Finance Model

A focus on kids could save your company

Tuesday, May 18, 2010 by Laura Colar

Lesson learned from the recession: parents stop spending money on themselves but are still willing to spend it on their children.

The New York Times recently published an article that features three small business owners who altered their companies focuses and have stayed afloat over the past few turbulent years.

Case study #1
A women's clothing store that started out focusing on hand-made sweaters and women's clothing (not cheap, but not too expensive) experienced a significant drop in sales in September 2008. Stores all around his began closing their doors and their empty display windows goaded the owner into action. What did he notice? Stores specializing in merchandise for children were still doing fairly well. So, he adapted, ordering baby blankets, toys and christening dresses. The result? He's happy to have his doors still open.

Case study #2
Meet a frame shop owner who knew things were going to get rough and began sending out gift certificates to the likes of interior designers, churches and schools. He noticed the main redeemers of the discounts were parents coming in to frame their children's artwork. Capitalizing on parents' desires to show off their kids' creativity now accounts for 25% of the shop owner's business.

Case study #3
Originally a copy store, Desktop USA has always had an adaptive business model, evolving into a shop that sold computers, accessories and could help with repairs. When business began to bottom out, the company started offering tutoring as well as service that teaches kids the ins and outs of the computers they are so attached to for social networking, gaming and homework. With the advertisement, "Can Your Children Build Their Own Computer? Let's Do It Together". Many parents have seen value in equipping kids with technical knowledge believing it will give their students a leg up on others in school.

Only time will tell if these ideas are true solutions for these business owners' woes. However, we can all take away the lesson that often times, adapting and evolving to our environments is necessary for our businesses to survive the bad and continually remain relevant to our customers.

Jack Stack says we're recovering

Friday, May 14, 2010 by Laura Colar

Jack Stack believes the economic recovery is under way. In fact, he asserts it has been for quite some time. He then warns - if you don't have a business strategy or business plan developed and in place to take advantage of the upswing, you may miss it completely.

It may be difficult to believe, particularly in our tiny worlds where we still hear about small businesses struggling for capital or individuals losing their jobs. So, where does Stack get this perception from and what evidence is he using to support it?

"I’ve been speaking eyeball-to-eyeball with entrepreneurs all across the country — in places like Pittsburgh, New York City, Richmond, Va. and Fresno, Calif. — and when I ask them how they did in the fourth quarter of 2009 or the first quarter of 2010, I keep getting responses like, “amazing,” “fantastic,” “record-breaking” and even “best we’ve done in years.”

Yet it seems we're all a little afraid of admitting things might be getting better. Maybe for fear the the worst is yet to come, just as we've allowed ourselves to breathe easy.

But there is firm evidence pointing to companies around the country once again experiencing growth. Stack uses his own company as example, SRC. He admits he had spent so much time reflecting on the economic collapse that when portions of his operations were experiencing new growth, he missed it completely.

Another sign he claims to see -- an increase in lead times, the period ordering something and actually receiving it. This means more and more orders which means more money being spent. Can we get two huge thumbs up for that.

"If you’re still not convinced, do some research of your own. Ask your customers and peers how they’re doing (and tell us in the comment section below how you’re doing). Do your own eyeball-to-eyeball research. Just as importantly, start putting together a strategy to take advantage of the recovery whenever you believe it’s going to hit. If you keep looking in the rear-view mirror and forget to look at what’s headed your way, not only might you miss a golden opportunity to build your business, you might just give your competitors the chance to move ahead of you or, worse, to eat your lunch right out of your hands."

We'd love to hear what you're seeing, hearing and experiencing yourself that either confirms Stack's assertion or proves it wrong. Please share, do you think we're in the midst of recovery? What evidence do you have that supports your claim?

Depending on your answers this might be the perfect time to initiate buying a business that supplements current operations, compiling new financial projections or rebuilding your financial model for the improving economy or to begin the product launch plan you put off when the bottom dropped out of the market. Any way you look at it, it may be time for action!

Listen to the young entrepreneurs

Monday, March 29, 2010 by Laura Colar

At Milestone Advisors, we value input, advice and experience from people in all stages of the entrepreneurial game. Whether they're brilliant minds creating product development business plans or brilliant financial models, we believe learning about experiences on all levels is of the utmost importance.

The popular Web site, Unstrapped, spent the past year reading every entrepreneurial blog in the great digital unknown to pull together a list that highlights the best and most innovative minds ever to dare and begin their own companies.

They rated the blogs based on not only the quality of content but also on the remark ability of what they had to say and their appeal to people of younger generations.

I've included some of the highlights below.

Rise to the top: David Garland
Why: It's an ideal mix of news and trends in education, business, and lifestyle itself accompanied by quick interviews that last just long enough to glean nuggets of truth without boring those of us on the go.

Quick sprout: Neil Patel
Why: Here you'll find all the necessary information and tools to not just succeed in the workplace, but to truly stand out. And it's blunt (something we all can appreciate).

Startup lucky: Aronado Placencia
Why: Need to connect with investors? Here's where to learn how.

Under 30 CEO: Matt Wilson and Jared O'Toole
Why: If what you've needed to get your operations off the ground has been a little push, you'll certainly find it here. Wilson and O'Toole can provide you the motivation or kick in the hind parts to start turning your ambitions into reality.

The list has many more blogs packed with insight, ingenuity and breathes of fresh air to give us all hope that there are countless small businesses and great ideas to fuel future job and economic growth.

It's important we continue to look not just to those who have gone before for advice and inspiration, but also to those who are coming up -- they are untainted by the perils of the business world, they are full of hope and have grown up in an entirely different time than many of us. What has fueled their development as people and more specifically, as entrepreneurs is a different kind of influence and one that should be explored.

Strategic planning, what kinds of questions do we ask

Friday, March 26, 2010 by Laura Colar

Here at Milestone Advisors we truly do it all, number crunching and market analysis to create financial models, we fulfill leadership roles such as part time CFO duties, we create plans and help businesses in the execution as well as tracking the results. Whatever the Indianapolis business community needs, we work to deliver customized solutions.

One of our favorite projects to help clients with is building a strategic plan. Why, you ask? The strategic plan is truly the defining blueprint for the future of any endeavor and we love seeing great ideas come to life as they're mapped out in realistic terms. It's all about clarity. How do we get there?

- We conduct high-level analysis of external elements such as your Industry and Competition.
- We also analyze:
- Core competencies
- Mission, Vision, and Values of your organization
- Business objectives
- Major goals
- Key strategies

Once this 'self-reflection' is completed, an approach to business that is 100% original to you, your vision and company is developed along with actionable steps and plans to put it into place and start generating revenue.

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.

Time to be uplifted

Tuesday, March 2, 2010 by Laura Colar

I am not typically a fan of reality TV. The Bachelor quite literally makes me sick (how can you sincerely fall in love with more than one person at the same time) and I don't think The Apprentice accurately or even interestingly portrays anything. Undercover Boss might be a different story.

Chicago's CBS affiliate recently covered an episode taking place in the city. The owner of White Castle went to work in one of his South Side locations and discovered an entrepreneur.

Jose Gonzalez, a White Castle employee, is shown in the episode to be an extremely hard worker with entrepreneurial spirit and a mind whose wheels never quit turning. My reaction, what a refreshing depiction and discovery.

Gonzalez wants to become a chef and takes culinary classes at his high school and brings his homemade salsa prototypes to the restaurant for co-workers to sample and weigh-in on whether or not he should add more jalapenos. He picks up as many shifts as possible and is thorough while on the job.

All of this caught the eye of CEO David Rife who has awarded Gonzalez with a college scholarship and introduced him to various Chicago culinary professionals all in an effort to make his dream of owning and operating his own restaurant come true.

Yes, entrepreneurs are born from fast food joints. Yes, fellow entrepreneurs who have achieved success have a responsibility to give back. And yes, not all reality TV is terrible.

I believe being an entrepreneur comes with a certain amount of responsibility to help others achieve just as we seek to achieve. It's a small community that contributes so much to the community, nationally and globally. At Milestone Advisors, we recognize this responsibility and seek to do our part by marrying great ideas with the proper bank financing or financial models that will attract investors, etc. Whatever we can do to help others achieve, we do.

And thanks to Rife putting himself in the shoes of his employees and deciding to give something back, Gonzalez now has a world of opportunities open. He may be competition for Rick Bayless in 10 years when Chicagoans are seeking authentic Mexican. He may become a mogul, dispensing business strategy or brand marketing strategy to more young entrepreneurs - all because one entrepreneur gave back. Think about it.

504 loan rates

Friday, February 26, 2010 by Laura Colar

Great News!

The effective rate for bank loans funded in February is 5.55%, a slight reduction from the January rate. Why are we excited? Those are historically low rates that can help you, our clients and other small business owners secure bank financing or funding. On another note, there is media discussion about enhancements to SBA loan programs, including a refinance program, for owner occupied commercial real estate loans coming due in the next few years. These program enhancement proposals are currently in Senate and House legislation. The refinance program is not yet available.

We would say now is the ideal time to start a business. We'd love to see Indianapolis and businesses everywhere taking advantage of these low rates and other opportunities. And we'll be here to assist in developing your financial model, build a business plan and a go to market strategy so you're prepared to visit the financial institution down the street and secure bank financing for your startup.

Inspirational black entrepreneurs

Thursday, February 25, 2010 by Laura Colar

In recognition of Black History Month, Entrepreneur has compiled a list of the most iconic black entrepreneurs in history and dubbed it 'The Soul of Small Business'.

1. Oprah Winfrey (this should have been blatantly obvious)
Her story is incredible, her beginnings meager and her success unprecedented. Oprah reinvented daytime TV and transformed her personality into a brand with sheer innovation.

2. Berry Gordy
Gordy transcended racial lines of jazz, R&B and soul music when he developed the interracial 'Motown Sound' later leading him to found the iconic Motown Records.

3. Madam CJ Walker
The daughter of slaves and no stranger to personal tragedy, Walker developed her own product (a scalp conditioning/healing formula) and became the first female, self-made millionaire in the U.S.

4. John Johnson
The founder of Ebony and Jet magazines, Johnson provided African Americans with their own mainstream media outlets.

5. Cat

hy Hughes
Hughes developed and grew Radio One to the tune of 65 stations after being denied financing by 32 banks.

6. Russell Simmons
Simmons is an icon and attributed with making hip hop an acceptable and often applauded part of America's mainstream pop culture.

7. Magic Johnson
Yep, he's a basketball star. But he's also a smart investor. He's developed movie theaters, restaurants and coffee shops in urban areas in an attempt to revitalize their neighborhoods.

8. Tyra Banks
Beautiful to look at and smart too. Banks has become a media mogul, developing wildly successful TV shows, dabbling in music and movies and creating camps to teach young girls self-worth.

Here's what to take away from their examples.

Oprah is a marketing machine and it's all based on who she is, inserting bits of yourself or your personality into your company's marketing communication strategy or marketing strategy plan may give you that slight edge.

Both Walker and Johnson created something brand new. Innovation will help you lead the way in your industry accompanied by a product development business plan.

Cathy Hughes struggled to secure bank financing and won the battle. It's not an easy process but you only need one yes.

Venture capital is alive and well (and it can do good!), we know this thanks to Magic.

As for Tyra and Russell Simmons, they welcomed new technologies and adopted advancements in the media to launch their brands.

The best place to learn can often be the past.

How much cash should you raise?

Sunday, February 21, 2010 by Doug Allgood

Many entrepreneurs wrestle with this question and may get opposing viewpoints. I have seen recommendations that say you sould figure out what you need, double it, and don't be afraid of dilution. Other views counter balance this approach with caution that you should not take too much investment money too soon. This view is supported by examples of how taking too much money results in pressure to deliver growth before you are ready. Causing a change in focus from creating customer value and building a durable organization to meeting arbitrary business plan goals.

As I work with technology companies to understand how much cash to raise, I suggest a detailed review of the business plan. With the pace of technology change, it is important that you frequently analyze the market potential for your products, the best approach for packaging and pricing, sources of supply, and go to market plans. The analysis of the market, competitors, and cost drivers becomes the building blocks to development of a financial model. The financial model provides the lense to see the potential for your growth and to give insight into how cash would help you achieve the full potential of your business.

Unfortunately, I have not found the easy rule of thumb to how much case to raise. However, I have learned that following a good methodology for strategic planning, having the right financial models, and getting outside expertise will give you the best answers.

Venture Capital deals remains hot with Software Companies

Thursday, February 18, 2010 by Doug Allgood

As Milestone Advisors works with technology companies to determine the best avenues to raise capital, we are excited that venture capital activity remains strong in software technology according to a recent PricewaterhouseCoopers MoneyTree report. For the full year of 2009, venture capitalists invested $3.1 billion in 619 deals, a 40 percent decline in dollars and a 35 percent decline in deals from 2008 when 45.1 billion went into 948 deals. Software remained the largest single industry category in terms of deal volume and second largest behind biotechnology in terms of dollars according to PWC. In the analysis of the software deals, Milestone Advisors has found that valuations for companies with recurring revenue through SaaS software get a higher valuation. As we work to help product development companies with their strategic business plans, we’re consistently seeking ways to leverage the SaaS model in recommending a go-to-market approach for technology products. The recurring revenue model is relevant in many products as a way to help customers conserve cash and can reduce the sales cycle in delivery of the product.

www.pwcmoneytree.com/MTPublic/ns/index.jsp

Business Planning & SaaS

Monday, February 15, 2010 by Doug Allgood

In my December blog post, “Scale Business Operations – Conserve Cash” I discussed Cloud Computing as a consideration for conserving cash. As I assist companies with their business plan and technology architecture, a consideration I regularly recommend for delivering the needed business applications is a Software-as-a-Service model.

SaaS is a model that involves the delivery of software solutions in a form different from the traditional, on-premise client-server solutions that have dominated the software industry. With SaaS, a third party hosts the application and end users access applications over the web. With high speed secure networks, end users enjoy high performance and reliability, while outsourcing the management of and purchase costs of hardware, networks, application updates, backups, database administration and licensing, etc. The net result to the company is a monthly expense that conserves cash and is typically a lower overall cost. The software company who delivers the solutions via SaaS can offer these services more efficiently with economies of scale. Additionally, you benefit from lower support costs because the applications are running on servers they control, without multiple hardware and software versions that must be supported and maintained with the traditional on-premise licensing model.

If you are in a situation where you have outdated technology that needs to be refreshed or have an application that may be on a very old release, I would consider looking for a SaaS solution in your business plan.

Are your corporate assets safe?

Monday, February 15, 2010 by Nicole Wallace

The reality is that fraud does exist in today's business environment, with potentially devastating effects. Uncovering and unwinding fraudulent activities in a company's financial accounting department can be very difficult and many times the business owner will not recoup their losses. How can a small business owner prevent and/or detect fraud? How can fraud be prevented in circumstances where one person is responsible for the finances? How can a business owner safeguard the company's assets?

There are a few steps that business owners can take to reduce the risk of fraud:

Lock your valuables such as check stock, cash, signature stamps, and physical inventory.
Segregate accounting duties such as check writing and signing, receiving and counting inventory, and depositing checks and reconciling the bank statements. If this isn't possible with your current staff, you might consider a part-time cfo, controller or bookkeeper to segregate the duties.
Review third party back-up when authorizing transactions, such as reviewing original invoices before signing accounts payable checks.
Perform background checks and/or check references on all employees and prepare performance reviews to monitor the employees activities.

Unfortunately fraud will always exist in the business world, but with the right business strategy the risk of fraud can be greatly reduced.

Before You Build Your New Product . . .

Friday, February 5, 2010 by Jeff Good

I recently met with the CEO of an early-stage software development company, just to see how things were going. "Things are moving forward", he said, ". . . busier than you can imagine . . ." The good news is that the company had customers - good paying customers, in fact. Like many product development companies, though, they were tight on cash and barely making it month to month. In addition, because many of their products were still in the development stage, they had negotiated a wide range of pricing and payment arrangements with their customers. When I asked about the company's long-term pricing strategy and whether customers would be willing to pay prices that supported a profitable business (given the costs necessary to deliver the products), I got a blank stare. "That's a really good question," he said . . . "I sure hope so."

What a shame that so much hard work and money is often expended without really having a long-term vision for the company's profitability or a well thought-out business plan. As I reflected on our conversation, a few things that might help similar early stage companies came to mind:

Know your market - Having a great product is not enough. Market research is necessary to understand who will buy your product and how much they're willing to pay. Figure this out early before you spend too much time or money building a product.
Understand your cost structure - Just because someone is willing to pay for your product doesn't mean you'll have a profitable business. What does it take to deliver your product - all in? This includes not only the direct costs of manufacturing, delivery, installation, etc., but also the costs of product development, maintenance and overhead. Is there enough profit, given market pricing to cover projected costs? Does the projected profit make it worth your effort personally? As comedian/actor Steve Martin once said, "... it's a profit deal."
Predict your cash needs - Many early stage businesses sacrifice profits early on to capture market share and gain critical mass. This is fine as long as you have the cash to finance those early losses. Having a solid financial plan that carefully models cash flows is critical - you don't want to run out of money!

Of course, there are many other important elements to an effective business plan, but these are a few critical starting points before you get too far down the road.

Why it Makes Sense to Hire a Part-Time CFO or Part-Time Controller

Friday, February 5, 2010 by Tom Gabbert

I often get asked why a part-time CFO or part-time Controller makes sense for an entrepreneurial company. The answer is simple, you get the expertise you need at a fraction of the cost. Most small businesses have many of the same needs to that of a large business when it comes to the finance and accounting function. The biggest difference is that they don’t need it on a full time basis (with a hefty salary and benefits).

At some point in the evolution of a small business, the business owner reaches the decision that he or she needs to get more from the accounting or finance function. Maybe they are feeling like they need better reporting / instrumentation. They may also be feeling the need to prepare financial projections to help them better plan for the future and understand the cash requirements of the business. Maybe it is as simple as feeling the need to prepare a week-to-week cash flow plan that they can follow when cash is tight. It is at this point that I see many small business owners make a classic mistake – they hire a full time person. While the needs are real, the job itself often does not require a full time person. I would suggest that business owners consider the idea of a part-time Controller or part-time CFO to fill the void. By bringing in finance / accounting experts on a fractional basis, a business owner is able to cover the entire spectrum of needs for the business in a much more cost effective manner.

Let's learn from James

Thursday, February 4, 2010 by Laura Colar

Ah, I laugh even as I type it but let's ask ourselves the recent question posed by Inc. all the same, 'What Business Lessons Can We Learn From Avatar'? More specifically, what can entrepreneurs learn from the man behind the curtain (if you will), legendary director James Cameron?

Here are some takeaways...

It took Cameron 10 years to make Avatar. Sure, some startups launch quickly and the money follows soon after. That's rare, building something substantial that stems from your passion and results in a quality product takes time. Long term thinking will benefit you and your company.

Cameron first conceived and wrote Avatar in the mid '90s. His vision was incredibly detailed and in effort to stay true to the original concept, he waited years to raise the funding necessary to do so. Getting your own vision to stick to will provide you with the fortitude needed to execute and achieve your goals.

The film has grossed an estimated $1.6 billion thus far and is still in theaters. It cost $500 million to make. The takeaway, invest. There's a time to be thrifty and there's a time to spend money in order to make it. You just need to figure out what time it is for your operations.

We're not suggesting you throw your financial model out the window, but the way Cameron has handled this blockbuster hit could be incorporated into your current business strategy, new product positioning or global marketing strategy.

He thinks big, he acts on passion and he most certainly gets results.

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.

Market Research Not Important? Think Again.

Tuesday, February 2, 2010 by Glenn Dunlap

I was approached recently by the CEO of an upstart software as a service company to consider helping his company develop a corporate finance strategy and raise the requisite capital. We talked at length about the application that the company had built, the customer base, the channels that the company sold through, and the market opportunity. We also talked about some of the obstacles that the company faced in order to be successful.

It appeared to me on first blush, that while the product was a great solution, the "problem" wasn't painful enough to the prospective customers to cause them to beat a path to the new application or even make the purchase if proactively presented with the solution. But that was only my first reaction and I've been wrong before. We needed to dig a little deeper.

I offered to review the business plan and bring in our part time CIO to help assess the technology and the opportunity. But before we had received the information for our discovery process, we received an interesting call from the CEO.

The company had decided to put everything on hold. Everything. The board had met over the weekend and decided that it would take too long to pull together the necessary funding to continue the next phase of the product development plan. The other option would be to attempt to grow the business organically but they didn't feel that could be done successfully either.

What initially appeared as an incredibly large target market was actually not nearly as large as thought. The challenge? The pain factor, or lack thereof, that I mentioned before. I was afraid of that...

It's difficult for early stage or startup companies to consider spending time or money on market research - largely because both resources are so scarce. The other concerns are that asking prospects for feedback and input could "let the cat out of the bag" too early, cause challenges with meeting deliverables, create competitors, or put intellectual property at risk.

All of these concerns are legitimate and should be addressed and treated with caution. However, the risk of spending time in production or development ahead of completing a thorough market research process can cause greater problems down the road.

If you have a great idea that you are considering turning into a product or business, work with an individual or firm that can provide you with the market research services to support business plans for small business. You'll be glad you did and you'll be better positioned as a result.

The Indianapolis Colts: A model franchise

Monday, February 1, 2010 by Laura Colar

I would most certainly be remiss if this week I didn't find a way incorporate the Super Bowl bound Indianapolis Colts in a blog post. Being an Indianapolis consulting firm that works side by side with entrepreneurs and business owners to build strategic business plans, develop actionable financial models and conduct extensive market forecasting, the Colts are actually a great example of how to seamlessly run an organization, setting it on a path to the ultimate goal. While for the Colts this means heading to Miami to play for the Lombardi Trophy - for local businesses it means profitability and sustainability, two concepts you can easily learn from the leadership of the Colts organization.

They plan well - detailing what decisions should and will be made in given situations (i.e. the seamless transition from Tony Dungy to current coach Jim Caldwell). They conduct extensive research to inform these decisions (for example, look at their draft history and the outcome of last year's picks). They also know when to lead and even more importantly, when and how to delegate.

Over the past few weeks, several pieces have been published profiling the Jim Irsay and other leaders within the Colts organization including a piece in USA Today and one in Sports Illustrated. After reading through these and hearing people discuss even more, it's clear business owners can take a cue or two from Irsay and other involved with the Colts to achieve their dreams.

Now let's go Colts!

Stanley Bing brings it again

Friday, January 15, 2010 by Laura Colar

In one of his more recent posts, the always opinionated columnist for Fortune starts out discussing sleep patterns. He reminisces about when he was a young professional just starting out, he firmly believed he required a full eight hours of sleep in order to function well on the job. If he didn't get it, he just knew deep down his productivity was going to suffer.

Now he points out that his job requires him to consistently switch living, functioning and yes, working, between two timezones. Therefore, he has learned to work effectively and produce desired results without the famed and restful eight hours. He then makes this assertion:

"I may be wrong here, but I think most of senior management, in corporations and governments alike, function on something like this very same sleep schedule. Work all day. Stay up late. Get up early. I wonder what it does to our decision-making processes. Actually, I don’t have to wonder. I know what it does. It makes people a little bit grouchy, more impatient, more solution-oriented, with shorter attention spans and a greater need for visual, auditory and sensory stimulation. We are never tired. We are always tired. And if we stop moving forward, we sink in the water, like sharks. They don’t sleep much either, do they. Maybe that’s why they’re one of the few species to survive while so many others have fallen to the wayside. And why they pretty much run any corner of the ocean they choose to inhabit, come to think of it."

I think he's right and I like the analogy here. That's why entrepreneurs succeed. They're the people whose passion burns so hot, they can't sleep at night and instead are up working on a global marketing strategy for a product launch plan that details a new brand no one has ever heard of. These are also the people who drive the economy and why America as a whole can be the global competitor it is - we can't concentrate on tonight's Leno when we know there's an organizational development strategy that needs to be laid out. During Sunday's sermon we're running through our company's numbers and reminding ourselves that a new finance model needs to be created. The wheels are always turning, the desire to achieve is a constant.

So yea Stanley, I like it. We're sharks.

Boost your financial IQ

Thursday, January 14, 2010 by Laura Colar

Do you cringe when the time rolls around to deal with your company's numbers? Do you have a vague or general understanding of terms like accounts receivable and payable, inventory and equity but if you needed to pull together a comprehensive analysis of all of them combined you might be lost?

Many managers and entrepreneurs who run their own businesses face this issue - an overall deficiency in basic financial knowledge that prevents them from fully contributing to any discussion that takes on a financial tone or deals with financial strategy.

It may be a good idea to try and increase your financial literacy - taking a course in corporate finance or asking someone who you trust and may be more financially savvy to mentor you. Another idea is to find others within the organization who may need to build the same skills, you may be able make taking a class a company-wide event (it won't hurt for everyone within your company to have a working understanding of these concepts).

The other option is to bring in someone who can offer that C-level expertise as a CFO. Renting a CFO can allow you to benefit from someone else's years of experience dealing with corporate finance, bank funding, financial forecasting and finance models - without the large price tag of hiring a full time executive.

Regardless of the solution you opt for, it's important to boost your financial IQ or bring someone else aboard who can help you do so.