Archive Monthly Archives: December 2018

Episode 060 – Let Ruth King Explain How Entrepreneurs Can Have the Courage to be Profitable In Their Business (Part II)

In Episode 059, Jack has invited Ms. Ruth King, who is a serial entrepreneur owning or having owned 8 businesses since 1981, to explain how entrepreneurs can have the courage to be profitable in their businesses.  This will be the Part II of the interview. 

Ruth has a passion for helping businesses get and stay profitable utiliSing the latest technology that makes sense to use. Ruth is also the #1 Best selling author of The Courage to be Profitable and three other award winning books.

What else can you tell where the balance sheet is wrong?

"If you're a company that has inventory but you have no inventory on your balance sheet, it is wrong. Because if you've got inventory in your business and you don't have it on your balance sheet, somebody's playing games.  Let's put it this way. They're not creating proper numbers."

Spending 15 minutes a month on your business' profitability assessment

"I quite frankly don't look at return on equity on a month by month basis. Maybe once a year I looked more at what's called current ratio, which is the thing that says can you pay your bills or not? If you take your current assets, which are things that are cash or turned into cash, like cash receivables and inventory basically, and divide that by current liabilities, which are things that you have to pay within a year and you divide those two numbers is called the current ratio. Your current ratio should be increasing, so if this month your current ratio was two and next month it's two point one and the month after that is two point two. That means your profitability is increasing. If you're current ratio ever falls under one,  you have a problem because you have more bills coming in. Then you have assets to pay them. It's not a good thing."

15 ways employees and vendors steal from you and what can you do about it

[Ruth is sharing a personal story here ...]

Ruth 's Most Favourite Quote
"When tough things happen, pick yourself up, dust yourself off, and keep going." 


Want to know more about Samuel? 
Facebook: https://www.facebook.com/ruthking1650
Twitter: https://twitter.com/ruthking
LinkedIN: https://www.linkedin.com/in/ruthking1
Email: rking@ontheribbon.com
Website: http://www.thecouragetobeprofitable.com/

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  4. Tap the blue Search key at the bottom right.
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Episode 059 – Let Ruth King Explain How Entrepreneurs Can Have the Courage to be Profitable In Their Business (Part I)

In Episode 059, Jack has invited Ms. Ruth King, who is a serial entrepreneur owning or having owned 8 businesses since 1981, to explain how entrepreneurs can have the courage to be profitable in their businesses.  This will be the Part I of the interview. 

Ruth has a passion for helping businesses get and stay profitable utiliSing the latest technology that makes sense to use. Ruth is also the #1 Best selling author of The Courage to be Profitable and three other award winning books.

What is profitability and why is it important?

"The key is really and truly understanding that yes, you've got to have profitable sales. If you sell something for a dollar, you have to have it cost less than a dollar. And you have a little bit left on the bottom line,  but you also have to collect for that sale. So you can have tremendous profits and no money in the bank or you can have a loss in one month and have a lot of money in the bank. Now, multiple months losses caused problems obviously, but one month or something like that is ok."

Which is more important, the balance sheet or the profit & loss statement?

"The balance sheet is more important than the profit and loss statement because the balance sheet tells you about long-term profitability.  You're going to say, wait a minute. my profit & loss statement tells me about profitability too but it does only for a month or only for a specific period of time.

Your balance sheet actually talks about the history of your business from the time you started your business or through the time you dispose of it or closes its doors through what is called retained earnings or that amount of profit that you keep in the business. As long as retained earnings keep going up, your profitability will keep going up as a general rule. So the balance sheet tells you whether you can pay your bills on time. Your balance sheet tells you whether you're taking on too much debt. for those of the listeners in your audience who have inventory, it tells them whether there's, they're building up too much inventory.  So those are the types of things that the balance sheet actually tells you every month. And you think, wow, am I able to pay my bills or not?  You know, and that's, I think just as important as whether I have profit or not."

You can tell whether a balance sheet is wrong in about 30 seconds!

"If the balance sheet doesn't balance, there is something wrong. If you have negative cash on the balance sheet, there is something wrong because you can never ever have negative cash in your business. If you have negative loan payments or anything that's negative on the liability side of the balance sheet, there is something wrong. 

As a general rule, somebody is either cooking the books I eat, not doing things right or stealing from you or they are just don't know what they're talking about. And if you have a bookkeeper who is incompetent, get rid of him or her."


Ruth 's Most Favourite Quote
"When tough things happen, pick yourself up, dust yourself off, and keep going." 


Want to know more about Samuel? 
Facebook: https://www.facebook.com/ruthking1650
Twitter: https://twitter.com/ruthking
LinkedIN: https://www.linkedin.com/in/ruthking1
Email: rking@ontheribbon.com
Website: http://www.thecouragetobeprofitable.com/

Did you like what you heard?

If you liked this podcast, please leave a review on iTunes!  Click here to discover the iTunes page.

Did you know that Cracking the Entrepreneur Code Podcast Show is on Apple's Podcast app?

  1. Launch Apple's Podcasts app.
  2. Tap the Search tab.
  3. Enter "Cracking the Entrepreneur Code".
  4. Tap the blue Search key at the bottom right.
  5. Tap the album art for the podcast.
  6. Tap Write a Review at the bottom.

If you found value in this episode, assist your friend and share this episode on Social Media.

Like it?  Take a second to Support "Cracking the Entrepreneur Code" on Patreon

Please follow and like us:
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