Gratitude

Entrepreneurs have a lot to be grateful for. First and foremost are our country and the free market system that allows Entrepreneurs the opportunity to create and grow businesses and prosper.

Employees are the backbone of companies and Entrepreneurs should be thankful for the dedication, loyalty and hard work put forth by their people to make businesses successful.

No business can sustain itself without customers and clients. Be thankful to your sources of revenue for putting their trust in you to provide services and products.

Entrepreneurs should also appreciate their suppliers and service providers who continue to supply essential goods and services to sustain their businesses.

Shareholders and financiers who have invested in your abilities to grow the business and provide a return on their capital should be high on the list of people to whom Entrepreneurs are grateful.

Lastly, the community that you operate your businesses in should be appreciated also.

So on this Thanksgiving Eve, I encourage Entrepreneurs to express their gratitude to the above stakeholders in your companies.

Ravi Patel

www.patelCFOservices.com

Debt Renegotiation

Are you struggling with your debt payments due to the reduction of cash flow in your business? What are you doing about it?

Entrepreneurs might think about cutting costs or delaying expenditures to increase short-term cash flow. You should also consider debt renegotiation.

Most lenders would rather work with you to restructure the payments than create a situation of default. Discuss with your lenders the possibility of postponing payments for principal, interest or both for an appropriate period.

Be creative in your debt renegotiation to manage your short-term cash flow issues.

For information on Patel CFO Services, please visit my website at www.patelCFOservices.com.

Ravi Patel

www.patelCFOservices.com

Internal Controls – Bank Reconciliations

When an Entrepreneur hears bank reconciliation, the first thought that comes to mind is that it is an “accounting thing.” While it is indeed an accounting task, Entrepreneurs should be more familiar with it since it is a significant internal control feature.

Reconciling the balance on the bank statement to the amount in your General Ledger (GL) is normally a monthly procedure, but it can be performed more frequently depending upon the number of your banking transactions. The bank reconciliation process highlights unusual transactions such as customer checks recorded in the GL, but not deposited in the bank; unrecorded bank charges; as well as checks that clear the bank, however, there is no record in the GL. Some of the reconciling differences could identify signs of irregularities in your financial system, including fraud. That last word should definitely get the Entrepreneur’s attention.

A key internal control is assigning the responsibilities of performing and reviewing bank reconciliations. The designation of the proper persons should be based on adequate segregation of duties.

If you need more info, please contact us at www.patelCFOservices.com

Ravi Patel

www.patelCFOservices.com

Utilize your Bank’s Service Offerings

Are you aware of all the services that your bank offers? How many services are you utilizing to make your business more efficient?

Entrepreneurs should demand from their bankers more than just a checking account and a line of credit. Ask your banker to visit your company and review with him or her the financial transaction processing issues that you might have. Banks have invested heavily in new technology to compete effectively in the advancing technological marketplace.

As Entrepreneurs, ask your banker for the same type of services that larger companies are utilizing to streamline their financial operations and reduce costs. Learn about the new services and develop a plan to incorporate them into you business.

For more info on Patel CFO Services, please visit my website at www.patelCFOservices.com

Ravi Patel

www.patelCFOservices.com

Do the Right Things

Entrepreneurs are normally go-getters who love to get things done. They are not afraid to roll up their sleeves and delve into tasks at hand in order to accomplish them. As companies grow in size, Entrepreneurs become knowledgeable in most aspects of their functional areas  of their businesses. In most cases they can perform most tasks as well as or better than their employees. Sometimes there is a natural tendency to do things themselves as they can do them better, faster, and right.

The passion of Entrepreneurs to do things right and to do it themselves limits the growth of their companies. Instead, they need to create an environment and culture where their people do things right. Proper training of people, even allowing them to make mistakes and learn from them, and promoting a culture of continuous improvement allows organizations to become self-sustaining and grow well. Entrepreneurs will then not have to worry about doing things right because their people will be doing it themselves.

What should Entrepreneurs do then? Do the right things.

To find out more, please read the full article at www.patelCFOservices.com

Ravi Patel

A Silver Lining in an Economic Downturn

Most people are complaining about the economic downturn and how it is adversely affecting their businesses. However, there is a silver lining in this situation and Entrepreneurs should take advantage of it.

While business activity has slowed down, Entrepreneurs should take this opportunity to critically examine their business processes and constructively utilize their human assets (employees) to strengthen and improve their systems and procedures. Taking time now to streamline your operations and intensively train your people will give you a head start when the economy picks up.

While continuous improvement should be the goal of every Entrepreneur, the reduced activity now should give a tremendous opportunity to push aggressively and set up improved business processes and trained resources to create a competitive advantage when the economy rebounds.

For more info about Patel CFO Services, please visit my website at www.patelCFOservices.com

Ravi Patel

www.patelCFOservices.com

Bailout Mania

Entrepreneurs must be puzzled about all this talk about bailing out mega corporations. After all, Entrepreneurs are held accountable for running their own businesses and prudently managing their financial situation. Why is it that the management teams of large corporations are not being held accountable in a similar way?

The initial strategy of the government infusing credit and liquidity in the financial system was prudent and necessary. Priming the economic machine with new funds to get it re-started was conceptually right on. However, the government bureaucracy and special interests took over in the implementation phase and the process now is really messed up.

The bailout of the insurance and auto industries, now spreading to other industries and even city governments, is getting to be detrimental. The whole idea of a free market system where companies have to perform well to survive is being discarded. Management teams of these troubled companies, instead of being held accountable for performance, are being rewarded with additional funds to mismanage them again. When and where will it stop?

What is needed is to let the free market takes its course – survival of the fittest; failing firms need to reorganize under bankruptcy or be bought over by stronger companies with strong management. I am not suggesting that we close down weak companies, but merely revamp them with new and better management to compete effectively in the open marketplace.

While this might mean layoffs and short-term pain, it would be in the best long-term interests of consumers, employees, other stakeholders, and more importantly the taxpayers.

Ravi Patel

www.patelCFOservices.com

Published in: on November 18, 2008 at 6:03 am  Leave a Comment  
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SWOT Analysis

Have you performed a SWOT analysis for your business? An Entrepreneur might want to annually step back from the day to day operations of their business and have a strategic planning session with their management team.

As a part of the planning session, conduct a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Analyze the strengths of your company; critically examine your weaknesses and what you need to do to fix these; review the market opportunities given your strengths and minimized weaknesses; and finally assess the external threats posed by competitors, regulatory agencies, economic factors and so on.

A SWOT analysis might be a valuable planning tool for Entrepreneurs looking to improve and grow their businesses.

Ravi Patel

www.patelCFOservices.com

Published in: on November 17, 2008 at 6:10 am  Leave a Comment  
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Financial Response Strategies

Entrepreneurs should be attempting, in the current economic environment, to develop response strategies on how to deal with the impact of the severe financial downturn on their businesses . Some of the issues faced by Entrepreneurs include cash conservation, employee layoffs and morale, reduction of overhead and fixed expenses, re-alignment of variable expenses to revenues, customer and product/service rationalization, restructuring of debt and so on.

Entrepreneurs should create a menu of contingency plans to deal with different kinds of financial situations and implement, as needed, cost-effective strategies to deal with the economic downturn.

Creative solutions are what will enable Entrepreneurs to successfully address this business cycle.

Ravi Patel

www.patelCFOservices.com

Internal Controls

While most Entrepreneurs are aware of the need for internal controls in their companies, the size of their organization often limits proper segregation of duties.

In any event, Entrepreneurs should be vigilant about proper checks and balances as they build their organizations. While trusting your people is a fine virtue, a solid company is built on strong systems and procedures with proper internal controls.

Even in a smaller organization, creative division of responsibilities with reviews and approvals can provide adequate controls. We will discuss internal control issues in future posts.

Ravi Patel

www.patelCFOservices.com