Asking if you suck at personal finance can seem insulting, but the question is not meant to be insulting. It’s just that, being a small business owner and having recently taken a deep look at my personal finances, I have to say that I suck at personal finance. A lot of my small business owner buddies do, too. How do I know this? Because we have all been taking the 30-Day Challenge by Ramit Sethi of the Scrooge Strategy, and it has been truly eye-opening.
What is the Scrooge Strategy 30-Day Challenge?
Basically, it’s an ebook written by national bestselling author Ramit Sethi. The challenge is to see if you can save $1,000 in 30 days by doing the steps in his ebook. There is one step per day.
There’s nothing really revelatory in the book but one message comes through loud and clear, especially for small business owners:
Most of us are far too busy maintaining our business finances that we let our personal finances fall by the wayside.
Or, to put it another way, we are too tired, lazy, or burned-out at the end of a business day to do the steps that Ramit suggests in his ebook. Being a small business owner can be difficult, and at the end of the day many of us want to take refuge in comfort rather than engage in the drudgery of personal finance.
An Enlightening Example of Why We Suck at Personal Finance
When it comes to saving money, most of what Ramit talks about is common sense. He calls it the “well, duh!” factor. An educated small business owner might read one of the personal finance tips, find it to be common sense, and say, “Well, duh! I already know that.” And that’s the end of it.
That’s all well and great, but just knowing about something and taking action are two completely different things. One example he gives in the book is pretty relevant as we move into winter and colder weather. One of his tips is to turn your thermostat down by three degrees to save money. He gives specific savings figures for several major cities so that you can estimate the amount of money you will probably save by turning down your thermostat.
Well, duh, right? OK, suppose you actually decide to turn down your thermostat. You bounce out of bed in the morning full of enthusiasm for saving money, and crank the sucker down by three degrees. Fabulous. Good for you.
Off you go to your small business, where you have a lousy day and waste lots of time fighting fires and producing little. You drag your butt home at night, feeling worn out and looking forward to a cozy evening on the couch with dinner and a glass of wine.
What a shocker when you open the front door and are greeted by the arctic temperatures inside your house. Oh yeah, you cranked your thermostat down by three degrees that morning. It seemed like such a good idea at the time. Now it seems like a totally lousy idea invented by a complete moron. You are tired, hungry, and not in the mood to suffer. You rush to the thermostat, turn the dial up to 85 degrees, and promise that you’ll do better tomorrow. In actuality, the thermostat stays at 85 degrees and never goes back down.
That’s what Ramit means about the “well, duh” factor. We know better than we act, and thus our personal finances suck the big one. To fix this problem, he suggests that we stack a fuzzy robe, hat, and warm slippers by the front door before we leave for work in the morning. That way, when we drag our butts home at night, we will not only be reminded of why we turned the thermostat down, but we will have some immediate warmth to help us get through the shock of the cold air inside the house.
What’s the Moral of This Story?
The moral of this story is that if you are like most small business owners, you work yourself to the bone to squeeze the maximum profit out of your business, only to squander it with lousy personal finance skills.
Hmmm … sounds like a quandary to me. After all, why am I busting my butt at work only to end up with very little to show at the end of the day, week, month, or year? That seems silly. I might as well quit my small business, flip burgers for a living, and use some savvier personal finance skills to get ahead.
That’s why the Scrooge Strategy ebook has been so valuable to me. It helps me retain more of what I earn through my small business. Sound like a good idea to you? You can download the book for free and read it for 30 days. If you hate it, you don’t get charged. If you love it, there’s a one time charge of around $28. It’s been a heckuva deal for this small biz owner.
Check out the Scrooge Strategy for yourself here.
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Photo credit: http://www.flickr.com/photos/jonas_brothers_luvs_ammy_lou/ / CC BY 2.0
Tags: personal finance, Ramit Sethi, Scrooge Strategy, small business, small business owners
A while back I wrote a blog post on finding a great accountant for your small business. Recently, I decided to take my own advice. I have used the same accounting service for almost a decade, and have always had a great relationship with them.
However, I found that as my small business focus shifted away from a “bricks and mortar” city environment to an online environment mixed with country living, I needed an accountant with different specialties and skills.
Where to Find a Good Small Business Accountant
I’m of the generation who “Googles” everything first. It hardly ever occurs to me to peel open a phone book if online access is just a few clicks away. Digging around on Google, I found several “accountant search” sites, and entered my request on several. Most sites asked for the following information:
- number and types of businesses I owned (sole proprietor, S-corp, etc.)
- number of employees and contractors I employed
- average revenue numbers
- accounting specialties being sought (home business, agricultural, government contracting, etc.)
I was surprised and pleased to receive both an email and a phone call from a representative at GoodAccountants.com. Shahana Faridi, my representative, asked several questions and said she would get back to me within a week with one or more suitable accountants. In fact, she got back to me within a couple of days, and set up an appointment for me with some local accountants.
I had thought she was setting up a phone appointment, and marked it as such in my calendar. Boy was I surprised when Denise and Janni showed up in person! The interview went well, and I will soon be finalizing my agreements for them to handle my small business accounting needs in the coming year.
Is It Time To Reconsider Your Accountant?
The difference between a suitable accountant for your small business and an unsuitable one can be vast. It can be the difference between paying in a huge chunk in taxes every year versus paying a much smaller sum. It can be the difference between sleeping well at night knowing your accountants will back you up with the IRS should the need ever arise, and sweating at night wondering if the other shoe is going to drop soon.
For me, an accountant suitable for my various small business enterprises means someone who knows about home business, the livestock business, the publishing business, and S-corporations as well as C-corporations. I asked a number of probing questions, all of which Denise and Janni answered to my extreme satisfaction. It was a good time to change accounting services, and I am looking forward to my new relationship with Denise and Janni.
What about you? Have your small business accounting needs changed in the recent past, and is it time to re-evaluate your accounting relationship?
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Photo credit: http://www.flickr.com/photos/denniswong/ / CC BY 2.0
Tags: good small business accountant, goodaccountants.com
Posted by Stephanie Valentine on Jul 16, 2009 in
Small Business Cash Flow 
In my last blog post I outlined two alternative and somewhat adventurous ways that small business owners are bring cash into their businesses, even in this cash-poor economy: factoring and creating multiple streams of income.
Factoring is a way for small businesses to generate cash by selling their accounts receivables for up-front cash. Creating multiple streams can take many forms, some of which I outlined in my last blog post. Each of these options has pros and cons, and each of these can increase a small business’ cash flow if implemented right.
Now I’m going to introduce a third option that is enticing many small business owners as a viable new income stream: MLM, also known as multi-level marketing or network marketing.
Why MLM and Why Now?
Many small business owners who had previously shunned the MLM industry are now joining in significant numbers. The question is, why now? Small business owners are habitually busy, so it doesn’t make sense that they would add another business to their already overloaded schedule. Yet they are, and for good reason.
1. MLM is Supported by Capitalist Big Wigs
Did you know that investing guru Warren Buffett owns several MLM companies, including Pampered Chef? Did you know that best-selling authors and well-known businessmen Robert Kiyosaki and Donald Trump wrote a book supporting this industry? In fact, Donald Trump believes in it so much he recently launched his own MLM company. The MLM industry, formerly the king of scams and schemes, has grown up and become a solid business proposition.
2. When Cash is Tight, MLM is Inexpensive
In this cash-poor economy, an MLM business has one of the lowest startup costs and overhead of any business. Rather than buying a franchise or investing in other companies, many small business owners are joining MLMs and operating these businesses in their homes, which keeps the overhead low and increases their tax advantages. On average, small business owners are spending $350 to $500 to start their businesses, and roughly $200 to $400 per month the run it. Although it may not produce income right away, most who consistently work their business earn a passive income, over and above their expenses, within 6 months to 2 years.
In this economy every penny counts so even a small income stream will pay off. Did you know that last year 91% of foreclosures could have been prevented with $500 additional income per month? Plus, according to Dun and Bradstreet, 95% of all businesses close because of lack of cash. Many small business owners are realizing that investing in an MLM business is a smart investment for the near future.
3. MLM Helps You Claim Additional Tax Advantages
Sometimes cash comes not in the form of greenbacks, but in the form of taxes that you or your business don’t have to pay. Most small business owners are in a catch-22 when it comes to taxes. They are damned if they make a profit, and damned if they don’t. For instance, one shopkeeper earned a good profit one year, but ended up paying huge taxes on her take-home pay to the IIRS. To prevent that, the next year she increased her business expenses by hiring an employee to mind her store while she took more time off. Her net after-tax income was the same in both years. It doesn’t seem fair, does it?
Many small business owners are caught in the same situation, but they can change that by starting an MLM business in their homes. When a small business owner owns and operates an MLM out of her home, she can hire her children (7 years or older) to work in her MLM, and claim that child’s wages (translation: allowance) as a tax deduction. She can claim additional square footage in her house for office use and deduct that from her taxes. She can deduct her commuting miles between home and business round trip. She vastly increases her ability to deduct certain kinds of expenses, which ultimately means her take-home paycheck, after taxes, is much larger. Now isn’t that a creative way to generate dollars?
The Conversation is Just Beginning
There are a lot more advantages than can be listed here for small business owners to start their own MLM businesses. This is just the start of the conversation. MLM isn’t the same scammy industry it used to be, just as the economy isn’t the goldmine that it used to be.
If you own a small business and you are looking for a way to create a new stream of income, consider MLM. These days, an open mind can lead to a healthier checkbook. To learn more about how MLM can create a new income stream for you, consider these resources:
Educational webinar
Free consult
Phone chat with a warm body
Read the MLM blog
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Photo credit: lunch chat
Tags: MLM, multi-level marketing, network marketing
Posted by Stephanie Valentine on Jul 14, 2009 in
Small Business Cash Flow 
In my last few blog posts I’ve highlighted different ways that small business can increase their cash flow, with strategies that vary from bartering with other companies to turning away slow/no pay clients. Here’s a list of those blog posts in case you want to know more about ways to bring more cash into your small business:
3 Ways to Beat the Small Business Cash Flow Crunch
3 More Ways to Beat the Small Business Cash Flow Crunch
4 Ways to Decrease Small Business Overhead and Increase Cash
Small Business Cash Flow - Collect Early or Don’t Collect at All
In this blog post, I explore some more adventurous alternative ways that small business owners are discovering for avoiding the cash flow crunch.
Adventurous Ways to Avoid the Cash Flow Crunch
The methods I discussed in my previous blog posts are fairly common sense and standard; ask any good accountant and you’ll get some, if not all, of these suggestions. The two methods I cover in this blog post are less standard, and you may or may not have heard of them. Even if you have heard of them, you may not have considered them as viable options for you. But with the economy being the roller coaster that it is right now, you may want to keep your options open. So what are these two adventurous options?
- Factoring
- Creating Multiple Streams of Income
Here’s an overview of these two options so you can start wrapping your mind around them.
Factoring
The word “factoring” doesn’t give you much detail about this option, but it can give your business a boost if you are suffering from constipation in the cash department. With factoring, you sell your accounts receivable to a factoring company, which is usually a bank or a commercial finance company. When you sell your company’s receivables, you get cold hard cash. It is then up to the factoring company to collect cash from the clients who owe money.
The good news is that factoring is becoming more popular and more possible for small business. Previously, if you small business owned less than $10,000 in accounts receivables, a factoring company would not consider working with you. These days, factoring companies are willing to be more flexible. According to the president of one factoring company, only three percent of all small business that are eligible for factoring are even aware that this is an option to generate cash for the business.
Now for the bad news. As with any finance option, you pay a price for getting cold hard cash. The average fee is 5% per month of the total receivables amount, and the factoring company may not accept receivables with payment terms of longer than 90 days. In addition, you run the risk of angering clients if the factoring company resorts to harsh measures to collect their cash. Factoring gives you a definite cash option that you may want to consider, depending on how strapped your small business is for greenbacks.
Creating Multiple Streams of Income
Popularized by Robert Allen and other authors, the creation of multiple streams of income is the new frontier for entrepreneurs and small business owners. Whether this means becoming a shareholder in other companies, creating a new line of electronic products that can be digitally delivered, or doing pure investing, these days small business owners are gathering income streams from diverse markets for financial stability.
The bad news is, of course, that in a cash-poor economy you might not have cash on hand to invest in real estate or other companies (the whole goal being to bring cash in, not spend it).
The good news is that you have other assets that you might be able to convert into alternate streams of income, aside from what your small business currently brings in. For instance, as an entrepreneur you have knowledge, experience, skills, and talent. These intellectual assets are all inside your brain and, for you, free for the taking. The question then becomes, how can you turn those assets into products you can sell for an additional stream of income? Additionally, can you turn one of your company’s physical products into a digital one? Here are some of low-cash sweat-equity ways small business owners are cashing in on multiple streams of income. They are using their own knowledge plus the intellectual and physical assets in their small businesses to sell:
- educational DVDs, CDs, and ebooks
- memberships to websites and webinars
- online consulting (fixed price for a fixed job)
- networking events to match businesses with each other
- affiliate programs
Does this spark any ideas in your brilliant mind as to how you might turn your own or your small business’ assets into a new stream of income?
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Photo credit: jungledrumsonline
Tags: cash flow, factoring, multiple streams of income, small business
Posted by Stephanie Valentine on Jul 9, 2009 in
Small Business Cash Flow 
Did you know that the longer you allow your small business accounts receivables to age the less likely you are to get paid? After a while, the money your clients owe you can start to seem like a bad dream: tragic, but something that happened a long time ago. Like you, your clients probably have pressing issues to handle on a daily basis, like firefighting, and don’t have the time or cash to settle old debts.
Waiting is Bad for Small Business Cash Flow
According to the Commercial Agency Section of the Commercial Law League of America, the chances of your small business getting paid decrease dramatically the longer you wait to get paid. Here’s the breakdown of your probability of getting paid (I’ve rounded the number to make them easier to read):
When due: 98%
1 month late: 94%
2 months late: 85%
3 months late: 74%
6 months late: 58%
9 months late: 43%
12 months late: 27%
24 months late: 14%
Are you starting to get the picture? Waiting is bad, bad, bad for your small business cash flow. The moral of this story is: get paid early or don’t get paid at all.
Need Cash Flow Help for Your Small Business?
In the coming posts I’m going to feature some unusual ways that some small business owners are using to improve their cash flow. But before you dive into these solutions that are a little out in left field, consider some of the more traditional ways to plus the cash flow leaks in your small business by reading these recent blog posts:
3 Ways to Beat the Small Business Cash Flow Crunch
3 More Ways to Beat the Small Business Cash Flow Crunch
4 Ways to Decrease Small Business Overhead and Increase Cash
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Photo credit: hand out
Tags: accounts receivable, collections, Small Business Cash Flow
Posted by Stephanie Valentine on Jul 2, 2009 in
Small Business Cash Flow 
In the last few blog posts I’ve talked about ways to reduce the cash leaving your small business and increase the cash coming in. In other words, these are all methods to shrink the cash flow gap.
I just read a case study (on the Business Owner’s Toolkit website) that gives a really interesting perspective on the cash flow gap. This case study profiles a small business that makes custom furniture, and tracks the cash flow in and out of the business as the owner creates a custom dining room table.
A picture is always worth a thousand words, and the bar graph that goes with the case study is priceless. It tracks, over the duration of the job (67 days), both the cumulative cash flow and the company’s check register. You can easily see where the cash flow crunch occurs. It happens over and over again, with the cash flow going negative on day 13 and not hitting the black again until day 67. Ouch! That’s 54 days of operating in the red.
This case study really gives you a picture of why cash flow is so important to a small business, and how easily your business might be operating in the red even if your accounts receivables look healthy. Read the whole case study here, and then take a look at your own small business’ cash flow picture:
Case Study: The Cash Flow Gap
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Photo credit: Cash flow
Tags: cash flow gap, small business
Posted by Stephanie Valentine on Jun 30, 2009 in
Small Business Cash Flow 
What’s overhead? Not just the roof. For a small business overhead is usually the debt hanging over the small business owner’s head. Actually, overhead is the ongoing general cost of running your small business, and can include items like the cost of carrying inventory, office supplies, payments on equipment, and the cost of service providers like accountants and lawyers.
In the last few articles I’ve discussed ways small business owners can increase their cash flow into the business, by converting accounts receivables into cash. In this article, I outline four ways to decrease your company’s overhead. These simple solutions can help your business preserve cash, and stay solvent.
Decreasing Small Business Overhead
1. Barter with Others
Trading products or services with other businesses is one way to reduce your overhead. I often use this approach in with my small businesses. I may trade my writing services or web-design work for graphic design services or legal advice from another company. Bartering works well so long as both parties have goods or services of equal value to trade. If you’re not sure how to go about bartering, check in with your local Chamber of Commerce, which may already have a barter network in place.
2. Reduce Inventory
The cost of carrying inventory makes up a large percentage of the overhead for many small businesses. While it’s essential to provide your clients with what they want, there are ways to do that while trimming your inventory. First, review your inventory to identify which items are hot-sellers and which have been sitting on the shelf gathering dust. Next, locate the items that generate the best profit for your business. Finally, trim the low-profit and slow-selling items from your inventory. You can even turn this action into a benefit that can be conveyed to your customers. Turn an inventory reduction into a “specialization.” For instance, one gift store business reduced inventory by carrying only products made by indigenous people around the world. The resulting reduction in overhead has allowed the business to expand their marketing efforts, and the increase in cash flow is the overall result.
3. Renegotiate the Cost of Regular Business Services
Most small business owners are too busy to price-shop, but you’ll find that you can negotiate lower costs for regular services your business buys by doing just a little price shopping. Call around and get three to for quotes for regular business services, including insurance, long distance phone service, equipment maintenance, and delivery services. Once you find the best rate, go back to your current supplier and suggest they meet the price. If they refuse to do so, consider setting up an account with another, less expensive service.
4. Join a Buying Co-op
Buying in bulk is always less expensive. Many small business owners are now forming buying co-ops to purchase office supplies and equipment in bulk. For instance, many office supply stores offer discounts for buying paper, ink, or toner in bulk. If you don’t already have a buying co-op in your area, call up a few of your fellow small business owners and create one from scratch. You can also call your local Chamber of Commerce to see if a buying co-op exists in your area.
Reducing small business overhead is really a matter of paying attention to the details. Often, the savings you get from renegotiating your insurance policy or buying in bulk may not seem like much, but if you add up all the small savings you’ll find that your average annual savings can be significant. These days, when cash is vital to business survival, pinching pennies where you can is often the difference between a thriving enterprise and a bankrupt business.
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Photo credit: Office Supply Construction
Tags: barter, cash flow, inventory, small business overhead
Posted by Stephanie Valentine on Jun 25, 2009 in
Small Business Cash Flow 
In my last blog post I talked about three simple ways to improve your small business’ cash flow, including prompt billing, avoiding slow and no-pay customers, and asking for your cash sooner.
Now I have three more ways you can increase the cash flow. More specifically, these methods help you turn accounts receivables into cold hard cash that your small business can use today.
3 More Ways to Increase Cash Flow Into Your Small Business
Some of these cash flow strategies may take a little time to set up, but you’ll find that the resulting positive cash flow will be worth the effort. By implementing these strategies, you’ll be joining the thousands are small business owners who are looking at resourceful ways to get paid sooner.
1. Make It Easy for Your Clients to Pay
It’s only logical that your clients will pay you sooner if you make it easy for them. Here’s how. First, when you establish a relationship with a client, state your payment terms and options up front. Let your clients know whether you accept cash, checks, credit cards, and online payments.
Second, start accepting credit cards. As your clients begin experiencing their own cash flow crunches, they will want to manage their cash flow by using credit cards to pay for services. By accepting credit cards, you will increase your chances of being paid in a timely fashion. These days, small businesses ranging from plumbers to accountants are accepting credit cards–and seeing an upsurge of cash flow as a result. Although you will have to pay 1-3% to a credit card processor, the increase in your small business cash flow make the fees worth paying. Remember that 90% of business failures are due to cash flow.
Third, consider accepting online payments through services such as PayPal, Verisign, Quickbooks, or Authorize.net. Your clients are every bit as busy as you, and by allowing them to pay online, you allow them to handle payment at a convenient time, which may not be during regular business hours.
2. Don’t Be Afraid to Ask for Your Money
Studies show that friendly reminders, along the lines of, “Did you get my bill and when can I expect payment?” can significantly increase payment rates. Before you start asking for payment, be sure that you have made your payment terms clear at the outset of your relationships with your clients. Next, use software to track the age of various accounts receivables so that you can easily list late-paying clients, and start calling with friendly reminders. Finally, if necessary, consider using an outside collection agency for extremely delinquent accounts. Use this option with caution, as you may negatively impact your business relationship with your late-paying clients, or others who know those clients.
3. Balance Your Client Base for Steady Cash Flow
Depending on how you typically bill for products or services in your business, you can create a steadier cash flow by using different payment structures for different clients. For instance, if your business is seasonal or experiences fluctuations in cash flow, consider switching some clients over to a retainer-basis so that the monthly cash flow is steadier. With a retainer, you offer your client a certain amount of products or services for a fixed fee per month. To encourage clients to switch over to this method, consider throwing some bonus products or services into the mix or offering a slight discount. While this might cut into your profit margin a bit, you will get the benefit of steadier cash flow every month.
It can take some time to implement these strategies. For instance, if you decide to accept credit card payments, you will need to set your business up with a merchant services company. Similarly, if you choose to move some of your clients to a retainer basis, you’ll need to spend some quality time with those clients to persuade them that a retainer is a win-win solution. However, you’ll find that if you invest this time and effort up front, your bank balance will reflect a much healthier cash flow, which is crucial in today’s tough economic times.
Have you got some resourceful methods for increasing the cash flow into your small business? Care to share?
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Photo credit: Pay Me!
Tags: billing, business failure, increasing cash flow, payment terms, small business
Posted by Stephanie Valentine on Jun 24, 2009 in
Small Business Cash Flow 
What do 90% of business failures have in common?
Lack of cash.
Cash is king. According to Dun and Bradstreet, 90% of business failures happen because of poor cash flow. In today’s fragile economy, maintaining a strong positive cash flow for your small business is more important than ever.
Cash Flow Basics for Small Business
Well, duh, right? Any high school economics student can tell you positive cash flow is important to a small business. But knowing about cash flow and keeping a positive cash flow for your business are two different things. So what do you need to consider when it comes to your business’ cash flow? Three factors affect cash flow:
- Accounts Receivable (cash flowing into your business)
- Accounts Payable (cash flowing out of your business)
- Overhead Expenses (a subset of accounts payable)
In this article I give you three ways to increase the cash flow into your business.
3 Ways to Increase Cash Flow into Your Business
If you accounts receivable records look good, your business cash flow should be good, right? Wrong. A positive accounts receivable column only helps your business if you can convert your receivables to cash. Your business’ accounts receivable is a listing of money owed to your company. But being owed and having cash in hand are two different things. So how do you turn accounts receivable into cash faster for your small business?
1. Bill Promptly and Accurately
Another “Duh!” suggestion, but you might be surprised at how many small business owners are guilty of neglecting regular and prompt billing, viewing it as another paperwork hassle that goes on the back burner. If your small business doesn’t bill promptly, start now. Assign an employee to handle this task if necessary. When working on long-term projects, arrange to bill monthly for work-in-progress and ask for a deposit before you start the project. Also, be very careful and detailed in your billing. Nothing strains a good business relationship like billing errors. Review your bills for errors and omissions before sending them out.
2. Avoid Slow or No-Pay Clients
You might be amazed at the kinds of clients who are slow to pay, or totally delinquent. According to Dun and Bradstreet, the worst slow-pay offenders are large businesses, those with 500 employees or more. On average, these businesses take 62.7 days to pay up, more than 4 weeks past normal 30-day terms. Here’s the other shocker: the most common no-pay offenders are clients who owe $500 or less. Apparently, these clients feel that this amount of cash is insignificant, and don’t feel guilty about not paying up.
Before you take on a new client or extend credit to a client, do your homework. You can do a credit check on all new clients using an outside agency, or request credit references and do your own checking. Another option is to call other businesses that do business with your client to learn whether the client pays on time. If the potential client turns out to be the slow/no pay type, don’t take them on. In lean economic times it may seem crazy not to accept all the business you can get, but clients who don’t pay up can seriously and negatively affect your cash flow. Not only will you wait endlessly to get paid for goods and services already delivered, but you will also spend a lot of internal resources tracking delinquent accounts and chasing your cash. The best policy is: “Just say no!”
3. Plan for Fast Cash
There are two ways to get your clients to pay up sooner. First, you can negotiate short payment terms when you contract with a client. These days, many small businesses are asking for and getting “net 15″ terms. See which if your clients might be open to these terms. Second, if you’re not comfortable asking for “net 15″ terms, you can offer clients a discount for early payment. Offer a one to two percent discount for paying within 10 days. While you’ll be losing a little cash to the discount, you’re overall cash balance will be a lot healthier.
These three simple strategies for cash flow management can be the difference between your small business operating in the black or becoming one of the business in the 90% failure bracket.
Do you have your own unique ways of preserving or increasing the cash flow into your business?
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Photo credit: Stimulus Package
Tags: billing, business failure, increasing cash flow, payment terms, small business
Posted by Stephanie Valentine on Jun 23, 2009 in
Small Business Cash Flow 
Horses. Murder. Mystery.
Those are the usual components of a Dick Francis novel. Dick Francis, once the Queen of England’s steeplechase jockey, is one of my favorite novelists. Why? Because he writes about two things I love: horses and solving mysteries.
If you’re a small business owner you’ll probably like books by Dick Francis, too, even if you’re not a horse freak like me. Actually, let me rephrase that. If you are or want tobe a successful small business owner, you should love Dick Francis novels … or other kinds of mysteries.
Successful small business people share one thing in common with the main characters in Dick Francis novels: a love of solving mysteries. Look around at some of the people who founded tiny companies that are now huge: Sam Walton of Sam’s Club, Gordon Moore of Intel, and Michael Dell of Dell Computers. They all love the process of tackling and solving problems.
Throwing Down the Gauntlet - Are You a Problem Solver?
Last night I was so inspired reading Robert Kiyosaki’s “Increase Your Financial I.Q.” book that today I am going throw down the gauntlet to all you small business owners out there: I challenge you to become more successful than you ever dreamed in your small business by focusing on one thing–solving problems.
This may sound silly, since business owners always seem to be solving problem, or at least fighting fires. But firefighting and problem solving are two different things. Firefighting is simply running around and dealing with whatever is most urgent in your business. Solving problems means developing final and permanent solutions to problems that plague your small business. Firefighting gives you a small period of peace. Problem solving brings your business a solid revenue stream, real profit, and a solid financial base. In other words, a permanent sense of success even in rocky seas.
Small Business Problem Solving in Today’s Economy
What kinds of problems do small business owners deal with in today’s economy? To start with, see if this list resonates with you:
- cash flow crunch
- lack of credit
- increased global competition
- failure to find or keep good employees
- clients with shrinking budgets
Sound familiar? Sound bad? It’s not. Here’s the good news. While everything may be topsy turvy in the financial world, one thing is for certain: all of these problems are amazing opportunities for you to learn how to solve problems.
I know, it sounds kinda like your mother telling you that eating vegetables is “good for you.” On the face of things, it doesn’t very exciting, does it?
But being a seasoned problem-solver is the on asset you can count on, no matter what the financial markets do. In fact, it’s the one reason Robert Kiyosaki gives for being certain that he will survive any financial disaster of any magnitude. He’s survived numerous personal financial disasters, so he knows that no matter what happens to the world economy or his business finances, he’ll survive just fine. He’s got his Sherlock Holmes skills to fall back on.
So … having said all that, I’ve had to ask myself, “Am I willing to see problems as opportunities to learn? Do I love a good mystery, even if it’s not in a book?” For me, it’s a resounding “Yes!” I love cracking the code on a good mystery. I’m as stubborn as a mule in that way. Problems that crop up in my life have a way of sticking in my craw, and I just can’t let them go until I get them solved.
Here’s a good example: I wanted to learn how to sell retail products over the internet. When I first got started, I knew next to nothing about selling on the internet. I just dove in and hoped for the best. I got lots of nothing, for months, even years. Today, seven years later, that business produces a steady passive income stream and is mostly “hands off.” That income pays all my monthly bills, so I can work on cracking the next code.
Are You a Sherlock Holmes for Your Small Business?
What about you? Have you got that Sherlock Holmes propensity for solving a good mystery? Maybe you don’t go looking for mysteries to solve, but that doesn’t mean that you can’t become an excellent problem solver for your own business.
To help find your inner Sherlock Holmes, the coming articles are going to focus on helping you, the small business owner, become an effective problem solver for the biggest problems plaguing your business today. The first stop on this mystery train will be … drum roll … cash flow.
Cash flow is king, so stay tuned to see how you can solve any cash flow problems that your small business might have!
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Photo credit: Sherlock Holmes
Tags: cash flow, sherlock holmes, small business problem solving
