Spicer Matthews » Cash http://www.spicermatthews.com Random Thoughts By Spicer Matthews Wed, 09 Jun 2010 20:00:17 +0000 en hourly 1 http://wordpress.org/?v=3.0.1 The New Age Business Man / Womanhttp://www.spicermatthews.com/the-new-age-business-man-woman/ http://www.spicermatthews.com/the-new-age-business-man-woman/#comments Wed, 09 Jun 2010 19:56:33 +0000 Spicer http://www.spicermatthews.com/?p=205 BrickandMortar02 The New Age Business Man / Woman Something that has been on my mind for a while now is; What does the new age business person looks like? As more and more consumer dollars are being spend online and less and less spent in person on the streets, how does this affect the first time entrepreneur? Really great companies have been built by people with simple resumes. I see in many ways it is becoming harder and harder for a first time entrepreneur to break ground on their dream because they have to do business on the web.

It use to just take someone that was willing to work long hard hours and maybe some start up capital to build a truly profitable business. Whatever business the entrepreneur was going to go into they did not have to have 20 years of experience working in the industry, however in many cases that helped. I have a close friend who went to college and graduated with a business degree. Other than odd college jobs this friend did not have much of a resume. He knew one thing; he did not want to work for “the man”, and he was willing to work his butt of to make it happen. After much research he raised a small amount of capital and went into the fast food business. Today he has grown the business rather successfully. All this friend had was a passion and a good head on his shoulders.

The New Skill Set Needed

The above example is getting harder and harder with the move to the web. To launch even a basic business you often have to surround yourself with domain experts in all sorts of different niches. If you want to compete on the web. You need to hire a designer, web programmer, mobile programmer, sysadmin, web marketer, experts on understanding your market, and more. You can not just sit on a busy street count the people going by to understand your market. You can not just lease a space and open your doors. You have to surround yourself with domain experts that often are not cheap. So a good head on your shoulders and some start up capital turns into a bunch of people with good heads on their shoulders and tons of capital.

How Do We Solve The Problem?

The problem I want to solve; Is how do we move the world to the web but keep the “all you need is a dollar and a dream” way of business alive? I know there is not a simple answer and as the Facebook generation morphs into business people they will already be hitting the streets with a leg up on my generation and older generations, but I would like to find better ways to bridge the gap.

As a side note, I realize this is a very general topic. I realize there are many case studies of the web making live easy for first time entrepreneurs. However, looking around most of the successful web companies are started by people with tech backgrounds. I want to find better ways for non-tech people to start great businesses without tons of money.

]]> http://www.spicermatthews.com/the-new-age-business-man-woman/feed/ 0 Don’t Overlook The Balance Sheethttp://www.spicermatthews.com/dont-overlook-the-balance-sheet/ http://www.spicermatthews.com/dont-overlook-the-balance-sheet/#comments Wed, 30 Sep 2009 21:42:46 +0000 Spicer http://blog.spicermatthews.com/?p=5 100161 main Full Dont Overlook The Balance Sheet

This spring will be my 10th year in business for myself. By no means does this make me an experts in business but I have learned a few things along the way. There seems to be two type of businesses; explosive and non-explosive. To define this further lets use the example of a sub shop. Once this sub shop gets operating the revenue for the company should be about steady. Of course there are ups and downs but overall there is not one big pay day. Money just seems to come in each month. This would be an example of a non-explosive business. Then there is the example of an explosive business. This could be a Realtor, loan broker, builder, lawyer, or whatever. These types of businesses tend to have big pay days. Money might not be rolling in everyday but when it rolls in it rolls in big.

Explosive business owners tend to be more exposed to this explanation but non-explosive business owners need to be equally aware. So many explosive business owners are so over joyed by the success of a few deals and are rolling in the money they made. They often are only thinking one thing. How do I deploy this new profit to make the same sale again but only double this time? This is where the problem lies. So many business managers do not have adequate reserves. Business owners tend to try to max out their return on equity. Just because you have $100,000 in the bank does not mean you have to deploy every cent of that.
Small business owners are not as obsessed with their balance sheet as they should be. Every day an owner or manager should ask them self “If we never made another penny again how many days, months, years could we keep the doors open and the lights on”? First, the question needs to be answered honestly, next you need to figure out what is a good answer. Every business is different. If you have tons of debt, employees, loans, expenses you will want the number of days/months/years to be higher. Clearly when you are a start up your cash on hand is going to be tough to maintain. What I do as a manager is I grow our balance sheet over time, but never losing focus on the benefit and importance of reserves. So a certain percentage of profit always goes to growing cash reserves, hence growing ability to sustain.
Lastly, look at some of the greatest business minds of all time they horde cash. Warren Buffet, Bill Gates, Jamie Dimon and so on. They always have cash ready to deploy when an opportunity comes about. Even at the small business level having the ability deploy cash and take advantage of an opportunity can better your profit. Lets say you are that sub shop. Lets say you spend $1,000 a month on cups. Another sub shop is going out of business and is selling you a year’s worth of cups for 10 cents on the dollar. If you had the reserves on your balance sheet you can take advantage of the opportunity and help your future profitability. Simple example but that same concept can apply to bigger deals as well.
If you are a small business, a large business, or just an every day person keeping a clear eye on your balance sheet is key to long term success.

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