- BETTER USE DISCRETION
- WE’RE SELLING MORE THAN EVER – BUT WE’RE BROKE
- Financing a Lifestyle Can Be Risky Business
DISCRETIONARY EXPENSES – BETTER USE DISCRETION
One of the very first things I review when either called into a troubled company or appointed as a receiver are a business’ discretionary expenses.
Unlike utilities, insurance, rent or mortgage payments, payroll and other fixed costs, discretionary expenses have to be paid for with left over cash.
Delivery trucks, new machinery and equipment, business (and personal) vehicles, and luxuries all fall under the heading of discretionary expenses.
Let’s take a look at a couple of these items and examine some of the ways these discretionary items can impact cash flow.
Delivery trucks are essential, but how much delivery truck is essential? Size, engine choice, ...
“WE’RE SELLING MORE THAN EVER – BUT WE’RE BROKE”
Many of you may think this title is a mistake or misleading or just plain stupid. Of all the complaints business owners have made, this particular complaint may not only be the most baffling, but the most indicative of a serious cash flow problem or problems. The truth of the matter is that it is COMPLETELY possible for a company to sell its way into a very deep hole. Unfortunately selling out of the hole may be harder than selling into the hole.
Let’s take the idea apart and examine some of its implications.
A conversation between the production manager and the sales manager might go something like this…&......