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Budgeting & Banking for Small Businesses in Israel

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Budgeting & Banking for Small Businesses in Israel

Download to read offline

"Getting a Grip on Your Business' Financial Health"
"Business Banking in Israel"

Slides from my Nefesh Presentation on Feb 22 to small business owners and the self-employed. Visit my site for more information and tools.

Credits:
Peter Baelish art from AimeeZhou.tumblr.com
Client mapping tool use: Bubbl.us

"Getting a Grip on Your Business' Financial Health"
"Business Banking in Israel"

Slides from my Nefesh Presentation on Feb 22 to small business owners and the self-employed. Visit my site for more information and tools.

Credits:
Peter Baelish art from AimeeZhou.tumblr.com
Client mapping tool use: Bubbl.us

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Budgeting & Banking for Small Businesses in Israel

  1. 1. Getting a Grip on your Business’ Financial Heath Shuey Fogel
  2. 2. Shuey Fogel Principal, Fogel CFO & Management Services Husband & Father of 5 Lower East Side  Jerusalem  Elazar Public Service & Nonprofits Israel Banking Sector Department Mngr, Banking Solutions for Businesses & Nonprofits NonprofitBanker: Online Resource for Israel’s Global Nonprofit Sector Former Chairman & Treasurer of Town Council
  3. 3. Shuey Fogel Principal, Fogel CFO & Management Services Outsourced CFO/Controller: • Internal Fiscal Direction & Management • External Financial Communication • Satellite Office Services • Banking & Credit • Consulting Projects • No-Kickback Referrals
  4. 4. Do I need a long term plan? I don’t know the answers. Do I even know the questions? What tools are at my disposal? Whom can I trust? Our Business’ Health
  5. 5. Uncertainty + Annoyance
  6. 6. Agenda Define Terms Introduce Key Concepts Tools & Best Practices Practical Applications
  7. 7. Defining Terms • Income = Billing = Payments from Clients • Profit = Income - Expenses • Fixed Costs = Constant • Variable Costs = Changing
  8. 8. BUDGET Tool Means to an End The What ≠ The How Be Conservative ≠ Reimbursables
  9. 9. BUDGET The Dream
  10. 10. CASH FLOW Reality
  11. 11. Defining Terms • Working Capital = Available Cash = Net Liquid Assets = Current Liabilities - Assets
  12. 12. CASH FLOW Bank Account The How ≠ The What Reimbursables VAT Destroyer of Companies & Countries
  13. 13. TIP #5 When creating spreadsheets, enter data only once to avoid inconsistency. Fact of Life: Owners Get Paid Last
  14. 14. TIP #1 Simplify life by consolidating payment dates. Paying by credit card can help.
  15. 15. TIP #2 Choose a credit card payment date that matches client payments. Otherwise, the calendar month.
  16. 16. TIP #3 In the early life of a company, cash flow might be more important than saving money.
  17. 17. TIP #4 When creating spreadsheets, enter data only once to avoid inconsistency.
  18. 18. ONE WORKSHEET: Budget Billing Cash Flow
  19. 19. Financial Theory of Relativity:
  20. 20. Cash flow problems can become budget problems when: 1. Increased interest expenses related to credit. 2. Greater income needed to cover cash flow issues.
  21. 21. CLIENT ACQUISITION COSTS Time & Money Increase existing clients Axiom: “Losing 1 unsatisfied customer = 40 new clients”
  22. 22. FINANCIAL GOAL SETTING Planning When to change the status quo? Were original estimates correct?
  23. 23. Defining Terms • Liabilities = Payments for past expenses • Assets = Resource with economic value • Solvent = Assets > Liabilities
  24. 24. LIABILITIES: AM I SOLVENT? Liabilities Outstanding checks Upcoming payments Loan Payments Assets Checks in-hand Cash Credit Line PayPal/Credit Card
  25. 25. COST OF TIME Client Work BizDev Administration Shmoozing Education & Development
  26. 26. PRICING Your Time Product Top Down (Salary/Time) Bottom Up (Product) Payment Dates
  27. 27. CLIENT NET WORTH Income Referrals Additional Value • Timely Payments • Reputation • Volume • Quality of your Work
  28. 28. Calculating Client Net Worth • Analyze both past and present clients • Create common denominators • Convert these commonalities into services, products, or modules • Assign income and expenses • Map clientele • Divide income according to mapping
  29. 29. FROM THEORY TO PRACTICE: Client Net Worth: Client Mapping
  30. 30. STAFF Two Kinds: 1. Salaried 2. Outsourced
  31. 31. STAFF Salaried Pull in 120% Pay by the 10th Mandatory benefits According to law Outsourced Per cost According to contract VAT Per month/contract Quality & Ownership
  32. 32. CREDIT Do I have a Cash Flow problem or a Budget problem?
  33. 33. CREDIT: LINE OF CREDIT Cash Flow Challenges Discrepancy btwn income and expenses Ongoing, occasionally used
  34. 34. CREDIT: LOANS Invest ≠ Pay Yourself Refinance Credit Personal or Business Home Equity (Protect Yourself)
  35. 35. GROWTH Growing our biz to: • Increase profit • Increase quality of life Funding growth with: • Surplus • Credit
  36. 36. • Budget • Cash Flow • Client Acquisition Costs • Financial Goal Setting • Liabilities • Cost of Time • Pricing • Client Net Worth • Staff • Credit • Growth Topics Covered
  37. 37. Making Business Banking in Israel Work for You Shuey Fogel
  38. 38. Israeli Banking Today: • New technology • Rotating managers • Increased regulations • American (IRS) Invasion Accept the possibility of switching banks every 3 to 5 years.
  39. 39. When it comes to service, there are no good banks, only good branches.
  40. 40. DIGITAL SERVICES Check Deposits Shekel Wires F/C Conversions “Super” Branch Online Tellers
  41. 41. Don’t use your brain when navigating bureaucracy. Just do what they tell you.
  42. 42. ACCOUNT NAMES Will mirror company or charity name. Individuals can use DBA (Doing Business As) name. Incoming checks & wires need to match too.
  43. 43. FEE TRACKS The Great Equalizer
  44. 44. FEE TRACKS Basic = ‫בסיסי‬ 10 Automatic ‫ישיר‬ 1 Clerk ‫פקיד‬ Expanded = ‫מורחב‬ 50 Automatic ‫ישיר‬ 10 Clerk
  45. 45. FEE TRACKS Defined as Small Business ‫קטן‬ ‫עסק‬ First Year or under 5 million shekels annually
  46. 46. MULTIPLE ACCOUNTS Optional: separate accounts for independent projects. Banks may not name other accounts as you wish.
  47. 47. INTERNATIONAL TRANSFERS Banks Exchange Brokers Peer-to-Peer Peer-to-Peer in Israel is less popular & perhaps not needed
  48. 48. “It's easy to get a loan unless you need it.” - Norman Ralph Augustine
  49. 49. CREDIT Types: Loan Line of Credit Credit Cards (Checks)
  50. 50. CREDIT Loan = ‫הלוואה‬ Lower Interest Full amount up front Line of Credit Higher Interest Use as Needed
  51. 51. CREDIT Banks treat all credit as the same. Approved one amount, broken up as you wish (kind of). Use/change to your advantage.
  52. 52. CREDIT CARDS Most issued directly from your bank. Need to provide collateral. Exception for small amounts.
  53. 53. Choosing the right bank for my business: • Service • Online capabilities • Credit • Not about the money
  54. 54. Thank you Shuey Fogel Outsourced CFO/Controller Internal Fiscal Direction/Management & External Financial Communication shuey@fogelcfo.com fogelCFO.com @fogelCFO /shueyfogel

Editor's Notes

  • Internal Fiscal Management & Leadership

    External Financial Communications

    Satellite Office Services

    Banking & Credit

    Consulting Projects

    Referrals
  • Internal Fiscal Management & Leadership

    External Financial Communications

    Satellite Office Services

    Banking & Credit

    Consulting Projects

    Referrals
  • Ask audience what brought them here
  • Ask audience what brought them here
  • Ask audience what brought them here
  • Tool
    Means to an End
    WHAT IS OUR GOAL?
    The What

    ≠ The How

    Be Conservative:
    Estimates
    Currency Conversions

    ≠ Reimbursable or Passthrough
    Like VAT
    But when to include it?
  • The Dream
  • Tool
    Means to an End
    WHAT IS OUR GOAL?
    The What

    ≠ The How

    Be Conservative:
    Estimates
    Currency Conversions

    ≠ Reimbursable or Passthrough
    Like VAT
    But when to include it?
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • Cash flow problems can become budget problems.
    Increase expenses.
    Greater income to cover cash flow issues.
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • Compare liabilities and assets
  • Client Work
    BizDev
    Administration
    Shmoozing
    Education & Development

    WHEN TO START TO HIRE HELP
  • Invest =
    Equipment
    Personnel

    Won’t personal loans put me at risk?
    Financially, no.
    Legally, yes.
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • Separate campaigns and referrals

    Choose colors to help – everything can be changed
  • 2 tools to help understand value of client

    Mapping
    CRM / Database
  • Invest =
    Equipment
    Personnel

    Won’t personal loans put me at risk?
    Financially, no.
    Legally, yes.
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • What kind of credit problem do you have?
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • GREAT EQUALIZER

    Very low monthly minimums

    Affects how many accounts we want to open
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • ONE CAVIET
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • When and how you pay
    Reflects reimbursable items
    Reflects VAT
    Main cause of small biz failure
  • What bank is right for me?

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