Inventory, inventory, inventory...who deals with inventory?
Anyone in your company who helps you with inventory is a key player in your cash management!
Here are a few thoughts about inventory and cash:
Smaller is usually better. An Optimal amount is best.
If possible, don’t own the inventory, but keep it nearby or on hand.
Look at suppliers as key partners to help you keep investment costs down.
NOTE: The investment is the amount you buy before you use it. Cost is what you pay.
The lowest cost per unit is not always the lowest cost of acquisition.
I could keep going and going!
All of these impact your cash going out of the company.
The worst problem I've ever seen was a retailer that had over a year of inventory.
What’s the worst inventory problem you’ve seen?
E-mail me your comments at [email protected]
The COVID-19 global pandemic is a wake-up call to ALL business owners to take responsibility for their company finances.
I posted that financial advisors are responsible for the companies they work with to have good financial plans, including a 13-week cash flow model. Now, I am putting the responsibility 100% onto business owners. There are no more excuses.
For too long business owners have said...
"It's not about the money, it's about the people."
"I do it for the love of my craft."
"Someone else can deal with the finances."
"I want to be my own boss, but so I decide that I only want basic bookkeeping."
Now a tiny virus has told you that you are wrong.
You are in business. Business is about the numbers.
Not only numbers, but if you don't have money, you can't...
...work your craft
...let someone else worry
...be your own boss
If you survive this downturn, fix your finances.
Start with a cash flow model that tells you how long you can survive. (Put "Cashflow" in the comments if you...
"I sat down and said, "I think I can figure out 99 ways to manage cash flow!" and I was wrong. I'm up to 135 ways to manage…so far!"
In the fall of 2018, I was working for an NGO that provided education loans to people around the world and I traveled regularly to Europe, Africa, and South America to meet with people who benefited from these loans. It was hugely rewarding emotionally; I was doing good in the world.
At the same time, I needed more. More of a challenge. More of something that I could call my own. Something I could do part time to meet my creative needs.
I wasn’t sure what to do, so I spoke with my wife and most trusted advisor, Lisa. We brainstormed options for a few weeks.
A Niche to Call My Own
As Lisa and I talked, we discussed the consulting work I’ve done. I’m good at it and it pays well, so why wasn’t that the solution? There were two issues:
It has been challenging articulating what I do when I consult because what I do was different for each client. My consulting approach...
When people think of cash management, most don’t think about attitudes or mindset. The business owners that manage their cash recognize that faith, gratitude, and thankfulness area critical for sustaining good cash management during bad times and good.
The inspiration for this blog post came to me during the American holiday of Thanksgiving. It is a day where we focus on what we are grateful for. People who are doing well have a lot to be grateful for. People who have had a difficult year often take a step back and reflect on what went well and small blessings in their lives that make the challenges easier to bear.
So, on Thanksgiving I reflected on what I was grateful for, including my work on The Cash Management Project. I reflected on the companies I have worked with and realized that the business owners in real trouble with their cash had a lot in common. They:
In my last article, “Some Bad, and Some Good, Advice on Cash Flow Management,” I told you I’d give you the details for the seven steps to implement a sound cash management program.
I mentioned that people sometimes want to move too quickly. Generally, their problem isn’t what they think it is (see my article “Keep Digging. The Problem with Your Cash Flow Isn't What You Think It Is.”)
I advise everyone to take a systematic approach.
In this article I’ll go into more detail on how to implement a solid cash management program in any company. Here are the seven steps:
Step 1: Put your bookkeeping in order. Create a solid foundation.
Most businesses without a professional controller will have significant errors in...
A business owner’s mindset about cash management is the difference between having enough cash and struggling to meet expenses every day.
When I meet a business owner who struggles with cash flow, I ask, “Tell me about your business?” They can say whatever first comes to mind, and they usually tell me the good things, starting with whatever their business is known for and what’s going well.
People talk forever about the wonderful parts of their businesses. Those areas that the business was built around- marketing, products, software, services… anything that helped them grow sales.
The One Thing that...