Effective Time Management

May 3, 2019 by Comerica Bank

As small-business professionals, your time is one of your most valuable assets. It’s essential that you use it effectively. Establishing goals and deadlines, prioritizing work and delegating tasks are some ways you can achieve this.

Track your time

Completing tasks within a specific time frame is a huge test for small-business owners. Important tasks can get overlooked with too much time spent doing odd jobs. Without tracking your time, you’ll have no way of identifying time wasting activities or tasks that could be delegated.

To work more efficiently, you need to track your time. Doing so can lead to increased productivity, as businesses will better understand where time is well-spent and where it's being wasted.

Begin by detailing what tasks you do each day and the time each task takes. This can be in the form of rough notes, although there are some free programs and apps available online to help you out.

Time-tracking programs record time spent working on each activity. They’re useful for small-business owners to:

  • Monitor Internet usage.
  • Allocate time for projects.
  • Record time sheets for employee wages.
  • Graph the effort spent on each task.

Toggl™, ClickTime™ and Replicon™  are just a few of the better time-tracking programs available online.

Set priorities

Identify tasks that will best assist your business to work toward maximum profitability. After recognizing the tasks that need to be done, make them a priority by completing them before any others.

Try not to waste time achieving perfection. It’s more important to just get each task done.

Establish deadlines

Deadlines are critical for completing all activities in a timely manner. Ensure you:

  • Set realistic deadlines for all your activities.
  • Schedule interim deadlines for long-term projects.
  • Allow time for contingencies, especially on longer tasks.
  • Decide whether your deadlines are flexible or fixed. If certain activities have fixed deadlines, don’t permit them to take longer than they should.

Reduce time wasting

Small-business owners deal with similar kinds of time-wasting activities, such as:

  • Changing between tasks.
  • Answering emails.
  • Being distracted by phone calls.
  • Excessively long meetings.

As a result, some small- business owners experience reduced productivity. This makes it more difficult to finish their to-do lists.

Make note of any time-wasting activities at your workplace and meet with staff to discuss and brainstorm solutions. Consider the following:

  • Scheduling times to check emails so they don’t distract you from your current task.
  • Assigning phone responsibilities to certain employees.
  • Ensuring a task is completed before moving on to the next one.

Employees work more efficiently when they know something needs to be done. Have clear guidelines and instructions for each staff member so they know exactly what needs to be completed and when.

Delegate responsibility effectively

As a small-business owner, you don’t have to undertake all the major tasks and responsibilities yourself. By effectively delegating tasks to your employees, you’ll free up valuable time to focus on growing your business. This can be a great way to get more organized and move your company forward.

List some tasks you could delegate to reliable employees whose skills are suited to particular activities. Many employees want to develop new skills or have added responsibility in their jobs. Learn to rely on them, and to trust them, to complete their designated tasks.

Can you delegate some of your urgent yet least important activities to someone else within your business? Doing so will allow you to give the highest priority to activities that are both urgent and important.

Improve work processes

Poor work processes can contribute to unhappy customers and stressed employees, as well as missed deadlines and increased costs through inefficiency. This is why it’s crucial to improve processes when they aren’t working well.

Get organized

Invest some time now in developing well-organized systems for your business. The savings will be apparent in the long term.

Most small businesses have tasks that need to be done daily. They’ll be easier to manage if you have established processes in place. Some steps you can take include:

  • Clarifying your processes during team meetings.
  • Keeping yourself focused with a list of tasks you need to accomplish and their deadlines.
  • Ranking tasks by priority to ensure the most important jobs get done first.
  • Staying motivated by ticking items off your to-do list as you complete them.

Identify redundant tasks

Work processes can be improved by recognizing any outdated or redundant tasks within your business environment. One example may be when a bottleneck occurs. You must assess the situation and determine if new technology could improve the situation.

Work to your personal productive times

Whether you’re a morning person or an afternoon person, it makes sense to undertake the big projects or arrange the most important meetings for the time of day you work best. Try scheduling more routine activities for your less productive times of day.

Make meetings productive

Endeavor to avoid meetings becoming social gatherings. Run them to a tight timetable so productive time isn’t wasted.

Start with a plan to set strict time frames on meeting agendas. Request only those employees who need to attend each specific meeting. A focused discussion is what you’re trying to achieve and establishing these parameters will support that.

Be well prepared to ask good questions, which elicit quality feedback from staff, to get the most out of meetings. Good questions will cause people to think about their responses and not simply reply with ‘yes’ or ‘no.’

Set realistic goals for improvement

Setting specific goals that are realistic will keep motivation high while encouraging employees to go that extra mile.

Bigger goals should be broken down into attainable sums with set milestones to help make them achievable. For example, when expanding to another location, you may look at acquiring staff as a first milestone, followed by finding the right location and eventually setting up your new premises.

Goal-setting gives you both direction and a destination. Assess which tasks will help you achieve your goals then allocate your time accordingly. It’s imperative to focus on priorities so you spend most of your time on activities that help you achieve your goals.

Business goals are vital to your success as they let you take control of your business’s direction, instead of allowing events to control it.

Proper time management is essential for running a business smoothly. Applying the time management guidelines above will help your business operate more efficiently.

Next Steps

  • List any time wasting activities and any outdated or redundant tasks.
  • Meet with staff to discuss these activities and to consider ways of increasing efficiency.
  • Look into using a time-tracking program. 

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

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Creating a Cash Flow Budget

April 17, 2019 by Comerica Bank

While most companies are focused on generating revenue, and rightfully so, it's important to remember that money doesn't only flow into a business, but out. Profits are just one part of the equation, as businesses have monthly expenses and debt obligations they must meet. This means owners have to pay strict attention to their reserves to ensure they always have enough cash on hand. This is called cash flow budgeting, and it's an important process for any business.

How to create a cash flow budget

Cash flow budgeting is the practice of tracking all cash inflows and outflows. Inflows are your cash receipts: any accounts receivable expected within a certain time period, immediate payments made to a business or income from other services. Outflows refer to the fixed and variable costs that operations incur, including electricity and gas payments, insurance premiums, building rent, equipment fees and employee wages. Creating a cash flow budget is a matter of adding up your inflows and subtracting your outflows. What you're left with is the remaining cash balance you'll have on hand, or cash flow. If it's a positive number, great; if negative, there are issues.

Creating a cash flow budget for any given month is as easy as:

  • Using a basic spreadsheet application or software, like those available from Microsoft®️ or Google®️.

  • Tally up what you expect to receive from accounts payable, recurring revenue and carry-over surpluses.

  • Add together your expenses; estimate your variable expenses to the best you can, even overestimate slightly to leave wiggle room. 

What's left is your cash reserve, a sum from which you can draw for ad hoc costs, reinvestment in your business and other reasons. A cash flow statement is the document itself depicting your inflows and outflows. It's required for publicly traded companies to file such statements with regulatory authorities. While small businesses may not be required to provide statements, there are benefits to keeping records. For one, visualizing cash flow can help you to better manage it; also, potential investors will usually demand that level of insight into operations before extending financing.

Cash flow forecasting

The reason a cash flow budget is so critical is that profitability on paper doesn't always translate to cash on hand. For instance, if your clients typically pay a month or two after services were rendered (which is common), an apparent windfall from a large project may actually be leaving you in a lurch in the meantime when expected profits don't make up for bare-thin cash flow margins. Sometimes you might still be in a good place, but an emergency expense or natural disaster wrecks everything.

For these reasons, it's essential to use cash flow forecasting. This process is basically the same as crafting a short-term cash flow budget, but with cash flow forecasting you're looking ahead at months, quarters or years to come. 

Projecting cash flow variables ahead of time can help businesses better track and allocate assets, as well as protect their solvency and ability to meet obligations. For instance, adjusting cash flow expectations to account for upcoming seasonal changes could prevent a harsh winter and high energy costs from creating balance sheet problems. It's also a good idea to construct forecasts for when large debts or loans come to bear. If unexpectedly slow revenue or late payments should affect cash flow, the ability to make those debt payments could be threatened.

All told, cash flow budgeting is a must for businesses. It provides valuable insight into operations and financial management. Yet it can be a complex process with all the different factors that must be considered. If interested in improving your cash flow management, talk to Comerica Bank today about services and products that can assist.


This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

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Ways to Build Value in Your Business

April 12, 2019 by Comerica Bank

Pretend you’re the buyer

The key to building value in your business is to plan the process in a systematic way, whether you are aiming to grow the business or groom it to get a better price from a buyer.

Whether you just want to build a stronger business or you are looking ahead to the day when you might want to sell it, it helps to think of your business through the eyes of a buyer:

  • Identify any weaknesses they might see in your business and what you can do about them.
  • Think about the strengths that may attract them and how you can reinforce these strengths.

Work on stability

The longer your business has been operating, the easier it could be to sell, provided it has a solid track record. So it’s important to:

  • Keep well-documented business performance and tax records.
  • Document business history and projects completed or customers gained.

Develop reliable markets

A strong history is reassuring, but buyers will be more interested in the future. Make sure you can:

  • Show evidence that your main market(s) are growing or at least stable rather than declining.
  • Demonstrate you’ve taken steps to change your market position, if necessary. For example, a motel may be able to grow by making steady improvements to its facilities, moving up market and, as a result, increasing its prices.

Nurture a stable customer base

A well-managed customer database is one of the most valuable assets as it can be used in many ways for marketing and gaining referrals. Some steps you can take include:

  • Improving and updating your customer database.
  • Measuring customer retention rates and customer referral rates.
  • Implementing a customer loyalty program and referral incentives. Buyers will want to know that key customers won’t leave if you do.

Secure your cash flows

Stable future cash flows are critical to the value of a business. Buyers will want evidence of reliable revenue streams. You can make sure of this by:

  • Building more diversity – therefore, resilience – into your customer base if you are too reliant on a few major customers.
  • Looking for ways to develop more revenue streams by adding extra services or products and lock in stable revenues through customer loyalty programs and contracts.

Refine marketing tactics that work

Review the marketing tactics that have been particularly successful. That way you aren’t only refining them, you are demonstrating them to potential buyers. Here are some strategies you might consider:

  • Documenting your marketing strategy and your promotion plan tactics for the next 12 months.
  • Demonstrating how you measure all marketing to identify the best and eliminate what is not working.
  • Identifying what you are doing to expand your markets and distribution channels.
  • Listing some still unexplored areas that could offer potential, such as a better website or social media marketing. 

Maintain tight financial control

Excellent financial management will show up in your credit history – something you can be sure a buyer will check out. Make sure you:

  • Keep improving your money management skills through cash flow and profit forecasts and budget reports.
  • Show you understand and monitor the key performance drivers in your business.
  • Demonstrate that you have credit management under control and that your average debt collection time is at least as good as the industry average.

Develop great business systems

Good business systems add considerable value to any business because they allow you to spend more time working on your business rather than in it. They also make the transition to new ownership much easier.

  • Prepare your business as if you are planning to franchise it.
  • Start building an operating manual that documents all processes in simple, easy-to-understand steps.
  • Show how good systems enable faster training and enable staff to cover for absent employees.

Grow your brand

A buyer will see significant value in an established and respected brand that differentiates your business from competitors.

  • Work on developing a brand that captures the essence and unique selling points of your business.
  • Take any necessary steps to enhance or reinvent your branding.

Protect your intellectual property (IP)

The IP your business owns can add considerable value to your business, but only if it is well protected.

  • Review the US Patent and Trademark Office (USPTO) website. You should make sure to protect your logo and brand as a trademark.
  • Consult a patent attorney or IP expert about protecting any designs, inventions, copyright material or other IP that will add value.

Build strategic alliances

Strategic alliances can be an important source of growth and added value.

  • Consider what extra skills and resources you lack to exploit opportunities you are missing.
  • List and approach businesses that could help you gain work your business couldn’t normally deliver on its own.
  • Contact businesses that have more extensive distribution and sales channels.

Lock-in key employees

Dedicated and experienced staff can be a key asset in the eyes of a buyer, especially if they’ve helped you create a valuable business.

  • Ensure you provide opportunities for career progression and use incentives to align pay with the value that your staff create.
  • Make your business an attractive place to work. Good working conditions and competitive wages will help to retain skilled staff.
  • Look for people who can create value for your business, and managers with transferable skills who can help you build growth.


Successful business owners are those who are always looking for ways to build value in their business. Even if sales and profits are good, it’s not wise to rest on your laurels. Continually look for ways to make improvements, and when you do, always try to consider them from the point of view of someone who might want to buy your business. Using this technique will not only ensure continual improvement in your business, but it will prepare you if a good opportunity to sell it does arise.

Next steps

  • Talk to us about cash flow management and how we can help maintain tighter control on your finances.
  • Use our cash flow forecast guide and template to determine your financial position.

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such. 

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Choosing Payment Terms for Your Business

April 10, 2019 by Comerica Bank

Getting paid correctly and on time by customers can be a constant frustration for business owners. Communicating your terms is the best way to ensure you aren’t out of pocket or left chasing debtors.

Setting your terms of payment

Your terms of payment let customers know when and how you expect to be paid. Setting your terms and informing customers about your expectations gives you better control over your business and a useful method for resolving potential payment issues.

Setting terms of payment shouldn’t discourage regular or new customers from doing business with you – it can pay to give customers a number of different options.

Remove any barriers to a sale

Encourage customers to buy from you by removing barriers to the sale. Make purchases as easy as possible through a variety of payment methods, including:

  • Cash or check.
  • Bank deposit.
  • Online money transfers to your bank account.
  • Debit or credit card payment.

Take the time to become familiar with all these options and their relative pros and cons.

You might, for example, decide to accept only major credit cards, offer a discount for cash payments or give your staff leeway to negotiate cash discounts if customers request them.

Know your industry’s norms

It’s worth researching the generally accepted payment methods in your industry and the terms your competitors use. This doesn’t mean you have to follow suit. You may be able to spot a gap or opportunity to be more flexible. The following examples could help you build a competitive edge:

  • Feature more payment options than most competitors.
  • Provide quicker and easier ways to pay.
  • Offer a discount for cash deals that give you immediate cash flow and protect you from credit payment defaults.
  • Advertise a discount for online purchasing, as this has lower costs for your business than conventional transactions.
  • Offer longer payment terms in return for a slightly higher price.
  • Investigate faster and more convenient ways to pay using the latest smartphone technology.

Offer variations for payment

There are numerous terms you can offer to your customers to choose from. Sometimes it’s best to use a method that works for both of you.

Payment in advance

Some businesses, such as ones operating over eBay or other auction sites, require payment in advance to provide protection against possible online fraud.

Customers first pay the purchase price (including shipping costs) into your bank account. You then wait for the payment to clear before sending the goods or supplying your services.

Be wary of relying on faxes of bank deposits or email confirmations not sent directly from the depositing bank as proof of payment.

Progress payments

These can be useful if you’re working on a lengthy project, such as a building or software development program.

Progress payments serve two important purposes:

  • They provide a regular cash flow to pay running costs.
  • They protect you against total loss if your client goes bust.

Normal practice involves building progress payments into contracts, which should be based on measurable milestones.

Early payment discounts

Early payment discounts can encourage customers to pay on time. They’re typically more useful on higher margin products or services, as the discount will have less impact on your profits than thin-margin products.

For example, if you offer customers a 60 day credit, consider a 5% discount if payment is made within 30 days.

Some customers will try to claim discounts after the due date. It’s in your interests to politely, but firmly, point out your terms of trade. If you don’t stick to them, your customers won’t either.

Contracts and debit orders

Businesses that offer regular services, such as gyms and accounting firms, can benefit from offering customers a set annual (or longer) contract. The attraction for the customer is a price that’s typically lower than paying for each visit or service.

Spreading the cost over 12 monthly payments can also make it easier for them to manage their budgets. Meanwhile, your business benefits from a regular cash flow. Requiring the customer to set up a debit order also eliminates any time you would spend chasing down payments.

Selling on credit

Selling on credit terms can expose your business to delayed payments or outright loss, which can seriously disrupt your cash flow. Some helpful rules include:

  • Developing or adapting a credit application form – your bank manager can help with the details.
  • Asking customers for business references and permission to run a credit check.
  • Setting agreed credit limits.
  • Clarifying your payment terms – 30-day and 60-day terms are the most common.
  • Explaining any interest charges you’ll impose on late payments.
  • Getting your customers to sign acceptance of your conditions to prevent future arguments.
  • Monitoring any overdue payments or orders that may breach agreed credit limits.

Choosing your payment terms

By now you should have a strong idea of what payment terms could suit your business. Remember to run your choices past your accountant, bank manager and lawyer for their input.

Bear in mind that your terms should attract customers, not turn them away. For example, if you don’t accept credit cards or add a surcharge for credit card payments, you might lose out on easy sales. In this case, weigh the extra costs of accepting credit card payments against the business you might otherwise lose. It’s ultimately your decision.

Communicate your terms to customers

Whatever payment methods you go with, be sure to communicate them clearly in your terms of trade and in your business signage. For example, don’t frustrate shoppers who arrive at the cashier to discover that you don’t accept credit cards.

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

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Selling Your Business

March 12, 2019 by Comerica Bank

Start preparing the sale of your business as early as possible because the process takes a while. The best time to sell is when your business is doing well and you’ve got enough energy and enthusiasm for the final push.

Oftentimes, business owners only start to consider selling during a downward trend – either they’ve run out of steam, the business isn’t going well or an event in their personal life has made work difficult. This makes the process unnecessarily stressful.

When planning, consider if you need to sell by a given date or for a minimum price. Also decide whether you’d like to act as a consultant to the new owner, or work for the business. This could improve your asking price and speed of sale and will also impact the type of buyer you can attract.

Preparing for sale
While you’re working hard to keep the business going, some issues inevitably get put off for another day. Now’s the time to gather up those loose ends and get your business in the best possible shape.

Focus on reducing financial burdens on the new buyer, freeing them up to take their own direction. Bring all costs back to short-term spending as much as possible – investing in long-term projects at this point could make a buyer feel obligated to go in a direction they weren’t planning.

You can make your capital position more attractive by reducing stock and tightening credit control. Any superfluous assets can also be sold off. Be careful with this – you only want to trim the fat, not force the new owner to start from scratch.

Improve your internal processes, documenting them carefully. You want to offer the easiest transition possible and a finely tuned machine will be very attractive. If a buyer asks for information, provide it quickly and accurately to generate confidence in your internal systems.

Your buyer ultimately wants to make money, so make sure the financials of your business are great shape. Time your promotions and large purchases with sales peaks and troughs to show a more stable pattern of growth. Be realistic with your sales figures, however – massaging the figures may drive buyers away.

The buyer’s perspective
The best approach to preparing for sale is to always think from the buyer’s point of view – what would you want to see if you were buying a business? In general, buyers will only be interested in a business with good cash flow, solid systems and potential for growth.

You’ve already been through the process of making the best possible case for your business in your business plan. Update this document and use it as your selling tool.

A business with only a few customers is a high-risk proposition for a buyer. Demonstrate multiple sources of income from a healthy customer base. If you only have a few key customers or suppliers, reduce the worry by locking them into longer contracts.

A buyer wants to avoid inheriting problems – especially legal ones. Demonstrate compliance with current legislation and if there are outstanding legal issues, do your best to resolve them quickly. Be transparent about them too – you need to earn your buyer’s trust.

Bringing in the experts
Seek expert advice on accurate valuation, properly accounting for the goodwill you’ve generated. Asking too much puts people off, but asking too little sends a poor message about the health of your business. Research what other business are going for and what is selling well to determine the right price.

Hiring a broker can smooth negotiations and free up your time to continue running the business as normal while they look for buyers. Make sure to interview several brokers – don’t go for the first one you meet or be overly tempted by wild promises of a high selling price.

Brokers can also help to protect your business by keeping your identity confidential. When selling a business, you want as few people to know as possible as it can cause unnecessary concern among suppliers and customers. A business for sale can also be misconstrued as failing so only tell those who need to know, such as your staff and professional advisors.

Your broker and lawyer can also protect your trade secrets by drawing up a confidentiality agreement to use during negotiations with potential buyers. Remember to also protect your intellectual property.

Finding buyers
Selling to staff members can be convenient as they already know your processes. It also eliminates the problem of protecting your trade secrets. Be careful not to go too far down this road only for it to turn sour – you and your successor will still need a good team to work with.

Your competitors may be interested in buying your business to acquire your competitive advantages and improve their market share. Avoid divulging trade secrets without legal protection, because they could pull out of the sale with all the information needed to make a play for your niche in the market.

Consider looking abroad for buyers as well. Your business may offer a great opportunity for an overseas company to break into the US market. A broker with international experience can help with this.

There may also be a distributor, supplier, customer or manufacturer who would be interested in having a stake in more than one level of the chain, as a way of increasing profitability. This would also help them to preserve the existing chain and protect the interest of their current business.

Choosing the right buyer
Avoid selling quickly to the first person who comes along. It may not be the best offer you’ll get and if they don’t have the skills to keep your business afloat, you won’t see the money from your sale.

You can use your lawyer and accountant to pre-qualify candidates before it gets to negotiation stage, but some key questions to ask might include:

  • Do they seem serious?
  • Do they have financial capacity?
  • Does their track record show the right experience?

Closing the deal
Once you have found the right buyer, their offer will be subject to due diligence – going over the finer details of your business and ensuring there are no surprises.

Your buyer’s accountant will want to review all the finances; the lawyers will check issues such as ownership of assets and current contracts. You may be asked to sign warranties and indemnities so make sure your lawyer reviews these documents.

Members of your team may need to help with this final stage, but it should be a formality. If you’re confident your business is in good shape, you could well have found your buyer.

Next steps

  • Put a plan in place to get your business in the best shape possible.
  • Get expert advice.

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

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