Cash Matters

I ask every audience I talk in front of, “What is the most important thing to measure to tell you how well your business is doing?”.

And, without fail, people always come back to me with the wrong answer! They call out ‘sales’ or ‘turnover’ or ‘profit’ but they hardly ever mention the right and probably only answer and that is ‘cash’.

The reality is that it may be illegal to trade without profit but it is impossible to trade without cash.

So how do you keep your head above water? It isn’t rocket science, but very few people seem to follow the basic steps.

1. Measure cash-flow like a hawk – it is your business so it is your responsibility to know exactly how much you owe, how much you are owed, how much you have got and how much you are going to need. Do the numbers.

2. Do the cash-flow projections – depending on how close you are sailing to the wind and how big the fluctuations are, do cash-flow projections every quarter/month/week. Failure to do so is entirely inexcusable.

3. Have clear credit terms on your initial contract and on all subsequent invoices.

4. Check all new clients’ credit records – and watch them until they have proved themselves to be reliable.

5. Have a rigorous process for invoicing, following-up and collection. Be reasonable but be firm. Talk to anyone who owes you money. Listen. Be clear and be firm. It is your money that they owe you.

Also recognise that a tightly-run credit control system is useless if you are not making the profit in the first place.

As Michael Porter says, “Cutting prices is usually insanity if the competition can go as low as you can”.

RELEVANT LINKS
Cutting Prices - blog on Porter
Recession Blues for Recession Bores - blog
Recession Blues - article

Recession Blues #1 & #2 (Take Two - hit the wrong button the first time!)

See Recession Blues blog entries at smeweb.

RELEVANT LINKS
Recession blues
Recession blues 2

Testimonials etc etc

I am a great fan of testimonials - they are so much more convincing than anything you can write yourself... they are in the voice of another customer/client and so the reader can relate to the comments in a way that is different from the way that they would read your own words.

An Example: Baiju Solanki, Director of Performance Coaching and Training Ltd features the Let's Talk More Profit Seminar in his blog as follows:

I recently attended a workshop run by Robert Craven. The workshop was on how to make more profits. The key thing when running your own business, and what you can do to make more profits, is to be open minded about what others are doing and to really look at what works for you. As someone, who not only delivers, but also attends workshops, I am always fascinated how the same old things, when put to you in a different way can have a positive impact... Read more

RELEVANT LINKS
Performance Coaching and Training - their blog
Let's Talk More Profit - free seminars

Corporate Responsibility Top 100 in Sunday Times

In May 2008, The Sunday Times published the Top 100 companies for CSR: Number Four was BHP Billiton.

Certain members of the team here at The Directors' Centre are puzzled by this.

I remember members of my team refusing to work on a project with BHP - they refused because of BHP Billiton's CSR record!! A quick search on google for "BHP Billiton CSR record" still generates some interesting links.





RELEVANT LINKS

Sunday Times Top 100 - pdf - also go to BITC for the full commentary
Corporate Social Responsibility Is Immoral, Unfair And Damaging - It is tantamount to signing a death warrant for your employee’s job security. (CEO Magazine, Aug 2006).
Green Is The New Black - Tara Struk - despite what their PR suggest, companies probably don't make changes out of goodwill.
Barclays Let's Talk Green Business - events where you can discuss how to create a greener business

The Most Effective Sales Method

A (not so) recent survey (from The Directors' Centre!) asks the question, ‘If you could only use one sales method then what would it be?’

When asked what was ‘the most effective sales method’…. small and growing businesses put
- Face-to-face selling, and
- Referrals and customer recommendations
at the top of their list!

So...
- Do YOU know which sales methods are the most effective in my business?
- Do YOU allocate sales effort in the most effective manner?
- Do YOU know how much it costs to acquire one new client?
- How much is the average new customer worth to YOU?


RELEVANT LINKS:
Which Sales Method Is The Most Effective? article
Getting More Bangs For Your Bucks - further commentary at istaris.co.uk

Bright Marketing Manifesto - Selling is Everything

Most businesses think that their product or service is pretty cool... so what's the problem?

Well, most business don't know how to sell their products; they are too obsessed with making a great widget but they don't see the picture through the eyes of the customer! So, get some decent sales coaching/training, now. Before it is too late!


RELEVANT LINKS
Bright Marketing - the book
The Directors' Centre - TheDC can help you improve your sales and and profits! Phone up to find out how.

Bright Marketing Manifesto - Infect Your Customers!

Infect your customers and staff with your passion and excitement for your business - they are your ambassadors!

I am a great believer in nurturing the passion and excitement that you have for your product - create raving fans and ambassadors for your product and suddenly life becomes much easier. It is simply not enough to deliver an OK service; you need to blow people away with your legendary service and then they will tell others.

I am often cited for my "I love my accountant" quote.

And why do I love him?

Because he blows me away with the quality of the service and because of the customer experience.

So there's some food for thought. If an accountant can excite staff and customers then why can't you?


RELEVANT LINKS
Bright Marketing - the book
The Directors' Centre - TheDC can help you create the legendary customer experience that will boost your profits

SMEweb Blogs #3

I am continuing to write a series of short, tight blogs for the people over at SMEweb. Recent posts you might like to look at include:

My ‘don’t do’ list policy - part 1
My ‘don’t do’ list policy - part 2

RELEVANT LINKS
SMEweb
SMEweb Blogs#2

PS Next week's Wrexham More Profit event is mentioned in their blog. Meanwhile next week sees Let's Talk... Start-Ups in Sheffield and Let's Talk... More Profit in Hull, Doncaster and, of course, Wrexham! Visit the website!

The Vulgar Mr O'Leary

I have just been trying to track down a quote from Michael O'Leary along the lines of
"I want to drive out the sh-tty competitors".

All I could find were the following rather vulgar comments:

"Code-sharing, alliances, and connections are all about "how do we screw the poor customer for more money?"
and
"Air transport is just a glorified bus operation."
— Michael O'Leary, Ryanair's chief executive, quoted in BusinessWeek Online, 12 September 2002


Most complaints, O'Leary tells me, are generated by the company's no-refund policy. "We don't fall all over ourselves if they... say my granny fell ill. What part of no refund don't you understand? You are not getting a refund so f-ck off."
and
"There is too much: 'we really admire our competitors'. All bollocks. Everyone wants to kick the sh-t out of everyone else. We want to beat the cr-p out of BA. They mean to kick the cr-p out of us."
How low can you go?
By Graham Bowley, FT.com site; Jun 20, 2003


RELEVANT LINKS
BusinessWeek Online, 12 September 2002
How low can you go?By Graham Bowley, FT.com site

Bright Marketing Manifesto - better/different

If there’s a choice between being better or different then different wins every time – Ideally you should be different and better.

RELEVANT LINKS
Bright Marketing - the book

Bright Marketing workshops with Barclays

Bright Marketing Manifesto - You get known...

You get known for what you do.
– So what is it that you are known for? Is it the right stuff?

Ask Eddie 'The Eagle'!

RELEVANT LINKS
Bright Marketing - the book
Bright Marketing workshops with Barclays