is strong and where to focus first, and retake it after 90 days.
- Days 1–30 (Know your numbers): Monthly statements and review; Margins and break-even; 13-week cash forecast
- Days 31–60 (Set direction): SWOT and customer interviews; Value proposition; One-page plan; Weekly leadership meeting
- Days 61–90 (Build the engine): KPI dashboard; Pipeline and CRM; Marketing review; Quarterly planning
Key takeaways
- Days 1–30: know your numbers and cash.
- Days 31–60: set direction with a one-page plan and weekly meeting.
- Days 61–90: dashboard, pipeline, marketing and quarterly planning.
Apply it at work
Put the 90-day plan into your calendar with owners and dates, and book a 90-day review with your leadership team.
Which statement shows it?
Match twelve items to the financial statement where you would find them, then check your answers.
Break-even and target profit calculator
Enter your monthly fixed costs, average price and variable cost per unit to see contribution margin, break-even and the sales needed for a target profit.
Business health check
Rate your business on eight areas covered in this course. The radar chart shows strengths and gaps, with a next step for each. Retake it after your 90-day plan.
Final exam: Business Basics for Owners: Cash, Costs, Strategy and Sales
20 questions covering the whole course. Score 70% or higher to pass and unlock your certificate of completion. You can retake it as often as you like, and wrong answers come with explanations.
Your certificate of completion
Enter your name as you want it to appear, then print or save it as a PDF.
Certificate of completion
This certifies that
Your name
has successfully completed the Chmltech course
Business Basics for Owners: Cash, Costs, Strategy and Sales
16 lessons · 3 interactive labs · final exam passed
Chmltech Ltd.CHM-0000Certificate no.
www.chmltech.com
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