What is a Cash Flow Forecast and how can it help my business?

The key to avoiding a cash crisis in your business is to have as much visibility as possible into your Company’s future cash flow.  A cash flow forecast can help your small business plan more effectively.  If you can look into your Company’s operating results in a quicker fashion, you can make changes to your business quickly if you need to.  Before you make a cash flow forecast, make sure that you track your financial results in real-time (as in now).   Most companies receive their financial statement two-to-three weeks after the end of the month or in some cases, much longer.  That is a problem because you are now reviewing history and therefore reacting late.

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Financial problems: How to avoid them in your small business

One of my favorite financial concepts is “rationalizing” a business. By definition, from our friends at Merriam-Webster, rationalize means: to apply the principles of scientific management to (as an industry or its operations) for a desired result (as increased efficiency).  Rationalization of a business’s operations is a simple concept. However, in my opinion, it’s not easy to implement because of ego.

Entrepreneurs work very diligently to grow their businesses by adding talented staff along with non-staff overhead (nicer office, computers, the list goes on, etc.). If a rapid growth strategy is not executed with a laser-like focus on financial metrics, here is the all-too-familiar scenario that unfolds: the anticipated revenues do not materialize and the business is unable to support the increase in staff and overhead.

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Business Brand Management: Finding the Right Medium to Promote Your Company

Business brand management is all about getting your message out there to the right people, through the right means of communication and building a reputation to back it all up.

But, as a small business entrepreneur, you’re probably asking yourself just what is the right way of communicating with people so that your company’s name gets out there.

That’s a question that weighs on the minds of many small business owners.

And with good reason!

Without the right message, your company will fail to get people to come through your doors and, without people coming through your doors, you won’t be seeing the kind of revenue you need to see in order to turn your business into the company that you envisioned when you first drafted up your business plan.

But how do you go about working on business brand management so that your name gets into the right ears?

This post will discuss some of the different ways that you can approach the practice for the best possible results and give you some idea of what you can do, depending on your company.

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Financial Statement Analysis: Learn About What Shape Your Business Is In

When it comes to running your business, one of the best ways to learn about what kind of shape it’s in than conducting a financial statement analysis.

Not only will analyzing a financial statement show you where your company has stood financially but it will also show you where it is standing now. Analyzing your company’s financial statements can also help you make plans for the future that will allow you reach the goals you’ve set up for your company.

That’s why you don’t want to make the same mistake that I often see with many other entrepreneurs.

Too many times I’ve seen business owners take a look at their financial situations and, if they were satisfied with that they saw, that was the end of it.

That’s a mindset that I believe every business owner needs to get away from if they want to thrive.

Complacency will only hurt your business in the long run. No matter what stage your company is in, you should always be in the same frame of mind you were in when you started. Always look for the next big thing, always look for ways to improve what you do and continuously try to make your situation better.

This post will show you just how you can do that by starting with your financial statement analysis.

So let’s get started.

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Stages of the Business Cycle: How Your Business Will Develop Over Time

As an entrepreneur, it helps to know what the different stages of the business cycle are so that you can better prepare yourself for what’s to come.

While no two companies are exactly alike, I can guarantee you that your firm will experience a life-cycle that is fairly similar to what many other companies have seen in the past.

This is especially useful information to have because knowing the various phases of the cycle before they actually arrive will allow you to pre-emptively allocate the use of the resources at your disposal.

Let’s take a look at the different stages that your business will generally experience, and you will see how the universal business cycle applies to your company, no matter what the product and/or services you offer.

 

The Stages of the Cycle: The Seed Stage

If you haven’t actually begun building your business, this is where it all begins.

During the seed stage, your business is just a thought that you have in your head. However, that’s exactly where all ideas start.

Since you haven’t actually committed to anything yet, the main challenge you’ll face during this stage of your company’s development is dedication to your idea.

We’ve all had ideas in our heads at some point in our lives that, for whatever reason, fizzled out and faded away. You don’t want that to happen with your own company.

During this conceptual stage, you want to pour as much energy as possible into researching your idea and making sure that it’s not only feasible for current market conditions, but that your idea for a business is a sustainable one.

Even at this early stage, you want to think in the long term. Ask yourself the infamous interview question.

“Where do you see yourself in one/five/ten years?”

Work from there when developing your company, but remember to be realistic. It’s absolutely fine to dream big, but don’t dream so big that you take on more than your can actually handle.

During this stage of development, you will also want to look at establishing sources for seed money to get your feet off the ground. Look for bank loans, investors, grants, and anything else that can help you get started and you’ll be well on your way.

 

The Start-Up Phase

Congratulations! You now have a living, breathing company from which customers can purchase goods and services.

Your focus now is to manage your money carefully during this phase of the business cycle, as it’s likely that you don’t have a substantial cushion upon which you can rely to run your company. You want to keep an especially close eye on the way your business develops because of that.

During this phase, keep a very close eye on the business plan that you established during the seed phase. As things happen and new developments arise, don’t be afraid to scale back on certain areas of that plan and expand on others.

It’s important to remember that, above all else, you want to be flexible. While this is true for all stages of the business cycle, I would argue that it’s more important here than anywhere else, as the formative years of a business are often the most crucial.

While establishing your customer base and hiring talent that will help you move closer to your business goals, you want keep a very close eye on your expenses and keep them low in whatever ways you can without hurting your sources of revenue which will, by extension affect your reputation.

 

The Established Stage

Your company went from being an idea, to becoming a reality, to growing into a respectful company, and now you have a name.

At this point in the game, you want to always look for ways to bring in new customers, more revenue, and different ways to increase the hold you have on the marketplace.

While you should always strive to improve the processes that you’ve set up over the past few years, it’s especially important during this phase of the business cycle. This is because, as your company grows and becomes well known, more people will be looking at you.

And I don’t necessarily mean customers.

When you gain some recognition, fledgling companies that are in the same position you were in previously may see your firm as something to gun for in order to establish themselves.

Do everything you can to show customers and investors what you plan to do to expand on your successes and continue evolving as a company.

This means you constantly have to be planning your next move, looking at new markets to tackle and trying to figure out how you’re going to branch out. Look at introducing new services, partnering with other firms, and, most importantly, keeping focused on emphasizing what you do best.

 

The Maturity Stage

This stage of the business cycle is the one that you’re likely aiming for.

At this point, people know who you are, the money is coming in steadily, and your groundwork has been well laid so that you can enjoy much-deserved success.

The keyword during this phase of your business’s life is stability. However, with stability often comes increased competition with it, so you want to keep an eye on the way that things develop in order to maintain your market share and defend the position you’ve worked so hard to obtain.

While innovation is something that you want to practice at all times, it can often be what separates you from other companies of similar notoriety at this point in the business cycle.

Take what you’ve done to reach this point, improve on it, always keep your customers and their desires in mind, and you’ll enjoy success for years to come.

 

What It All Means

Running a business is hard work, but with the right idea and the right level of determination, it’s possible to create an opportunity that will allow you to create the kind of business that you want to create.

Since your company is different from every other, even those within your own sector, your experiences within each stage of the business cycle may be slightly different. I can tell you, however, that with the right determination and business coaching, you will be well on your way to success before you know it.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more information on business analysis, business planning, and ways to grow your small business profitably, please check out our website www.portalcfo.com.  Follow us on Twitter @portalcfo

Sign up for our weekly blog email update to stay tuned for details on our upcoming teleseminar for maximizing profits in your business.

Identifying Business Functions

identifying business functions

Of the many things that you can do to ensure that your company is successful in the long term, identifying business functions is among the most important.

Being able to identify business functions helps you to have a clearly-defined path to guide your company towards.  You will also be to shape the roles of your team and the other people who help you get where you want to be as an entrepreneur.  Knowing about the functions of your business involves being at least somewhat involved in every aspect of your business; whether that’s by being hands-on, acting in a supervisory role, or simply checking progress every so often.

So how do you go about identifying business functions so that you can better shape your company’s future?

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Identifying Business Structure

Knowing How to Classify Your Company

As an entrepreneur, you’re probably asking yourself about identifying business structure in order to better organize your business to deliver your products and services as efficiently and effortlessly as possible.Identifying Business Structure

By knowing about the organizational structure under which your company works, you’ll not only have a clear idea about who in your company is responsible for what, but what your company is capable of as far as leadership and manpower are concerned.

By having a clear structure in which everyone has a defined role that he or she performs, a job can often get done quickly and without any confusion as to who is responsible for what, but is this kind of organization always needed within a company?

Let’s take a look at the practice of identifying business structure and you’ll get a clear idea about how important it is and whether or not it’s something you’ll need to take up.

The Types of Business Structure

There is no one type of business structure that’s one size fits all.

Since businesses come in all kinds of sizes, so too do the types of structures that cater to those businesses. You wouldn’t need a board of directors for a small, locally owned grocery store anymore than you would attempt to have a single executive run a multinational conglomerate.

Because of this, there are several officially recognized types of business structures that a company can claim, but it all depends on several factors. In addition, each type of structure has its advantages and disadvantages.

So let’s take a look at each type of structure and you’ll be able to determine what’s best for your company.

  • The Sole Proprietorship – Your business is a sole proprietorship is the type of business you run when you are the only employee involved.

    Whether you simply want to make a little money on the side in order to supplement your full time job or you feel as though you’re enough of an expert in a given subject that you could be successful as a consultant, the sole proprietorship is the business structure you would classify your company as so long as you’re the only employee.

  • The Partnership – This is the structure you would follow if you were starting a company with another person or a small group of people.

    If you are identifying business structure as a partnership, then it’s important to know that all of the partners are accountable for profit, loss, and liability.

    Likewise, each partner has a legitimate claim to profit as they are considered joint owners of the company.

  • Corporation – This is the most complex of business structures due to all of the people involved, as well the number of laws that are in place specifically to govern corporations.

    This type of business structure is unique from the others in that corporations are, in a sense “people”. While a group of entrepreneurs may form a corporation, it eventually becomes separate entity from those founders.

    Under law, this means that a corporation can legally do things that people like you and I can do like open bank accounts and own property.

    Unlike other types of structures, the owners of corporations are not responsible for things like debt and lawsuits. Any financial judgments made against a corporation are taken from its assets, not those of its share and stockholders.

  • Limited Liability Company – This is a fairly new classification of business structure that combines some of the features of both partnership and corporation.

    If you are identifying business structure as an LLC, then you should know that LLC status is typically granted by state statute.

    Within an LLC, owners may be individual members, corporations, and other LLCs and most states allow an LLC to have only one member.

    Identifying business structure as an LLC is advantageous because it allows you more flexibility in how you manage your business as opposed to what you can do with corporation status.

These are the basic types of business structure that you can use for classification when you begin building up your company.

It’s important to remember that each type of structure has its own setup procedures, paperwork, and red tape that you have to work through in order to make sure that you are in compliance with the law, so it pays to have an expert in business advising to make sure that everything involved with identifying business structure is in line before you actually get started.

By knowing the rules associated with each type of business structure, and just what the advantages and disadvantages are with each one, you can be well on your way to running a successful company that will be on the minds of your customers for years to come.

This post is a part of a series that helps you identify opportunities and problems within your small business.
Click here to read more related posts.

Identifying Business Strategy

identifying business strategy

How to Plan Ahead In Order to Get Ahead

Identifying business strategy is an important part of running your own company, no matter what industry you operate in.  I would say that doing this is especially true for small and medium-size businesses that are nowhere near the level of maturity that many of their competitors have reached.  When it comes down to it, being aware of your corporate strategy is very much like developing your business plan during the beginning stages of your business.  The difference here is that you could argue that business strategy planning for future development once your business is up and running is much more involved than initial business planning.

Since your company has begun establishing itself in its sector, gathering a steady customer base, and bringing in a respectable amount of revenue every quarter, it only makes sense that the stakes are higher now.

By identifying business strategy, you can make sure that your company continues to follow the path that brought from its infancy into the role of a legitimate business and continues to take it farther than that.

So let’s take a look at some of the ways that you can make sure you identify and establish the right strategies in order to achieve long-term objectives.

Analyze Your Situation

When you’re planning anything, whether it’s related to business or not, you want to look at the situation and try to consider any factors that might affect your plans.

As far as your company is concerned, this would mean making sense of your business environment. That would include factors like:

  • Knowing your industry – Is your industry currently in an upturn or downturn? Is the nature of your industry such where new developments are always emerging (i.e. technology)? Are there times of the year that are bigger for your industry than others (i.e. toys and Christmas)?

Questions like these should be on your mind all the time, but they should be especially prevalent when it comes to identifying business strategy.

  • Knowing your customers – You wouldn’t be anywhere without them, so it helps to know just who your serve so that you can further capitalize on your efforts and strengthen your reputation among consumers.
  • Assessing the viability of your ideas – While you’re analyzing your situation, it pays to know just how plausible any ideas you might come up with would be. You may want to test certain practices, seek advice from colleagues and mentors, and study any similar situations that may have occurred in the past

Testing your ideas will allow you to see how well they might thrive in the market or, conversely, how poorly they might do if rolled out on a larger scale.  By testing your ideas early, you can either generate a positive buzz and create anticipation for a future product, or kill an idea before it hurts your revenue and reputation.  Analyzing your situation is a step in the right direction but, once you’ve done that, it’s time to follow through.  After you’ve looked at the circumstances, the next step is identifying business strategy by establishing long term goals.

Key Long Term Goal Areas to Examine

Since every business is different, there is no true one-size-fits-all formula for coming up with an effective business strategy, but there are a few areas in which every business should establish goals.

Some of those can include:

  • Your standing compared to the competition – Look at what the companies you compete against do as far as business is concerned and figure out where you want to be. By knowing your standing, you can figure out if there are things that you can do better than them, capitalize on those areas, and try to take some of their market share.
  • Your employees – Not only do your employees serve as the face of your company, their skill drives it; which makes them a core part of identifying business strategy.

From providing additional training in important skill sets, to implementing policies that keep morale and productivity high, you should work to develop your employees and offer an example that other companies will want to follow.

  • Growth – This goes hand in hand with planning your business’s future, but you should clarify just what kind of growth you want to achieve.

Do you want to get a larger office? Open additional locations? Expand the variety of offerings you bring to the market? Expand the geographic area that receives your product?  Growth in business can mean many different things and part of identifying business strategy has to do with just how you want to grow.  By identifying the type of growth that you want your company to achieve, you can establish a clear path for how to get there.

In order to plan a corporate strategy effectively, you have to look to the past, the present and the future.  Only by knowing where you’ve been, where you are right now, and knowing where you want to go in the future, can you establish a strong, well-thought out plan that will help you navigate your industry and outmaneuver your competition.

By taking the right steps in identifying business strategy, you can not only avoid actions that might harm your business, but seize opportunities that will take it to great places.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more information on business analysis, business planning, and ways to grow your small business profitably, please check out our website www.portalcfo.com.

This post is a part of a series that helps you identify opportunities and problems within your small business.
Click here to read more related posts.

Business Reorganization Consulting

Going through the process of restructuring your business can be difficult enough that you should consider business reorganization consulting in order to make sure the process goes smoothly for everyone involved.

With the economy being the way it is right now, many businesses of all sizes and industries are changing the way that they operate.

Some are scaling back on operations by reducing staff or changing locations to cut costs.

Others are repurposing their staff and consolidating roles

During economic times like this, it isn’t uncommon to see mergers and acquisitions occur so that a company on the brink of failure can keep its doors open. Nor is it uncommon to see a company completely rebrand itself and radically change its offerings in order to weather an economic downturn.

Regardless of the reason why your company is changing the way it does things, having business reorganization consulting can make sure that you’re able to turn your company around and get through the restructuring process without missing a step that could come back to haunt you later.

So what are some of the areas that you need to cover when you’re restructuring?

Let’s take a look.

Key Areas and Characteristics

No one walks away unaffected when it comes to reorganizing a company. From the executives at the very top to the newest entry-level hires, everyone is going to feel the impact of this major event one way or another.

As a result, this fact extends to all areas of your company as well. Departments and practices like management, marketing, and accounting are all going to change in some way. Beyond those, you need to consider areas like:

  • Your Assets – How will these be affected when you reorganize?

Depending on the nature of the restructuring, some might remain intact, but others might have to be sold in order to generate revenue during the restructuring process. If some of your assets are underutilized, it might be in your best interest to dump them and keep them from becoming liabilities.

  • Basic Operations – Restructuring means taking a look at every part of your business, including the everyday practices that turn the wheels of the company.

In some instances, you’ll have to ask yourself if certain aspects of your operation can be outsourced for more efficient, more cost-effective output than what your company currently produces.

  • Your Reputation – Business reorganization consulting would, in part, advise you on how to maintain your relationship with your customers through effective public relations that assures them your restructuring will do nothing but benefit them.

As you know, customers vote with their dollars, so you want to do everything that you can to make sure that you don’t lose your base as your company changes its operations.

  • Your Plan – Without a strong business plan, you’re not going to get anywhere. That’s why it’s important to know exactly where you’re going as you work through your restructuring. You can use it to assess the current state of your business and establish goals that you want to reach, as well as a timeline for when you want to reach them.
  • Your Debt – Business reorganization consulting will help you make sense of your debt and how it relates to your plans to restructure.

It’s important that you have a strong understanding of your debt obligations at all times, and that means, among other things, carefully monitoring payments that you make on it.  It’s possible that, in analyzing this part of your business, you will have to rely on some negotiations with your creditors.

It’s important to make sure that all of your affairs are in order when you’re reorganizing your company’s operations and the areas discussed on this page are just a few that you’ll need to be familiar with during the process.

With business reorganization consulting, you can make sure that each area of your business gets the attention it needs during restructuring, so that you’ll be able to adopt new business practices without any trouble.

With all of the work it takes to rearrange the way your business operates, the last thing you want is to make a mistake that could potentially jeopardize the process. Good business reorganization consulting can make sure that happens.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more ideas on how to grow your business, please check out our website.

Sign up for our weekly blog email update to stay tuned for details on our upcoming teleseminar for maximizing profits in your business.

How to Enhance Business Performance

When you’re running your own business, one question you’re constantly asking yourself is how to enhance business performance?

If it isn’t, then it should be!

Starting your business and making a name for yourself in your given industry is a tough enough task, yes, but you should never, ever rest on your laurels once your business is off the ground and earning money.

As with any kind of operation, there is always room for improvement. There is always something that you could be doing better, more efficiently, and in a way that you will win over more customers and bring in more revenue for your company.

Businesses like yours involve a lot of different moving parts that work together to make the entire venture run smoothly, and things will only become more complicated as your company grows and expands with time.

You need to learn how to enhance business performance while your company is still young. If you don’t, then the road ahead will be that much harder as time progresses.

Let’s take a look at many of the different things you can do to optimize your company’s performance and you’ll see just how involved the process of getting the most out of your company can be.

Sharpening Your Talent

Your company wouldn’t be anything without the talent that goes into selling your products and services.

Whether you have a team of employees, or your company is a single-person operation, the skills used to persuade potential customers to part with their hard earned money requires that your talents always be in the best possible shape in order for you to have the competitive edge.

With that in mind, know that there are several things you can do in order to keep your skills current:

  • Follow industry-relevant news and developments like it’s your job because, in a way, it is!

In just about any industry, things can change at the drop of a hat. The latest and greatest can quickly become obsolete. The last thing you want to happen is you having to play catch up because you weren’t aware of a development that affected the whole industry.

  • Take continuing education, because graduating from school doesn’t mean that you stop learning. In order to keep up and make sure that you’re using the latest bit of knowledge related to your company, you should look into enrolling in classes every now and then.
  • Learning from your mistakes is practically “how to enhance business performance 101”. Everyone stumbles at some point in their lifetime, and it’s no different in business.  You want to be sure that any shortcomings you’ve faced in the past are looked at closely so that you know what went wrong and how to keep it from happening again.

It’s important to note that dooming yourself to repeat a mistake can ultimately lead to failure or, at the very least, stunted growth as a company. Whenever you make a mistake, you should note it regardless of how insignificant it might seem. You’ll be glad you did later.

Make Use of All Resources Available to You

Some entrepreneurs have already figured out how to enhance business performance by going beyond their immediate circle and outsourcing certain aspects of their business. There’s no reason you shouldn’t do the same.

Whether it’s because the service in question is too specialized, but highly necessary to running a business, or because outsourcing it means fewer resources used than would be the case if the task was taken on in-house, doing so can save you time and money.

In figuring out how to enhance business performance, many companies have turned to outsourcing services like:

  • Accounting
  • Information Technology (IT)
  • Marketing
  • Payroll

With important aspects like these being handled by other companies outside of your own, you can easily focus on what makes your business work and how your customers can best benefit from what you offer. You won’t have to fumble around with things that require a certain level of expertise in order to pull off effectively.

Build Your Alliances

In a way, this tip harkens back to the previous one about sharpening your skills.

Every entrepreneur wants to know how to enhance business performance, but few realize that one extremely effective way to do this is through networking, building alliances, and creating mutually beneficial relationships with other entrepreneurs.

In the world of business, it pays to have as many allies, contacts, and partners as you can. You want to take every available opportunity to attend events, seminars, and conferences where you can meet people who will be able to help you in the development of your business.

Whether these people are potential clients, suppliers, business partners, or even industry veterans who can offer you some help and guidance, it pays to put yourself out there and see how others will be able to help you.

You never know who you might meet!

Giving It Your All

When running your business, you should never skip out on anything that could help your company move to the next level.

You want the product or service that you offer to become synonymous with the industry, but you can only do that with business performance and management that will take in every advantage available as an entrepreneur.

From making sure that the people working for you have the skills and equipment they need to do their jobs, to looking at your resources and planning ahead, your company’s day-to-day practices are just as important as your long term plans.

In figuring out how to enhance business performance, you need to look at all possible avenues to be sure that you’re employing the best possible practices.

By doing everything within your power to make your business the best that it can be and promoting it enough that people know your name is one that should always be on their minds, you will be well on your way to a successful and long term existence as a business.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more information on business analysis, business planning, and ways to grow your small business profitably, please check out our website www.portalcfo.com.  Follow us on Twitter @portalcfo

Sign up for our weekly blog email update to stay tuned for details on our upcoming teleseminar for maximizing profits in your business.