upsize online resource directory

“We’ve always been very conscious of what is a need-to-have vs.
a nice-to-have. We’re more so now,” in a tight economy.
QQUOTABLE
— JOE KEELEY, Franchise Development Group
To keep track of cash,
time expenses, pester
customers (politely)
Every business owner says cash is king,
but you haven’t felt it until you’ve rushed
to the bank with a customer’s check on
the Friday of payroll. Conserving cash is
a must, and here are some practical
ways to do it.
If you know that certain large revenue
and expense items will occur at approximately
the same time each year, you can
use that information to your advantage.
Take the time to review and analyze both
your budget and your cash flow each
month, so you keep careful track of
where you are. This will decrease your
probability of being blindsided by an
expenditure you didn’t expect.
Try to budget expenses when cash is
available. Delay an equipment purchase,
company function, or other discretionary
expenditure until you have the cash on
hand. Plan for seasonal inflows. If you
run a lawn-cutting business, revenue will
be pretty thin in January — but you will
still have fixed expenses that must be
met. Use times when you are cash rich
to prepare for periods when you are not.
Make certain you have a top-notch
accountant who can tell you authoritatively
what you can and cannot claim as
expenses for tax purposes. Be diligent
about maintaining proper receipts. Keep
up on your estimated tax payments.
You’ll be delighted if your firm’s income
rises faster than expected, but if your tax
payments are based on a lower estimate,
next year’s cash flow can get whacked by
a balance-due tax payment.
Spread employee bonuses out over the
entire year. This has two advantages: It
provides an incentive and reward for better
performance and it eases the cash
flow burden of paying all the bonuses at
one time. Remember that there is no rule
that says companies must issue their
bonuses at the end of the year. Hand out
bonuses and incentives during a company’s
best months for accounts receivable.
Set up transaction payment processing
(debit and credit cards, electronic check)
to provide additional convenience for
your customer, with almost the same
payment certainty as cash. If you’re
extending terms, screen your commercial
customer. Check their credit history.
Ask for personal guarantees if needed.
Once you extend credit, you’ve added
collections to the responsibilities of your
business. It’s critical that you establish a
process by which to manage your
accounts receivable. Set up performance
objectives (for example, no payments
over 45 days) and monitor progress
against those objectives.
Badger past due accounts. Be polite but
persistent. Call the first day that the
account is past due. Call the second day,
too, and the day after that.
Assume that every single so-called fixed
expense is negotiable. This includes
office space, office supplies, printing
costs, copier costs, telephone, long distance
and Internet service. Bid these out
to be sure you’re getting the best deal.
You’ll learn from every negotiation you
do and get better at it. And if you’re
dealing with a specialized area where
you have little experience, go through a
buyer or a broker.
TO-DO LIST
Offering discounts
in a tight
time may seem out of
the question, but enticing
your customers to pay
early will help your cash
flow.
While inventory is
vital to many businesses,
it is also quite costly
to keep on hand. Scrutinize
your inventory and
adjust to the necessary levels
to meet customer
demand.
In other words, if it
isn’t selling, move it
out any way you can.
1 2 3 4
Keep things in perspective
and ask
yourself if each cost is
adding value to the business.
If not, cut it or delay
it. Many business owners
swear by being frugal.
UPSIZE | 12 | ONLINE
NOV08