Cash is King, Mantra of Small Business

May 27, 2008 | by Adam Ross

Through my many years of working with small businesses, just like you, one thing I have come to realize is that “Cash is King”; and everything in the business revolves around budgeting for the current cash on hand and the expected incoming cash. Therefore, “wants” are a luxury that most small businesses cannot afford; and as we know there is a big difference between a need and a want. Small businesses have to be smart with the investments they make in their business, and they are constantly evaluating each investment for how much of a return they can make on those investments.

Typically a small business evaluates headcount (whether it is a full-time employee or a contract employee) as the largest capital investment they make. And it is easy to relate back an additional headcount to the amount of time it will save the “Owner” or how much top line revenue they can make by adding this person. Unfortunately, this is exactly the wrong way to look at this. What a small business should be asking themselves is “Will an automated system free up my time, save me the cost and headaches of hiring additional people, and still perform all the necessary tasks?”

How do you automate your business today?

 

Posted In: Small Business

 
  • http://www.convey.com.au Ash Clarke

    Your comments are 100% correct, more staff is not necessarily the answer. A better business
    system and practices can avoid the need for expensive staff and in the end improve the bottom
    dollar. At Low Cost Conveyancing Services we have refined our business over a period of years
    thus eliminating the need for more staff. Websites is one way, ie. http://www.convey.com.au which has
    generated business for us and eliminated the need for additional phone staff. We act on peoples behalf when they are buying or selling property in Melbourne or throught out Victoria in the Conveyancing industry.

  • http://www.infusionsoft.com Adam Ross

    Thank you for your comments Ash, you hit on a great point which is the use of multiple technologies to solve the age old issue of resources. A very well put together web site that educates your prospects as to what you do without them having to phone you is very important.

    I believe the ultimate goal for anyone running a small business would be to get the prospect to “buy” their product or service without ever having to use human capital. Boy, wouldn’t that be great for the business owners, however when we get to that point, all of us “buyers” will have to get used to the numbness of less human interaction!

  • http://www.disruptivetechnologyllc.com Anthony Mallgren

    While I’m all for automating business processes and cutting operating costs through more intelligence and process automation, I think that it is important to underline the value of connections. Many times, maintaining a high level of cash on hand depends on a full pipeline and a full pipeline depends on connections with all different industries and a diverse set of resources.

    Maybe it is worth it every once in a while to throw work to a resource, even if they are temporary, for the sole reason of developing another valuable asset. We, small business owners, need to be careful of the fact we are not suffacating our companies due to an inadequate ecosystem.

    FYI – I am part of a technology consulting firm (http://www.disruptivetechnologyllc.com), so I agree with your point 100%. Just wanted to play devil’s advocate to provide a balanced picture.

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