Jim Blasingame

Business futurist, award-winning author, speaker and columnist

header image

profit

Five Financial Mysteries Revealed, Part III

by

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

In this article, I’ll complete my attempt to help you stay on the right side of the business survival/failure statistics. So, 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 every business deals with financially every day the 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 [Continue Reading]

Revealed: Two More Of The Five Financial Mysteries

by

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 that a lot of people haven’t learned what you must be able to do to sustain your business: operational financial management.

If you think you’re an excellent financial manager, then you won’t find any mysteries here. But if 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 thing. Today you’re going to discover the Second and Third Financial Mysteries. [Continue Reading]

Business Financial Mysteries Revealed, Part I

by

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.

That’s the good news.

The bad news is [Continue Reading]

Business Financial Mysteries Revealed, Part I

by

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]

Personal Service Businesses: Think Prices Not Wages

by

Millions of small businesses sell personal services like consulting, website development, or janitorial services, instead of something tangible like a computer or a kumquat.

Unfortunately, pricing a service is not as intuitive as pricing a tangible product. Consequently, service businesses too often don’t charge enough to sustain themselves profitably because of how they think about what they sell to customers.

Don’t make the professionally fatal mistake of comparing what you charge customers to deliver your product – a service – to how much you would expect to make per hour as an employee. Doing so, to paraphrase Mark Twain, is like comparing lightning to a lightning bug. You must think like a business, not an employee. You have to think pricing, not wages. Here’s why: [Continue Reading]

Categories

Archives

Share this page with your friends and followers