Accounting Advice

Creating an advisory board

Friday, March 12, 2010 by Laura Colar

An advisory board can alleviate pressure from CEOs, management teams or founders. They can provide valuable insight and advice to grow your company or deal with challenges that develop along the way. A board can also hold a CEO accountable for decisions, a valuable check to have in place.

And the great part, you don't always have to take their advice.

Jim Bourdon, chief executive of Accounting Management Solutions has a column in the NYT that address a decision his board of advisors helped him make and tips for putting one together that will benefit your operations. Here are some of the main takeaways.

HAVE AN OBJECTIVE The most successful boards are formed with a specific goal in mind.

BE OPEN TO CHALLENGES In addition to making sure that your advisors will not be mere rubber stamps, seek out those who fill knowledge gaps within your company or your own background.

TURN TO A NETWORK Search for advisors by taking inventory of your contacts who possess skills or expertise you lack, eventually settle on a ranked wish list of eight (most experts agree that small-business advisory boards of more than six are not productive).

PUT IT IN WRITING Though advisory boards are more informal than boards of directors, they should still be governed by written agreements. It is vital to consult with your lawyer before forming and working with your board.

PAY FOR THE ADVICE Your board members will not be in it for the money. For many, being a part of a board offers mentoring, networking and social opportunities that make the experience worthwhile. It is still, however, a good idea to compensate them.

After reading the column, I believe as your operation grows and becomes more complex, a board seems to be an intelligent tactic that will only improve your business. When building an initial business strategy or business plan structure, think about it.

Meetings making you unproductive?

Thursday, March 4, 2010 by Laura Colar

Every company has a different approach to communicating internally. Meetings are used to discuss company issues as well as brainstorm to develop plans for clients and delegate responsibilities for the execution of said plan.

Getting together is necessary to discuss the latest market research forecasting, new financial models or a product launch plan. Yet, sometimes they simply equate to lots of talking, little doing.

Yet, when run effectively, meetings put everyone on the same page and foster positive relationships throughout a company as well as the resulting creativity that occurs when minds meet.

MarketingProfs offers actionable advice to run a meeting that doesn't waste your time or your clients' time.

    •    Set a clear agenda when you schedule the meeting. The best outcomes happen when everyone is fully prepared to discuss the topic at hand.

    •    Ask for full participation. Instead of letting one or two voices dominate the conversation, create a collaborative environment in which all ideas are welcome. "Encourage everyone to speak up," he suggests, "but respect those that require time to process what they're thinking by not putting them on the spot right away."

    •    Don't lose track of time. According to Stephens, you should set a limit—and stick to it. "When the time is up," he notes, "the meeting is over. If you didn't accomplish [your] goal you'll plan accordingly next time won't you?"

    •    Establish what each participant will do next. Make everyone accountable by distributing an immediate summation of each team member's responsibilities.

I would recommend adding an area to your business communication strategy or strategic plan that deals with internal interaction and meetings. Establishing best practices for regularly occurring meetings will foster positive communication and increased productivity.

Accounting tips for beginning a business (while keeping your day job)

Friday, February 19, 2010 by Laura Colar

Just starting out and setting things up like accounts payable and receivable? Simply trying to get a handle on things? You need to get some accounting help or get an accounting strategy in place. There are few basic things listed below from the blog Less Everything that you can use as parameters to get yourself organized and off to a good start. We have two words for you: sole proprietor.

Keep it simple - This means sole proprietorship. Opting for this form of ownership means less complexity when it comes to communication, corporate filings and the IRS.
Concentrate on building your business and not on the IRS. As a sole proprietor, the IRS will not even know you exist until after you file your first personal income tax return.
Over 90% of small businesses fail or change ownership within the first five years. Plan your business to thrive but if it fails under a sole proprietor you simply stop doing business.
How do you get paid as a sole proprietorship? Simply take the money out as a draw. No payroll taxes or quarterly forms needed. Most start ups lose money for the first several years, so keep your day job to pay your living expenses.
After you pass the five year hurdle, then you can talk with a CPA about another entity type that might save you taxes. Again a simple bookkeeping entry transfers all of the business assets from the sole proprietorship into the new entity without any tax penalties.

We agree with the writers at Less Everything but don't want you to think that one size fits all when it comes to choosing a legal entity for your startup. While a sole proprietor can be a great fit for many if not most startups, keep in mind that there are many other things to consider such as having multiple owners in the business, potential liabilities, the need for investors (today or the near future), the nature of your industry or business, protecting your personal net worth, and on and on. Those entrepreneurs with business plans for small business startups can best get the legal and accounting advice they need to choose the right entity.

Help yourself out by getting great advice and keeping it simple.

Miller High Life

Friday, February 12, 2010 by Laura Colar

Post Super Bowl several discussions are bound to occur. Why the team who won was so deserving. What decisions were made by the opposition that led to their downfall. What the future looks like for the league. And inevitably, what everyone favorite commercials were.

My favorite this year was Miller High Life's spot that gave four small business owners a chance to shine and show off their humor. What a great idea! To begin with, this concept of buying a spot and advertising for another entity (let alone advocating for small businesses) generated more media attention and exposure than any of the other commercials did buy simply airing commercials during the big game. Because of the gesture, Miller Coors have probably solidified some passionate brand ambassadors for life.

Big business advocating for small business. We certainly don't see that a lot but when it happens, we should publicize it. I believe Miller Coors' efforts are proof that corporate America realizes that an essential part of our economic recovery will be small businesses launching, surviving, growing and thriving.

This is a truth we believe in at Milestone Advisors which is why we do what we can to extend accounting advice, facilitate the market research process, build product development business plans and equip thought leaders to bring to market new products and services, fulfilling their passions and dreams.

So, we tip our hats to Miller Coors and their Miller High Life commercial. We hope to see more advocacy for small business in the future.

Ways to Improve Cash Flow in This Economy

Monday, February 8, 2010 by Sarah Loughery

Everybody is asking these days, "How can I get my customers to pay quicker in this economy?" Here are some things that some Indianapolis companies are doing with the accounting advice from Milestone Advisors' part-time bookeepers and part-time controllers:

1. Email invoices rather than mailing them. (You'll get the added benefits of lower administrative costs and becoming green!)
2. Offer discounts for Accounts Receivable over 60 days with an immediate payment.
3. Implement new policies that all invoices less than a certain dollar amount are to be paid immediately via credit card.

These are just some changes that can help your company's cash position that can be implemented quickly.

Is a part time CFO for me?

Tuesday, February 2, 2010 by Laura Colar

Running a business is hard. Developing an original idea and building an organization upon it requires passion, dedication, time and creativity. Not only that, those four intangibles must flow forward continuously, providing you with a steady stream of inspiration and motivation. This doesn't leave a lot of time for all the additional nuts and bolts of running a company including hiring, firing and communicating with employees, managing vendor relationships and (many entrepreneurs least favorite task) balancing the books and projecting future growth.

Odds are, you don't have time handle all your company's finances. Maybe you have time to cut checks and perform a daily assessment of your bank account. Maybe you have time for more than that. The bottom line remains, more often than not, entrepreneurs are idea people, not numbers people.

Even if they do enjoy calculations and percentages, odds are they don't have the level of expertise that will allow them to compare their company to current market research and trends, build a sustainable financial model and project for the future (creating reports that enable you to make decisions that will ultimately allow your company to grow).

Many startups and small businesses can benefit from using the services and expertise of a part-time CFO. They can provide you with important information and advice to aid in decision making that leads to growth, avoid numerous business accounting pitfalls and aid in problem solving efforts positioning your operations for as much success as possible.

Our outlook for 2010

Wednesday, January 20, 2010 by Laura Colar

As we look ahead toward the coming year and beyond, we find ourselves full of optimism. By listening to our clients and responding to their evolving challenges, we have recently expanded our service offerings, some of which are already beginning to see traction. Several recent engagements have stemmed from our ability to supply clients with more functionality and expertise in additional areas and as their needs grow, we are able to meet and fulfill each one.

We’re also beginning to see signs that the economy may be turning. The credit market is beginning to loosen and over the course of the next year, we expect to see lenders relax their lending practices to provide small businesses with the working capital they need to flourish. Additional factors, such as manufacturing and factory orders also seem to be on the upswing and unemployment rates have begun to stabilize. All good news!

While the above are indicators that, as a nation, we’re embarking on the proverbial road to recovery, we still proceed with an element of calculated caution. Many operations have been weakened by the events and turmoil that surround the past few years and we anticipate bumpy roads still ahead of our clients and in turn, ahead of us as well. However, this also provides us with a great opportunity to help you navigate out of these difficult times, demonstrating our value and making our services more indispensable than ever before. Our desire is to become your long-term partner, assisting you in whatever aspect of business you may need advice.

As you look to 2010 and even further, what challenges or successes do you anticipate for your company? Is it time to reassess your business strategy? To revamp an old marketing strategy or build a completely new product development strategy? Maybe you're taking a look at your old accounting practices and finding inefficiencies you'd like to change. Whatever your situation may be, we can help.

We want to leave you with one word that embodies Milestone Advisors’ vision for 2010 and that is opportunity. As entrepreneurs, you know how to look for opportunities in every situation. We look forward to seeking it out as well as help you find and capitalize upon it.

Three reasons to start a business in 2010

Tuesday, January 12, 2010 by Laura Colar

I think by now my love for Inc. Magazine is well documented here. If you're an entrepreneur, a business person or a professional in any field, I think it's a must-read. With an abundance of advice and first person accounts of launching start ups, it's a perfect tool to learn how to begin, manage and grow a company. If you're on the employee side, what better way to excel in your job and current responsibilities than to understand all the various intricacies your boss may be dealing with on any given day. Reading Inc. can help you become an idea person, helping dream up innovation.

OK, rant over.

Inc. recently posted three brief points from Eric Ries on why you should start a business now (and money isn't one of them). They are as follows:

Change the world

Make your customers' lives better

Create an organization of lasting value

If you are considering starting your own business, the above are all great and noble reasons. Just be smart as you attempt to 'change the world' - write a thorough business plan or business strategy before your launch, including a financial model. Strategy and planning are everything and when clearly defined, will ensure success.

Stats on cutting holiday festivities

Monday, December 14, 2009 by Laura Colar

Over the past year in particular we have seen endless cost-cutting measures being taken by companies both large and small. In lieu of accounting advice, some have chosen to simply eliminate employee appreciation programs, celebrations and bonuses. Others have analyzed their cost and set out to find more cost-effective, creative means to reward employees and boost morale.

A recent Indy Star article discussed some numbers and what's being cut this holiday season. Below are some of the key findings:

62% of companies will have holiday parties this year, compared with 77 percent in 2008 and 90 percent in 2007.
30% of companies will spend less on holiday parties this year.
36% of companies are catering a meal this year, compared with 57 percent in 2008.
31% of employees at small businesses will get end-of-year bonuses, compared with 44 percent last year.
35% of employees at small businesses will get holiday gifts, compared with 46 percent in 2008.

While cutting extra expenses like holiday parties and gifts can be a good idea to save in areas of discretionary spending, keep in mind, measures like these can also affect employee attitudes. Happy, satisfied employees tend to more effective workers. Make sure whatever cost cutting measures you are taking, you're also making an effort to reach out to your staff and show you appreciate the work they do.

Want to extend cost-cutting habits beyond the holidays? Get in touch with Milestone Advisors. Our experienced accounting staff can look over both your accounts receivable and payable, combine that information with market forecasting and a review of your current financial model to develop effective accounting strategies that will amount to significant savings year round.

Rebuilding a business

Monday, November 23, 2009 by Laura Colar

Duane Draughon's military experience trained him to be loyal, under any and all circumstances, to his original mission. And in a recent article in Fortune Small Business, he claims that training is the only reason his small business has survived.

Draughon's story is one of quick success and then a series of unfortunate events that crippled his business and caused his net worth to plummet. First Draughon's business partner made an unanticipated exit from the company, a devastating loss as he was one of company's best sales people and also served as a crew chief (Draughon's company builds patios). This also meant all the day-to-day responsibilities of running the business fell on one person's shoulders, the result? Draughon began to mismanage costs for the company and before he knew it, he and the company were broke.

Duane's position is one that thousands of entrepreneurs have found themselves in. Just by its very nature, starting a business or running a small company involves massive amounts of risk. Unexpected issues constantly rear their heads whether that be disagreements with business partners, malfunctions with product production, legislation interfering with operations or turmoil in financial markets.

A part time CFO would have helped Draughon a great deal. Being able to sit down with someone who has knowledge of the financial markets as well as the background to offer accounting advice would have helped furnish Duane with the perspective and financial expertise he needed to still manage the business well.

Eventually, Draughon did meet with a management consultant and a financial expert to assess where his company stood and create a business strategy to move it forward. Outside help boasts expertise the business owner may not have as well as an impartial third party who isn't emotional about the success or failure of the venture. Both of those aspects make business consultants a great option when seeking a way out of a sticky situation.

Is bartering a good idea?

Thursday, November 12, 2009 by Laura Colar

I'll trade you this accounting advice if you give me that office remodel. I'll provide you with part-time controller services if you give me IT support.

With the present economic state it’s no surprise to hear that companies are seeking non-traditional means of distributing their own goods and services. Say you’re a consumer electronics retailers with extra inventory – there are now ways to unload stock and you don’t have to chalk up to a complete loss.

You can do so privately of course, in one case I am familiar with, a PR firm offered their publicity services to a Web design and Internet marketing firm in exchange for a new Web site. However, there are now official barter exchanges. Several Web sites, featured in a recent piece by Inc. magazine, promote online barter exchanges to encourage mutually beneficial trades for organizations.

It could be a good option for your small business. Be careful though, the piece warns that the systems that have been set up are far more effective when you are bartering with and for services than they are with actual goods.

It’s an option and trend that’s worth considering.

U.S. Small Businesses Administration Announces Changes, Indiana Lenders React

Thursday, October 29, 2009 by Laura Colar

Recently, legislation affecting the U.S. Small Business Administration 504 program has been proposed and small business lenders throughout Indiana have declared their support for the pending changes.  

Traditionally used to allow companies to fund the purchase of real estate, buildings and equipment, 504 loans have been integral in empowering the small business community to create jobs and spur innovation. Under the revised plan, the ceiling for loans will increase from $2 to $5 million and loans for small manufacturers would increase from $4 million to $5.5 million.  

This fiscal year, 1,035 SBA loans were made in Indiana, totaling $266.8 million, a significant drop compared with 1,460 loans totaling $307 million the year before. These proposed changes in legislation have Indiana lenders and small businesses looking forward to the coming year when lending should increase.

More SBA loans this year will provide Indiana’s small business community with the critical resources they need to create jobs and invest in the economic future of the state.  

Here at Milestone Advisors, we have a history of successfully working with SBA’s 504, 7a, and other programs on behalf of our clients. Our experience providing advice for clients concerning corporate finance, accounting help or buying a business has equipped us to help small businesses capitalize on these enhancements. With these changes, we are looking forward to helping more small businesses assess financial projections, determine the right capital structure and assist in obtaining the capital to operate and grow their business.

Wall Street Journal Discusses the Trend of Using Part-Time CFO's

Tuesday, September 22, 2009 by Glenn Dunlap

Startup and early stage companies have often used the services of a part-time CFO. In fact, our Indianapolis consulting firm has been providing these services to entrepreneurial companies for over six years. We were recently contacted, however, by the Wall Street Journal to discuss whether using part-time CFO's was a growing trend not just with early-stage companies but also with companies who would have traditionally had a full-time CFO. Here are some excerpts from the article that they ran today:

Some small-business owners in need of accounting help to balance their books and guide them out of a financial black hole are renting CFOs rather than hiring them. The strategy comes at a time when the deep recession has forced small companies to look for money-saving alternatives that can yield good returns yet avoid substantial overhead costs.

"They're looking for ways to streamline and be efficient as they can," says Glenn Dunlap, a co-founder of Milestone Advisors LLC, a small-business consulting firm in Indianapolis that provides CFO services.

The average annual salary for a full-time CFO in a small- to medium-size businesses ranges from $94,250 to $175,750, according to a 2009 Salary Guide by Robert Half International Inc., a Menlo Park, Calif., staffing services firm that serves the accounting and finance fields. Renting one can be significantly cheaper.

Entrepreneur Bob Compton, founder and chief executive of Vontoo Inc., an Indianapolis-based voice-messaging company, says he has rented CFOs for six companies he has started or been a lead investor in. "To hire a CFO in the early-going is a waste of money," Mr. Compton says. "It's much better to invest that money in engineers and sales people."

For Vontoo, he pays $5,000 a month for the CFO's strategic advice, bookkeeping services and accounting expertise. "It's a tremendous cost-saving," he says.

Click here to read the full article or follow the links to our webpage to learn more about how Milestone's business consultants can complement your management team in all aspects of your business.

IBJ Article Features Milestone Client - Ali Sales Roach, President of Compendium Blogware

Monday, August 10, 2009 by Glenn Dunlap

The Indianapolis Business Journal featured a few "Women in Technology" in this week's issue. We have been fortunate enough to work with Ali Sales Roach, the President of Compendium Blogware. Here's a portion of the article about Ali:

From fellow to entrepreneur
A case in point is Alison Sales Roach, an Orr fellow from 2003 to 2005. She majored in English at DePauw University and was not very attracted to

Compendium President and Co-Founder, Ali Sales Roach

technology.
    “I was more interested in marketing and figured good writing skills couldn’t hurt any position,” said Roach, who grew up in Columbus, Ind.
    As an Orr fellow, she worked for two years at ExactTarget, an e-mail marketing software company, where she was mentored by Chris Baggott, one of its co-founders. There, she became intrigued by “real-life problems that all marketers face: How do I generate a never-ending stream of demand? How do I constantly get new, inbound prospects in front of our salespeople?”
    She left to head online marketing at the local office of RCI, a New Jersey-based resort timeshare network, and then at Cha-Cha, a Carmel mobile search company founded by Scott Jones.
    In 2007, the entrepreneurial spirit struck. She and Baggott co-founded Compendium Blogware, which specializes in blog software and search engine optimization. Named to IBJ’s 40 Under 40 list this year, she is president of the company, which has 35 employees, offices in Circle Tower and 40 angel investors.
    “Getting technology to solve problems is easy when you have lived them firsthand,” Roach said. “You are always in the shoes of your users. So I never really aspired to create technology, but technology was the inevitable solution to the problem of customer acquisition. And the broad exposure I was able to get at ExactTarget as an early employee and part of the Orr fellowship gave me a good sense of how you build a technology company from a business perspective.”

Milestone Advisors, a group of 25 Indianapolis Business Consultants, works with Ali and other CEO's of high growth companies to provide them with strategic planning, developing financial projections, accounting services, and Part Time CFO services. If you are looking for help wth your business strategy, obtaining bank financing, or just need accounting advice, give us a call. We would love to work with you too!

Congrats to Ali on the feature!

Client Success Story - Keller & Keller

Wednesday, July 29, 2009 by Tom Gabbert

Since 1936 the attorneys at Keller & Keller have specialized in the practice area of personal injury, and today, personal injury cases are the AV-rated law firm’s sole focus. With offices in Indiana, Michigan and New Mexico, Keller & Keller is known for being the most innovative and experienced firm of its kind, using state of the art technology to maintain a national presence. Jim Keller and Randy Juergensen have both been recognized by their Indianapolis peers as “Super Lawyers”. This prestigious designation is awarded to only 5% of all lawyers in each state or region.

When Jim and Randy found out they were losing a long-term administrator in their firm, they were nervous about the change. Milestone Advisors’ Sarah Loughery seamlessly transitioned into Keller & Keller’s as their part-time controller and has since streamlined many areas of their accounting services and operations. Sarah has also worked with Keller & Keller to be more proactive in anticipation of year-end tax work, including 1099 processing, and she regularly provides reports to Keller & Keller’s tax accounting firm to facilitate tax planning and compliance.

The firm has also hired a professional employment organization, or “PEO”, which has helped to improve its HR functions while offering better health insurance to employees. In cooperation with the PEO, Sarah has been able to enhance the payroll process, providing a better snapshot of where the firm is spending money. Each month Sarah produces financial statements, maintains and reconciles balance sheet accounts, reviews accounts payable, performs bank reconciliations, and handles 401k enrollments and transactions. Sarah also provides accounting advice to Keller & Keller’s bookkeeper and the New Mexico office manager.

When asked about working with Milestone Advisors, Jim Keller said, “We couldn’t be more thrilled with the arrangement. Sarah’s personality fits in well with our staff. With Milestone Advisors we receive the benefit of learning about other business environments. Milestone leverages their financial accounting expertise in a way that can help any business.”

Milestone Advisors takes care of the accounting operations at Keller & Keller allowing Jim Keller and Randy Juergensen to spend more time doing what they do best, ensuring that their injured clients are fairly compensated.

Visit www.2keller.com for more information about Keller & Keller.

To learn how Milestone Advisors can help you save valuable time to devote to your business, contact Glenn Dunlap, 317-581-1820.

The Year of the CFO? May It Never Be!

Thursday, March 12, 2009 by Glenn Dunlap

I was recently forwarded an article written in The Economist entitled "The Year of the CFO." The colleague who forwarded it to me thought that I would be encouraged because of the Part-Time CFO services that we offer through our Indianapolis business consulting firm.

After reading the article, I can see why he thought I would like it. It talked about how many CEO's would be replaced by CFO's from inside the company. How financial types will rule the board room. How companies will return to strong fiscal policies. However, the article didn't have the intended effect on me.

Now believe me when I tell you that I understand why things are headed toward tighter fiscal policies. Let's face it - when in a recession, you have to tighten the belt. That makes perfect sense and we provide that accounting advice to our clients daily. However, the article goes on to talk about how CFO's who are elevated to CEO's often look at everything through a financial or fiscal lense which may cause them to strip the company of talent and other valuable assets that will be needed to grow the firm.

Difficult times are not only the times to build your financial projections and eliminate costs, they are also the times to review your business strategy to determine what opportunities you have to grow your market share. There might be opportunities to extend your product lines, attract new customers, or broaden to new territories. Let's not forget, it might also be a great time to acquire a weakened competitor or to drive them out of business.

My point is that minding the expenses for your company is only one of your responsibilities as CEO. Use this time to get creative. Recognize that most other companies are feeling like they are against the ropes, too. Getting aggressive might just be your best tactic. Focusing on "below-the-line" expenses might just put you at risk of suffering that knock-out punch from a hungry competitor.

If you are unsure of how to develop your business plan, seek help from your trusted advisor. At Milestone Advisors, we serve our clients with Indianapolis business consultants who can help you with the most complex corporate strategy issues you might face.

Milestone Co-Founder in the News

Monday, February 16, 2009 by Glenn Dunlap

The Indianapolis Star ran an article today talking about my background in entrepreneurial activities and my passion for baseball. Here is an excerpt from the article:

"I'm often asked how I came up with the idea for my baseball tours company, Big League Tours. It's pretty simple, really. Just like everything else in my life, when my experience, passions and opportunities intersect, "big breaks" have occurred.

What led me to start Big League Tours is my background in entrepreneurial activities, my love for baseball and my recognition of a niche opportunity.

My background in entrepreneurial activities began at a young age when my dad encouraged me to mow lawns in my hometown of Summitville. He helped me set a price, ask for the money and realize that when you are providing a service that people need or want, you shouldn't feel like you are selling them anything.

From there I went to Ball State University to study entrepreneurship, which only increased my desire to be involved with entrepreneurial ventures. Starting at the Small Business Development Center in Columbus and later the SBDC in Indianapolis, I counseled and trained small-business owners in all aspects of business planning, startup and operations.

Seeing a need to provide services to entrepreneurs led my co-founder, Tom Gabbert, and me to launch Milestone Advisors in 2003. At Milestone, we advise CEOs on business strategy, corporate finance and management accounting. We have worked with more than 300 companies since our inception and have grown to 25 people."

You can go to IndyStar.com to see the full article. You can also visit MilestoneAdvisors.net to learn more about the business strategy, corporate finance, and part-time CFO or other management accounting advice that the firm offers.

Managing Your Banking Relationship–It Can Either Make You…Or Break You! - Part II

Monday, January 26, 2009 by Jeff Good

3) Understand the agreements that you have signed. Many relationships are soured by misunderstandings or lack of knowledge by the borrower about the terms and conditions of the loan. If you don’t understand the terms and conditions, ask your lender questions. If you are still unsure, seek professional advice. Attorneys, accounting firms, and consultants that have worked with bank transactions can help you understand the agreement

4) Live by the agreement. If you owe your lender financial statements on the 15th of the month, "don’t" provide them on the 16th (or later). Provide borrowing base certificates on time. Provide year-end reviewed statements as required. Whatever the terms and conditions are, none of them should be a surprise to you and they are in the agreement for a reason. The less your lender has to hound you to live up to your end of the deal, the more apt they will be to want to help you in the future.

5) Get to know more than one person at the bank. Very few people will stay in one position at one company for very long. Bankers are no exception. Get to know your lender, the head of the banking division, even the President of the bank. When changes are made within the bank, you’ll have insiders that can still assist you after the transition.

6) Keep your lender in the loop. What’s new in your business or industry? How are you doing regarding meeting your business plan? Any needs for additional capital? While much of banking is based on numbers, there is a very important personal relationship element as well. If you haven’t met with your lender within the last quarter, you have waited too long.

7) You must tell them the bad news, too. This is the hardest rule for most entrepreneurs. The idea of sharing bad news with their lender makes them cringe. But if you have been living up to your agreement, have kept your lender in the loop, and have more than one person at the bank on your side, you will be surprised how they can help you work through bad situations. They would rather know up front and have an opportunity to help than to find out after it’s too late to do anything.

Keep these rules in mind as you maintain your banking relationship, and your bank is more likely to be there for you when you need them most. Either way, if you need assistance with any of your business finances, from buying a business and raising capital, to bookkeeping and paying the bills, and beyond, Milestone Financial Advisors is here to assist you as well.

Managing Your Banking Relationship–It Can Either Make You…Or Break You! - Part I

Monday, January 26, 2009 by Jeff Good

Most small business owners (and many large business owners as well), don’t understand the importance of "Managing Their Banking Relationship". Even if they do understand its importance, few know how to nurture that relationship to the point that it can actually help them grow their business.

The relationship you have with your bank could be critical to the ultimate success of your business. Every business has to weather a few financial storms from time to time, but if your banking relationship is healthy, your business has a much better chance of being around to see brighter days.

So what’s the trick to maintaining a good banking relationship? For starters, follow the 7 rules outlined below. Remember, the best way to avoid seeking a new banking relationship is to wisely manage the one that you have. If you are not a financial accounting expert, some of these rules may be a little intimidating, but they have to be followed to protect that all-important relationship with your bank. If necessary, get some assistance from a qualified Business Finance Advisor or experienced CFO. Avoid getting advice from friends or people that "think" they know what they are talking about. Uncle Bob has ruined plenty of banking relationships already.

1) Know your needs. The bank is there to provide you with capital to support your needs. They are not there to determine your needs. So be prepared. Complete your business plan and include all appropriate financial projections. Determine the capital required and the preferred structure. Then work with your lender to put that structure in place.

2) Plan for (and discuss) the future. Communicate your future capital needs to your lender, not just the needs for today. In other words, don’t borrow money today expecting that in six months you’ll borrow another round of funds without any problems. You may have reached your maximum borrowing capacity. If so, you will come to an impasse with your bank in six months. More importantly, you may not be able to address the business opportunities after you’ve built them.

You’re the Boss; Where do you turn? - Part II

Monday, January 12, 2009 by Glenn Dunlap

Where to Go for Help

So now that you’ve decided to ask for help, where do you turn? Fortunately, you have numerous options. The path you choose will depend on your particular situation: stage of your company in its development, strength and diversity of your management team, available time and money. So where do you start?

First, try to perform an honest assessment of your business strategy and financial plan. What kinds of issues/problems are you facing? What are the obvious symptoms and what might be some of the root causes? Don’t be afraid to involve your management team or other employees – they may have observations and suggestions you haven’t thought of and will appreciate the opportunity to become involved. You might also consider doing some outside research on your particular problem, since it’s likely others have faced the same challenges. Fortunately, there are a variety of articles, books and other sources available on various subjects related to business and the issues business owners face.

The next step might be to seek input from your peers or other business professionals in your community. Others who are not as close to the problem as you are can often provide useful, objective insight into your underlying issues, as well as possible solutions. People to contact might include your banker, an accounting firm, financial planner, consultant or attorney, all of whom have probably worked with other companies with similar issues. You might also want to join a local business group such as the chamber of commerce, a trade organization or a CEO "round table". These groups often provide an excellent opportunity to meet and develop relationships with individuals like you who have experience in running and growing a business.

Finally, if you haven’t already, you should consider developing your own board of advisors. While your board might not be as formal (or as lucrative for its members) as your Wall Street counterparts, it can be just as beneficial to the company. Your board might consist of lenders, attorneys or accountants, as well as other business partners such as vendors, customers, and community/business leaders. A great choice might be an individual in your community who has successfully grown his/her business in another industry and could provide you insights from their experiences. You could also target an individual with certain functional experience that is relevant to your situation. These are both examples of individuals that you could meet thru networking.

Regardless of which course of action you take, the key is to access this information by asking for help. As the CEO of your company, it is imperative that you don’t isolate yourself with nowhere to turn. Instead, seek assistance from others and surround yourself with resources that can help you lead your company to the next level.