The end of the year is a great time to think about money – today we have a guest post from Carolyn K. from the BlogContentGuild.com – take it away Carolyn.

The holidays have descended upon us, and the end of the year is rapidly approaching. If you are a business owner, you’ve probably noticed how difficult it can be to manage cash flow around this time of year. One of the greatest things about November and December is that your sales usually go up during these months. One of the worst things about this time of year is inventory management and order management become more difficult largely because of all the sales you you’ve made.

Here are some tips to help you control your cash flow this holiday season:

1. If you sell goods, double-check your inventory every day. Don’t solely rely on the stock information logged in the computer. Clerical errors are easy to make, and you could end up thinking you have enough of a product to go around when you simply don’t.

2. Make sure you ship orders or deliver services to customers in a timely fashion. Customers don’t want to wait around for you just because it’s a busy time of the year. They expect what they ordered to reach them as soon as possible, just as they would expect any other time of the year. You and your employees may need to work overtime around the holidays to ensure that customers are satisfied with your swift service.

3. If your customers pay you on a monthly basis, make sure you call or email them to remind them about their payments in November, December, and January. These months are when customers are least likely to pay you on time because they have a lot going on in their lives and many of them are low on cash. However, the health of your business during the holidays may depend on payments received.

4. Have a talk with your employees about stepping up their game around the holidays. Everyone at the company needs to be on the same page and devoted to accomplishing all necessary goals before Christmas and in between Christmas and New Years. You might want to ask employees to work overtime for a few Saturdays just to make sure everything gets done.

5. Don’t be too hard on yourself. Mistakes happen. If you and your employees work your absolute hardest during the holiday season, your company’s cash flow situation will remain favorable.

Some great ideas from Carolyn – we’d love to hear your thoughts on holiday cash concerns.  Let us know what you think in the comments below.

Shawn Kinkade  Kansas City Business Coach

Photo by TibChris

It’s that time of year – the end of the calendar year and for most the end of the fiscal year. For many businesses, when it comes to their financial statements, it’s the time of year spent reviewing their “numbers”. 

In fact, it’s likely that small to medium sized business owners spend more time looking at their financials between Christmas and New Year’s, than any other time of the year. Why? Because it tends to be a slow time of the year (unless you’re in retail), it’s planning time for next year, and everyone is anxious to see how their year ended, even if everything isn’t entered yet.

However, if you’re like most business owners, you probably didn’t get into business to spend all day looking at financials. You got into business to deliver your product or service. The financials are just a by-product and your accountant pulls information off them to keep Uncle Sam happy. Sound familiar? You are not alone – most business owners have a real fear for numbers!  You know they’re important, even if they’re sometimes baffling, but it’s likely you aren’t really learning what you need to from those numbers…!

Try This

The basics are important…but you need to go deeper than just the accounting reports or the tax impacts that your accountant is looking at.  This year, as you look at your Balance Sheet, Profit & Loss, and Income Statements, try focusing on questions like these:

- Did I really make any progress this year?   (How do I know?)

- Why do I have less cash in the bank but my sales increased?

- What areas of my business generated the most revenue?  The most profit?

- Is my spending in line with other companies that provide similar products and services?  (If you’re not sure…we have a really cool financial benchmarking tool that can help you figure that out – call us!)

- Are my employees, department, or staff generating acceptable amounts of revenue for our industry?

- What kind of Return on Investment did I get on my marketing investment this year?  What worked the best?  What was worst?

The list of potential questions is long and they are all valid and yes, there are answers. Unfortunately instead of buckling down and finding the answers, many business owners get overwhelmed and shift their focus back to delivering their product or service, because after all that is why they got into business in the first place. Right?

If you want your business to succeed long term, don’t fall into that trap. If you don’t understand what the numbers mean, raise your hand and get some help. If you do understand your financials, but you aren’t sure if they mean you’re doing good or bad or you struggle to figure out where the opportunities lay for improvement, get some assistance. A fresh detailed Financial Analysis of a business can be an incredibly enlightening and profitable experience for a business owner.  Sometimes a 3rd party can see things that you’re too close to (or help you ask questions you might not have thought about).

Do you know what to look for in your financials? Besides sales and profits, what are the drivers that you scrutinize? Feel free to share your comments below.

Chris Steinlage, Kansas City Business Coach

Photo by MeddyGarnet

In Jim Collin’s book “Good to Great” he discovered that one of the key drivers for great companies was the consistent ability to “Confront the brutal facts”. 

“Great organizations lead with questions, not answers. If the organization openly confronts the brutal facts of each situation, the right decisions will often become self-evident..”

Basically it’s the ability to do a completely honest and thorough assessment of your current situation – be willing to hear and face the truth, no matter how painful and bleak it might seem.

One common area of brutal facts for many companies centers on employees and their costs.  To start with you need to make sure you’re following another one of Collins key tenets…having the right people on the bus…and in the right seats.

This process includes taking into consideration the employee’s strengths and weaknesses and matching them with the roles and responsibilities in your business. It also means having systems and training procedures to ensure they have every opportunity to perform at their highest level. You have to give them the tools to succeed.  Everyone wants to succeed and do a good job, but if you don’t have the right people in the right roles with the tools and support they  need, you are going to fail. 

When’s the last time you really looked at how your employees fit in your business as it is today?  Do you have the right people in the right roles?

What about confronting brutal facts when the issue is employee numbers and costs?  What do you do when forces outside your control create an environment of change, change that will affect your current staffing needs?

Example – The US Postal Service

Although it has been developing for some time, the US Postal Service will remember the fall of 2011 as the time they were forced to deal with changes that are affecting them in a monumental way.  Caught in this transformation are over 500,000 US Postal employees who for the most part have all been doing their specific jobs perfectly well. However, the internet has changed how we communicate & conduct business…forever. Changes are needed to rescale a US Postal Service into an entity that has the potential to sustain itself, which will undoubtedly mean fewer employees. It has to be dealt with; it is a “brutal fact”.

I don’t know what’s going to happen with the US Postal Service, but what happens all too often in the small business world is a lack of confrontation.  Business owners do not want to accept that a significant change is taking place and so they keep doing what they do in hopes that it will get better on its own. First a few weeks pass, then a few months, and sometimes it turns into years. If they would just truly look at their market trend, at their data, their cost structure, confront the brutal facts, it would be clear a change needs to take place.

In my personal experience, the longer I waited to make an employee change the higher the number of people I negatively impacted. I realized as a business owner, it is imperative to make decisions that keep your business financially sound at all times. If you don’t, you are jeopardizing the livelihood of all the employees and not just the few that may no longer have a place in your organization.

For a small to medium sized business owner this can be a particularly sensitive matter because employees often feel like family. It is completely different than terminating employees for performance issues or when they simply don’t fit your culture. The “brutal facts” are often painful, but at the end of day a downsizing of the company may be the best solution for your company to once again experience momentum and growth (and ultimately add employees again).

Where do you stand on your cost structure?  Are you in the red or the black?  Do you need to consider cutting headcount to make sure you’re still healthy?

Have you confronted the Brutal Facts when it comes to your financials?  Has your world changed and you’re not willing to confront it?  We would love to hear your thoughts on this topic. Please share your comments below.

Chris Steinlage  Kansas City Business Coach

Photo by bruckerrlb

  photo by chuckyeager

I started Aspire 4 years ago, give or take a couple of days, and it’s been a fun, exhausting and enlightening ride so far.  Not only have I had a chance to learn a ton of great things through my own business efforts, but I’ve picked up a lot of amazing things from my clients as well.

When I started Aspire, I didn’t realize I was ramping up my business a few months before the ‘Great Recession’ started, which has led to some really strong lessons as well (things like living within your means, slow and steady, bootstrap wherever possible, etc.).  It hasn’t been easy and certainly there have been plenty of stumbles and frustrations over the years but there’s also been steady growth and I’ve gained a lot of clarity with each lesson.

As they say…”If I only knew then what I know now…!”.  Which brings me to the point of this post – I wanted to take a shot at sharing the most useful things I’ve learned over the last few years – hopefully they’ll be helpful to others…and if you’ve got some useful things that I haven’t learned yet, then share them in the comments!

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I had the chance to watch Hoosiers over the holidays – it had been a long time since I’d seen it (and the rest of the family hadn’t seen it!).  Great movie – I’d highly recommend catching it again!

If you’re not familiar with the movie – it was made in 1986 and it’s the story about a basketball coach (Gene Hackman) who gets a final chance at redemption by coaching at a very small rural Indiana school.

Although it’s a very small school they have some talented players and reasons to believe they can compete but they’re undisciplined and raw when the coach makes it to town.

One of the things that stood out to me is the coach’s approach to bringing the team around – early on he tells the team:

“I’ve seen you guys can shoot but there’s more to the game than shooting. There’s fundamentals and defense.”

There’s more to the game than shooting…now how would that apply to small business owners? (you knew I was going to tie this into business somehow didn’t you…?)

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