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Todd Sudeck's Car Care Library
Todd Sudeck
from The Ding King

Todd Sudeck is chairman of The Ding King Corporation, the leader in the automotive appearance repair training. The Ding King provides state certified training and cutting edge equipment packages designed for entrepreneurs to learn how to capitalize and maximize profits in the automotive appearance industry. Always "crazy about cars", Todd has owned and operated an auto detailing company, car wash, body shop, a chain of automotive appearance retail outlets, mobile units servicing auto dealerships, managed hail repair teams and has a trained individuals in how to duplicate what he has accomplished in the automotive aftermarket industry.

With America's passion for automobiles continuing to grow year after year, and guided by a belief that the automotive appearance industry would thrive, he began developing state licensed training schools in 1993. Today, The Ding King is the only state licensed training company in the nation focusing on complete cosmetic repair training. With four campuses located in California, Missouri, Florida and Michigan, Todd has helped students remain close to home while gaining an education. The Ding King has received state licenses to operate all of its school locations and is registered to offer Registered Business Opportunities nationwide. Sudecks' foresight and his vision of the growing industry have been central to the success of The Ding King Training Institute.

Under Todd's leadership, The Ding King mission has been to continually advance and improve auto reconditioning technology, and to make it easier, more cost-effective and a more enjoyable experience for consumers to have their vehicles repaired using Ding King's SMART ™ Technology. The company is committed to a long-term view, reflected in its investment into research and development of new automotive appearance products being introduced in the 2008 fiscal year. In 2005, he wrote a Business Development Manual designed to guide new owners of auto appearance businesses on how to:

  • Establish A Business Plan
  • Financing Options for Training and Equipment
  • Select and Register A Business Name
  • Apply for All Required Business Licenses and Permits
  • Operating Guidelines
  • Acquiring Proper Insurance Coverage
  • Accounting Systems
  • Estimating Software
  • Custom Designed Stationary and Business Forms
  • Marketing Programs
  • Advertising Campaigns
  • Website Design
  • Search Engine Optimization
  • New Account Development
  • Technical and Business Support
  • Hiring Practices

Todd and his wife Cindi have donated training scholarships to non-profit organizations and to those that couldn't otherwise afford to learn a new trade, as well as developed welfare to work programs and VA training assistance for our Veterans.

Feel free to contact Todd with any questions you might have about training and equipment at 1-800-304-3464 or Todd@dingking.com.

Sunday
Aug092009

Understanding Cash Flow

If you are an entrepreneur looking to start your own Mobile Detailing Business or detail shop, an existing detail business owner looking to increase your detailing skills and profitability or a consumer looking for answers to tough auto appearance questions... You've come to right place!

If you're opening your own auto appearance business, no doubt you plan to make a profit. Knowing how to do a cash flow analysis is an essential skill for every new small business owner; it can be the difference between being able to open a business and being able to stay in business!

Cash flow analysis provides a means for you to conduct a periodic check on your company's financial health. A projected cash flow statement estimates what the stream of money will be in coming months or years, based on a history of sales and expenses. A monthly cash flow statement reveals the current state of affairs.

A cash flow budget is your core tool for maintaining control of company finances. For example, you can show profits in a company, but still be short on cash if a customer is late on payments. While you can usually cut costs, you can't always generate income or sales. You need to know where the money is, where it's going and how to get more when you need it.

Calculating Your Cash Flow
To get a handle on the financial outlook for your dent repair and auto reconditioning business, start with your budget; which projects profits or losses by looking expected income and expenses. (If you need a hand with budgeting, feel free to call The Ding King for personal assistance for proper planning.)

For our purposes, the most important use of the budget is that its numbers can be used to help anticipate cash flow needs, which is essential to keeping a small business operating smoothly.

The basic elements of cash flow are:

  • Starting cash - This is your starting balance - what you have on hand at the beginning of each month.
  • Cash in -This is all cash received during the month, including sales, paid receivables, interest or cash from sales of assets or stock.
  • Cash out - Includes all fixed and variable expenses.
  • Ending cash - This is your ending balance. Add starting cash to cash in for total cash, and then subtract cash out.

Let's say you started the month with $3,500. You brought in $2,500 in sales and $500 in paid receivables. You paid out $1,500 in rent, $250 in supplies, and $1,750 for wages and owner's draw - for a total of $3,500 in expenses. Your ending balance is $3,000.

While you did show some sales, your monthly cash flow would be -$500. To survive, you want positive cash flow, which means taking in more than you are spending. Positive cash flow gives you forward motion to build and grow.

Even a small lag in sales or an outstanding bill can make a dramatic impact on cash flow, but you won't know that without your cash flow budget. At the end of every month, compare actual business sales with estimated cash flow and hold them up against your master budget.

If they are out of sync, consider the cause. Maybe you didn't factor in auto reconditioning supplies or labor. Cut back on cash out where you can, and adjust monthly cash flow projections to more realistically meet your needs.

Cash Flow Management Practices
Good cash flow management means you can anticipate when your cash flow needs will occur. Your cash flow budget will help you predict what's coming, but you have to be diligent in daily record keeping and reporting of cash in and cash out.

The following steps can help you monitor cash flow:

  • Use pre-numbered cash receipts and account for all receipts
  • Deposit checks daily
  • Send customer invoices within two days
  • Collect receivables within 60 days
  • Take advantage of cash discounts
  • Use pre-numbered checks for all disbursements

A good cash flow manager should be ready to meet challenges. For example, if your company has a history of slow summer sales, you may have trouble meeting payroll in those months. If you have periodically reviewed your cash flow budget and projections, you will be prepared for the crunch with additional sources of cash, and will have established good relationships with creditors and banks should a short-term loan be necessary.

Here are some ways to project and meet cash flow needs:

  • Anticipate payroll
  • Anticipate outstanding debt payments
  • Set money aside for expansion, emergencies and opportunity purchases
  • Use short-term financing when necessary
  • Establish a line of credit with a bank to avoid making bad decisions in a cash panic

Cash Flow: Offer Customers Credit with Caution
You may find yourself in a situation where offering credit is necessary for doing business, or you may decide to accept credit as a way to generate more business. Of the two types of credit, trade and consumer, consumer is the easiest to offer and maintain.

Consumer credit involves the acceptance of major credit and debit cards. To offer this service, you simply approach your bank and set up a program. The bank takes a small fee or percentage on each charge and in exchange, it accepts the credit risk. Trade credit is offered by the business itself. In some industries, such as manufacturing and wholesaling, customers expect trade credit. For example, when a wholesaler ships supplies to a retail company, the accompanying invoice indicates terms of payment. Most wholesalers give the retailer 30 days to pay the bill, which amounts to 30 days of credit.

Cash Flow: How to Deal with Profit
What do I do with all this cash?

If you have managed your cash flow effectively, you should end up with extra cash. What you do with those profits should be directly related to your cash flow budget. Remember that you created this budget to predict cash flow needs. There may be some outstanding debts ballooning in the future or inventory that needs restocking. These anticipated needs determine where and how long you can reroute cash.

Some places to put excess cash include:

  • Debt service - Repaying debt should help improve cash flow even further, unless the loan's interest rate is so low you would get a better return for your money on outside investments.
  • Investments - Check out the pros and cons of investment opportunities such as certificates of deposit, money market funds, sweep accounts (combined checking and investment accounts) or interest-bearing checking accounts.
  • Emergency savings - Liquid cash accounts can help you over small hurdles and provide ready money for unexpected opportunities.
  • Capital improvements - Putting money back into the business may be a long-term goal in keeping with your business plan and capital budget.
  • Increasing wages and dividends - Salary increases can help you retain your best employees, and you may deserve a reward, too.
  • Profit sharing - A benefit and an incentive for employees