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| 10
Critical Steps Companies Should Take NOW for 2008 |
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| Even
if we're not officially headed into a recession,
prudent business owners will want to "storm proof"
their businesses for the coming year. As you struggle to
reduce costs, find new sources of revenue, and operate
more efficiently, it's always good to remember some
basics. |
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1. |
Stay
on top of your cash situation
Take time to prepare cash flow projections
for the next 12 months and revise weekly if needed. |
| 2. |
Know
your key drivers and manage them
Keep
a careful eye on areas that affect cash flow: accounts
receivable collections and inventory turnover. How are
you doing compared to past performance and your peers?
Watch key areas that affect profits, net and gross margins, labor and fixed asset utilization.
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Workshops
for Business Owners
Over
97% of the people attending our workshops say they've
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Profit
Mastery for
2008
Schedule is Finalized!
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“This course has been a wake up call to me,
to keep my eyes wide open as my company grows in the future.”
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| 3. |
Monitor
Accounts Receivables closely
Process invoices immediately, distribute an outstanding
accounts receivable statement weekly and take action on
late accounts immediately. Start with a polite but firm
personal call and don't get off the phone without a
commitment to a payment date. A few days improvement in
collections will make a huge difference in cash flow.
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| 4. |
Insist
on good financial data
Accurate, timely financial statements are critical in
tight economic times.
Don’t accept excuses.
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| 5. |
Get
funding now!
The worst time to get
financing is when you are about to run out of cash.
Arrange for loans and lines of credit before you need
it. Your
cash flow projections from tip one will help you figure
out how much you’ll need and when you can pay it back. |
| 6. |
Review
your long term financing
Are you financing long-term growth (or assets) with
short-term funding such as a credit line?
If so, see your banker about getting it changed. |
| 7. |
Have
good advisors and use them |
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Make
sure you have a solid team of outside advisors, meet
with them regularly and listen to what they say.
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| 8. |
Don't
turn financial decisions over to others |
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There's no need to turn yourself into a CPA, but you
must be able to read financial statements, talk with
financial people and assess your company’s
performance.
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| 9. |
Understand
and use break-even analysis |
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Do you know your contribution margin? If not, you
won’t know how much more you need in sales when costs
rise or prices fall.
At the same time you'll know how much to cut
when sales fall and analyze the need for expansion or
capital decision.
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| 10. |
Stay
close to your clients |
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This will generate good will for you, give you a chance
to spot new opportunities and provide an early warning
in the event their
industry isn’t doing well.
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Remember…
Ships are safest in harbors but that’s not what
they’re made for.
Don’t let fear of the future paralyze you now. Get
moving and do something!
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Feel
free to forward this newsletter to your colleagues.
©2008
Business Resource Services
Business
Resource Services respects your privacy and does not
give out or sell
our subscribers' names and/or email addresses.
ISSN 1553-0558
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