5May, 2023
    Take the Money and Run

    Recently, I have talked with several clients who really have no idea what state their business is in financially, but they know they need a loan. These are not a small sized businesses, they turn millions of dollars a year and the leadership is smart talented people. But when I ask for a balance sheet or income statement, they look at me like I have two heads. Which prompted me to write this blog. Study after study shows 80-90% of businesses that failed cite a lack of cash flow as the primary factor. And a growing percentage of that population, the business owners took whatever funds were left and vanished. They didn’t close the doors. They didn’t sell. They literally took the money and ran. This should be alarming to you as a business owner because you do not want to get caught up in their negative downward spiral.

    Cash flow refers to the amount of money that flows in and out of a business. Positive cash flow occurs when the amount of money coming in exceeds the amount of money going out. Negative cash flow, on the other hand, happens when the amount of money going out is greater than the amount of money coming in.

    Of course, cash flow is the lifeblood of any business. Without enough money coming in, it becomes challenging to pay suppliers, employees, and other essential expenses, leading to financial strain and eventually, failure. This statistic underscores the importance of managing cash flow effectively in any business. Maintaining positive cash flow is crucial for the survival of any business, and it requires careful planning and management. Sounds like common sense, right?

    However, cash flows cannot be seen on your profit and loss statement. P&Ls can tell you if your are making money, but it cannot tell you the cash flow through your business at any given time. So businesses that are not paying attention to their cash flows can find themselves in a cash crunch, and not be able to make payroll, or they start paying vendors 30 days late, or 60 days late, and at 90 days, they are insolvent.

    One of the most common reasons in today’s market that companies run out of money, is they simply aren’t paying attention. “Revenue’s are higher than last year, so I’m good, right?” Actually, no. Expenses are up too due to inflation. Inflation has a sneaky way of creeping up on you and eating your profits, and nibbling away at your reserves or dwindling your equity. So without knowing it, business owners keep the same ole spending habits without realizing it is causing a cash flow problem. Conversely, they may know there is a problem, but feel helpless to do anything about it.

    One of the contributing factors is business owners have been struggling for the past couple of years and are tapped out of new ideas, much less holding the emotional strength to keep trying. While this may not be you, it might be one of your suppliers, clients, vendors or other small businesses you depend on to operate efficiently. And that can be a surprise to your business operations when an unplanned event hits the bottom-line affecting your cash flow.

    Another common reason why businesses experience cash flow problems is because they have too much money tied up in inventory or other assets. Inventory costs money to acquire, store, and manage. If a business has too much inventory or other assets like real estate, it can tie up valuable cash that could be used for other expenses. This can lead to cash flow problems, especially if the inventory isn’t selling quickly enough to generate revenue. We call this asset rich, but cash poor.

    Further reasons are lack of effective billing and collection processes. In good markets, people mostly pay on time. In down markets, late payments from customers can have a significant impact on your cash flow, as it delays the arrival of money that’s needed to pay bills, pay payroll and cover other expenses. It’s important to have a system in place for invoicing customers promptly and following up on late payments. making notes as you go to create a history of conversations.

    In some cases, businesses can also run into cash flow problems due to unforeseen circumstances, such as a sudden drop in demand or a supplier going out of business. These situations can be challenging to manage, but having a contingency plan in place can help businesses weather these storms.

    To avoid cash flow problems, businesses need to plan and manage their finances carefully. This includes regularly reviewing financial statements, look for trends up or down in every line item, forecasting cash flow needs, implementing effective strategies for managing inventory, collecting payments from customers and staying in contact with your business partners. If you are not already reviewing a monthly cash flow statement, it is recommended to add it to the monthly financial statement reviews and course correct while it is a manageable situation. If you are not in a regular routine, now is the time to start as well as have a contingency plan in place to deal with unexpected events that can negatively impact cash flow.

    A contingency plan may be seeking a working capital loan or line of credit that is your rainy day fund. Of course, apply for a loan when you do not need it, because waiting can cause a situation to go from a little need to sorta critical to a desperate situation in an instant.

    Only the 18% of business owners who plan for their business cash flow will live to see the next boom. By implementing sound financial management practices, businesses can minimize cash flow problems and position themselves for long-term success. Are you in the lucky 20%?

    22Apr, 2023
    The proverbial Should-a Could-a Would-a’s.

    Regret is a complex and multifaceted emotion that can significantly cloud not only our decision-making process but the happiness and joy we experience in our daily lives. At its core, regret is a feeling of disappointment or remorse over something we or someone else has done or failed to do. In the context of decision-making, regret can arise when we realize that we have made a suboptimal choice or missed the perfect opportunity. I call it the should-a could-a would-a’s rollercoaster ride.

    What does that sound like? Here are a few examples:

    “Well, if I would have known XX, then I could have done YY.”

    “I guess I should have known better.”

    “I am afraid to decide, what if I am wrong.”

    Have you heard someone say, “You have a case of the shoulds?” or “Stop shoulding all over yourself.” There are memes about it, but we have yet to tackle these negative behavior patterns, so we can let them go and start to live a life of freedom and exchange. As a business owner, you are constantly asking yourself questions. Should I do this, Could I do that, Would I do this other thing? What if that happens, what will I do next? What are the consequences of doing or not doing any of them?

    You try to plan and control every aspect of the day-to-day tasks to ensure a greater outcome, but ooooops, somehow your crystal ball was in the shop today and you missed something.  Its like an addiction to always being right. Then almost immediately regret sets in for not making the right decision or executing the most perfect choice at that moment. Then your brain starts searching for the guilt and shame emotions or looking for the blame emotion to focus the attention on someone or something else. Even if “they” did not cause the problem, let’s blame “them” because blaming someone else sure feels better than guilt or worse, shame for knowing better, your brain says to itself.

    Blaming the outside world, people, and situations outside of ourselves rather than looking inward is the crazy part. Yet we do this every moment of every day. It is a habit that you learned well. It is so ingrained in your decision-making thought process, that you do not even know it is happening. You are literally oblivious to it. Our parents and their parents have passed it down for generations.  Some people have a greater dose of the regret gene than others, but believe me, it is a part of the human condition for everyone around the world. But if you embrace it rather than try to avoid it, you will find that it is what makes life worth living.  

    Regret can play a significant role in decision-making in several ways. One of the most significant is its impact on risk-taking behavior. Studies have shown that people who are more prone to regret are less likely to take risks, as they are more concerned about making a mistake or experiencing regret over a bad outcome. This can be both a positive and negative trait, as it can lead to more conservative decision-making that minimizes the risk of negative outcomes or the need to feel like you must control all of the outcomes in order to feel safe. But it can also limit possibilities and opportunities for growth and innovation.

    Regret can also play a role in our assessment of decision outcomes. When we experience regret, we tend to overestimate the negative impact of our decision and focus more on what we could have done differently. This can lead us to second-guess our decisions and become overly cautious in the future, and we use it as an opportunity to beat ourselves up of the wrong decisions. On the other hand, if we do not experience regret when a decision turns out poorly, we may be more likely to repeat the same mistakes in the future.

    Another way that regret can impact decision-making is through the phenomenon of “choice overload.” When we are faced with too many options or choices, we may experience decision paralysis and become unable to make a decision. Crippling fear is often due to a fear of making the wrong choice and experiencing regret. In such situations, it can be helpful to focus on the most important criteria for decision-making and eliminate options that do not meet those criteria.

    Funny story, my mom used to ask everyone, and I mean everyone, what they would do if they were in her shoes. Of course, everyone, with the desire to help, would tell her what they would do regarding that situation. But then, she would do none of them. In fact, she would sit back and just watch it unfold. I asked her, Mom, why do you ask for everyone’s opinion but then not take any of their advice? She said, I just wanted to see what they would say. Some of them had some great advice too! But because of her choice overload, she could not make a decision. She feared that any decision that she made would be the wrong one. So rather than risk being wrong, she missed the opportunities to be right too. She faced some real challenges in her life because of her fears of future regret.  

    Finally, regret can also impact our motivation to make decisions. When we experience regret over a past decision, we may become hesitant to make future decisions for fear of making the same mistake. This can lead to decision avoidance or procrastination, which can ultimately harm our business or personal life. This fear of making the wrong choice often holds us back and keeps us from moving forward. To better cope with it, you can focus on the lessons learned from past regrets and use them to inform future decision-making. Rather than allowing regret to paralyze you, you can embrace the suck and choose better next time.

    Regret is a natural feeling that arises when we realize that we could have done something differently or better. As a business owner, I know that regret can be a powerful and sometimes debilitating emotion. Over the years, I have experienced a fair share of regrets, and I have come to realize that it is an inevitable part of running a business or being an entrepreneur.

    I have heard countless stories from business owners, you have probably heard them too. These may even sound familiar to you:

    “The first time I experienced regret was when I missed a critical deadline for a major project. I had not properly planned and managed my time, and as a result, the project was delayed by several weeks. This delay had a significant impact on our business, and we lost a lot of revenue as a result. I regretted not being more organized and focused, and I learned the hard way that time management is crucial in running a successful business.”

    Another one, “I regret not investing enough in marketing and advertising. For a long time, I believed that word-of-mouth advertising was enough to keep our business growing. However, as competition increased and our business grew, we began to realize that we needed to invest more in advertising and marketing. I regretted not making this decision sooner, as we could have grown our business much faster had we done so.”

    And another one, “One of my biggest regrets is not hiring the right people. Early on in our business, we hired a lot of people based solely on their technical skills, without considering their fit with our company culture. As a result, we had a lot of turnovers and lost some valuable employees. I regret not being more diligent in the hiring process and not prioritizing culture fit over technical skills.”

    And yet another one, “I regret not being more innovative and adaptable. In today’s fast-paced business environment, it is crucial to be constantly innovating and adapting to changing market conditions. However, I have found that it is easy to get complacent and stuck in old ways of doing things. I regret not being more open to change and not taking more risks in trying new things.”

    Or moreover, the honesty we have with ourselves about our regrets on our deathbed. Nearly 90% of the people in hospice feel the need to make amends for the regrets they had in their lifetimes. Ninety percent, NINETY PERCENT! They confess that they wish they had more time and would have, could have, or should have done something different. Here are the top few regrets…

    Not spending enough time with loved ones: Many people express regret over not spending enough time with their family, friends, or loved ones. They wish they had taken more time to create meaningful relationships and connect with the people who mattered most to them.

    Not following their dreams: People often regret not pursuing their dreams or passions. They wish they had taken more risks and followed their hearts instead of playing it safe and settling for what was expected of them.

    Not expressing their feelings: People regret not expressing their feelings enough, whether it’s telling someone they love them or apologizing for past mistakes. They wish they had been more open and honest with the people in their lives.

    Working too much: Many people regret spending too much time at work or focusing too much on their careers. They wish they had balanced their work and personal lives better and made more time for the things they enjoyed outside of work.

    Not traveling enough: People often regret not traveling more and experiencing different cultures and parts of the world. They wish they had taken more opportunities to explore and broaden their horizons.

    Not taking care of their health: People may regret not taking better care of their physical and mental health. They wish they had made healthier choices and prioritized self-care.

    Not forgiving others: People may regret holding grudges or not forgiving others for past wrongs. They wish they had let go of anger and bitterness and focused on forgiveness and compassion.

    Despite these regrets, very few have come to realize that having regrets are not necessarily a negative experience. Regret can be a powerful motivator to learn from our mistakes and improve ourselves as business owners and people. It is important to acknowledge and reflect on our regrets, not to wallow in them or use them as an opportunity to beat ourselves up. It can be equally advantageous to take action to change what we are doing so we can have the life we deserve. Certainly, when the rest of your life’s happiness and joy depends on how you respond to regrets, you will make different choices.

    You can try to prevent regrets by having a clear vision and plan for your future. But you cannot avoid them altogether. Regrets and mistakes are a part of the human experience. There will always be missed opportunities. Sometimes the only choice is a bad one; a choice between two not-to-positive alternatives, so you pick the best one and be okay with your choice.  How you respond to those missed opportunities, good or bad, is what makes life worth living. So, if you do not have any regrets, I would say you are playing it too safe. Go out, take a risk, make some mistakes, and have a few regrets. Your regret, in the end, maybe that you regret not taking more chances or believing in yourself more. To have to plan for every little detail to avoid regrets or making a mistake is harder in the long run. And frankly, that is not as much fun to be around.

    I have read so many books on strategies to prevent the unpreventable. There is no such thing as a perfect anything or the “right” people. And I acknowledge that you do not need to throw caution to the wind. To have no regrets means to make no mistakes, which we both know is impossible. Plus, where is the fun in that?

    “Surround ourselves with the right people, only hire the right employees, and build a network of insightful mentors.” Blah Blah Blah. That is what society wants you to believe. Strive for perfection and do not let anyone see your mistakes. “It’s embarrassing.” That perspective creates a space for judging people and situations incorrectly. You should have a diverse group of perspectives, to make more informed decisions but you will never find enough “right” to avoid regrets related to the unforeseeable. People will always disappoint you in these instances. Which is why there are so many legal battles and divorces in the US. Legal battles are not happening because people are doing the right things. They happen because of disappointment from somewhere. Then you get to take the pressure and focus off yourself and put the blame on someone or something else.

    So how do you get off the regret rollercoaster ride? Take a stand and find a place to start and go from there. It is more important to be open, stay flexible, and adaptable as a business owner. This means being open to change and willing to take risks. It also means being able to pivot quickly in response to changing market conditions or unexpected challenges. Or realizing when it is time to let go of something, like your business. By staying nimble and flexible, you are not avoiding anything, you are seizing the opportunities to take action or to powerfully choose something different. That is where the power belongs, and it is the key to where abundant living begins both as a business owner and as a human.

    When you are trying to avoid something, as we mentioned above, it causes you to make decisions differently. But if you approach it as a positive, you can accept you are an imperfect person. You do not have to choose the “right thing” every time. And when you don’t, let yourself off the hook and stop beating yourself up about every little thing you cannot control. Simply acknowledge, you had an experience and you learned from it. Trust me, if you learned the lesson, you would not have to learn it again. If you do not, it will come back around bigger and stronger than before until you get it. That is the magic of living a life well lived.

    The most successful business owners understand this concept and they have adopted the philosophy of failing fast. Try something and see how it goes. Learn from it and try it again. With every round of trying and failing, something new is learned. New doors begin to open and new opportunities you didn’t see coming start to show up. Repeat the process until you find the path to achieve your goals. It is just like a baby learning to walk. They must learn to crawl first by exercising the muscles that are weak. They keep trying until one day they take their first steps. Every human started out the same way, but we forgot the simplicity of walking before you run and how many mistakes we had to make along the way. We expect that business owners have all the answers and that they make all of the right decisions all of the time. It is simply not true. So let yourself off the hook.

    In summary, regret and making mistakes are a natural part of being a business owner and an effect of the human condition. It is a powerful emotion that can significantly affect our decision-making processes. It can impact our risk-taking behavior, our judgment, our assessment of decisions/outcomes, our motivation to make decisions, and even our fear to make decisions in the first place. However, by acknowledging and learning from past regrets, we can use them to inform our future decisions and ultimately become better decision-makers, better risk-takers, and better people.

    It’s time to embrace your mistakes and recognize there is nothing to regret. You made a choice and there was a wanted or unwanted outcome. When you intimately know this, It is only then that the doors open to experiencing the emotions of compassion and unconditional love for not only others but yourself as well. You can use this emotion to catapult you to the next level rather than being used by it. Either way, the choice is yours. No regrets!

    11Apr, 2023
    Worries about a recession?

    At BLS we are committed to help you both personally and professionally weather the economic storms. Here are some thoughtful tips to hedge against the economic headwinds. There are several financial strategies that individuals and businesses can consider preceding an economic recession:

    Personally….

    1. Build up an emergency fund: Having an emergency fund can help you weather financial storms during tough times. Aim to have three to six months’ worth of living expenses saved up in a high-yield savings account.
    2. Pay off high-interest debt: If you have high-interest debt, such as credit card balances or personal loans, prioritize paying them off before the recession hits. This will reduce your financial obligations and free up more money to cover other expenses.

    3. Diversify your investments: Don’t put all of your money in one basket. Consider diversifying your investments by spreading your money across a range of assets, including stocks, bonds, real estate, and commodities.

    4. Re-evaluate your budget: Take a close look at your budget and identify areas where you can cut back on expenses. This will help you free up more money to save or invest.

    Business….

    1. Build up cash reserves: Just like individuals, businesses should have an emergency fund in place to help them survive during tough times. Aim to have enough cash reserves to cover at least three to six months’ worth of operating expenses.
    2. Diversify your customer base: Don’t rely too heavily on one or two major customers. Instead, diversify your customer base by targeting new markets and customers. This can help you weather downturns in specific industries or regions.
    3. Reduce debt: If your business has a lot of debt, consider refinancing or consolidating your loans to reduce your monthly payments. This can free up cash flow to help you weather a recession. Consider selling under performing or non-performing assets early while there is a market for the asset. As values decrease, you may find yourself in a pinch to wholesale to the lowest bidder.
    4. Control expenses: Take a close look at your expenses and identify areas where you can cut back. Consider renegotiating contracts with suppliers, reducing staff or hours, or implementing cost-saving measures such as energy-efficient lighting or telecommuting.
    5. Maintain a strong relationship with lenders: If you need to borrow money during a recession, it will be easier if you have a strong relationship with lenders already in place. Maintain open lines of communication with your lenders and keep them updated on your business’s financial health. The rule of thumb is, lenders only lend to those who do not need it. So, apply for a loan early in a recession. It is better to have it and not use it, then to be denied on your loan request when you need it the most.
    6. Focus on customer retention: During a recession, it can be harder to attract new customers, so it’s important to focus on retaining the ones you already have. Consider offering loyalty programs, discounts, or other incentives to keep your customers coming back.

    Above all maintain a long-term perspective: Remember that recessions are temporary and that the economy will eventually recover. Avoid making rash decisions based on short-term market fluctuations and instead focus on your long-term business goals.

    By implementing these financial strategies, businesses can position themselves to weather an economic recession and emerge stronger on the other side.

    It’s also worth noting that it’s never too late to start implementing these strategies, even if you suspect a recession is already underway. By taking steps to shore up your finances, you’ll be better equipped to weather whatever economic challenges come your way.

    Let us know which steps (if any) you are taking to not only survive, but thrive in 2023!!

    3Feb, 2023
    Worries of Stagflation??

    Are we seeing signs of the dreaded stagflation in the economy? Who knows, only a picture in the rear view mirror can tell us. But regardless of the terms we use, businesses are experiencing some turbulent and uncertain times. We are handing you the keys that might help your navigate these challenging times.

    We anticipate that for an extended period, revenue may flatline while costs keep increasing. If you have exhausted the cushion you had set aside, it is time to take some other strategic measures to preserve the cashflow.

    KEY #1 – Keep the cost of debt to a minimum. And if interest rates are rising, consider replacing any variable interest rates loans with fixed rate interest payments. The fixed rates may feel high now, but if the Feds launch into drastic action, you will be prepared. Conversely, when the interest rates fall again, you can refinance at the lower rates.

    KEY #2 – Become a landlord. During stagflation, rents may increase and your business’s revenue might not. If you have extra cash available, consider buying the building in which your business operates, then rent the other half of the building to other tenants. Of course, purchase wisely. There are very friendly loans available to support purchasing commercial real estate for occupancy and rentals. So explore all of your options.

    KEY #3 – Be opportunistic about acquisitions. Companies that are going out of business or need to raise cash may sell property or equipment at below market prices. Consider acquiring commercial property, equipment, assets, brand lines or staff with needed skills to augment the business you are operating.

    Likewise, consider merging/acquiring a competitor, buying a channel, or manufacturing your product in-house if doing so allows both companies to reduce overhead, expand into new markets or offer an expanded array of products or services.

    KEY #4 – Augment staff with technology. Embrace automation in your business can supplement the staff and allow people to do more with less. If you have been resistant to incorporating technology into your daily business routine, you may be missing one of the biggest opportunities for growth in your company and for your staff. Technology can enhance your product output as well as offer a better customer experience. Should you higher staff person, or should you invest in technology that helps everyone grow. Business loans are available to expand your business technology needs and help your business be more cashflow positive.

    This is the time to think strategically and put the sound principles into action. This year will be another year of change to stay alive, or you can make it a year of change and leverage the opportunities coming available. Ultimately, its these times that help us grow and expand into places we did not even know existed. Protect the cashflow, manage the cash, and leverage debt where possible.

    We are here to find the strategies and the loans that help propel your business forward.

    3Jan, 2023
    Who should be on my team in 2023?

    There’s no time like the beginning of the year to complete a thorough assessment of your business activities.  Where have we been? Where are we now? and Where are we going? Most good business owners take the time to at least think about what the year will bring. And in the wake of uncertainty of the upcoming year given inflation, increasing interest rates, the war overseas, and political turmoil, one of those line item tasks should include asking:

    Who do I surround myself with this year?

    Take an assessment of the professionals around you. Your attorney, your cpa, your banker, your technology person. Yes, you’ve worked with them for years, but are they serving the purpose you need them to right now? Certainly, you do not want to be in a quandary and then have limited options to choose from. The best time to explore your options is when you are not under a stressful situation.

    Who should be on my team in 2023?

    The obvious as stated above, but is that all the key management players I need to achieve my big impossible goals this year? Who else should I consider to help my teams perform? More importantly, who are bringing good ideas to the table that lets me choose the next steps for our business? Or takes my business into a new direction?

    Think you have it under control? Think again! The world of finance is changing rapidly.  You do not have the time nor probably the desire to keep up with the latest and greatest growing financing trends, but there is nothing wrong with exploring some tried-and-true methods and incorporate some well-worn paths to grow your business.

    As I have said many times before, cashflow is king. Protecting your business cashflow is the secret to your business success. I can guarantee, that none of those professionals can advise you on protecting your cashflow. They can only speak to managing your money, not generating it. Which is actually different than managing your cashflow.  Not having cash-on-hand to make payroll or pay your bills is one of those things that will keep you up at night. Not being prepared for a surprise negative cashflow situation, will take you out of business in an instant.

    Of course, turning to the banks, when you need the money; they cannot lend it to you when you are in an adverse financial position. We are already witnessing the banks tightening their lending criteria and standards. And if you remember in 2008 crisis, the banks were not your friend. They were often the source of the problem. I am not saying this is 2008 all over again. The current situation is very different and there are some strong fundamentals at play. However, there are some similarities that are worth paying attention to. How does the saying go? The banks only lend money when you don’t need it. There is some truth to that.

    And if you find yourself in a quandary, predatory lenders are waiting behind the scenes to scoop up on the opportunity. This is a position you want to avoid. So, if you are planning for a business-as-usual kind of year during your assessment, you may miss the mark. Lets be honest, this is a “Take Action” kind of year, not a wait and see how it goes kind of year. The smart people will make decisive plans and act early in the cycle. They will expand their tolerance limits and plan for the low cashflow possibilities. And they will surround themselves with talented people who can bring creative ideas to the table when navigating a difficult year. You will be brilliant!

    At Business Loan Solutions, we are dedicated to your business success. We understand the importance of cashflow in your business and we strive to find the right solutions to keep operations running smoothly, even in this uncertain time. If the saying goes, the banks only lend money when you don’t need it is true, then the opposite is true too.  While your business is going well, look for solutions that work for you. Consider a working capital loan or a line of credit as a back up plan. Consider consolidating your loans, especially if you have a long-term loan coming due this year. Take advantage of equipment leasing or invoice factoring to diversify your cashflow possibilities. Or even investigate an SBA loan to expand your business. We have many levers to pull in your favor and we can help you plan this year’s cashflow strategy.  

    So as we head into an uncertain economic year, who do you want on your team?