A Retired Banker’s Confession

So, there was this business owner sitting at my desk at the edge of desperation seeking another loan. No working capital, little equity and lots of debt. It was a nightmare. The person left with little hope as I pledged to re-crunch the numbers. Unfortunately, the numbers never came together.

That same day, another business owner came to my desk and we spoke for a few minutes. After a short call to credit administration, the customer left with a commitment for a $1 million signature (unsecured) loan at a rock-bottom interest rate.

Capital 101: Why Businesses Must Understand Capital Before Cash Flow

There is a reason our economic system is called Capitalism – capital is one of the pre-requisites for surviving in the system. There are two forms of capital that, while related, are different things.

The first form is “outside capital” such as borrowed money or money put into the company by investors. The second form is “capital as business equity” or net worth. Whether you are a commercial business, non-profit or social enterprise, getting a handle of both forms of capital is vital.

Goals: Crystalize Your Thinking

In our last couple of posts we have talked about “to do lists” and “short term goals”.

We have briefly discussed how “to do lists” in many cases link or connect to “short term goals.”

To do lists are generally daily or perhaps weekly. Short term goals could be weekly, monthly or perhaps quarterly.

Long term goals are set for an extended period of time, most likely 6 months or more into the future. You can establish long term goals for 6 month increments or set goals for each year and perferrably link the direction of all goals to the very long term of 3, 5 or 10 years.

Time Management: Short Term Goals

In our last posting we spoke of “To Do Lists”. To do lists help focus on daily or several days of must do items. To do lists can be effective in getting things done.

At the end of each day your to do list should be reviewed to see what tasks or items were started, advanced to completion or not even touched. Once you have reviewed your progress compare your actions to your short term goals for the week, month or the quarter.

Time Management: To Do Lists

When I was young my friends and I would use a magnifying glass to catch the sunlight to start camp fires. We would prepare a bed of grass with small wood chips on top, and then would use the magnifying glass to focus sunlight onto it. Within a short period of time the intense light would start the grass smoldering, and with continued effort the grass would catch fire.

In our daily tasks we have much to do in our business. One way to help catch things “on fire” is to increase our focus on the tasks at hand. We each have 24 hours in a given day. How we use it is determined by our situation and desires.

Is your product or service a solution?

What are you going to do for the consumer?

While everyone likes to hear the word “FREE,” it isn’t always a priority.

If free is easy, the response will always be greater—especially, if free is also immediate.

But, the response may still be minimal because consumers generally don’t care what you’re offering.

They want to know what it’s going to do for them. Knowing what the consumer should value about your company is the place to begin building your brand.

Advertising, Marketing or Branding

Entering any market or forum, there will obviously be competition, so to start, make sure your message is creative, hard-hitting, memorable, clear, and informative.

Identify the best part of your product and develop around it. But, be careful to avoid making promises that you cannot keep. A consumer who is disappointed with the product, may feel betrayed when the product fails to live up to the hype.

Year – End Tax Planning

It is hard to believe 2007 is winding down. We now enter a busy time of the year for most business owners and managers. Wrapping up the financial side of the business and getting ready for a new year to start.

In addition to everyday close out of one year and starting a new one, comes the dread of the tax man. Payroll, State and Federal Taxes will occupy much of time at year end and the start of the new year. If you have employees the month of January can become extremely busy trying to get out W-2’s, not to mention vendor 1099’s.

Bank Reconcile: That Time of the month

If you are in business or managing a business, once a month you get a bank statement for each bank account. Many of us set the statement aside to look at later. (over 60% from my experience). Never to look at it again.

Others quickly review the checks, deposits and bank charges… Assume everything is correct and move on. (30% or so of us).

Cash Flow Management

Cashflow is the life blood of every business. Tell us of your success or issues in handling your business cashflow. Let us know the tools you use to wrestle this demon of business.