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Starting a Business is like Training for a Marathon

31 Mar

"Pittsburgh Marathon"

My Next Challenge

For those of you who have experienced the daunting task of starting up a business or have trained for a marathon will completely understand the comparison between the two.  I, for some crazy reason, decided to do both at the same time! Continue reading

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Reducing Energy Costs

11 Mar

MANUFACTURERS FIND A COMPETITIVE EDGE IN UTILITIES

What would you do with monthly electric bills in excess of $30,000? This is a reality for many manufacturers who are using large machinery and equipment to heat buildings or produce product.  And quite simply, a cost of doing business.  I’ve actually seen bills significantly higher than that.  With raw material costs and direct labor creeping up, utility expense can be one area where business can find relief.  In many cases utilities are one of the top three expenses on an income statement.  Just the smallest cut in kWh rate from an electric supplier can mean thousands of dollars to a manufacturer’s bottom line.  With collaborating resources, my team has saved thousands of dollars in utility costs for  manufacturers throughout Pennsylvania.

It’s easy, painless, and quite honestly…a no brainer.  For credit worthy businesses, my team of energy specialists will evaluate cost savings opportunities and provide a number of solutions to consider.   The cost to the small business is nothing and the savings can be significant.

Get your free analysis of your utility savings today!

 

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4 Easy Steps to Prevent Business Fraud

9 Mar

A recent study estimates that a typical organization loses 5% of its annual revenue due to occupational fraud and abuse.  And nearly all companies are susceptible to risk according to the Association of Certified Fraud Examiners.   Recent high profile cases have been beneficial as more executives are becoming aware of white collar crimes.   Yet many Small Businesses don’t take the necessary precautions to prevent being victimized.

As Ben Franklin once said, “An ounce of prevention is worth a pound of cure”.

 

Fraud usually begins on a small scale and then escalates when undetected.  An undercover Pennsylvania State Trooper has recently seen an increase of embezzlement cases in very rural areas of western Pennsylvania.  One of which was a small Catholic Church in New Castle, PA.  Many of the victimized companies, reports this Trooper, were shocked that it happened to them.

Here are 4 easy steps for organizations that may identify fraudulent activity or perhaps even prevent it.

  1. Owners & Managers must learn Business Acumen – Many Small Businesses heavily rely on their Accountants to detect such activity within their organization.  But, at the end of the day, it’s the Small Business that is ultimately accountable.  So, a little education in this area will go a long way.
  2. Ask the Accountant for more – Many Accountants provide the typical Business Services…quarterlies, payroll and year-end taxes.  But that doesn’t mean they can’t do more.  Ask the accountant to periodically review the financials for suspicious activity.
  3. Get a Business Health Check-up – A comprehensive analysis of your business’s financial and operational position can be an early detector of financial misbehavior.
  4. Be Alert – Owners should be awake at the wheel and be mindful of “red flags”.  Pay close attention to detail and have good people skills.  Sometimes it is those who are trusted the most that become the biggest disappointment.

In a globally competitive world and while businesses slowly recover from the recession, it’s more critical now than ever that businesses don’t fall victim to fraud, embezzlement or any type of financial mismanagement.  Statistics show that white-collar crimes are on the rise.  And now many Universities and Schools have added one or two forensic courses to their Accountancy programs while Conferences on Forensic Accounting and Fraud Detection are gaining popularity.   These are all signs of an alarming trend adding more to a business owner’s plate.

So, don’t be part of the headline in tomorrow’s paper.  Take action immediately and make the necessary adjustments to prevent an unnecessary financial hardship.  It starts with leadership and can end with compliance, business acumen and a stronger, healthier organization.

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Control Cash Flow with This Simple Tool

7 Mar

Many small businesses struggle with managing cash flow….especially in the economic climate as of late.   I recently visited a company that manages cash flow on a daily basis….as in they look no further  than TODAY!  Some weeks they’re not sure if they’ll make payroll.   It’s no wonder that they are having critical money management issues and will soon be forced into layoffs.

A simple tool commonly known as a 13 week rolling cash-flow can be very useful to companies in such a cash-flow predicament.  It forces management to look at the bigger picture over three months; and clearly illustrates with ample response time to a cash shortage problem.   This tool can be developed very easily in excel with a little spreadsheet experience  or a customized template that can be purchased.   In either case, some resources will be needed.  But it can be the smallest of investments that can yield the greatest of returns.

So, if you’re needing to manage cash-flow a bit better, you may give consideration to a 13 week rolling cash-flow tool.  It could be the difference between making payroll or sleepless nights followed by stomach ulcers.   It’s all about choices; Just saying….

Lessons from the Past, Present, and Future

5 Feb

John F. Kennedy once said, “Change is the law of life.  And those who look only to the past or present are certain to miss the future.” This is profoundly true on so many levels.  We can all exercise this in our personal lives as well as our business.  There is much to learn from our past and we can use that knowledge to adjust the present in order to create the desired future.  If we burned our favorite dinner by cooking it too long, we take note and adjust the baking time for the next time that meal is prepared.  The same rule applies within our businesses.  But we first must be aware that there are lessons to be learned or improvements to be made  from past practices.

So the question remains; How do we know when past business practices are not best practices?  What if there are no signs of problems with past practices – like the burnt dinner? Most businesses review historical financial data such as income statements and balance sheets in order to create budgets and adjust operations for the future.   This practice is quite common, but begs the question, Are we performing ahead of the competition?  Without industry intelligence, a company may only know where they fall in the race when they reach the finish line.  So where and how is one to find such information?  The answer is there are several places and ways to acquire this data.  Most banks subscribe to RMA (Risk Management Association).   This tool provides comparative financial data within specific industries and is used as a measure of performance.  CPA Firms frequently will have access to this data too.  This information is very valuable however the information is publicized annually and can often be outdated depending on the industry.  Some banks and CPA firms use another subscription resource that collects and publicizes the data daily and can also provide Key Performance Indicators (KPI’s) within an industry.  It can be a more reliable resource when identifying trends and comparing performance; and this is the benchmarking tool that I personally prefer.

A friend and respected entrepreneur who owns and operates a very successful business enthusiastically agreed to have a Health Check-up done on the business.  There were no signs or symptoms of any problems and I might add that this business owner demonstrated great progressive and visionary business practices meeting with business mentors and  the accountant monthly to review the financials.  The Health Check-up that compared the operation to industry standard identified two rather critical issues that went undetected for years.  First, they consistently were holding three times the inventory than industry standard and their peers.  Second, although the gross profit margin was spot on, the net profit margin was off noticeably from industry.  This discovery has caused this business owner to “clean-up” in their exact terms, their business in the coming year. Benchmarking now has a whole new meaning for this business owner.