By Debbie Gregory.

Cash-flow and profit margin both relate to the health of a company. However, each term relates differently to the company’s bottom-line. Cash-flow is important to a company’s expansion and potential. Profit margin is a different concept that may relate more directly to the company’s bottom line.

Cash-flow governs the everyday workings of the company. Cash flow may come from any of a variety of sources, including the owner’s personal funds, investors, or loans, as well as revenue. Cash flow pays the bills, the employees, and the creditors in the short-term. Profits matter in the long-term, especially in the wake of large investments from investors or creditors.

For a smaller company with an independent cash flow, operations may continue for quite some time (or even indefinitely) before turning a profit, based on the enthusiasm and motivations of its operators. This is especially true with a home business. For a larger enterprises, profits must ultimately keep up with the cash flow. This is especially true when the original investors become creditors demanding payment.

So how do we more specifically define profits versus cash flow? “Profit” is basically the same as “net income.” Within a given period, your “profit” is your business revenue minus your expenses (including cost of providing products and services and overhead).

But how to manage cash flow? Assume a loan of $15,000, with a payment plan of $500 per month. That initial loan provides a healthy cash flow early in the history of the company, but the subsequent $500 per month will eat just that much into the profit margin.

Financial experts sometimes consider cash flow a better indicator of a company’s performance than profit margin. Cash flow affords better opportunities for growth. Cash flow may indicate better credit on the part of the company, and greater enthusiasm on the part of investors. By extension, the incoming monies may signal a brighter future for the company.

On the other hand, profit holds a different importance to the company’s bottom line and plans for expansion. A small side-business can emphasize profitability from the get-go, absent lofty ambitions. Smaller enterprises need not incur debt. Entrepreneurs with bigger plans must consider cash flow while they can maintain their company in the growth stage before reaching the critical mass necessary to generate independent profits.

A small business should consider maintaining a “cash flow statement” that details their periodic cash flow. These statements are called “free cash flow,” or “FCF” statements. In order to calculate your “FCF,” you should:

(1) calculate your operating cash flow

(2) subtract your capital expenditures

(3) on the chance that your company pays dividends, subtract your dividends, which are shares of profits paid to part-owners of the company.

Business owners should carefully monitor both cash flow and profits, for the sake of the progress of their company, as well as tax considerations. Cash flow could originate from an excited or generous relative, or a small business loan, or any of a variety of sources. Profitability depends on total revenue minus expenses, including negotiated payments to investors or lenders.

Profitability may indicate long-term success, but cash flow generally indicates engagement with the economy and a vibrant outlook for success. Healthy cash flow demonstrates that the company functions in the here and now. In many cases profitability may come afterward.

We hope that you have enjoyed this article and the prior one on profitability.   We work hard to bring our audience timely and important information.

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By Debbie Gregory.

The COVID-19 pandemic, with all the necessary social-distancing and isolation measures, has pushed businesses in almost every industry.   The pandemic has pushed businesses to allow some, or their entire, workforce to work remotely.

The various collaborative technology platforms such as Zoom, Slack, and Microsoft Teams have all seen a dramatic increase in users and a huge demand for their services. This increase in demand for these services is not likely to go away once the pandemic ends or abates. Among younger business owners and workers, remote working is being viewed in an increasingly positive light.

Earlier this year, 500 small business owners across the United States were surveyed about remote work and below are the findings of those surveyed:

A.) Small Business Owners are More Open to Hiring Remote Workers:

Currently about 55% of small business owners in the United States would consider hiring remote workers after the pandemic ends or abates. This is a significant increase from the previous year (2019) as only thirty-six percent would have considered it at that time

B.) Age Determines How Remote Work is Viewed:

Small business owners, aged 18-34, stated they have used remote workers in the past twelve months; Sixty percent would consider hiring remote workers in the future; Eighty percent or approximately one half of the small business owners aged 18-34 surveyed stated that they feel remote workers are more productive than on site office workers; while only thirty-five percent of small business owners aged 35-44 and a mere fifteen percent of small business owners aged over 65 stating remote workers are more productive than office workers.   Additionally, small business owners aged 18-34 also feel the quality of remote workers to be higher than office workers, forty-three percent as compared to sixteen percent of small business owners who are 65 or older.

C.) All Generations are Concerned About Remote Work Challenges:

All age groups surveyed agreed that working remotely comes with a great deal of benefits for both the employees and the employers. However, there were also a significant number of concerns about the challenges presented by moving the workforce from the office environment to the home.

Concerns such as:

• Employees are being distracted
• Employees spending too much time on personal matters during work hours
• The ability to effectively manage employees remotely
• Information safety and security
• Technology requirements, service, and upgrades

D.) Most Small Business Owners (in all age groups) Were Already Working Remotely Themselves:

Even though the older generations of business owners are hesitant to allow their employees to work remotely, many were already doing it themselves. In fact, approximately sixty-five percent of small business owners work remotely. It is not surprising that younger business owners are more likely to be working from home, eighty-six percent; the older generations are not far behind with fifty-four percent working remotely.

As employers and employees alike experience the benefits of working remotely, more companies will inevitably decide to make this leap. In the future, once the pandemic has finally passed or abated, there will be a dramatic rise in fully remote companies without any physical workplace.  This will also dramatically change the commercial real-estate market especially in very high rent areas on both coasts.

Since so many VAMBOA members are working remotely, we want to extend to our members and friends, significant discounts up to 50% from our Dell, our technology partner.   Here is a link to check them out:

https://vamboa.org/dell-technologies/

By Debbie Gregory.

Due to the COVID-19 pandemic there has been a huge surge in both business owners and employees working remotely from home.

Small businesses in the Midwest are the least likely to hire remote workers while small businesses in the Southeast and Northeast are really warming to this trend. Regardless of what region of the United States that you operate your business, should you allow your employees to work remotely?  This is a challenging question to answer. To determine if a remote workforce would be best for your business, you have to consider the employee’s specific job duties, their ability to work effectively from home, and their ability to work securely from home.

Types of Things to Consider:

• Is the employee safer at home than in your office?
• Would your business benefit from lower overhead?
• Does the employee have the equipment and technology at home to work efficiently and effectively? If not, are you willing to provide it?
• Does the employee work with highly sensitive business data? If so, do you have security practices and solutions in place to safeguard that data when accessed remotely?
• Does the employee have the tools to provide customer service or customer support?

If you choose to allow your workforce to continue to work remotely, you will need to put in place policies for how they will work, how you will manage them, and how you will deal with the challenges that arise.

What You Need to Work On:

• Make sure you get your new remote work policies put into writing and distributed to your team so that everyone is on the same page.
• Schedule and conduct regular check-in calls, video chats, or meetings to ensure everyone is working together.
• Provide opportunities for remote social interaction. Even though you are not all working in the same location, team building and bonding is still very important. Schedule and conduct virtual happy hours, trivia contests, team luncheons, etc.
• Make sure to deploy the correct technology to keep your employees connected and collaborative. Things such as video conferencing tools, instant messaging, office productivity technology, security, software, and more.
• Also, take the time to assess how working remotely is working out for your staff. Schedule one-on-one talks and ask your employees how things are going for them and if they need more support from you.

While there are a lot of benefits of remote work for both the employee and the business, there are also a lot of concerns and challenges to address. We are all exploring new issues with productivity, boundary setting, and personal relationships. Employers are worried their workers at home are too easily distracted with everything going on in their home life. They worry they do not have as much control over their remote workers and they feel they are harder to effectively manage; even while they feel that the work-life balance for employees is the greatest benefit of remote working.

People were already adopting remote work; the pandemic simply accelerated the popularity of the trend and it seems to be growing significantly. More and more companies are looking to expand the remote team model and shift a large portion of their workforce to remote work for good. Since more employees now have the technology and equipment they need to work remotely, it’s easier for companies to offer that ability going forward.

Your small Veteran or Military Owned Business will need technology to effectively work remotely in this new normal.   VAMBOA members and friends are able to take advantage of end of the year savings from our Dell Technologies of up to 50 percent.  Check out these values here:

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By James Pruitt, Senior Staff Writer

Just when we thought we were “over the hump,” coronavirus cases spiked. Many brick-and-mortar stores took fatal blows trailing the last wave of shutdowns. Hopefully, the lessons from the first wave may cushion the impact of the next.

The necessary steps include education about the necessary measures to protect customers and staff, and to balance this information with the needs of your business. Then business owners can plan the necessary steps for reopening in a safe manner.

Always ensure that information sources are reliable. Some of the best sources for information include the CDC:

• at cdc.gov, Guidelines for Opening Up America Again, https://www.whitehouse.gov/wp-content/uploads/2020/04/Guidelines-for-Opening-Up-America-Again.pdf.
• gov, OSHA, www.osha.gov, and the World Health Organization, which has a coronavirus information site at: https://www.who.int/emergencies/diseases/novel-coronavirus-2019?gclid=CjwKCAiAzNj9BRBDEiwAPsL0d__FIHt2u10uM-dKWoXQl4IBp3X91iqydExOfZ9XS0g9XCYolOYN7RoCgKcQAvD_BwE

Misinformation abounds about coronavirus, and the importance of accurate information about this crisis cannot be overstated.

We can expect another spike in coronavirus cases over the winter. Brick-and-mortar businesses will face a larger impact than online businesses. Brick-and-mortar stores should consider the following:

• the ability to enforce proper social distancing
• any lockdown orders that may exist within that locality
• the severity of the pandemic within your locality
• the level of contact with customers.

Examples of businesses facing the worst impact include gyms, restaurants, and beauty establishments.

Depending on the structure of the business, human resources issues may prove tricky. For example, last spring, a business had to shut down for two weeks because an employee called in to lie about having coronavirus: https://www.thestate.com/news/coronavirus/article241351951.html.

The company’s facility needed a thorough cleaning, that led to huge financial losses in the meantime. Other, more small-scale companies may have the flexibility to deal with such issues on a case-by-case basis, given the management’s closer relationship with the employee. The ABA (American Bar Association) notes the importance of input from both employees and clients. They also note that each reopening plan will be different, given the circumstances of the company. For example, some businesses may require brief health screenings by qualified health professionals, such as quick temperature checks.

The ABA notes that “[r]eopening a business during the pandemic is essential and inevitable but it will certainly be a daunting process that will require consideration of how workers can be brought on safely, how customer concerns will be addressed, and how everything can be done in a way that allows the company to survive financially.”

https://www.americanbar.org/groups/business_law/publications/blt/2020/10/protecting-workers/.

On the plus side, news is positive about defeating the pandemic in the next several months. Recently, several companies and institutions have developed several vaccines with amazing success rates. On the negative side, winter promises to bring a spike in cases before return to a semblance of normal. Dr. Anthony Fauci estimates a rollback of coronavirus measures sometime in April:

https://www.deseret.com/u-s-world/2020/11/13/21562555/coronavirus-dr-anthony-fauci-covid-19-vaccine.

In the meantime, small businesses can use this next spike as an opportunity to expand their horizons, build their online presence, and augment their human resources expertise. This pandemic will not last forever, and resources abound for struggling business owners, despite its devastating impact. Such a crisis arises once in a blue moon. Hopefully we will be able to strike a balance.

By Debbie Gregory.

The mission of LinkedIn is to connect the world’s professionals to make them more productive and successful.  Over the last few years LinkedIn has grown to be one of the most widely used social platforms for business. It is currently the third most popular social site, right behind Facebook and Twitter. If you are not yet on LinkedIn, you are missing out on a huge audience for your recruiting efforts, business networking, and potential new customers.Below is some information on ways to use LinkedIn to expand your Small Veteran Owned Business:

1.) Craft your Profile and Pages with SEO in Mind:

LinkedIn is a valuable source for business to business (B2B) marketing and other business-related connections. As with your website or blog, your LinkedIn profile and pages should be optimized for SEO purposes.

Areas of Focus:

• Include a title along with your last name in the name field. For example, instead of listing just Jill Brown, make changes to it reads: Jill Brown, Sales Professional. In this manner, Jill Brown’s profile will pop up when someone performs a search for a salesperson.
• Add keywords to your headline too and not simply your title. For example, instead of Sales Professional list something such as “No. 1 sales professional in the city of Portland for the last 3 years.”
• Make sure to include other keywords in your summary in a more natural fashion. Yes, LinkedIn has a specific place in your profile to list up to 50 skills (make sure to ask for recommendations on your skills too) but you should also try to pepper them into your summary text.

2.) Make Sure to Create and Optimize a Page Dedicated to Your Company:

A business page on LinkedIn is a powerful marketing tool. Make sure that your business is easy to find on LinkedIn and that all visuals on your page match the look and feel of your other online presences (website or other social channels).  Additionally, keep it up to date with regular posts!

Basics for your page:

• A concise, yet engaging, company description and overview.
• Your company logo.
• An attractive banner image.
• A call to action.

3.) Put Together Showcase Pages for Products or Services:

Once you have your business page ready to go, you should consider adding showcase pages for specific products, services, or separate arms of your core business to help users better find you and engage with the parts of your business that most interest them.

4.) Promote Your Page:

Your page will not help your business grow if no one is looking at it! Once your page, and showcase pages are setup to be robust, and compelling, your next step is to promote it and gain followers. Of course, you can simply run paid ads on the platform to boost your visibility, however, there are other ways to promote your page that will not cost you anything.

Free Ways to Promote Your Page:

• Add the page to your own LinkedIn profile.
• Add a “follow” button to your main website to drive traffic from there to your LinkedIn page.
• Promote the new page(s) in your company newsletter, blog posts, and other social media pages.
• Add a link to your LinkedIn page in your company email signature.
• Ask current employees to promote the page on their own LinkedIn profiles.

5.) Join LinkedIn Groups or Create Your Own Group:

LinkedIn groups are intended to connect like-minded individuals and similar businesses with one another to foster camaraderie and to expand knowledge. You can join existing groups and actively engage in conversations.  You may also create your own group to help establish yourself as an expert in your industry. We strongly recommend that you consider both options to make sure that you are active in the group and provide valuable tips and add robust posts.

As you can see from the information in this blog post, LinkedIn offers a variety of ways for businesses to network, market themselves, and connect with new customers. These are just a few of the ways to join in and start reaping the benefits of LinkedIn for your business.   One last kernel of information, a regular account on LinkedIn is free.  They also offer premium accounts at a reasonable cost.   Start your engines and join LinkedIn today or enhance the profile you have already set up to promote your Veteran Owned Small Business.

VAMBOA, the Veterans and Military Business Owners Association invites you to join as a member.  There are not any fees or dues.   You may also proudly display the VAMBOA seal on your website and collateral.   We provide several articles on our blog weekly with all types of valuable information.

JOIN TODAY here:   https://vamboa.org/member-registration/