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“Small Businesses’Mission Critical:
Understand It, Plan and You’ll Prosper”
Susan Caldwell, Area DirectorUniversity of Georgia - Small Business Development Center - Augusta
[email protected] / www.georgiasbdc.org
TechNet Augusta: Small Business Workshop11 Sep 2013
Federal Contracting Opportunities
Myth Reality
Investment:• Time• Money
?
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Source: American Express 2013 OPEN for “Government Contracts Survey: Trends in Federal Contracting for Small Business”3
• Firms with 10 employees, on average, spent just $37,172
• Firms with less than $250,000 in revenues invested $26,115
Prospective contractors must have: Adequate financial resources to perform the contract, or the ability to obtain them-- $$ The necessary organization, experience, accounting and operational controls, and
technical skills, or the ability to obtain them -- $$ Necessary production, construction, and technical equipment and facilities, or the
ability to obtain them - $$Source: FAR 9.104-1 and FAR 9.104-3(a)
Financial stability – ability to perform a contract, prior to receiving the award • If cash flow problems or other financial weaknesses already exist, winning a
government contract will most likely put a company out of business – not save it• Will your company be there for the “long haul”………
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General Operating Expenses
Results – Delivering on a Contract Requires…….
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“An activity, device, service or system whose failure or disruption will cause a failure in business operations. “
'Mission Critical‘ definition (Source: investopedia.com):
What is “Mission Critical” for all small businesses……….
Their “Cash Flow Management System” (CFMS)
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Cash Flow Management System …………Why “Mission Critical”
• It tracks movement of cash – going in and out of the business
• Determines:
– Funds you will need
– When
– Where you’ll find the funds
• You avoid a cash flow crisis
A business cannot operate in the absence of cash
Profitable businesses do go out of business
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Sales are NOT the same as Cash
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Cash Pays the Bills – Sales Do Not
Month Sales Money ReceivedJan 5,000 0Feb 5,000 0March 7,000 5,000April 9,000 5,000May 9,000 7,000June 8,000 9,000July 6,000 9,000August 12,000 8,000Sept 10,000 6,000Oct 9,000 12,000Nov 10,000 10,000Dec 8,000 9,000
ANNUAL SALES $98,000 $80,000
Bulldawg Consulting and Sales, LLC
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Cash Conversion Cycle
Inventory Days Outstanding(45 days)
A/R Outstanding (45 days)
Cash Conversion (60)
Purchases(Inventory / Raw
Materials)
Pay for Purchases
Sale / Contract Complete
Receive Payment
0 30 45 90
A/P Outstanding (30)
Days
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Involve the right people………
…………………….Internal and External Resources
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"Modernizing for Network 2020 and Beyond: Empower, Connect, Dominate!"
So, where do you fit in the puzzle?
The “fit”………
• You understand your “Mission Critical”
• Develop a financial Plan
• Are on sound financial footing / A financially stable vendor
• Can compete, deliver results and complete your contracts
• Ultimately……….Have the “Power to Prosper”
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Our “fit”………
We are:The University of Georgia
Small Business Development Center
706-721-4545
www.georgiasbdc.org
Our Mission“To enhance the economic well-being of Georgians”
How we accomplish our mission……….By arming Georgia’s entrepreneurs with the tools and knowledge that enable them to prosper and grow sustainable, profitable businesses.
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Provide consulting services at “no cost” to Georgia’s entrepreneurs …we help them:
• Develop financial strategies
• Prepare realistic financial and cost projections
• Avoid cash flow shortages
– Identify how much $$ they will need and when
• Identify sources of capital
What we do…………
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If Georgia’s Entrepreneurs understand their “Mission Critical” and develop a financial plan,
they have the power to prosper and we can say…………
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