Growing your businessManaging Cost, Funding,
Customer Satisfaction

(c) Copyright Expressive Business
Strategies 2007-2010...
Financial Management
• Decide “rules”
– What are your revenue sources?
• What are the “billing items” that make up the rev...
Accounting
• “Keeping the books”
– Bank account
• Handling money
– Availability of money (demand accounts vs saving)

– Wr...
Financial Reporting
• Income statement
– Determines profitability
– Determines amount of taxes to pay

• Balance sheet
– A...
Sample Income Statement

(c) Copyright Expressive Business
Strategies 2010 - 2012
Sample Balance Sheet

(c) Copyright Expressive Business
Strategies 2010 - 2012
Why are these reports important?
• They give you a quick picture of the “health”
of your business.
– You should look at yo...
Cash is King!
• You need to understand “cash” and how
important it is to your business.
– Sales do not pay bills, cash doe...
CASH Flow
Ask your accountant to construct a cash flow
statement. Proper cash management begins here:

(c) Copyright Expre...
CASH Flow defined

• Cash flow is defined as cash
receipts minus cash payments
received over a given period of
time.

(c) ...
Improving CASH Flow
• Collect your receivables faster.
• If you have a product business get extended credit from
your vend...
Debt Collection
•

•

•

When you accept purchase orders and grow your receivables, you
are extending credit to your custo...
A final thought on Cash Flow

• Remember that a REAL
customer is only one that pays
their bills in the agreed upon
time.

...
Funding your Business

(c) Copyright Expressive Business
Strategies 2007-2010

14
Funding your business
• Understand your business, Understand your
market, Understand your risk, understand
your competitio...
Raising Capital is dependent on:
• Government

– Business codes
– Laws
– enforcement

• Culture

– Risk-taking
– Saving vs...
Dependence (con’t)
• Business climate
– Competition
– economy

• Size of deal
• Investor type
–
–
–
–
–
–

Family/ friends...
A word about Partnerships
– Choose Partners carefully
• Do they complement what you do?
• Are they of a like mind?
– Equal...
When raising capital what people
forget….
• Two factors are frequently overlooked by
those raising capital, and weigh heav...
Threshold Amount
• The threshold amount is that sum which is
needed to fund the company until it can
either:
– Raise more ...
Liquidity
• Liquidity is necessary for an investor to profit
from an investment
• Liquidity events could be:
– From profit...
The Funding Deal Structure
• Can alter risk, threshold amount and liquidity
• Should be specific to the investor audience
...
How investors decide….
• Investor decision making is primarily a process of
“due diligence”
• Due diligence is often an in...
Managing Due Diligence
• Do not emphasize your own convictions. These are
opinions. Investors want evidence.
• Use researc...
The Decision
• Remember, investors decide to invest when
“they” conclude the business will succeed, not
when “you” conclud...
Use of Funds
Funding provides cash that fuel
business growth.
Let’s look at ways to grow your
business

(c) Copyright Expr...
Customer Satisfaction: Growing
your business
• Simply defined, growing your business means
to generate more revenue and in...
How do you do that?
1. Gain new customers or clients
2. Increase the profits associated with each
sale, transaction or con...
New customers / clients
• Requires a lot of resources and effort
– Branding
– Longer sales cycle
– … money

• (Obviously) ...
Increasing profits for each
transaction
• Reduce costs
– Must add up everything that goes into the cost of
a business tran...
Repeat business
• Much easier to sell more to current customers
– Relationship is already established
• They know who you ...
Reaching current customers
• You need a method of telling customers when something new
is available, a sale is occurring, ...
Reaching current customers –
Customer satisfaction
• No point trying to reach current customers or
clients if they are not...
Achieving customer satisfaction
“The customer is always right”
•Take their complaints and learn from them –
use the inform...
Retaining existing customers
Do not assume that your customers will keep
buying just because they’ve purchased from you
be...
Survey your customers
Find out about their experience / satisfaction with a
product. Use this information to improve AND t...
Customer satisfaction
•
•
•
•

Provide good value for the price
Provide excellent service
Listen to your customers
Pay att...
Key to Growing your business
• The easiest sale is to your current customers /
clients, keep them satisfied.
• Don’t be so...
Summary
• Business is about risk. It’s a risk to start a business.
• Understanding your risk, market, business and
competi...
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Growing your business managing cost, funding, customer satisfaction - final

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  • {"28":"Most businesses assume that the best way to grow your business is to gain new customers. While you obviously want to do that, one area that is often neglected is repeat business.\n","34":"Examples: Marriott – room location, Hertz – disgusting car immediately substituted, SkyView – complaints about software being hard to use \n","29":"Use roll-out of SkyView Policy Minder for AIX \n","35":"Perceived value example – software maintenance – can’t assume customer\n","13":"It only makes sense to sell something to a customer that you know will pay you.\nDoing work for or selling to a customer where you question if they will ever pay you is not a good business model.\nIt is better to have not done business with that customer at all and instead, spend your time finding real paying customers. \n","37":"Costco – goal is to make customers feel that they have received good value for the price they’ve paid.\n","32":"I get postcards in the mail from sporting goods about running shoes, I get email from several clothing stores, SkyView uses a newsletter, I have a hotel that calls me with vacation specials\n","10":"It is really the flow of money in and out off your business and that flow determines the health of your business.\n"}
  • Growing your business managing cost, funding, customer satisfaction - final

    1. 1. Growing your businessManaging Cost, Funding, Customer Satisfaction (c) Copyright Expressive Business Strategies 2007-2010 1
    2. 2. Financial Management • Decide “rules” – What are your revenue sources? • What are the “billing items” that make up the revenue sources? – What are your expenditures? • What are legitimate business expenses? (c) Copyright Expressive Business Strategies 2010 - 2012
    3. 3. Accounting • “Keeping the books” – Bank account • Handling money – Availability of money (demand accounts vs saving) – Writing down (registering) income • Collecting Money • Depositing money into bank account – Writing down (registering) expenses • Payment Terms • Paying expenses (c) Copyright Expressive Business Strategies 2010 - 2012
    4. 4. Financial Reporting • Income statement – Determines profitability – Determines amount of taxes to pay • Balance sheet – Assets, Liabilities and Equity • Cash Flow – Understand difference between cash and profitability. (c) Copyright Expressive Business Strategies 2010 - 2012
    5. 5. Sample Income Statement (c) Copyright Expressive Business Strategies 2010 - 2012
    6. 6. Sample Balance Sheet (c) Copyright Expressive Business Strategies 2010 - 2012
    7. 7. Why are these reports important? • They give you a quick picture of the “health” of your business. – You should look at your income statement and balance sheet monthly. – You should look at your cash flow daily. • Let’s talk about Cash Flow… (c) Copyright Expressive Business Strategies 2010 - 2012
    8. 8. Cash is King! • You need to understand “cash” and how important it is to your business. – Sales do not pay bills, cash does – Cash is the gasoline that makes your business engine work. – Most businesses fail because they run out of cash through losses or other poor management practices. – 100% of businesses that run out of cash - FAIL!! (c) Copyright Expressive Business Strategies 2010 - 2012
    9. 9. CASH Flow Ask your accountant to construct a cash flow statement. Proper cash management begins here: (c) Copyright Expressive Business Strategies 2010 - 2012
    10. 10. CASH Flow defined • Cash flow is defined as cash receipts minus cash payments received over a given period of time. (c) Copyright Expressive Business Strategies 2010 - 2012
    11. 11. Improving CASH Flow • Collect your receivables faster. • If you have a product business get extended credit from your vendors, maybe 60 or 90 days. • Sell inventory faster and keeping your inventory levels low. Know what sells well and what doesn’t. • Encourage your customers to pay with credit cards. • Give customers cash discounts for paying there bills on time. • Ask customers to pay a deposit or advance for services before you perform them. • Bill customers as soon as you perform the service or deliver the product. (c) Copyright Expressive Business Strategies 2010 - 2012
    12. 12. Debt Collection • • • When you accept purchase orders and grow your receivables, you are extending credit to your customers, make sure you establish credit practices that are 1) fair enough to your customers under any applicable laws, and 2) strict enough to ensure that your business will get paid. Have a set procedure in place that your business will follow if customers don't pay when they're supposed to, i.e. overdue notices, demand letters, and collection notices. A measured approach to debt collection is better in the long run than immediately going to a collection agency or court © Expressive Business Strategies 2008- All Rights Reserved 12
    13. 13. A final thought on Cash Flow • Remember that a REAL customer is only one that pays their bills in the agreed upon time. (c) Copyright Expressive Business Strategies 2010 - 2012
    14. 14. Funding your Business (c) Copyright Expressive Business Strategies 2007-2010 14
    15. 15. Funding your business • Understand your business, Understand your market, Understand your risk, understand your competition… These are all the fundamentals of a business plan. You need a business plan to raise capital. • Let’s look at the process… (c) Copyright Expressive Business Strategies 2007-2010 15
    16. 16. Raising Capital is dependent on: • Government – Business codes – Laws – enforcement • Culture – Risk-taking – Saving vs debtor – Interest friendly • Business type – – – – Product vs service Key asset Large vs small Risk level (c) Copyright Expressive Business Strategies 2007-2010 16
    17. 17. Dependence (con’t) • Business climate – Competition – economy • Size of deal • Investor type – – – – – – Family/ friends High net worth individuals (“angels”) Other businesses (e.g., partners) Professional investors (e.g., venture capitalists) Lenders governments (c) Copyright Expressive Business Strategies 2007-2010 17
    18. 18. A word about Partnerships – Choose Partners carefully • Do they complement what you do? • Are they of a like mind? – Equally yoked versus unequally yoked • Understand the value of what they bring. – Don’t just “go for the money” • Understand how you would resolve conflict should that arise. (c) Copyright Expressive Business Strategies 2007-2010 18
    19. 19. When raising capital what people forget…. • Two factors are frequently overlooked by those raising capital, and weigh heavily on investor decisions: – Threshold amount – Liquidity (c) Copyright Expressive Business Strategies 2007-2010 19
    20. 20. Threshold Amount • The threshold amount is that sum which is needed to fund the company until it can either: – Raise more capital – Ensure liquidity (c) Copyright Expressive Business Strategies 2007-2010 20
    21. 21. Liquidity • Liquidity is necessary for an investor to profit from an investment • Liquidity events could be: – From profits – From the sale of assets – From the sale of the business – From becoming a Public company (allowing the sale of an individual’s stake in the business) (c) Copyright Expressive Business Strategies 2007-2010 21
    22. 22. The Funding Deal Structure • Can alter risk, threshold amount and liquidity • Should be specific to the investor audience • Thus, multiple versions of a Business Plan may be appropriate (c) Copyright Expressive Business Strategies 2007-2010 22
    23. 23. How investors decide…. • Investor decision making is primarily a process of “due diligence” • Due diligence is often an investigation of why a business will NOT succeed. It is a hunt for “horribles” • Your role is to provide independent evidence that “bad things” will not happen (c) Copyright Expressive Business Strategies 2007-2010 23
    24. 24. Managing Due Diligence • Do not emphasize your own convictions. These are opinions. Investors want evidence. • Use research and analysis, the more independent, the better. • Keep a record of all possible concerns • Respond only when prepared • Follow up on all concerns (thoroughly) • Admit risks or unknowns (c) Copyright Expressive Business Strategies 2007-2010 24
    25. 25. The Decision • Remember, investors decide to invest when “they” conclude the business will succeed, not when “you” conclude it will succeed. • Focus on the “lead” • Follow up aggressively, but not obnoxiously • Be flexible • Be prepare for a long process (c) Copyright Expressive Business Strategies 2007-2010 25
    26. 26. Use of Funds Funding provides cash that fuel business growth. Let’s look at ways to grow your business (c) Copyright Expressive Business Strategies 2007-2010 26
    27. 27. Customer Satisfaction: Growing your business • Simply defined, growing your business means to generate more revenue and increase your profits. © Expressive Business Strtegies, 2012. All Rights Reserved.
    28. 28. How do you do that? 1. Gain new customers or clients 2. Increase the profits associated with each sale, transaction or contract 3. Increase repeat business (keep current customers / clients coming back for more) © Expressive Business Strategies, 2012. All Rights Reserved.
    29. 29. New customers / clients • Requires a lot of resources and effort – Branding – Longer sales cycle – … money • (Obviously) If you have a completely new business, you do need to focus all of your efforts in gaining new customers. © Expressive Business Strategies, 2012. All Rights Reserved.
    30. 30. Increasing profits for each transaction • Reduce costs – Must add up everything that goes into the cost of a business transaction • Costs of raw materials, salaries of workers • Don’t forget rest of the costs – for example, rent, taxes, all other salaries, marketing, travel – Be careful not to sacrifice quality!!! • Raise prices (very difficult to do in tough economic times) © Expressive Business Strategies, 2012. All Rights Reserved.
    31. 31. Repeat business • Much easier to sell more to current customers – Relationship is already established • They know who you are • Trust is established • Like your products or services © Expressive Business Strategies, 2012. All Rights Reserved.
    32. 32. Reaching current customers • You need a method of telling customers when something new is available, a sale is occurring, etc – Have them sign up for a mailing list – Gather their email and mailing addresses – Sign up on Facebook or your website – Get their phone number • Use the method of reaching your existing customers that makes sense for your company © Expressive Business Strategies, 2012. All Rights Reserved.
    33. 33. Reaching current customers – Customer satisfaction • No point trying to reach current customers or clients if they are not happy with your products and/or services! © Expressive Business Strategies, 2012. All Rights Reserved.
    34. 34. Achieving customer satisfaction “The customer is always right” •Take their complaints and learn from them – use the information to make your process or product or service better © Expressive Business Strategies, 2012. All Rights Reserved.
    35. 35. Retaining existing customers Do not assume that your customers will keep buying just because they’ve purchased from you before Customers: •Must feel there is a perceived value •Want consistency of products and services •Need to feel listened-to © Expressive Business Strategies, 2012. All Rights Reserved.
    36. 36. Survey your customers Find out about their experience / satisfaction with a product. Use this information to improve AND to know you’re doing the right thing •Offer product reviews on your website •Comment card on restaurant table •Coupon for filling out survey •Email a survey •Call once a service has been completed to make sure it was satisfactory © Expressive Business Strategies, 2012. All Rights Reserved.
    37. 37. Customer satisfaction • • • • Provide good value for the price Provide excellent service Listen to your customers Pay attention to the details – Often it’s the small things that make a difference Ask yourself – would I be satisfied with our customer service and the quality of our products? © Expressive Business Strategies, 2012. All Rights Reserved.
    38. 38. Key to Growing your business • The easiest sale is to your current customers / clients, keep them satisfied. • Don’t be so focused on gaining new customers that you ignore your customer customers / clients © Expressive Business Strategies, 2012. All Rights Reserved.
    39. 39. Summary • Business is about risk. It’s a risk to start a business. • Understanding your risk, market, business and competition helps you with business planning • With a good plan you can raise money to fuel growth. • Grow your business and keep your customers satisfied. • The Result: Success! (c) Copyright Expressive Business Strategies 2007-2010 39

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