Page 24 - Improved +Example+Assessment+Report (LG Accrual) {FlipBook Test v1}_Neat (Online upload)

Some initial areas that have been identified to review from the [2018] Profit & Loss Account, given

their relative impact on OpEx overall include:

➢ Professional Fees
➢ Travel & Subsistence
➢ Office Expenses

These 3 categories account for a combined total of almost 57% of OpEx in the 2018 year on a pro

rata basis for the full year, and would therefore be the most sensible place to start a review of OpEx
in terms of meeting our OpEx reduction targets over the next quarter(s). We should still review and
assess the other OpEx categories to ensure that we are minimising costs as far as practical – not only
is this sound business practice, but it may also accelerate the rate at which the Target Allocation
percentages can be achieved for Profit, Owner’s Pay and Tax.

We can also see from the above comparison between the two [years] that all other areas of OpEx
decreased over the prior year with the exception of Materials and Subcontractors.

Further review of the 2017 and 2018 OpEx in due course will reveal further detail allowing us to be

more targeted in our approach towards reducing OpEx in the business.

Debt - The only way to pay off debt (which is simply past expenses that you haven’t paid for yet) is

to be profitable. You must currently make more than you are spending to ensure that you have current

profits. Then you use those profits to pay off your debt (past expenses).

Pay all the minimum fees out of your Operating Expenses. Then focus on debt elimination through a
combination of available cash in OpEx bank account (monthly) and the Profit account (quarterly). No
matter what, keep doing the profit allocation of Profit First even while there is debt to pay down. This
may sound crazy... but you MUST build up the habit of always taking your profit first. Then when you do
your quarterly profit distribution, take 95-99% of that distribution money and use it to crush one of your
debts. The remaining 1-5% is used for you to celebrate. This process has you constantly chipping away
debt (from Operating Expenses) and then hitting the debt hard on a quarterly basis. It is kind of like
boxing...jab, jab, jab then a massive right hook.

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