The Seeds of Tomorrow's Cash Crisis Are Being Sown
That's My Story
- Tip of the Month:
January is an Ideal Time...
Seeds of Tomorrow's Cash Crisis Are Being Sown Today
owners often get trapped because they don't heed the messages their business
sends and they don't pay attention to basic principles. The following
checklist represents a clear set of danger signals - situations and issues -
that have a clear and negative effect on cash flow. Take a few minutes
under the harsh, cold light of reality to ask yourself how many of the
following danger signals exist in your business and then evaluate carefully
physical inventory taken on a regular basis.
of unsold inventory sitting around.
monthly cash budget projection.
credit line not paid down to zero within the last year.
loan payments were paid late one or more times within the year.
at trade shows without a purchasing plan.
credit like credit lines used for long term assets such as rental
statements not reconciled every month.
discounts rarely taken for early payment.
annual sales increase of over 25%.
sheet prepared only at the end of the year, and only used for tax
review of financial statements on a regular basis.
interest rates on bank loans.
amount of credit supplied by credit cards.
debt expense increases every year.
Accounts Receivable report on weekly basis.
moving items are often out.
checks have been written late one or more times this year.
systems in place to prevent internal fraud.
communication with CPA is in April to discuss tax avoidance strategies.
handle on company cost structure or break even level.
profits but no cash.
cycle contains sharp seasonal slumps or booms.
the greatest danger of all: not having adequate records and/or financial
skills to be able to answer all of these questions - or not having any
questions to ask! Planning is the vital element, especially when we're talking
about cash flow. Danger signals are just that - signals. The
longer you wait, the fewer options you will have. Now is the time to
gain control and keep it. Get yourself ahead of the game, sleep better
at night, and get in a much better position to weather whatever rough seas lie
of the Month for resources to help build a cash budget for the year
I read this story by personal coach Drew Rozell
a couple of months ago and it's still
resonating with me. I hope you enjoy it,
too. Learn more about Drew by visiting his Web
site at http://www.evolutioncoaching.com.
While there, be sure to sign up for his
terrific ezine "The Drewsletter".
sat on the couch next to my father.
how long will you be home?" he asked.
weeks, remember?" I replied.
weeks. Right. And then what? Do you have any
plans for the future? Any job prospects on the
horizon to get some money coming in?" he
detected the tone in his voice - it was
oh-so-subtle. But it landed in my stomach
immediately. And I reacted.
Tip of the
Month: January is an Ideal
to put together a
12-month profit plan and cash flow projecton for
your company. Once you have one, share it with
your banker and arrange a credit line before you
need one. Avoid the cash crunches and sleepless
our Tool Kit area http://www.brs-seattle.com/toolkit.html
to download our free template (look for the
Excel file called Profit Plan and Cash Flow
Projection.xls), or try out our FIT software
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to improve your bottom line, BRS Profit Mastery
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Workshop for Pharmacy Owners
2006 Calendar for Profit Mastery Workshops
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