Tom Stamborski Cash Flow Financing – “The Mind’s Eye”

No matter what stage of business you’re in, get ahead with Tom Stamborski Cash Flow Financing tips and business advice.

Tom Stamborski Cash Flow Financing

In working with various clients and prospects, beyond the strategic cash flow financing that I provide, the mindset of the business owner is an important factor that has to be taken into account. The business scenarios that create the need for my services cover a wide spectrum of circumstances. They run the gamut, from high growth to business survival.

Central to the situation is a triggering event that creates the need to enhance cash flow.

Can’t qualify for traditional bank financing?

For newer companies that currently don’t qualify for traditional bank financing, private assets are normally limited and operations progressively become strained. Suppliers demand upfront payments and restrictive terms. Customers prefer to stretch out their payables as they contend with their own business issues, creating an unpredictable cash flow stream. Continuance of this scenario puts many companies at risk during a very vulnerable period in their life cycle.

Need even more financing?

For high growth companies, a common problem is that, in many instances, their current bank is unable to increase the level of financing availability as rapidly as their growth would dictate. This, of course, is an unfortunate situation as their growth opportunities could catapult them to the next level of development.

Are there more options?

For companies that fall between these two scenarios, there are different variations. Due to industry downturns, poor management practices, internal disputes, etc., their financial statements reflect losses and weakening financial ratios. This can result in their financing availability being frozen, reduced or not renewed.

In the case of their current bank having capital issues, the result could be the bank asking the client to leave. As the situation intensifies, it logically puts increasing pressure on the business owner. As they become more fixated on finding a solution, they unfortunately are drawn away from important business activities, thereby exacerbating the problem. In many instances, by the time I’m called in to assist the prospective client, I’m providing a form of cash flow triage.

Tom Stamborski Cash Flow Financing: Helping you get ahead

As I’m able to implement a strategic plan to address and stabilize their cash flow needs, the corresponding benefit to the business owner is their ability to revisit important aspects of their business such as developing or refining their business plan, marketing and sales as well as expenses and profit margins. With predictable cash flow, they can confidently make the important business decisions so vital to their company.

Being in business is not a clinical exercise. It’s fraught with a range of emotions that run the spectrum, from bolstering a business owner’s confidence to a level of concern bordering on desperation. I’m gratified that I have been able to play a part in delivering the financial resources so crucial to the viability and growth potential of my client’s businesses. I’d welcome the opportunity to be of service to those prospects and clients where you deem my services to be appropriate.

“Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice and discipline”. – Jim Collins

International expansion: Is your company ready? (Part two)

In part one, we explored the pressures that cause us as leaders to look at international expansion for our companies. We also discussed the importance of market research surrounding cultural differences and structure (distributor, joint venture, wholly owned subsidiary). In part two, I’ll share lessons learned over 30 years as a senior executive running international operations for Fortune 500 companies.

We will go in-depth to discuss the management of international operations. The focus should be on avoiding the common mistakes that cause you to have less market share and be less profitable outside of your home market. Assuming you have applied the subject matter discussed in part one correctly, you won’t choose a market for expansion only because potential customers speak the same language. Ask yourself why Target failed in Canada when its headquarters in the U.S. is so close to the Canadian border.

Let’s talk about the culture that elevates the most successful people in the home market to leadership roles in the international expansion effort. When culture, which is transmitted through language, is ignored due to a company culture where leadership reflects home market success, the effort is likely to fail.

Part one signaled that a decision needs to be made regarding alternative structures for market entry. When I see a company having to choose between a distribution organization, a joint venture or a wholly owned subsidiary company, I recommend that the answer should vary by country. You should consider a weighted matrix that includes these considerations at a minimum: return on investment, commonality of customer base, competition, barriers to entry, financing and logistics. Obviously, the decision made for country A would not necessarily be correct for country B. Also, the weighting of your matrix items needs to vary in relation to your product category and local regulations. Should a company merely mimic its home market success as its expands internationally, the odds of success are against it.

Why did I place return on investment first on my list of considerations? I know that focusing on ROI favors choosing a distributor network structure, with the drawback that selling wholesale produces a smaller gross margin. However, your objective is to consider the return on investment that is repatriated to the home company after taxes as a percentage of the investment in the foreign country, rather than in-country gross margin.

Commonality of the customer base influenced my decisions while running international operations for a major truck leasing and logistics company. The company’s international expansion was fueled by following customers in automotive logistics that the company served in the U.S. The key was to provide the same systems and experience that they were used to. Rather than invest heavily in assets, we chose to become a third-party logistics provider, supervising local logistics companies to help them provide an equal level of service as in the U.S. We chose to go the route of being a wholly owned third-party logistics provider with logistics design and systems, rather than operating trucks, warehouses and equipment.

For other clients, such as two major car rental companies, I’ve chosen to go in another direction since there was little commonality among customers. Outside of the U.S., it is very common to provide cars as a perk to management. As a result, the business of fleet management is much more important to car rental companies. Plus, taxation, environmental regulations and tourist preferences make airport locations outside of the U.S. less attractive. Certainly, we catered to members of frequent renter programs while keeping the focus mainly on fleet management.

Since local competition in most countries benefits from both obvious and not-so-obvious barriers to trade, do your homework. Among the obvious barriers are tariffs on imports, the need to meet standards that are different from country to country, exchange rate risk and government “buy local” policies. However, the lesser-known barriers need to be studied as well. Examples are controls on access to hard currency, protection of local distributors and dealers, and labeling requirements.

When Colombia faced a sudden shortage of hard currency in the early 1980s, the Xerox affiliate I was running couldn’t import spare parts to support our large customer base unless we could find a way to earn dollars by exporting something. Another company gained market share because it already had export divisions that generated hard currency.

Many countries protect local distributors and dealers of imported products by making it extremely difficult to terminate such relationships. Beware of the international buyer who appears in your home market and purchases your product for export to a foreign country. In that country they may pose as the distributor of your product. You may say that you never signed any such agreement. However, it will take time and money to get rid of them. I have seen cases where a foreign company takes over the distribution of a product in order to gain a competitive advantage for a competing product by purposely limiting the first product’s sales.

In part three, we will focus on international finance, logistics, labor and treasury functions.

Business referral network

­­­­­­­­­­­­6 ways to expand your business referral network

A strong business referral network can bring new life to your business strategy, but they don’t happen by accident.

Business referral network

It takes time and effort to foster a high-quality business referral network that you can count on. But while you probably already know that building those relationships is essential for business success, you might still be avoiding giving it the attention it deserves. Maybe you’re focusing on other priorities…maybe you don’t have time to network…or maybe you’re not quite sure how to get started.

Building a high-quality business referral network doesn’t have to be a chore. It can actually be strategic while still being enjoyable.

Treating referrals as a business development pipeline instead of a casual, ad hoc exercise is the first step. As Harvard Business Review explained, building and sustaining relationships can help business leaders solve problems, uncover new insights, and achieve business outcomes. So we’ve gathered a few strategies you can use to strengthen your relationship building skills and increase referrals:

1. Diversify your business referral network to build new relationships

Staying inside the same network or circle can deepen existing relationships, but it can be hard to develop new ones. Instead, go outside of your immediate circle of acquaintances and begin meeting new people in adjacent circles — and beyond. Looking at your second-degree connections can be a less intimidating starting point, for example, with a partner supplier, vendor or one of their trusted customers.

2. Put as much into your business referral network as you expect to receive

Effective business relationships require a give-and-take from both parties. Offer and deliver your expertise and assistance. Connect colleagues, clients and partners, or share industry information others would find useful. This will encourage those in your network to reciprocate when you also need a helping hand.

3. Recognize and thank those in your business referral network

Whether with a phone call, email, holiday card, or handwritten note, acknowledgment of a referral encourages partners to refer even more. They see you appreciate the fact they’re helping you achieve your business goals, increasing the chances they’ll refer more in the future. Who doesn’t like to hear «Thank you» every once in a while?

4. Invest quality time with key relationships

As your circle grows, it will be hard to spend time with everyone. So you must determine which relationships are the key connections to your growth. These relationships will generate higher returns in the short and long term and are worth spending time on. Don’t spend as much time nurturing the ones that aren’t providing you value, and you may consider ‘retiring’ other referral contacts that have consistently fallen short. Remember, more is not always better. It’s the quality of the relationship, not the quantity.

Read: 5 steps to grow an outstanding referral partnership

5. Pay attention to the local social and business landscape

Your community already has bonds, loyalties and networks of its own. It’s time to make them work for you. Research events happening in your community, whether it be on your local Chamber of Commerce website, in your partners’ social news feeds, or in industry publications. Keep track of conferences, tradeshows and meetups where your referral network may be attending. Recognize the ebb and flow of your community — then get involved where possible. Bonus: You might even open up areas to gain a new competitive advantage along the way.

6. Prune, nurture and reshape your network often

A business network is a dynamic, living thing that will grow and contract over time. You should cultivate relationships with partners essential to your business growth and eliminate the ones who are no longer useful — which can sometimes even mean customers. Revisit your network regularly so you can see which relationships you should continue to nurture. Work this tactic into your ongoing business plan and make it a business objective to keep your network trim but powerful.

Focusing on relationship building as a business pipeline can have a dramatic effect on your business. It takes time to develop them to the point where referrals come through to you consistently. Following these strategies will be part of building your own process to grow a successful business network.

Read more about how to leverage referral partnerships to increase your sales. And learn more about our Liquid Capital Referral Partner Program if you are a commercial finance professional, a BDO, or a banking professional that is interested in extending your network.

About Liquid Capital

At Liquid Capital, we understand what it takes for small, medium, and emerging mid-market businesses to succeed – because we’re business people ourselves. Our company is built on a network of locally owned and operated Principal Offices, so whenever you’re talking to Liquid Capital you’re talking directly to your funding source and a fellow business person.

Business referral network

La seis mejores maneras de expandir su red de referencias comerciales

Una sólida red de referencias comerciales puede darle una nueva vida a su negocio, pero eso no es producto de un accidente.

Business referral network

Se requiere tiempo y esfuerzo para crear una red de referencias comerciales de alta calidad con la cual usted pueda contar. Pero, aunque usted seguramente ya sabe que fomentar esas relaciones es esencial para el éxito de su empresa, tal vez aún esté evitando prestarle la atención que se merece. Es posible que usted esté concentrado en otras prioridades, que tal vez no tenga tiempo para hacer relaciones o que incluso no sepa exactamente por dónde empezar.

Crear una red de referencias comerciales de alta calidad no tiene por qué ser una tarea pesada. De hecho, puede ser estratégica y agradable al mismo tiempo.

El primer paso es considerar las referencias como una fase de desarrollo comercial y no como un ejercicio especial u ocasional. Como se explica en la revista Harvard Business Review, crear y mantener relaciones puede ayudar a los líderes empresariales a resolver problemas, a revelar nuevos conocimientos y a obtener resultados para su empresa. Hemos reunido entonces algunas estrategias que le permitirán afinar sus habilidades para establecer relaciones y aumentar sus contactos de referencia:

Diversifique su red de referencias comerciales para establecer nuevas relaciones

Permanecer dentro de una misma red o de un mismo círculo permite consolidar relaciones existentes, pero puede hacer difícil la creación de nuevas. En lugar de ello, salga de su círculo inmediato de conocidos y empiece a conocer otras personas de círculos adyacentes y más allá. Mirar hacia sus conexiones de segundo grado puede resultar menos intimidante como punto de partida; por ejemplo, el proveedor de un socio, algún otro proveedor o alguno de los clientes de confianza de estas personas.

Póngale a su red de referencias comerciales un empeño a la medida de lo que espera recibir

Las relaciones comerciales eficaces reposan en un dar y recibir mutuo. Ofrecer y dar experiencia y asistencia; conectar a colegas, clientes y socios, o compartir información sobre la industria que le pueda ser útil a otros. Esto animará a los miembros de su red a retribuirle este gesto cuando usted también necesite una mano.

Reconozca y agradezca a los miembros de su red de referencias comerciales

Una llamada telefónica, un correo electrónico, una tarjeta navideña o una nota manuscrita son maneras de darle gracias a una referencia, y esto fomenta más recomendaciones. Esas personas ven que usted aprecia el hecho de que le estén ayudando a lograr sus objetivos empresariales, aumentando así las posibilidades de que lo recomienden aún más en el futuro. ¿A quién no le gusta escuchar un «gracias» de vez en cuando?

Invierta tiempo de calidad en sus relaciones claves

A medida que su círculo se agranda, será más difícil pasar tiempo con todo el mundo. Por lo tanto, usted debe determinar cuáles relaciones constituyen contactos claves para su expansión. Estas relaciones generarán mayores ingresos a corto y largo plazo; así entonces, vale la pena pasar tiempo con esas personas. No gaste mucho tiempo cultivando aquellas que no le representen valor, y considere también la posibilidad de «retirar» a otros contactos de recomendación que no hayan estado a la altura. Recuerde que no siempre más es mejor. Lo que importa es la calidad y no la cantidad.

Lea: Cinco trucos para formar una sociedad de referencias excepcional

Preste atención al panorama social y empresarial local

Su comunidad tiene sus propios vínculos, lealtades y redes ya establecidos. Es hora de hacerlos trabajar para usted. Busque eventos organizados en su comunidad, bien sea en la página Web de la Cámara de comercio de su localidad, por medio de la transmisión de noticias por redes sociales entre sus socios o en las publicaciones de la industria. Manténgase al tanto de conferencias, ferias y encuentros a los que pueda que miembros de su red de referencias asistan. Reconozca las fluctuaciones de su comunidad e involúcrese en el proceso.

Pode, abone y remodele su red con frecuencia

Una red comercial es algo dinámico y vivo que crecerá y se contraerá con el tiempo. Usted debe cultivar sus relaciones con colaboradores esenciales para el crecimiento de su empresa y eliminar a aquellos que ya no sean útiles, lo cual a veces significa incluso deshacerse de algunos clientes. Examine su red con frecuencia de tal modo que pueda ver cuáles son las relaciones que debe seguir cultivando.

El hecho de enfocarse en el establecimiento de relaciones como fase de desarrollo comercial puede tener un efecto drástico en su empresa. Llevar dichas relaciones al punto en el que las referencias lleguen a usted sistemáticamente toma tiempo. Estas estrategias formarán parte de la creación de su propio proceso de establecimiento de contactos comerciales.

Lea más sobre cómo aprovechar sus relaciones de referencia para aumentar sus ventas. Y obtenga más información sobre nuestro Programa de socios de referencia Liquid Capital si usted es profesional del financiamiento comercial, director de desarrollo comercial o profesional bancario y está interesado en expandir su red profesional.

 Acerca de Liquid Capital

En Liquid Capital, entendemos qué necesitan las pequeñas y medianas empresas o los mercados emergentes para tener éxito, puesto que nosotros mismos somos pequeños empresarios. Nuestra empresa está formada por una red de oficinas principales cuyos dueños y administradores son locales. De este modo, en donde quiera que usted acuda a Liquid Capital, estará hablando directamente con su fuente de financiamiento y colega empresario.

Business Growth Strategies

7 business growth strategies for a healthy financial new year

A new year means new opportunities for your small business. Start planning with these top business growth strategies for 2020. 

Business Growth Strategies - Start planning for 2020

The final rush of the year usually means many small and medium-sized business owners are focused on hitting sales targets, ensuring contracts are fulfilled and that staff will help make it through the holiday rush. But this time of year, you’re likely also trying to plan for the year ahead. 

Developing a business growth strategy for a new year can be a daunting task filled with uncertainty. Business owners may even forgo planning and stick with the status quo. But some careful planning can unveil areas of opportunity, expose unnecessary expenses and set up their business so it can withstand anything the economy throws at it. 

Whether you’re hoping to hold steady or expand your business next year, here are some of our top business growth strategies that you should keep in mind as you forge ahead.

1. Create a business budget

A business budget helps you allocate resources, control costs, set prices, plan for expansion and, generally speaking, make better decisions for your SMB. It’ll keep you on track for a positive, successful year, while also giving you performance information about your business. You’ll know, at a glance, how well you’re doing by comparing your numbers to your forecasted budget. (Plus, if you ever need to secure funding, you’ll need to create one to show the lender.)

2. Have an emergency fund

This is a classic piece of advice, but a good one for any business to follow. An emergency fund helps you deal with unexpected costs whenever they may arise and can get your SMB back in action right away. Start building your emergency fund into your financial planning now and redirect some of your income into it today. Your business will thank you later.

3. Reduce long-term costs

Instead of just looking at ways to reduce your «regular» fixed costs such as the electric bill for your office, how about looking at your long-term fixed costs? These are things like software subscriptions and year-long leases or agreements. 

By switching from a long-term to a short-term agreement or subscription, you’ll enjoy more flexibility. Yes, you’ll sacrifice some of your profits to pay the higher rate, but you’ll feel better knowing you can scale down your fixed costs whenever you need to. That peace of mind might outweigh the additional cost.

4. Reduce uncollected revenues

In the enterprise world, interest and late fees are the norm. Vendors and customers who run afoul of payment dates are penalized appropriately. SMBs, however, may be hesitant to do this for fear of offending and losing their customers. But when a customer is late paying you, you’re essentially lending them money, which can have a wide range of negative impacts on your financials. So consider offsetting your losses from late-paying customers by charging penalty fees.

Want to get ahead of late-paying customers and accounts receivable challenges? Consider factoring your invoices to get more working capital upfront. Here’s how it works.

5. Understand your winners and losers

That is, your product winners and losers. Chances are you probably have a few that offer high returns and great value to your customers. Investing in these can bring higher profits. On the flip side, you’ve probably got other products that aren’t performing to expectations. It can be a hard call to retire those, but once you realize you’re spending far more on development, production and marketing than you’re receiving in revenue, it’s much easier to do.

6. Encourage customers to buy during your slow times

Every business experiences slow periods throughout the year, and when nobody’s buying, you’ll need a proactive plan to incentivize your customers. Brainstorm ideas on how your products can provide great value and then market them appropriately. You could use the same strategies to market your existing products year-round (like a «Christmas in July» promotion), or offering complementary services to your business. For example, if you’re a landscaper, offer snow plowing in the winter. Or if you’re a manufacturer, offer a Spring Super Savings discount to preferred customers who haven’t yet placed orders.

7. Eliminate unprofitable clients

Stop working with slow or late-paying customers and you’ll immediately save money. By freeing up time to work with higher-paying customers, it can lead to more income. The key is to focus on customers who deliver greater profitability for your business and eliminating the ones who don’t. Review your customer roster regularly and trim the lower-value customers as needed.

With a few financial tweaks, your business can be set for success in 2020.

Using these business growth strategies can help you reduce expenses, save time and, most important, improve your overall financial health. Find out more about how we can help

About Liquid Capital

At Liquid Capital, we understand what it takes for small, medium, and emerging mid-market businesses to succeed – because we’re business people ourselves. Our company is built on a network of locally owned and operated Principal Offices, so whenever you’re talking to Liquid Capital you’re talking directly to your funding source and a fellow business person.

 

Business Growth Strategies

Siete estrategias de crecimiento empresarial para un nuevo año financiero sano

Business Growth Strategies

La recta final del año significa por lo general que muchos empresarios, pequeños y medianos, se enfocan en lograr sus objetivos de ventas, asegurándose de terminar sus contratos y de que su personal les ayude a atravesar la fiebre de las fiestas. Pero por esta época del año, es probable que usted también trate de planificar el año que viene.

Desarrollar una estrategia de crecimiento comercial para un nuevo año puede ser una tarea abrumadora y llena de incertitud. Con plazos cortos y otras tareas prioritarias, un empresario puede incluso renunciar a la planificación y mantener el statu quo. No obstante, con un poco de planificación cuidadosa, se pueden revelar áreas de oportunidad, constatar gastos innecesarios (indicación de ahorros) y así preparar a su empresa para enfrentar cualquier crisis que la economía augure.

Que usted desee mantenerse estable o expandir sus negocios durante el año que viene, tenga en cuenta estos consejos financieros a medida que avanza.

1. Elabore el presupuesto de la empresa

Un presupuesto le permite asignar recursos, controlar costos, establecer precios, planificar la expansión y, de forma general, tomar mejores decisiones para su PME. Además, lo mantendrá encarrilado para un año positivo y exitoso, y le proporcionará al mismo tiempo los datos de rendimiento de su empresa. Al comparar sus cifras con el presupuesto pronosticado, usted sabrá, con un solo vistazo, qué tal le está yendo. (Además, si en algún momento necesita obtener financiamiento, usted deberá crear uno para mostrarle al prestamista.)

2. Tenga un fondo de emergencia

Este es un consejo clásico, pero excelente que toda empresa debería seguir. Un fondo de emergencia le ayuda a afrontar costos inesperados cuando estos se presenten y le permite a su PME ponerse de nuevo en acción y de inmediato. Empiece ya mismo a crear su fondo de emergencia dentro de su planificación financiera e inyéctele una parte de sus ingresos desde hoy. Su empresa se lo agradecerá más adelante.

3. Reduzca costos a largo plazo

En lugar de simplemente buscar maneras de reducir sus costos fijos «normales», como la factura de electricidad de su oficina, ¿por qué no examinar sus costos fijos a largo plazo? Estos incluyen las suscripciones de software y los arriendos o contratos anuales.

Al pasar de un contrato o de una suscripción a largo plazo a uno a corto plazo, gozará de una gran flexibilidad. Es cierto que algunas de sus ganancias saldrán sacrificadas para pagar una tarifa más alta, pero se sentirá mejor sabiendo que puede reducir sus costos fijos siempre que lo necesite. Esa tranquilidad puede compensar dicho costo adicional.

4. Reduzca los ingresos por cobrar

En el mundo empresarial, los intereses y recargos por pagos atrasados son la norma. Los proveedores y clientes que no respetan las fechas límites de pago se ven penalizados de manera apropiada. Las PME, sin embargo, pueden dudar en hacerlo por miedo a ofender a sus clientes y perderlos. Pero cuando su cliente no le paga a tiempo, básicamente usted le está prestando dinero, lo cual puede tener una serie de efectos negativos sobre sus finanzas. De modo que considere compensar sus pérdidas ocasionadas por los clientes que se retrasan en los pagos cobrándoles multas.

¿Desea hacerles frente a los clientes que no pagan a tiempo y superar sus dificultades relacionadas con sus cuentas por cobrar? Piense en obtener un factoraje para sus facturas y consiga más capital circulante por adelantado. Así es como funciona:

5. Comprenda cuáles son sus ganadores y sus perdedores

Es decir, sus productos rentables y no rentables. Lo más probable es que usted tenga algunos productos que ofrecen una elevada rentabilidad y mayor valor para sus clientes. Invertir en estos puede hacer aumentar sus ganancias. Por otro lado, es posible que usted tenga otros productos que no se venden a la altura de sus expectativas, y puede resultar difícil retirarlos. Pero en cuanto se dé cuenta de que está gastando mucho más en desarrollo, producción y mercadeo que lo que está recibiendo en ingresos, será mucho más fácil tomar la decisión.

6. Invite a sus clientes a comprar durante la temporada tranquila

Toda empresa tiene temporadas en el año que son más tranquilas, y cuando nadie compra nada, se necesita un plan proactivo para incentivar a sus clientes. Haga una lluvia de ideas sobre cómo sus productos pueden ofrecer gran valor y luego véndalos adecuadamente. Puede utilizar las mismas estrategias para comercializar sus actuales productos durante todo el año (como una «promoción navideña en julio») u ofrecer servicios complementarios. Por ejemplo, si usted es paisajista, ofrezca el servicio de retirar nieve en invierno, o si es fabricante, ofrezca un super descuento en primavera a clientes seleccionados que no hayan hecho aún ningún pedido.

7. Elimine a los clientes no rentables

Deje de trabajar con clientes que se demoran en pagar o que pagan tarde; así ahorrará dinero inmediatamente. El hecho de liberar tiempo para trabajar con clientes más rentables conducirá a mayores ingresos. La clave es enfocarse en los clientes que producen mayor rentabilidad para su empresa y eliminar a aquellos que no. Revise con frecuencia la lista de sus clientes y recorte a los menos rentables, según sea necesario.

Con tan solo algunos retoques financieros, su empresa quedará bien lista para el año que viene. Reduzca gastos, ahorre tiempo y, lo más importante, mejore el estado general de sus finanzas.co

3 more warning signs of a business downturn

Is a business downturn on the way? Spot these signs and then take action immediately.

Business turnover — Get ahead of the problems

Ups and downs are part of business life. A short-term slump doesn’t always signify an impending disaster. Even so, if a slump lasts for several months, there could be a larger challenge on the horizon. 

We’ve already seen five warning signs that your business could be failing, so now let’s look at three more warning signs of a business downturn:

1. Inventory is rising

An increase in the value of your inventory could mean that you’re purchasing more than you’re selling. It could also mean that the cost of your inventory is rising. Whatever the reasons behind an increase in inventory, it is not usually good news. Excessive inventory could be a sign of a deeper problem with the business, and it ties up cash.

2. You’re constantly fighting fires

If a business is about to enter a free fall, the CEO or business owner will often be called upon to fight fires. Spending more time on the day-to-day management of the business may be a sign that the staff can’t cope. Your employees are leaving it up to you make decisions such as who should get paid and who should not. This is not because your employees are unable to make the decisions. Your team is not making decisions because they realize that these decisions are now crucial to the future of the business.

3. You’re paying yourself less money

If you have stopped paying yourself to save some cash, that’s an obvious sign that something is not right. Reducing how much money you take out of the business may provide a temporary fix, but it’s not a long-term solution. If the business can no longer afford to pay you, it’s time to make some changes.

 

There’s strength in knowing the signs of a business downturn.

The sooner you spot the signs that your business may be failing, the sooner you can act to remedy the situation. That’s why it is so important that business owners and CEOs never take their fingers off the pulse of their business. Reviewing trends and key performance indicators (KPIs) can seem like a chore, especially if the business appears to be healthy. But tracking financial KPIs will help you spot the underlying signs that something is going wrong and give you the time to fix it.

For best practices in managing cash flow to keep your business healthy, access the Cash Cycle Guide or click the image below to get your own downloadable copy.

Ultimate Cash Cycle Guide

Otras tres señales de alarma de recesión en su empresa

Los altos y bajos hacen parte de la vida empresarial. Una corta crisis no siempre significa un desastre inminente. Y aunque una crisis dure varios meses, puede haber mayores dificultades al horizonte.

Ya vimos cinco señales de alarma de que su empresa puede estar declinando, entonces ahora miremos otras tres señales de recesión en su empresa:

1. El inventario aumenta

Un aumento del valor de su inventario puede significar que usted está comprando más de lo que está vendiendo. También puede significar que el costo de su inventario aumenta cada vez más. Sea cual sea la razón detrás de este aumento de inventario, por lo general no es de buen augurio. Un inventario en exceso puede ser signo de un problema de fondo con la empresa, además de causar un bloqueo de liquidez.

2. Usted está apagando incendios constantemente

Si una empresa está a punto de venirse abajo en caída libre, el director o dueño de la empresa tendrá que acudir para apagar los incendios. Si usted pasa más tiempo en la gestión del día a día de su empresa, esto puede ser signo de que el personal no logra manejar la situación. Sus empleados, por ejemplo, le están dejando la tarea de decidir a quién se le debe pagar y a quién no. Esto no es porque sus empleados sean incapaces de tomar dichas decisiones, sino porque ellos se dan cuenta de que el futuro de la empresa depende de estas.

3. Usted se está pagando un menor salario

Si usted ha dejado de remunerarse para ahorrar algo de dinero, este es un signo obvio de que algo no anda bien. Reducir el dinero que usted toma de su empresa puede arreglar las cosas temporalmente, pero no constituye una solución a largo plazo. Si la empresa ya no logra pagarle, es hora de hacer algunos cambios.

Se es fuerte sabiendo.

Cuanto más rápido detecte los signos de que su empresa está en decline, más rápido podrá actuar para remediar la situación. Por eso es tan importante que empresarios y directores nunca dejen de tomarle el pulso a su empresa. Revisar tendencias e indicadores claves de rendimiento (ICR) puede parecer fastidioso, especialmente si la empresa parece andar sobre ruedas. Pero vigilar los ICR financieros le ayudará a detectar los signos subyacentes de que algo anda mal, permitiéndole resolverlo a tiempo.

Para conocer las mejores prácticas de la gestión de flujo de caja para mantener la buena salud de su empresa, descargue la Guía de flujo de caja.  

Recent Fundings – December 2019