February 2011 Business Improvement Tip

Have you ever driven at night in poor visibility? There is really not much you can do other than slow down. However, if you were flying an aircraft then slowing down is not an option. When flying in cloud in the dark you are totally dependent on your instruments to tell you what is happening. Your instruments give you critical information like air speed, altitude, attitude, direction, oil pressure, temperature, remaining fuel and similar. Ideally you would also have radar to tell you the location of other aircraft and mountains. It is the aircraft's on-board instrument systems, not your eyes or "the seat of your pants", that are giving you the information needed to guide you to your destination.

As a business owner, you've probably found yourself "flying in the dark". Like an aircraft your business needs instruments to successfully navigate to its destination. Without instruments you could get lost, run out of fuel, or possibly crash into a mountain. The primary instrument panel of any business is financial mastery. I can hear the groans from some of you ... but the fact is that mastering your financials really can be fun if you present them in a way that suits your own needs and personality. When you have appropriate indicators giving you accurate, realistic and current information about your business then you will get that really great feeling and confidence that comes from being fully aware of what is really happening and being able to plan your activities based on that information. Please bear in mind that not being fully aware of your current financial situation, choosing to ignore it or even denying what is happening, is not fun ... it is the primary reason why so many small businesses struggle and one of the main reasons for failure. They simply run out of available cash. Their aeroplane runs out of fuel and crashes into the ground.

So let's take a brief look at the most important aspect of financial mastery - cashflow. The primary tool to manage cashflow is the cashflow forecast (or budget), which is a weekly or monthly summary and projection of money coming in and money going out relative to time. Simply put, it is a tool to monitor the cash flowing in and out of your business, today, tomorrow, next month, next year. Cash is the fuel for the business. To keep flying we must always have enough fuel in the tank to meet the needs of the engine from now until we reach our destination with a reserve for unforeseen events such as having to fly around a storm. It is vitally important to understand that cash is not profit and profit is not cash. Fuel that we own in a tanker at the airfield is not available to us when we are flying. I have spoken to many business owners who are confused because the Profit & Loss statement provided by their accountant clearly shows a profit, yet they do not have any readily available cash. It is not enough simply to sell your goods and services; you must obtain the money for those goods and services in as short a time as possible in order to make that money available to you. If there are periods of time when your business cannot be profitable, as in a seasonal business, then you need to have other sources of cash available, such as savings, credit and similar, so that you don't run out of fuel. All of these issues should be clearly displayed relative to time in your cashflow forecast (budget). This is the fuel gauge for your business.

Now is the time to make sure that you have a working "cashflow" fuel gauge fitted in your business instrument panel.

Now is also the time to think about other instruments you may need in your business instrument panel. Instruments such as a working "breakeven" indicator - which helps you to determine the minimum your business must sell per day, week, month and year in order to ensure that you continuously stay in profit. Perhaps you could add a "Cash Gap" indicator - which shows how long it takes from you buying widgets to selling them on and getting full payment for all of them. Perhaps you could add a few warning lights, such as when tax demands, rent, utilities, car payments and similar will be due.

I would love to help you build an instrument panel especially for you and your business.

Change for the better ... do it now.

Remember ... your business is neither a hobby nor a charity ... you run your business
primarily to make money (create wealth) for yourself and those you care about.

I can help ... no matter what product or service you may provide, what type of business you may have, what size of business you may have, how successful your business may be, how long you may have been established, or how slowly or rapidly you may want to, or need to, improve ... I can help you build a better business, a better lifestyle, a better life and a better future.

Call me now ...we will arrange either a free "no strings" Coaching Session - or a free "no strings" Business Health Check - where we will talk about you, your business, your challenges, your frustrations and your problems ... we will talk about your hopes, dreams, desires, aspirations and long term goals ... we will explore the opportunities for improvement which exist in you and your business ...
I will show you how you can achieve the business, the success, the lifestyle, the life and the future you really want and deserve to have ... or we could just have a chat, a cup of coffee, or tea, and a macaroon.

Call me now ... you have little to lose ... and a great deal to gain.

Jim Yates - 01778 345990
success@ardent-business-support.co.uk - www.ardent-business-support.co.uk