What a Business Financial Statement Can Tell You About the Health of Your Business

Tom Spencer

Bills come in, sales go out, you have your day-to-day goals and you watch the curvy line of profit and loss make its inexorable progress throughout the financial year. Business Strategy balance sheet business planning cash flow statement financial statements income statementWhen you run your own small business, it can be difficult to keep an objective distance from what you do.

Managing a Sales Funnel for Your Consulting Business

The Clever Consultant

Create and managing a sales funnel. We spoke to our friend Brian Sullivan, Vice President of Global Accounts at Sandler Training , who offered us this advice: View Your Sales Funnel as a Live Tool. Your sales funnel is a living entity that needs regular attention. To make it easy, make sure you have a simple vehicle in place that enables you to collect details about prospects and where exactly they are in your sales funnel.

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5 Sales Negotiation Traps to Avoid at All Costs

LSA Global

Sales Negotiation Traps that Make the Difference between Success and Failure. Sales negotiation traps can trip you up. Five Sales Negotiation Traps to Avoid. You should never enter a sales negotiation without a clear idea of what would be the best outcome for both parties.

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How to avoid a sales slump after a busy period

MBO Partners

Most merchants know that busy sales periods like the holiday season or promotional periods are often followed by a sales slump. Without proper planning, this can mean lots of excess stock on the shelves, poor cash flow, and a myriad of other consequences. Insights & Analysis Productivity

The End-of-Quarter Sales Rush Costs Companies Money

Harvard Business

Ask any organization what’s happening in the sales department on the last few days of the month and the entire last week of any fiscal quarter. Sales teams are closing deals, at all costs. Data shows that sales reps give better terms to customers who wait until the last minute — with both sides knowing they can rely on dropped prices and a sure closing, thanks to the end-of-the-month company push. million sales transactions from the anonymized data of 151 U.S.

Case Math

Tom Spencer

Net Present Value: The NPV of an investment is the present value of the series of expected future cash flows generated by the investment minus the cost of the initial investment. Perpetuity: A perpetuity is a constant stream of identical cash flows with no end.

Business Book Review: Boston Consulting Group On Strategy

Management Consulted

The focus here is completely on cash flows and not projections. Though this perspective was first written in 1988, it is a good historical record as it shows the link between time utilization and sales. Cash Flow of a Product – It’s an excellent study on rules of cash flow if you’d like to know more on the performance of products and the effect it has on sales at each stage in production.

Need Clients Now? 5 Strategies to Quickly Get More Consulting Clients

Consulting Matters

However, there will be times when you have to feel the cash flow pressure and need to find clients.right now! If you want to achieve sustainable success as a consultant - ideally you want to create a marketing system to ensure you have a consistently full pipeline of right-fit clients.

CFO Branding 101

Free Agent CFO

You’re spending far too much time talking about fixing cash flow problems (remember, that’s typically a symptom of a far bigger problem). When you believe several acquisitions are the key to stellar sales growth.

Does Your Brand Inspire Customer Devotion?

Joellyn Sargent

You see, most revenue-focused executives worry about sales first. Satisfied customers become advocates and evangelists, working like an advance team to sell your products and services before your sales team even knows a buyer is looking. It’s Nice to Be Liked.

We Tracked Every Dollar 235 U.S. Households Spent for a Year, and Found Widespread Financial Vulnerability

Harvard Business

The lack of access to stable, predictable cash flows is the hard-to-see source of much of today’s economic insecurity. Financial Diaries (USFD), an unprecedented study to collect detailed cash flow data for U.S. We logged all transactions, whether they occurred digitally or in cash, above the table or below, in money or in kind. But this close-up look at cash flows suggests new routes to helping families.

Breaking Down Case Interview Frameworks – M&A (Mergers and Acquisitions)

Management Consulted

All acquirers will want to increase cash flow, but the length of their investment in the company will differ, depending on the type. They will often just want to rapidly decrease costs and increase top-line revenues and profits with cash injections. If your client wants to integrate the target, is there potential for synergy, either by piggybacking one company’s strong areas onto the others to increase sales or by reducing operating costs?

Which MBAs Make More: Consultants or Small-Business Owners?

Harvard Business

So, we begin by assuming that the traditional path offers cash compensation equal to the average starting salary. (It The chart below shows that over the first 10 years of employment, the cash compensation from the traditional job dominates. In this example, the annual cash flow is $1.5

Earnings Cheating Season: Is Your Favorite Company Cooking the Books?


In other words, there may be more to the recent flash-crash than just one weak retail sales datum a deeper malaise surrounding weak profits may be driving events. Is there a growing divergence between net income and operating cash-flow?

There’s No Wrinkle in Time for the Time-based CFO

Free Agent CFO

Sales go up 11-12 percent annually. And cash flow? Free cash flow is predictable and also tracks consistently with earnings. Each time I read an article telling me to focus more and more on the future, I just roll my eyes.

Bank of Japan Seeks to End Stimulus, Currency Market in Disbelief


The stimulus is a centerpiece of Prime Minister Shinzo Abe''s campaign to end two decades of deflation and fitful growth, and BOJ Governor Haruhiko Kuroda has vowed to keep cheap cash flowing until his 2 percent inflation target is in plain sight.

Economies of Scope - Tom Spencer consulting blog

Tom Spencer

Sales – Selling products is easier when salesmen can provide customers with a range of value options, as well as upsell and cross promote … “Would you like fries with that?”. More stable cash flows are attractive for three reasons. About. Book Shop. Archive. Definitions.

Organizing for growth

Seth Godin Blog

First, there''s a cash flow issue. New jobs mean more need for paint and materials, but he has to lay out his own cash to pay for it. No cash, no time, no joy. He could require a down payment on every job, an amount calculated to cover all of his cash costs.

Chinese Malls Hit With Low Traffic, Rising Vacancies, Plunging Rent, Massive Overcapacity


Rising vacancy rates and plummeting rents are increasingly common in Chinese malls and department stores, despite official data showing a sharp rebound in retail sales that helped the world's second-largest economy beat expectations in the third quarter. Less foot traffic means cash flow of mall owners and developers are getting squeezed - a potential hazard for an economy growing at its slowest pace in decades.

Business Valuation Lessons From ESOPs

Martinka Consulting

In the Discounted Future Cash Flow method profits are projected (same as the first issue) and discounted back to a present value. Using comparable sales of much larger firms will distort the value. I’ve been working with a client company on the implementation of an ESOP (Employee Stock Ownership Plan). In an ESOP, a qualified plan, the plan buys the stock of the firm from the owners with vested employees now the owners, en masse.

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Housing Starts in China Plunge 25%; Did China's Property Bubble Finally Burst?


Retail sales also grew more slowly than expected in April, and the furniture market stalled as fewer families moved into new homes. As the property slowdown has kicked in, housing starts, completions and sales have turned markedly lower, especially outside the principal cities.

Another Obama Clean Energy Fiasco, Potentially Involving Largest Bankruptcy in Spanish History; Appeal of Clean Energy


Abengoa had no problem in getting Citi to lead a €100 million (£70million) share sale in July to raise funds for the group at a price of €2.80 Furthermore, days after the Citi-led share sale, Abengoa revealed it was seeking to raise €650 million of capital and dispose of €500 million of assets. It also alerted the market that its free cash flow for the year would be as much as €800 million lower than previously forecast.

How Incentives for Long-Term Management Backfire

Harvard Business

Two obvious pieces of evidence: The use of earnings for share buybacks that cost more than they’re worth, and dividend increases that divert cash from long-term investment. The diversion of cash from investment slowed long-term strategic success.

Forget Startups – Buy a Business

Martinka Consulting

Richard but in a sales system and culture, which attracted customers and high-quality employees. You trade your capital for immediate cash flow, i.e. you get a paycheck on payday just like everybody else. Fast Company recently had an article titled, “ Forget Startups Just Buy a Small Business from a Retiring Entrepreneur.”

The Challenges GM Is Facing, and the Reasoning Behind Its Plant Closures

Harvard Business

Car sales in the U.S. But car sales are now probably past a cyclical peak, not only in the U.S. Alistair Berg/Getty Images.

Time to Short the US Dollar? Go Long Commodities?


Bunds will not be able to follow the re-pricing of Fed (away from early 2015 hike) and growth in the US (It’s not the weather) as Q2 gets revised back down to 2.25-2.50% and geo-political risk and lag of global earnings for S&P-500 companies reduces margin and cash-flow.

Quick Tips for Consulting to Small Organizations | Consulting and.

Consulting and Organizational Management

Don’t be afraid to look at the “business” or “hard” data, at least to understand the cash situation of the organization. Get help to do that if you aren’t comfortable with cash flows. Library. Translate This. Home. Share » Connect » Blog: Consulting and Organizational Development. Library Blogs Home. This Blogs Home. Guest Writer Submissions. Policies. To Subscribe to a Blog. About. Feedback.

Unrealistic Expectations

Martinka Consulting

I’m seeing more and more owners of small businesses ($3-10 million or so in sales) thinking their company is going to be priced the same as a $50-100 million firm. In the last few weeks owners (of companies doing $3-10 million in sales. I expect to sell my business for 6X total cash flow (profit or EBITDA plus owner salary). A firm with volatile sales, low earnings and an owner who thinks he should get one times revenue.

The Debate on Corporate Tax Reform Just Started for Real

Harvard Business

The Brady-Ryan plan is based on a “destination-based cash flow tax” (DBCFT) that is also mistakenly labeled a “border-adjustment tax” and has five critical features: A reduced rate, down to 20%. But it uses corporate cash flows to do it, rather than the way the VAT works around the world: through the so-called credit invoice method , where businesses are taxed on sales but deduct taxes paid on inputs.

Unrealistic Expectations – Part II – Gotcha!

Martinka Consulting

And this applies to any type of deal, not just the sale of a business, where terms influence the price. The seller got a higher price so she was more motivated to do a deal, the buyer has improved cash flow to grow the business and improve operations, and isn’t that what it’s all about. What happens when interest rates are higher, the supply of businesses-for-sale increases, and pricing gets back to “normal?” (And

What GE’s Board Could Have Done Differently

Harvard Business

Since Immelt’s departure, GE’s stock is down another 30%, as its new CEO, John Flannery, has struggled to cope with the cash flow drain from years of problematic acquisitions, divestitures, and buybacks. In one set of violations, GE had effected December “sales” of locomotives to unnamed financial partners, who left most of the ownership risks with GE. HBR Staff/YASUYOSHI CHIBA/Getty Images.

Severe Weather Threatens Businesses. It’s Time to Measure and Disclose the Risks

Harvard Business

When weather conditions are on average adverse over days, weeks, or entire seasons, shortfalls in sales cause reduced cash flows and can lead to financial distress and business failure. last year triggered shortfalls in sales, store closures, and job cuts. This boils down to writing a relationship between a financial variable (sales, volume, profits or margins) and a weather index (temperature, precipitation, wind speed, etc. Photo by Annie Spratt.

Subscription Business Models Are Great for Some Businesses and Terrible for Others

Harvard Business

In the transactional economy, the most important measures are new customer acquisition and sales. For sales, the moment of transaction is the start, not the finish line. Today it seems like everyone is rushing to join the digital membership economy.

The Simple Question That Can Make or Break a Startup

Harvard Business

” This one flaw harmed significantly more companies than well-known startup challenges such as cash flow (29%), competition (19%), and poor timing (13%), to name a few. They’re paying for the benefits promised in the sales copy and testimonials.

AAA – Not to the Rescue

Martinka Consulting

When it comes time to sell however, they want to demonstrate that the business has more cash flow than the tax returns (and financial statements) show. Similarly, I once saw a deal where it was stated that if the buyer reduced the sales staffs’ commissions from 10% to 8% this adjustment would create more profit. If the only way a buy-sell deal can be made to work is because of AAA, it’s probably not worth doing. AAA stands for: Adjustments. Assumptions. Add-backs.

A Refresher on Marketing ROI

Harvard Business

It’s about “delivering customers and sales.” To do this, you need to establish your sales baseline. What would our sales and profits have been if we didn’t spend on this marketing program? But even that can be complex, she says: “Last year’s sales line had a bunch of marketing behind it. A CFO might just see marketing expenses walking out the door and not a corresponding build-up of cash flows and assets,” Avery explains.

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Why Your Company Culture Should Match Your Brand

Harvard Business

As the industry moved toward an emphasis on customer service and merchandising, the company fell behind, because its employees were focused more on increasing inventory turns and sales per square foot. And your sales and marketing departments aren’t working at cross-purposes, each with its own view of what success looks like.

Shockingly Bad Fiscal Health of Chicago (and the Financial Engineering Chicago Uses to Hide that Fact)


Among other things, she handles the structuring and sale of bonds for schools across the state. The fund also includes tax increment financing revenues that flow to projects in designated TIF districts. It is not a balance sheet test, but a cash flow test.

What Should U.S. Companies Do If Congress Ever Passes a Tax Holiday?

Harvard Business

companies a one-time “tax holiday” rate of as low as 10% to bring home their stockpile of cash earned overseas. Skeptics expect companies to use much of the cash to repurchase their shares, just as they did in response to the tax holiday that George W. So what should companies do with repatriated overseas cash if the tax holiday comes to pass?

Subscription Businesses Are Booming. Here’s How to Value Them

Harvard Business

Indeed, some analysts have gone a step further, declaring that subscription boxes are in the midst of a venture capital-fueled bubble not unlike the flash-sale business craze that ended five years ago. ” It is specifically suited for subscription businesses, driving revenue off of the flow of incoming customers over time, their retention patterns as they stay with (or abandon) their subscriptions, and the average revenue per customer (ARPU). that aggregate sales in the U.S.