poor cash flow is not the problem!
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Poor Cash Flow Is NOT The Problem!. presented by Daniel Jobe Joel Menchey Friedman, Kannenberg & Co., PC Menchey Music Service. Grow your business like you grow your bank account…. Objectives. Discuss the difference between “good” and “bad” cash flow - PowerPoint PPT PresentationTRANSCRIPT
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Poor Cash Flow Is NOT The Problem!
presented by Daniel Jobe Joel MencheyFriedman, Kannenberg & Co., PC Menchey Music Service
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Grow yourbusiness likeyou grow your
bank account…
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Objectives
• Discuss the difference between “good” and “bad” cash flow
• Determine when debt seems appropriate
• Offer 5 focused areas for improvement
• Q&A along the way
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What is cash flow?
• A revenue or expense stream that changes a cash account over a given period. Cash inflows usually arise from one of three activities - financing, operations or investing - although this also occurs as a result of donations or gifts in the case of personal finance. Cash outflows result from expenses or investments. This holds true for both business and personal finance.
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What cash flow really is!
“The movement of money in and
out of a business”
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How to create “good” cash flow
• Increase revenues• Control expenses• Sell-off aged inventory
and old other assets
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Why do I have “bad” cash flow?
• Discounting fast turning inventory
• Supporting a personal life style
• Other reasons?
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Items for your “TO-DO”
list…
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Action Step 1
Develop internal financial controls and review your
financials monthly;If you’re not profitable... get profitable!!
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Action Step 2
Refine your inventory control and decrease
your aging inventory….you are NOT running a
museum!
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Action Step 3Banking – Create a relationship with a bank…even when you do not need
them.
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Is borrowing right for me?
“Let us not bankrupt our todays by paying interest
on the regrets of yesterday and by borrowing in
advance the troubles of tomorrow.”
Ralph Sockman
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Action Step 4
Obtain the “type” of
financing based on asset life.
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Which financing is right for me?
1. Vendor Credit – inventory purchases
2. Bank Line of Credit – help with the slow times of year
3. Long Term Notes – long term assets that return money over time (i.e. rental assets, vehicles, computers)
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When should I not borrow?
• To extend the term of a note longer than the asset value, or return on the asset (i.e. vehicles, rental pools)
• To fund the losses of an unprofitable part of your business
• To support your personal lifestyle
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Action Step 5Before you try something new….
–Write a plan–Figure out how to track it–Know when to push forward …or “get out”
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Create a Plan…
“It takes as much energy to wish as it does
to plan.” Eleanor Roosevelt
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Tracking…and pushing forward
1. Monthly Profit & Loss Statement2. Balance Sheet3. Annual “P&L” Budget4. Marketing Plan5. Business Plan
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Need more help?
Contact Jen Lowe after this seminar
to set up a meeting time