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Tag Archives: business finances

When Less Money is More Money

Here’s a sad story about trying to get more money when the end resulted in far less money: A business was owned by two friends. The relationship soured and as a business advisor, I was attempting to facilitate an agreement for one partner to stay and the other to exit. The most probable buyer offered over half a million dollars. The other partne... Continue reading

Establishing a Baseline for Business Growth

Since it’s the beginning of a new calendar year, it’s a great time to make sure your business has a baseline for measuring growth in 2013. If you can measure your activities and results properly, you can quantify your growth. Each of the following should be available to you for each month of last year as well as the total for last year: Reven... Continue reading

Focusing on Customer Retention is Profitable

If you would like to increase the number of customers your business has, the default thinking is to add more new customers. This is your customer acquisition rate. If you start the year with 1,000 customers and your acquisition rate is 15%, you can’t assume your customer count will go up to 1,150. The reason is that you also will lose customers ... Continue reading

Instant or Deferred Gratification?

There can be a tendency to celebrate short term business success too soon. Let’s say your business has a good month and you make a nice profit. Should you take a bonus? Should you reward yourself right away? There is a philosophy out there that says to wait – to defer to the future. This is based on the assumption that when a business does ... Continue reading

Managing Your Interest Rate Risk

It seems 'the crowd' is assuming that interest rates will remain as low as they currently are for a few more years. A year ago this was true also. And since then the rates have actually gone down! Although I can’t predict the future, there is one thing that concerns: Since banks go out and borrow the funds they loan out for fixed rate mortgages,... Continue reading

Rent Some Money to Make Some Money

Have you ever heard the saying, ‘you need a quarter to make a dollar’? What if your business has the opportunity to purchase $100,000 worth of new product that can be resold at a 35-40% mark-up? Why wouldn’t you buy it?  One reason you might not make the purchase is you don’t have an extra $100,000. Even if you have credit available, s... Continue reading

Vacation – Tax Deduction?

Wouldn’t it be great to take a winter vacation and get a tax deduction too? The first person to convince is your tax advisor and the second review could be by the income tax authorities. Here are some tips to assist in your negotiations: Be real – I am strong supporter of getting away from the day to day business distractionsto focus on st... Continue reading

Discounting Your Price or Value Add?

It is fair to state that if you give a customer a ‘deal’, you could sell more than if you didn’t. But instead of giving a discount on price, have you considered adding value instead? As an example, if you discount a $1,000 item by 10% to get the sale you get $900. But if you offer an additional item valued at $100 for free as part of th... Continue reading

Increase Profits by Learning to Say ‘NO’

Some business owners have trouble saying NO. This often costs them financially. Here’s why: 1) Customer selection criteria - Let’s say you have a current customer who consumes a lot of resources and also owes you money. If they want more credit to get more services, the correct answer is NO. You are already losing money servicing this account... Continue reading

A Simple Solution to Small Business Cash Management Problems

I was talking yesterday with a client who I consider to be the best at collecting money as a small business owner. Quite a few years ago he actually went to jail trying to collect money from one customer because he tipped a desk over on him! – He doesn’t recommend that approach. The secret to easy collections is the conversation BEFORE the sal... Continue reading