Start Ups

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

February 16, 2023 by Jim Blasingame

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

February 2, 2023 by Jim Blasingame

“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

January 27, 2023 by Jim Blasingame

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.

Revealed: Two More Of The Five Financial Mysteries, Part II

January 20, 2023 by Jim Blasingame

This is the second of three articles on how to prevent your firm from becoming part of the increasing mortality statistics of U.S. small businesses. That’s right. The SBA reports that 50% of small businesses fail in the first four years, instead of five years, as they reported 20 years ago.

In this series, I’m revealing what I call the Five Financial Mysteries. Actually, they shouldn’t be mysteries at all – they’ve been around for generations. But with this much Main Street carnage – a 20% increase in startup failures – it’s obvious to me that a lot of people haven’t learned what you must be able to do to sustain your business: fundamental financial management.

If you think you’re an excellent financial manager, then you won’t find any mysteries here. But if you think you think you could use a little help with your financial management, then this series could be just what you need. Don’t worry, we won’t get too mathy.

In the previous column, the First Financial Mystery was revealed: Cash and accounting are not the same things. Today you’re going to discover the Second and Third Financial Mysteries. [Continue Reading]

Business Financial Mysteries Revealed, Part I

January 13, 2023 by Jim Blasingame

This is the first article in a three-part series on how to prevent your operation from joining those who are driving the increasing mortality of U.S. small businesses.

One of the pillars of the American Dream is the ability of any citizen to start a business from scratch, build it, own it, and pass it along to their heirs. Research indicates that there are more than 25 million of these dreams come true in the U.S. Approximately eight million have employees, the balance are independent contractors, professionals, etc., and together they create half of the U.S. economy. All of that is the good news.

The bad news is that the rate of small business mortality – when the dream turns into a nightmare – which was once 50% in five years, has now increased by 20% in the past 20 years (U.S. Small Business Administration). The reason for this unfortunate trend is associated with Blasingame’s 1st Law of Small Business: It’s easy to start a small business, but it’s not easy to grow one successfully.

The smoking gun that kills most small businesses is the founder’s ignorance of or disregard for the financial fundamentals of business. And most of this business carnage could be avoided if every Founder understood what I call the Five Financial Mysteries. In this installment, I’ll reveal the first Mystery with the others to follow soon. [Continue Reading]

Sustained Small Business Success Requires Two Kinds Of Passion

January 3, 2023 by Jim Blasingame

Over the years, as I’ve talked with many a budding entrepreneur about how to start their business, it continues to amaze me how many haven’t conducted anywhere close to a prudent amount of research or due diligence on their baby. Indeed, they often act as if they must get their business going … right … now … or … they … will … just … POP!

This kind of impatience is dangerous.

Doing my best to talk them down off the ledge, I walk the fine line of tough love, between slowing them down to the speed of reason and smacking their entrepreneurial passion into a wall.

When would-be small business owners get that far-away look in their eyes at this impetuous stage, they have plenty of passion for what the business does. They can’t wait to sell suits, manufacture plastic parts, bake bagels, or (your baby here). And passion for what they want to do is not only a good thing, it’s essential.

But without a healthy interest in – if not an attraction for – business fundamentals, passion has only slightly more value than a dream. [Continue Reading]