Every single month, I sit down with Matt. Most of you don’t know him, but he is a key reason IWBNIN has continued to grow and expand. You see, Matt is our Financial Administrator. He manages all of the finances for our businesses. He and his team manage the regular financial management dealings of a business: payroll, accounts payable, accounts receivables, bank account reconciliation, credit card reconciliation, and governmental filings. However, Matt helps with a monthly task which we’ve found to be vital to our success – monthly cash flow planning.

For our two businesses with employees, we sit down at the beginning of each and every month to plan our financial decisions.

Here is the process we utilize:

1. 12 month rolling plan  We have a rolling 12 month plan. This means at the end of each month, we add a new month at the end of the plan to ensure we are always looking forward for an entire year.
2. Evaluate last month  We review last month’s plan to identify any major deviations – both positive and negative. This intelligence is utilized to continually improve our planning.
3. Plan next month  We make changes to this month based upon known information.
4. Review the next 12 months  We make changes to future months based upon known information.
5. Make business critical decisions  We utilize the cash flow plan to determine when we can spend money for larger initiatives.
6. Live by the plan throughout the month  Once the plan is finalized, the financial team follows it. If an unusual opportunity presents itself or major expense crops up, it generates a conversation amongst company leadership to determine an appropriate course of action.

Here’s how we’ve found the 12 month cash flow planning process to be helpful:

1. Prepare for major financial challenges  As with any business, there are cycles. Some months are higher revenue while other months cause business owners to wonder if their business is going to fail. These cycles can create cash flow crunches if not carefully planned for. Viewing 12 months out allows our leadership to make better decisions.
2. Prepare for known, upcoming non-monthly expenses  This type of planning forces a leader to think longer-term. As a result, known upcoming non-monthly expenses can be accommodated with ease by ensuring appropriate accrual accounts are established. Nothing makes me happier than to know the money is stored up for estimated quarterly tax payments, car repairs & replacement, annual software licenses, etc.
3. Communication  Monthly reviews create a “trip point” that forces communication to happen regarding the financial and general affairs of the organization.

Want to get rid of a bunch of financial headaches? I highly recommending instituting a monthly cash flow planning meeting!

This post is part of a Small Business Series here at the wildly popular JosephSangl.com. Click HERE to read more of the posts in the series.

I love listening to Dave Ramsey on the radio. He’s a JosephSangl.com Financial Hero. I remember a specific conversation he held with a caller who felt they “deserved” a pay raise. When asked why they felt they deserved increased compensation, the caller could not effectively answer the question. They felt an answer of “I deserve it” should be sufficient. Dave responded with this great statement:

“Your pay raise is effective when you are.”

In other words, when you value to your organization and help them generate more revenue or more profit, you will be in position to receive more revenue.

• If you help your company reduce warranty claims, you reduce their operating costs – which leads to more profit.
• If you sell more products at excellent margins, you yield more profit.
• If you are a manufacturing line worker and reduce a specific defect by 50%, you help the company reduce re-work expenses – which leads to more profit.
• If you are a hair stylist and your work is so good that 95% of your business is repeat/regular customers, you’ve demonstrated the ability to secure profit.
• If you identify a way for your company to increase its business in another field, you’ve added tremendous value to that company.

It is the individual who shows up to work every single day knowing their work is essential to the company’s success that helps the company become wildly effective. And money tends to flow toward wildly effective and innovate people.

Questions:

1. How do you add value to your organization? Can you monetize that value? If so, how much value do you bring?
2. How can you add more value to your organization? What idea(s) would help increase revenue and profitability?

This post is part of a Leadership Series here at the wildly popular JosephSangl.com. Click HERE to read more posts in the series.

Having successfully started a few small businesses and acquiring another, I can confidently say that it takes sacrifice to make the dream of a small business come alive.

I worked the equivalent of two full-time jobs for an entire year while I Was Broke. Now I’m Not. launched. I would work all week and then jump into a car and drive to some distant place to speak about personal finances. Usually, I would end up spending more money on gas, hotel, and food than I would receive in income from the event!

As I share in my book, Oxen, you can’t load up a baby ox as soon as it is born, or it will die. Yet, many people do this very thing when birthing their small business. They finance the entire start-up costs and then quit their job as soon as they launch the business – forcing the business to pay them a salary from day one. They “load up the baby ox” with all of the costs of debt, salaries, and rent – causing even great business ideas to collapse before they really had a chance to succeed.

It takes sacrifice. Here are 3 key sacrifices you can expect to make when launching your small business dream.

3 Key Sacrifices Business Owners Make

1. Time With Family  Starting a business is not a 9am to 5pm, 5 day a week job. Curb the impact of this by being very intentional in the time you do have to spend with your family. Another tip is to include them in the work and decisions of the business. For example, I bring my daughter along with me to help with speaking events. She manages the resource table. Better yet, we have the chance to talk during all of the plane and car rides.
2. Money  People who are launching their small business venture will have to invest substantial amounts of money in the hopes of a financial return. There is no guarantee of success. I’ve found that investing my own money into the business helped me be very attentive to business expenses. It seems to be much easier to spend borrowed money.
3. Other Dreams  Because of the enormous consumption of time that a new small business demands, many other hobbies and passions are placed on hold. Saying “yes” to starting a business will mean one must say “no” to other desires.

For those who have successfully started your own small business, what are some other sacrifices you have had to make? Please share in the comments?

This post is part of a Small Business Series here at the wildly popular JosephSangl.com. Click HERE to read more of the posts in the series.

When you are called into a leadership role, you will inevitably face a very difficult situation that requires a hard decision.

And the moment will come when you realize you are the leader who must make that hard decision.

I’ve faced them as the leader of I Was Broke. Now I’m Not. and INJOY Stewardship Solutions.

I’ve had to make them as the leader of my family.

Here’s what I know to be true about this difficult decisions:

• It is no fun at all
• It exacts a pound of flesh from you
• Some people won’t understand the decision
• It never gets easier

I always run these decisions through the following filter:

1. Glean all information I can via conversation and gathering data from everyone and everything involved
2. Prayer
3. Discussion with my bride
4. Conversation with my leadership team

Here are some questions I ask:

• What is the real situation?
• What is the real decision that is needed?
• What is best for my family?
• What is best for the business?
• What is best for all parties involved?

This post is part of a Leadership Series here at the wildly popular JosephSangl.com. Click HERE to read more posts in the series.