Tame the CASH-FLOW BeastGET OUT OF your fear of DEBT
It’saknownfactthatcompanyownersneedtouseatoolcalled“debt”inordertogrowtheirbusinesses.It’salsoaknownfactthattheweightofdebtcauseshardshipinbusinessesandinfamilies.It’sextremelyimportant,therefore,tobesurethatweusethistooltoouradvantage.Researchstillshowsthatafter3-4years90outof100newbusinesseshavefailed.BankManagerswilltellyouthereasonisduetofinancesnotbeingmanagedproperly.After10years,onlyoneoutof100newbusinessesremain.Why?
1.Lackoffinancialcontrol.2.Workingyourselftodeath...figurativelyorliterally...inthequestforfinancialcontrol.
InStrategy#4ofmy7SimpleStrategies4SuccessIdon’tteachyouhowtoreadyourmonthlybookkeepingreports(seeStrategy#2)noryourprofitandlossstatements,thoughIdostresstheimportanceofyourdoingsoregularly.Wefocusonnumeroustopics,allrelatingtoyourfinancialsuccess,suchas:Pricingandhowyoucanbesureyou’rereceivingtop$$fortheworkyoudo.(Asyoureadthisstatement,areyouone
ofthosepeoplewhowantstotellmethatjobsareonlyawardedtothelowestbidder?Pleasedoso,then.Ilookforwardtoyourcall.)Ifyou’dratherbeoneofthebusinessowners,however,whogetscontractorswhereyousetthepricing,knowingyou’rebeingwellcompensatedforthequalityofyourteam’sworkandtheconfident&competentwayinwhichyouleadyourbusiness,whenyoucallmeI’llaskyoutodosomeresearch.Call10ofyourfellowassociationmembersandaskthemiftheyhaveeverbidhighonaprojectandbeenawardedthecontract.Thenaskthosewhohave“Howdidthathappen?”I’msureyou’lllearnthatit’sthankstotherelationshipthey’vebuiltwiththecustomer,thequalityofservicetheyprovide,thequalityofworktheirteamsdoandthequalityoftheirteams.Ithasmoretodo,though,withtheirlevelofself-confidence.Now,ifyoustillbelievethatthere’snothingthatcanbedoneforyoutoensureyou’reendingupwiththetopdollarforyourproducts&services,youhaveoptions.Debts–gooddebtsvsstupiddebts.Clientsinthe7SS4Sidentifytheirowngooddebtsandtheirstupiddebts…andfocusoneliminatingthestupiddebts.What’sthedifference?Debtisatool.UsedproperlyyoureceiveanROIonyourdebt.Simpleasthat.IfyourdebtisnotgivingyouanROIit’sastupiddebt,soeliminateitasquicklyasyoucan.Simplyincreasethemonthlypaymentstoaccelerateitsrepayment.Startwith5or10%ifnecessary.Increasethat5or10%(ie.$1,000/mobecomes$1,100/month–andwecanALLreducefrivolousexpensestofindanextra$100/month)byanother5or10after3to6months.Andcontinuelikewiseuntilthenon-ROI-creatingdebtisgone.Fromtodayonward,committoonlyenteringintodebtthatwillgiveanROI,evenameagreone.
WhatweFOCUSonGROWS.WealsofocusonBudgets&Reserves,withoutwhichneitheryounoryourbusinesswillthrive.Haveyoueverheardtohavingafinancialreservetocover3months’ofyouroperatingcosts?It’ssomucheasiertoaccomplishthanyoucanimagine,ifyoudon’tcurrentlyhavea3-monthreserve.
Whyisthisinfamous3-monthreserve(ofwhichevenyouraccountantandyourbankspeak)soimportant?Becauseshouldyoueverrunintosuchadiresituationassomeofmyclientsoverthepast15yearshave,we’llworkverycloselytogetherforyoutoimplementnumerouschanges,applyingall7ofthese7SimpleStrategies4Success,andgetyourbusinessrollingagain…yetevenstronger&betterthan(likely)everbefore.(Mikewasonesuchclient.Onthevergeofbankruptcyhegotoneofthosepre-approvedcreditcardsinthemailanddecidedtouseittoworkwithmeand,ifnecessary,rollit,too,intohisbankruptcy.Within7weekshewasnowpayingeverysinglebilleverymonth.Within11weekshehadaccepted2job-placementstudents,astheywereaffordablehelpatthattime–andtheybothstayedonwithgoodsalaries.Within6monthsMikewasgiddywithexcitementandthethrillofhavingrepaidallofhissmalldebtsandwasstillshowingaprofit.Andprofitablebusinessessimplydon’tgobankrupt,dothey?)Whenwasthelasttimeyoureviewedyourfamilybudget…andyourbusinessbudget?Workingwithonecontractorandhiswifetheytoldmetheydidn’tknowwhattheirfamilyspendingwasbecause,quitefrankly,theywereafraidtoknow.Anothercontractorandhiswifeinvestedthetimetokeepeverysinglereceiptfor1month,andthen,withknowledge,madeanappointmentwiththefinancialplanner(whosecallstheyhadn’treturnedinyears).Theywereexcitedaftertheirsecondappointmentwiththeirfinancialplannerbecausetheysawwhenthey’dberidoftheirstupiddebtsandtheystartedplanningtheirvacations.Irecentlyaskedaroomfulofsmallbusinessownersforashowofhandsofthosewhohadafamilybudget.Notahandwasseenandeveryonelookedaroundtheroom,insilence.Onewomandaredtospeakupandsaid:“Wedon’tliketobelimitedinwhatwecanspend.”Thefunnythingaboutabudget,Iexplainedtoherandeveryoneelse,isthatitseemslikeabadwordtomany;alimitation.I,ontheotherhand,(likemany,ifnotall,ofmyclients,now)haveafamilybudgetsowecanseehowmuchweneedtoearnduringtheyeartohavesufficientfundstosetasideforprojects,FUNtoys,spur-of-the-momentget-aways,whateveryoumaybelongingfor…andmuchmoreFUNvacations.Yes,that’sright.Vacations:inthepluralform;andmuchMOREFUNthanyoumayhaveevertakenbefore.Mostofmyclientshadn’ttakenmanyvacations(manyhadtakennoneintheprevious3-6yearsandsome…none!)becausethey’retoobusy…orworseyet,I’veheard“becausewecan’taffordavacation.”LWhenwegetrightdowntoit,though,theyseeitasfrivolousspendingbecausetheydon’thavea“budget”forvacations.WhywouldoneevenWANTtotakeavacation?Manydon’tseetheROI(ReturnonInvestment)inavacation.Well,theremustbesomethingvaluableinvacationsifourforefathersfoughttohavelawscreatedforemployeestoearnthem.Right?Vacationsnotonlygiveyouanopportunitytorest…andunplugfromyourbusiness–Iknow.Iknow!Mostentrepreneursdon’tyetknowhowtounplugfromtheirbusinesseswhentheygoaway.TherightvacationsalsoprovideyouwithFUNexperiences;hands-oneducation;thrill;excitement.Andnowyoutakeallthatjoybacktoyourbusinessattheendofeachofyournumerousvacations…toshareitwithyourAll-StarTeam.That’sjustonereasonwhywewanttodevelopthehabitofcreatingafamilybudget.Theotherisso,asImentioned,weknowhowmuchmoneyweneedtoearnsowecanadjustourbusinessbudgetaccordingly…andthenyoupayyourselffirst,notfromwhat’sleftoverorwhat’snotyetmaxedonyourLinesofCredit.Withabusinessbudget–projectionsfortheyearahead–it’seasytoseewhereyou’reatinrelationtomeetingyourtargetsforsalesandforinvestments(a.k.a.expenses).Coursecorrectionsareeasytomakealongthewaytoensureyoucanpayyourselfatthefirstofeverymonthinaccordancewiththefamilybudget.Asmentionedearlierit’sessentialtoeliminatestupiddebts;andwhiledoingsoIencourageyoutoincreaseyoursavings,aswell.Tostartwith,thisisanidealtimetostartaccumulatingthe3-months’reserve.After
that,savingforretirementisagoodinvestment,whetheritbethroughfinancialinvestmentsorrealestate.Speakingwithanexpertinthisfieldwouldbeaveryworthwhileinvestmentofyourtime.Themostimportantreasonforcontrollingyourfinances,however,isbecauseitgivesyouthepower,theconfidence,thecourage,tosay“NO”tojobsthatyoujustdon’twanttodo.Askyourself:“HaveIevertakenonajobIjustknewIdidn’twanttodo?”Beingincontrolofyourfinanceswillgiveyouthepower(confidence)toturnthosejobsdownwithnofearaboutfromwherethenextjobiscoming.Anotherpowerfulreasonforbeingincontrolofyourfinancesisthatitmakesitmucheasiertomakedecisions.Let’ssayyouhaveacquiringanothervehicleinthisyear’sprojectedfiguresandnowyoulearnyouneedtoreplaceone,aswell.Reviewingyourfiguresyoumakeadjustmentsbyputtingsomeothersizeableinvestmentoffforabit,orafewsmallerones,oryouincreasesales…byofferinganewproductorservice,orsimplyfocusingmoreonhelpingyourcustomersmakebetterinvestmentdecisionsinyourcompany(youmaybesurprisedhoweasythisistodo.Eddidthisfortheveryfirsttimeandwithin8daysofthecommencementofourcoachingpartnershiphesecureda$200,000job…fromoutoftheblue!Talkaboutrecuperatinghisinvestmentinworkingwithme!onwhichIhelpeveryclientstay
focusedduringourcoachingpartnerships.Eddiditinsideof8days…andhe’snotthe1stclienttodoitthatquickly!!).Whateverthe“coursecorrection,”it’ssomucheasiertomakedecisionswhenyouhaveyourcoursemappedoutinfrontofyou,whenyou’renotfeelingheavinessfrom“debt”knowingthatyourdebtismerelyatoolyou’reusinginyourbusiness,andyoupossesspersonal“power”,thankstobeingincontrolofyourfinances.AnotherofthenumeroustopicsonwhichwefocusinStrategy#4comesfromStrategy#2…Gettingbacktotheplan…bycommunicatingwithyourfinancialsupportteams:
• youandyourfamily(toreviewyourbudgetandexplainthe“why”)• yourhiredsupport(tohelpyouremployeeshelpyoureachyourgoals,andtohelpthemgainpersonal
powerbycontrollingtheirownfinances,aswellastohelpyouraccountant,yourbanker,yourfinancialplannerhelpyougetbetterresults),and
• yourcustomers(togetyourpricingright,helpthembecomeAorBqualitycustomers–moreinStrategy#6–andintroduceyournewproductsandservicestothem.Afterall,it’syourcustomerswhopayforeverything,right?).
Staytunedfor… Strategy#5: Find,Hire,Train&RetainThem LeadanALL-STARTeam
Fun Has Never Been So Profitable
Asgeneralcontractorforherhome,Lynneidentifiedthatwhilecontractorsaregreatonthetools,theystruggletobalancemoney&time…especiallytimeinwhichtohaveFUN.AsasolutionLynnecreatedTheTrade-Contractors’BusinessCollege,ayear-longcoaching&trainingprogramforbusinessownersintheconstructionindustry,covering7SimpleStrategiesforSuccesswhicharekeytoeverysuccessfulbusiness.M.LynneJacob,BusinessPerformanceCoach(Diploma)mljInternational.com [email protected] ContactLynnetodaybyvoiceortextat613-484-3861.Tellheryoureadthisarticleandsave50%onaDiagnosticAssessmentofyourBusiness.Stillcomeswiththe300%ROIGuarantee!
