How’s your cash flow? | Issue #156
How Getting Cash Flow Right Will Help Your Business Grow
‘Revenue is vanity, profit is sanity, cash is king.’ Heard that phrase before? It’s probably familiar to you, particularly the last bit about cash. If you’re wanting to grow your business, you need money. Because growth eats cash. This can be a big challenge for CEOs. Assets and liabilities are what you owe, equity is your book value and you can’t pay the bills with profits. You need cold, hard, accessible cash.
The pandemic has brought this into stark relief. Businesses with cash reserves have weathered the storm far better than those without. More than that, they’ve taken advantage of new opportunities and pivoted quickly to maximise their return. In his book, ‘Great by Choice’, Jim Collins looks at smaller businesses and their return on luck. A lot of it’s due to cash reserves. At any one time, you should have at least three times your monthly costs in cash, available and ready to go.
If you’re nodding your head, it’s time to take a step back and look at this critically. How exactly does money move through the system of your business? And are you missing tricks that could fund your future growth?
How to Build an Effective Commercial Sales Team in the Information Age with Steve Schrier
If you’re wondering what you can do to improve your sales function, but you’re not a salesperson yourself, then don’t miss Steve Schrier on this episode of The Melting Pot.
Steve knows sales. He’s been a salesman, he’s run sales, he’s consulted on selling. His focus isn’t on transactional one off sales, he sees sales as more deal making, consultative selling, doing deals in negotiating. In particular, as the business world moves towards an annual or monthly recurring revenue model with longer customer life cycles, rather than one off deals, Steve decided to help people get their sales function in order to write a book about it.
Build Your Sales Tribe is a step by step guide for non sales managers, i.e. not salespeople, who are looking for a commercial structure to take their business on a high growth path and need to know everything about building and managing a sales organisation.
In this conversation, Steve shares a little bit about his background, but the chat is mainly about the things he felt compelled to capture in the book, the things that non sales people wouldn’t know, but need to know to grow their business in the Information Age.
This is a fantastic conversation with Steve, we’re sure you’ll enjoy it as much as we did.
You might think you know what it takes to lead a happier life… more money, a better job, or Instagram-worthy vacations. You’re dead wrong. Yale professor Dr. Laurie Santos has studied the science of happiness and found that many of us do the exact opposite of what will truly make our lives better. Based on the psychology course she teaches at Yale — the most popular class in the university’s 300-year history — Laurie will take you through the latest scientific research and share some surprising and inspiring stories that will change the way you think about happiness. iHeartMedia is the exclusive podcast partner of Pushkin Industries.
My company, Happy, was not in happy shape! Sales had flatlined over 5 years. We were making a substantial loss. We had enough in the bank to last just 6 months. And we had parted company with the M.D. of our largest department.
There seem to be endless studies about the impact of Hybrid Work. Microsoft’s most recent study, supported by academic studies, shows a significant decline in cross-functional communications when people work from home. And we have all read the studies about Zoom fatigue, the need to get fresh air, and the importance of physical activity during our stint in the hybrid work environment.
Early in the pandemic, I received an e-mail from a reader who embraced my writing about the importance of deep work and the need to minimize distractions, but was thrown by my use of the term “productivity” to describe these efforts: “The productivity language is an impediment for me.” Intrigued, I posted a short essay on my Web site that reacted to her message, proposing that the term “productive” could be salvaged if we define it more carefully.
Who needs investors? More than two generations ago, the venture capital community- VCs, business angels, incubators and others -convinced the entrepreneurial world that writing business plans and raising venture capital constituted the twin centerpieces of entrepreneurial endeavor. They did so for good reasons: the sometimes astonishing returns they’ve delivered to their investors and the astonishingly large companies that their ecosystem has created. But the vast majority of fast-growing companies never take any venture capital. So where does the money come from to start and grow their companies? From a much more agreeable and hospitable source, their customers. That’s exactly what Michael Dell, Bill Gates and Banana Republic’s Mel and Patricia Ziegler did to get their companies up and running and turn them into iconic brands. In The Customer Funded Business, best-selling author John Mullins uncovers five novel approaches that scrappy and innovative 21st century entrepreneurs working in companies large and small have ingeniously adapted from their predecessors.
In all walks of life, we constantly make decisions about whether something is worth our money or our time, or try to convince others to part with their money or their time. Price is the place where value and money meet. From the global release of the latest electronic gadget to the bewildering gyrations of oil futures to markdowns at the bargain store, price is the most powerful and pervasive economic force in our day-to-day lives and one of the least understood. The recipe for successful pricing often sounds like an exotic cocktail, with equal parts psychology, economics, strategy, tools and incentives stirred up together, usually with just enough math to sour the taste. That leads managers to water down the drink with hunches and rules of thumb, or leave out the parts with which they don’t feel comfortable. While this makes for a sweeter drink, it often lacks the punch to have an impact on the customer or on the business. It doesn’t have to be that way, though, as Hermann Simon illustrates through dozens of stories collected over four decades in the trenches and behind the scenes. A world-renowned speaker on pricing and a trusted advisor to Fortune 500 executives, Simon’s lifelong journey has taken him from rural farmers’ markets, to a distinguished academic career, to a long second career as an entrepreneur and management consultant to companies large and small throughout the world.
MEANINGFUL ACTION FOR MONDAY
Take a new approach to your 1:1s
If you’re looking at ways to improve your 1:1s with your team, consider this approach. Next time you’re sitting down with them, ask them four questions. 1) Yesterday – were you an A, B or C-Player? 2) Last week – were you and A, B or C-Player? 3) The same question for last month 4) And the same for last quarter. You will then know if your perception of reality is the same as theirs. And if they’re clear about what they’re supposed to be doing and what you can do to help them. Then they need to be clear about what objectives to set themselves in the next quarter, so that when they look back they’re not making it up. This can be challenging but it works.
Conducted in The New Forest, away from the uproar of the everyday commercial world, the Scaling Up Made Simple Workshop is presented by Scaling Up Coach, Dominic Monkhouse to allow you the mental space to look at your business afresh – to recognise your strengths, your weaknesses and your opportunities. The workshop is your first step in the process of identifying and addressing the real challenges confronting your business. You will receive practical guidance in the essential skills that underpin manageable growth.
Quote of the week
“Entrepreneurs believe that profit is what matters most in a new enterprise. But profit is secondary. Cash flow matters most”Peter Drucker
Dominic offers business coaching and management development, strategy planning and organisational change, using tried and tested methods to launch your organisation onto an unparalleled growth trajectory. His programme is a function of his broad experience, his deep expertise and a proven process used by over 2,700 firms worldwide.