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.

We do not charge members any dues or fees.  If you are not yet a member of VAMBOA, please join here:   https://vamboa.org/member-registration/

Members may use our seal on their web sites and collateral and will receive special discounts and other important information.

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:

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

By Debbie Gregory.

I think that we just need to move on to 2021 and leave 2020 in the rear window to fade away. This has been a challenging year for everyone, especially for Small Veteran and Military Business Owners.

We commend you for staying the course during these unprecedented times.   We have all had to adapt personally as well as professionally in how we operate our business.  Many of us are working harder and having to do more with less.  We are also doing things differently including working remotely and virtually creating and/or attending online events/conferences and training.  Many businesses have had to shut down physical operations and expand their online offerings.

VAMBOA, your Veterans and Military Business Owners Association works hard to bring you informative and timely information that will help your business.  We try to provide at least two or three new articles weekly on our Blog.  We hope you are not only enjoying the articles but are also gaining value from them.

We also try to provide you tips on the new skills needed to move your business forward as well as various loan programs that will provide you financial assistance.  Next year, we will be featuring and telling the stories of some of our members.  If you are interested in telling your story, please email me at:  info@vamboa.org.

I want to personally extend our sincere gratitude and thank our members, sponsors and those who have supported us during the year (you know who you are).   We appreciate you so very much.

This holiday season is unlike any other, to cap off a year unlike any one in our history Throughout this season, and as we move into a new (and hopefully better) year, we wish you moments of peace amid the difficulties, connections with family and friends even if they cannot be in person, the warmth of memories from holidays past, and wonderful glimpses of the joy that still lives under the surface.

Our holiday wish for each of you is health, happiness, and prosperity.   Hope is on the horizon with several viable vaccines and treatments for COVID 19.  Without health, none of us can prosper so please keep yourselves, your loved ones, and employees safe.

Acts of Kindness are important and rewarding to both the recipient and the giver.   You may enjoy this article on “Kindness Changes Everything.”

https://vamboa.org/?s=Kindness

Sincerely,

Debbie Gregory

CEO & Founder, VAMBOA (Veterans and Military Business Owners Association)

The “Go To” Association for Veteran and Military Business Owners

With over 8,000 Registered Members and almost a quarter of a million fans and followers

Membership is free – to join go to:  https://vamboa.org/member-registration/

Special End of Year Technology Discounts (up to 50% off) Only for VAMBOA Members & Friends: https://vamboa.org/dell-technologies/

By James Pruitt – Senior Staff Writer

A blog allows agency over your company’s narrative. With a blog, your company’s news comes from your perspective. With news releases, any information must filter through another outlet. Your blog allows information through the horse’s mouth so to speak.

Blogs are essentially websites with primarily informational content. Your company’s blog should provide information directly from you and your organization. While news releases certainly have value as marketing tools and as evidence for recognition of your company’s accomplishments, blogs eliminate the hearsay factor and allow you to control the narrative of your company’s development.

Blogs are a boom to new companies. In the past, marketing was a more challenging process. News releases, public relations specialists, and advertisement executives mattered far more. Since the Information Age, blogs have done much of the initial marketing work, and applications such as WordPress have placed much of this work directly in the hands of the small business owner.

Assuming access to a newswire, a news release can in fact reach more people. Hence the continuing relevance of news releases. However, blogs allow a starting point for directed marketing.

From your blog, you can begin a directed marketing plan for yourself, under your own thumb. Not least important, blogs allow tracking of website traffic, and hence facilitate marketing through the most appropriate channels. No one likes spam. However, directed marketing works.

As you are starting a company, starting a blog allows opportunities for the initial pitch, for control over your own cycle of news, and for a plan to track site visits. Additionally, a blog administrator for a new business should consider the ins and outs of visitor feedback, and archiving information. The new blogger can trace organizations that may link back to your blog or track the number or origins of site visits. Such information can help with directed marketing and provide cues about the best routes for varieties of outreach strategies.

Blogs can serve as their own news release source.  The business owner can schedule posts over the course of the year regarding any variety of subjects, including new hires, new innovations, and new policies. The owner can set their own rhythm to these updates, and at their discretion, news outlets can respond accordingly.

Also, blogs allow an opportunity for feedback. In other words, blogs are interactive, rather than news sources which are under the control of some third-party news outlet. Therefore customers can provide business owners with feedback, and give endorsements and create greater opportunities for more business. The interactive nature of blogs is priceless for a new business owner. The old-fashion news report only spews information through any channel that will publish it. A blog allows a one-on-one with the ownership of the company.

This direct interaction can provide some of the most important feedback for a small company at its earliest stages.

Traditional routes such as press releases are not irrelevant for your new company. However, this deep into the Information Age, blogs allow the business owner unprecedented control over the initial stages of their marketing campaign. By setting up a blog, you, the business owner, may control your own business plan and marketing trajectory.

VAMBOA, the Veterans and Military Business Owners Association hopes that you enjoyed this first article on blogs in our mini-series.  Stay tuned….

If you are not already a member of VAMBOA, please consider joining.  There are not any dues or membership fees.  We provide a great deal of valuable information weekly.  You can also proudly display the VAMBOA seal on your website and collateral.

Here is a link to sign up:  https://vamboa.org/member-registration/