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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Clarity

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

Financial Forecasts, Financial dashboards accurate product or service costs and other business intelligence all lead to one thing.

Clarity

The more clarity you have about the future the less fear and anxiety you have about your business.

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

Financial Forecasts, Financial dashboards and accurate product or service costs are all things that I do to help bring clarity to the business owner.

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

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Cash Flow v Net Profit

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.

Net Profit and Cash are not one in the same.  Many business owners don’t understand why.

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

Cash is derived by taking net profit which you are likely familiar with and adjusting it for non-cash expenses like depreciation and amortization and then changes in all of the balance sheet accounts.  And by changes, I mean the differences from one accounting period to another.  For example, let’s say Accounts Receivable went from $10,000 last period to $30,000 this period that is a cash depletion of $20,000. Because the increase in Accounts Receivable represents cash that did not come in. Another Example is if Accounts Payable went from $10,000 to $20,000 That represents a cash increase of $10,000 because that is money we kept and did not pay vendors.

A business owner who runs their business purely on cash flow will likely make bad business decisions.  A business owner who runs their business purely on net profit will also likely make bad business decisions.  It is the CEO who understands and manages their business by understanding both cash flow and net profit who will maximize both profitability and cash flow.

Remember, the most successful business owners know their numbers.

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Cash Flow Statements

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.

Most business owners look at their P&L, some business owners look at their balance sheet, but virtually no business owners look at their cash flow statement.

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

In order to run and manage a business effectively, the business owner needs to look at all three financial statements.

That’s the P&L, balance sheet, and cash flow statement.

Omitting the cash flow statement is the reason why business owners don’t know where cash, the lifeblood of any business, is going.

The Cashflow statement can be hard to read but the cash flow statement in quickbooks starts with net profit, and then it adds back depreciation and immunization and the rest of the numbers are the changes in the balance sheet accounts for the date range requested, and those changes are either sources of cash, which are positive changes, or uses of cash, which are listed as negative changes.

By reading the cashflow statement, you’ll know where cash is going.

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

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Business Forecasts

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.

By doing a business and cash flow forecast you will know more about your business than 80% of your competitors know about theirs.

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

The business and cash flow forecast is so revealing in terms of understanding the most effective business model you can have, that the business owner can’t help but begin to develop and implement the right strategies making their business more successful and more of a threat to their competitors.  Why, because the business and cash flow forecast is a business model and if it does not work in the forecast it will not work when executing it.  

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

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Being Successful

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 business and entrepreneurship, all you have to do is be spectacularly right, one time, about a business or an opportunity in your business, and you will be abundantly successful.

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

One great thing about being an entrepreneur is it really doesn’t matter how many times you were wrong because as long as you are spectacularly right one time about a business or an opportunity, you will be abundantly successful.  

A big part of being spectacularly right is having good financial numbers, understanding what those numbers are telling you, and looking into the future to know your risks and opportunities.  

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

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Advertising Agencies

 

 

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.

What has happened to accountability?  Why is all the accountability falling squarely on the shoulders of the business owner?  Why can’t the business owner make their employees accountable?

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

There are 3 main reasons why business owners cannot make their employees accountable:

  1. Lack of communication due to fear of losing the employee
  2. Lack of Proper planning and direction by the business owner 
  3. Not having the proper tools to measure performance starting with accurate and timely financial statements and ending with metrics to evaluate performance

Accountability of employees will appear if you can put these 3 things in place

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

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Daily Bank Reconciliations

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 am a big advocate of daily bank reconciliations.  It only takes 5 minutes. Today there are too many automatic debits and debit card transactions that change bank balances constantly.  With all of these additional hits there is too much room for error and with cash being so tight these days it can cause a chain reaction of bounced checks not to mention it helps cut down employee theft.  

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

One time I had a client where the Mass Dept of Revenue hit his bank account 3 times for one sales tax bill of $5,000.  If daily bank reconciliations were not done many important checks would have bounced, but since we noticed it right away through daily bank reconciliations we nipped the problem in the bud.

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

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