For obvious reasons I’ve been working on a back to fundamentals theme for the present economic uncertainty, with emphasis on how you focus in hard on your plan and your planning process, to manage better when times are tough.
I was on the radio earlier today with Jim Blasingame, the Small Business Advocate, talking about how planning fundamentals apply during what Jim called a time of uncertainty. You can click the link here to listen.
The bring vs. burn ratio is essentially a break-even analysis, run month to month, so you can watch the comparison of the bring (essentially sales less cost of sales, also known as sales less variable costs) vs. burn (running fixed costs).
Another key element in this is the possibility of slower payments from your business customers, which can require you to get extra financing. Watch this carefully, because it can affect your bring numbers by slowing incoming payments. Don’t be surprised. If you are still doing okay but just dealing with slower payments, tell your bank early, before you really need help.
These topics are included in the interview (click the link above).