Jim Blasingame

Business futurist, award-winning author, speaker and columnist

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Bring Your Customer’s Customer Into Focus

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When you take a photograph, the resulting product is two-dimensional: tall, wide, and flat. But in most cases, you want the photo to show depth, where images in the foreground and background are all in focus.

In photographic terms, the range of focus front to back is called depth of field. The best way to expand depth of field so more of the subjects in the photo are in focus is to add light. Light contributes to depth of field.

If you were given a photo of people who were the most critical to your success, you’d easily recognize your customers in the foreground in perfect focus. But as you look deeper into the photo you’d notice the images behind that first row increasingly drop out of focus with each receding row. The reason is that for most of the history of the marketplace, businesses have gotten away with having a very narrow customer depth of field.

When the coin of the realm was to be competitive, that meant you spent all your time thinking about how to serve the person in the foreground, the first row of your business world: your customers. But as I’ve revealed in the past, being competitive has been trumped by being relevant. And in The Age of the Customer, perhaps the most important component of being relevant to business customers is helping them serve the most important person in their photo:  [Continue Reading]

It’s Possible To Succeed Yourself Out Of Business

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This is another offering in my ongoing series on understanding the fundamentals of business as we become better business managers. Remember, fundamentals are like natural laws: they don’t change; they’re the same for everyone, and you can’t succeed without understanding and respecting them. The fundamentals today are all about funding growth.

Consider the following scenario that plays out on Main Street every day:

“Finally, my business is growing,” a small business owner confides to his friend, “but why is it creating so much negative cash?” And then, with that deer-in-the-headlights look, he completes his report, “I thought by now, with increased sales, cash would be the least of my worries. I used to be afraid I couldn’t grow my business; now I’m worried it will collapse from growth.”

This entrepreneur’s lament is one of the great ironies of the marketplace: a small business in danger of failure succeeding itself right out of business.

Beware Blasingame’s 2nd Law of Small Business: It’s redundant to say, “undercapitalized small business.” This maxim is especially true for fast-growing companies because revenue growth depletes cash in two dramatic but predictable ways. [Continue Reading]

How “The Cloud” Can Empower Your Small Business

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One of the greatest products of human society is the marketplace. Webster defines it as a place where goods and services are offered for sale.

Over millennia, innovations took markets from local to global, and now to the 21st-century iteration – virtual. Virtual markets are powered by “cloud computing,” aka “the cloud,” and accessed via the Internet and a handy interface program presented on a screen of some size.

Historically, as trade expanded markets, products led the way because services were difficult to convey to the last mile of consumption. But technology has helped services catch up, and now digital services are delivered efficiently from the cloud. And more than anything else, this last reality is helping small businesses compete and grow in ways that were formerly the domain of larger companies.

Here are five cloud-based resource categories that help your small business operate more efficiently, competitively, and profitably. [Continue Reading]

Shocking Confessions of a Legendary Actor and the World’s Greatest Salesman

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After a lifetime on stage and screen, the legendary English actor, Sir Laurence Olivier, once admitted that he had always suffered from stage fright.

Imagine that. One of the 20th century’s most revered actors, appearing in over 120 stage roles, 60 movies, more than 15 television productions, and countless performances, actually battled the fear of rejection and failure. But when you look at the numbers of his body of work, it’s obvious that Sir Laurence didn’t let his “condition” cost him success.

And now, after a sales career that has spanned more than a half-century, a legendary salesman named Blasingame reveals that he’s suffered from the marketplace equivalent of stage fright – call reluctance – his entire career.

Imagine that. Having conducted thousands of sales calls on multiple continents, in front of decision-makers from the towering C-Suites of Fortune 100 CEOs to bell-over-the-door Main Street mom-and-pops, perhaps the greatest professional salesperson of all time struggles with…making first contact. But when you look at the numbers of his body of work, it’s obvious that the man known as JB to colleagues and “The Force” to competitors, didn’t allow his “condition” to cost him success.

Alas, it’s a sad truth that even well-trained and motivated people can suffer from the scourge of the sales profession to challenge their performance. What about you? Have you experienced call reluctance? If so, what do your numbers tell you? The good news about stage fright/call reluctance, as proven by Sir Lawrence and JB, is that it’s a condition you can overcome. Indeed, their success, and the fact that they’ve been willing to share their personal struggles, provide us with at least four clues about their professional grit and spirit. [Continue Reading]

Small Business Owners Are Still Crazy After All These Years, Thank God

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“Still crazy after all these years.”

That’s the title of a 1975 song and album by the legendary Paul Simon. Hearing that song – for the zillionth time – makes me think about what makes small business owners different.

It’s the crazy way they look at the world.

Entrepreneurs think about challenges, imagine outcomes, appraise risk, project potential, and measure all of that against their resources and themselves, differently than everyone else. And when they decide to move forward, [Continue Reading]

Revealed: Financial Mysteries Four And Five, Part III

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This is the last of a three-part series covering what I call The Five Financial Mysteries. The first three Mysteries were about the relationship between cash, accounting, and profit. 

In this article, I’ll complete my attempt to help you avoid becoming part of the business failure statistics. If you haven’t seen the first three Mysteries, be sure to look for the previous two articles nearby. Now, buckle up as I reveal Financial Mysteries Four and Five.

Financial Mystery Number Four

You can get squeezed between vendors and customers.

Vendors and customers are the prime entities you deal with financially every day your business is open. Understanding your relationship between these two – literally between, because your business is in the middle – is the key to cash flow management. The way to avoid getting squeezed is by managing your Accounts Receivable (A/R) Days and Accounts Payable (A/P) Days. Warning: This will get a little mathy, but not difficult IF you have current records. 

A/R Days is the time it takes to collect from customers for sales you made on credit. Divide the A/R total on your balance sheet (you do have a current balance sheet, right?) by total sales revenue from your P&L (you do have a current P&L, right?) then multiply that quotient by 365.

Example: Accounts Receivable $80,000 ÷ $750,000 Revenue = .1067 X 365 = 38.9 Days Receivable. You took an average of 38.9 days to collect your receivables. 

Next, A/P Days – the time you take to pay vendors for purchases. Divide the A/P number on your balance sheet into your cost of goods sold (COGS) for the period from the P&L. Then divide that quotient into 365.

Example: COGS are $450,000 ÷ $35,000 Accounts Payable = 12.86. Then 365 days ÷ 12.86 = 28.4 Days Payable. On average, you paid vendors within 28.4 days.

The relationship between your A/R Days of 38.9 and A/P Days of 28.4 shows that on average you paid vendors 10.5 days faster than customers paid you. That means, without cash from other sources, you will experience negative cash for over 10 days. 

That number – 10.5 days, is the magic number every business owner should know about their business. Your company could very well be profitable and growing. But in this case, for a third of a month, you will be out of cash, unless you rely on credit or have working capital from retained earnings (profit).

Now that this mystery is revealed, here’s how to make this cash shortfall essentially go away: use a combination of taking longer to pay (4 days), collecting sooner (4 days), and covering the other two days with organic capital in the form of retained earnings (profit).

Financial Mystery Number Five

Profit is the Queen of Business, but Cash is the Emperor.

Does this sound like having cash is more important than making a profit? Well, it is – sort of.

It’s always important to make a profit. It’s the protein your business must have to become strong and muscular, so you can work through periodic unprofitability that befalls almost every venture. But even a profitable business will be out of business if it goes too many days without cash. 

The most intense, anxious, and anguishing moments of your career as a small business owner won’t be when you don’t make a profit, it’ll be when you’re out of cash. Manage your business for profitability but operate it for cash flow. 

Now that the Five Financial Mysteries have been revealed, you should have a better handle on the relationship between cash, profit, accounting, and the impact of time on all financial aspects of a business. And you should be able to remain part of that other business statistic: the millions of successful, profitable, sustainable small businesses.

Write this on a rock … Let’s rope all Five Financial Mysteries into one short, handy sentence: Buy low, sell high, keep track.

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