Philip Campbell's Blog

Caine Monroy is a young entrepreneur with an amazing lesson to teach each of us

The spirit of the entrepreneur is an amazing gift. I have had the good fortune to work with some amazing entrepreneurs in my career. I got to see firsthand how they turn their dream for a business into reality through vision and hard work.

Well, I have a treat for you today. Here’s a story of a young kid who has the spirit of the entrepreneur. It will put a huge smile on your face. It will probably even put a few tears of joy in your eyes as you watch it.

And the story even provides an example of the value of helping a young person succeed in business. And the power of social media to get attention.

It’s the story of young Caine Monroy and how he created Caine’s Arcade.

Check it out here http://cainesarcade.com/

You’ll love it!

Becoming a success in business presents some fun (and rewarding) opportunities

Being successful in business is both fun and rewarding. (And not just financially rewarding.)  It also gives you the ability to share what you have learned and to help other young business people along their path to success.

I remember some years back (2004 to be exact) when I was finishing up my first book about business, Never Run Out of Cash: The 10 Cash Flow Rules You Can’t Afford to Ignore.

Seth Godin Helped Me

I needed some big name authors to provide a “blurb” for my book that I could include on the front and back cover. I sent an email to Seth Godin because I loved his books Permission Marketing, Purple Cow, and The Bootstrapper’s Bible (you can read this one free on Seth’s web site).

He had no idea who I was. But he replied to my email almost immediately and agreed to take a look at the book. I sent it to him and he provided me a blurb for the book. A big name author helping out a guy writing his first book. That was super cool.

Brian Tracy Helped Me

I did the same thing with one of my favorite authors and audio program creators, Brian Tracy. There is no telling how many of his Nightingale Conant programs I have listened to as a young business guy wanting to learn and grow. He was a hero to me.

I sent him an email and he did the same at Seth Godin. He agreed to take a look at the manuscript. I sent it to him and got a handwritten blurb back in short order.

That always made an impression on me that big time authors would invest some of their time to help someone who wanted to learn and grow.

So I made a commitment to myself to do the same for others as those opportunities arise.

Who Can You Help?

I hope you will do the same for a young business person who would like to learn from you. What a very special gift you would be giving that person.

Just think how fun it would be to share a small bit of your success and wisdom with those who follow and admire you.

The smart way to evaluate an acquisition opportunity

Acquisitions can be fun and exciting and a great way to grow your company quickly. One of the first lessons you want to learn though when considering an acquisition is to recognize this important fact – it’s almost impossible to overcome a bad purchase price.

Meaning that paying too much for an acquisition can be deadly.

It’s kind of like buying real estate. You make your money on the buy, not the sell. Buying at the right price makes it possible to sell it later at a price that yields a nice profit.

Here’s the Secret

When evaluating an acquisition opportunity, make sure you have a number of different people (and personality types) assisting you.

Some of the biggest mistakes I have seen entrepreneurs make is they tend to look at the deal only through rose colored glasses. The problem is you don’t get a complete look at the business and the related risks when you look at it through only one lens.

You want to evaluate the deal from every angle. From the upside to the downside. The ins and the outs. The pluses and the minuses.

Trust me; you don’t want to have to try to dig out of a bad purchase price. It will more than ruin your day!

17 tips for surviving a cash crisis in your business

Nothing can challenge the very existence of your business like a cash crisis. Lenders are raising hell. Vendors are threatening to stop shipping. Employees are scared to death. It puts the pressure on you like nothing else can.

Having seen that scenario unfold many times during my career, I wanted to list a number of tips that I have found helpful in weathering the storm.

Here they are:

1. You have to have good numbers (financial statements)
2. No flying blind
3. Pay the government
4. Create visibility about what’s going on financially
5. Put the financial reality on paper
6. Don’t hide
7. Be accessible
8. Be proactive
9. Understand your strengths and weaknesses
10. Get help on the areas you are not comfortable with
11. Provide fast and accurate financials
12. Track cash daily
13. Have daily or weekly cash projections
14. Answer requests quickly
15. Have a weekly update call
16. Don’t over commit
17. Keep everything legal and ethical

Let me know if there are specific tips in that list you would like me to expand on.

Good luck!

Cash flow planning is all about setting cash balance goals and creating projections

We all know and agree that cash is the lifeblood of your business. If the cash ever runs out, then your entire business goes down the drain.

That’s why it is so important to know what your cash balance is now and what you expect it to be six months from now. That’s what my book Never Run Out of Cash is all about.

Having Cash Balance Goals

The goal is to make money. If you are not generating cash in your business, then you are not achieving the objective. In fact, the ultimate measure of your success in business will be determined by how much cash you create and how much of that cash you hang on to.

Therefore, you must have a goal for exactly what you want your cash balance to be.

Having specific cash balance goals will solidify in your mind exactly what you need the business to do for you financially. Your focus on cash will have an amazing impact on your ability to create a business that takes care of you financially. And that's the objective, right? 

Seeing Problems Before They Happen

Joe Frazier, the famous boxer, said "The punch that knocks you out is the one you didn't see." What Joe Frazier was saying is that in boxing, if you see the punch coming, you have a chance to react. You have a chance to get out of the way. You have a chance to at least "roll with the punch." It's when you don't see the punch coming that you get knocked out.

In business, you can't have a punch (a cash flow problem) show up at the last minute, when you didn't see it coming. This kind of surprise blow will knock you out. It could be the kind of blow that ruins your business.

Cash flow projections are the key to avoiding a nasty surprise.

8 great tips for perfecting your pricing strategy (and improving your profitability)

How you set the price of the products and services you sell could be the difference between the success or failure of your business.

Get it wrong, and you create a problem you may never overcome.

Get it right, and you dramatically increase the likelihood of creating a business that takes care of you financially.

There Are a Number of Moving Parts

Setting prices takes careful thought, analysis and testing. There's no one-size-fits all strategy here, but a number of elements to consider to arrive at a price for your product or services.

You must:

• Determine what you want to achieve with your pricing strategy;
• Evaluate what you're currently charging, and whether or not it's working;
• Compare your strategies to competitors';
• Understand how your product is perceived in the marketplace;
• Align your product with market perception;
• Analyze pricing strategies, constantly; and,
• Be prepared to increase your prices when necessary. 

A Short Tutorial

I wrote a tutorial for Inc. Magazine a while back that they turned into a really sharp online presentation titled Perfecting Your Pricing Strategy.

Click on the link to check it out. It only takes a few minutes to watch the presentation.

The tutorial goes into more detail on each of the steps involved in getting your pricing strategy fine-tuned.

It also includes a number of worksheets you can download at no cost to help you put the strategy to work in your business.

Getting your prices set (and adjusted) properly is critical to driving your profitability and cash flow higher each year.

A weak accounting function can drag you (and your company) down

I write a lot here about the importance of getting the accounting and financial side of your business under control.

So just in case you are thinking I may go a bit over board, I wanted to clarify a few points on why I focus so intently on moving you toward that goal.

I'm not saying the accounting and financial side of your business is the most important component of your business.

I understand how important it is to attract prospects and make the sale. I understand that performing for the customer is vital to the success of your business. You have to excel at attracting and keeping customers to grow a respectable business over time.

I'm saying that having a weak accounting and financial function can drag down the other functions that are performing well. It can keep you from growing. It can keep you from attracting the cash you need to grow.

It can keep you from attracting investors or attracting a Board of Directors that can help you achieve your plans for the business.

Here’s the Biggie

What a waste of smarts and talent it would be to be top notch in those important areas of the business and allow your financial function to underperform.

It's like being in a power boat flying across the water and throwing out the anchor. It slows you down - real fast. It puts a strain on the engine. It slows the boat down. It's dangerous. It's not smart. It can kill you.

Same way with your business.

It slows your people down. They have to spend time making excuses for how the financial side of your business is managed to customers and vendors.

You have to explain things you shouldn't have to. You have to fight fires you shouldn't have to.

It makes no sense to willingly tie an anchor around your neck (and leave it there). It's illogical. It isn't helping you take your company to the next level.

Maybe the time has come to fix it! No harm in making it better, right?

The three parts of your business that must be strong (are they strong in your business?)

A solid foundation for growing your business includes having strong people on your team, a selling and operations function that is firing on all cylinders and an accounting and finance function that ties it all together.

Think of each component, or function, within your business as three legs of a stool.

If one leg is weak or broken, then the stool will collapse when weight is put on it.

The strength of two of the legs won't prevent the stool from dropping you on the ground hard if one leg is weak and neglected.

Where is Your Weak Link?

That is what happens in a business when an unexpected event happens that hurts your financial results. You can get away with a weak financial function for a little while. But it will catch up to you real fast if your revenues take a hit because of a hiccup in the economy or maybe the competition snags one of your customers.

Allowing your accounting and financial function to be a weak link (a weak leg on the stool) adds unnecessary risk and exposure.

If you had a stool like that in your home you would fix it or replace it.

Same approach applies in your business, right? :-)

Student loans just topped the $1 trillion mark (here's why this is bad news)

Recently, I wrote about the importance of managing your personal lifestyle and personal debt since it can have a big impact on the cash you need to take out of your business.

From time to time, I will write here about personal finance issues and the use of personal debt. It is such an important part of winning financially that I want to share some tips and strategies with you.

Student Loans Are Dangerous

One of the biggest enemies of smart financial management right now is student loans. Students, and parents, are taking on student debt at a mind-boggling rate. Total student loans just passed the $1 trillion mark. And it is climbing fast.

Student debt has surpassed total credit card debt and total auto loans.

But here is the point everyone is missing. The $1 trillion of student debt is owed by about 37 million borrowers. That’s an average of about $27,000 per person.

The average credit card debt per person is in the $5,000 range. And the average auto loan balance is just under $10,000.

Here’s the Deal

My view is that 6 out of every 10 people who take on student loans are harmed financially. Think about that for a minute.

You wouldn't send your child out on a drive across town if you knew there was a 60% chance they would be seriously hurt before they returned.

You wouldn't fly on an airplane if you knew the odds of your plane going down in flames were 60%.  You would find an alternative means to get where you are going.

My advice for you is to seriously consider outlawing the use of student loans in your family. More and more private lenders are trying to get parents to take out student loans for their kids or having parents co-sign for their kids. Just say no… please.

Freedom from Student Loans Blog

I will be starting a blog soon devoted to helping you learn why student loans are such a nasty form of debt. Send me an email if you would like me to let you know when that blog is up and running.

I'd like to see you win financially in life.

Freedom from student loans is an important part of your journey toward winning in life. I hope I help in some small way in your success along that path.

How to grade your accounting function

Here are three areas/factors you need to evaluate in your accounting and finance function. I like to grade a company's accounting operation in these three categories on a scale of 1 to 10.

• Confidence Factor - This goes right to the heart of whether the people backing and supporting you financially have confidence in your numbers. You also want to determine if your management team has confidence in the financial information they receive. A lack of confidence is a big warning sign that your accounting function is letting you down.
• Insight Factor - This component takes a look at whether the information coming from your accounting and financial function is insightful or not. Most accountants don’t think in terms of really providing insight to others. Big mistake. This is an important part of how you create trust and confidence with lenders and investors.
• Accuracy and Speed Factor - The last component is focused on whether people trust the financial information you provide. Nothing kills your credibility more than providing financial information that is inaccurate or tends to bounce around and change all the time. When you provide accurate information quickly, and you do it consistently month to month, you set yourself out as a company that has its act together. Lenders and investors love it and you will forge a strong relationship with them that will last a long, long time.

Sit down with your Controller or your CFO and rate the accounting function on a scale of 1 to 10 in each of those three areas.

Then measure the progress they make in each area over the next three months.

It could be the start of something new and exciting!