Business Management

Do you have strong cash management?

Poor management is the main reason for business failure and poor cash management is among the most frequent contributors to failures. Managers need to understand the basic concepts of cash flow and how to plan for unforeseen problems that are often faced in business.

Cash vs. cash flow

Cash is ready money in the bank or in the business. It is not inventory, accounts receivable, and it is not property. These can potentially be converted to cash, but can't be used to pay suppliers, rent, or employees.

Profit growth does not necessarily mean more cash on hand. Profit is the amount of money you make over a given period of time, while cash is what you must have on hand to keep your business running. Over time, a company's profits are of little value if they are not accompanied by positive net cash flow. You can't spend profit; you can only spend cash. Watching the cash inflows and outflows is one of the most pressing management tasks for any business.

Positive Cash Flow

If its cash inflow exceeds the outflow, a company has a positive cash flow. A positive cash flow is a good sign of financial health, but is by no means the only one.

Negative Cash Flow

If its cash outflow exceeds the inflow, a company has a negative cash flow. Reasons for negative cash flow include too much or obsolete inventory and poor collections on accounts receivable (what your customers owe you). If the company can't borrow additional cash at this point, it may be in serious trouble.

Practice Good Cash Flow Management

·       Good cash management is simple. It involves:

·       Knowing when, where, and how your cash needs will occur

·       Knowing the best sources for meeting additional cash needs

Being prepared to meet these needs when they occur, by keeping good relationships with bankers and other creditors

The starting point for good cash flow management is developing a cash flow projection. Smart business owners know how to develop both short-term (weekly, monthly) cash flow projections to help them manage daily cash, and long-term (annual, 3-5 year) cash flow projections to help them develop the necessary capital strategy to meet their business needs. They also prepare and use historical cash flow statements to understand how they used money in the past.

 

Business Branding

Great new Branding Tips

In this week’s blog I am happy to endorse a new book authored by one of my associates, Ed Roach,  a person for whom I have a great deal of respect in the Brand building business.

I recommend it to any business organization looking for a fresh approach to reviewing and renewing their brand.

Here is a brief version of the press release that provides a description of the book and a link to Ed’s web site for acquiring the book. You won’t be disappointed by taking the time to get a copy.

 

Branding Expert Releases New Book Containing Over 100 Branding Tips SMEs Can Use Right Now!

 

A new book, packed with straight forward no B.S. branding wisdom bundled to easily steer any business in a positive direction.

 

 “101 Branding Tips” offers a wealth of practical advice that small to medium size enterprises (SMEs) can immediately use in the branding of their business.

 

 “101 Branding Tips” is different in that is focuses its attention entirely on the small to medium size enterprises.

“It's hard to relate when you're a small business,” says Roach, who tries through his book, “101 Branding Tips” to deliver valuable advice that an SME can resonate with immediately.

“101 Branding Tips” hits your small business audience dead on.

 

 

“101 Branding Tips” is available at:  http://www.amazon.com/101-Branding-Tips-Practical-advice/dp/0988125005/ref=sr_1_6?ie=UTF8&qid=1344783268&sr=8-6&keywords=101+branding+tips

 

 

Business Management

Culture at its best

For many employees their job is more than a paycheck. In order to keep employees engaged and committed to success it is important for owners to focus on maintaining a positive work environment and culture. Here are techniques to consider:

1.     Empower employees

 As an owner, you can stay in close touch with your staff but you can't be in the thick of it all the time. Instead, you need to encourage employee involvement and be willing to step aside as they take control.

When employees drive the product direction and culture, they feel more vested in it and loyal to the products they help create.

2.     Limit Meetings

Use meetings as necessary but limit participation to those who are directly involved in the issue. Encourage more ad hoc discussions where employees are authorized to implement decisions.

Hold periodic broadly based meetings where all staff can join in and brief the entire company on their current activity. Treat staff to lunch at these broader based meetings.

3.     Make it comfortable

Physical space and comfortable, modern equipment in an attractive location are valuable assets to improve employee morale. These are assets when recruiting also.

4.     Make jobs fun

Take the opportunity to host monthly activities for employees to relax. Holiday parties, picnics, “fun Fridays” are common options used to provide downtime for employees and make them feel like part of the family. Providing break time improves staff’s ability to focus and improves overall productivity.

5.     Be selective

In order to maintain a positive culture be selective with every new hire. Ensure new employees fit and can become a positive team player and contributor. Bad apples can spoil the environment quickly.

As you continue to build and maintain your culture, efforts in these areas can pay dividends on a continuing basis.