7 Tips for Improving Your Cash Flow

They say cash is king. Find out how to give yours the royal treatment.

written by Pam Newman

There's a golden rule in business you'd be smart to learn now: No matter how much you sell, if you don't collect the money, you're going to go out of business. As business owners, we often get so wrapped up in selling our products and services that we forget to take the time to ensure we're managing our cash flow and receiving the money for those sales. But when it comes to your bottom line, you'd be wrong to simply focus on total sales dollars: You also need to focus on the cash collection of those sales.

To help get that money in the door, here are seven tips for improving your cash flow:

1. Require a down payment on projects so that your customers fund the project, not you.

2. Set your terms to be payment in full upon completion. Don't extend out 30 or 60 days after you've completed your work. You don't get to use your hard-earned cash until payment is received from your clients, so get it as soon as you can.

3. Negotiate terms with your vendors for 30 days or more so you have an opportunity to complete the work, bill your customers and receive payments prior to paying your vendor.

4. Have a collection process in place, and follow through. When your customers delay payments, they're using your cash. You need to ensure that you're being diligent in collecting from your customers.

5. Set up a line of credit at your bank that you can use in case of emergency. Often, lenders rates will be less than the late fees your vendors will charge. This line of credit will help you cover a lapse in cash flow for short periods of time.

6. Factoring of your receivables allows you to sell your receivables and get cash now instead of waiting 30 or 60 days. There's a fee for using a factoring service, so you need to ensure that the benefits of getting cash today exceeds the cost you'll pay for that expedience.

7. Minimize the amount of draws you take personally from your business. Each dollar you take from your company reduces the amount of cash flow you'll have available for the business to grow.

Not all these options will work for every business--you have to consider which of these will work for your specific needs.

Here's one last tip: Don't ever think you're too busy making sales and working in your business to worry about your cash flow. This mindset is the very thing that can put a business out of business when there's no cash to pay the bills. So take the time to analyze your business's cash flow to locate--and make--some small changes that will have a big impact on your cash flow.

Remember, your cash flow is not the same as your profits. You can have a profitable business, but a negative cash flow. Prepare a monthly cash flow statement to ensure that you don't get caught unexpectedly without enough cash to handle your day-to-day operations.

Pam Newman is president of RPPC Inc., which helps entrepreneurs succeed in their businesses through small-business training and consulting services in the areas of accounting and management. She's also author of Out of the Red, a management accounting guide for small-business owners.

Retrieved on 16^th October 2009 from http://www.entrepreneur.com/money/moneymanagement/financialmanagementcolumnistpamnewman/article159782.html

My Business or My Child?

When it comes to being successful, the answer has to be both.
written by Lisa Druxman

Being a mom is great. Being an entrepreneur is great. Being both at once? That's great, too, but there are definitely pros and cons. While I wouldn't trade it for anything, I don't think it's for everyone. When I ask mompreneurs about their greatest business challenge, the answer I get, consistently, is balancing work and motherhood.

It's tough to put your heart and soul into your business only to drop it at a moment's notice when your child needs you. But that is exactly what happens and what we do.

You are a mom first and foremost. When the school calls because your child is sick, you're the one who drops a meeting to pick him up. When your baby is up all night, you're the one who has to tackle another workday even though you're sleep-deprived. When there's a school party or play, you're the one who leaves work with your video camera in hand. Yes, I know there are many dads who step up and fill in. But on the whole, I find it is mostly mom who sacrifices career for the family.

Before becoming a mom, I worked 12-hour days without blinking an eye. I worked until the job got done. Now I work until my kids need to be picked up. I work when I can, and I can't always work. It puts us mom entrepreneurs at a disadvantage when you consider that our non-mommy counterparts can work any day, any hour. Because my office is staffed with mommy workers, we are used to losing days of work because of child-care issues.

I receive e-mails almost daily from aspiring mom entrepreneurs. Many have unrealistic visions of their children playing happily by their side while they work or napping regularly while they take calls. They also think their husbands will pick up more parenting responsibilities because the women are working. Reality check, mommies. This rarely happens. You will be working in any spare minute of the day that you can find. You will work before your family wakes up, and you will work after they go to sleep. You may work fewer total hours but, in essence, you are always working. You'll still be doing all of the mommy things you used to, and your best-laid plans will often fall through. I'm not saying this to discourage you. I'm simply trying to create a more realistic vision of your future life as a mom entrepreneur.

Make peace with the fact that you would get more quality work done if you weren't balancing your business with motherhood. Make peace with the fact that you'll sometimes need to ask for help to meet a deadline. Make peace with the fact that you can't be everything to everyone. Most important, make your peace with why you do what you do. For me, my work gives me satisfaction, stimulation and inspiration. Motherhood keeps me grounded and reminds me daily of what is truly important.

Here's my best advice to someone considering becoming a mom entrepreneur:

1. Be clear about why you want to become a mompreneur, and stay true to that reason.
2. Be flexible, and have a sense of humor along the way.
3. Don't let fear of failure stand in your way. Be willing to take risks.
4. Be a model mom. Run your business and your life in a way that you want your children to learn from.
5. Be mom first and foremost. You have the rest of your life to take on the business world.


Lisa Druxman is Entrepreneur.com's "Mompreneur" columnist and the founder and CEO of fitness franchiseStroller Strides. Druxman is also a nationally recognized speaker and author, and is considered an expert in the field of fitness, particularly pre- and postnatal fitness. She hosts a free monthly webinar during which she answers questions from fellow mompreneurs. If you are interested in participating, contact her atlisa@strollerstrides.com.

Retrieved on 22nd October 2009 from http://www.entrepreneur.com/startingabusiness/mompreneur/mompreneurcolumnistlisadruxman/article202680.html

Dealing With the Unexpected

You thought you knew what working from home would be like--until you came face to face with problems you hadn't planned on. Here's what you can do to solve your homebased dilemmas.

written by Paul and Sarah Edwards

Not unlike a thunderstorm that surprises even the local weather forecasters, unexpected problems will arise when you work from home. Have any of these five situations happened to you--or could they? Read on to find out what you can do if you encounter the unexpected.

Problem: Zoning Restrictions. When you bought your house, you had a job and didn't expect to be working from home, so you had no reason to check your local zoning laws to determine if they allowed homebased businesses. But now you work at home and a neighbor has told you're not in compliance with the zoning laws. You suspect she may report you.

What You Can Do: First, check for yourself what the zoning ordinance actually says. Cities vary when it comes to which homebased businesses they allow and disallow. If you find you're out of compliance, first check your other neighbors' feelings about your working at home. If they'll support you, you can apply for variance or conditional use permit.

Problem: Noisy Neighbors. You've been working from home for some time when your next-door neighbor decides to open a day-care center in their home. It's so noisy that you can't work much of the day. You find out that local zoning laws allow day-care centers in your neighborhood and though you might be willing to change your schedule to work nights, you just can't--your customers need you during normal working hours.

What You Can Do: A combination of techniques can make your home office livable again. Rearranging your office so your desk is as far away from the window as possible will lower the decibels you hear. Floor-length draperies over the window--which you should weather-strip--will also help. For a more expensive option, you can replace your standard windows with those that contain newer, triple-gazed glass. A gurgling fish tank, a cage of songbirds or playing background music can help, too.

To reduce your need for space, consider outsourcing parts of your work to other businesses or independent contractors, or hire an employee who can work in his or her home. Renting storage or warehouse space for the "stuff" of your business is another possibility that may free up needed space.

Problem: Chatty Friends and Family. When word gets out you've quit your job and are now working from home, your mother, your sister and several of your nonworking neighbors keep dropping by or calling to chitchat.

What You Can Do: Let family, friends and neighbors know your work hours and when you're available. When they come by unexpectedly, let them know you're working and suggest they come by after five or that you two visit over lunch and tell them you'll be over at noon. To manage phone calls, consider screening your calls by letting your answering machine pick up. Caller ID can help, too, by allowing you to identify, in most cases, just who's calling. Also, if you haven't done it already, set up a separate phone line for your business calls and ask your friends and family not to use that line for personal call.

Problem: Needy Neighbors. You're starting to get requests for favors from a few of your neighbors "since you're already home anyway." And while signing for an occasional UPS package isn't much trouble, being asked to pick up a neighbor's sick child from day care when you've got deadlines to meet just isn't going to work.

What You Can Do: You need to establish clear boundaries and let people know you can't interrupt your work schedule to take on personal tasks for them. With some people, you may need to be pretty forceful and let them know that while you'd like to help, you just can't get away from work and that you hope there won't be any hard feelings.

Problem: No Elbow Room. Your business is outgrowing your home office, but neither moving to a larger home or renting an office is a good option for you.

What You Can Do: Since moving to another location is out of the question, you can either find ways to optimize the space in your home or outsource some of your work. Professional organizers can help you do more with the space you have. You can find an organizer in your area from the National Association of Professional Organizersor the Independent Association of Professional Organizers.

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Paul and Sarah Edwards are homebased business experts and consult and coach on the subjects of the 16 books they've written. Their latest book isThe Best Home Businesses for People 50+. Free portions of their books are available at www.workingfromhome.com.

Retrieved on 8^th October 2009 from http://www.entrepreneur.com/homebasedbiz/homebasedhowtoguides/article76396.html

10 Steps To Retire A Millionaire

written by Lisa Smith

Having a million-dollar portfolio is a retirement dream for many people. Making that dream come true requires some serious effort. While success is never a sure thing, the 10 steps outlined below will go a long way toward helping you achieve your objective.

1. Set the Goal

Nobody plans to fail, but plenty of people fail to plan. It's a cliché, but it's true. "Plan" is the leading self-help advice from athletes, business moguls and everyday people who have achieved extraordinary goals.

2. Start Saving
If you don't save, you'll never reach your goal. As obvious as this might seems, far too many people never even start to save. If your employer offers a 401(k) plan, enrolling in the plan is a great way to put your savings on autopilot. Simply sign up for the plan and contributions will be automatically taken out of your paycheck, increasing your savings and decreasing your immediate tax liability.

If your employer offers to match your contributions up to a certain percentage, be sure to contribute enough to get the full match. It's like getting a guaranteed return on your investment. Finding the cash to stash may be a challenge, particularly when you're young, but don't let that stop you from pursuing future riches.

3. Get Aggressive
Studies have shown that the majority of the returns generated by an investment are dictated by the asset-allocation decision. If you are looking to grow your wealth over time, fixed-income investments aren't likely to get the job done, and inflation can take a big chunk out of your savings.

Investing in equities entails more risk, but is also statistically likely to lead to greater returns. For many of us, it's a risk we have to take if want to see our wealth grow. Asset-allocation strategies can help you learn how to make picking the right mix of securities the core of your investing strategy.

4. Prepare for Rainy Days
Part of long-term planning involves accepting the idea that setbacks will occur. If you are not prepared, these setbacks can put a stop to your savings efforts. While you can't avoid all of the bumps in the road, you can prepare in advance to mitigate the damage they can do.

5. Save More
Your income should rise as time passes. You'll get raises, you'll change jobs, and maybe you'll get married and become a two-income family. Every time more cash comes in to your pocket, you should increase the amount that you save. The key to reaching your goal as quickly as possible is to save as much as you can.

6.Watch Your Spending
Vacations, car, kids and all of life's other expenses take a big chunk out of your paycheck. To maximize your savings, you need to minimize your spending. Buying a home you can afford and living a lifestyle that is below your means and not funded by credit cards are all necessities if you want to boost your savings.

7. Monitor Your Portfolio
There's no need to obsess over every movement of the Dow. Instead, check your portfolio once a year. Rebalance your asset allocation to keep on track with your plan.

8. Max Out Your Options
Take advantage of every savings opportunity that comes your way. Make the maximum contribution to tax-deferred savings plans and then open up a taxable account too. Don't let any chance to save get away.

9. Catch-Up Contributions
When you reach age50, you are eligible to increase contributions to tax-deferred savings plans. Take advantage of this opportunity!

10. Have Patience
"Get-rich-quick" schemes are usually just that - schemes. The power of compounding takes time, so invest early, invest often and accept that the road to riches is often long and slow. With that in mind, the sooner you get started, the better your odds of achieving your goals.

The Reality Of Retirement
Retirement might seem far away, but it when it arrives nobody ever complains about having too much money. Some people even question whether a million dollars is enough.

That said, with lots of planning and discipline, you can reach your retirement goals and live a comfortable life after work.

Retrieved on 28^th September 2009 from http://www.investopedia.com/articles/retirement/08/retire-millionaire-million-dollars.asp

5 Senior Businesses to Start

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