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Aug 15 •
Owner's Manual
This community is meant to spread financial knowledge. None of the contents are financial advice. I will never tell you what to do with your money as I am not certified to do so. The content is meant to be educational. If you find it useful, please share it with others. At no point should ANY sensitive or protected data be shared without consent. All figures presented can be cleaned to get the benefit of the analysis without divulging real data. I am currently enrolled, and near the end of the CPA Canada Professional Education Program. I write the final examination in September 2026. I want to spread the knowledge I have accumulated throughout my journey in accounting and finance. I have real world experience with the concepts I will teach. I do not claim to know everything. That is why I created this community. We can learn from each other and elevate our understanding of finance and accounting. What to expect from me: - I will always provide answers to the best of my knowledge. If I do not know something, I will say so and then find the answer. - I will be honest in my answers, even if it is not what you might want to hear. I expect the same from members of the community. - I will be active and timely. This does not mean untethered access. - I will act with integrity. I strive to do what it right, not what is easy. - I will treat everyone with respect. Everyone must start somewhere. What to expect in the community: - I will be uploading educational content (TBD on the format). - I can answer questions. I encourage other members to share their thoughts as well. - This community is a choice. If you decide to join, I expect that you follow the same rules I listed above. - We are here to learn together. I am new to this and as such would appreciate all the feedback I can get. I welcome and appreciate all of you who decide to join and start improving their financial education. I will end this post with a quote from an idol of mine. “Someone's sitting in the shade today because someone planted a tree a long time ago.” - Warren Buffet
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Sep 8 •
Financial Statements
I am curious to know how many of you are familiar with financials statements and how often you review them. If you own a business, how often do you review your financial statements?
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2 members have voted
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Sep 5 •
Contribution Margin
Contribution margin is the basis of unit economics and likely to be a focal point of future posts and classroom content. What is your contribution margin (CM)? Your CM is the difference between your selling price and all variable costs associated with delivering on the service. - CM = Selling price - variable costs The CM is what helps you pay the fixed costs of your business (think rent, software licenses, insurance, etc). Why should you care? Your business is delivering a service and requires labor hours (unless its automated) and so you have variable costs associated with delivering that service. The higher the CM, the faster you can pay your fixed costs and ideally, pay yourself. What if you have more than one service offering? Let's look at an example: Service 1 - requires 1 hour of labor - $100 of CM Service 2 - requires 2 hours of labor - $150 of CM What one should you choose? We will assume that your business is constrained by the amount of labor hours available. This is likely the case in a service business as you and each of your team members only have 24 hours each day. With this assumption, we MUST look for the contribution margin PER unit of constrained resource. In your case, labor HOURS. Service 1 - $100 CM / labor hour (100/1) Service 2 - $75 CM / labor hour (150/2) Although the total CM is greater for service 2, given that labor hours are limiting your supply, service 1 should be pursued as it provides more CM per labor hour used. For a further analysis on how CM relates to your total profits, please read the Operating Leverage post here: https://www.skool.com/poor-sams-almanack-7280/operating-leverage Stay Under Par, Samuel
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Sep 4 •
Cash Conversion Cycle
How fast do you collect your receivables? How long do you take to settle your accounts payable? In a service business, these are the two main drivers to the cash conversion cycle. This is what creates "velocity" for your cash. Let's assume you collect your cash upfront (no receivable balance) and take 30 days to pay any suppliers for materials. - Your cash conversion would be 0 - 30 = -30 days. HUH? You read that right. Your cash conversion cycle would allow you 30 days to generate cash before paying vendors. Let's now compare this to a scenario where you grant 30 days of credit to customers and pay vendors upfront. - Your cash conversion cycle would be 30 days - 0 days = 30 days. This means that your cash leaves your account before you collect your cash from the sale. Scenario 1 allows you to grow significantly faster as the cash received upfront can be used to acquire more customers before having to pay vendors 30 days later. Why would you care? In a normal service business, the largest expenses is generally your payroll. Payroll is paid weekly or biweekly in most cases. That means that if it takes you 30 days to collect on sales, then you would have to cover 4 weeks of payroll before cash enters your account. And you wonder why your sales go up and yet there is no cash to show for it. Stay Under Par, Samuel
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Sep 1 •
HI NICE TO MEET YOU AND I AM GLAD TO BE IN THIS SPACE YOU ARE TRYING TO BUILD
Hey everyone, just joined and wanted to introduce myself. I'm currently working on my own Skool community and connecting with other creators who are also somewhere in the building or pre-launch stage. I'd be interested in hearing from other community owners here. If you're the owner, feel free to say hello or send me a DM. I'd love to compare experiences.
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