A case study of detailed cash planning using SurvivalWare Cash Planner

Ivan Newton was kind enough to be interviewed about his usage of SurvivalWare to right his business and propel it forward.  His conclusion: “SurvivalWare is the best solution we’ve found that addresses the unique ‘balancing act’ of our small business.”

Here is his story as re-told by Mary Ritley:

Ivan Newton is a franchise business owner who is always looking for ways to improve operational efficiency and profitability. Located in Pittsfield, Massachusetts near Albany, New York, Newton acquired and ran three Kentucky Fried Chicken locations with a partner from 1983 to 1986.   Newton’s role in the business was that of silent partner – investing, contributing ideas, and reviewing profit and loss statements.  By 1996, lack of profits forced Newton and his partner to downsize from three locations to one.  In 2002, when his business partner became ill, Newton found himself taking a more active role in the operations and eventually took over the business in 2003.  
 

The Challenge

While the business always looked profitable on paper, further review of the financials uncovered notable cash flow problems – enough that Newton had trouble paying the bills necessary to keep the business going. He found himself in the situation that every small business owner dreads. He was cash poor.

 

Newton made it his mission to better understand cash flow. He searched the internet for information that would help him understand where the money was going and why he wasn’t retaining more profit.

 

He purchased a variety of software programs that promised to help him understand ratios, make projections, and improve his business. But he quickly became frustrated with expensive “solutions” with complicated applications that offered little more than monthly comparisons. Newton found that these applications didn’t address his fundamental business problem. He needed something much more granular – something that gave him a magnified view of the cash going in and out the door on a weekly, even daily basis. 

 

The Solution

It wasn’t until Newton found an article about understanding cash flow by Rusty Luhring that he began to understand the basics of cash planning and how to better manage his resources. The article offered tips like identifying invoices that need to be paid immediately and those that can be put off without penalty, invoicing clients early, and offering incentives to pay within ten days. Newton found that Luhring was “speaking his language” and was pleased to learn that Luhring also developed a software package – SurvivalWare – that put those cash planning concepts into action.

 

After an online purchase and a simple installation process, Newton found himself up and running with SurvivalWare’s Cash Planner quickly. The interactive solution allowed him to assess his cash situation on a daily basis and made it easy to move numbers back and forth, see the impact of proposed spending, make changes, and smooth out his cash flow. SurvivalWare also offered the ability to convert numbers to charts and graphs that provided a visual representation of cash flow trends. This functionality also made it easy for Newton to share financial information with his operations manager and to understand the critical combination of primary factors – sales, cost of sales, and cost of labor – that drive profitability. 

 

The Results

According to Newton, “We began using the software in earnest three years ago when we found ourselves in a serious cash crunch. Since that time, SurvivalWare Cash Planner has helped us use our cash wisely, prepare for unexpected expenses, and ultimately maintain a higher cash-on-hand balance.” Newton was also able to meet his financial obligations and avoid bouncing checks.

 

The ability to actually see the impact of cash adjustments and the results of anticipated decisions was essential for Newton’s business.  “No other software package we found offered the ability to conduct an assessment of the business and see how things were changing on a monthly, weekly, and daily basis. With SurvivaWare, I can enter in my accounts payable, and based on accurate sales projections, chart my projected income,” says Newton. He also found the online help to be very beneficial. When he needed to speak with a support person, Luhring returned his call directly and solved the problem.

 

What’s Next

Newton has recently installed the beta version of SurvivalWare 2.0 scheduled for release in June. This new version has inspired Newton to experiment with features he had not previously used. SurvivalWare 2.0 has enabled him to categorize his sales vs. only seeing sales as a single number. He can now view his cost-of-sales, identify hot items, see items that are generating the most profit, and decide which items to promote. Newton anticipates this new knowledge of his sales mix will help him further improve his profitability.  He concludes, “SurvivalWare is the best solution we’ve found that addresses the unique ‘balancing act’ of our small business.”

 

 

 

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