Recent Posts

Mar 12 2010

Networking - Don't Just Stand There

Networking

Author - Richard Jones

Being in sales as long as I have, you get to your fair share of conferences, events, mixers, client parties, etc.. It’s an excellent place to cover all of your sales basics (grow existing client base, recapture/retention of at risk clients, prospecting, and big ideas). However, these face to face opportunities don’t work well when you don’t make the opportunity work for you.  Here are a few tips you should consider for your networking efforts.

Tip 1 – Attend a lot of events:  Remember the first time you tried something – perhaps sports, or the obligatory dance class in college to satisfy one of your easy A’s?  The first time is always the hardest, so I advise my sales teams to improve by doing. Pick the events and mixers that will help you grow your business and start attending regularly. I try to attend an event once a week – and make sure I get the most out of it.

Tip 2 – Smile and shake hands:  When you are there have your business cards easily accessible and a pen for writing – then walk around and introduce yourself. “Hello, I’m Richard, good to meet you. What brings you here?”  Don’t get stuck in the “lonely guy prison” of networking. This is where you introduce yourself and the person won’t let you go. Learn a bit about the individual, share what you’re doing – exchange cards and make a note on the back of their card if you agreed to send something. Tell them it was a pleasure to meet them and hope to see them at the next event and move on.

Tip 3 – Know why you are there: Know why you’re there, and what you want to walk away from this event with as well as what you want those who meet you to walk away with from you.  Networking is about connecting with prospects. I’ve attended events where my sole goal was to meet the speaker who was important to my business – I was laser focused, met with them prior to the event and afterwards. I may not have talked with anyone else (highly unlike me) though my mission was accomplished.  Know what you’re networking for.

Tip 4 – Don’t be too aggressive: I sit on a lot of boards and have talked with clients to find out what we could do to get them more involved, and they always come back with some form of “If you could keep the hard closing salespeople away from me, I’d enjoy it and attend more often”. Don’t be the person everyone wants to avoid. If you’re attending a lot of events, you’ll learn that these networking events are about introduction, re-acquaintance, helping to introduce others, and enjoying yourself. The selling comes afterward with a follow up meeting.

Bottom-line: Networking is highly effective if you learn to get comfortable in the room. Bring plenty of business cards, follow up with everyone you meet and set follow up appointments where appropriate and attend as many relevant events as you can so you’re not only comfortable, but you’ll soon find yourself among friends who will be glad to introduce you to more people.

0 comments - Posted by Tom Markel III at 3:33 PM - Categories: Richard Jones' Column

Mar 12 2010

Working Capital - How To Manage The Cash

Author:  Richard Munro

A few weeks ago, we talked about the balance sheet and cash flow financial statements as two important tools to help you track the financial pulse of yourWorking Capital business.  This week I am going to expand on that theme and talk about monitoring and managing your business working capital.

Why is this important?  Well, because if your business runs out of cash, it will die.  Simple as that.  That’s why millions of small businesses die each year – their owners did not have a business plan and manage cash.  Cash is the lifeblood of business.  Without it, you cannot pay your staff or vendors or meet any other financial obligations of the company.

What is business working capital?  Working capital is the cash that your business has on hand or can convert quickly into cash from accounts receivable and inventory to pay current liabilities like vendor payments, payroll, taxes, other regular business expenses, interest and debt servicing.  It is generated through the normal business cycle beginning with inventory purchases, to sales to customers, to cash collections from customers to payment to staff and vendors and so on.  The goal of every business should be to make sufficient profits to internally generate cash working capital to support its growth.

The working capital ratio is defined as total current assets (cash, accounts receivable, inventory and prepayments) divided by total current liabilities (amounts due short term to vendors, staff, payroll taxes, loans payable).  The result of this calculation is a ratio and is a direct measure of the business’s ability to pay its short term liabilities as they fall due.  This is also called business liquidity.   If the calculated ratio of current assets to current liabilities is above 1.0 then the business has positive liquidity.  A ratio above 1.5 is good and above 2.0 is considered very good.

One of the primary financial measures that banks and lenders look closely at when evaluating a business loan request is business working capital or liquidity because it is an important measure of whether the business can generate enough cash from its ordinary operating cycle to pay the interest and principle on the loan.  If you are preparing your business plan or are planning to submit a loan request to a lender or investor, it is important to include this in your plan to make sure that your business plan shows that your business will have adequate working capital to grow and sustain itself.

You can calculate your working capital ratio easily by reviewing your business balance sheet and determining is total current assets greater than total current liabilities and calculating the ratio.  If they are positive (ie: your ratio > 1.0) then your business has positive working capital or liquidity available to meet its short term financial obligations.

It’s a good idea to track your working capital ratio monthly and work to improve it by improving sales and gross margins and reducing costs.  You can set up a simple dashboard graph or data to track its trend and give you early warning of any adverse trend requiring corrective action to protect your business.

0 comments - Posted by Tom Markel III at 3:06 PM - Categories: Richard Munro's Column

Older Posts

Mar 10

Why Each Business Needs A Business Plan

0 comments - Posted by Tom Markel III at 5:01 PM - Categories: Terry Harrison's Column |

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