WOODALLSCM.com July 2019 - 25 MARKETPLACE GUEST VIEW Tina Nail The statistics revealed in the latest “The State of Small Business Cash Flow,” a global study conducted by Intuit (the makers of QuickBooks), are staggering! Results indicate that 61% of small businesses around the world struggle with cash flow. It’s not surprising then that poor cash flow is the reason 50% of smallfirmsgooutofbusinesswithinfive years. Achievingaperfectbalanceofincome vs.expense(cashflow)canbeachallenge forsmallbusinessowners.Seasonalbusi- nesses like campgrounds are especially susceptible to cash flow issues. Even campgrounds operating year-round are subject to seasonal fluctuations. Almost as alarming as the statistics is thefactthatmanysmallbusinessowners never even consider cash flow. Be hon- est,whenwasthelasttimeyoulookedat a cash flow statement for your camp- ground? I admit, I owned my camp- ground for four years before being introduced to this financial report. Truth be told, many of my clients know nothing about financial reporting. If there is money in the bank and a posi- tive number at the bottom of the “profit and loss statement” at the end of the year, they are good. However, it is possible — dare I say, commonplace — for a business to fail even with money in the bank and a net profit at year’s end. The good news is that you don’t have to become a statistic. First, take some time to find a good fi- nancial partner. A bookkeeper, account- antorevenaskyourlocalSmallBusiness Development Center (SBDC) for guid- ance.Ifyou’renotsurehowtodetermine if someone is good, bad or otherwise, send me an email and I will happily pro- vide a list of things to look for and ask. For the purpose of controlling your cashflow,youaren’tlookingforsomeone to do data entry. You are looking for someone who understands financial reports and how to make the data they produce work to your advantage. In the camping industry, I would recommend you review your income statement (profit & loss), balance sheet and statement of cash flow on a monthly basis.Your trusted advisor will work with you to set these up and educate you on what information each provides. The re- portscanbesavedsoyoujusthavetoclick run and print.You can handle that right? I bet you are wondering, ‘What will these reports tell me about my business that I don’t already know?’These reports cantellyoueverythingyouneedtoknow about the path that your business is on — and provide opportunity to head problems off before they happen. For example, wouldn’t it be helpful to know: •Whatisyourmostprofitableincome source?Your least-profitable source? •Isthereahigh-enoughprofitmargin figured into your rates?What about your store merchandise? • Is there a period during the year when cash flow is a problem? • Conversely, are there months of the year when cash flows freely? • Do you consistently have long-term negative cash flow? • Can you afford to make park improvements? Can you pay yourself? These are just a few examples of an- swersyourfinancialreportscangiveyou. Answersthatareimportantinmanaging your cash flow and your success. What’s Next? Whether you have a cash flow prob- lem or not, there is always room for improvement. Armed with the proper knowledge, you and your financial advisercandevelopacashflowmanage- ment strategy. Common ways to improve cash flow include: • Reevaluating your operating expenses.Areallofyourexpensesneces- sary? If they are, is there a cheaper (yet functional) alternative? • Is there room to increase prices? What are your competitor’s charging? Have inventory or costs of sales increased? • Expand your sales market. Are you missing income opportunities? Are you giving away services that you should be charging for (off road dump services, someactivities,areTVandInternetcosts calculated in your site rate, etc.)? Think outside of the box to determine if you can offer a unique new service. • Encourage your current customers to buy more. When I had my camp- ground, we rigged our golf cart with an outlet for a small portable freezer and began selling ice cream after our store closed. It became a huge income producer that required a very small investment. • Reevaluate your marketing strategy. What worked a couple of years ago may not be working today. • Liquidate old inventory. Anything sittingonyourshelfismoneynotinyour pocket (or flow of cash). Carefully con- siderwhichproductssellwellandwhich you have a hard time turning over. Also, watch your sales patterns and order inventory accordingly. This is not a one-and-done process, but it doesn’t have to be a major time suck. If you are using a desktop version of QuickBooks, there is a fantastic cash flow forecast tool that you should absolutely take advantage of. Otherwise, a budget vs. actual report can keep you on track. Again, these are toolsyouradvisorcanhelpyousetup,so it is not a huge monthly production. If you spend 30 minutes a month (6 hours/year) reviewing these reports, you will have a better view of your business and peace of mind. That sounds like time well spent to me. Tina Nail is managing member of Nailed It Business Services, which offers QuickBooks trainingandsupport,alongwithbookkeeping services,and/orprofitabilityconsulting.For12 yearsshewasalsotheowner/operatorofa265- site campground.To learn more,you can head towww.naileditbusinessservices.com. WCM Income Vs. Expense: Does Your Business Have Cash Flow Issues?