Category Archives for "Merager Business Financial Advice"

Simplicity Translates To Profits

So I’ve got a great quote for you

“Complexity is impressive, but simplicity is genius”.

That was said by Lance Wallnau. Fantastic observation.

We can have such complex systems that we stop understanding how they work and this can be especially true for a lot of us that are entrepreneurs that own businesses. There is a vast number of applications out there that do all kinds of things and they are so tempting to just, let’s go out and get this app, this app for this. All these things and all of a sudden we have a system that is so fragile that if one of the main people dies that knows how all this works, or you know they’re out of the picture somehow, let’s maybe not go that bleak, but if something were to happen business continuity, and I’ve seen this so many times that nobody else in the company knows how to find the things that they need to. It’s not a system that is meshed together. It’s not obvious. Not using the same data and of course the data is the key to everything we do now, right?

If we don’t have synced up data, then you know maybe our marketing is doing one thing. Sales are doing another.

We have a price that a client expects and now we can’t give that to them because our systems are marketing and our accounting systems aren’t together. Maybe we don’t have our contracts married up to the accounting system and to the marketing system so that everybody has access to that.

So one of the takeaways clearly to me and I think to most small business owners is to make your system as simple as possible. Try to integrate as much as possible. There are systems such as that, they allow databases to speak together to some degree, but one of the problems that we have with our businesses is we can get so bound up in the administration. It takes so much time doing all the little busy work. If we have systems that are disparate, are not connected to each other we might run the very real risk of not only wasting our time but possibly blowing up a deal. Having a bad client relationship.

You know imagine if a salesperson says that the first month is free. The accounting system doesn’t know that. They’re billed. Is there any number of instances where one of the worst things we can do I think is double bill a client and then not know when they call us and say, “what’s going on here, I’ve already paid this” or “I’ve already received a bill and you’re billing me again,” your company immediately loses credibility. It’s a brutal thing to do to one’s own company.

So, there’s a lot of ways to integrate systems. One of the systems that I use is QuickBooks Online. They have a lot of third-party apps. I don’t have any financial interest in people using QuickBooks although I can provide a discount, which is really helpful for a lot of businesses, but whichever system you go with, for your accounting, your marketing, your CRM, all the things that you’re using, just have something that’s integrated so that you integrate it once and you know it’s going to be fed out to all of your systems and yeah, so that’s sort of the takeaway. Simplicity, if it’s not easy to understand. If you can’t pull up reports easily on the fly, so you know where your company is, it’s a big risk. It’s a place of risk and I think each of us needs to know where our business is at any time.

So, if you need help with any of this. If you need to use something like QuickBooks. You’d like a discount. You’d like to talk about your business, about where your business is and some of the hopes and dreams, some of the plans you’d like to make real, give us a call. We’d love to talk with you. Give you half an hour, 45 minutes, however long it takes to have a good discussion so that you have a good place to go. Even if it’s not us. We want our clients to be happy, long-term relationships where everybody is pleased with what’s going on, that’s what we look for.

So, I’m Steve from Merager Financial Solutions and we absolutely look forward to talking with you and we find the truth within your books. We’d love to help you with that.

Pick up the phone and call (720) 300-6735

Intricacies Of Buying A Business

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Are you thinking about buying a business? Are you in the process of buying a business? Do you consider that something that you might need to know about sometime in the future?


A lot of businesses do. Some of the most successful businesses buy their competitors. I know somebody that did that. It was about a decade ago. Absolutely fantastic decision. His business is going crazy.


I spoke with a business owner just last week, and he bought a domain. It was a brilliant domain. Because of that, and it cost him a good amount of money, he is getting free traffic. He doesn’t really even have to do any other marketing.


There’s a lot of really good reasons to buy a business and think about buying a business.


Of course, there’s a lot of intricacies in buying a business, not only the financials, of course, the taxes the profit and loss, the balance sheet, all those things. There’s also how much the business is going to make. What’s the profit? You really have to see a lot of different things including the revenue that’s coming in which can change based on a number of different things.


What if there was a carwash for instance? So that’s great the company was making a ton of money, but what’s in the process is another carwash is going to be built just half a mile down the road, a huge change in revenue.


Those types of things really need to researched, see if there is any plan in process, what’s going to happen to that.


There’s also things, obviously the expenses, right? You need to know what the expenses are going to be. My company does this work and we’ll get the financials, and we’ll see trends, that’s what we all want to see.


If a company has had a huge piece of equipment and they’ve been using it for a number of years, it only has maybe a seven year lifetime, and it’s in Year Three or Four, what can happen is that the maintenance costs are going to start to go up at a much higher rate as every year goes by. That increase in expenses is really going to make a difference, so we need to look not only at what is happening right now, but what we expect to happen in the future.


There’s so many aspects of this that are really important including the contracts the company has, especially if it’s a service company, the contracts that they have with their clients, the contracts that they have with vendors. I’ve had companies where vendors have given a sweet deal that has an expiration date, and that might have to be renegotiated. The company may not want to renegotiate it. It may not be in their best interests, and that could decrease profits substantially.


We want to make sure that our clients, this target company, that the clients have long term contracts. I want to see what they are. Maybe they’re not long term contracts. Maybe there’s a lot of short term contracts, but we want to make sure that they’re signed contracts, we know what the income is going to be, and we know what the expenses are.


What I also want to make sure that within the books that we know how much each client is bringing in profit which is then an interesting thing because you think, “Oh, okay, well this company that I’m thinking about buying, they’re getting this much in profit.”


The thing is that a company could have, worse case, it has one client, and if that client goes away, then the entire business is going to go bust.


There’s also the possibility of having multiple clients which can be great. Maybe they’re really short term. Maybe they’re two or three month contracts, but we want to see that we’re getting new clients in on a regular basis. And we want to be sure that the due diligence is being done of engagement letters being created so that everybody is onboard, they understand the same thing, there’s not going to be something like a huge recall of the company’s goods or services.


There’s a lot of different things that we want to look at. I love talking about these things. I love talking about the big picture type of situations that can really enrich your life as a business owner, both professionally and monetarily.


Give us a call. We’d love to chat. Love to talk this through and figure out what the best solution is for you.


I’m Steve from Merager Financial Solutions. Give us a call.


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How Many Business Units Do You REALLY Have

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How many business units does your company have? We ask that a lot in our engagements with clients. And it’s really interesting, the responses that we get. Sometimes we hear two, because maybe they have two product lines and in the marketing and in the sales, they don’t work together. So they think they have two. But, what about administration? What about the other piece that you have in between those or maybe you’re reselling products.


One of the more interesting engagements that I’ve had, it was a software company and they were doing a fantastic business, but the company was losing money. The owner was pulling his hair out. He couldn’t understand what was happening. They were up-charging, they had an hourly rate that was vastly more than the hourly rate that they were paying their employees. They couldn’t figure it out. They thought they had two business units. But, they didn’t figure administration. You should always consider administration. It’s going to be an anchor on the company. It’s never going to make any money.


In this case, they were selling, they were reselling items. They were reselling, let’s say, laptops, and other things, but they were selling hardware. Reselling hardware. So they would buy it from another company. They would do whatever they needed to do with the piece of equipment and then they would sell it to their client. Great business. Great business idea. Client was happy. They didn’t need to spend all their time, all their people’s time getting the laptop ready, right? It’s not something that that business does best. They could make a lot more money having their people engaged in whatever it is that their business did. Okay. So that’s great.


So everybody was happy. Here’s the problem. The company, my client, was just adding on, let’s say, 20% to the cost of that laptop, flat. They weren’t tracking their time. They didn’t have people put in time sheets for precisely what they were doing, so, they weren’t realizing, they weren’t putting together that it cost a person, it took one of their technicians five hours, to do that type of work. And at $175 an hour, you get the point. They thought they were going to make 20%, $200, but they were spending, whatever that works out to, $900, outfitting the laptop so it could be resold.


So, it’s really interesting. That business had been going for a number of years, it wasn’t very old, but, and they had taken on these new business lines, and there wasn’t a continuous thought of ‘What is our profit for every single one of these things that we’re doing? And how do we know that?’ We can make assumptions, but unless we have that data intact, in our system, and we can pull it out easily, we won’t know how much it costs.


One of the objectives of this, is to make sure that we have the correct pricing for the business lines, but we also want to make sure that we know how much profit we’re making per company. Sometimes, you know, the 80/20 rule, you’re spending 80% of your time servicing 20% of the customers. There are times when this very often happens, that a client may end up costing your business more money than you’re bringing in.


And that brings up all kinds of other opportunities, such as pricing. There’s different packages that can be brought on board. If a client is happy with the business, they’re going to stick with your business. It’s a matter of making sure that we see what we have and knowing the profit that we’re making, knowing how much time we’re spending. Having a complete look, complete understanding of our business and the profits that we’re making incrementally, within our business.


Clearly, that’s one of the things that we do, encourage you to give us a call. We’ll spend half an hour, 45 minutes chatting about your business. We can essentially guarantee that you’ll walk away with at least one good, if not great, idea.


So, give us a call, Merager Financial Solutions. We find out what the story of your books really is. And how to bring more profits into your company, stop unnecessary spending, and make your life such that you know more about your business.


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Good Client Relationships Are A Key Company Asset

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Merager Financial Solutions

Boulder, Colorado


So, I wanted to talk a little bit today about having clients that ask for their money back. And if you’ve been in business for any amount of time, you’ve likely had this as one of your scenarios. If you haven’t, good for you. You’re doing a great job. Or it might just be like. So, I just want to go over a few of the things that we can do to keep ourselves out of that type of situation.


One of the things that I do is budgeting for businesses, and what that does … The fundamental thing that that does, is that we have a conversation beforehand. The client … I have, in this case, a conversation with the client before the time the money needs to be spent. The takeaway from that is that we want to have a conversation with our potential clients before something might happen. So we really want to have some really in-depth conversations, have a really good onboarding system. Questions where we’re asking them what their business is, how they conduct business. If they’re the right fit for our business. We don’t want to just work with every business, and clearly it’s not just because of the money. It’s because we may not … We simply many not be a good fit.


And so the first thing we want to do is really have a clear onboarding system where we’re having some really deep, good discussions, we’re figuring out what the client needs, and we have an honest thought within ourselves of, “Can I actually provide this to my potential client?” And if we can’t, we need to have that wonderful backup of hopefully you know some people. You’ve been doing some networking. I can give you a good person that can help you with that. That really … It’s great for your reputation. It’s the best place to be so that you’re not doing work, spending time doing work that you’re hoping you can get paid for, and then having to possibly refund the money. It can damage a reputation. It can take our time, take the money back. But it can also make us question what we’re doing in business. So we want to just absolutely make sure that we do an good onboarding process.


The second thing is to avoid having to return money, or have wasted time, is to have a really solid engagement letter. A lot of business owners, especially new business owners, they think that it’d be too much of a burden, or they might think they’re might be an, “Oh, no!” That the client might say, “What is this? Well, I’m not going to do business with you.” But really, any business, any person that’s been doing business for any amount of time, really, they expect that. They expect that, and what the engagement letter is simply is it’s not confrontational. It’s simply saying this is what you, client, are expecting of me. This is what I, business, can do for you, client. This is what the charges are going to be. This is if we decide to stop doing business. We’re going to give each other, let’s say, a month notice, a week notice, whatever you think might work.


And it helps everybody out. It really is great for the relationship. Your relationship with your client. Because if anything comes up, you can simply point to the engagement letter and say, “Well, you know, I understand that this is your concern. This is what we agreed to before and we may need to change it going forward.” And you can have that discussion afterwards. But if you can show a client that you had an agreement, it makes it such that it’s not acrimonious and you can still have a good relationship with that client.


These are some of the things that I speak with about clients so that it’s not just the money that’s coming in. You want to make sure, really, that everything that you’re doing … That you have the backup for it. That you have the agreements. That you have the bill of sales for any type of disbursement. All the things that you’re doing, anything that you’re doing, there should be some documentation so that maybe even years down the road, if something comes up, that you have something that you can refer to, and it’s not just your memory. Our memories are great. They’re helpful. They can be great. But when something happens and a situation comes up, we really want to make sure that we keep a good relationship with our clients.

And again, the money part of it … I think it’s secondary to the trust and the good relationship that we maintain with our clients, and we want to … I think, if you’re like me, you want to have long term relationships with our clients. We want that trust. And we find it one of the most valuable things in our company.

So, I hope you found this useful. If you need any help with this, please contact me, my company, and we can sit down for half an hour, 45 minutes, and have a complimentary discussion. We’ll talk about some of these things, and I can almost guarantee that you walk away quite pleased with our conversation.

I’m Steve from Merager Financial Solutions. Contact us, and we can find out the true story in your books.

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Is your financial business strategy matching what is in your books?

If you don’t really read your books correctly, how can you know your financial strategy for your business growth is on track?

I know a lot of folks, they see reports that come out, financial reports, and they think, “Oh, my god. Look at all these numbers. This is crazy. I don’t want to look at it. It doesn’t mean anything to me. There’s all these numbers.” It sort of makes me think, because this is a natural thing that I do. I work with numbers all the time. I work with a lot of different types of businesses, different industries. I look at somebody’s books, and I see, and I encourage my clients to see their books as a story, as the story of their business. I think one of the takeaways is every one of those numbers that you look at on your reports, it has some human story behind it.

Print out your reports, print out your profit and loss, and take a look at one of those numbers. Just think about it for a second. Think about the decisions that came into play to make that happen. Let’s say travel. You see a number. Maybe you see $5,000, and great. Whatever. But at some point, you had made a decision to spend $5,000. Now, hopefully, you made a decision well before that point so that you had a strategic reason to do that, you thought about your return on investment. But this sort of leads me to the idea that a lot of businesses have a story that is going on in their business itself, but it’s not reflected, that story isn’t reflected on their books.

I think it’s a really key point is that when you print out or take a look at your financial reports, your profit and loss, that’s one that’s really straightforward and easy to think about. If you’re looking at that report, and you’re not seeing your business, you’re not seeing, for instance, everything that I’m doing, for instance, everything that I’m doing to attract new clients is altogether, and so I can see my multiple different strategies that I’m using to bring clients into my business.

Really, if you’re not seeing your strategy reflected in your books, if it’s not clear, if you’re not looking down every one of those categories and subcategories, which are incredibly important, and you’re not saying, “Oh, that’s right. I remember. I remember that I wanted to bring in five clients a month, and I realized that it was going to cost $600 per client to do that. I also realize,” for instance, “I need to do networking, so I’m involved in maybe the chamber, a few different professional organizations.” You also had, as a separate category, marketing. Maybe another category as advertising. Another category as discounts. All these things. Travel. You have your travel. You have your meals, and you have a very specific reason why you have them broken out the way they are.

Your books are absolutely solid gold, especially if you’ve been in business for a significant amount of time, and even more so if you’re profitable, and even more so if you have a complex business.

Let’s get you together with me, Steve Merager of Merager Financial Solutions, and really take a look and see where you are, see what your business is really trying to do. You have … If you’re successful, you’re a thoughtful, intelligent person, so you’ve gone through, and you’ve thought about this. It’s important to reflect those decisions that you’ve made that are so, so critical and helpful for your business. See them all in one place. That’s the solid gold of your books.

If you’d like to do that, we can spend half an hour as freebie, and we can take a look at your books. I can essentially guarantee that we’ll find something, and you will walk away with a smile. I’m Steve from Merager Financial Solutions. Give us a call, give us an email, and we’ll help you out.

(720) 300-6735

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Merager Financial Solutions

Boulder, Colorado