Your Passionate Business Cheerleader, Creating Successful Leaders One Entrepreneur at a Time.

What is Your Purpose?



 

     I met a “real man” yesterday, an individual who confided he is dying.  His illness is terminal…timeline perhaps soon but uncertain.  He is not a quitter; he has defied the odds for at least ten years.  While some of us turn inward and focus on putting our life in order and taking care of estate plans this man is full boar on with his business. It gives him purpose.  Yes the other aspects are looked after too but this guy inspired me with his legacy building approach to his life’s work.

He looks at his business and staff as his family in addition to his wife and children.  Continuance of his ideas and goals will live on without him because he has mentored his employees, taught them his values and encouraged them to be the best at what they can be. He surrounds himself with talented people and learns about their strengths and personal goals and helps them aspire to greater success.  He has created a shared fun working environment of value.

This resonated with me because losing our daughter recently brought us (my wife and I) face to face with the reality of what is our purpose now?  The answer is legacy.  What can we do with our experiences?  How can we share our skills and knowledge with others to help them succeed?  Finding this purpose keeps us all strong.

For those reading this post ask yourself about your true life goals.  Where do YOU want to take YOU?  Once and a while it is a good to think big picture purpose even when you are in a spot where all looks bleak.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

 

What is the Difference Between Cash Flow and Profit?



     Question From Paul, Minneapolis, Mn. USA

At a quick reckoning Revenues minus Expenses should equal profit.  Profit will boost the amount of cash a business has available to meet oncoming expenses.

Expenses however can take different forms;

  • Depreciation is a non-cash expense meaning you do not write a check to the government for allowing this deduction against revenues.  It is a “write-off” without real cash cost.  This translates into being taxed on a lower profit number.  It is prudent for business owners to depreciate their major capital expenditures like vehicles and buildings.  The idea behind this favorable tax code is to build up cash resources so these assets can be replaced.  In the process you will owe less to the government.
  • Then there are discretionary costs; those that owners choose to spend on or not.  For example; when revenue is lower in a given period the entrepreneur may chose to take less from the business thus “discretionary” expense.  This has the effect of preserving cash leaving more for non-discretionary expenses such as rent, hydro etc.
  • Timing differences too are a major part of cash flow.  A contractor may have a profitable job at hand but has to put out cash to cover costs in front of being paid.  If you don’t get paid for 90 days then you may have a profit but a negative cash flow.  You have to find a method of financing the timing lag or collect your money faster.

While cash flow is positively linked to profit it really represents the movement of money through the business. With modern cash management services now available at low cost, business owners can determine which checks have not cleared and which invoices have been billed and collected. This results in a method of monitoring your flow of money and eliminates a situation where a business owner applies for credit by writing a check against insufficient funds.  The responsibility for managing cash flow rests with the business owner not the financial institution.

Therefore Cash Flow is different from Profit; however more of the latter and quick collection of receivables will improve cash flow.

Image courtesy of sscreations at FreeDigitalPhotos.net

 

Five Keys To Successful Business Relationships



We spend a lot of time instructing about the What, Why, Who Where and When of the new business idea or project.  Answer the five Ws and you have your business plan. You then imbed the action plan that will make it all work…the How.  If the how is executed perfectly you have the Look. What does the business look like after three months, six months a year and beyond? “The Look” is called forward forecasting and with realistic assumptions based on research and facts you can project what your results could be.  This will give you a clear idea of what your potential Reward is for taking the Risk.  Your return on investment has to be measured otherwise you will not achieve the green light from family, friends and those who might be willing to help you launch your business. Aside from your plan solid relationships are crucial.  Consider the Five Points:

  1. Accept responsibility for your behaviours. This builds maturity;
  2. It is OK for others to question you.  This is how investors and customers “buy-in” to your business;
  3. Learn to exercise patience when others have ideas to share.  They are trying to help not hinder;
  4. Express your feelings with calm and patience; arguing will turn those who can help you away;
  5. Attach yourself to like minded people; other business leaders who may have experienced start-up, success, failure and resurrection.

So beyond having the perfect business plan you need to reflect on your personal skills and track record in relationship building.  If you have a good track record you will likely have little difficulty getting along with customers or your future workers and support professionals.  If you have a history of temper tantrums and half finished projects and of letting friends and family down then you might think twice about launching.  Answer these questions; do you get along with people well? Are you a SAP (self absorbed person)?  What are you going to do to improve your people skills?

Image courtesy of farconville at FreeDigitalPhotos.net

Do You Have the Guts to Pay “it” Forward?



    Pay it forward is today’s phrase for simply helping others.  Like mentoring or by engaging in random acts of kindness without expectation of payback.

Wikipedia describes such an act by Benjamin Franklin in a letter to a debtor dated April 25, 1784 “I do not pretend to give such a Sum; I only lend it to you.  When you meet with another honest Man in similar Distress, you must pay me by lending this Sum to him; enjoining him to discharge the Debt by a like operation…I hope it may go thro’ many hands, before it meets with a Knave that will stop its Progress.  This is a trick of mine for doing a deal of good with a little money.”

So then the act of paying it forward lies in one’s heart and willingness to enhance goodwill to others. In today’s world we do not go about advancing funds to strangers without precaution and receiving an adequate return on investment. We do however give of ourselves to charities, fundraisers, volunteerism and teaching those that seek learning.  The feeling of great satisfaction we derive from these acts is our true return on investment.  It connects us.

Is business so different?  You help customer’s everyday and relate to them so they reward you with their return business. If you take the attitude you don’t care then what is likely to happen?  So it is with your workers. Everyone is someone’s son or daughter.  The father who teaches his son to play baseball is in fact paying it forward and he does so again when he volunteers to coach the little league team.  Mothers too offer right from wrong teachings and values that will eventually be paid forward to their children’s children.  As a business owner you can pay it forward by playing the role of mentor to your workers; the respect you gain will increase productivity and sales.

Paying it forward is not a choice it is our duty.  It becomes our legacy to those who follow us. Although the US election highlighted the great voter divide in America I think we could all use a dose of goodwill.  This does not mean we need Government to be the answer to all our problems but we must participate in ways that make our world a greater place. Consider, Collaborate and Create!