Doug Barra's Blog

Have you ever looked at your financial statements and wondered, “If I made a profit, where is the cash?” or “How come I have cash in the bank, if I didn’t make a profit?”  The reason is very simple, profit is not the same thing as cash!

Many business owners look at their financial reports and see a profit and go out and celebrate, or see a loss and go out and drown their sorrows. Hmmm, seems to always generate the same result in one sense…  Well, it probably should.

Have you ever tried to buy that drink with profit?  Try it some time, go to the bar with your profit and loss statement, show the bartender the profit at the bottom and ask for a drink.  I can pretty much guarantee that the bartender will then ask you for cash!  Profit is a theory! Cash is King!

Don’t go off the deep end in the other direction either, though.  You can’t effectively run your business from your bank account.  In the end, you need to have both. You need to understand what your profit and loss statement is actually telling you and you have to understand the cash flow in your business.  Invest time in learning how to read your financial statements and use them to manage your business, and learn to understand the ways that cash flows through you business and how you can manage it in the most effective and efficient manner.

I know it’s a bit goofy and clique, but it got your attention… And, it’s relevant to what I want to talk about.

Especially in challenging times, we (and I mean human beings in general) tend to get caught up in the day to day and loose sight of our dreams. Often this results in our feeling that the dreams are never going to happen, or that they are so far off that there is no point in focusing on them. Nothing could be farther from the truth!

When we are in challenging time, or even when we are just discouraged about our dreams, we MUST stay focused on our dreams, our aspirations and our goals. This is how we can stay motivated to succeed. A measure of a person’s metal is how well they can stay focused on the prize, even when the going gets rough!

It’s 80% Mindset:

1. Are you looking for opportunities? Or, are you complaining and giving in to panic?
2. What are your goals? Are they really clear.
3. Who is around you? Are they focused and positive?
4. Do you have “Think time” for new ideas?
5. Planning is the key. Drill down to the details. What do I need to learn? Whose help do I need to recruit?

And 20% Business Skills:

1. Trim the fat – reference your plan, never cut just to cut. Do you need to cut people, costs, etc.?
2. Look at your product line, what’s selling? How and where can you add value and keep good margins?
3. Examine your sales and marketing. Are you getting a return on your investment?
4. Are you managing your cash flow and budget, it’s critical?
5. What do you need to do to keep your existing customers happy?