Good Financial Management

Good financial management is essential to the survival and success of every business. Unfortunately, many small business owners have relatively limited exposure to financial management and are unaware of how strategically important it is to their business’s performance.

In general, financial management deals with the procurement of funds for a business and the effective use of those funds in the operations of the business. It also involves using accounting numbers to measure the financial health of a business, to understand the reasons for the current financial position, and to make strategic decisions that will improve the general performance of the business.

The best way to demonstrate the importance of good financial management is to describe some of the tasks that it involves:

o Taking care not to over-invest in fixed assets

o Ensuring that there is a sufficient level of short-term working capital to sustain and manage accounts receivables and inventory

o Setting sales revenue targets that will deliver growth

o Increasing gross profit by setting the correct pricing for products or services, reducing the costs of raw materials, negotiating supplier prices, and managing other factors that influence the costs of production or service provision

o Controlling the level of general and administrative expenses by finding more cost-efficient ways of running the day-to-day business operations

o Tax planning that will minimise the taxes a business has to pay

o Managing employee benefits

o Performing financial analysis using numbers generated from financial statements.

Good financial management begins with a solid book-keeping system that will allow for the production of accurate financial statements. It requires knowledge of how to use the figures in the financial statements to the business’s advantage. For example, a good financial manager should know that a positive net profit and an increase in sales does not automatically translate into financial success. If the business’s borrowed capital has increased at a rate higher than the increase in profits or sales, it means the company is financially worse-off than it previously was. Are you and your management team aware of this?

There are many other strategic mistakes that managers who are unfamiliar or untrained in financial management make. Over time these mistakes can become detrimental to a business’s success and survival so it is crucial that you learn as much as possible about how to financially manage your small business. If you have trouble with this, you may want to consider soliciting the services of a professional who knows the ins and outs of the process.

For more information on financial management, have a look at my article “Impress your bank manager! How to read your profit and loss account report”.

Singers, Bands & the Artist Management Team

As singers and bands compete for the ears of music industry pro’s, hoping to become the next greatest pop icon, mangers and the relationships with their acts have become increasingly important. With the evolution of technology, the internet and fledgling record labels, trying to compete for the next money making act, you can be sure that artist managers have their plates full sifting through myriads of press kits and demos trying to pick the needle out of the haystack.

With each demo that is sent out, artists wait in anticipation of what might become their next step in their artist career pathway. Most of the time, however, the group or singer is met with the, “Thanks for your submission, but no thanks,” letter at the door. What can singers and bands do to increase their odds of developing a relationship with an artist manager? Good question – Let’s look at some ideas and concepts that you can put to work as you try to move your career forward.

As a former talent booking agent with the William Morris Agency and as the owner of http://www.reelmusician.com, I can tell you that one of the biggest walls that is built between artist managers and acts is a singer or group that is not prepared. They want the representation, but not the responsibility and financial demands that are placed upon them in the initial phase of their careers. They want someone to hold their hand and make it happen for them before they have sunk initial investments whether time, money or emotional investments that being maturity and basic music business knowledge and understanding. With this wall up you can forget it. There’s too much competition out there for a manager to waste their time – Would you? – Of course not and neither will they. Therefore, you make it your first priority to be prepared.

How do you prepare yourself or your band you ask? – Great question. Start with your music. Is your music the same run of the mill sound that’s already out there at countless levels? Does your music or style lend itself to marketing, or can if be differentiated from scores of others already signed to the majors? Be honest here. Quite honestly many individuals or acts have copied the sound of some other act and have not fully matured into developing their own sound. There’s nothing wrong with having musical influences, every act out there will tell you who has captured their musical hearts, but your sound has got to sound like you.

What does your press kit look like that you are sending out? Is it self-produced with fairly good looking pictures, bios, etc, or is it even a step below that? Your press kit has to shine and grab the attention of your music industry pros or you can forget it. Consider having your press kits reviewed and re-worked where necessary. You’re really missing the ball if you don’t have not only a professional looking press kit, but one that is specifically designed to get your act through the obscure doors of the music industry.

What are you doing now that is worthy of representation? Is it a dream or a real concrete musical idea that will grab the hearts of your listeners? Your listeners have to fall in love with your music. All it takes is one individual with a little clout at a record label to fall in love with your music for them to start talking you up in the halls. And with a little clout, nobody wants to be on the wrong side of the aisle on any given project, so therefore, the ball starts to roll. That’s how it usually works and good managers know this.

When you start out looking for a good manager you want to find out as best you can how authentic, honest and obviously go-getters they are. When you start to approach managers, understand that they only have so much time and resources. Da you say. Well put that information into practice. As you approach managers, what can you do to not only make their lives and jobs easier, but to let them know that you are not a “taker.” Do you know how many individuals, on a regular basis, who approach us wanting to be stars, who want us to invest all of our time and resources without offering anything in return? – Countless. Don’t do that. Offer something to your manager. Offer to help pay for the phones, press kits, postage, etc on behalf of your act. Now you’ve got the attention of the manager. He or she now knows that you are not a taker and are a serious contender in the music industry campaign. Never thought about that did you?

When you start to approach managers, your press kits, as previously detailed, need to exude professionalism. You will want to include a logo that has been specifically designed for you or your act. This logo should be remember able and characteristic of the emotional tone you want the act to initially portray and look like. Put this logo on all of your material including websites, pictures, bios, CD’s, etc. Don’t send out press kits without a logo. There is a lot of software out there to help you with logo creation, but if you need further help you may contact us tgauger@reelmusician.com or 615-300-5030 and we can help you with it.

In closing your approaching artist managers with the “We’ve got a great attitude and would like to do our part,” mentality will go along ways. Make sure that the demos you are sending out, are worthy to roll down the halls of the record labels with artist press kits that shine and show detailed experience and marketing knowledge sure to grab the attention of A&R directors. Do your part and hopefully one day an artist manager will do theirs on your behalf.

The Importance Of A Good Management Team When Investing In A Company

I am regularly asked by clients and investors of the importance of company management. When deciding to invest in a company, out of all the attributes and qualities that we review, we first focus on how important are the people in charge. Secondly how do we measure this?

Some of the attributes and qualities that we look at when reviewing a share investment include: are debt levels under control? And, what is the growth potential? However, these review factors quickly become meaningless if there is not a strong and trustworthy leadership in place.

People in managerial positions have a tremendous impact on the success, or failure, of a business. Their vision, leadership and abilities all combine to determine the future of the business.

One such person, who is often singled out as a strong leader in New Zealand, is Don Braid from Mainfreight. The company’s success is based around the unique culture among staff, which is demonstrated from the top, by management. Having a strong company vision and a focused strategy are both critical to business success.

So the answer is a resounding ‘yes’. Quality management is crucial and is top of the list when deciding which companies belong in our clients’ portfolios.

In answer to the second most popular question: how we measure this, is a lot harder to answer. Quantitative and financial review factors are easier to see and therefore measure – these can be put into spreadsheets with forecasts applied. Measuring intangible quality factors associated with management however, is much more difficult, yet arguably somewhat more important.

So what are some of the quality factors we look at in company leaders? These include:

– someone who is very focused on delivering shareholder returns
– someone who knows their businesses intimately
– someone who has a track record of success
– someone who can provide transparent and open communications with shareholders
– a disciplined, sensible approach to business growth

Many companies do not succeed because they take an overly aggressive approach to expanding, or by buying good assets but paying too much and getting the business into too much debt in the process. Large transformation decisions, such as strategic acquisitions are not bad, they just require some added scrutiny.

A lot of successful companies have management teams that have remained stable for a long period of time. While a new approach can often refresh a business, continuity is also critical. We look for managers who have been part of a company’s team in charge for a reasonable length of time. Having an equally competent team is another important factor and a good manager will surround themselves with such a team. This is also a factor we look for. The alarm bells start to ring when there have been a lot of different executives.

We also look for management that has a history of doing what they say they will do, supported by financial forecasts with. It is additionally a good sign when a CEO and managerial team have invested their own money into the business. This not only demonstrates that their interests are aligned with their shareholders, but ensures that management shares the successes and failures with shareholders.

Investing in a company equals investing in the team in charge of running it. It doesn’t matter how good the assets or prospects of a company are, it can fail to deliver if managed poorly.