How Does Your Cash Flow?
If you haven't read "Rich Dad Poor Dad" take a minute right now and add it to your to summer reading list. The focus is on personal finance, but so much is applicable to businesses, too.
Last week I talked about "Working ON your business not IN your business" and it resonated with many. That statement was coined by Michael Gerber in his landmark "E-Myth" book series. Small businesses create the brightest futures by moving from managing their cash flow to creating wealth. Here is a short history of business styles and how they work their money or cash flow.
Money Path of a Job-Preneur. A job-preneur is a business owner that has created a job for herself. Typically when the owner expires or retires, the business does likewise. The most important information this business owner looks for is cash flow - what is coming in and what goes out. Do we have enough to pay all expenses and maybe put some aside for retirement? If this is your business, just being clear on what it is and planning for the future is important.
Money Path of the Business Owner. The business owner that has some employees and a plan for growth will likely be looking carefully at not only the cash flow of the business but also the Income Statement. The typical business owner will be aware of the liabilities associated with growth and asset acquisition. But few businesses in this category have "income producing assets", they are just large expenses. For example, the company car is an asset and maybe it has a loan, but does it really generate any cash flow? If these businesses are to be sold, the price is usually not much beyond a multiple of the business' profits. No Proft? Difficult to sell over the fair market value of the assets. Again, knowing what your exit plan is may mean that the business is what you want it to be. If you want more from your business, read on.
Money Path of an Entrepreneurial Business. Here the owner is striving to not only pay all the bills, pay down the liabilities and build assets but building a business where the owner works ON the business. A business that builds for the future is managing the cash flow, the income statement and most importantly the balance sheet. The key to getting assets to grow and generate income is having repeatable processes. These processes are for everything from answering the phone to providing outstanding service. If it can't be repeated, you don't have a salable process. These processes free the owner to be a leader and not just a worker-bee. The beauty of buying a franchise is that you are purchasing a tried and true way to have an income producing asset! Think about how you can create a business that is easy for someone else to come and replace you. When you know you can walk away and the cash will keep flowing, you have built a business based on wealth creation.
Being clear as to what type of business you are building means you will have a unmistakable understanding of what to expect. Businesses, like children, can only produce what we train them to do!
Copyright 2011 Linda Lucas Fayerweather
http://www.changinglanes.biz/
419-897-0528
Tuesday, July 12, 2011
Monday, July 04, 2011
Freedom FROM Your Business
Fourth of July is a great time to reflect on your future with your business. July begins the third quarter and second half of the year.
Copyright 2011 Linda Lucas Fayerweather
www.ChangingLanes.biz
419-897-0528
Send Linda an email to start the activation of your next adventure in business. Coach Linda
"No one was either Tory or Whig; it was either dependence or independence." --Caesar Rodney
"In politics the middle way is none at all." --John Adams
"The greatest ability in business is to get along with others and to influence their actions." --John Hancock
"Advertisements contain the only truths to be relied on in a newspaper." --Thomas Jefferson
- Maybe you see yourself as a major competitor in your industry and going public or being acquired?
- Or are you just going to create a great retirement plan to keep your mind active and your wallet happy?
- Maybe you see your business as something to provide for change in your community.
Copyright 2011 Linda Lucas Fayerweather
www.ChangingLanes.biz
419-897-0528
Send Linda an email to start the activation of your next adventure in business. Coach Linda
Businesses: Made in America
My old home has a copy of the Declaration of Independence hanging over the mantle. The mantle is from the estate of William Floyd's who signed the Declaration from New York state. The copy was originally hanging in Robert E. Griffin's office when he was General Manager of the Oldsmobile Plant in Lansing, Michigan. It then hung in my dad's offices when he was a school principal, my mom's office when she became director of a senior center and now in my historic home. Mr. Griffin would always talk about how in the USA anyone can be come anything!
My old home has a copy of the Declaration of Independence hanging over the mantle. The mantle is from the estate of William Floyd's who signed the Declaration from New York state. The copy was originally hanging in Robert E. Griffin's office when he was General Manager of the Oldsmobile Plant in Lansing, Michigan. It then hung in my dad's offices when he was a school principal, my mom's office when she became director of a senior center and now in my historic home. Mr. Griffin would always talk about how in the USA anyone can be come anything!
Happy birthday America! Let's celebrate the week ahead by saluting some of the country's most tried-and-true products:
- Louisville Slugger - Made in Kentucky since 1884.
- Wonder Bread - Founded in 1921 and still going strong - 130+ million loaves are sold a year.
- Harley-Davidson - Two friends William Harley and Arthur Davidson made their first motorcycle in 1903. 2006 sales: 350,000 bikes.
- Ivory Soap - has been keeping Americans clean for 128 years.
- Crayola - Founded in 1903, nearly 3 billion crayons are produced annually.
- Woolrich Blankets - kept Civil War soldiers dry and warm and today they're still in use 177 years after Woolrich's founding.
- Jack Daniel's - has been distilled in Lynchburg Tenn. since 1866, but you can't drink whiskey there - the town has been dry since Prohibition!
- DuPont - Incorporated in Delaware in 1802 and was the major supplier of black powder for the War of 1812 - most known now for the inventions of nylon, corian and kevlar.
- Seth Thomas - clockmakers since 1813 - check it out in NYC Grand Central Station.
- Libbey, Inc. - glassmakers since 1888 and still in Toledo, Ohio.
- Both Hires and Vernors claim to be the oldest continuously made soft drinks in the United Sates - 1876 is the year they both claim and they are currently both owned by Dr Pepper Snapple Group.
- Levi Strauss - 1873 is considered the birth of blue jeans when U.S.Patent No.139,121 was received for the still popular Levi's - for all shapes and sizes - still privately held by relatives of Levi Strauss.
"No one was either Tory or Whig; it was either dependence or independence." --Caesar Rodney
"In politics the middle way is none at all." --John Adams
"The greatest ability in business is to get along with others and to influence their actions." --John Hancock
"Advertisements contain the only truths to be relied on in a newspaper." --Thomas Jefferson
Monday, June 27, 2011
Summer IS Vacation Season
It is vacation season and I am ready. I've got my backyard in shape so that daily I can take a mini vacation watching the birds and feeding my koi. And my plans are set for the annual family trek "Up North."
Most businesses will have employees going on vacation or just taking time off between July 1st and Labor day weekend. Dealing with vacation on a regular basis requires everyone in your firm to think about more than jumping in the car and heading out to the woods.
Here are some vacation tips so that employees will return from vacation relaxed and rejuvenated and those holding down the fort will not feel burdened.
1. Have a policy on vacation which will include how to request, time frame for request and how much is available.
2. Create a vacation planner - A calendar that all have access to is best.
3. Prior to vacations, rearrange work so that no one returns to "too much" work.
4. Encourage vacation coordination between your employees.
5. Do ask for destination contact information for emergencies and only use it for that! Even with cell phones, sometimes people go places without coverage.
6. Schedule time after the vacation to "see the pictures".
7. Announce job or corporate changes after the vacation season, not before.
The purpose of a vacation is to de-stress, relax and get rejuvenated. Helping your employees achieve that will help your company achieve its annual goals with less stress.
Don't' forget to plan your own vacation and try to have a few days where you unplug!
Copyright 2011 Linda Lucas Fayerweather
http://www.changinglanes.biz/
419-897-0528
Most businesses will have employees going on vacation or just taking time off between July 1st and Labor day weekend. Dealing with vacation on a regular basis requires everyone in your firm to think about more than jumping in the car and heading out to the woods.
Here are some vacation tips so that employees will return from vacation relaxed and rejuvenated and those holding down the fort will not feel burdened.
1. Have a policy on vacation which will include how to request, time frame for request and how much is available.
2. Create a vacation planner - A calendar that all have access to is best.
3. Prior to vacations, rearrange work so that no one returns to "too much" work.
4. Encourage vacation coordination between your employees.
5. Do ask for destination contact information for emergencies and only use it for that! Even with cell phones, sometimes people go places without coverage.
6. Schedule time after the vacation to "see the pictures".
7. Announce job or corporate changes after the vacation season, not before.
The purpose of a vacation is to de-stress, relax and get rejuvenated. Helping your employees achieve that will help your company achieve its annual goals with less stress.
Don't' forget to plan your own vacation and try to have a few days where you unplug!
Copyright 2011 Linda Lucas Fayerweather
http://www.changinglanes.biz/
419-897-0528
Monday, June 20, 2011
Living in a Multi Generational World
Last week my webmaster got engaged and invited me and my husband to the engagement party. I knew it would be fun (it was), unique (it was) and I would be one of the more mature (read that oldest) at the event. When I got engaged years ago, we hadn't even heard about engagement parties. So, what does all this have to do with Multi Generational Worlds? Well, unless you are Royalty for life or an Old Dictator, most of us will be working with and for those that are younger or older than ourselves.
In my travels, I have meet the very young banker that really does understand business cash flow beyond credit score. I've also worked with elders that cause me to feel like a newcomer to my fields of study. Realizing that we all have talents and strengths, in the workplace we all need to figure out how to work together.
If you are leading or managing older employees without the years of "war stories to tell", take heart, it can be done even if you have a baby-face. Whether you are the owner of your business (do you really think that Mark Zuckerberg, CEO of Facebook has only younger employees?), or have been given the authority by your boss, here are some tips to help you grow in your authority.
1. Express Confidence. Not just self-confidence, but also sharing where the company is going. Assume your ideas and directions are well founded. Don't undermine yourself with qualifiers like "I haven't done this, but . . ." Or "You many not all agree. . ." Or "This might not be right, but. . ." Your own statements that express doubt in yourself, will only cause you to not be taken seriously.
2. Embrace an Open-minded stance. You are responsible for setting the agenda and leading the charge, asking for input is different than asking for guidance. Be ready to listen - that is the genius of innovation.
3. Ask for Feedback. Feedback is asking people for their view of what the company is actually doing - "Why is this not working" or "Why is it working so well". We want to learn the root cause of on-going problems.
4. Acknowledge and Reward those that make you shine. Humility is a characteristic that allows a great leader to share stellar performance. The statement often joked about in Dilbert "Hire people smarter than you" really means hiring smart to meet your Vision and Company's Vision. Telling the world of your staff's successes helps solidify a team while the company is seen as unified.
Last week, I talked about Standard Operating Procedures and the sister document is the Policy Manual or Employee Handbook. If you really want to spend your time as a leader, these documents give staff the guidance they need for the simple stuff!
In my travels, I have meet the very young banker that really does understand business cash flow beyond credit score. I've also worked with elders that cause me to feel like a newcomer to my fields of study. Realizing that we all have talents and strengths, in the workplace we all need to figure out how to work together.
If you are leading or managing older employees without the years of "war stories to tell", take heart, it can be done even if you have a baby-face. Whether you are the owner of your business (do you really think that Mark Zuckerberg, CEO of Facebook has only younger employees?), or have been given the authority by your boss, here are some tips to help you grow in your authority.
1. Express Confidence. Not just self-confidence, but also sharing where the company is going. Assume your ideas and directions are well founded. Don't undermine yourself with qualifiers like "I haven't done this, but . . ." Or "You many not all agree. . ." Or "This might not be right, but. . ." Your own statements that express doubt in yourself, will only cause you to not be taken seriously.
2. Embrace an Open-minded stance. You are responsible for setting the agenda and leading the charge, asking for input is different than asking for guidance. Be ready to listen - that is the genius of innovation.
3. Ask for Feedback. Feedback is asking people for their view of what the company is actually doing - "Why is this not working" or "Why is it working so well". We want to learn the root cause of on-going problems.
4. Acknowledge and Reward those that make you shine. Humility is a characteristic that allows a great leader to share stellar performance. The statement often joked about in Dilbert "Hire people smarter than you" really means hiring smart to meet your Vision and Company's Vision. Telling the world of your staff's successes helps solidify a team while the company is seen as unified.
Last week, I talked about Standard Operating Procedures and the sister document is the Policy Manual or Employee Handbook. If you really want to spend your time as a leader, these documents give staff the guidance they need for the simple stuff!
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