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| Small Business Success | Business Finance |
By: Santi Chacon
Business Coach
This Is Not Your Grandmother's Finance
Don't complicate it! have more money coming in than going out, keep cash reserves for a rain day or an economic burst, know when you reach your financial cap on a product or service and set market share goals, and diversify in other industries.
Good Accounting
Positive cash flow is a big challenge with smaller companies. Negative cash flow is symptomatic of faulty marketing or no marketing at all. Being a great marketer takes experience. If you haven't forged the experience to make your company profitable just know that marketing is a skill that can be learned or outsourced.
Stewardship
Great financial stewardship should require three things. The first concept is to save what you can, the second is spend slowly, and third create more income streams within reasonable time. Consider the illustration of having a tub (this represents your business), with holes (these represent accounts payable/debt) and running faucets (these represent accounts receivable/earning opportunities). The goal of the business finance game is to turn on as many faucets and plug as many holes up, so that the water (cash) steadily increases.
Water
Your first financial obligation to stakeholders is to grow cash reserves. Cash has the benefit of keeping your lights on and keeping jobs i.e. buying you time when you are racing against the clock to produce results. You will have rainy days in business maybe even rainy years brought about by unexpected market or economic conditions. Be prepared! Save at least two years worth of of your company's expenses.
Holes
An executive needs to be disciplined in spending, if you find yourself making poor purchasing decisions I have a few suggestions you can apply before making a purchase:
- Measure and Document Your Return on Investment
- Document Your Opportunity Costs
- Create a Purchasing Board
Set market share goals. Focus on penetrating target markets until you meet your objective. As your business experiences steady growth began focusing a percentage of your resources on creating a related subsidiary. A key to creating a successful subsidiary is to leverage current strengths i.e. knowledge, experience, customers, vendors, partners etc. in gaining traction in your new niche.
Examples Of Related Industries
A few examples of closely related industries would be Telecommunications and PBX (Long Distance and Phone Systems), Telecommunications and Teleconferencing (Long Distance and Audio Conferencing), Hosted Software Solutions and Stand Alone Software Solutions, Business Consulting and Business Coaching, and Business Consulting and Information Products (reports, books, booklets, e-books, subscription based publications online and offline etc.). All these related businesses can be leveraged using the same resources.
The OCD ADHD CEO and Small Business Success
- Management
- Branding
- Market Research
- Business Finance
- Lead Generation
- Lead Conversion
- Client Fulfillment
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