Factoring Accounts Receivable

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

Selling your accounts receivable today, at a discount before the receivables are collected is called factoring.

There are 3 things that need to be present before it is a good idea to factor

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

Those 3 things are:

First, The Company has growth opportunities that they have identified

Second, The Company has solid and consistent profit margins; and
Third, the company has customers who pay on time.

And remember, the most successful business owners know their numbers.

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Expanding Your Business

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

One of the things we business owners need to pay more attention to is doing what we do best and capitalizing on it.  All too often we see other opportunities and they look great and they might even be for big bucks but we don’t do them well or our employees do not have the proper skill set and it ultimately it turns into a loss or much more trouble than it was worth.

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

There is no question you can grow your business by expanding your horizons and getting into new product or service lines, but you need to make sure that you are good at it and that you have the proper skill set and strategy to beat the competitors who are already doing it well. 

If you can’t be great at it, continue to strengthen what you do well and be the best.  Because there’s always a market for someone who is going to be the best.

And remember, the most successful business owners know their numbers.

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Employee Theft

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

Would you steal from the company you work for if it meant keeping your home and keeping a roof over your kids head?  Unfortunately some people would.  Employees you have now could be contemplating that exact question

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

80% of all theft is employee theft.  One surefire way to tempt an employee to steal is give that one employee multiple financial responsibilities.  

I caught an otherwise honest employee stealing $18,000 in less than 3 months. She needed the money because she was facing foreclosure. She was responsible for all of the financial activities in the business and had access to everything.  Also, now with online banking you can do more frequent bank reconciliations which will help you catch unusual transactions more quickly 

And remember, the most successful business owners know their numbers.

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Employee Loans

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

Watch out when employees ask you if they can borrow money.  It can mean that they have a desperate situation and that desperation can turn into disaster.

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

One of my clients has an employee who about a month ago asked to borrow $1,500. In this case my client said no.  Turned out the employee was desperate for money to pay for hospital bills for his wife who has cancer.

This past weekend, I caught him stealing $6,000.  

Whether you loan them the money or not doesn’t mean they won’t look for more.

When employees ask for a loan, in my view you should never give to them, but whether you do or you don’t we business owners need to be vigilant and more aware about stealing when an employee asks for money.

Also in most states it is against the law to withhold a portion of pay to pay for an employee loan. So don’t think you have pay withholding as collateral. 

And remember, the most successful business owners know their numbers.

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Decision Making

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

The number one reason why a business fails is “Poor Decisions”. 

Not taking Care of customers 

Running out of money

Poor Planning

Inadequate Financial Management

Failure to innovate

These are all a function of Poor Decisions.

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

So, if poor decisions are the root cause of business failure, how can decision-making be improved? 

  1. Take care of customers
  2. Have a strategic growth plan
  3. Know your Customer
  4. Consistently add value to your products and services
  5. Pay attention to financial management

And remember, the most successful business owners know their numbers.

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Decision Making

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

The number one reason why a business fails is poor decisions.

Not taking Care of customers 

Running out of money

Poor Planning

Inadequate Financial Management

Failure to innovate

These are all a function of Poor Decisions.

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

So, if poor decisions are the root cause of business failure, how can decision-making be improved? 

  1. Take care of customers
  2. Have a strategic growth plan
  3. Know your Customer
  4. Consistently add value to your products and services
  5. Pay attention to financial management

And remember, the most successful business owners know their numbers.

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Cutting Losses

 

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

Matt Young, Jack Clark, Edgar Renteria and Julio Lugo are just a few of many examples of Red Sox Free Agents that didn’t work out.  Most baseball experts would argue that the Red Sox didn’t want to admit they made a mistake and kept these players too long.  The Red Sox didn’t cut their losses.

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

Many business owners keep unproductive employees way too long.  The proper strategy is to put together an exit plan for these slackers as fast as possible and cut your losses.

The moral of the story.  Hire Slow meaning take your time on the front end and Fire Fast and cut your losses.

And remember, the most successful business owners know their numbers.

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Customer Complaints

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

I met with a client in the education business last week and he said he wanted to lower his prices because he was getting customer complaints.  I asked him how many complaints he got.  He said he got one complaint out of every four customers.  I told him that’s perfect!

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

Getting one out of four customer complaints to me means you’re pricing is right on.  It is when you don’t get any customer complaints your prices are too low.  I had another client in the service industry that wasn’t getting any complaints come to find out he was selling his products and services below cost.

Remember, the most successful business owners know their numbers.

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Conviction and Belief in your Business

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

In 1900 if you asked 1000 people “Is it possible to fly?”  How many would have said yes?  Probably 2 and they would have been hauled off in strait jackets.  Today if you asked 1000 people “Is it possible to fly?”  Only 2 would say no and they would be considered crazy!   The point is in 1900 2 people, Orville and Wilbur Wright had the conviction and the belief that man would fly despite what others thought.  The founder of a startup company has to have this very same conviction and belief.

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

If you are starting a business and you don’t have the conviction and belief that your product or service is great even despite what others think you are going to have a rough road.

It all starts with an undying faith and belief

And remember, the most successful business owners know their numbers.

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Contract Manufacturers

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

Many companies who want to manufacture a product don’t have the financial wherewithal to buy or lease a facility and equipment and need to get contract manufacturers. 

Finding the right contract manufacturer can be a challenging pursuit.

My name is Michael Barbarita from Next Step CFO with the Know Your Numbers Minute.  

Here are just 3 of many things you need to know about finding the right contract manufacturer:

  • Make sure they have enough manufacturing capacity
  • Make sure they have the right equipment
  • Make sure they have the right prices so you can be competitive in your market

And remember, the most successful business owners know their numbers.

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