Archive for finances

Easing Your Cash Flow


When you are into a business, what is your main goal? Undeniably, in anything a business does, the main purpose is to gain revenue, profit or return of investments. But how can you do that with ease and affluence? Easing your cash flow is tough, it needs effort and time. You have to work hard for that so you’ll achieve what exactly you want.

Easing your business cash flow can be done in a myriad of ways. The first thing to consider is your industry’s inflows and outflows. What do we mean by this? Inflows are your revenues while outflows are your expenses. So how can you facilitate your cash flow well? Of course, you have to earn more and spend less. Be very practical in purchasing materials that is not necessary in the business. Instead, buy resources and supplies that are beneficial to the company and can be used in a long time.

Another, you should address your customer’s needs. By doing so, you can identify the products and services that needs to be in front of the stores shelves. Because there are instances that customers are mistaken of their needs and opt to buy product that will not address their necessities.   How can you do that? By advertising and marketing your products to them. With this, they can realize that there is more suitable product for their needs.

You must be happy when there are less product stocks in your shelves rather than shelves full of stuffs.  This just only implied that you are successful in selling your goods. Your cash flow will improve more and more if that is the case.

[ Full Transcript Follows ]

Hey folks, Thom Rigsby here, from This week, we’re talking about changes that business owners need to make to improve their business, some of the most common ones, and how they can make them with as least pain as possible, with as little pain as possible. Today’s topic: improving your cash flow. I know all of you can benefit from that, stay tuned, 7 Minutes in the Morning is coming up.

Hey folks, good morning and welcome. This is 7 Minutes in the Morning, it’s your daily dose from me, your business coach, my name is Thom Rigsby. Well, this week, we’re talking about change. You know, change is a hard thing, and Monday, we talked about kind of a framework for making those changes, and how we can make them less painful and more effective when we engage in that, and the number one thing to do is to name that fear — because it’s a fear of change that holds us back, name that fear — and face it head on. So that’s what we’re doing. Today, we’re talking about one of the things that a lot of business owners struggle with, and that’s improving or easing your cash flow. Now, you know, as I’m fond of saying, I’m sure you’ve heard me say it before, “If you want different results, you have to do things differently.” Wishing harder is not an effective method for increasing or easing your cash flow. There are changes that you can make this week that will help your cash flow.

Now, there are two parts to cash flow: income, and outgo. I mean, this is very simple, high-level stuff. If you want to improve your cash flow, you either need to increase what’s coming in, or decrease what’s going out. The one place though that a lot of business owners get tripped up with that is in inventory. Yes, you have to spend money raw goods and materials, or maybe to buy products wholesale, but you need to turn that over as fast as possible, with as little lag time in between there as possible. In fact, there’s this principle in retail called inventory turns. Let’s just use something simple as an example. If I have a box pencils, and I buy those pencils for my manufacturer, I want to get the longest terms on that possible. Maybe 45 or 90 days, maybe, if they’re generous. And I want to buy enough pencils that I’m going to sell them all in that 90 days so that I have all of the cash before it’s time to pay the bill. Now, if you’re just starting out, you’re not going to get 90 days, I’ll just tell you that right off the top. But 30 days, probably pretty standard. In the case of a wholesaler who’s not helping you, maybe 15 days. Now, the temptation is to run out to… I don’t know, Sam’s, Costco, whatever your big box store is, and just buy the pencils there. The problem with doing that is that you’re tying up your cash from day one. So you want to make — you want to extend that period until when you have to pay it. Now, if you do this responsibly, you can do it with credit cards at Sam’s or Costco, you buy on the credit card, you don’t have to pay it for 30 days. That is an effective way to do it. The downside of that is, one, if you don’t sell and you don’t start paying a lot of interest on it, and two, you’re only get 30 days or less. So you only want to buy a 30-day supply, so you have to make more trips, so that’s the downside.

Now, I had to go through that principle to explain the next principle to you. I’ve been through this many, many times. If you haven’t gone through it, just go to, and search for “Paying to Product.” What you want to do is understand your customer’s pains, and then you want to enlist your customer, or enlist your products, and then map your products to those customer pains. Many, many, many times I go through this exercise with my clients, and find out that they are carrying products that don’t solve the customer pain. Now, why is that a problem? Well, as we just went through, that ties up your cash flow. You’ve paid to acquire that product to offer to your customers, and nobody’s buying it. It’s just sitting on the shelf. That’s where we say inventory is money. It’s just cash sitting on the shelf. You’re far better off to liquidate that at cost, or maybe you can take a little bit of a loss, as little as possible, but liquidate that inventory, get it out of there. That does two things for you. If you’ve got a physical space where you’re having to hold that physical product, it frees that space up, and get that cash back into your cash flow. The second thing it does for you though is it gets it out of here, out of your head. So you don’t have to come in everyday, and see all this inventory sitting around and not moving. You know, sometimes it’s impressive to have a big warehouse with a lot of products, and you can bring people in and say, “Oh, look at my products.” And everything that you offer. I look at that and think, “Yeah, look at all that cash you got tied up, sitting on the shelf there.” If you can move it, that’s fine, but if you’re not moving inventory, you got to get rid of it, and the best way to do that is to find those products that melts all the customer problem, and get rid of them. Now, what if you’re a service provider? You provide a service and you don’t have a tangible product that you offer, but your services list is very long. Well, you have to advertise and maintain awareness of those services, and that costs you money. Know those service offerings down to just the ones that fit your ideal customer profile. Now, I want you to raise your hand — and if you’re driving, keep both hands on the wheel. I want you to raise your hand and say, “Aye!” if your ideal customer is anybody with a checkbook or cash in their pocket. Okay, so if you raised your hand, you’re not niched down. You’re trying to serve everybody. When you try to be all things to all people, you can’t really do a good job for anyone. So you got to tighten up that market. So … come off those services that are not meeting your ideal customer’s needs. Now, I can hear the questions already, “Well, I sell some of those, so if I stop offering, I won’t sell it.” Yes, but at what cost? If you’re not meeting ideal customers’ core requirements, then this is just something extra you’re doing over here on the side. The time that you would’ve spent delivering that service, you can now devote back to your core customer needs. Much, much more valuable expenditure of your time. So… I should’ve covered this in the beginning. I apologize, but I’ll cover it right now. I said in the beginning that there’s cash that comes in and expenses that go out. There’s only one way to make money, folks. You can call it whatever you want, only one way to do it. And that is to sell something. If you’re employed, you’re selling your time, and some places, your soul to your employer. If you own a business, you’re selling a product or a service to your customers. So, if you want to increase revenue, you have to sell more. That’s the long and short of it. The unfortunate thing is that most of us don’t like selling. Now, I’ve got plenty of material here on this site,, that talks about ways that you can market without selling. You can maintain awareness of yourself, and your products and services, without feeling like a used car salesman — no offense to any of you used car salesmen in the audience. Be sure just go to the website, look up marketing, it should be in the right-hand side bar there. Click on Marketing and you’ll see a whole list of topics there where we cover that. Now, we talked about inventory, how to reduce inventory, and what impact carrying that inventory has on your cash flow.

Now, the last part of the equation are your expenses. Why are you spending money on that you don’t need to spend money on? I cannot tell you how many business owners I’ve talked to or worked with, as soon as they got their business license, the next stop is at the car dealer. “I need a better car for when I meet clients and carrying them around.” And then they go out and they loosen office. And then they have to have furniture for the office, and a telephone, and Internet, and until what are you spending money that you don’t need to. Now, some .. you have a retail space, you got to have the space and learn to understand that’s part of their business. If you are a service provider, and you have space, do you really need that? Now, you’re tying up money every month, paying for a space. How many times has your customer come to your office? I mean, in my case, I like to share a personal example. I had an office for two years and I realized, I had one customer who ever visit me. It was nice, it was a nice office in a nice building with a nice view, and a nice rent check every month. It cost me money to get out of that lease, but at the end of the day, it was a better expenditure of that money, and that let me put more cash back into the things that actually had a value to my customers. These are all — the reason we’re talking about this is because these are changes you have to make to have you looking at your business, and those changes can be hard. You got a nice, comfortable office, but nobody ever comes to see you there? It wouldn’t be hard to give it up. Think about that though. So if you have questions about today’s topic, I’d love to hear it from you. Send me an e-mail at, or in any things we’ve been talking about this week, love to hear your feedback on those. Now, tomorrow, I’m going to ask you if you’ve picked up on the pattern we’ve been talking about this week. There is one there, just curious if you’ve picked up on it yet. So look forward to talking to you again, and be sure to tune in tomorrow for 7 Minutes in the Morning. Until then, my name is Thom Rigsby, and I’m your business coach.


Finding Financing


This week we have been talking about Business Basics and today we are going to go through financing. Most people attribute the failure of their business to lack of funding. In fact 80% of businesses fail in their first year of operation and most of these failures are attributed to lack of financing. However, I challenge that idea. My own surveys have indicated that most people close their businesses because they either lost their passion for the business or they have decided that it is not a viable venue to continue venturing in. Financing though is a problem that has caused many businesses to have shatter their doors.

Being in a mountain of debt is a very stressful situation that will ultimately lead you to burn up. So, how do we avoid a mountain of debt? Sometimes it is practically impossible to avoid it. In those cases, where does the funding come from? We are going to discuss 3 places where the funding can come from.
1. Bootstrapping.
Bootstrapping your business involves paying for your business expenses yourself. This might include spending all your life savings in your business. How smart is this way? It might be a smart way to go about it but if anything goes wrong, you are done. No savings to fall back on, you are simply wiped out.
2. Loan from the bank.
A more conventional way of getting the funding for your business is getting a loan from a bank. The problem with that is that your business cannot get the loan because it does not have a credit history. You still have to personally guarantee the loan. Your assets will still be at risk. You[DM1] got assets that total up into millions but you just need a couple hundred thousand. Is that a manageable risk for you? The other thing that comes up when you go to the bank is that they want to know things about you. You have to have a good business plan, a good market research and a plan to show them how to monetize your products. They want to know they can be paid back.
3. Investors.
There are two kinds of investors: angel investors and friends and family. If you are thinking about getting to business with friends and family, that’s a very bad idea. This is why; when you get in business with a friend, inevitably you are going to disagree on some things. In lots of cases it’s the end of the friendship though it’s not the end of the business. Now you have to go to work every day and you are financially committed to a person you do not like anymore. It get more awkward with family. An angel investor is a person who someone who comes, looks at your business likes it and gives you the money to get it started. In most cases they want a share in the business, a sit in the board, a cut of the profits such kind of things. They will want a part of your livelihood.

Financing is a tough topic because all of those sources are tough. In my views, I think the best way to reduce these risks is to spread it around. Get little bits of your funding from several sources then after seeing that it’s a viable opportunity approach an angel investor and get started. In a short time you will have got the money to pay their money back and buy that part of the company back.

Business Myth: You Have To Spend Money To Make Money


As with most of the myths we’ve tackled this week, this one has been said so often that it is assumed to be true. The fact is though that while it is possible to make money without spending money… most business owners don’t have any kind of control over spending at all, and they use this trite saying as justification. Let’s have a listen to today’s episode of 7 Minutes In the Morning to hear what Thom has to say about it…

Your Action Steps for Success

  • Take a critical look at your spending
  • Examine each line item and ask if it is necessary
  • Use the 3F Filters (Focus, Finances & Freedom) if you need help