Companies run into trouble from time to time. But why do some companies survive those troubles and others don’t? To me, there are two issues. First, it’s knowing when to ask for help. Second, it’s being willing to follow the advice that you’re given. But not everyone waits till they’re in trouble to ask for help. I remember getting a call from a business owner who said he was doing pretty well, he just wanted some help because he “didn’t know what he didn’t know.” Sometimes I meet with companies that are in a different situation. They have waited so
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KPIs, Key Performance Indicators, are an important way for any manager or business owner to keep track of how he or she is doing. Remember one key point – If you don’t measure it, you can’t improve it. Which KPIs should you use to determine the success of your business? It would be nice and easy to tell you the six (6) most important KPIs for your business. The problem is that each business is different, and to make the decisions more difficult, each business owner has different goals. So how do you determine what KPIs are the ones that
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You created your budget last fall, and you were relieved that you completed the task. You don’t need to worry about it for another year. But what is the reason that you created the budget? If it was just to put a target on your company’s back for this year, then you are missing the opportunity to have another planning tool at your fingertips. Let’s look at three major areas of your budget to see how it can help you through this next year. Revenue and Gross Margin There are a lot of factors that go into your revenue numbers:
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We truly don’t know when the recession is coming. It might be in six weeks or six months. But historical financial records show that one is coming. So, how can you prepare your company to better handle the recession when it does come? Last month, I discussed how carefully managing your Accounts Receivable and Inventory can help prepare you for what’s coming. This month let’s take a look at some other crucial business matters. Manage your use of credit Carefully use your credit line. A credit line should never be used to cover operating losses. If you are near the
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Part of the I don’t know what I don’t know series This is seemingly a very simple topic, but it certainly can have a dramatic impact on the cash flow of your business, because it can impact both sides of your ledger – your Accounts Receivable and your Accounts Payable. What does it actually mean to give someone Payment Terms? It is the period of time that you give your customers to pay their bills. But it can be more complex than just that. When someone sends you an invoice that gives 2/10N30 payment terms, do you really know what
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