Business Should Be FUN...

A small business should be full of your personal passion, exhilaration and excitement. However, many times you may not pay enough attention to core issues (such as financial management) that will determine whether an endeavor succeeds or fails.

Often, small business owners don’t have the training or knowledge in finance; they know how to manufacture that specific item, provide the greatest service, be the best salesperson or are able to leverage that brain-stormed idea into a business.

A business’ unique product, service and niche - Every business has a unique niche and product, however, a very critical component of enterprise success is often overlooked or breezed over- FINANCE

• ·        Cash IS King – Do not run out of money. You need to know your “burn-rate”.  Do not run out of money. Do not base your cash flow forecast on your full monthly cash inflows. What happens when that big customer does not pay you on the 30^th and your most important vendor needs to get paid on the 10^th? Do not run out of money.

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• ·         Cashflow tracking System – Set this up from the 1^st day you open your doors. (Or NOW, whichever comes first). Most entrepreneurs assume they will get around to this “detail” when they start to bring in the money… This rarely happens. This is equivalent to building a house and living in it and then deciding you need a concrete foundation. If you live in a mobile home (set-up on blocks), what happens in the first bad windstorm?

• ·         Financial Metrics for Everything - You have a system in place, you can (and should) measure every event. How much time do your employees spend on lunch, how long does it take to drive to your customer’s place of business (how much fuel do you use…) you name it, it should have a metric. Become obsessive.

• ·         If You DO Not Know where You Are Going - you will end up somewhere else. Create an annual plan, a quarterly plan, a monthly plan, a weekly plan. And then follow your established benchmarks…

• ·        If it sounds to Good to be true – it probably is. Be careful of personal guarantees. Try not to co-mingle your finances. You have enough at risk; do you really want to put your personal house up for collateral? Yes, I know, banks love personal guarantees, and co-mingling. True entrepreneurs hate them. You should avoid them at all costs, if you can. You are already investing a huge amount of your personal assets and energy in your business.

• ·         Watch out for UCC-1 Liens – Many lenders, as a standard, file a “blanket” lien. Check your UCC lien status. You may not be required to sign a lien to have one filed against you, you may have agreed to one when you signed the funding contract.

• ·        Speaking of contracts - Do not only read it. You do not understand it. Have your attorney read and explain it to you. There is often a clause in a contract that states that you acknowledged that you have engaged legal counsel, If you haven’t, you may be in trouble. Try not to let this happen to you.

• ·         Familiarity does not always equate with competence - It may be tempting to use your wife’s, sister’s neighbor as your lawyer, or banker, or accountant… Keep in mind that just because you will get a lower fee and you see him at church (or the bar, or etc..) every week that you will get accurate and knowledgeable results. Find professionals who know what they are doing and have a passion, and experience with entrepreneurial companies, like yours.

Business should be FUN, and it can be, if you have systems and finance professionals in place to help you on your trail to continued success!