Keeping the cash flowing

Keeping the Cash Flowing

IT’S TOUGH OUT THERE in retailing You read the papers, you walk through the shopping malls, and retailers are closing up or being bought out. It’s been a long time since retailing was so tough. Having personally gone through the extreme highs and the lows in retail, I can now comment on why I feel a lot of retailers are going through hard times.

Whether you are a start-up, small business or a multi-national, cash flow is imperative to business survival. Retailers have gone through a stop-start love affair with cash flow management, by putting out fires when they arise, rather than implementing some simple management tools.

To understand how to manage cash flow, you must fully understand what its components are:

Pay accounts slower — Your suppliers that you have good relationships with should give you some leeway with time frames to pay your accounts. Sometimes we chase the discount that is given for early payments on accounts, but should ask ourselves if that discount will make a major impact to the bottom line.

Remember — don’t mistake profit (the money that you make after you have paid for everything) with cash flow (the money that pays the running and growth of the business).

Reduce inventory — Retailers are generally very good at doing this. But rather than slashing prices, have a look at some other alternatives such as: setting open-to-buy budgets; standardising layouts across stores that maximise sales in core departments; reviewing/implementing a replenishment program; concession arrangements with suppliers; and returning stock that has not sold and replacing it with faster moving lines.

Collect accounts receivable — Because most retailers don’t have large accounts outstanding, this really applies to those who have a corporate section of their business. If you are a retailer that has account systems in place, look at ways to reduce the terms of the account from 30 days down to 14 days, or take deposits.

Reduce costs of goods — Internally this would be your processing in which you receive, store, and distribute stock. When dealing with suppliers, organise strong trading terms, which gives you more margin in the backend for rebates, co-op advertising and return-to-supplier programs.

Increase prices — «You’re insane, you can’t increase prices, we’ll get murdered out there.» Yes, retail is competitive, and the majors have pushed everyone into discounting mode to increase sales. But without freaking you out, have a look at the stock on the floor, and determine which items you have that experience high levels of competition (and keep these prices competitive), and review the items which have little or no competition (and increase the prices of these products).

Stopping the leaks

In understanding what makes up cash flow, retailers should put in strategies to ensure that they maximise their cash position at all times. Here are some simple strategies that can be implemented in your retail business.

Measure stock turns — This is the cost of sales times the cost of goods in stock for a 12-month period. So if you had $1 million of total inventory for the year, and sold $1 million at cost, you would have one stock turn a year. The benchmark is to have four stock turns a year, to maintain a healthy cash flow.

Measure wages as a percentage of sales — Setting a benchmark on wages as a percentage of sales is a very basic, but important, strategy. Remember to factor in all of the add-on costs that are associated to wages such as commissions, payroll tax, superannuation, workers compensation, etc. Also when deciding on your wages percentage target, look at what you can afford within your margins, and also adequate floor coverage, so in order not to miss any sales opportunities.

Measure marketing expense as a percentage of sales — It is amazing how many businesses burn cash on useless or over-marketing expenditure. Some of the budgets are plucked out of the air, with no real understanding of how it impacts cash flow. Then when times get tough, retailers rein in advertising, which compounds on the loss of sales. Set yourself a marketing expenditure budget based on a percentage of sales, so that you don’t overspend, or lose traction when business slows down.

Evaluate your rent expenditure — Evaluate your location strategy on a regular basis, if you can rent cheaper premises without hurting the business, then move. We know how hard it is negotiating rents with a major shopping centre, which is why we focus on location strategy rather than negotiating a cheaper rent.

Law firm in costa rica — find an attorney in costa rica

Law Firm In Costa Rica — Find An Attorney In Costa Rica

If you are planning on visiting Costa Rica, getting married in the country or are considering moving to the country to buy property, it is a good idea to get in touch with a law firm in Costa Rica that can help you understand the laws of the country when it comes to business, employment, immigration and even domestic law.  You can find an attorney in Costa Rica by going online and finding out what type of services they offer to those who are visiting the country, are immigrants of the country or who are planning on visiting or staying in the country.

It is always a good idea to have some type of legal counsel before you sign any legally binding contract in any country in which you do not know the law.  In fact, it is a good idea to have legal counsel in your own country.  If you plan on emigrating to Costa Rica to live, do business in this country or to get married in Costa Rica, you should look for legal counsel.  When you are in Costa Rica, you have to abide by their laws. 

There are many people who wish to have a vacation home in Costa Rica and, perhaps, rent it out during some times of the year to others.  In order to do this, you need to find an attorney in Costa Rica who not only understands real estate laws in this country, but who also understands the obligations of landlord and tenant.  You need to find a law firm in Costa Rica that can help you with these issues. 

If you plan to do any banking in the country of Costa Rica, it is a good idea to get an attorney in Costa Rica who can help you with this type of offshore banking.  If those who are renting your home in Costa Rica are paying you, they might be paying you through and agent in the country.  It will be necessary for you to set up an offshore banking account.  This will also give you some tax advantages when it comes to your affairs in the United States or in some other countries. 

Buying property in Costa Rica is a good option for those who want to invest in property that is not only in a vacation climate all year long, but also is priced to sell.  Before you do this, however, you need the advice of a legal consultant in Costa Rica. 

If you live in Costa Rica and want to get legal counsel about any type of matter that has to do with the law, you need to use a law firm in Costa Rica.  Do not depend on your own lawyer in your own country to help you with this as the laws vary from country to country.  Divorce, for example, is very different in Costa Rica than in the United States.   For any type of legal help in Costa Rica, whether you are visiting, planning to get married in the country or if you are planning to buy property, seek the advice of Costa Rican lawyers. 

Is an executive virtual office right for you

Is An Executive Virtual Office Right For You?

The economy has not been kind to many businesses of late. An increasing number of business owners are finding out that a drastic slowdown in sales or clients means that being able to cover operation costs is becoming more and more difficult. An executive virtual office, though, is a financially–savvy cost to make when it comes to keeping such costs at a reasonable level. However, such an arrangement may not be perfect for every business.

Most of the time, the people who run extremely streamlined businesses such as those that are internet-based or single-employee consultancies are the ones who benefit most from using a virtual office space. This is because businesses like these are highly-reliant on the ability to cater at any time of day to customers or clients who are often in remote locations. These businesses have little or no requirement for large, permanent office spaces, being based mainly on a minimal number of highly-skilled employees.

Another aspect to consider about an executive virtual office is the frequency with which you will need its services. Such offices are usually used on a semi-regular basis, such as conference rooms to be used for monthly meetings or occasional seminars. As such, a virtual office may not be the best choice for a business that is built on daily face-to-face interaction between clients and staff.

If you’re considering switching business operations to a virtual location in order to save on rental costs, then you’re on the right track. A virtual office space is almost always available at a cheaper rate than a permanent office address. Additionally, signing up for such a service allows a business owner to enjoy the same facilities as that of an «actual» office. This means not having to sacrifice conveniences like phone answering services and a business address. As a matter of fact, features such as a respectable address, professional receptionists and efficient mail and fax management systems are all part and parcel of the virtual office. 

Houston real estate | what to expect from the houston market

Houston Real Estate | What to Expect from the Houston Market

Houston real estate has long been a barometer for the rest of Texas. But now, in the recession, the city is behaving out of character. One day things might look promising; the next, not so good. With the rest of the state looking for guidance, it is easy to see how many realtors are concerned. But the truth is the market is trying to work itself out. It is vulnerable to the economy. It is aggressive in its method. And it will not go away. Gently. So, the big question is when and how the market will recover, not if it will recover. Houston-area home sales fell for the 20th straight month in April as the local housing market continues to slog through the recession and financial crisis. Single-family home sales last month fell 22.5 percent compared to the previous April, according to data from the Houston Association of Realtors. Prices, though, were down less than 1 percent, a positive sign after six months of more significant drops. The median price for a single-family home was $149,050 in April, compared to $150,000 a year ago. The median is the point at which half the homes sold for more and half sold for less. ?€?The housing industry recovery will be a gradual process, but Houston continues to demonstrate the strength of its home values compared to other communities around the country, where pricing ballooned and then bottomed out,?€? Vicki Fullerton, the association?€™s chair and broker of record at RE/MAX of The Woodlands & Spring, said in a news release. Homes sold out of foreclosure made up nearly a quarter of all the single-family homes sold in April. But that figure has been tapering since January when foreclosures made up 34 percent of sales. With historically low interest rates and a federal $8,000 tax credit, real estate agents are reporting more activity among first-time home buyers. Realtors sold 4,200 single-family homes in April through the Multiple Listing Service. Most of the sales were of existing homes. Preliminary figures for May signal another decline, with a 25.3 percent drop in pending sales at the end of April. Those are listings expected to close within the next 30 days. The number of properties for sale also fell in April to 45,269. Rental demand picked up again last month with leases of single-family homes up 8 percent on a year-over-year basis. Townhouse and condominium leases were up 12.2 percent. So there you have it, Houston is a city on the brink. It could go either way. But for savvy investors, with the right capital, credit and security, plenty of lucrative investments are available.

How executive suites can save a start-up company money

How Executive Suites Can Save A Start-up Company Money

A start-up company sometimes overlooks executive suites as an office space option and they shouldn’t be. They can save as much as 70% over conventional office lease space.

For example, let’s say you are starting a company in Irvine, California. You have basically two choices. You can lease office space in Irvine and go through the hassle of negotiating a contract. This contract will probably tie you down for a year or more.

Or you can rent an Irvine executive suite

Here’s what you will discover. Executive office space can be rented for a day, a week, a month or whatever time frame fits your plans…and there is no delay. You will be able to move right in.

Also, there is nothing to buy. Executive office space can be completely furnished for you. That alone will save a ton of start-up capital. Plus, executive suites are almost always located in prestigious, ‘Class A’ buildings. That means you’ll be looking successful from day one, whether you’re renting Irvine executive office space or one of many executive suites in other cities.

The benefits and savings don’t stop with just the furniture when renting executive suites. You will also have access to a whole battery of office equipment, such as copiers and fax machines. Plus, a trained receptionist is provided to greet your visitors…and this person isn’t going to be on your payroll. A broadband wireless Internet connection is also provided, enabling you to be doing business on the Internet minutes after walking into your new office.

Here’s why executive office space is so ideal for any start-up company.

1) No long term lease.
2) No furniture or office equipment to buy.
3) No staffing required. (Executive suites can also provide a secretary.)
4) An impressive office building, which gives you the look of success.

And here’s an added benefit we haven’t mentioned. You’ve got a fully equipped meeting or conference room available…not just in Irvine or wherever you happen to be. Executive suites are part of a worldwide network so you can arrange meetings in prime facilities all around the globe.

There’s no question about it. If you’re in a start-up mode, one of the smartest things you can do is check out an executive suites provider in your area. You’ll look like a well-established and successful company the moment your executive suite’s door is opened for business.