Figuring Out If We’re Having An OK Year

We’re hitting our numbers in terms of new sales, but we’re still off in overall revenue and profit forecast. We’re trying to figure out what’s working and what’s not working. Is it mix? If the mix is OK, maybe our forecast was off? What about the time it takes to ramp up and show results?

THOUGHTS OF THE DAY: Delivering according to plan can be complicated. Coming up with a plan that makes sense can be just as challenging. Look at the puzzle from multiple points of view. Take a critical look at the timing of income and expenses.

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Pleasing the Bank

We need to get a loan to tide us over as we start to ramp up to our busy season. All the banks have been calling us saying they want our business, and so far we’ve talked to a couple. When we get into the details, we find they are hard to please. While the local reps say they want our business, the higher-ups don’t seem so eager. One bank said they didn’t want our business, another said they needed more information. Is it worth it going through the process? If we don’t get a loan it could be really tough managing cash until all our clients pay up.

THOUGHTS OF THE DAY: Understand what the bank wants. Be prepared to fill out a lot of forms. Ask for a realistic loan amount and repayment terms. Back up what you say with a business plan.

You need to have business experience. If you’re a startup with less than two years of history, getting any bank loan will be close to impossible. You’ll probably do better getting a personal loan and personally lending money to the company until there’s some history to show.

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Why It’s Important to Stay on Plan

Find it hard for me to trust the numbers and use them in calculations going forward. Things seem to change dramatically from when we lay out a plan to the end of the year. We line up for good things to happen, then things dip as the year unfolds.

Thoughts of the Day: Working backwards from a plan is one way to get where you want to go. Make sure your plan makes sense. Have a variety of solutions to implement to get things back on track. Monitor progress in small increments.

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Protecting your business from risky clients

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We just got clobbered by a client who went under, taking our receivables with them. We’ve gone from having tons of money in the bank to being very thin. Since this was a sizable account, it’s going to be hard to replace. We want to learn from this experience. What should we have done differently – so we can do it right next time?

Thoughts of the Day: Big clients can help boost the business, but they can also be dangerous. Make sure you have a good handle on what’s going on with every customer. Build in protections for things that might go wrong.

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Manage your cash flow so your business stays afloat

Cash flow is short, cash is tight. Makes it hard to plan the next three to four months. We’ve been making money, so I don’t understand. And I’m worried about what comes next, in case we lose money in our slow period. On top of everything, we have three payrolls in one month coming up soon. Yuck! How do I get out of trouble?

Thoughts of the Day: Look at the whole picture to figure out how the business is doing. Use credit lines properly. Be disciplined about managing the situation. Sell your way out of the problem the right way.

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