I’m reviewing budgets with clients right now, and I see one mistake over and over again. It’s a basic math error, but it’s hitting owners right in the wallet! Most of us were taught that Profit = Sales – Expenses. That’s wrong. Or at least it leads to wrong thinking! Let me explain. When new…
I got a lot of reaction to my post about sweating out payroll; it seems that a lot of us are anxious about getting our cash in the door. Here are five ways to improve the cash flow of any business! 1. Improve Your Payment Terms Setting favorable payment terms with your clients is the…
There’s nothing that makes me feel more like a failure than when I don’t know if I’m going to have the cash to cover payroll. Vendors can wait, you can negotiate with bankers, even landlords will give you some leeway. But when your payroll is late you are affecting the lives and families of your…
My client called because he was going to have to skip his paycheck this week. Something that hadn’t happened in a long time. “Brad, I used to be able to keep track of my business in one spreadsheet. I had my pipeline on one tab, and my income on another tab and my expenses on…
When I was in the business of buying entrepreneurial companies, the first thing we’d look at to determine the value is the cash flow. If you want the option to sell your business someday — it might make sense for you to pay attention to your cash flow now! Most businesses are valued based on…
When you first start your business, it’s important to “follow your gut” because you don’t have any track record and your numbers don’t point anywhere. Your “gut” is your true north. In the fog and confusion of a start-up, you need something “steady” to hold onto, and your gut instinct is as close as we…
We’ve been talking this week about the value of building a budget for your business — today we will do it. If you didn’t download my magic budget spreadsheet, you should do it now. My budget spreadsheet builds your profit and loss statement for the next year by predicting the sales and expenses for each…
We talk a lot about budgets at Anchor Advisors. In fact, we sell them so much you might think we stand to make a commission on them! “This budget here … it’s the answer to all your financial woes. Look at all the bells and whistles. It can keep your business on track by helping…