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Have a Meeting with Yourself about Cash Flow
When you perform all the executive-level functions at your business, the important role of officer meetings, such as those at large enterprises, is overlooked. But a few intervals throughout the year are ideal for requiring your inner CFO to describe cash flow results to an empty room of imaginary executives. You'll force yourself to articulate key money matters. This prevents them from remaining mere abstract concepts in the dark recesses of your mind.

Cash flow is different than profit. Cash flow from operations ignores uncollected revenue and unpaid expenses. These elements are identified on a cash flow statement as the changes in accounts receivable and accounts payable. You then add or subtract other factors from operating cash flow. Interest expenses and depreciation are added. Costs for depreciable assets are subtracted. Loan payments are also subtracted. Any money that's borrowed or that you put into the enterprise as an owner adds to cash flow.

A cash flow statement is a key report, but some smaller operations already maintain cash basis bookkeeping. In those cases, cash flow from operations can be identified from the cash basis income statement, which already excludes uncollected income that's still in accounts receivable and unpaid expenses that are still in accounts payable.

Comparing cash flow from one period to another delivers insight into the overall financial health of the business. Although rising cash flow is generally good, building too much cash may indicate excessive borrowing, not paying bills on time, or ignoring replacement of old equipment. Short-term cash flow dips are not so bad if they result from increasing revenue that's not yet collected.
How to Win Big in Today's Economy

The altered economic landscape presents innovative and nimble businesses with opportunities to thrive.

Find out how by requesting my free report "How to Win Big in Today's Economy."

Just reply to this email and I'll send it right out to you.

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How Giving Back is Good for You and Your Business
The benefits of giving others tokens of appreciation as well as charitable giving have long been documented, with a multitude of scientific studies reporting a strong correlation among selflessness, altruism, personal happiness and high self-esteem. But did you know that giving back also has positive effects within the workplace?

While it may not initially bring immediate financial gain, investing in local initiatives will improve your reputation within your community. By identifying needs within your operating area, asking prominent local organizations if they need help and making targeted efforts to contribute, you'll form valuable relationships between customers and community members, increasing your standing in the process.

Similarly, leaders who identify and fund charitable enterprises are sure to foster respect within their own companies. Not only does giving back improve employee cohesion and job satisfaction, but it's also a great morale booster that improves employees' regard for their corporate heads.

There are no two ways about it: philanthropy is also a fantastic way to connect and network. Philanthropic organizations are often associated with other industry leaders with whom you'll be able to build new relationships based on mutual trust and respect. More and more, philanthropy is acknowledged as a central part of a successful business model.

Whilst tapping into this invaluable networking resource, it is still possible to give authentically by remembering that empathy is the basis for true altruism. Pay attention to the small details and remember that if you are publicly giving, include details about your chosen charity's website, phone number, or GoFundMe account, shining a light on the charity itself.

If you're part of a startup and financing is in its early stages, it's still possible to positively impact your community with volunteering, mentorship and pro bono work.
Worth Reading
Creating "Safety Signals"
Might Help You
Beat Anxiety, Yale
Researchers Say
By Wanda Thibodeaux
Did you know that you can train your brain to operate more calmly under stress? Safety signals could be the key to promoting better productivity in the workplace and possibly help some sufferers of anxiety. As an alternative to "exposure therapy," safety signals train our brains by activating different neural networks than the pathways typically associated with the threats that trigger the fight-or-flight response.
Read More
How to Assess
Your Brand,
Marketing and
Here's the ultimate guide to whisk you diligently through a brand and marketing audit. From lead generation to overall brand positioning, this article gives a 360-degree view of how to objectively and confidently approach optimizing brand and marketing activities. Move forward with solid facts to have the best shot at growing your business and achieving your goals.
Read More
When Was the Last Time You Did a Brand Audit?
As fast as our world has been changing, is your brand keeping up? A brand audit is both an external and internal checkup that will help you stay aligned with and relevant to your target audience, remain strong in the competitive market and improve sales outcomes. Here are the basics.

Be true to yourself. Are your mission, vision and brand promise statements still true? If not, revise them to make them current with your business goals and values.

Talk to your customers. How do they see you? What words would they use to describe you? How would they describe you in comparison to competitors?

Talk to your employees. Ask the same questions of your employees, and value their feedback just as much.

Check your competitive presence. How do your competitors position themselves in regard to the overall industry and customer values? Where do you sit in comparison? It's important to remain true to who you are while differentiating yourself from the competition (while also not going too far outside the box).

Align communication. Reevaluate everything that communicates on behalf of your brand digitally, physically and verbally, from brochures and promotional materials to sales team training and scripts to social media and your website. Are you in alignment with who you say you are and the customer experience you want to deliver?

Have someone else do it. It's always hardest to see yourself clearly through your own lens. If you have the funds, the best brand audit insights will likely come from hiring an outside company with expertise in this arena.
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Links You Can Use - Social Media Tools and Trends
Consumers are spending more time than ever glued to their phones; marketers are swarming to the scene. Here's how to stay up to date and stand out from the crowd.
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and What Can It Do for
Your Business?

Learn more about Stories from
Instagram and other platforms
and how to leverage them.

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Social Commerce
Strategies to Expand
Your Business

2020 has seen an explosion
of social commerce. Here's the
411 on the what, how and why.

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A Small Business's
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How to Advertise
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Time to Scrutinize Your Business Financial Details
Changing economic conditions are the greatest stimulus to urgently determining the best course of future action. To identify the most crucial matters to address, you must first know how to read and understand your business financial statements.

Assets & Liabilities

The collection of reports comprising business financial statements provides a complete picture of the cash flow and overall condition of your enterprise. Most importantly, the balance sheet is a reporting of business assets and liabilities, with the difference between these two factors being the equity you've built over time in your business.

Too many business owners only examine the income statement for revenue and profit. Those factors transform into a deeper meaning by scrutinizing key elements on the balance sheet. A major detail to easily spot as a red flag is higher liabilities than assets. This means your business owes more than it owns. Even if this troubling condition does not exist, you want to evaluate if your business is headed in that direction. This is simply accomplished by comparing over time the ratio of debt to equity. A rise in this metric signals potential problems ahead.

A corollary issue uncovered by the balance sheet is the expansion of accounts receivable or inventory relative to sales. Having too much in uncollected accounts receivable can mean insufficient cash for timely payment of billed expenses. Although possessing enough inventory is important, having too much wastefully ties up your cash. Trends for accounts receivable and inventory can also be assessed by ratios. These determine the number of days you have on hand of accounts receivable and inventory based on recent sales. Since these calculations demand a little experience in analysis, your accountant can help with the math. All you need for this exercise is accurate up-to-date bookkeeping.

Revenue & Expenses

The income statement is the familiar report of revenue and business expenses. Many small operations keep their books on a cash basis, meaning the income statement reports revenue when received and expenses when paid. If your enterprise is accrual-based, it records revenue when customers are invoiced and expenses when bills are received. An accrual-basis operation will, therefore, also need a cash flow statement.

Declining revenue is obviously bad. But a temporary period of falling sales can be survived with some expense reductions or borrowing money. Look for unnecessary expenditures that can be reduced or eliminated. Your business may be stuck with large costs for space and personnel, but other categories are ripe for cutting back. Lower spending for multiple small categories can add up to substantial improvement in cash flow.

Deciding whether taking on more debt is sound brings you back to the balance sheet. If your business has plenty of equity, having more liabilities will not harm the operation's financial strength. The other consideration with borrowing is assuring sufficient cash flow for loan repayment. Finding your cash flow number, which is not necessarily the business profit, permits you to calculate the sufficiency of incoming funds to cover the sum of all loan payments. That's another simple ratio but also a factor to consider with input from your accountant.
This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.

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