What good is a business plan? I know my business.

As I tell my clients, not having a business plan is rather like going on vacation to Disney Land with no idea when you will go, how you will get there, how you will pay for it or where you will stay once you get there.  You might get there anyway, but you will likely

Liquid Assets

Resources that can be converted to cash in a relatively short period.


The financial resources in the form of coins and currency, bank deposits and short-term investments that can be converted easily into currency and that can be used to pay for resources and obligations of a business.

Operating Profit Margin

The ratio of operating income (sales revenue less operating expenses) to sales revenue.

Getting Paid with Xero

The best part of an accounting/bookkeeping system is seeing the money come in.  No matter how much you might dislike bookkeeping, that part is at least a bit enjoyable.   What isn’t fun is gathering the payment information from all the various sources.  Xero has a couple of solutions for that. First, Xero connects seamlessly with

Average collection period

The ratio of accounts receivable to average daily sales. Businesses that invoice for services might have an average collection period whereas a retail outlet probably would not.

Current Ratio

Current assets divided by current liabilities. This is a measure of solvency of a business.

Quick Ratio

This ratio measure short-term solvency. It is the ratio of the most liquid of current assets (usually cash) to current liabilities.

Working Capital Ratio

The ratio of current assets to current liabilities. A company needs a positive working capital ratio to remain solvent.

Return on Sales

Also known as profit margin. The ratio of net income to sales.