Learning Center

One of my favorite things to do is teaching in the Master’s of Science in Information Management (MSIM) program in the Information School (affectionately called the iSchool) at the University of Washington. The UW iSchool is globally recognized as a leader in the 41 iSchool programs worldwide. These schools are found in prestigious universities including Syracuse, Berkley, Carnegie Mellon, Rutgers, Dublin, London, Amsterdam, Melbourne and many others. More information is available at http://ischool.uw.edu/ and  http://ischools.org/ . The iSchool is one of the fastest growing university programs worldwide.

Goals and budgets are not the same thing. They serve very different purposes, but they overlap and often get confused.

Understanding your financial performance as a collection of trend lines changes everything. The invisible will come to light.

Anyone building a business knows that the key to success is good disciplines. One of the biggest reasons for organizational failure is – well – the lack of organization. Without good structure things fall apart. But wait - there is an important counterintuitive piece to this picture.

There are 4 basic financial levers that business owners and entrepreneurs have to work with. Most owners and managers are aware of these, but rarely are they thought about as the “4 pillars” that need to be balanced in order to give their business a solid footing. Getting these right will not guarantee that your business will thrive, but getting one of these wrong will almost certainly pull you down or bring you to a halt.

If you have enough money to pay your bills plus take-home pay for the owner, isn’t that enough? Unfortunately it’s usually not that simple. Just covering monthly obligations is not enough. For most businesses, revenues bounce around from month to month, and so do expenses. Even a very profitable company is likely to have times when revenues dip below expenses. And that’s why we care about liquidity. If you don’t have adequate liquidity (weather proofing) you can get blown away when the big “financial storm” comes your way. And storms are inevitable.

Over the years Corelytics has built a special appreciation for the resource companies used by our customers (small business owners). These resource companies have played an important role in the life of many of our customers. It is interesting to see that small businesses that take advantage of these resources are the ones that are growing and getting the most traction.

Where the P&L tells you how well you are doing during a certain time period, the balance sheet shows how well you have done for the life of your company. The P&L gives you the score for an inning. The Balance Sheet gives you accumulative score for the whole game – plus a whole lot more.

When my drill sergeant said “get down and give me 50”, I knew what I had to do. The over-the-edge  crackly anger in his voice was motivation enough. I could do 50 pushups with no problem. But if you politely asked me to do as many pushups as I felt comfortable doing, I would probably do 20 and notice that it was getting harder, so that would be enough. My lesson: it takes a combination of specific goals and a sense of urgency to get top performance.

Every business person knows that cash is an essential ingredient for company survival. On Maslow’s Hierarchy of Needs it’s just about like air is for people – it is very basic and very critical.