Tag: Financial Planning
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Business Scaling Strategy During Recession
Every startup wants to scale, and a lot of them start scaling, but then they realize that as their top line is growing, their bottom line is shrinking. At the same time, in today’s inflationary environment, many businesses are seeing increased costs and are forced to turn to cost-cutting strategies like bulk-buying and automation while […]
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How To Establish Pricing For Your Offering
I am often asked how to establish a product/service price. Here are some background thoughts: Even with these thoughts in mind, determining the price to set for a product or service can be challenging if some historical price and demand data is not available. So be sure to considered the following questions when setting a […]
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The Funding Paradox
You need to show you can make money to raise money, but you need to raise money to develop and sell the product/service offering to make the money to show the investors. This is not the first time this paradox has suddenly dropped into an entrepreneur’s lap. In fact, it’s a cycle that I have […]
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Business Sale Pre-Planning Steps
A recent M&A Source study found that about 80 % of businesses on the market will never sell. This should be a huge wakeup call for all business owners. This means you have less than a 20% chance of success if you go to sell your company. One of the reasons for this is that […]
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Assessing A Company’s Health Using Financial Analysis
By themselves, financial statements tell you quite a bit…like, how much profit the company made, where it spent its money, how large its debts are. But how do you interpret all the numbers these statements provide? Is the level of debt healthy or not? If you’re looking to assess the health of your company & […]
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Thoughts About The Cash Flow Statement
Differentiating between one-time and ongoing expenses is key. One-time costs include obtaining assets like equipment or machinery, but may also involve licenses or permits for certain businesses. These costs usually occur during the startup phase or when a business expands. Expenses that must be paid monthly or periodically (like quarterly) represent ongoing costs. Variable costs, however, will […]
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Thoughts About The Income Statement
Of the three main financial statements, the income statement generally has the greatest bearing on a manager’s job. That’s because most managers are responsible in some way for one or more of its elements: Generating revenue. In one sense, nearly everyone in a company helps generate revenue…the people who design and produce the goods or […]
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Thoughts About The Balance Sheet
It is important to understand how to use balance sheet ratios in managing your own business area. Let’s start by looking at a couple of ways in which balance sheet figures indicate how efficiently a company is operating. Working capital. Subtracting current liabilities from current assets gives you the company’s net working capital, or the […]
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Steps To Selling Your Business
How to Sell Your Business You only sell your business once. That thought may be enough to keep you up at night when you decide it’s time to cash in on your years of hard work as if there isn’t enough pressure associated with every step of the sale of a business. But there’s much […]
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You Don’t Have To Pivot In A Crisis
When COVID burst upon the scene in early 2020, startup ventures faced dramatic shifts in markets and the importance of agility became axiomatic: If you wanted your venture to survive, let alone thrive, pundits (including ourselves) almost universally advocated deep internal cuts accompanied by pivots to new markets and business models. Many business owners, however, […]
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Lessons From A Business Exit Sale
Selling your company is a second, full-time job. Here’s how to do it right. If you lead a startup, there may come a day when it’s time to consider an exit…in my case, I knew and my investors knew that I would have some kind of equity event during year 5 of my startup. Therefore, […]
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Keep Personal & Business Finances Separate
It can be difficult to keep your personal and business finances separate when you own a small business. It is especially challenging to keep your accounts divided if your business is structured as a sole proprietorship. Since sole proprietorship is considered a nonentity, there is no legal separation between you and the business. When you […]
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How Independent Contractors Budget
During a recent workshop, I was asked if independent contractors can really operate using a budget…if so, how do they budget? Yes, independent contractors can make a monthly budget even though they live the 1099 life. Here’s how. The concept of a monthly budget is a no-brainer for people who rake in a regular paycheck […]
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Business Startup Steps
There are no limits on who can become a great entrepreneur…I am a good example. You don’t necessarily need a college degree, a bunch of money in the bank or even business experience to start something that could become the next major success. However, you do need a strong plan and the drive to see […]
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Fundraising Pitch Deck Mistakes
Since I raised over $20 million in venture capital for my businesses from top-tier VCs, new founders often ask me to review their fundraising pitch decks. Over and over again, I see early-stage founders repeat the same mistakes, reducing and sometimes eliminating their chances at funding. Here are four of the most common ways a […]
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Business Valuation Methods
Whether you’re thinking of selling your business or you’re looking for new investors, there may come a time where you need to evaluate the economic value of your business. Determining the value of a business isn’t simple. It requires accounting for a number of factors within your business finances. Because this process is so complex, […]
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Ransomware Attack Disaster Planning
When developing a business strategic plan in today’s new digital normal, make sure your SWOT outside environment threat analysis addresses the threats of ransomware attacks. Be sure to ask the following questions: Who will your company contact once it suspects a ransomware attack? How will you get the word out to employees and clients? Where […]
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Key To Fund Raising
When starting the process of raising funds for your startup, make sure to start on the right foot. Over my 40 year business career, I have raised millions of dollars to fund my startups. I learned that the three most important words you need to remember when going out to raise funding for your startup […]
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Testing Your Marketing Strategy
In business, what gets measured gets managed…that’s especially true for marketing. It’s important to test your marketing strategy — you won’t know if you’re on the right track until you take the time to analyze the results of your efforts. Your marketing is the link between your product & your customers, so don’t treat it as an […]
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Calculate Gross Profit
Since my last post about understanding the difference between markup and margin, I have been requested to explain how they tie to gross profit. One of the most important financial concepts you’ll need to learn in running your new business is the computation of gross profit, and the tool you use to maintain gross profit […]
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Difference Between Markup & Margin
Markup is a term you hear tossed around from time-to-time…such as “that store really marks-up their products” but what does that actually mean? A markup is, technically, the amount thatʼs added to the cost of a product to derive the selling price. For example, a cheese retailer that wants to have a minimum of 50% […]
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Know Your Business Credit Score
What Is a Business Credit Score? As an individual, you most likely have a consumer credit score, a measure of your creditworthiness that allows lenders to compare you with other people. It’s a single number that’s built using data from your detailed credit report. Likewise, your company may have its very own business credit report […]
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Common Accounting Mistakes
Over many past years, I have helped hundreds of business owners grow and scale their businesses. I have had the privilege of helping business clients increase their revenue in a short period of time by teaching them how to create systems and controls and making smarter business choices. Unfortunately, for many business owners the process […]
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Sales Forecast – Backbone of the Business Plan
The sales forecast is the backbone of your business plan. People measure a business and its growth by sales, and your sales forecast sets the standard for expenses, profits and growth. Usually, sales forecasts are based on past sales data, industry-wide comparisons, and current economic trends. It is easier to come up with a sales […]
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Expansion Thoughts
The following issues should be considered prior to making any decisions about opening a second location: Determine if your business can be duplicated (for example, run without you). If your presence is critical to your business’ success, it cannot be expected to operate well without you. One way to test this is to ask yourself, […]
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Finding Cash – Reduce Inventory & Receivable Financing
According to one report I recently read, 38% of businesses fail because they run out of cash. All companies are dependent on cash flow. But managing money is not a skill that all small business owners have. Some entrepreneurs are visionaries, while others are more focused on business growth. If you want your business to […]
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Finding Financing – The Elevator Pitch
An elevator pitch needs to be distilled down to a single nugget of truth.
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Cash Flow Management – Surviving Shortfalls
Cash Flow – Your First Priority A lot of business think of Forecasting Cash Flow last, but I would argue it should be first. It is imperative to prepare cash flow projections for next year, next quarter and, if the business is on shaky ground, next week. An accurate cash flow projection can alert the […]
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How To Start A Budget
Every successful business needs a budget, and here are some tips on how to make one that works for you. It’s a basic tenet of business – before you can make money you have to figure out how to spend it. Drafting a budget is a key way to help you turn your dreams for […]
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Pay Per Click Budget
Approximately 65 percent of all clicks made by searchers who are ready to make a purchase go to paid advertising (i.e., pay-per-click ads). So, what should you spend on PPC (pay-per-click or paid advertising)? This is a question many businesses ask. Regardless of whether you are starting out with PPC, launching a new strategy, or […]