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Category Archives: Increasing Profitability

How to Save a Retail Store That’s Losing Money Every Month

By | Business By The Book, Business Improvements, Cash Flow Management, Increasing Profitability, Organization & Strategy | No Comments
Avoiding Business FailureQ: I launched a retail store about nine months ago, but I need immediate help. My business is losing several thousand dollars per month and I am not even drawing any salary for me or my family. My revenue has flattened out due to the economy and is around $40,000 per month, but my expenses are running around $46,000. I have an SBA loan payment of $6,600 per month and a building lease of $3,300 per month. I" />

Q: I launched a retail store about nine months ago, but I need immediate help. My business is losing several thousand dollars per month and I am not even drawing any salary for me or my family. My revenue has flattened out due to the economy and is around $40,000 per month, but my expenses are running around $46,000. I have an SBA loan payment of $6,600 per month and a building lease of $3,300 per month. I’m thinking about trying to refinance my SBA loan to get a lower payment. Any suggestions? A: The first thing I would suggest…

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Business Planning in a Down Economy

By | Business By The Book, Buying a Business, Buying a Franchise, Growing a Business, Growth Strategy, Increasing Profitability, Investing in Small Businesses, Planning, Starting Up, Valuing a Small Business, Writing a Business Plan | No Comments
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Q: Should the economic forecast be an important factor in determining the type of business to start or acquire? A: Most businesses that are acquired or started are done so with a long time horizon in mind. Add to that the fact of the typical continuous cycles of any economy: (downturn, bottom out, upturn, and peak). Given that long-term view and the necessary expectation of economic cycles that almost defy the ability to forecast the timing of those trends, it’s more important to pick an industry/market in which you have loads of experience and create a superior offering with a…

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Need Advice on Interpreting Financial Results

By | Accounting, Business By The Book, Finance, Finance, Finance & Accouting, Financial Reporting, Increasing Profitability | No Comments
Declining Net Income

Q: Over past 10 years, our service company’s Revenue and Long-Term Liabilities have increased while Retained Earnings, Equity, and Net Income have decreased. Any observations and/or counsel? A: While it is somewhat difficult to answer the question without additional information, the most likely scenario is that your Expenses are rising faster than your Revenue and — as an owner — you continue to take out the same salary/distributions that is affecting most or all of the Net Income and the shortfall is being made up by taking on more Long-Term Liabilities. To illustrate the point, here is an example of…

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How to Improve the Profitability of a Conference

By | Accounting, Business By The Book, Business Improvements, Cash Flow Management, Finance, Financial Reporting, Increasing Profitability, Organization & Strategy | No Comments

Q: My family has planned and managed a Christian family conference each year now for several years, but we end up losing quite a bit of money on each conference. We really feel it is of the Lord and that the conference is a blessing to many families, but it has turned into a painful financial experience for us. Do you have any advice you could offer us? A: There are two ways to improve the situation: to increase revenue and/or reduce expenses with the goal of never spending more than you are bringing in. Here are some specific suggestions…

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