It's Cinderella Time Baby!

 One of my favorite times of year in the sports world is the NCAA tournament.  68 teams take to the court to determine the national champion.  There are no convoluted polls to determine the winner.  It is all settled on the court.  And, it is the only time of year, I can stand to listen to Dick Vitale.

    The best part of the tournament is watching the underdogs (Cinderella) teams upset the bigger schools.  Over the last few years, we have seen some Cinderellas find a permanent place at the big boy table.  This used to be the exception to the rule, however, there are more Cinderellas than ever.  Teams such as Gonzaga, Butler, Virginia Commonwealth (VCU), and even Belmont are upsetting higher seeded teams on a regular basis and are now finding themselves to be favored teams themselves.

    What do these teams have in common that allow them to compete?  Fundamentals!  They play smart basketball, screen well, rebound, and even hit their free throws.  This in a league that is becoming more like an And1 Mixtape.

    Sure, there will be the occasional Florida Gulf Coast with their Dunk City approach, however, those will be the exception to the rule.

    Fundamentals - forming or relating to the most important part of something - as Merriam defines it, is what can keep a small business on track.  All too often, we get caught up in what’s new, what the 24 hour news cycle is telling us, or just get bogged down in putting out fires.

   Specifically, financial fundamentals can help guide a small business.  Yes, I am sneaking a financially sound article past you, but rest assured, it will be over soon. 

Below are three fundamental habits you should maintain in your business.

1. Accounts Receivable – The last person to get paid is always the small business owner.  Ask my garbage guy.  Sorry, Gordy!
   Make it easy for your clients to make payment, bill immediately, and don’t be afraid to pick up the telephone to ask for your money!
2. Annual price increases – I couldn’t begin to tell you the number of my clients who have not had a price increase since they have opened.  Your expenses have gone up and, in most cases, so should your prices.
   Consider having an annual price increase, add additional services as needed, and even write a letter to your customers explaining why you are doing this (you will find they are much more understanding than you may believe.)
3. Keep an eye on expenses – We get so caught up in our day-to-day operations, we forget to keep an eye on the bottom line.Make it a monthly habit to review your cost of goods sold (COGS) and fixed expenses to see if anything is out of line.  You can compare them to your financial statements from last year and even compare them to other businesses in your industry by using a free site like www.bizstats.com.