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.
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.
I have no more money to put into the business. Over the years the business has been good to me. It has supported lots of families — mine, as well as my employees. Right now, I need more cash to pay the bills, I can’t get a line of credit like I used to and I’m tapped out. I’m planning to sell the business in the next few years, but it’s going to take some work to get it ready for a good buyer. Have I dug a hole too deep or is there a way out?
Thoughts of the day: It’s a different financial landscape for many businesses today versus 10 years ago. Figure out what got you into trouble in the first place. Be a conservative borrower. Prove your business has high value by turning it into a money machine.
We’d like to buy a building. We also want to invest in developing more sales. Unfortunately we have limited funds to work with and we’re thinking this building could be a once-in-a-lifetime opportunity. How much do we need to buy a building? What is the best decision to make?
Thoughts of the day… Investing in growth is essential to the future health of any business. On the other hand, a building is a tangible asset, something that most service businesses lack. Make sure you have a handle on all anticipated costs. Cash flow is going to be king as you consider taking on new expenses and juggling priorities. Think long term, while you manage through the short term.
We’re having trouble making a profit right now. Invoices are up this year, but so is payroll and just about every other expense. If we can’t make money, what’s the point?
Thoughts of the Day: Growth needs a plan in order to get things to turn out right. Figure out what you really want. Don’t try to get it right all at once. To get where you want to go, put someone in charge of managing finance.