May 03 2010

Profit

Randy Joy @ 10:28 pm

Profit (the first p in happy) is the extra value your business is creating.

H- Home

A – Assets

P – Profit

P – Perpetual Revenue

Y – You

As long as your business is a for profit one, you ought to be seeing extra value, ie. profit.  If, perchance your organization is one that has clearly stated it is a not-for-profit concern, then this “profitability” still should be a facto, as a non-profitable non-profit will end up with a questionable sustainability.  Clearly, some profitability must be achieved no matter what your business or organization has as its mission.

 

I worked with a startup during the dot-com era where the philosophy was growing things fast, even though there was no profit.  Venture Capitalists were throwing millions of dollars into companies that had no revenue or profitability.  We know how much of a bust that boom went at day’s end.

 

Unless you want to raise money often and have family and friends with enormous deep pockets, profitability is the key to stay in business and keep your doors open.

 

Once you have a profitable, sustainable and scalable model, it is only then that you can really reliably leverage your system to start creating true assets for your business.

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Category: Cash Flow Maximization,Clarifying Your Vision

Apr 26 2010

Becoming a HAPPY Business Owner

Randy Joy @ 12:20 pm

Happiness in your business is often times directly related to the amount of work you put into your venture. That is why, if you invest your whole self, dive all the way in and work really hard, you will derive more pleasure than if your business was instantly successful.

I will take the concept of Happy business owners and analyze it one letter at a time, showing you one step at a time of what needs to happen to give you a positive business experience.

H – Home

A – Assets

P – Profit

P – Perpetual Revenue

Y – You

Home.

This is your first priority as we discussed in the Personal Home blog (http://randyjoy.com/2010/04/personal-home/). What are your boundaries in life? If you put your business in front of your home life, be sure there will be a backlash at home. Know why you are working and be thankful for your support.

Assets.

This is the second most important piece of your business. If you stopped going to work tomorrow, what would your business be worth tomorrow?

Profit.

The more profit you have and the quicker you collect customer revenue, the higher your cash flow. This combination will increase your survivability rate and create a business system that you can replicate and grow.

Perpetual Revenues.

There is no business without revenues. This is the first step in starting a business, get the revenue line flowing.

You.

You must be true to yourself in your business. It is best to do what you love and what you are passionate about. Your positive attitude will attract investors, employees and customers. Being self aware is the first step to choosing the right business, your position in the company and your long term goals.

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Category: Cash Flow Maximization,Clarifying Your Vision,Joyful Business Model,Strategic Planning

Apr 16 2010

Money is an Illusion

Randy Joy @ 10:58 am

Most people aim for money. People chase the dollar with another job, a bigger house, a new location, or a fancy car. Companies chase the next best trend, highest paying client, and most lucrative business deal. But money can be an illusory experience, gone before it can be grasped.

It is only when you learn to use money as a tool, that money can become an enabler to fulfill your goals. It is only when you differentiate between “here today, gone tomorrow money” and actual permanent money can you aim to earn the right kind.

Your company looks great when it is making lots of money in revenues. However, lots of revenue doesn’t mean your company is profitable or that it has quality revenue streams. Your company is attractive when it is very profitable. Yet, that doesn’t necessarily translate into sustainable profitability or cash flow.

Cash flow defines how long your company can stay in business. If assets are not liquid and the company does not have working capital, no matter how much revenue the company has its survivability is questionable.

Your company is truly great when it is continuously profitable, with strong, sustainable revenues and solid assets.

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Category: Cash Flow Maximization,Clarifying Your Vision,Strategic Planning

Feb 12 2010

Decide on Your Business Goals First

Randy Joy @ 7:28 am

 

Before you start or make any big changes to your business know your business’ goal.  It can be any one of the following:

  1. Cash flow
  2. Salary
  3. Building an Asset/or boosting your Net Worth
  4. Following a dream/doing what you love or using a talent you have

 

Now if you only chose one of the above goals, that is fine and dandy – it is a legtimate goal.  However, here is a secret to know – a  GREAT business is one that contains all the goals listed above. 

Creating and building a great  business helps you reach beyond the business world to achieve your personal goals in life.  Think of your business as eventually being a boat that can sail you away anywhere, to any personal goal you might dream up. 

I can coach you in building the boat, help you with maps and compasses, but eventually, my friend, you will be the one who will have to find out where your heart wants to sail.

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Category: Cash Flow Maximization,Efficiencies & Cost Saving,Strategic Planning

Feb 11 2010

Best and Worst Case Scenario

Randy Joy @ 2:01 pm

In business the term “Best and Worst Case Scenario” is used to decide whether to proceed with an investment.  This might seem complicated, but it is more complicated to jump into an investment without thinking through the various gamut of possibilities opened by that investment. So, take the time, and think out your investment by following the flow of the steps below.

Decide financial goals. 

  1. Short term Cash flow
  2. Long term Cash flow
  3. Long term appreciation
  4. Exit strategy

Schedule benchmarks to ensure you are on the road to success.

  1. Monthly and annual budget to actual reviews based on cash flow projections
  2. Key benchmark timeline
  3. Target customer goals
  4. Revenue expectations
  5. Budget to actual reviews

 Analyze

  1. Explain any major changes or fluctuations from your original financial projections
  2. Revise annual cash flow expectations based on new findings
  3. Document the new changes
  4. Review revised long term financial projections to see if the exit strategy is still valid

 After this analysis is performed, numbers should be used to create short term and long term financial plans. The best and worst case scenario ranges will help in deciding on a conservative plan to achieve all of your goals.  The financial plan will help make sure everyone is on the same page and create a reasonable time frame to achieve your goals.

Businesses routinely use this method with a business plan.  A business plan describes the new business ventures, target customers, key financial goals and long term exit strategy.  A business plan and life plan are essential to ensuring all of your goals are achieved.  And that you know what to expect, no matter which way the wind blows.

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Category: Cash Flow Maximization,Efficiencies & Cost Saving,Strategic Planning

Feb 04 2010

7 Steps to Fight the Good Fight

Randy Joy @ 9:41 am

The business struggle to grow is a fight.  Each growth achievement makes the company stronger and more likely to succeed.  If you will be meeting your issues head-on, you want to learn how to knock ‘em down to the mat.

Fighting, often, is most successful when there is a fighter’s attitude.

So put up your dukes and follow these seven steps to fight the good fight:

1.        See  every challenge as an opportunity to grow stronger.  Yes, you are fighting, but don’t forget that you are also getting stronger muscles by doing that.

2.        Every new customer is an opportunity to learn and grow so be willing to fight for that customer.

3.        Never quit.  As long as you get up from the mat, the fight is still on.

4.        Anticipate challenges and plan for them. 

5.        Fight fair.  Never compromise your company’s values to win.

6.        Reward yourself and the team for fighting (and not just for winning!). For each bout  of fighting for the company’s mission and vision reward the team for that milestone.

7.        Remember each time you fight – it will get easier as the company grows smarter and stronger.

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Category: Cash Flow Maximization,Joyful Business Model,Strategic Planning

Feb 03 2010

The fight.

Randy Joy @ 9:11 am

There are two types of fish: farm raised and wild. The farm-raised fish live an easy life, swimming in steady water with food readily available. On the other hand, you have the wild fish, whether in the Pacific or Atlantic. These scrappy fish have to fight for their food and swim against the current to survive. Wild fish tend to be stronger and healthier.

So too for the business owner. First generation owners and founders who have to fight for their first customer, fight to make payroll and fight to raise money are stronger and healthier than those that have a large bank account without the experience of fighting for every dollar and valuing it.

Every day you fight for the growth of your business Instead of seeing it as potential failure that you are struggling, see it as success…for every time you struggle, you are getting stronger.

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Category: Cash Flow Maximization,Joyful Business Model,Optimizing Operations

Feb 01 2010

Know Thyself, Including Your Flaws

Randy Joy @ 9:03 pm

Identifying all company issues, current and future

A weak company is one that makes itself vulnerable to predators because it fails to recognize issues and protect itself. To make your company resilient, all potential threats must be identified. 

Here is the shortcut how to do the tally of your issues:

1.        List all company issues keeping you up at night.  These are your current day-to-day issues (example:  hr, cash flow, accounting, investor relations).
 
2.        Look one year into the future of your company and try to project what would be the threats down the road?   (example: competition, growing overhead, payroll, replacing employees)

3.        Look 5 to 10 years out and project what your competition will look like at that time.  How will your customers have evolved?   Technology? Product?

4.        Now that you’ve thought what issues there are and what issues might arise,  mentally visualize solutions.

5.        Start with short term issues today and put your solution into progress.  Then move on to the next solution for the next issue on the list.

 You might want to make a matrix — where you list the issue in one column, jot down some ideas of a solution that might help in the next column, and in the last column write who would carry out that solution. 

 Let me give you a short example based on a real issue.  There is a brilliant doctor, excellent diagnostician, with abysmal ratings on the web whereby patients tell others to stay away from her.  She has an easier time identifying her issues, as some of her former patients did that homework for her, hanging out the dirty laundry of her office for all the public to see.  At this point, if she did her homework, she might list her issues as such (I’m only picking two of her issues for brevity):

 ISSUE                               POSSIBLE SOLUTION                 

Bad web ratings              Get Testimonials of other patients                  

Mistaken Billing              Retrain Medical Billers or Create Manual on how to bill                           

Asign a person to each outstanding issue and solution.

It is amazing how once a company recognizes and faces current and  pending issues, it can begin to actively choose to conquer them once and for all.

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Category: Cash Flow Maximization,Joyful Business Model,Optimizing Operations,Strategic Planning

Jan 25 2010

Let’s get to work

Randy Joy @ 7:45 am

Creating the Financial Schedule for the New Year

What is your Yearly Plan for your Business’ Financials?

Here is a sample:

Weekly/Bi-Weekly

  • Ensure payroll is accurate, timely and cash is available
  • Review outstanding bills and pay priority bills
  • Pay bills and print checks to vendors
  • Pay owners a salary/cash flow consistently
  • Once per week have owner/executive sign checks

Monthly

  • 1st review all credit card bills
  • 10th Bank reconciliations 11th
  • Actual Income Statement Review
  • 15th Send investors/bankers monthly financial reports
  • 20th Meet with executive team and discuss outstanding financial issues

Quarterly

  • Make investor distributions
  • Board Meetings present financials

Annually

January

  • Put all previous years Vendor Bills in Envelopes and put away in storage
  • Executives review year end financials
  • If the company is audited do not put away bills but start collecting audit request items

February

  • Send finalized financials to accountant

March

  • Sign and send in previous years tax return

April   

  • Review all Insurance documents and policies

May    

  • Create criteria for new financial systems

 June

  •  Implement and changes to the financial schedule, systems or structure

September                

  • Start preparing your Budgets for the new year

October

  • Finalize budgets and send to investors and bankers

November                

  • Review annual financials to get ready for tax season

December                 

  • Contact accountant and make any last minute financial adjustments for tax purposes – such as 401K, sep plans, payment of outstanding bills

When all of your financials, time and important documents are organized everyone will feel the difference especially your owners, executives, employees and investors.

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Category: Cash Flow Maximization,Joyful Business Model,Strategic Planning

Jan 21 2010

Success is not an Answer – It’s a Series of Questions

Randy Joy @ 4:53 pm

Before even asking questions, some people make up answers.  True business and life wisdom comes from asking questions, from the search for answers, and not from having the pat answer.

Because of fear of arriving at answers that are different than the one pat answer we might have come up with, many of us shy away from questions.  Don’t ask why we do things this way.  Don’t question if there is a better way.  Don’t even ask what the end goal of some things might be.  Not asking those questions is a huge mistake.

Often times, we don’t ask questions because we are so busy with our business struggles that we don’t have the time to sit and think clearly as to what the questions are that we should be asking.

Case in point.  Routine sounds like a successful answer.  But success is not an answer.  Success is the questioning process that makes sure you are heading your program or business to where it ought to be going.  A for profit company kept dealing with major cash flow issues.  I arrived as a consultant to get their cash flows in order.  I began asking questions – “why do you have trouble paying payroll each week?” “how are bills prioritized?” “how do you ensure the company is profitable?”.  Solid questions with one answer from staff.  We pay bills as they come in.  We were trained to do it this way.  The organization kept having cash flow problems, but had one pat answer to why they did anything they did – namely, this is how we have always done it.

What is the big picture for your business?  Where do you want to go?   Where are you?  It is important to stop regularly and think, then do and finally realign your time and money to match your true priorities and goals.  Question EVERYTHING.  Routines, procedures, expenses.  Openness to ask the questions, even if the answers are very different than preconceived notions, is the secret to success.  This success  is measured by the actual growth they will get as the company is moving forward with awareness of the path they are choosing.   The executives and owners actively make a stand to move the company further than it’s ever gone before.

 Don’t be scared of good questions. Just toss out the pat answers.

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Category: Cash Flow Maximization,Clarifying Your Vision,Joyful Business Model
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