BOW TO REVENUE PROJECTIONS

Happy Friday !!  It's been an exciting week . . .

I received a phone call the other night from a client I have been working with since December.  She was so excited . . first she thanked me for asking her the question "when are you implementing?" then she continued to share she signed a new contract with a former client at her new pricing structure.

I am THRILLED for her, to see her achieve her DREAMS.. . and as I shared with her.  . we did the work to create the model, (the motivator), she set the intention of what she wanted, then lead the direction and the path she wanted to go.  The end result, she is tripling her income in 2012.  This is no small feat.  This is HUGE, close to 7 figures HUGE.

How cool is that???

What did we do you ask?  We created revenue projections for 2012. 

First step - we determined her products, prices and units.  Each product had its own separate line on the model, with price and then units by month. In this case the units were hours.  She is a service provider and there are so many hours in a day, so you calculate the number of hours you are willing to work each day, multiply it out by the number of days you work in a week and then how many weeks in a month.  Make sure to adjust for the weeks and months you take off for conferences, vacation and holidays. Yes, you can plan your time off and see the impact right there. No guessing or waiting.  Make sense?

Now it's not only to calculate the numbers, this is used to create a conversation around, how much do I want to spend in a day working with clients, what am I charging, do I want to explore with charging a higher rate?  Do I want to make more money, hmmmm, what will that take? What would that look like?  What is needed so I feel good and confident?

Once you have inserted the criteria, next step is to implement the services, sell the new products and compare actual numbers to projections to confirm you are on target, going way beyond target, or missing the mark totally.

It's about seeing where you have been (past), where you are now (current), and projecting out where you want to go (future).  Revenue projections is one tool for creating a solid, organized financial foundation for your business.

And you know what, this is what I do and I want you to as well. I passionately support YOU the CEO's, entrepreneurs and business owners with achieving your DREAMS through numbers, in a bottom line kind of way, (pun intended) this is for the success of your business and for the success of cash flow.

Get on board with playing, exploring and having fun with creating revenue projections for the dream you hold for your business.  I have the tools for you already mapped out and the 28 years of experience supporting CEO's of privately held companies achieve their PASSIONATE dreams.

Reach out, connect and say Debbie I want to create my revenue projections with you to see my dreams come true. You may reach me at d.rosenfelt@cfomadeeasy.com

Have a great weekend and I look forward to connecting with you next week.

Warmly -

Debbie Rosenfelt

Chief Heart Officer

TUESDAY'S CFO TIP - ORGANZING YOUR FINANCIAL RECORDS

Welcome to today's easy CFO tip, to help you organize your business financial records.

Today's tip is about setting up file folders for your business for 2012.

This past weekend I created 2012 file folders for my businesses financial records and my clients.  I picked up manila folders and I have a label maker and I created labels for:

Checking statements

Savings statements

Credit card statements for

            American Express

            Bank of America

A/P paid

2012 Deposits.

I made it easy by placing my business name at the top and then placed the description below.

For example:

Financial Mapping LLC (Insert your business name here)

2012 Deposits

An additional tip for deposits, photo copy the deposit slip and bank checks received before taking it to the bank.  Tape or staple the bank receipt to the photcopy  confirming the deposit was made, and stick it in the folder.  Anytime you have a question for a spcific customer payment you are able to go to the file folder.

Also any payment received from third party vendors, such as PayPal or a credit card company, print off the receipt and place it in your payment folder.  You will then have all deposits in your account nicely organized.

Make sure to add a tick mark or some type of indicator that you entered the deposit in to QuickBooks.

This was Tuesday CFO tip.  Was this helpful and easy?

Leave a comment, question or suggestion to let me know what easy financial tips you would like to hear about at the bottom of this blog.

Debbie Rosenfelt

Chief Heart Officer

HOW CASH IS KING

My husband and I are business partners with my son, Bryan.  He purchased a franchise, in October 2007 and started the business from the ground up.

The first couple of years were financially and emotionally tough.  This was during the downturn of the economy and my son Ken, (Bryan's brother) passed away. 

The business opened in February 2008 with enough cash to operate for the first 8 months, or so we thought with the projections we created.  Revenue was not pouring in as we had projected.  With revenue not supporting the business expenses, Bryan had to stop taking a pay check in June 2008.

The challenge - growing a business to be cash flow positive.  2009 sales were growing at a snails pace and rent was increasing 3%, beginning March 1st.  OUCH!

Bryan trimmed expenses down to the bare minimum.  For this franchise business, there were not very many expenses.  Yet the rent was running at about 45%.  YOWZA!!  That was the only expense left to trim down.

In February 2009, we went to our landlord (at the time, that's another story on a different day) and asked for a reduction in rent. 

YES, you ask, if you don't ask, you don't get.

He said "No", "however you can pay us half rent, and then pay us back with interest at the second half of the year."  We explained that Bryan stopped paying himself in May of 2008 and we needed his help.  The landlord explained times were tough for them as well.  That was the best they could do at the time.  We said, OK, we will make it work, sales needed to grow.

Sales were growing, yet not fast enough to pay the increased rent and salary for the owner.

When July rolled around, the business started paying back the landlord in increments of $1,000 a month, or more when the cash was there.  However, when cash was still tight, my business was able to provide a loan when bills needed to be paid.  I'm not talking much here.  $1,000 here or there. 

In November 2009 when the property taxes were due, there was enough left over at the end of the month to pay the taxes. Here comes December 2009 , at the home stretch of paying back the landlord.  We were not quite there, so one more time we provided a small loan to pay off the balance to the landlord.  I sent him a letter explaining the business was not in a financial position to pay the balance of the interest, yet the principal was paid off.  Whewwww. What a relief. It felt good to ahve that behind us.

We went back to the landlord again in January 2010 requesting a reduction of rent, he conceded and lowered the rent to a very reasonable amount.  From then on the business has been carrying itself with Bryan receiving a pay check again.

In 2011 the business began paying back the loans my business provided.

So last night, Bryan and I sat down to review January's cash #'s to balance the cash account, compare sales from the previous year and see what was left over to pay down the business credit card.  Once we confirmed the cash ending balance, Bryan took a HUGE sigh of relief and said, - let' put $1k in savings, pay down the credit card by $2k and leave the balance in the account for February.

What are the benefits for managing cash daily; peace of mind, the facts jack, (knowledge) the ability to know what is needed to pay down your business credit card or vendors and place money in savings.

Here's how to get started, track cash daily with the 12 month check register tool, and cash management map.  Enter in deposits daily, NO slacking, and transactions daily.  Once you build rhythm and see common recurring monthly charges, such as rent, utilities, loan payment(s), commisions and payroll, make it easy for yourself and copy over to the next month.

What will you learn about your cash needs for your business?

Was this tip helpful?  Leave your questions below or e-mail me directly at d.rosenfelt@cfomadeeasy.com

Warmly -

Debbie Rosenfelt

Chief Heart Officer

THE DEFINITION OF INSANITY

You have heard this before, right?  The definition of insanity is doing the same thing over and over again, expecting different results.

So here we are, six days into 2012.  The truth is that every minute of every day is an opportunity to "begin again".  It is filled with new opportunities to think differently and to be different.  You don't have to repeat the past.  Stop.  . . right now . . YES, right now and take a deep breath.

So I ask . . what do you need?  What do you need right now to say ok . . I am going to do this.  I am committed to organizing my business finances.

Steps I have shared so far to get you on the road, keep personal finances and business finances separate.  Open a business checking and savings account. Apply for a credit card in your business name.

A word of caution, DO NOT, comingle personal funds with business funds.  It leaves room for the IRS to disallow an expense for your business if you are even audited.

Next step, separate income receipts, and expense receipts.  Income is the revenue your business earns and the expenses are what you spend money on to maintain your business.

Now let's get your revenue and expenses organized.

Find and setup a system that is easy to use and maintain.  Setting up a system properly is the key to keeping it simple and easy. 

I use and recommend QuickBooks, it is easy and a simple system.  Yes, there are other simple systems, you just have to find one that works best for you and that will provide support.  Support is key.

Step one setup for QuickBooks -

Start by creating the chart of accounts for your business.  A chart of accounts is like a story book of the financial events that occur in your business. 

The benefit of of having a Chart of Accounts is tracking revenue and expenses.  You will learn and see which products and services are generating the most or least revenue and expenses tell you where you are spending the least and most of money on your business.

Example - If your business has several different products or services, you can set up the Chart of Accounts to reflect as much detail as you want.

Let me give you a couple of samples from businesses that I work with -

Retail business - cards, clothing, gifts, jewelry.

Gym business - Memberships, Single, joint, family, tanning, Key cards, etc.

Service business that offers products, coaching, product #1, product #2, etc.

Your easy homework assignment - create a list of products and or services that you offer and that you want to track.  We will use this information for creating a chart of accountsfor your business.

Next week, I will cover examples of expenses. 

One last tip for today - when you create a deposit, photo copy the deposit slip and checks to keep track of all money coming in.

The benefit, having the backup/support for each deposit allows you to go back and see the actual deposit if your account does not balance at the end of the month. 

Repeat after me "Cash is KING" and you want to track cash accurately.

Have a PASSIONATE filled weekend and I will connect with you next week.

New Programs to Support you Build a Solid Financial Foundation

A few words of wisdom I read this morning -

Our human journey is all about facing our challenges and moving through them faithfully instead of being paralyzed by fear.  There is no shame in experiencing challenges or going through periods of confusion and uncertainty. But Remember - you are not supposed to stay there.

I love reading inspiring messages that remind me I am on a human journey. Sometimes I just get caught up in not understanding something or I am experiencing overwhelm.  What a gentle reminder to guide me on my daily path, that it is ok to have challenges and be confused.  As I read this I also thought of you.

So how may this message apply around finances? 

First, face where you are, honor and acknowledge the challenge you hold around organizing your finances and move faithfully by taking one step toward creating a solid organized financial foundation for the heart of your business.

So how can you do this with guided support?

Over the next couple of weeks I will be offering new CFO Made Easy programs that will support you with building that solid organized foundation.

What do these programs look like? 

Well, to start off 2012, I will be offering a 5 week home-study course on setting up QuickBooks for your business.  There will be videos with me walking you thru each step of the set up, bank accounts, credit card account, chart of Accounts to reconciling your bank account, setting up items, customers and invoices.  Setting up Vendors, payables and writing checks and running important reports so you can see the financial progress of your business.

A step by step process that you will have in front of you.  A QuickBooks instruction video to follow along as you set up your business QuickBooks.  Two windows on your computer, side by side.  How easy is that?

There is value in consistency, so you will practice each day, with me right by your side, walking you thru the how to' on the video, and you will see and feel you confidence soar each step of the way.

Next, I will open a community membership site for you to join interact with and participate in bi-weekly Q&A strategy sessions.

And then there is the FREEDOM program.  The acronym represents;

Financial Foundation

Revenue Tracking Map

Expense Tracking Map

Easy Profit and Loss

Daily Cash Management Tracking

Opportunity to Plan Cash Flow.

Monthly Trailing Map - that tracks the progress of businesses who have been operating for more than 12 months.

For the next several days I will share with you pieces of the home-study program and the FREEDOM program and the positive impact of creating a solid organized financial foundation.

Wramly,

Debbie Rosenfelt 
Chief Heart Officer