Tips offered for small businesses
By Gregory Koteles
Acorn Staff Writer

The devil might call Hades home, but in the business world he’s in the details—and amid the day-to-day operations of a small business, it’s easy to lose track of those details.

Warren Cooley, manager of the Gold Coast Small Business Development Center (SBDC), spoke last Thursday at the Calabasas Chamber of Commerce’s monthly luncheon about the devilish details of cash-flow management. In a quick rundown of a two-hour seminar the SBDC offers, Cooley rattled off a checklist of 31 points for the small business owner.

"There’s a heck of a lot I need to know that I didn’t know I needed to know," said Cooley, describing what goes through the minds of most start-up entrepreneurs.

Dividing his points into the areas of financial management, revenues, expenses, inventory, accounts receivable and banking, Cooley covered the absolute requirements of every commercial enterprise.

One of the points he emphasized was to "consistently forecast" at least six months out and compare actual results to your budget.

In marketing, he advised early planning to take advantage of media rate reductions and to keep an ongoing presence in advertising. He warned, however, to keep ratios in mind, estimating that only 6 to 7 percent of an established business’s budget should go toward marketing.

Inventory—specifically too much inventory—is where most small retailers get into trouble, according to Cooley.

"Dispose of slow-moving merchandise and give shelf space to the stuff that sells," he advised. Avoid having "a warehouse full in reserve."

Shrinkage (better known as theft) and breakage were also discussed.

"The people who steal the most are your employees," he said, and he recommended developing a system to minimize employee theft.

Progressive billing, incentives such as cash discounts for early payment, immediate processing of customer claims (short-shipments, damaged goods, etc.), penalties for late payments and CODs for slow payers were among the points Cooley presented in the ephemeral area of credit.

Finally, in banking, the small business guru advised making deposits daily, avoiding bank service charges and putting cash to work in interest-bearing accounts, which even at today’s low rates are better than nothing.

Cooley, who owned the Living Tree, a small chain of stores specializing in religious books, gifts and music, has been a consultant for two years at Gold Coast. In partnership with the Valley Economic Development Center, Gold Coast SBDC offers free business consulting, as well as $25 per person workshops, including Cooley’s on cash flow management.

The SBDC can be contacted by calling (818) 907-9922 or going on-line at www.vedc.org.