Successful Entrepreneurs’ Stories : Meet Veronica Pullen

Veronica Pullen
Social Marketing Queen

Imagine having Asperger’s Syndrome, rheumatoid arthritis, hearing difficulties, an eyesight issue which means you are blind at night, and mobility issues. What might life hold for you? Meet Veronica Pullen. She has all those health issues, but that hasn’t stopped her being a hugely successful entrepreneur based in the United Kingdom. Because of her ailments, Veronica began networking online 18 years ago; through internet chat rooms and forums, she made friends. A book keeper by day, online networker by night, Veronica realised that business people were starting to wonder how to use the online world to network – something she had been doing for years. So, a new social media business was born.

Veronica admits she did undertake some social media training, but soon realised she knew as much as the trainers. What she needed to learn was how to build and run a business to support her social media skill set. Veronica is passionate about learning, so even today, while running a hugely successful business, she is continuing to explore new ways to develop and run her business.

At first Veronica tried to ignore her health challenges, thinking that if she just focused on her expertise in social media, no one would pay any attention to her health issues. She was wrong. By not acknowledging her issues, Veronica found she alienated her audience. Once she began to ‘weave in’ her health challenges, people started to accept her as they respected the personal challenges she had overcome, and continues to overcome to this day.

As you might expect, being a social marketing queen, Veronica has built her customer base via social media. The friends she had developed became her first customers when she established her new business, and in turn they continue to refer her to their friends. Now Veronica has social media customers all over the world, and some very well known names have their social media activity managed by Veronica and her team.

Veronica has been shortlisted for and won various business awards. She credits a lot of her business success to having mentors and coaches supporting her. They teach her and she always implements their teachings. She also continues to participate in Mastermind type coaching groups with others in business. These environments ensure Veronica continues down the right path in her business. Veronica’s greatest joy in business is that she owns and runs a business that is an extension of herself. As she says, she “shows up as Veronica”! She gets paid to talk about and teach the things she lives for. For Veronica, there is no distinction between work and play. It is all play!

To be successful in business, Veronica believes:

1) Do something in business that you love. If you are not passionate about it, you will not achieve the success you aspire to achieve.

2) Always make sure you are networking with people who are more successful than you. If you want to grow your business, look at the people who are around you, and make sure they are helping you to go forward and not holding you back.

3) That all businesses need to embrace the power of social media to support the growth of their business.

Adèle’s Note:
I had the pleasure of interviewing Veronica Pullen for my book: BIG Profits – 12 Strategies To Substantially Grow YOUR Business Profits, in which Veronica features.

Veronica is amazing. She decided early on that she would not let her health issues affect the quality of her life, and she hasn’t. Veronica has embraced her ailments, and has used them to her advantage. She has a hugely successful international business, and aspires to achieve even more. She has set herself some significant goals for the next five years, and is on track to achieve them. Veronica has found that she enjoys the life of a celebrity and being recognised, so has set her sights on presenting her material on the stage to larger groups of people. Go Veronica. You are an inspiration.

You can listen to the original Interview with Veronica Pullen here:

To connect with Veronica Pullen:

Adèle hosts an interview series entitled:

• Successful Entrepreneurs’ Stories : Adèle McLay Interviews…..
• Business Success Tips : Adèle McLay Interviews …..

…where she interviews successful entrepreneurs from around the world, asking them to share their entrepreneurial stories, and other business ‘subject matter experts’ who share business success tips. If you would like to be part of Adèle’s success community and receive the interviews and much more directly to your inbox, please click here.

Listen to more Successful Entrepreneurs and be inspired in the Successful Entrepreneurs’ Stories: Adèle McLay Interviews….. YouTube and Podcast series:

Other articles on What Makes Successful Entrepreneurs:

Seven Secrets of Super Successful Entrepreneurs
Entrepreneurship vs The Meaning of Life
Mega Entrepreneur Defined!
Supercharge Your Profitable Business!
Leadership Qualities
What Makes Great Entrepreneurial Leaders?
All Work + Little Play = Boring!
Entrepreneurial Success without Fulfilment: Who Wants That?
Millionaire Mindset
NZ Entrepreneurship Success

Successful Entrepreneurs’ Stories : Meet Rachelle Harte

Rachelle Harte
Managing Director, Lollipop Events

Rachelle unexpectedly found herself leaving a corporate job she loved, having been with the same company for 18 years. This change in circumstance due to the need to support a family member with severe ill health meant Rachelle needed to consider her part-time employment options. After researching the market, she decided to establish an events business that focused on planning and project managing children’s parties, building up a reputation in that niche before moving into other event management areas. That strategy worked, as Rachelle has been an entrepreneur for over 11 years and owns a highly successful events management business, Lollipop Events.

When establishing her business, Rachelle’s initial concerns were how she differentiated herself from the local competition, and her ability to manage her business while only being able to work part-time. As a highly focused service oriented person, she wanted her business to quickly stand out in the market by growing its reputation in its niche so she could then move into a broader range of events management, so balancing her personal and work commitments was a challenge.

In the past Rachelle relied on advertising for growing her business, but in the end found advertising was not offering an effective return on investment. In recent years Rachelle has enjoyed business growth through referral marketing and collaboration. She joined a local business networking group, BNI, and that involvement has enabled her to widen her network base, support other businesses to be successful, and substantially grow her own business.
Strongly branding her business has also been a key decision for Rachelle, so that Lollipop Events is now recognised as a major events management business in South East London and beyond.

A key lesson Rachelle has learnt along her entrepreneurial pathway is that she cannot do everything herself (as much as she wants to). As a young entrepreneur, she found she was good at most things, but she continues to force herself to enlist the help and support of other professionals who complement her business, often in a mentoring way, and as a result they have helped her to grow and sustain her business for the future.

Rachelle’s advice to budding entrepreneurs is:

1) Make sure everyone knows about your new venture and plans and ask them to spread the word.

2) Have a plan for what you want to achieve and keep focused on the plan. What are you here for? Where are you going? How are you going to get there?

3) Get up a little earlier each day. Even 15 minutes can make a real difference to how much you can get done when the phone is not ringing.

4) Ask for help! You will be surprised how much others want to support your success.

Rachelle’s business plan includes substantially growing her corporate customer base over the next three to five years. A key area of business growth for Lollipop Events will continue to be working with local government on the regeneration of town centres in the United Kingdom, something Rachelle and her team are passionate about supporting.

Rachelle truly believes she is living her dream as an entrepreneur. She is working in an industry she loves, supporting customers to achieve their business and personal goals when hosting their event; and her company continues to substantially grow and is highly profitable.

Adèle’s Note:
I had the pleasure of interviewing Rachelle Harte for my book: BIG Profits – 12 Strategies To Substantially Grow YOUR Business Profits, in which Rachelle features.

Rachelle is a focused, determined and very successful business woman who goes out of her way to support other businesses to achieve the success they are seeking, and in return she has built a substantial events management business herself. I have known Rachelle for several years, and have thoroughly enjoyed hearing of her ongoing business successes, and how she supports others towards their own success. Having had the privilege of using the services of Lollipop Events to manage an event of my own, I know firsthand how committed Rachelle and her team are to ensuring their clients achieve the outcomes they are seeking for their events; they definitely go beyond the call of duty in their work, and I am sure this attention to service delivery has played a major role in the success of Rachelle’s business.

You can listen to the original Interview with Rachelle Harte here:

To connect with Rachelle Harte:
W: www.lollipopevents.co.uk

Adèle hosts an interview series entitled:

• Successful Entrepreneurs’ Stories : Adèle McLay Interviews…..
• Business Success Tips : Adèle McLay Interviews …..

Listen to more Successful Entrepreneurs and be inspired in the Successful Entrepreneurs’ Stories: Adèle McLay Interviews….. YouTube and Podcast series:

Other articles on What Makes Successful Entrepreneurs:

Successful Entrepreneurs’ Stories : Meet Phil Turner

Phil Turner
Electrician and former owner of a Fujitsu Heat Pump Franchise

I have known Phil Turner as the electrician for my property investment business in New Zealand for over 10 years. He and his team have always been excellent providers of service as electricians, totally focused on giving great customer service at fair prices. On the back of that, Phil built up a successful electrical contracting business.

While on holiday in 2007, Phil learnt about the international heat pump industry; at the time, The Netherlands was predicted to be the next big market for the industry. Phil returned to New Zealand, did his research, and decided to purchase a heat pump franchise through Fujitsu. Because most New Zealand homes are not centrally heated, the heat pumps are used in New Zealand to warm houses in winter and cool them in summer; the technology was moderately new to the country at the time. Phil had always wanted to own a product focused rather than service business, and felt that the heat pump industry was a natural progression from being an electrician, so took on the new business and industry with a business partner, Gareth.

Fujitsu New Zealand was impressed with Phil’s business plan, so embraced the new business supporting them with advertising investment. When they started, Phil and Gareth had budgeted to install four heat pumps per week; in fact, at times they were installing six per day and had a four week waiting list. Phil notes that they could have installed 10 units a day if they had had the staff to support them.

Initially Phil and Gareth used a home delivered magazine to advertise in, but eventually focused their marketing and advertising budget on Google AdWords, as it was the means by which they received most of their customer leads. Phil’s wife is an accountant, so supported the business with day to day accounting and administration.

Phil notes the business’s greatest achievement was being Fujitsu’s number one dealer in the country; something they achieved after two years, to the delight of Fujitsu, Phil and Gareth.

The industry got very competitive as more heat pump companies entered the market. And, as often happens when a new market matures, Phil’s business ended up competing with one-man-bands who operated out of home without the business overheads.

After five incredibly successful years, in 2013 Phil and Gareth decided to sell the business after being made an offer they couldn’t refuse. At the time of the interview, Phil was still coming to terms with not being in the business, noting he had just booked his first decent holiday in five years.

After taking a good holiday, and in light of enjoying the experience of selling a product, Phil is considering other product ideas that draw on his electrical contracting experiences. He is too young to retire, and besides, he loves the cut and thrust of being in business.

Adèle’s Note:
I had the pleasure of interviewing Phil Turner for my book: BIG Profits – 12 Strategies To Substantially Grow YOUR Business Profits, in which Phil features.

Phil and Gareth were really pleased with the way in which they ran their very successful business. If they had continued in it, in view of competition, they would have to have reviewed their business overheads in order to increase profits, but at the time they achieved the financial success they were seeking. Phil and Gareth should be an inspiration to anyone seeking to break out of a business they know into something new. If you apply your business knowledge to the new industry and are passionate about achieving success, you will do it. Then the rewards are there for reaping – great profits; selling out for an excellent price; lifestyle.

You can listen to the original Interview with Phil Turner here:

Adèle hosts an interview series entitled:

• Successful Entrepreneurs’ Stories : Adèle McLay Interviews…..
• Business Success Tips : Adèle McLay Interviews …..

Listen to more Successful Entrepreneurs and be inspired in the Successful Entrepreneurs’ Stories: Adèle McLay Interviews….. YouTube and Podcast series:

Other articles on What Makes Successful Entrepreneurs:

Successful Entrepreneurs’ Stories : Meet Bice Awan

Bice Awan
Social Entrepreneur, CEO – Skylight Trust (up to Dec-14)

Skylight Trust, a non-governmental social enterprise, was established in 1997 in Wellington, New Zealand after key community leaders identified a lack of local and national resources to support children and adults who were experiencing stress, grief and trauma. Bice, who has a significant international health consulting background, took up the role of chief executive, and spearheaded the development of Skylight, which today is a leader in providing support and resources in New Zealand and across the world to people in desperate circumstances.

Bice started the Trust as a ‘one-woman-band’ and has grown it significantly on the back of a strong vision. Not without its own business challenges, even today, Bice notes, “that the Skylight Trust is still moving along the social enterprise continuum from dependency to total financial independence.” “Social enterprise is a philosophy of balancing social missions with revenue generation, but we haven’t got to the stage yet of being fully in that position.” Bice commented that, “it is important never to lose sight of either in managing and growing the enterprise day-to-day.”

To address the issue of financial independence, Bice and her team established a publishing arm to the enterprise, and to date have published over 50 resources, which are available for purchase. The resources are of such a high quality and relevancy, that Skylight Trust has won major organisational customers and contracts in New Zealand, Australia, Denmark and Saudi Arabia, to name a few countries.

Branding and marketing has played a key role in Skylight’s development. Skylight sees itself as a ‘hope broker’; it can’t fix somebody’s trauma, loss or grief, but Skylight can give hope for the future. This message is used strongly as part of its branding and marketing strategies.

On the back of the strong branding and marketing work, which has created significant visibility for Skylight, it enjoys significant repeat business with its customers, many of which are very large organisations seeking a holistic approach to working with grief, stress and trauma in their organisations.

To be successful in developing a social enterprise, Bice believes in:

1) Establishing a board of directors who truly understand the importance of balancing a social mission and financial imperatives.

2) Having working capital available from the beginning, as most enterprises don’t and that is a real commercial challenge.

3) Developing profitable partnerships with other agencies as those associations can be very powerful and provide a way of growing a social enterprise in the early years.

Adèle’s Note:
I had the pleasure of interviewing Bice Awan for my book: BIG Profits – 12 Strategies To Substantially Grow YOUR Business Profits, in which Bice features.

Bice’s vision and drive to make a difference has been the cornerstone of Skylight’s success as a social enterprise in New Zealand and internationally, in the lives of those affected by stress, grief and trauma, and whose voices are often not heard. As a leading Government official said to Bice, “If Skylight didn’t exist, New Zealand would be a very sad place!” As well as being successful in achieving its social mission, Skylight as a business is a success. Recognising the need for financial independence, it has developed significant and profitable revenue streams which, as those continue to grow, will hopefully allow the enterprise to enjoy absolute financial security. Bice and this enterprise are a true inspiration for business owners and other social enterprise leaders.

You can listen to the original Interview with Bice Awan here:

To connect with Skylight:
W: www.skylight.org.nz

Adèle hosts an interview series entitled:

• Successful Entrepreneurs’ Stories : Adèle McLay Interviews…..
• Business Success Tips : Adèle McLay Interviews …..

Listen to more Successful Entrepreneurs and be inspired in the Successful Entrepreneurs’ Stories: Adèle McLay Interviews….. YouTube and Podcast series:

Other articles on What Makes Successful Entrepreneurs:

Successful Entrepreneurs’ Stories : Meet Andy Harrington

Andy Harrington
World Leading Public Speaking Expert and Trainer

Some would say that Andy Harrington lives a dream life. With his family he travels the world, speaking on stage with some of the world’s leading business and motivational speakers who have included: Sir Richard Branson, Donald Trump, Bill Clinton, Tony Robins, and Brendon Burchard, to name a few. Andy is a public speaking entrepreneur, teaching public speaking from the stage, and selling entry to his Public Speakers University courses. He has developed a system that, when applied by his students, means they become expert public speakers.

But it hasn’t always been that easy. Prior to establishing this, his third business, Andy suffered the financial failure of his second business due to a flawed business model. But as Andy says, you have to “lick your wounds and get back into the game”. He returned with a more robust business model for this business, and as a result it has thrived. In establishing his current business, Andy was concerned not to ‘overtrade’ as he has the ability to grow businesses extraordinarily quickly. He has ensured this business growth is measured and has implemented an appropriate infrastructure to support the growth. Key to that infrastructure is a team of skilled staff.

One of the keys to the success of Andy’s public speaking business is personal branding. Careful management of his personal brand has resulted in large promoters who organise international conferences now seeking Andy out and promoting him around the world. As he teaches communications to his audience, Andy has invested heavily in video technology to support the growth of his brand by enabling his audience to watch him via YouTube and to receive free tutoring if they opt-in to his free information. If they are interested, they can then pay to attend his training programmes. To achieve a worldwide audience, Andy has focused on dominating the YouTube categories of ‘public speaking’ and ‘presentation skills’, which gives him a competitive advantage.

Andy has also created modules and systems with his products, so that others on his team can teach the public speaking tools he has developed. Through doing that, he now has a scalable business that can grow without being totally reliant on him. Andy also has a business mentor who helps to flesh out ideas, acts as a sounding board, and challenges him in areas where his skills are weaker in business.

Andy’s three key points for a budding entrepreneur are:

1) To be successful, an entrepreneur needs to specialise and stand out in some way.

2) Build a systematic business right from the very beginning, so that the business is not reliant on the entrepreneur.

3) Build winning teams around the business, advice Andy himself took from Sir Richard Branson.

Over the next six years Andy plans to exit from his business as a regular speaker, only appearing in selected elite events. To achieve that goal he will be focusing on finding and training the best speakers in the world to run the business and to teach the people who enrol on his public speaking training courses.

Adèle’s Note:
I had the pleasure of interviewing Andy Harrington for my book: BIG Profits – 12 Strategies To Substantially Grow YOUR Business Profits, in which Andy features.

Notwithstanding some early business setbacks, Andy has always wanted to be an entrepreneur, so in establishing his public speaking business he learnt from his earlier mistakes, developed a clear vision and system for teaching public speaking, created a business infrastructure, and used his personal brand to grow his business. Today he is hugely successful, and ‘brand’ Andy Harrington is recognised and followed by vast numbers of people around the world. Andy is a truly inspiring professional speaker and teacher, and successful business man, who has found his niche and is reaping the rewards of his hard work.

You can listen to the original Interview with Andy Harrington here:

To connect with Andy Harrington:
www.andyharrington.com

Adèle hosts an interview series entitled:

• Successful Entrepreneurs’ Stories : Adèle McLay Interviews…..
• Business Success Tips : Adèle McLay Interviews …..

Listen to more Successful Entrepreneurs and be inspired in the Successful Entrepreneurs’ Stories: Adèle McLay Interviews….. YouTube and Podcast series:

Other articles on What Makes Successful Entrepreneurs:

How to Solve Cash Flow Problems: Inventory Turn

Effectively managing inventory is critical when asking “How do I solve my small business cash flow problems?” In many respects inventory is like cash. Sell the inventory and you have cash (once the accounts receivable is paid). Having too much inventory in the warehouse or having inventory that is not selling, is going to have a major impact on cash flow, as you have spent money buying the inventory, but it is sitting there doing nothing. If it is not selling, it is as good as wasted cash!

So, how to solve cash flow problems? Focus on actively managing your inventory turns.

In accounting terms, we have a little formula called the ‘Inventory Turn’ which helps businesses to effectively manage their cash flow. The Inventory Turn formula is calculated as:

Inventory Turn = Cost of Goods Sold / Average Inventory

Average Inventory = Beginning Inventory + Ending Inventory / 2

Inventory Turns can be worked out for any period – a year, six months, quarter etc. Whatever suits the business. Often it is helpful to calculate multi-period Inventory Turns to ensure the result is consistent across a longer period.

Let’s look at an example. If the cost of goods sold for a year is $200,000 and the average inventory is £50,000 then the Inventory Turn is 4, which means the inventory is ‘turning over’ or being sold, on average 4 times per year over every 91.25 days (worked out by dividing 4 by 365 days in the year).

Inventory Turns differ in industries, so it is important to look at what the industry norms are for your industry. Perhaps you accountant might be able to assist you in providing that information. Equally, industry associations often hold that type of information.

So how does Inventory Turn help to answer the question, ““How do I solve my small business cash flow problems?”

As I mentioned earlier, if you have a lot of inventory sitting and not being sold, that is effectively wasted cash or dead cash, as you have paid for the inventory. It is important to be turning your inventory as often as is suitable for your industry. Whereas a high inventory turn might be suitable in the grocery trade, it will be low in the luxury car market, for example.

Also, it pays to look at the composition of what stock is selling and what is not, as the ‘devil is in the detail’. Some inventory may be turning over quickly, whereas other stock may not. It is important to look beyond the numbers to actually see what stock is selling.

Slow moving stock may be obsolete or damaged, and therefore chewing up cash. In that instance, it is best to ‘fire sell’ it if possible to release the cash, rather than throwing the inventory away at some future time.

If you would like to learn more on how to address the cash flow issues in your business, then please go to www.adelemclay.com/free-resources and download my SPEARHead System™ – 50 Strategies For Supercharged Small Business Cash Flow.

Could some guidance from me be helpful to you? If so, please arrange a free 30 mins Skype strategy meeting with me. Here’s my calendar to book a meeting. I’d love to support you in some way to gain ‘seductive clarity’ in any aspect of your business or life.

Other articles on Small Business Cash Flow:

Small Business Cash Flow – The Ultimate Guide
Cash Flow Problems in YOUR Small Business
Small Business Cash Flow Problems
Cash Flow in Business
Cash Flow Projections – Important in Business?
Projected Cash Flow – Relevant in Business?
Small Business Problems: Why are YOU in Business?

Cash Flow Projections: Important in Business?

The term ‘cash flow projections’ is used interchangeably with the words ‘cash flow forecast’, ‘cash flow management’, ‘cash flow planning’ to name a few. Essentially they all mean the same thing; planning, forecasting or projecting the cash that is going in and out of the small business during a period. That period could be annually, monthly, weekly, or daily. It depends on the business.

Importantly, cash flow forecasting /cash flow projections are critical to success in any business. Cash flow forecasting is a business tool that all small business owners/entrepreneurs must engage with to effectively manage the success of their business. Failure to understand cash flow within a business, and the business becomes vulnerable and out of control. Cash is King (or Queen) in business. Profit is important, but it doesn’t pay the wages and the bills. It is cash that does that!

Many entrepreneurs manage their business from one cash flow crisis to another, simply due to poor or no cash flow projections (or cash flow forecasting) having been done in the business. I think many small business owners are frightened of ‘the numbers’ in business, or don’t want to spend the money asking their accountant or book keeper to do the work for them, or they don’t spend time working ‘on’ their business, preferring to work ‘in’ the business, working within their comfort zone.

Cash flow forecasting is done in all large businesses around the world with incredible accuracy. In fact it is so important to large businesses, that they have large teams of finance and treasury staff managing the cash flow on a daily basis. For example, a very dear friend of mine is a senior finance executive in a multinational business. She knows the daily cash balance and the net in and out flows to the business down to the last dollar, as they manage cash flows that carefully in the business, given its importance to the business.

While small business is not of that scale, it is similarly important as small business owners are responsible for paying staff (often) and they have monthly business expenses to pay. Consistently not being able to meet its financial obligations could well result in the business failing, and staff, who depend on the business for their income, being made redundant.

For many small businesses, cash flow forecasting is not difficult to do, by virtue of the fact they are small businesses. Cash flow projections templates can be freely downloaded from the internet and used to accurately plan for cash flow within the business. As well, many accounting systems can ‘spit out’ cash flow forecasts as a report, so long as the correct information has been put into the system when the accounts receivable or payable was entered into the accounting system in the first place, and so long as the book keeper or accountant includes all other accounting transactions that have a cash flow impact.

There are two steps to cash flow forecasting or cash flow projections. The first is to forecast/project the money the small business expects to receive in cash and pay out on any given day/week/month (if managing daily/weekly/monthly), starting with an opening balance of cash in the bank (or overdraft amount), on day one. Secondly, at the end of the period the business needs to re-forecast the cash flow based on what actually happened in the business, so that the small business owner has an accurate account of cash flow at all times.

For instance, let’s say an account of $10,000 is due to be paid by a customer on 20^th of the month, and is put into the monthly forecast as such. If the customer doesn’t pay on that date, at the end of month the small business is going to have $10,000 less in the bank than it predicted, and that will potentially have an impact on what expenses can be paid at month end. Therefore, the cash flow needs to be re-forecast at the end of the month to allow for the late arrival of the $10,000 into the account and late payment of business expenses. This exercise happens on a monthly cycle, as cash flow projections or forecasts are just that, projections or forecasts. They are not accurate day to day unless they are updated daily.

It might seem like a lot of work, but it is necessary work for a small business. However, it should be delegated within the business, so the small business owner can continue working in the business, and simply reviewing the cash flow information that is provided to them. With that information, it is likely that customers will need to be chased up for payment of their accounts if they are late in paying, or creditors may need to be spoken to about delaying their payments if there is not enough cash in the bank.

Information is power. Cash flow projections/cash flow forecasting provides information on which to act. So, how about it? How about arranging a meeting with your accountant or book keeper to seek their help in preparing cash flow projections for your business, so you maintain control of it!

Other articles on Small Business Cash Flow:

Small Business Cash Flow – The Ultimate Guide
Cash Flow Problems in YOUR Small Business
Small Business Problems – Why are YOU in Business?
Small Business Cash Flow Problems
Cash Flow in Business
Projected Cash Flow – Relevant to Business? How to Solve Cash Flow Problems: Inventory Turn

Projected Cash Flow: Relevant in Business?

The term ‘projected cash flow’ is used interchangeably with the words ‘forecasted cash flow’, ‘management of cash flow’, ‘cash flow planning’ to name a few. Essentially they all mean the same thing; planning, forecasting or projecting the cash that is going in and out of the small business during a period. That period could be annually, monthly, weekly, or daily. It depends on the business. So, is the concept of projected cash flow relevant for small business entrepreneurs?

The short answer is YES!! A projected cash flow statement is the saviour of business, and is critical to success in any business. Cash flow projecting is a business tool that all small business owners/entrepreneurs must engage with to effectively manage the success of their business. Failure to understand cash flow within a business, and the business becomes vulnerable and out of control. Cash is King (or Queen) in business. Profit is important, but it doesn’t pay the wages and the bills. It is cash that does that!

I think many small business owners are frightened of ‘the numbers’ in business, or don’t want to spend the money asking their accountant or book keeper to do the work for them, or they don’t spend time working ‘on’ their business, preferring to work ‘in’ the business, working within their comfort zone.

Projected cash flow statements are important as small business owners are responsible for paying staff (often) and they have monthly business expenses to pay. If a small business is not consistently able to meet its financial obligations, the business could fail, and staff, who depend on the business for their income, being made redundant.

For many small businesses, projecting cash flow is not difficult to do, by virtue of the fact they are small businesses. Templates that help in creating projected cash flow statements can be freely downloaded from the internet and used to accurately plan for cash flow within the business. As well, many accounting systems can automatically prepare cash flow projections, so long as the correct information has been put into the system by the data entry team.

Projecting cash flows might seem like a lot of work, but it is necessary work for a small business. However, these administrative tasks should be delegated within the business, so the small business entrepreneur can continue working in the business, and simply reviewing the cash flow information that is provided to them. Armed with a projected cash flow statement, the entrepreneur can then work ‘on’ their business and direct action that needs to occur to improve cash flow. For instance, it is likely that customers will need to be chased up for payment of their accounts if they are late in paying, or creditors may need to be spoken to about delaying their payments if there is not enough cash in the bank, sales may need to be improved, inventory levels reduced… decisions that can only be taken once a projected cash flow statement is to hand.

Information is power. Projected cash flow statements provide information on which to act; ensuring the business entrepreneur has their ‘finger on the pulse’ of their business. Cash is the lifeblood of business and must be carefully monitored at all times to ensure small business success.

Other articles on Small Business Cash Flow:

Small Business Cash Flow – The Ultimate Guide
Cash Flow Problems in YOUR Small Business
Small Business Problems – Why are YOU in Business?
Small Business Cash Flow Problems
Cash Flow in Business
Cash Flow Projections – Important in Business?
How to Solve Cash Flow Problems: Inventory Turn

Cash Flow in Business

What is cash flow in business? Cash flow is the sum of all the cash received into your business, less all the cash payments being made from your business. Positive cash flow is when there is more cash coming into the business than is being paid out of it. Negative cash flow is when there is more cash being paid out of the business than is being received by the business.

Cash flow business issues arise in a small business for two major reasons:

The small business doesn’t have enough revenue (gross income) coming into the business compared to its expenses, and/or
The small business doesn’t have good internal financial management and administration procedures in place to support the business. This could mean the business has difficulty collecting its accounts receivables; it has too much cash tied up in stock; and/or it is spending too much money on business overheads/expenses/assets.

Many small businesses mostly focus on gross income and profit – before or after tax. While both are important in business, cash flow is the life blood of all businesses, and without it they eventually die.

Think about blood in relation to your body. If you lose all your blood, you will die. It is the same in business: have no cash and the business will eventually fail. While a business can sustain negative cash flow for a while if it has ample cash reserves, most small businesses do not, so consistent negative cash flow will wipe out a business.

Yet, very few small business entrepreneurs spend much time thinking about cash flow or understand how critical a business driver it is. The key transactions in business that affect cash flow are:

Sales (cash and credit).
Purchases (inventory and business expenses).
Business loans (new and repayments).
Business assets (buying and selling them).
Investments (new and repayments).

The key principles of good cash flow management are simple. Firstly, the small business needs to ensure it has more income coming into the business than expenses; and the business needs to have its accounts receivable paid on time so it can pay its own creditors.

I have developed the SPEARHead System™ – 50 Strategies For Supercharged Small Business Cash Flow to support small business entrepreneurs around the world get to grips with cash flow in business issues, so that it is a thing of the past. Why the SPEARHead? Well, the system addresses all the cash flow issues in small business as follows:

S – Sales Receivables

P – Purchases and Payables

E – Expense Management

A – Asset Acquisition

R – Residual Cash

Head – How does your business ‘head –off’ or ‘SPEARHead’ its competitors in the market?

It is critical that each of these factors is actively managed to improve the cash flow in business. Equally, cash and financial management is not necessarily the primary skill set of a small business owner, so it is important that they get help. An accountant or business manager can offer invaluable assistance, as can a book keeper or personal assistant, as they can collect accounts receivables outstanding; they can help with expense management; they can look for and perhaps negotiate for c cheaper input costs for the business. If the small business owner asks others to help them in managing their business, they can work on the parts of the business they are good at, which is very often the sales or business development side of the business.

All parties working together will see the cash flow business issues reduce or hopefully be a thing of the past. Doesn’t that sound attractive? I think so.

If you would like to know more about the SPEARHead System ™ and how it might help minimise the cash flow business problems in your business, please go to www.adelemclay.com/free-resources to download my SPEARHead System™ for free.

Other articles on Small Business Cash Flow:

Small Business Cash Flow – The Ultimate Guide
Cash Flow Problems in YOUR Small Business
Small Business Problems – Why are YOU in Business?
Small Business Cash Flow Problems
Cash Flow Projections – Important in Business?
Projected Cash Flow – Relevant in Business?
How to Solve Cash Flow Problems: Inventory Turn

Small Business Cash Flow Problems

Small business cash flow problems are an issue that afflicts many small business entrepreneurs across the world. Here are my top tips for getting through crisis situations in relation to small business cash flow problems.

Reduce the cash tied up in the business’s operating cycle

Accounts receivable and inventory holding can be major drains on cash flow. In a crisis situation, it is key that the business owner reduces the money held in accounts receivable by assertively collecting outstanding customer payments. At the same time, the business owner must increase the inventory turn so that there is less cash tied up in inventory in the business.

Review and increase the business’s gross profit margins

Essentially, this means either increasing the sales price of the products and services sold or reducing the cost of producing the goods (cost of goods sold).

Reduce the operating expenses within the business

A business often incurs too many expenses for its size. With serious attention a business owner can heavily reduce expenditure and therefore improve cash flow.

Reduce sales volumes

By reducing the sales volumes, by default sales and the cost of goods sold will decline. As a result, inventory holding will decline as will the money tied up in accounts receivable. This method of cash flow control is difficult for small businesses to implement and, if undertaken for a considerable period, will require the business owner to substantially reduce operating expenses. This should be considered as an emergency response only.

Ask suppliers for extended payment terms

Delaying the payment needs to be a short-term solution for managing a negative cash flow as it can affect a business’s credit rating with its suppliers. Holding back on the payment of inventory and other operating expenses will have a positive impact on cash flow. The practise of delaying payment of invoices is illegal in some countries, so a better option is to proactively ask your supplier for extended credit terms to help your business through the cash flow crisis.

Borrow money

Borrowing money from banks, family or friends can help a business through short or long-term cash flow crises.

Find equity capital

If the cash crisis is ongoing, another option for a business is to find an equity partner that will contribute cash in exchange for a percentage of the business. This is fraught with danger if the wrong equity partner is found, as things can go very wrong in the business. Equally, it can be a real opportunity if the equity partner is genuinely interested in helping the business grow and become more profitable and successful. When considering this option, make sure your business gets the correct business advisory support to ensure the deal is not too one-sided in favour of the new equity partner.

Hold cash reserves

This is the pie-in-the-sky option for businesses existing hand to mouth each month and unable to amass cash reserves at the bank. Regardless, the only way in which a business will be less impacted by negative cash flows is to have a cash reserve. The best way to have a reserve is to put a bit of money aside for a rainy day during good times. I can promise you that after your business experiences a few nightmarish cash flow crises, you will never want it to happen again, so finding money to put aside for the future is the best way to protect the business for the future.

Perhaps it is comforting to know that most entrepreneurs experience small business cash flow problems. If you know Sir Richard Branson’s entrepreneurial story, you will know that on many an occasion his businesses had no cash, and the banks were close to closing him down.

The key is NOT to put your head in the sand and hope it goes away. Small business cash flow problems come with the territory of being in business. Be front footed in addressing the issues. Talk to people who may be able to assist – your customers (to get paid quickly); your suppliers (to get extra credit); your accountant (to assist in trimming costs from the business and other business consulting support); your bank (to get extended credit if possible); potential equity parties (if your business can sustain this option).

Other articles on Small Business Cash Flow:

Small Business Cash Flow – The Ultimate Guide
Cash Flow Problems in YOUR Small Business
Small Business Problems – Why are YOU in Business?
Cash Flow in Business
Cash Flow Projections – Important in Business?
Projected Cash Flow – Relevant to Business?
How to Solve Cash Flow Problems: Inventory Turn