12 Concepts To Help Your Buisiness With The Shifts In The Economy!
We have all experienced amazing shifts in the economy most of us never thought we would see
. Couple that with stress of the holidays and it can seem a little bit overwhelming to everyone, especially small business owners.This list is not meant to be a comprehensive list, however the concepts we will be discussing are vitally important to the success of your company. They can also be applied to your personal life!
1. Understand what you do- It is vital you understand how your company generates revenue. Everything has to be secondary to making revenue.
2. Keep an eye on the cash leaches- We all have those little things that gradually suck money out of our companies. It's like Benjamin Franklin once said "if you take care of the pennies the dollars will take care of themselves". It is vital for the success of your business that you make sure you are watching all of those pennies. Each company is unique but we all have a couple basic "Cash Leaches".
a) Reduce Inventories- Don't fall in love with your inventories! You should only have inventory for the sales on hand. Try to figure out how you can follow JIT or Just in Time principles, having the inventory just as the client needs it or better yet have it shipped from your wholesaler.
b) Keep an eye on A/R- Do what ever you can do to shorten your A/R time. IN some situations it may be worth it to offer a discount to make sure you have your money collected.
c) Extend your Payables- Your goal should be to collect as fast as you can and pay as late as you can (make sure you are not incurring F/C (finance charges) or other penalties. You need to make sure your company is as liquid as possible at all times.
d) Cash is King- You need to treat cash like your most valuable tool, because it is! It does not matter what opportunities come your way, if you do not have the cash on hand you will not be able to capitalize on them.
Remember that we are currently experiencing the greatest transfer of wealth America is likely to ever see. You can either be the one paying it or the one getting it. And frankly this is the one time that it is much better to Get then Give!
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