Biz4theRestofUs, Keeping Small Business in Business.

You and your competitors are in the same industry. That means you chase the same customers, use the same vendors and have many of the same challenges and opportunities. How do you separate yourself from the herd?

Mission critical

Things go wrong, the break, they go away. What resources are absolutely essential to your business? Are you managing those mission critical resources as though your future depended on them? Some resources are critical to nearly every business:
•    How do your customers, vendors and employees communicate with you? How would you continue doing business if the telephone isn’t behaving?
•    How much of your business information is on a computer? What else does it do? Is it also your cash register?
•    Is there one customer who represents over 50% of your business? Do you send enough fruit baskets?

Every mission critical resource needs an alternative or backup plan. The alternative may not work as well as the real thing but at least you can keep going. Both the mission critical resource and its alternative need managing.

Money out, money in

An operating cycle measures the time between spending money on a job and getting paid for it. Bankers love this number because it is a key component of cash flow and liquidity.
•    Cash flow looks at volumes of money in/out for a period of time.
•    Liquidity is the ease of meeting obligations. Can you pay with available cash?

Suppose your operating cycle is 45 days. Then you may need to have enough cash reserves to run your business for 45 days. When all goes well, you get paid before you need to pay your bills.