March 16, 2006
Vol. II, Issue 06

A Note from the Editor

Hello to All,

Welcome to this issue of The ART of Business newsletter and a big welcome to all the new subscribers. We hope you enjoy this week's feature article, "Business By the Numbers."

And for those of you who didn't see our Springtime Special announcement about the Infopreneuring Intensive 7-Week Training Course, you can check out our website for details: Infopreneuring Intensive.

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Business By the Numbers

The truth is: dirty dishes aren't the only thing that make me slightly crazy. I'm also nutty about numbers: my bank account balance, my website traffic stats, PIN numbers, phone numbers--I've become dependent on digits.

In some situations, that's not such a bad thing. After all, it's good to know your social security number by heart, right? And all those PIN numbers--you need to know the numeric code to access your voicemail, or do your banking over the phone or online. Numbers have become a necessity of life. Especially in business.

Keeping your accounting records current, for instance, is vital to your company's financial health. If the time comes when your expenses outstrip your income by a 2-to-1 ratio, that's a numbers nightmare. It means you're spending twice as much as you make and you need to do something to reverse the trend before you sink into serious debt.

So while obsessing about numbers might not be healthy, monitoring them is. Developing a habit that includes weekly or monthly financial analysis is a "best practices" method that will help keep your company fluid. It's a numbers game, and if you want to win, you've got to master the game.

Here are some ways you can do that:

• Cost/benefits analysis: Before making an expensive investment, it's wise to crunch the numbers first to make sure the return on investment (ROI) is worth the cash outlay. For example, when planning a direct mail marketing campaign, researching the marketplace first to insure that the mailing piece targets your specific niche market will bring in the most qualified customers--those who are more inclined to buy. Your aim should be to attract enough business to cover the cost of the mailing. The benefit should outweigh, or at least, justify the expense.
• Flexible payment options: Before buying on credit, check to see if the company you're doing business with offers a discount on payments made within 10 or 15 days of the invoice date. Sometimes vendors offer incentives to early payers. Likewise, if you offer payment terms to your customers, consider giving a discount price to customers who pay cash. And if you do extend credit to your customers, make sure your invoices include a statement about late fees--a penalty assessed for payments made after the invoice due date. (Check that your state/province/country allows you to do this.) When customers don't pay on time, it negatively impacts your cash flow, and you incur the additional expense of having to bill them again. A late fee will help defray the expense, and encourages customers to make timely payments.
• Pre-order discounts: If your business sells tangible goods (products rather than services), you can offer your customers a discount for purchases they pay for in advance instead of on receipt. This helps you pay your own supplier without having to bear the cost of inventory until you get paid by your customer. The amount of the discount you give your customers will be offset by the savings you gain by not paying interest to the vendor for purchasing on credit.
• Procure contracts: Easier said than done, I know, but if you are able to secure a monthly contract for services or goods with a large entity, like a corporation or the government, it takes the burden off wondering whether you'll be able to pay the bills every month. Cleaning services, web designers, copywriters, database administrators, food service providers, landscapers, window washers, and vending machine operators are just some examples of the "freelance" work that corporations and some branches of the government outsource. You might not make quite as much per hour when you're under contract, but it's "money in the bank" every month.

Even if you're a "creative" type--artist, writer, photographer, designer--it makes good business sense to incorporate the numbers game into your repertoire. By taking good care of your business, you insure that it continues taking good care of you.

Until next time, wishing you all the best,

Angel Brown

www.womens-business-gallery.com

Please feel free to forward this newsletter to your friends and co-workers. You can subscribe to this newsletter by visiting: www.womens-business-gallery.com/newsletter.html

Copyright 2006 by Angel Brown. All rights reserved.

Published by the Womens Business Gallery, Woodland Park, Colorado