Dale Scmeltzle's Blog

Too Foolish To Fail

by Dale Schmeltzle

The big buzz on Wall Street is today’s planned IPO of Facebook. I hope it will reverse the recent downward trend (11 of the 12 last trading days were losers). Several months ago, a partner and I were discussing Mark Zuckerberg in the context of starting a new business. That discussion lead to a two-part post, which in honor of his IPO, I repeat in its entirety today.

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I HATE TO SAY I TOLD YOU SO!

by Dale Schmeltzle

This is a sad day for long-time antique Kodak camera collectors like me, not a day to remind readers about the critical importance of cash flow to business survival. Unfortunately, the inventor and one-time “King of Cameras” has been reduced to a shadow of its former greatness.

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Last week I introduced the topic of cash flow management. Cash flows generated or use by any business are the net result of the inter-action of three inter-related cycles. They include the expense and revenue cycles, which I discussed last week. Today I complete the topic with a review of the capital cycle.

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CASH: NOW YOU SEE IT, NOW YOU DON’T

The first response to a cash crisis is usually to tighten up on expenses, cut back on something, or generally to make do with less. That may be necessary, but it is usually only part of the answer. Cash flows generated (or consumed) by any business are the net result of the inter-action of three related cycles. They are the expense, revenue and capital cycles. I will discuss the first two today, and conclude next Friday with the capital cycle.

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CASH IS KING, LONG LIVE THE KING!

Today’s title is an obvious partial parody on the old phrase, “The king is dead. Long live the king!” It dates to thirteenth century England. It conveyed the immediate transfer of power between a deceased monarch and the heir to the throne. More relevant to our purposes, it signified the continuity of sovereignty, or the supreme authority. Today I will discuss the more basic question of why cash is cash king in the business world.

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WHAT A CPA KNOWS ABOUT MARKETING: MORE SALES AREN’T ALWAYS THE ANSWER

There is an old joke about a marketing executive who bought a truckload of melons from a farmer for $1 each. He advertised them for sale at $0.85. When his CFO asked how he planned make a profit, he proudly replied, “Volume!”

This story points out an often-overlooked fact: increasing sales is not always the correct decision. Knowing how to sell something without understanding the economic impact of those sales is a recipe for disaster. The ultimate result companies must focus on is how much cash a promotion puts in the bank. It really is that simple!

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You Can Have Any Color You Want, As Long As You Want Black (Part 2)

Today I conclude the article on product driven versus market driven companies. I began by discussing the cultural differences between the two. Product driven companies concentrate on achieving and maintaining technical superiority. Market driven companies devote resources to brand development and customer communications.

Today, I will discuss adapting strategies to market changes, I conclude by telling you the perfect strategy for success in your business.

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You Can Have Any Color You Want, As Long As You Want Black (Part 1)

This week, I get to incorporate two of my favorite topics, history and old cars, into a two-part article. My title is one of Henry Ford’s most quoted statements. He actually said, “Any customer can have a car painted any color that he wants so long as it is black”. I use it to introduce my real subject, product driven versus market driven companies. Henry obviously believed in a product driven strategy.

Let’s define your strategy!

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Curiosity was Framed, Ignorance Killed the Cat

Thomas Edison said he rarely picked up an object without wondering how he could make it better. I call that the curiosity factor. Either you have the curiosity factor, or you don’t. It cannot be taught or learned, and is seldom spoken of. Yet in many professions, it is probably the single best predictor of ultimate success.

Every business desperately needs someone who will leap headfirst into operations or finances with a dedication approaching a Pit bull on a pork chop.

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Customer Service #101: Buddy, Can You Spare a Sandwich?

It was Friday night, the end of a long week. After fighting construction traffic for 45 minutes, I stopped at a national fast-food chain. I ordered three sandwiches. Mind you, I didn’t order drinks, chips or dessert, just three sandwiches. The bill came to $27.14. Since I didn’t have much cash, I handed the salesclerk a credit card. I was informed their “system” only allowed credit card charges up to $20.

I’m not certain whether it is a new policy, a misguided rule imposed only by this franchise, or if the employee was simply mistaken. Regardless of the reason, it points out a common business failure.

The problem is creating unnecessary obstacles for people who might otherwise become loyal customers.

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