The One Simple Rule of Business Success
Many of the solutions to the problems that you're facing in your
business are probably right under your nose. If your business is not
performing and your cash flow is tight, it is time to look at your
priorities. Do you have them in the right order? Are you facing the
truth about your financial situation?
There are plenty of simple steps that you can take to improve the financial health of your business. Small and medium-sized businesses always have way too many customers who have not paid their bills.
It's the most obvious way to get the cash flowing in to ease the pressure on your cash flow. But it is amazing how many business owners are reluctant to ask their customers to pay up. It seems that they appreciate how much it has cost to acquire that customer and don't want to do anything that may jeopardize the relationship.
The rule is simple, you provide products and services and they pay you for them. You cannot be in business and be successful if you don't collect the money owing to you. The money is the reason why you started your business, so when you go to collect an unpaid bill remember that. From a business point of view, you are failing if your customers are not paying you according to your terms of trade.
You don't measure success by how many staff members you have, you don't measure success by the dollars that your business turns over, you don't measure success by the size of your mortgage. There is only one measure of success in business and that is PROFIT.
No matter what your priority is, ignore it if it is not profit. Your number one priority in business is profit. In a small business, especially, cash flow is king. Every week you should carry out an estimated cash base profit and loss statement. This will tell you where you are financially so that you can adjust quickly and aggressively. If money is drying up or you foresee some future problems, be absolutely ruthless about cutting expenses as soon as possible.
If you have non-performing employees, get rid of them, if your expenses are too high, cut them. This area requires your scrutiny on a regular basis. If you take your eye off it, it will ruin your business. No matter what the economy is doing, the owner of a small or medium-sized business has to be aware of the financial position at all times.
You need to run the financial side of your business with an uncompromising level of fiscal discipline. Just remember this absolute truth. The dollar you didn't spend is the best dollar you ever earned.
There are plenty of simple steps that you can take to improve the financial health of your business. Small and medium-sized businesses always have way too many customers who have not paid their bills.
It's the most obvious way to get the cash flowing in to ease the pressure on your cash flow. But it is amazing how many business owners are reluctant to ask their customers to pay up. It seems that they appreciate how much it has cost to acquire that customer and don't want to do anything that may jeopardize the relationship.
The rule is simple, you provide products and services and they pay you for them. You cannot be in business and be successful if you don't collect the money owing to you. The money is the reason why you started your business, so when you go to collect an unpaid bill remember that. From a business point of view, you are failing if your customers are not paying you according to your terms of trade.
You don't measure success by how many staff members you have, you don't measure success by the dollars that your business turns over, you don't measure success by the size of your mortgage. There is only one measure of success in business and that is PROFIT.
No matter what your priority is, ignore it if it is not profit. Your number one priority in business is profit. In a small business, especially, cash flow is king. Every week you should carry out an estimated cash base profit and loss statement. This will tell you where you are financially so that you can adjust quickly and aggressively. If money is drying up or you foresee some future problems, be absolutely ruthless about cutting expenses as soon as possible.
If you have non-performing employees, get rid of them, if your expenses are too high, cut them. This area requires your scrutiny on a regular basis. If you take your eye off it, it will ruin your business. No matter what the economy is doing, the owner of a small or medium-sized business has to be aware of the financial position at all times.
You need to run the financial side of your business with an uncompromising level of fiscal discipline. Just remember this absolute truth. The dollar you didn't spend is the best dollar you ever earned.
Thank you for reading this article. Peter L Mitchell invites you
to visit his web site where you will discover a wealth of resources such
as free downloads, ideas, articles, information and books, This site is
updated nearly every day. Click here http://plmitchell.com/
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