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Saturday, September 27, 2014

Unique Print Media Story

Most newspapers in the country are having difficulty keeping circulation up in the face of free online and real time broadcast media. The same is true for magazines and other print media. It is circulation that drives advertising rates in these businesses with the purchase price of the media covering a reduced part of the overall costs over the years. As a result many of these organizations, hemorrhaging red ink, have merged, sold or just closed up shop. One small local newspaper, facing all these pressures came up with a unique concept that has not only kept them alive, but put them back into the black.

They recognized the unique value that made the core business work, “local information”. They leveraged all the resources they could muster to provide more “local information” in one place. Many organizations were providing this information online at no cost, but it was either not local enough (as with a national network or large city news media) or focused only on a limited set of activities. This new “local information” was placed on a web site with appropriate advertising, as one might expect. However, after a few months of testing this, they began a process of charging a subscription fee that was higher than they charged for the printed media.  Up to this point in time, it was unheard of…all news, including local news was on line, free. Now a premium price was required to get the best local news in one place!

The result was a substantial increase in sales of the printed media. People that travelled or were away on vacation could keep in touch using the online site, for a fee. They proved that “local information” has value, and in the process turned the red ink to black. Other print media followed this example.

What can you learn from this?

Steve Koenig, SCORE Counselor



Wednesday, September 24, 2014

Great Customer Service

I recently had the opportunity to have lunch at a restaurant on Martha’s Vineyard and want to share the service experience as an example of how to do it right. We were a few minutes early for the planned meeting with friends, who were a bit late arriving. The hostess at this crowded restaurant overlooking the water first sat us early. The waitress served drinks. Then the hostess agreed to move us to a table with a better view as a table became available, before our friends arrived. Our new waitress took drink orders then gave us time to review the menu. After the great meal we were left alone while we reviewed ipod pictures of the families, etc. for quite a while. There was no attempt to move us from the table. The team received a very generous gratuity, as a symbol of our appreciation.

What would happen in your business?


Steve Koenig, SCORE Counselor



Friday, September 12, 2014

Do Potential Customers Seek You Out?

Why would they seek you over anyone else?

Unique Product or Service?

Lower Prices?

Better Location?

More Responsive?

How about because you are The Expert in your field?

Why do potential customers seek you out?


Steve Koenig, SCORE Counselor





I recently thought about the word “WORK”. Here is what I found:

As a noun the word means: An activity involving mental or physical effort done in order to achieve a purpose. It also means mental or physical activity as a means of earning income; as well as employment.

The opposite (Antonyms) of “Work” are: fun, laziness, unemployment, entertainment, failure, loss, idleness.

Finding the right balance between “work” and it’s “antonyms” is important in all of our lives.

Most of us have times in our lives where “work” is dominant. These are usually the times when we build the resources to allow the “antonyms” to become dominant. When the “antonyms” are dominant it takes a lot of motivation to return to a truly balanced life.

Often that motivation is fear-based: Fear of failure, hunger, housing, enough “antonyms”, etc.

Entrepreneurs and employees alike need to find the appropriate balance for themselves at various stages of their lives. All “Work” or All “Antonyms” does not make a healthy member of society.

Are you taking care of yourself and your employees?


Steve Koenig, SCORE Counselor





Wednesday, September 10, 2014

Cash Flow: The Pulse of your Business

Cash flow is the lifeblood of any small business. Some business experts even say that a healthy cash flow is more important than your business's ability to deliver its goods and services! While that might seem counterintuitive, consider this: if you fail to satisfy a customer and lose that customer's business, you can always work harder to please the next customer. If you fail to have enough cash to pay your suppliers, creditors, or employees, then you're out of business!

What is Cash Flow?

Cash flow, simply defined, is the movement of money in and out of your business; these movements are called inflow and outflow. Inflows for your business primarily come from the sale of goods or services to your customers, but keep in mind that inflow only occurs when you make a cash sale or collect on receivables. It is the cash that counts! Other examples of cash inflows are borrowed funds, income derived from sales of assets, and investment income from interest.

Outflows for your business are generally the result of paying expenses. Examples of cash outflows include paying employee wages, purchasing inventory or raw materials, purchasing fixed assets, operating costs, paying back loans, and paying taxes.

Note: An accountant is the best person to help you learn how your cash flow statement works. Please contact us and we can prepare your cash flow statement and explain where the numbers come from.

Cash Flow versus Profit

While they might seem similar, profit and cash flow are two entirely different concepts, each with entirely different results. The concept of profit is somewhat broad and only looks at income and expenses over a certain period, say a fiscal quarter. Profit is a useful figure for calculating your taxes and reporting to the IRS.

Cash flow, on the other hand, is a more dynamic tool focusing on the day-to-day operations of a business owner. It is concerned with the movement of money in and out of a business. But more important, it is concerned with the times at which the movement of the money takes place.

In theory, even profitable companies can go bankrupt. It would take a lot of negligence and total disregard for cash flow, but it is possible. Consider how the difference between profit and cash flow relate to your business.

Example: If your retail business bought a $1,000 item and turned around to sell it for $2,000, then you have made a $1,000 profit. But what if the buyer of the item is slow to pay his or her bill, and six months pass before you collect on the account? Your retail business may still show a profit, but what about the bills it has to pay during that six-month period? You may not have the cash to pay the bills despite the profits you earned on the sale. Furthermore, this cash flow gap may cause you to miss other profit opportunities, damage your credit rating, and force you to take out loans and create debt. If this mistake is repeated enough times, you may go bankrupt.

Analyzing your Cash Flow

The sooner you learn how to manage your cash flow, the better your chances for survival. Furthermore, you will be able to protect your company's short-term reputation as well as position it for long-term success.

The first step toward taking control of your company's cash flow is to analyze the components that affect the timing of your cash inflows and outflows. A thorough analysis of these components will reveal problem areas that lead to cash flow gaps in your business. Narrowing, or even closing, these gaps is the key to cash flow management.

Some of the more important components to examine are:

·         Accounts receivable. Accounts receivable represent sales that have not yet been collected in the form of cash. An accounts receivable is created when you sell something to a customer in return for his or her promise to pay at a later date. The longer it takes for your customers to pay on their accounts, the more negative the effect on your cash flow.

·         Credit terms. Credit terms are the time limits you set for your customers' promise to pay for their purchases. Credit terms affect the timing of your cash inflows. A simple way to improve cash flow is to get customers to pay their bills more quickly.

·         Credit policy. A credit policy is the blueprint you use when deciding to extend credit to a customer. The correct credit policy - neither too strict nor too generous - is crucial for a healthy cash flow.

·         Inventory. Inventory describes the extra merchandise or supplies your business keeps on hand to meet the demands of customers. An excessive amount of inventory hurts your cash flow by using up money that could be used for other cash outflows. Too many business owners buy inventory based on hopes and dreams instead of what they can realistically sell. Keep your inventory as low as possible.

·         Accounts payable and cash flow. Accounts payable are amounts you owe to your suppliers that are payable at some point in the near future - "near" meaning 30 to 90 days. Without payables and trade credit, you'd have to pay for all goods and services at the time you purchase them. For optimum cash flow management, examine your payables schedule.

Some cash flow gaps are created intentionally. For example, a business may purchase extra inventory to take advantage of quantity discounts, accelerate cash outflows to take advantage of significant trade discounts, or spend extra cash to expand its line of business.

For other businesses, cash flow gaps are unavoidable. Take, for example, a company that experiences seasonal fluctuations in its line of business. This business may normally have cash flow gaps during its slow season and then later fill the gaps with cash surpluses from the peak part of its season. Cash flow gaps are often filled by external financing sources. Revolving lines of credit, bank loans, and trade credit are just a few of the external financing options available that you may want to discuss with us.

Monitoring and managing your cash flow is important for the vitality of your business. The first signs of financial woe appear in your cash flow statement, giving you time to recognize a forthcoming problem and plan a strategy to deal with it. Furthermore, with periodic cash flow analysis, you can head off those unpleasant financial glitches by recognizing which aspects of your business have the potential to cause cash flow gaps.

Need assistance? We can help you analyze and manage your cash flow more effectively and make sure your business has adequate funds to cover day-to-day expenses.

Barry Eisenberg, SCORE Counselor



Tuesday, September 9, 2014

Top Business States 2014


CNBC produced a score for all 50 states on 56 measures of competitiveness. The position of Florida among the 50 is notable:


Cost of
Quality of Life


20      FL     37        11          27             3            28               12          35            38       31     7


How can this impact your business?


Steve Koenig, SCORE Counselor



Sunday, September 7, 2014

Questions for Franchisees

When you perform due diligence in considering a franchise one thing you should do is to talk to a number of people who already own the specific franchise you are looking at. They are already engaged in the business and have formed valuable opinions. It is up to you to select these people, calibrate and evaluate the input they provide. As with most financial discussions there will likely be some hesitancy, so tread lightly.

Here are some of the questions to consider asking:

How is working with company X?

Does the company serve your needs?

How long will it take to break even?

Would you recommend this business to your best friend?

Do you have any advice?


Steve Koenig, SCORE Counselor

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Tuesday, September 2, 2014

Customer Experience

How long does the customer experience last? The answer to this is important to your business if you want the customer to be a repeat customer.

Some business owners may think the customer experience lasts from the time they walk into a shop until the time they leave. WRONG!

Some business owners may think the customer experience lasts from the time they see your product or service until they get delivery. WRONG AGAIN!

How about from the time they see your product or service until they accept and pay for it? NOT RIGHT YET!

How about when they feel satisfied using your product?  NOT YET!

Most customers will pay with a credit or debit card today, so the experience does not end until they accept and pay the credit/debit card bill. That could be a long time after the product/service is delivered or used.

When the credit/debit card statement arrives and the amount charged to your customer is higher than the receipt they received from your business….you just lost a repeat customer!!!

What do you do to see that this does not happen in your business?

Steve Koenig, SCORE Counselor