Turner County News & Events
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Managing Cash Flow for Small Businesses
So what are the basics of good cash flow management? Are there any cash flow templates you can leverage? Where does your break even analysis fit in? What strategies can you use to ensure cash is flowing, whether you are in the startup stage or looking to grow an established business?
South Georgia Banking Company is completely committed to helping small businesses find answers to these important questions. Below are a series of cash flow questions with some real world solutions:
Q: Should a start-up venture in the early stages do a cash flow chart and why?
A: Cash flow is the single most important aspect of your business because it focuses on the actual cash that goes in and out of your company. Make a list of all the startup costs or one-time expenses, your monthly fixed and variable expenses, and project your sales to see if this business is feasible. Without knowing your costs and expenses, you will not be able to project your income needed to make a profit in your business.
Q: If you are unable to secure credit and credit has been cut or credit lines have been closed, how do you keep the doors open to your business?
A: You will need to sell the inventory that you have and pay cash for all inventory and services that you need until you can build up your credit again. Managing your money with your cash flow chart will help so that you are aware of all expenses. Cutting expenses and increasing sales is always the goal.
Q: Is it important for start-ups to calculate their break-even point and what is the easiest way for a non-financial person to do it?
A: Create a simple spreadsheet that lists all the income from sales each day, week, month and year and all the expenses that the company has to pay out. There are templates online that you can use; for example, SCORE (Service Core of Retired Executives) offers a free break even chart you can use.
Q: I have a hard time getting clients to pay on time. If they don’t pay on time, I have a hard time meeting our expenses. Any suggestions on how to get paid quicker?
A: You can offer a discount for COD (cash on delivery) or net 10 days; it could be 2% off for paying more quickly. Otherwise, the only way to get paid quicker is to call weekly and remind your customer that money is due and offer to take a charge card over the phone.
Q: I am in the process of opening a small retail store. How much inventory should I purchase for startup so that I do not overbuy?
A: With your financial projections, you can guess about how much you will be selling. Buy as little as possible to start—but make sure that you can get a quick delivery, as you never ever want to run out of anything. This is something that you will learn as you are in business.
Q: Is there a set percentage to mark up the prices for merchandise? Also, if I can get a discount from a vendor for purchasing a higher volume, do I sell it at a discount or should I sell it at the price I had before the discount?
A: A mark-up can vary depending on your overhead costs. Higher overhead would require a higher mark-up. Always sell your merchandise for as much as the market will bear. If there is a higher perceived value, people will pay more. The discount from the vendor means more profit in your pocket.
Q: What options do micro businesses (mom & pop) size have in obtaining periodic help needed with small loans to help with cash flow?
A: A line of credit is the easiest way to have money available as needed. You would have a limit and use it as needed and pay only for what you use. If you are not able to get a line of credit, you need to make sure that your sales increase to create cash flow. Give your customers incentives to buy more or offer discounts.
Q: At what point should you consider using a collection agency to help you collect on past due receivables?
A: Collection agencies take 30%, so try to collect on your own by calling and offering credit terms or returns or credit card payment. If the company does not have the money, you will not be getting paid so your only hope is to take back the merchandise if you can.
Q: What is the formula to determine how much cash reserves a business should hold?
A: Always have enough cash reserves to cover your slow months in business. You should be safe if you can have 3-6 months or more to cover all unknown or variable expenses that may come up. Always consider increasing your sales and moving your inventory as quickly as you can.
SGBC Celebrates National Ag Day with Financial Tips for Farmers
“There are a number of challenges facing today’s young producers. We’re here to help navigate the financial ones,” said Sam McCard, SGBC Executive VP and Chief Credit Officer. “We want to make financial decisions easier so farmers can focus on the farm.”
When speaking to a banker, young and beginning farmers should keep the following in mind:
1. Sweat the small stuff. Keeping accurate and detailed records encourages both short-term and long-term financial planning. Not only does it help you stay organized and make better management decisions, it makes it easier for your lender to assess your financial situation.
2. Develop a business and marketing plan. You will work smarter and improve your odds when you focus and organize your goals.
3. Evaluate your capital investments for profitability and payback. Keeping track of how long it will take to generate enough cash flows from a capital investment to justify the investment will help you make better financial decisions for the future.
4. Know your costs. When you consider your cost of living and expenditures, including depreciation and family living, you’ll have a better understanding of your overall financial situation. Your local banker can provide guidelines to monitor your financial ratios.
5. Decide on what type of operation you want to run. New farmers and ranchers should either be very efficient, low-cost producers or should add value that someone else will pay for.
6. Consider supplementing your operation with off-farm income until your operation is large enough to employ you profitably full-time.
7. Consider renting farm equipment or custom hiring instead of purchasing.
8. Shop around. Getting price quotes on supplies such as feed, fertilizer and fuel can uncover lower cost sources. Your research might get you a discount from a local, preferred supplier that gives excellent service. Make sure product quality is part of your evaluation.
9. Ask your banker about how to get access to state and federal credit enhancement programs. Some banks also offer special benefits for first-time schedule F tax filers.
10. When in doubt, ask for help and guidance from someone you trust–an experienced farmer or rancher, a trusted adviser or your local banker. You don’t have to make these important financial decisions alone.
Meet Donna NeSmith: SGBC Employee Spotlight
Meet Donna NeSmith: SGBC Employee Spotlight
Donna NeSmith has been with South Georgia Banking Company – in the Ashburn branch – for 20 years and has worn many hats in her career. Donna has had roles as a Mortgage Originator, Loan Assistant and Processor and back up to Customer Service Representative.
Donna gets a lot of satisfaction out of being part of the SGBC family. “I love the people I work with and love helping customers,” she says, and added, “I try to do all I can to take care of our customers. I want them to feel important to us.”
In addition to the relationships Donna has built with her customers and coworkers, she is also invested in the Ashburn community. Donna is on the Fire Ant Festival Committee (serving as Chairman for 2018 & 2019), is on the Chamber of Commerce Board of Directors, and is a member of the Rural Health Committee. She is also an active member of Bethel Baptist Church. Donna has always enjoyed clubs and being involved, and she loves representing the bank by reading to local students during Dr. Seuss week.
“I love that SGBC is involved in our community, and I love that they allow their employees to be involved,” says Donna. “Our Ashburn branch has always allowed our property to be used during the Fire Ant Festival. We have held fire ant digs, Strawberry Cook-offs and fashion shows on the porch of the old Thrasher House. We sponsored the Fire Ant Photo Contest for ten years, and now are proud to sponsor the annual Steak Cook Off and Kids’ Hamburger Challenge. We not only give money, but we give of our time, too. I love that we have a float in our Christmas parade, a tent at Relay for Life, give out candy at Ashburn’s Halloween Parade, welcome teachers on their first day of pre-planning and much much more.”
Donna is obviously community-minded but also strives to offer the kind of customer service that makes SGBC stand out from the competition. South Georgia Banking Company is proud to have representatives like Donna who demonstrate the heart of our business every day – in our bank and in our communities.
If you are a South Georgia Banking Company customer, there will be no interruptions of service. Our top priority at SGBC is to meet our customers’ needs to ensure their financial success, and we are committed to making this change as easy as possible for you. The Ashburn Branch will continue to provide the same products and services you have been accustomed to and you can count on seeing the same familiar faces as well. Even more, we have expanded our business hours at the Ashburn branch:
South Georgia Banking Company
561 E. Washington Avenue
Ashburn, Georgia 31714
Monday-Thursday: 9: 00 am – 4:00 pm
Friday: 9:00 am – 5:30 pm
Monday-Thursday: 8:30 am – 5:00 pm
Friday: 8:30 am – 5:30 pm
Saturday: 8:30 am – 12:00 pm
In addition to our seven convenient locations throughout South Georgia, you may also access your accounts 24 hours a day, 7 days a week by using SGBC online and mobile banking at www.sgbconline.com, calling 1.877.482.5680 for telephone banking or download our mobile app.
Age Category: Under 18 ( ) 18 & over ( )
Title of Photograph: _____________________________________________________
Choose the Appropriate Category: People ( ) Animals ( ) Landscape ( )
An impartial judging committee will judge the photographs on composition, clarity, use of subject and conveyance of theme.
Rules: Amateur photographs only. Professional photos will not be accepted.
All photographs must be submitted as 8 x 10’s. They may be in color or black and white. They must be matted or mounted for display. NO frames.
Limit 2 photographs per person per category.
One Registration Form is required for each photograph.
Photographs are due no later than 5:00 P.M. on FRIDAY March 17th at South Georgia Banking Company in Ashburn to the attention of Donna NeSmith.
Photographs will be on display at South Georgia Banking Company, Ashburn, during the week of the festival, March 20-24.
The Photography Show will be displayed on Saturday at the Fire Ant Festival at a location later announced.
Contact Donna NeSmith with questions: Phone: 229-567-9686 Email: firstname.lastname@example.org
Life’s is a beach in Ashburn ... or at least, it was for a day. Customer Appreciation Day was enjoyed by customers and employees alike. All we were missing was the salty beach breeze!
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