Ever wondered ‘Where’s the money gone”?

‘Where’s the Money Gone?’ traces the learning of a typical business person named Mike. Mike believed that to be successful he just needed to make a profit.

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Simple financial analysis software for business owners

By on February 24, 2011 in Financial Analysis Software

Are you one of those people that find it difficult to get your head around numbers?

Do the numbers of your business look like ant walking up a page?

Well the good news is that you’re in good company because many people relate to words far better than they relate to numbers. But that’s a problem because when you have a business, the financial numbers are one of the measures that determine whether you’re successful or not.

I’ve seen lots of different financial analysis software which is complicated and difficult to understand. It leaves many people more confused after using it than they were before they started.

I’m committed to trying to help business owners understand the financial aspect of their business and as a result I’ve developed a couple of pieces of software which can help in analysing the financials of a business.

Questions that I get asked by business owners include:

  • How well do you think my business is going?
  • Where’s the money gone in my business?
  • I’m making profits but where’s the cash?
  • What ratios can I focus on to make sure my business will succeed?

These questions told me that there was a great need to more simple financial analysis software. Many programmes have been developed for financial planners, accountants, financial analysts but at the end of the day business owners need simple tools which can quickly show them the health of their business.

In developing these two tools I had in mind that many business owners understand pictures and colours more than numbers so this has been taken into account in the development

Tool 1: One Minute Business Checkup
This free and simple tool relies on answering seven simple questions which will then be used to diagnose the health of your business. We recommend that you use this at least once a quarter to determine whether your business is heading in the right direction
To use click on this link www.oneminutebusinesscheckup.com

Tool 2: The Financial Fence
In planning your business you will probably use the well know method of

    a. Work out where you are
    b. Work out where you want to be
    c. Get a plan to get there

We’ve taken this simple concept and applied it to the financial information of a business. And the beauty of this is that you get the whole of a business displayed on ONE page in the form of a fence

To get further information on the click on this link www.thefinancialfence.com

How you can get value from Small Business Coaching

By on February 17, 2011 in Small Business Coaching

Are you frustrated at the lack of progress in your business?

Has your business turned out quite different to what you thought it would be like when you started?

Is your cash flow so weak that you’re only just keeping your head above your current debt level?

If you answered yes to any of those questions you may be thinking it’s time to get help from a small business coach.

But wait! Before you even think about getting a coach you need to work out what you want from small business coaching because like any expense in your business you need to make sure that you are getting value for money.

As a business owner you probably get lonely at times because the ‘buck’ always seems to stop with YOU. It can be very discouraging to see everyone else get a break but have to face up to the fact that you’re left with all the problems.

It is easy in these circumstances to find someone who you can talk to and who supports you emotionally but by itself this will not get your business heading in the right direction. So make sure you’re not just looking for an emotional fix because this may make you feel good but be a complete drain on your business finances.

You can contrast this with finding a coach who is a complete control freak but who knows exactly what needs to be done, forces you to do it their way and effectively takes over the running of your business. This can feel just like a takeover but when you’re desperate you’ll go along with it because you’ve tried and nothing seems to have worked. The major issue is that if your coach is effectively running your business what are you going to do?

Somewhere between these two extremes there is a happy medium because let’s face it, as business owners we do need emotional support. Likewise we don’t know everything and can take advice from people who have done it before.

So getting the best value relies on finding someone in the small business coaching market who allows you the freedom to call the shots and direct the business but provides the encouragement, business acumen and wisdom to back you up.

Remember that long term coaching normally produces the best results. Developing as a business owner takes time and your business also needs time to reach its full potential.

What’s your experience with small business coaching?

Discovering how to develop a most profitable business

By on February 15, 2011 in Most Profitable Business

Every day I meet business owners who wish they had the most profitable business in the world but they fail to even get past the first base in achieving that.

So what’s the best way to move towards developing a most profitable business?

To help us in this pursuit let’s use some wise thoughts from Seth Godin who wrote a very famous book called Purple Cow.

In this book he said that to really be successful you had to be the best in YOUR world at what you do.

He did not say you had to be the best in THE world.

He said you had to be the best in YOUR world
and then he went on to say DEFINE YOUR WORLD.

So the first step in developing a most profitable business is to work out what type of customer you are targeting which is another way of defining your world.

When many people go into business they fall into it in a very haphazard way which lacks any real focus. They try and sell everything to everybody and wonder why they never make any really good money.

If this has been your experience make a promise to yourself that you’re going to stop what you’re doing and DEFINE YOUR WORLD.

And remember this is a world where you are the absolute best at what you do. No longer can you be mediocre or nearly as good as others. This is a world where you are the standout business that everyone recognises and loves.

So if you’re struggling as an international business you might become a national business. And if you’re struggling as a national business you might define your world as being a regional business. This will allow you to focus on being the absolute best at what you do in a smaller market.

Once you have defined your world then the next step is to start asking questions of your best customers. This may be quite an ordeal for you because you may not like the feedback. It may not all be positive but your best value will be when your best customers can be 100% truthful in their feedback.

It really won’t help you if your customers tell you what you want to hear. If they have issues then it’s best for you to hear them because they at least have valued you enough to part with money and become a customer.

So ask these questions and then listen as best you can to the answers.

  • What do they like about your business?
  • What do they dislike about your business?
  • How could you improve in the future?
  • Would they recommend your business to others?
  • If they wouldn’t recommend your business then what would you have to do to get them to change their mind?

Now you may be asking yourself how this all relates to having a most profitable business.

A key element of profitability is Income. Without this, it is obviously very difficult to make a profit. The greatest source of income is from loyal customers who buy from you over and over again. This repeatable income stream will allow you to develop a successful business which brings you the greatest profitability.

3 simple tips on developing Budgeting Worksheets

By on February 10, 2011 in Budgeting Worksheets

As a small business owner you may have never prepared a budget because it seemed a very difficult thing to do with no real value to your business.

But having a budget will allow you to focus and develop goals which will lead you to more and more success.

Preparing a budget for the first time can be a difficult task even with the help of computer programmes such as Microsoft Excel. It’s easy to get lost in the detail and never get the right perspective on your budget.

So here are three tips which will assist you in building the right context for your budgeting worksheets

TIP 1
Make sure that you have as much analysis on your sales and income as you do on your expenditure.

Many profit and loss accounts that I see have 1 line for sales and 100 lines for expenses. While it is very important to know exactly what you’re spending in your business, I believe it is equally important, if not more important, to know the detail of where you are getting your sales from.

So you may wish to break down your sales by:
a. product or product group
b. major customers
c. geographic spread

There are many ways you can do this but budgeting worksheets are incomplete if they do not include a meaningful breakdown of the sales.

TIP 2
Make sure you include figures for your working capital.

Working capital (inventory, accounts receivable and accounts payable) is an area that can often soak up cash in your business. Often this is where money is hiding in your business without you even realising it!

Many small business budgets are prepared without even thinking about the trading terms in the business and how this will affect working capital.

You may have a highly profitable business but be unable to succeed because you haven’t worked out the money tied up in funding the working capital of your business. No budget is complete without solid calculations on the levels of working capital.

TIP 3
Make sure you include Capital Spending.

Capital spending such as plant and equipment, motor vehicles, computers and furniture is sometimes left out of budgeting worksheets because the budget is confined to a simple profit and loss account.

If your budget does not include a balance sheet then you may forget about these items altogether and find you run out of money half way through the budget period.

As a business owner you likely want to grow your business which will mean investing in capital equipment. If you leave this out of your budgeting worksheets there is a major section missing from your budget.