Quite a few of our clients are extremely talented and very good at what they do. They work very hard at businesses that involve creativity and innovation. They have a loyal following, and what always appears to be lot of business, and they put in incredible hours working.
But they’re always broke.
If this describes your situation, read on for some case studies on how we changed the dynamics of their businesses.
Cash flow and budgeting
One of the most important tasks a business should do is to develop a budget. Another is to calculate their break-even point. These two tools put together can tell a business owner whether they will be making a profit, just spinning their wheels – or even worse, taking a loss – when running a business. One small business was humming along, billing clients, getting paid, and paying the bills. But at the end of every month there wasn’t anything left over. We came in and did a complete review for them. With the help of the business owner we developed a budget that outlined exactly what his monthly expenses were. He was amazed at what some of his expenditures, such as equipment leasing, was costing. We showed him how to reduce some unnecessary or overpriced expenses so his business would finally be profitable.
Keeping up with inventory
As an artisan, this client is constantly buying and paying for raw materials so that she can keep a high level of inventory. This meant she was always strapped for cash, and it never felt as though she could catch up. We were able to help her secure a line of credit to buy goods so that her flow of cash was stable, and she could afford some much needed marketing and promotion.
Service with a smile
Service businesses have unique challenges when it comes to income. One of our clients, a partnership that offers creative marketing, has taken the concept of “over-delivering” so far that they end up working many hours virtually for free. We helped them devise a retainer fee system that allows their customers to still feel as though they are getting the best value for their investment, while ensuring our client is billing for every hour spent working. And since they didn’t have a bookkeeper to keep up with their invoices and collections, we were able to offer that service to them on an on-going basis.
To hire or not to hire
The two entrepreneurs were successful in their new venture beyond their wildest dreams. They acquired six large contracts within the span of two months and, since they were both already working very long hours, they wanted to add staff. They were considering hiring three new people before they wisely called us in for an analysis. After running the numbers, and comparing the actual cost of hiring employees against the profit they expected from the contracts, we determined that the best solution would be to hire one full time employee and another part time freelancer. This meant they could cut back on their hours and still realize a profit.
Influence in all the right places
A blogger and social media star had finally built her brand up to the point where she could charge for promoting other people’s businesses. She developed a price schedule of different types of promotions she could offer as an “influencer”. But she seemed to have very few takers, and was worried that she might be asking too much. After a little research we were able to learn that her prices were very much in line with her competition, and that her focus should be on letting the market know that her services were available for a fee.
It always pays to have an expert trusted adviser. If you need help understanding the finances behind your company and business decisions, call Neil Miller Consulting at 917.974.6651. Visit our website at www.neilmillerconsulting.com to learn more about how we can help you.