View
682
Download
0
Category
Tags:
Preview:
DESCRIPTION
Our CPA firm presented simple steps that businesses can take to survive the current economic downturn and help their businesses soar over their competition. The seminar was presented by Chad & Donna Bordeaux of Bordeaux & Bordeaux, CPAs, PA to the Belmont Chamber of Commerce.
Citation preview
Surviving an Economic Downturn
Strategies to Improve the Financial Life of your Company
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
www.yourcpapartners.com
Chad Bordeaux, CPA, CFE and Donna Bordeaux, CPA, PFS548 Nautical Drive #202
Lake Wylie SC 29710
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
What problems are you currently seeing in your businesses?
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Evaluating the Problem and Finding Solutions
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Managing your cash flow
Cash flow is the first factor that can “sink a business”
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Managing your cash flow
Planning with Budgets and Forecasting
Use budgets to review your expenditures
Use forecasts to look to see where you have the possibility of going
Planning draws the map from here to there
Benchmark your company against the industry averages
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Managing your cash flow
Evaluate all expenses by reviewing your Income Statement each month.
Review the services to see which ones are no longer needed, and research prices and offerings from different vendors to see if there are cost-effective alternatives.
Research prices through the web. Are there better alternatives?
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Managing your cash flow
Examples of operating costs◦Cost of goods or services sold◦Facilities (rent, cost of ownership)◦Payroll (including benefits, bonuses, etc)◦Contract labor◦Marketing and advertising◦Loan repayments◦Taxes (income, personal property,
sales/use, payroll)◦Insurance
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Pick 2!Remember when comparing anything your business buys, you can’t have all three. You pick 2 and the vendor decides the third.
Make sure that cutting costs does not lower the quality of your product or services.
Quality
Price
Service
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Managing your cash flow
The Silent, Deadly Killer in the Business
Inventory
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Inventory Management◦Control ordering function and take physical
counts◦Look at what sells and analyze re-order points◦Negotiate when trying new products◦Look at inventory turnover rate for your
industry ◦Get rid of slow moving inventory◦Require pre-payment for all specialty items◦Watch for restocking fees
Managing your cash flow
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Managing your cash flow
Receivables must be monitored closely!
Receivables can be an indicator of how hard your customers are being hit by an economic downturn, and could provide an early warning that clients are about to cut back on their purchasing.
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Managing your cash flow
Growing pains
When sales increase dramatically, watch out for cash flow problems◦Terms◦Factoring
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Managing your cash flow
Options when you need more cash◦Borrowing – from bank, family,
shareholders Use the right bank for your
business!
◦Additional Capital investment by owners
◦ONLY A SHORT-TERM SOLUTION
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Managing your cash flow
Is using a credit card a good option for your business?◦Keep credit in your business
name whenever possible.◦Get credit established when you
DON’T need it.
Use discipline!
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Revenue Saves the Day
“… this man did not spend a dime if nine cents would do, but the great lesson he was teaching me was that you make money by creating sales, not by pinching
pennies.” - Ken Blanchard & Sheldon Bowles
Big Bucks!
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Revenue Saves the Day
Look at what you sell and how you sell it◦Does the “new economy” provide different uses
for your product or service?Don’t fall into the media trap – you are not
a victim and the economy provides new opportunities if you will look at them.
Consider purchasing your competition or complimentary business
Expand services or Re-Invent
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Revenue Saves the Day
Look at your sales and marketing◦Passive Marketing◦Aggressive Marketing
How much does it cost to get a customer?
Enlist the help of a professional to learn how to sell or have someone sell for you.
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Revenue Saves the Day
Learn more about your competition◦Industry organizations◦Networking◦Have lunch with your competition◦Check out their websites for pricing, service,
and sales ideas
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
“Small Business Owners spend too much time working in their business and not enough time working on their business.”
- Michael Gerber,The E-Myth
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
Why did you go into business?Has your business changed directions
since it started?What has your experience been?What did you expect? Have these
expectations changed?
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
A•Accounting•Bookkeeping•Taxes•Payroll
T•Thing they do best
M•Management•Marketing
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
85% out of business
15% survive
Which group will you be a part of?
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
What can you do to improve your odds?It is tougher now than ever for small
businessesLarger businesses operate differently and
have better information for decision making
You need better information for decision making
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
If you work on your business, how do you know if it was a successful move unless you monitor your progress?
Bookkeeping and reports can create the X-ray but use your accountant to help read the x-ray. They can help you diagnose and put a treatment plan in place for your business.
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
What you need to measure your businessPrompt and thoughtful answers
to your business questionsMonthly financial statements
(balance sheet, income statement, sales analysis) with feedback and key performance indicators
Reconciliation of your bank accounts
Analysis of your business compared to your industry peers
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
What you need to measure your business (continued)Ideas for growing your businessProactive tax planning and
preparation to save you taxesAccurate, easy and integrated
payroll processingRequired reports: payroll, sales
tax, property taxes, income taxes, estimated payments
Prompt resolution of any tax notices
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
If you do not have this information, you are working with one arm tied behind your back.
Consider your strengths and weaknesses Do what you do best and outsource the
rest.Surround yourself with people who know
the answers.
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
Measure what you treasure
Don’t get stuck in the day-to-day activities so that you don’t have time to implement any new ideas
Step back and look at your business from the outside to objectively see what needs to be improved to help it grow
Free yourself up to implement those new strategies
Copyright © 2008, by Bordeaux & Bordeaux, CPAs, PA
www.yourcpapartners.com
Chad Bordeaux, CPA, CFE and Donna Bordeaux, CPA, PFS548 Nautical Drive #202
Lake Wylie SC 29710
We are here to help!
Recommended