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Entrepreneur Skills 101 - How to Grow Your Cash Balance

BY Eddy Hood In Profitability On May 10, 2013 With 1 Comment

Entrepreneur Skills

You know the theme song.

You know the fight scenes.

What you may not know is the history of how Stallone became Rocky.

Every good business owner has entrepreneur skills in common. Stallone was no different. Of all the entrepreneur skills to choose from, pig-headed discipline stands out above them all.

Here is the story in a nutshell.

Stallone started like many of us. He was working jobs that he hated and dreaming of something better. During the early 70’s, he was cleaning lion’s cages at The Central Park Zoo while trying to become an actor.

He had one problem though – he wasn't tall, dark and handsome. He was short, muscular, and had a funny lip thing that made him hard to understand on camera. To make things worse, he was flat broke.

Have you ever been completely broke? It’s hard to put yourself into Stallone’s shoes if you haven’t, but that’s what I need you to do. Now I want you to image the one thing in life that you prize more than anything else. Got it?

Great.

I want you to picture selling that for $50 so that you can get some food for tonight.

Everyone has their prize possession in life and for Stallone, it was his dog. He had nothing left and he had to eat. Stallone sat outside a local liquor store with a sign that said “Dog for Sale”. The best he could get was $50. He often talks about how that was one of the hardest things he had do, but he did it to hold on to his dreams for a few days longer.

Entrepreneur Skills Hit Him Hard

One day he saw a boxing match on television between Ali and Weppner and those entrepreneur skills hit him hard - maybe not as hard as Ivan Drago, but it was hard. He grabbed a pencil and a stack of paper and started writing as fast as he could. That was the night that Rocky was born.

Inspiration Hit HardStallone visited every producer he could to try and sell his screen play, and he actually got a few bites. He had one requirement though – he had to star in the movie. Nobody would take the script with him in it. He just wasn't the ideal look for a movie star.

Here's the kicker - Stallone was offered around $400,000 for his screenplay as long as he didn’t star in the film. How hard would it have been to say no to that offer?

That’s exactly what he did.

He told the producers “no” and walked away. His pigheaded discipline and entrepreneur skills kept him focused when the world tried to shut him down. As he got to the door, they finally caved in and agreed to let him be in the movie, but they would only pay $25,000 for the screenplay. He took it and I’m glad he did. This this day I tear up in Rocky IV.

Even more interesting is what he did after he accepted the offer. He found the gentleman that bought his dog and asked him if he could buy it back. No matter how much Stallone offered him, the man wouldn't sell the dog back. Eventually Stallone paid $15,000 and guaranteed the guy a spot in the movie. He really liked that dog.

The takeaway from all of this... He used the entrepreneur skills of pigheaded discipline and determination to stick with his goal. He made no excuses and he never gave up.

12 Entrepreneur Skills to Have

 

Honing Your Entrepreneurs Skills to Grow Your Cash Balance

In his national bestselling book titled The Ultimate Sales Machine, Chet Holmes discussed entrepreneur skills and focused on one in particular:

Pigheaded discipline.

This is actually my favorite book; so much so that we give a copy of it away to every one of our clients.

Since we're the small business accountants for over 500 businesses nationwide, let's use pigheaded discipline to grow your cash balances today. Without making any excuses, where is your business at and where do you need to be cash wise? Lets assume you have $10,000 on average in your bank.

Where does you business need to be in order to have a healthy cash balance? We suggest that you add up all of your overhead expenses, multiply that by a factor of 3, and make that your goal. If you overhead costs add up to $15,000 that would mean that a good cash target would be $45,000.

The next part is a lot of fun. What actions will you take right now to make a change within your business?

10 entrepreneur skills you can implement immediately to grow cash:

  1. Define how your business generates cash. Do you make more cash selling one type of product over another? Do you have multiple revenue channels that eventually bring cash in the door? Once you know your cash channels, you can write them up on the board and select your best ones to optimize.
  2. Have your bookkeeper provide you with a daily cash report so that you can control spending and identify unnecessary charges.
  3. Reinvent your invoicing and collections process so that people pay you quicker.
  4. Negotiate with a supplier to reduce your costs per unit.
  5. Set 10% of every deposit aside in a savings account and let it build up over time. This is one of my favorite because it's easy to implement.
  6. Find a way to reward customers for paying before invoices are due.
  7. Move yourself up on the cash flow ladder. This means that if you are in an industry where several other vendors must get paid before you do, find a way to change your business model. See if you can get paid before your vendors.
  8. Create a budget with your accountant and enter it into QuickBooks. Then have your accountant report your budget to actuals to you.
  9. Stop buying a bunch of personal stuff with company cash.
  10. Reallocate your spending from non-cash generating activities to cash generating activities. For example, stop eating out so much and use that money for marketing.

Now look at the list above and choose one of the entrepreneur skills that you can implement right now. Anthony Robbins, the world's leader in entrepreneur skills and success management, teaches that you should never leave the site of a goal without taking an action. If you do, you will never achieve your goal.

Let's say that you decide to set 10% of every deposit aside to build your cash reserves. It's a great strategy that all small businesses should utilize. What will you do right now to make that happen? You could bring your accountant in for a meeting and tell them to start with the checks that you receive today. You could then call your bank and add a savings account to your plan if you don't already have one. Then have your bookkeeper give you a daily report showing the growth of this savings account. Seeing it's growth will encourage you to keep up with your goal and will get you excited.

The last and final step is to decide what you will do when the excuses creep in and try to put the kibosh on your entrepreneur skills. Here is an example. Let's say that payroll is coming up and you need cash. It would be easy to pull all the money out of your savings account to get through payroll. However, can you decide right now what options you will take to get more cash instead of draining your savings? What could you collect from current receivables to make it happen? What could you do to bump up sales to make some quick cash? Do whatever you have to do, but do not touch that savings account. Now you see where pigheaded discipline comes into play.

So there you have it. It’s time to analyze your entrepreneur skills and get more cash. Have a great day growing your business!

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My name is Eddy Hood. I've coached over 500 businesses on how to become more profitable. I'm the Founder & CEO of Ignite Spot, and I have mad parallel parking skills.

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