Here is where you may be blowing it! Do you have someone that helps you stay financially disciplined both in your business and personally? Do you listen?
Financial Questions to Consider
Have you used cash flow forecasts to determine how much money is needed to fund your growth? Are you aware how much of you need to fund before banks and various other external sources will agree to contribute? Do you take money from the business before considering how it will affect your growth? Do you know how much cash you must leave in the business to cover taxes? What is your reputation with vendors? These are all questions you should look at.
Financial Tips For Success
As you can simply imagine, a client I’ve recently been writing about who lost millions in the sale of his business did not have good financial discipline. If they took a while to consider these tips things may have worked out better for them. Every business should grow with intentions that they may sell one day. Financial success can help raise the sale of your business. Below are some fast facts to consider:
1. Raising Money – Fancy presentations, fast talking and nice smiles will not hide which you have bad personal credit, pay your creditors slowly, leave no money in the business, and overpay yourself. You cannot hid it. In general, good investors do their homework and recognize poor fiscal management in a business. So hiding it will not save what will be seen.
2. Head Resentment – When partners and fellow leaders see you draining money from the business (and they will), they shed momentum because they feel that their hard work will probably waste. This then develops into an entitlement issue: the aggrieved parties demand much higher salaries, which either turns into further dilution of cash or further loss of productivity. Either way you lose. So choose wisely.
3. Budgets – If you create budgets and don’t adhere to them, they do not really exist. With rare exceptions for outstanding individual contributions, there should be no raises unless the company is growing. If the company is growing less than forecast, raises should be commensurately lower. I am not saying to not give out raises but they should only be given if the business is financially secure to handle them.
4. Balance Sheet – Pay particular attention to your balance sheet. Cash is king. Money is definitely where you build your ability to grow and handle unforeseen circumstances.