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What is the Owner’s Job? Part 1
- Tuesday May 15, 2012
By Tom Crouser So what’s my job as business owner? Makes my head hurt. Wrapped up in one short question is one seriously long answer. So, this is part one of four and my first answer is that there’s not a job for an owner. There is for the person running the business, however. Ownership is a passive verb. If you own stock in General Motors, you have a right to a return on investment and you have a right to expect your management will focus on increasing your shareholder value. In our kinds of businesses it is no different. You may own a car but that does you little good until you take on another role – the role of driver. Same is true with our businesses and the refusal of many business owners to actually drive their car is a... -
Question Masks Real Issue
by Tom Crouser - Friday October 7, 2011I learned early in consulting that when owners self-diagnose, often true issues are hidden. In fact, one of the criticisms leveled at consultants is their solutions are so simple that “anyone could have said that.†Sure, solutions are simple. Where a good consultant earns their money is asking good questions so that real problems can be defined; not in just providing solutions. My last post was a great example of this phenomenon when my printer-friend asked, “What percentage of sales should rent be?†I thought, “Why do you suppose the owner asked that?†So, after I responded (5% to 6.5% with a typical of 6%, which is up from 4.5% over the past five years), I asked the obvious: “Why do you... -
How Much Working Capital Do You Need?
by Tom Crouser - Wednesday August 24, 2011Hi, Tom I have been tracking my current ratio according to your formula for years and years. Now I am selling my business. We have 13 employees, a four-color shop, $2 million in sales, and very good cash flow. The potential buyer is calculating that he is going to need $220,000 in working capital. He calculates this from the fact that my accounts receivable is about $220,000. I am taking the accounts receivable, so he will have zero A/R the first day (bulk or asset sale). But he is asking the bank for an additional loan for $220,000 to cover his working capital. I am telling him that is too much because some of our customers pay cash or within 30 days, so he will have cash coming in to make payroll and he can work with the suppliers to... -
A Taxing Question
by Tom Crouser - Saturday January 22, 2011Hmm. Is the 1099 provision of the Health Care Act really that onerous? I work with hundreds of small businesses in the US, mainly in the printing industry, and 99% utilize QuickBooks and/or a similar automated system. Those out there who are still on a manual system should be automated for their own best interest. Now in QB, the ability to track purchases from a vendor is a couple clicks away, and printing out 1099s is fairly simple and quick. The hard part would be collecting the FEIN numbers. I anticipate vendors will quickly begin providing this info on invoices should this provision stand. Why? Vendors won't want incoming calls seeking the information any more than we small business owners would want having to track them down. So... -
NFIB Being Unfair to Members?
by Tom Crouser - Friday January 21, 2011So what’s up with the National Federation of Independent Business? I’ve engaged in a Tweet-a-thon with them @NFIB in which I’ve tried to point out inconsistencies of a member organization soliciting other members in direct competition with many of their own members. As a matter of disclosure, I work with hundreds of printers, copy shops as well as small businesses engaged in packing and shipping throughout the United States, many of whom are NFIB members, as is my firm. Fact is, I encourage and recommend the organization for it is an efficient voice of small business, and their basic model is great. They survey the opinions of small business owners and pass them along at the highest level in Washington as well as...
