GGBA: Message from the President, Business Tips and More!

 

 

 

GGBA Message from the President

What would bring you out for business?

Would it be peer/vendor or client networking?
Targeted business connections?
Owner/employee skills building?
Or something else?

The GGBA invites you to help shape future programming.

Let us know what would bring you Out for Business at info@ggba.com

Audry deLucia is the President of GGBA.

 

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Business Tips from GGBA: Where’s the Cash? A Lesson in Small Business Cash Flow

By Mike Milan–

 As a small business owner, I always got excited to see a month with a profitable income statement. That meant that customers were buying, and I was being smart with how I spent money—at least on paper. There were those times where I could see that I made money, but it just didn’t make it into the bank account. I still felt like I was struggling to pay bills, even though the financial statements told me I shouldn’t have a problem. Where was the cash going?

This is where the difference between profit and cash really set in. I had to realize that the income statement was limited to recording my business process, but didn’t account for actual dollars hitting the bank account. So, I went on a treasure hunt for dollars within my own company. Here is what I found:

There were five different places where cash was hidden from the income statement. These five areas were killing my cash flow and making it harder to stay in business. Once I made the connection between cash flow and profit, I was able to change the whole trajectory of my business and its future. If you feel this way, look here.

• Accounts receivable: Make sure that you are being paid as quickly as possible. I had a service-based business, where my largest expense was payroll. I had to educate my customers to treat my invoices more like a payroll expense and pay more frequently.
• Accounts payable: This may sound a little odd, but don’t pay much earlier than the due date, unless you are getting a discount. This is like a free loan and keeps cash in your company.
• Inventory management: Learn to set your base level inventory amounts. This is where you have just enough of an item between orders. Look at history and match your orders to your customers. If they normally buy 10 of a particular item in a week, then you should have 10–12 on hand. Your quantity on hand should match your base level (or par) at the beginning of an order cycle.
• Expense control: There is a hard and fast rule here. The change in operating expense should mirror the change in gross profit. If gross profit is reduced by $10k, then you should also reduce your operating expense by $10k. Simply put, when you have less money, you should spend less money.
• Mis-financing: Almost none of us check for this on a regular basis, but we should. This is where you have purchased a long-term asset, with a short-term product. It’s like buying a house with a credit card. You wouldn’t do this even if you could, unless you wanted the miles! No, you wouldn’t do this because the cost of borrowing is too high, and it would increase your interest expense. The length of the loan should match the life of the asset.
• Match budget to cash: It is important for you to visualize how cash moves through your company in order not just to make money, but also to have it in your bank account.

Mike Milan has worked with business leaders across the country on proactive cash flow management and sales strategies. He has been a pioneer in profitability transformations and is known for his hard-hitting practical content, relatable storytelling, infectious energy and lasting impact that he has on organizations. Mike’s proven methods help to modernize business decision making by linking business goals and key cash metrics. Special thanks to GGBA’s Corporate Partner, Moody’s Analytics, for their support of LGBTQ small businesses!

 

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Persistence Pays Off for Pride Resource Partners

By Michelle Burkhart–

The GGBA was the world’s first LGBTQ Chamber of Commerce and as such we work with LGBTQ chambers of commerce and LGBT professionals across California and the U.S. through our affiliations with the Western Business Alliance and the National LGBT Chamber of Commerce.

In November of 2018, through the GGBA’s Architectural & Engineering/Construction (AEC) Program, we were introduced to a remarkable LGBT-owned Project Management/Construction Management firm called Pride Resource Partners. Since that time, Pride Resource Partners has become an integral part of the GGBA’s efforts on the regional and the state-wide level in advocating for LGBTQ businesses within Caltrans and the California Public Utilities Commission (CPUC). Joe Maak is the CEO of Pride Resource Partners.

According to Maak, “My aerospace job was ending with the relocation of the company I worked for as a facility manager. I wanted my own business so I started it in 2014, at the same time CPUC’s LGBTBE certification started. I was the first LGBT business to be certified by the CPUC and I saw the opportunities and visibility a certification could provide to me. I was very lucky to be in the right place at the right time. When I got certified with the CPUC, an affiliate company was looking for an LGBTBE-certified business as a subcontractor to help them win the bid. Thus, within a short time I got my first master contract and my business grew exponentially from starting up in 2015 to $5.5 million in revenues in 2017.”

The impact of his LGBTBE certification certainly jumpstarted his business. It allowed him to grow to more than 40 employees in 15 categories of “mission specialists.” His business plan projects 250 employees by 2020.

Although Maak experienced rapid growth, he says he wants to diversify into other industries, and into the federal contracting world. He stated that the main impact of the CPUC LGBTBE certification, aside from revenues, was the growth of “reputation and credibility” in his company’s performance record as a certified contractor. This will support his diversification into other contracting areas. Since the LGBTBE certification is not mandated on the federal level, Maak is persisting in finding ways to climb this mountain, especially in this current climate that challenges most diverse communities.

When asked what advice Maak would give to other would-be LGBT-certified business owners, he offered the following tips:

• Be sure to have adequate funding sources, as you are paid 60–90 days out.
• Persistence is really important. Take time to talk to everyone, even if there seems to be nothing to talk about, as you never know whom you will meet.
• Seek out the people in the supplier diversity department to build relationships in order to get to the decision maker.
• One does not know everything, so find strategic partners, mentors or other business owners who can help you to navigate the ups and downs of growing your business. The LGBTBE-certified business owner has access to others across the nation, so you are not alone.
• Use the supplier diversity resources that are available to you. With the CPUC affiliates in California, for example, there are great trainings, mentoring and support that an LGBT-certified business has access to through the various affiliate supplier diversity departments.

Maak built a business from a one-person startup and experienced the same growing pains that all entrepreneurs do when building their company. He may have been in the right place at the right time to start his company. However, to retain that growth and to expand, Maak concurred with our title that persistence pays off … so never give up!

Michelle Burkart is the principal at Diversity Supplier Alliance. Questions? Reach her at michelle@diversitysupplieralliance.com

For more information on LGBTBE certification visit https://www.diversitysupplieralliance.com/

 

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 GGBA Calendar

Monday, May 6
Inspire SF!
San Francisco Small Business Week
5–9 pm
City View at Metreon
135 4th Street #4000
San Francisco
Registration: https://www.sfsmallbusinessweek.com/events/

Tuesday, May 7
GGBA MEGA Make Contact
5:30–7:30pm
Hi-Tops
2247 Market Street
San Francisco
Registration: https://ggba.com/

Wednesday, May 15
GGBA’s AEC EPIC Reception
For LGBTQ Architects, Engineers & Construction Professionals
EPIC Steak
369 The Embarcadero
San Francisco
Registration: Contact tom.baker@thebakergroupsf.com

 

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