Do Business Well

Even if you managed to obtain adequate finances for your business, one of the biggest traps is cash flow. Cash flow basically means the movement of money into your business (from the sale of your goods or services) and the movement of money out of it (to suppliers, the bank, other creditors and employees). The relationship of these two flows is very important. Many businesses go under because although they are owed a lot of money they do not have enough in hand to pay the bank/their own debts. There is nothing more frustrating than knowing you are owed 0,000 but not having enough cash in hand to pay for the weekly shop. Continue Reading »

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Crime in a variety of guises is on the increase. One of the major growth industries of our time is the supply of equipment to companies and individuals for deterring the thief. New devices for protecting vehicles and contractors’ plant are now on the market to meet the rise in car and equipment theft. Your firm could be suffering a steady drain on its resources through petty or substantial theft. Save money by reviewing all aspects of security.

1. Regularly review your company security arrangements

The thief soon spots any weaknesses in security routines that have been established and practised over a long period of time. These practices and routines become known to all concerned, including the thief, and the tendency is for slackness to creep into the routines anyway. A review of security practices will act as a deterrent. Continue Reading »

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Poor Accounting Controls

Accounts receivable. The A/R ledger has to be reconciled with the sales journal and the cash receipts journal. If not, it /Ispossible to lose an invoice, have the customer never pay, and never realize it. It’s also a good idea to add up the totals of your numerical invoice file and compare the results with your sales journal.

Accounts payable. Make certain that your A/P ledger agrees with your purchase journal and your disbursement journal. If you don’t do this exercise, you could double-pay an invoice, or lose an invoice and not pay it. The next time you need product from the supplier you will be past due on the account. This may result in your having to pay the old bill (which you weren’t expecting) and pay for the next order COD because you lost your credit standing with this supplier. Continue Reading »

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If they say they will mail it right out, mark the date that you both agree it should reach you on their file. Keep a record of each phone call by time, date, contact person, and details of discussion. Also keep a copy of all correspondence in the file.

B. Responses to wrong answers. Many times you will be told that they did not receive your copy by mail. Immediately send out a copy of the letter and invoice by certified mail, return receipt requested. If the amount is large enough or important enough you may want to use an overnight service. The key is to use a system that requires a signature. This will quickly eliminate this excuse. Follow up again with a phone call on the day you figure the item has arrived to confirm with your contact that they now have the invoice copy. Continue Reading »

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The net worth of most small business owners, is usually divided between the equity in their home and the net worth of their company. After selling a valuable business, it’s usually best to assemble a diversified portfolio. You may want to invest in an assortment of blue-chip stocks, tax-free municipal bonds, and treasury bills. These assets plus your house should provide excellent security into old age, and for your children as well.

But what is security if you no longer have any purpose in life? Common to most entrepreneurs is a love of what they do. Below, we’ll explore a few options that will allow you to have it both ways. Continue Reading »

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Whenever we talk to people about why they don’t start their own business, the most common excuse we hear is, “I don’t have the money”. Well, if you are truly committed to starting your own business, you’ll find a way or make a way of getting the money. But here’s the problem: All our lives we are encouraged and taught to invest in CASH ABSORBERS and not CASH GENERATORS.

CASH ABSORBERS are those expenses that absorb your cash like the Karoo in the rain. An example of a CASH ABSORBER is a brand new motor car. First of all, it costs a fortune. Then the day you drive it out of the showroom it loses approximately 20% of its value. The interest rate makes the monthly payments even more exorbitant, not to mention the cost of insurance, maintenance and, of course, the essential state of the art sound system. This car will absorb your cash like a vampire around your throat. Or to put it a tamer way, you are committing yourself to a substantial negative return on investment. To tell you the truth, you are committing yourself to a lifetime of financial struggle. Continue Reading »

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After your business has opened, your accountant should:

• Set up a mechanism to record your daily business transactions e.g. sales, cash receipts, purchases and all expenses.
• Open a set of books (now recorded on your computer) e.g. cash book, journals, petty cash etc. This will most likely entail the purchase and installation of a software package suitable for the recording and presenting of your financial results.
• Arrange to present your accounts to you on at least a monthly basis. You should receive a package consisting of an income and expenditure statement, a cash flow statement and a balance sheet not more than 10 days after the end of the month.
• You should insist on receiving the following information on a daily basis

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I don’t know your financial situation or what you dream of doing in your future. But if you’re like most teenagers, you have a specific high-dollar dream in your immediate future, whether it’s a car, a college education, or even a three-month overseas mission trip after you graduate from high school. Whatever your next big financial goal, this four-step strategy can help you reach it.

1. GO FOR GROWTH

Your number one investment goal is to make your money grow. Right now you have few expenses compared to your income. But soon you’ll be paying for cars, education, furniture, entertainment, clothes, food, housing, medical expenses, and a thousand other things that someday will obliterate your paycheck. Make the right investments now, and your money will grow substantially until you really need it. Continue Reading »

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By now you’re an old pro at this money thing. Just keep managing your existing investments, and transfer your accumulating savings balance to these or new investments as you see fit. If you paid attention, you saw that I followed a few simple guidelines for this strategy.

Use Your Savings Account as a Staging Area

In other words, use it to store your accumulating weekly contributions until you have a balance large enough to transfer to a higher-yielding investment. If you keep all your savings in a regular savings account, you’re missing out on better opportunities. Continue Reading »

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Financial Issues tend to be unpopular among entrepreneurs. Some find the subject tedious. Others find it intimidating. The result is that many entrepreneurs do nothing. Financed in many businesses become the state of the checkbook each morning. If there’s cash, the business is still around and if there’s no cash, the businesses become the state of the checkbook each morning. If there is cash, the business is still around and if there is no cash, the business has major problems.

One of the major benefits of creating a business plan is that it forces entrepreneurs to confront their company’s finances squarely. That’s because a business plan isn’t complete until entrepreneurs can demonstrate that all the wonderful plans concerning strategy, markets, products, and sales will actually come together to create a business that will be self-sustaining over the short term and profitable over the long term. Continue Reading »

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