Cash is the fuel that makes a business run. It is needed to pay salaries including your own, fund marketing programs to acquire and retain new customers, invest in equipment and facilities, pay rent, supplies and many more day-to-day activities. Most financial experts recommend three to six months of operating expenses, but using this for every business in every situation is misleading.
To determine how much cash you need, you must look at the following key areas.
How Much Cash Have You Been Using?
If you’re an established business owner, look at your monthly cash flow report (or go to the next paragraph if you’re a start-up). This report will provide an historical and seasonal perspective. Note the cash received from sales and the cash spent. The net of these two is often referred to as the “net burn rate.” For example, if you have $50,000 in sales and $30,000 in expenses, then your net burn is +$20,000
Your “gross burn rate” only takes cash expenditures into account; in our example, that’s $30,000 and is the more conservative amount, since it does not assume any sales are made. Historical spending patterns are a good starting point in considering future spending plans. Continue reading →
The SCORE Business Learning Center (SBLC) provides aspiring and existing small business owners the business strategies and tactics needed to make sound decisions and achieve greater levels of success.
The SBLC supplements the business resources available on score.org. It fills the gap between the high-level content on our website and the personalized expertise obtained from a mentor.
At the end of a course, users will feel they have a better understanding of their chosen topic and the resources available for continuous learning. They will also have a mentor they can work with to apply the learning to their business.
This article has been brought to you courtesy of Linkedin.
There are over 30 million small businesses in the United States, but only half of them will make it past five years. Ensure your small business is in the successful half and capitalize on how LinkedIn can evolve your business. Here are three ways to grow your business using LinkedIn:
Create & Promote a LinkedIn Company Page
LinkedIn members are 50% more likely to buy once they’ve engaged with your business on LinkedIn. But they can’t connect with you if you don’t have a LinkedIn Company Page. Personal profiles don’t have the same marketing, advertising, and recruiting features as Company Pages, making them less effective at promoting your business. As you create your page, think about the kind of impression you want to create among potential customers and employees. Continue reading →
Retail is a complex and challenging business, posing problems ranging from inventory management to theft prevention. When coupled with falling prices inspired by major retailers, like Amazon, and the rising costs of labor, there are a variety of pitfalls facing modern retail businesses.
With so many ins and outs to consider, now more than ever, effective management plays a critical role in retail success.
In this two-part blog series, we reveal the core principles and techniques you should apply to manage a store successfully.
Streamline In-Store Operations
Whether you know it or not, many of the day-to-day tasks that dominate small retail operations are based on old-school styles and strategies, like counting inventory by hand, creating manual schedules, and entering sales transactions one by one into bookkeeping software. While these methods can be useful, they cost you time that could be invested elsewhere. Continue reading →
First, what does it mean to scale your business, and how does it differ from growing your business?
Consider scaling a business:
“growing sales at an exponential rate while only adding costs incrementally by developing a replicable system for delivering goods and services.”
with simply growing a business:
“increasing sales coupled with increasing costs with little improvement on profit margins.”
The difference is clear. There is nothing easy about scaling your business, particularly for small businesses. It takes intention, strategy and investment.
Often business owners are caught in a Catch-22. They know they can sell more if they hire a Vice-President of Business Development. But, they can’t afford to pay for this this new position until they have increased sales.Yikes.
The larger your business, the easier it is to scale. Larger businesses may have multiple revenue streams, fungible staff and banked capital which can help see them through the ramp-up phase of accelerating growth. Smaller businesses often do not have this luxury. Continue reading →