The Ubiquitous Cash Flow Problem

The last thing any small business needs is cash flow problems. Actually, any business for that matter. In a good economy it's bad. In a bad economy it  can be the kiss of death.  So if the recession has you scrambling to come up with money to pay your bills on time, then these four ways to cure cash flow problems quickly should come in handy.

Eliminate Unnecessary Business Expenses

Pull out your bank statements. Pull out your credit card statements. What expenses do you notice? For the biggest return on investment, look for recurring monthly expenses you can cut.

There are often multiple business tool subscriptions, newsletter subscriptions, and software subscriptions in every business. And probably 5% to 15% of these are no longer being used or serving their original purpose. Identify those and cancel them immediately.

Another easy way to cut costs is to replace expensive services with cheaper services. For instance, replace your land line phone with a paid Skype account. Or find a free open source solution to replace a paid solution. Once you start researching, you’ll be amazed by how many good, affordable services are available to you. (Just ask your social network if you need help getting started.)

Invoice Faster, Pay Bills Slower

When cash is flowing out faster than it’s coming in, you have to do whatever you can to reverse the trend. Because ultimately you want the cash flowing out slower than it’s coming in. One easy way to do this is to collect on invoices faster, then “float” your money.  So, for instance: If you normally invoice on Net 30 terms, see if you can get your clients to pay sooner. Give them a small discount for paying the full amount up front or within a shorter time frame, say 14 days. The faster you get paid, the better your cash flow will be. The second step of the process is to keep your money as long as possible. So that means you will want to try to delay paying your vendors. 

You can ask for terms or ask for an extension on a specific invoice. Or if you’d rather not negotiate with vendors, you might try paying with a credit card. By paying with a credit card, you will automatically have an extra 25-30 days to pay. (Just make sure you have enough cash to pay off the balance at the end of the billing cycle.)

Outsource Tasks that Are Not the Highest and Best Use of Your Time

If you’re doing data entry when you could be doing work valued at $1,000 an hour, then that’s contributing to your cash flow problems. You will never have time to work on your business if you’re always stuck doing menial work in your business. 

You need to focus all of your time on doing things that maximize the monetary value of your skills. Any task that falls outside of your highest-value skill set should be outsourced to a reliable freelance worker. For instance, if you’re a solo entrepreneur, you might hire a Virtual Assistant (VA) to take care of some of the mundane and tedious tasks you have to do on a regular basis. Or you might contract with a company to screen phone calls, take messages, and book appointments. This alone could conservatively save a couple hours a week — freeing you up to do the things that generate more revenue and more profit.

Don’t Let a Good Month Ruin Your Cash Flow

If you’ve ever had a really good month in business, then you know how exhilarating it can be. You know how tempting it can be to go out and buy that expensive thing you’ve been lusting for. Here’s a piece of advice: Don’t buy that thing. Keep your emotions in check.

Set aside some cash when times are good so you can easily weather the bad months that may (or may not) happen in the future. Unfortunately, this advice is not usually followed. Just look at the guys running big product launches. The influx of money causes them to do stupid things… like buy six-figure luxury sports cars and 10,000 square foot bachelor pads. This is a huge mistake. Because one good month does not a good year make. Past performance is no guarantee of future earnings. The economic conditions of today are not the economic conditions of tomorrow. Etc., etc., etc. If you become financially over-committed in your personal life, it can very quickly bring down your business. 

The most successful business men (and women) I’ve met are those who are willing to forgo a lavish lifestyle so they can make wise investments and keep their businesses running smoothly. Some of the wealthiest are also the most frugal. It’s the entrepreneurs who run lean operations — even when the cash flow is good — that survive tough times and achieve longevity in their respective markets.

Follow these four business optimization strategies… be intentional about implementing them in your business… and you’ll cure your cash flow problems quickly.

First to Thrive in the Cloud: SMBs

Many SMBs have their heads in the clouds and the rationale is becoming definitive. Cloud computing is changing how computer business apps and related services are fulfilled. With the onset of the cloud, essential aspects of every business like data management, content, and collaboration tools are delivered from the Internet rather than supported by locally installed software and servers.


For SMBs there are many compelling reasons to migrate to cloud-based applications, like the following:

• Scaling up or down on demand
• Outsourcing the expensive burden of maintaining your own servers and software
• Accessing data from anywhere and from any device
• Replacing heavy IT expenditures with predictable operational expenditures
• Focused strategies and execution managed from a centralized environment

Many businesses are already using the cloud and don’t even know it. Several services we take for granted such as WordPress, Gmail, Skype and GoToMeeing are cloud based. And the skies are just going to get cloudier. Harbingers of the future, VCs are insisting their startups stay lean and mean by using cloud services to test and build out business concepts as well as to scale the business.

Concerns about security aren’t putting much of a damper on the party. Cloud-based startups are predicted to number in the thousands over the next few years. Cloudy with a chance of cost savings. Depending on whether you want to make a wholesale move to the cloud or shift a few operations, there are several hot services designed specifically for SMB productivity.

For the small and medium sized businesses out there these are very exciting times. Although technology has always been a game changer, the stark realities of over-extended budgets and shrinking revenue streams are constant. Remember, you don't have to dive headfirst into total migration or radical paradigm shifts in the infrastructure of your organization. You may want to start off by analyzing the myriad of Cloud software and services out there. Some are even free. The following list should help start the process:

• Mozy.com  Data Storage
• Salesforce.com CRM
• DropBox.com File Storage
• SoSonlinebackup.com Data Backup
• Schedulicity.com Scheduling
• Outright.com Accounting
• Google Apps Full Suite of Business Tools

For questions about your business and successful integration into the cloud, please call Computech Data for a no cost analysis today. 760-469-9118

Cloud Services: Why does my business need it anyway?

Cloud computing services allow you to use software and computer resources online as a utility. This allows you to pay for those resources when you need them, provided via the web, usually on pay as you go style models.

This means moving away from the, "software as a product", is replacing that paradigm  by online services.

To truly be considered “cloud computing” the actual work of any applications is performed in the cloud, rather than on the user’s machine. Users are using an interface where they can access the data that is being processed online.

This allows for more complex tasks that would traditionally have been seen as beyond the scope for traditional budget computers to be performed online, Computech clients gaining the results they need at more affordable prices.

So, where historically you may have installed Microsoft’s office suite when you purchase a new computer, many users are opting for cloud based alternatives, such as Zoho and Google Docs. In fairness to Microsoft, they have been making moves to the cloud offering a host of collaboration options with Office 365.

Convince me why my business should be hosted in the "Cloud"

The number 1 consideration for most SMB's is cost. Should it be though?

It is mission critical of course to stay within budget. Buried with the initial capital outlay is a layer of underlying justifications that may ultimately reduce TCO by as much as 65% over your present figures. Take the physical equipment you have presently for instance. When functionality is taken off site, through needing less powerful machines, you can reduce your physical technology costs by a huge margin.

Disaster recovery is equally important. If you have all your local servers at the physical location of your office, running your email and information storage, what would you do if there was a fire or other natural disaster? Do you have off site backups?

Accessibility of the data is also vital. Business is rarely conducted just in the office these days, and being able to access everything you need remotely wherever you are working is important. And with mobile technology becoming a prominent player with an ever increasing number of businesses, ask yourself how you will handle this technologically complex issue with your present network infrastructure.

If you are using the cloud, you can avoid the technology purchase required to hold all that data. Equally, emails and information storage can be reached seamlessly from multiple locations, allowing things to be more accessible as well as cost less!

Scalability is also an important factor for choosing the cloud – resources are supplied and paid for on-demand, rather than having excess redundant capacity. Many larger companies have shown substantially reduced total cost of ownership and increased productivity by migrating all or part of business processes to VM cloud technology.

Of course, security is a concern when considering this migration. This is something that is constantly being addressed by providers of cloud hosting services, and while not completely infallible, the vast majority of the services are secure. There have been some headline grabbing gaffes from providers like Google and SalesForce over the years, but these have been small isolated issues.

By not getting your business ready to use the cloud, you run the risk of being left behind by more agile competitors, who will be improving efficiency, ensuring the security of their data, and reducing their costs.

If you are waiting for results from your competitor's move to the cloud, then you might as well keep things status quo. By the time you are able to fully realize the cost saving features and robust application technologies of the cloud, your neighbor could be light years ahead of you.

Reluctant SMB Market Left Behind?

A certain famous Beatle is letting go. According to CNET, Paul McCartney and MPL Communications, his own media company, has partnered with HP to archive his personal media library hosted by HP. McCartney’s library is supported by HP’s Converged Infrastructure solution, a system of storage, servers and networking, resting on a private cloud in HP’s datacenters. Though MPL Communications and McCartney may be a ringing celebrity endorsement for HP, other SMBs are not quick to jump on board with the public cloud. In a recent survey, the research firm In-Stat reported that 70% of the SMBs who are using cloud storage are coupling it with an on-site storage unit. Hence, they are not truly leveraging the cloud.

The innovator/laggards dichotomy is applicable here. Since cloud is still a relatively new concept, most firms are wary of the “bugs” – performance, security, control, etc. Thus, they want to wait until the technology is more mature. Reluctant SMBs are removing themselves from the innovators and early adopter category and placing themselves squarely in the position of being late majority or laggards.

One way to mitigate these worries (and to not get left behind) is to engage in a private cloud or a hybrid – a combination of a public and private cloud – to meet SMBs’ infrastructure needs. Nonetheless, the costs of a private cloud deployment can be outside an SMB’s budget. While public cloud has security and performance implications, private and hybrid clouds are equipped with financial barriers.

When will SMBs be ready to let go and migrate to a public cloud? Despite the reports, adoption may be sooner than expected. Cloud security providers are working around the clock to develop best in class solutions for prospects. Additionally, Intel’s unveiling of AppUp, a hybrid cloud solution aimed at SMBs, is an example of how major players are actively engaged in pushing SMBs to the cloud.

It’s just a matter of time before most firms will be ready to let go – like Paul did, of over one million personal photos, videos and music clips.

This article originated from http://wiredre.com which I recommend to any IT professional interested in the latest industry trends.

Chris Borowski

Leadership Lessons

I found this Forbes article appealing in analogy and usage of truisms. It was worth the time to be sure.

Computech 24/7 Helping the SMB Conquer the Cloud

It has been the dream at Computech to provide consistent and reliable data storage and application delivery to small/medium sized businesses in the Coachella Valley. After well over a year of studies and obtaining necessary demographic metrics, it has been determined the Eastern Riverside County as a whole has a substantial deficiency with regard to data centers VS the number of small to medium sized businesses. A ratio of 1283:1 exists and this number continues to become more disparate as new businesses continue to amass in Riverside County.

Over the last few years, virtualization has been successful at helping companies reduce the number of physical servers leading to savings in space and power consumption. However, there is one area where consolidation has been elusive: network monitoring, analysis and security infrastructure. In modern data centers, ensuring reliable and secure operation is a must, which in turn requires an array of network appliances dedicated to monitoring network performance and usage as well as providing security. This infrastructure is no longer optional, but a prerequisite, especially as data traffic increases and more services are consolidated into larger private clouds. This will be part of the primary mission at Computech.|

New technology developments now make it possible to consolidate network appliances using some of the same principles and technologies that were used to consolidate application servers, including intelligent adapters and intelligent data distribution mechanisms. The solution enables Computech to further reduce their data center footprint, saving not only on capital expenses by eliminating appliance hardware but ongoing operational expenses associated with managing the devices.

“Improving a data center starts with a proper understanding of the business model and the business architecture that is being used and not by a simple roll out of the newest technology.” To meet the business and technology needs of a data center an architecture development method is wanted. To take an architecture approach in constructing a data center you first have to start with a proper comprehension of the business model that is being used …then you can formulate the business architecture and finally you can start with designing the IT architecture and defining a technical design and finding appropriate products. 

Losing the Battle: Ethical Business Practices

Ethics is concerned with "doing the right thing" but moral standards differ between individuals depending upon their upbringing, traditions, religion, social and economic situations, and so on. Hence, the existence of gray areas. Therefore, state the "moral" problem in a simple manner and review feedback so that an acceptable decision can be made with minimal overall harm/loss-i.e., we are concerned with "Pareto optimality," which is related to the net balance of benefit  over harm for society as a whole.

Economic theory is concerned with the efficient utilization of resources to satisfy consumer wants and to maximize profit and satisfaction. Pareto optimality exists at the point where it is impossible to make any given individual better off without harming another given individual. Although most businessmen believe that profits and cash flow are very important, there has been a move toward the recognition of social responsibility.

The blind pursuit of profits has resulted in bribes, environmental problems, injured workers, unsafe products, closed plants, and so on-this is unethical. Many business schools emphasize the philosophical, rather than the practical aspect of ethics. We need a practical approach to the solution of ethical problems. Ethical leadership calls for morals, fairness, caring, sharing, no false promises or unreasonable demands on others, etc. Is "ethical leadership" an oxymoron?

I believe that "ethics" should be a part of all management courses. Yes, there are grey areas depending on different perspectives, but there are also areas of "black" and "white". There is more to ethics than drafting and implementing codes of ethics for others to observe. Leaders should lead by example and refrain from adopting an approach which conflicts with ethical interests. Therefore, leaders should respect and care for all stakeholders: owners, employees, customers, suppliers, the community, etc., rather than only stockholders.

Making false promises and unreasonable demands on employees and others, preventing participatory management, talking about the "green" approach as a public relations exercise, rather than adopting a "green" approach, is unacceptable. Ethics is conscience-based, knowledge-based and attitude-based, and not suited to some individuals, who, by their very nature, have consistently demonstrated selfishness and greed.

Business ethics is concerned with dealing with dilemmas that sometimes do not have a clear indication as to what is right or wrong e.g. potential conflicts of interest, wrongful use of resources, mismanagement of contracts, false promises and exaggerated demands on resources which include personnel.

Right and wrong are black and white - pure and simple. Our ethical system and behavior are a function of several factors, including our cultural background, upbringing, education, ego, environment, circumstances and the related stress. Hence, the development of gray areas i.e. areas where explicit rulings or guidance is not available Looked at in another way, there are shades of black and shades of white, just like when you go to a paint shop to buy black paint or white paint or when you go to a clothing store to buy a black suit or a white suit. If you find that your ethical standards are higher than those of most people, you should follow your own standards.

It is possible to improve, from an ethical point of view. As we mature into adulthood, we develop an ego and try to use our communication skills to justify our behavior, while focusing on our own goals. With our ego-based approach, our innate selfishness, and the influences of friend and environment come many gray areas. One's image will depend on one's operation within the black, white and/or gray areas. This should always be borne in mind.

Alas, many business schools provide courses in business ethics which are philosophical, rather than practical, in approach. This needs to be rectified in the light of experience in the real world. Research confirms that the focus on ethics deters people from straying, although it is difficult to alter the basic nature of some people e.g. Bernie Madoff and Vincent Lacroix.

Constant communication and open discussions on ethics foster a bond between individuals who are keen on being ethical and help promote teamwork built on good spirit. Emotionally intelligent people are often more ethical than others.