SubscribeSMALL BUSINESS LEADER April 2006
ISSUE #81
April 2006
in this issue
Calendar of Events
Feature Article / Lesson
Small Business Marketplace
Note from Marian:
Last month I asked you about your "urgent business challenges". You told us that Technology and Time/Organization were your most urgent-challenges. $ales and Staffing were tied for second place. Of course this is just a small sample, but I was surprised at how many have technology challenges.
For the March Brain Exchange Roundtable our topic was also about current challenges. We had guest experts in Technology, Organization and $ales, all of whom specialize in serving small businesses. The feedback was that attendees came away with answers and helpful ideas. Suggestions for future topics include more on $ales, Marketing, Branding and Technology.
Of course every small business will continue to face challenges; they just may be of a different nature at different times. The secre+ is to focus and work through them as they become priority. I've been working on an audio boot camp (wait till you see this one) which has five elements that must be pulled together in a logical fashion. Finishing it became priority last week so I had to block off 3 days in a row to finish it. I did finish it, but I would not have if I had not made it priority and given it my time and focus.
You can't always do it that way, but you get the idea. You must be able to dedicate time, mental energy and resources (if necessary) to move beyond challenges. Otherwise they pile up and really start to weigh heavy.
Another challenge many businesses face is Ca$h Flow. Both new and established businesses can have ca$h flow challenges. Some businesses are more prone to such issues than others. Regardless of your business model, it's important to know the basics of good ca$h management. Our Feature Article, "Ca$h Planning: Key to a Stable and Profitable Business", reviews the basics and offers strategies to augment ca$h flow. Ca$h Flow will also be the topic of our April 24 th Brain Exchange Roundtable, http://primestrategies.com/bxrt If you can be in New York City that day, do plan to join us.
There are a couple of other events happening this month that you'll want to know about also. Both are for Small Business Leaders (that's you). See the details under Sponsored Events in the Calendar section below.
Thanks for being part of the Prime Strategies community of small business leaders. Your opinions, expertise and knowledge are always valued. Be in touch anytime.
Marian Banker
Publisher
Small Business Leader
NOTE: We have had to disguise some words in order to keep them from getting caught in the sp^m filters. Please bear with us.
Calendar of Events
Brain Exchange Roundtable
Monday, April 24, 2006
Brain Exchange Roundtable - Monday, April 24, 2006
NEW LOCATION: 1290 Avenue of the Americas, AXA Advisors 7 th Floor Conf. Rm., New York CityThe Brain Exchange Roundtable is a highly interactive format designed as a forum for entrepreneurs and key decision-makers in small-midsize business. Everyone learns by being part of a dialogue between experts and peers. Find new resources, gain new ideas, and make new connections.
Topic for This Meeting: "Keep the Ca$h Flowing"
Many entrepreneurs struggle with ca$h flow. Both new and well-established businesses often find themselves in a difficult ca$h situation and don't know what to do about it. At this Roundtable, you'll be able to hear from and talk with experts who work with small business in the specialty areas of ca$h flow.
Guest Experts are:
Furman Rogers , CPA , Garfield, Seltzer & Curcio (Accounting/Taxes)
Hans Bastien, Sterling Bank (Banking)
Todd E. Duffy, Esq., Duffy & Amadeo, LLC(Bankruptcy Law/Financial Restructuring)
Sign up today. Limit 25. Advance registration required.
Reserve your seat N0W!
http://primestrategies.com/bxrt.
Sponsored Events:
The Masters Transformative Leadership Program 2006,
April 25 th, 2006, 7:30 a.m. - 2:00 p.m., "Creating We: The DNA of Leadership"
Today's unprecedented array of organizational and management challenges calls for a new kind of leadership - Transformative Leadership - which will shape and inform the next generation of leaders in the 21st Century. 40% discount for SBL subscribers. Enter code, PS-1, when you register, http://masters.liminalgroup.com.
New York Enterprise Report Business Event. April 25, 2006, 4:30 - 9:00 p.m. :
"Small Business Success Stories: Insights and Secrets from New York's Leading Entrepreneurs". Some of the New York areas most successful small business leaders will share their challenges, successes and "how-to" secrets. Prime Strategies network members who register before April 7th receive a discounted price of $49 (use promotion code "PRIME"). After April 8th the price is $59 For more information about this event and to register visit: http://www.nyreport.com/success
Feature Article / Lesson
Ca$h Planning: Key to a Stable and Profitable Business
By Marian Banker
Like it or not, your ca$h flow picture is a report card on how well you're managing your business.
Business management includes making sure you have the ca$h you need to cover expenses as they occur. Ca$h flow planning is a must if you want to be in control of your business. It's only when you're in control that you can become a stable and profitable business.
Good ca$h planning requires review of historical financial information, including a look at business cycle and sa/es cycle. Cred1t policies and practices, marketing plans, periodic expenses, de6t and ca$h access need to be considered as well. The concept is to control what can be controlled and to manage what can't.
In order to do that, you will need accurate and timely information and know how to interpret what you see.
Ca$h Planning Basics:
Identify unusual ca$h needs as early as possible. Quarterly tax payments and 1nsurance payments often come due in specific months. For these months you obviously have to have the ca$h available. Use your historical financial information to help you identify such items.
Project both Income and Expenses for three to six months in advance. The key to making successful projections is to be conservative with income. Unless you know you've taken specific actions to increase income it will not likely be more; it might even be much less.
The objective is to maximize the "ca$h remainder" at the end of each month . That's where the challenge comes in. You know you will have certain relatively fixed expenses each month, and there will be some which are variable. You will likely have some ca$h income which is relatively stable. If not, one of your objectives would be to seek ways to have a predictable baseline income (see Strategic Ca$h Planning below).
If expenses are greater than income, you have a negative ca$h flow . You can't afford to sustain a negative ca$h flow for any extended period of time. Increase Income, Reduce Expenses.
Watch out for ca$h bottlenecks. Accounts Receivable and Inventory have the potential to tie up ca$h. These require early corrective tactics if they start to build up. Get help (if needed) before a real problem develops.
Most businesses spend too much on non-income producing items and services . Question every expense. Is that country club membership producing solid leads and eventual sale$? Do you need to travel to make the $ale or can it be done by ph0ne, fax and e-mail? Try to reduce these types of expenses. Better to have the ca$h on the bottom line.
Have a plan in place to cover the expenses when you know the income isn't going to be there. Your options are borrowing (from an outsider or yourself) or selling equity (getting a partner who has ca$h). Unless you have a long lead time, borrowing is pretty much your only answer. The kicker, of course, is you must repay the loan over time.
Strategic Ca$h Planning:
Once you've got the basics in place, consider strategies that might create more consistent income with a reasonably stable and predictable ca$h flow. In many cases this can be accomplished with little or no extra expense through a strategic alliance or sub- contract arrangement.
People are really busy. Anything you can accomplish that will free up some of their time has the potential to be a sustainable, consistently income-producing service.
Add a new service - Consider use of the Internet and current technology to help you find another service that would be of value to your existing customers and would provide a reasonable consistent ca$h flow.
Jill added career coaching and resume writing to her mostly project- oriented executive recruiter business. Greg added online bookkeeping to his tax-heavy accounting business. All could be accomplished virtually and did not require hiring anyone.
Provide support to fill customer's needs - Deliver the benefits that customers want. Keep asking what that is. If you see a pattern of requests for something you don't offer, maybe you should. The demand is there.
Donna, a café owner, extended her hours and brought in a 20% ROI on the additional costs. Gerald started offering grounds maintenance to his landscape design customers which created a steady monthly income.
Convert Project Clients to Retainer Clients - Project work means sporadic income. Look at the client needs for each project and see how it might be converted to a longer term process and payout. Clients are often happier with a consistent payment for a specified amount of work or time. Offer extended services once you are on board with a client. They already know you and have a level of trust in what to expect from you.
Russell was a graphic designer who started with clients on a single project, and through excellent customer service and making the suggestion for additional work, was able to convert two out of three project clients onto monthly retainer for additional ongoing graphic services.
Take over some of customers' functions - Where appropriate provide administrative support, customer service, facility maintenance, human relations services, order fulfillment. See what makes sense for your customers and your business.
Aileen was an executive coach who created a training program to groom and develop potential and newly promoted management for a client. The CEO just didn't have the time or the skill to effectively carry out training. Aileen saw the opp0rtunity to be of ongoing extra value and was able to negotiate a monthly payment arrangement to carry out the training and coaching.
Assignment:
Ask your clients what they need that they're having trouble finding or getting accomplished. Do the research on where there is an unmet need in the marketplace. Look for patterns, changes in regulati0ns, new technologies and techniques. Don't wait to be asked; prepare your service and make the offer.
Select one service (or product) that can be added to provide consistent additional ca$h inflow. Be sure you have a good margin to make it worth your while.
You're one step closer to a stable and profitable business .
Small Business Marketplace
Introduce your product or service he.re.
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