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"If
you do build a great experience, customers tell each other about that.
Word of mouth is very powerful."
Jeff Bezos
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"What
you do speaks so loudly that I cannot hear what you say."
Ralph Waldo Emerson
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- "People
are like stained-glass windows. They sparkle and shine when the sun
is out, but when the darkness sets in, their true beauty is revealed
only if there is a light from within.”
Elizabeth Kübler-Ross
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- "Happiness
is a positive cash flow." Fred Adler,
Venture Capitalist
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"It was the best presentation on this
subject I've ever seen."
-Harold Rousso
“This course has been a wake up call to me, to keep my eyes wide open as my company grows in the future.”
-Michael Evans
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Red Alert
by Laurie Owen |
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Business owners often get trapped because they
don't heed the messages their business sends and
they don't pay attention to basic principles. The
following checklist represents a clear set of
danger signals - situations and issues - that have
a negative effect on cash flow. Take a few minutes
under the harsh, cold light of reality to ask
yourself how many of the following danger signals
exist in your business and then evaluate carefully
their implications:
|
Inventory Management |
| · |
No physical inventory taken on a regular
basis |
| · |
Lots of old inventory and no plan to get rid of it |
| · |
Buying at trade shows without a purchasing
plan |
| · |
Buying for brand names versus targeted gross margin and turn |
| · |
No knowledge of what actual price points sell in your store |
| · |
Lack of a good point of sale system that shows your gross margin, turns and return on inventory by department |
|
|
|
| Purchasing |
| · |
Supplier
discounts rarely taken |
| · |
Offering
credit as a way to boost sales (why are you a
bank?) |
| · |
Buying
from vendors because you can’t say no (see
point 3) |
|
Banking
Relationship
|
| · |
No
on-going communication between you and your
banker |
| · |
Credit
line not completely paid off each year for at
least 30 days |
| · |
Short-term
credit such as credit lines used for long term
assets such as store expansions or leasehold
improvements |
|
Accounting Practices
|
| · |
You
brag to others about how much money you save by
doing your own books (hint: probably time to
fire yourself from this job!) |
| · |
Bank
statements not reconciled every month |
| · |
The
same person who does your books also deposits
your checks, pays your bills, opens your mail,
never goes on vacation, etc. (hmmm, wonder what
else they’re up to?) |
| · |
Balance
sheet is prepared only at the end of the year,
and then only used for tax purposes. |
| · |
You
don’t get accurate statements (income
statement and balance sheet) each month by the
15th of the following month (and you’re still
waiting for your year-end statements |
| · |
You
spend more time avoiding paying taxes than you
do actually figuring out how your business is
doing |
|
Danger signals are just that - signals. The
longer you wait, the fewer options you will
have. Now is the time to gain control and keep
it. Get ahead of the game, sleep better at
night, and get in a much better position to
weather whatever rough seas lie ahead.
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Feel
free to forward this newsletter to your colleagues.
©2008
Business Resource Services
Business
Resource Services respects your privacy and does not
give out or sell
our subscribers' names and/or email addresses.
ISSN 1553-0558
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