Deloitte’s Michael Raynor on Rules for Success1. Better before cheaper2. Revenue before cost 3. There are no other rules

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Deloitte’s Michael Raynor on Rules for Success

1. Better before cheaper2. Revenue before cost 3. There are no other rules

These rules are derived from 45 years of data on 25,000 established publicly traded corporations.

Raynor did not consider small businesses or start-ups… what about rules for us?

Rule 1 of Small Business Survival

Focus On Cash Flow Above *All* ElseEven Above Profit?

Your business can be profitable but fail. Why? Failure to collect on time Mismatch between payables and receivables Cash trapped in fixed assets doesn’t pay bills

• Equipment• Vehicles• Software

Rule 1 of Small Business SurvivalFocus On Cash Flow Above *All* Else

Even Above Debt?Consider Debt As A Tool To Enhance Cash Flow “Good Debt” Is Debt Tied to Activities Which

Improve Quality Produce Higher Revenue Ensures More Cash Coming In Than Going Out

Point of Sale (POS) Terminal Inventory Management Software Sales Tools

Rule 2 of Small Business SurvivalBuild and Manage Your Credit

Big Brother *Is* Watching! (aka ‘Equifax’)He Knows If You’ve Been Bad Or Good…

So Pay Your Bills On Time Request Increases In Your Credit Limits Use The Right Credit Tool

• Banks for Operating Lines• Credit Cards for Short Term Expenses• Lease Financing for Revenue Generating Equipment

Rule 2 of Small Business SurvivalBuild and Manage Your Credit

Credit Tips and Tricks Pull Your Own Credit Bureau Files Twice A Year

Helps Prevent Fraud Ensures You Haven’t Missed Anything Plan To Pay Out Select / Higher Rate Accounts

• Use Home Equity Line to Clear Short Term Debt• Take Advantage of Low Rate Balance Transfers• Never Close An Account You Might Need Some Day

Small Business Survival Rules for Success

1. Cash Flow Above *All* Else2. Better before cheaper3. Revenue before cost 4. Build and Manage Your Credit

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To Be A ContenderFollow The Rules!