The family business is an American small business tradition, one that gives parents, spouses, children, and other relatives an opportunity to contribute to and share in a dream that can grow and prosper over many generations.
But without proper planning and management, family businesses can also be the source of contention, acrimony, and even irreparable harm to once-loving relationships. That’s why it’s important for aspiring entrepreneurs to fully understand the pros and cons of going into business with relatives and in-laws. The needs of the business may not always be compatible with family harmony, resulting in a situation that if handled improperly, can jeopardize the survival of both.
When bringing family members into a business for the first time, especially as investors or in a startup situation, you should consider putting the business relationship in writing. Family members sometimes buy into the excitement of a business startup without a clear idea of their role once the business is underway.
In an ongoing family business, it’s important to treat family members fairly. While some experts advise against hiring family members, that sacrifices one of the great benefits of a family business. Countless small companies would never have survived without dedicated family members. But avoid favoritism. Pay scales, promotions, work schedules, criticism and praise should be evenhanded between family and non-family employees.
Don’t become the employer of last resort for every distant relation who calls. Base employment on the skills or knowledge they can bring to the business. If your kids will be joining the business, make them get several years of business experience elsewhere first to help them gain perspective of how the business world works outside of a family setting.
Problems and differences of opinion are common in a family business, so it’s important to keep lines of communication clear. Weekly meetings to assess progress, air differences and resolve disputes work well for many family firms.
Just as solo entrepreneurs and non-related partners need to separate their business and personal lives, owners of family businesses need to prevent work-related issues from dominating family activities. While it may be difficult to totally confine shop-talk to the workplace, make it a standing rule not to discuss work and business issues at social gatherings or at designated “family times” where the focus should be on other things.
Many SCORE counselors owned family businesses. Why not have a chat with one of them and take advantage of their experience. Visit the SCORE website, www.scorehouston.org, to learn about our counseling, mentoring and education resources.
Monday, 28 June 2010
Sunday, 27 June 2010
Think Like an Entrepreneur Virtual Book Tour - Tuesday, June 29
Join us for a virtual book tour stop at the “Your Focus Blog” on June 29th. You’ll get to ask questions about my new book, “Think Like an Entrepreneur: Transforming Your Career and Taking Charge of Your Life” (and about self publishing in general) and have the chance to win a few prizes.
Think Like an Entrepreneur Virtual Book Tour
Where: Your Focus Blog
URL: http://yourfocus.wordpress.com/
Date: Tuesday, June 29, 2010
Time: 7:30 pm Eastern time
Think Like an Entrepreneur Virtual Book Tour
Where: Your Focus Blog
URL: http://yourfocus.wordpress.com/
Date: Tuesday, June 29, 2010
Time: 7:30 pm Eastern time
Friday, 25 June 2010
Get Your Priorities Hijacked - II
There are other ways your priorities get hijacked besides telephone / e-mail emergencies and reverse delegation. During breakfast two mornings ago my mother-in-law committed criminal felony third degree assault on my priorities. She raped my morning schedule. To understand how she did that, I will tell you my normal morning routine. When my routine is disrupted, I erupt like Mount Vesuvius spewing all sorts of profane ashes on the person responsible for the disruption.
I get out of bed at exactly 6 A.M. every morning. By exactly, I mean when the alarm goes off at 6 A.M., my ass gets out of bed. I don’t get up at 6:10 or even 6:02. If I wanted to get up at one of those times, I would set the alarm for one of those times. I then shower, shampoo and wash myself in exactly the same order each morning. I dry off and walk three steps, exactly three steps, to the sink, where I shave and brush my teeth. I pivot 197 degrees and walk back into the bedroom, where I get dressed. Next, I walk downstairs using the stair case that leads directly into the kitchen. I never use the curved one that leads to the front door. I won’t explain why. There is a good reason, but you might think I’m crazy - like you don’t already. I go outside through the single garage door not the double wide door, pick up the newspaper, and bring it back inside. I take out the sports section and place it on the breakfast nook table in front of the left chair that backs up to the window to the back yard. Then I prepare breakfast which consists of a banana, two slices of double fiber whole wheat bread spread with peanut butter fortified with omega three fatty acids from flaxseed oil. Why did I take you through the tedious detail of my mornings? Because standardizing my morning frees my mind to set out my work day’s priorities. That is my point.
Two mornings ago, I had just placed the newspaper in its proper place, when I noticed my mother-in-law standing in the hallway leading to the front door. This is NOT part of my morning routine. At the 6:45 point in my routine, she is supposed to be still in bed. Like a dumb ass, I asked her why she was up so early. I know she has a Bible study meeting one morning each week, but she doesn’t have to get up early to get there. Then the crime was committed. She had gotten up early to ambush me. She then informed me that someone was not in the proper bedroom the previous night. Let me tell you that no boys were in any of my daughters’ bedrooms. So you can understand when I tell you I didn’t give a damn. I didn’t give a half damn. My mind that morning was deep into considering how to pry a $225K tax refund out of the I.R.S. for a client. My second priority was helping a client find a million dollars or so of working capital. In my personal priority list, someone being in the wrong bedroom was about the 475 billionth item on the list. But she continued. It was clearly the most important thing on her priority list.
Physicists tell us that our universe is likely not the only universe. There are alternative universes all around us. Our laws of nature probably don’t apply in these other universes. These universes might be very large or very small. In my mother-in-law’s universe, tracking the occupants of our bedrooms is the highest law of nature. Her universe is very small. In my universe, different laws of nature apply. I shall explain why her behavior is a crime in any normal universe.
There are three methods of human communication. Do you know what they are? No, they are not radio, television, and newspapers. The three methods or purposes of communication are to amuse, to inform, and bitching. I will define them for you.
Amusement and information are pretty easy to define. In both of these types of communication, the purpose of the communicator is to leave the target of the communication in a better position than previously. For instance, when Larry the Cable Guy makes fun of his fat relatives, we are amused. We feel better. So therefore, we are better off. Similarly when someone gives us information, we are better off. When we tell a child, “The stove is hot”, we are imparting useful information.
Bitching is everything else. If the purpose of the communication is not to improve the target’s life in at least some small manner, it is just bitching. My former mother-in-law is an expert. She is a wonderful person, who raised a family as a single parent in difficult circumstances. However, she bitches as a way of making conversation. If the sun is out, she complains that we need rain. If the weather is rainy, she gripes because the sun isn’t out. My current mother-in-law committed the crime of bitching. Nothing she was telling me was for my benefit. Her intent was to create drama and enrage me. It worked.
Because my priorities don’t matter very much in my own house, I stormed out. I was still hungry, so I drove to the I.H.O.P. near my office. I went to the I.H.O.P. not just for the food. I went for the lack of conversation. I went because none of the wait staff speaks English. I envisioned breakfast going as follows. “I will have numero tres from the menu, senorita.” She would then bring me numero dos and then flip this gringo the numero uno sign. I used to think big restaurants were making a mistake in hiring people who don’t speak much English. Now I think it is a fine business decision made in our best interests.
Everyone has a bad day once in awhile. Clearly my mother-in-law was having one. The bedroom issue clearly bothered her. However, the other seven billion of us on the planet might have other priorities. What do I do when I have a bitchy moment? Our dog, Sidney plays a major role. When I come home from work in a bad mood, ready to indulge in a good bitching / pity party session, Sidney follows me upstairs and listens while I change into casual clothes for the evening. When she barks, I imagine that she is telling me, “Frank, you are right. Everyone else in the world is a total idiot. You are an absolute genius. You have every reason to gripe.” Of course, I don’t speak Jack Russell terrier. She could just as easily be saying, “Who cares moron? Get me a chicken treat.” I prefer to believe the former.
Charles Darwin wrote about the origin of human communication in his not so famous unpublished manuscript called, The Evolution of Human Communication. In his book, he described why dogs became the caveman’s best friend. After a long day of hunting mastodon, a caveman would come home to his wife and mother-in-law. They would tell him that people were sleeping in the wrong rooms in the cave. Facing that, is it so surprising a mangy, snarling wolf would look like good company?
Those of you who graduated from college with communications degrees probably feel pretty stupid at this point. I have just taught you more about communications than you learned in four years of diligent university study. If you had just read these pages, you could have graduated magna cum smart ass. What is the point you can apply to your business tomorrow? Expressing displeasure at having your priorities hijacked is acceptable. Your universe will be a happier place. Train your employees to respect your priorities.
I get out of bed at exactly 6 A.M. every morning. By exactly, I mean when the alarm goes off at 6 A.M., my ass gets out of bed. I don’t get up at 6:10 or even 6:02. If I wanted to get up at one of those times, I would set the alarm for one of those times. I then shower, shampoo and wash myself in exactly the same order each morning. I dry off and walk three steps, exactly three steps, to the sink, where I shave and brush my teeth. I pivot 197 degrees and walk back into the bedroom, where I get dressed. Next, I walk downstairs using the stair case that leads directly into the kitchen. I never use the curved one that leads to the front door. I won’t explain why. There is a good reason, but you might think I’m crazy - like you don’t already. I go outside through the single garage door not the double wide door, pick up the newspaper, and bring it back inside. I take out the sports section and place it on the breakfast nook table in front of the left chair that backs up to the window to the back yard. Then I prepare breakfast which consists of a banana, two slices of double fiber whole wheat bread spread with peanut butter fortified with omega three fatty acids from flaxseed oil. Why did I take you through the tedious detail of my mornings? Because standardizing my morning frees my mind to set out my work day’s priorities. That is my point.
Two mornings ago, I had just placed the newspaper in its proper place, when I noticed my mother-in-law standing in the hallway leading to the front door. This is NOT part of my morning routine. At the 6:45 point in my routine, she is supposed to be still in bed. Like a dumb ass, I asked her why she was up so early. I know she has a Bible study meeting one morning each week, but she doesn’t have to get up early to get there. Then the crime was committed. She had gotten up early to ambush me. She then informed me that someone was not in the proper bedroom the previous night. Let me tell you that no boys were in any of my daughters’ bedrooms. So you can understand when I tell you I didn’t give a damn. I didn’t give a half damn. My mind that morning was deep into considering how to pry a $225K tax refund out of the I.R.S. for a client. My second priority was helping a client find a million dollars or so of working capital. In my personal priority list, someone being in the wrong bedroom was about the 475 billionth item on the list. But she continued. It was clearly the most important thing on her priority list.
Physicists tell us that our universe is likely not the only universe. There are alternative universes all around us. Our laws of nature probably don’t apply in these other universes. These universes might be very large or very small. In my mother-in-law’s universe, tracking the occupants of our bedrooms is the highest law of nature. Her universe is very small. In my universe, different laws of nature apply. I shall explain why her behavior is a crime in any normal universe.
There are three methods of human communication. Do you know what they are? No, they are not radio, television, and newspapers. The three methods or purposes of communication are to amuse, to inform, and bitching. I will define them for you.
Amusement and information are pretty easy to define. In both of these types of communication, the purpose of the communicator is to leave the target of the communication in a better position than previously. For instance, when Larry the Cable Guy makes fun of his fat relatives, we are amused. We feel better. So therefore, we are better off. Similarly when someone gives us information, we are better off. When we tell a child, “The stove is hot”, we are imparting useful information.
Bitching is everything else. If the purpose of the communication is not to improve the target’s life in at least some small manner, it is just bitching. My former mother-in-law is an expert. She is a wonderful person, who raised a family as a single parent in difficult circumstances. However, she bitches as a way of making conversation. If the sun is out, she complains that we need rain. If the weather is rainy, she gripes because the sun isn’t out. My current mother-in-law committed the crime of bitching. Nothing she was telling me was for my benefit. Her intent was to create drama and enrage me. It worked.
Because my priorities don’t matter very much in my own house, I stormed out. I was still hungry, so I drove to the I.H.O.P. near my office. I went to the I.H.O.P. not just for the food. I went for the lack of conversation. I went because none of the wait staff speaks English. I envisioned breakfast going as follows. “I will have numero tres from the menu, senorita.” She would then bring me numero dos and then flip this gringo the numero uno sign. I used to think big restaurants were making a mistake in hiring people who don’t speak much English. Now I think it is a fine business decision made in our best interests.
Everyone has a bad day once in awhile. Clearly my mother-in-law was having one. The bedroom issue clearly bothered her. However, the other seven billion of us on the planet might have other priorities. What do I do when I have a bitchy moment? Our dog, Sidney plays a major role. When I come home from work in a bad mood, ready to indulge in a good bitching / pity party session, Sidney follows me upstairs and listens while I change into casual clothes for the evening. When she barks, I imagine that she is telling me, “Frank, you are right. Everyone else in the world is a total idiot. You are an absolute genius. You have every reason to gripe.” Of course, I don’t speak Jack Russell terrier. She could just as easily be saying, “Who cares moron? Get me a chicken treat.” I prefer to believe the former.
Charles Darwin wrote about the origin of human communication in his not so famous unpublished manuscript called, The Evolution of Human Communication. In his book, he described why dogs became the caveman’s best friend. After a long day of hunting mastodon, a caveman would come home to his wife and mother-in-law. They would tell him that people were sleeping in the wrong rooms in the cave. Facing that, is it so surprising a mangy, snarling wolf would look like good company?
Those of you who graduated from college with communications degrees probably feel pretty stupid at this point. I have just taught you more about communications than you learned in four years of diligent university study. If you had just read these pages, you could have graduated magna cum smart ass. What is the point you can apply to your business tomorrow? Expressing displeasure at having your priorities hijacked is acceptable. Your universe will be a happier place. Train your employees to respect your priorities.
Thursday, 24 June 2010
Business Planning and Funding for the Start Up
When starting a business there are a few initial steps you need to take, such as writing a business plan, how to get financial backing and so on. If you didn’t take many business classes, or marketing courses you may not know exactly how to get started with everything.
Business Plan
Writing a business plan can help you organize your business early on, not to mention help you get capital. If you aren’t sure how to write your business plan, there are many services you can take advantage of. You can find templates starting at around $10 and you could spend up to $5000, depending on what you need done.
Even with the initial sticker shock, investing in your business plan can yield a positive ROI. Your business plan is what investors are going to want to read, and it needs to be laid out well, and have specific information.
The most important thing to keep in mind is to answer this question, “how will you make your investor money?” Once you answer that question, the rest should fall into place. “I will be able to make money because of A, B and C—I will do this by XYZ.” Avoid using a lot of buzz words—instead be straight forward, and get to the point.
Location
According to CNN Small Business, the top ten best cities to start a business are:
- Oklahoma City, OK
- Pittsburgh, PA
- Raleigh, NC
- Houston, TX
- Hartford, CT
- Washington, DC
- Charlotte, NC
- Austin, TX
- New York City, NY
- Baltimore, MD
- Salt Lake City, UT
- Minneapolis, MN
- Milwaukee, WI
- Los Angeles, CA
- Chicago, IL
- Dallas, TX
- Detroit, MI
- Columbus, OH
- Boston, Ma
- Newark, NJ
Gaining Capital
Angle investors are a great place to start for the new entrepreneur. There are now social networking sites that help you connect directly with angle investors.
FundingUniverse
This site helps connect entrepreneurs to the right lending source based on their future company’s needs.
Gaebler
This site has a state by state run down of angle investors.
Go4Funding
Similar to FundingUniverse, this site connects people to the right kind of investors.
These are just three of many sites you can find by doing a quick search on Google. The SBA is also a great resource for new entrepreneurs for business plan writing, all legal documents you may need, and how to find investors.
Shannon Suetos is an expert on lead generation writer based in San Diego, California. She writes extensively for an online resource that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs such as telephone answering systems at Resource Nation.
Wednesday, 23 June 2010
Speaker & Trainer Marcus Smith on Women Entrepreneurs - The Secrets of Success
His background includes a Bachelor’s Degree in Industrial Engineering from Georgia Tech, well over 50 speeches and workshops, and over 1 million views as a TV anchor at Home Depot’s Corporate offices. He blends hardcore analytical ability and natural communication skills to address business concerns from all conceivable angles. His experiences have shown him that communication (or lack thereof) can significantly impact the bottom line of a business.
http://www.marcusasmith.com
http://twitter.com/marcusasmith
12:00 pm EDT
Listen to the live or archived show at:
http://www.blogtalkradio.com/CoachDeb
Monday, 21 June 2010
How to Create a Squeeze Page that Gets Strong Results
by Kristin Marquet
The Internet is saturated with content, sales pitches and products. As a result, you have to make your business standout from the rest of the businesses out there.
Squeeze pages are one of the best ways to do this. They are mini web pages with opt in forms to catch the name and email addresses of prospects. They are used to build email subscriber lists.
Your squeeze page should look something like this:
If you're in a market where prospects are used to filling out opt in forms, consider using a longer squeeze page. You have to sell prospects to opt-in. Use a strong headline and sub-headline. Highlight all of the benefits of your product or service.
Answer these questions:
How can your business help your market?
Why is your business better than the rest?
What are you offering? Make sure it is something that is useful.
Kristin Marquet is a regular contributor to the Secrets of Success blog.
Squeeze pages are one of the best ways to do this. They are mini web pages with opt in forms to catch the name and email addresses of prospects. They are used to build email subscriber lists.
Your squeeze page should look something like this:
- Use a headline (in red size 18 or larger font), a sub-headline (in black size 16 or larger font), followed by 5 to 7 bullets (in black font)
- Keep your sales copy concise. The entire objective is to get the prospect to sign up through the opt in form
- Use 200 to 300 words on the page
- Use headline generator software to help come up with compelling headlines
- Use a keyword selector tool to help pick the best keyword search phrases for SEO purposes
- Use video to personalize your message. This helps you connect with prospects. (Check out www.marketingmakeovergenerator.com)
- Use product or service benefits as bullet points
- Use a simple opt in form from www.aweber.com, www.constantcontact.com or www.verticalresponse.com
- Adding bonus products with (high perceived values) will help convert prospects
- Use a privacy policy. Let prospects know that you respect their privacy and will never sell, rent, or lend out their personal information
If you're in a market where prospects are used to filling out opt in forms, consider using a longer squeeze page. You have to sell prospects to opt-in. Use a strong headline and sub-headline. Highlight all of the benefits of your product or service.
Answer these questions:
How can your business help your market?
Why is your business better than the rest?
What are you offering? Make sure it is something that is useful.
Kristin Marquet is a regular contributor to the Secrets of Success blog.
Saturday, 19 June 2010
With SMBs Finally Seeing Lending — How Can You Attain Extra Capital
We all know times are hard these days. Money is hard to attain, and most don’t want to part with what money they do have. Small businesses are the bread and butter of our economy, but what happens when they can’t find the capital they need to stay afloat during hard times?
The government understands how important small businesses are to our society, and has asked banks to start lending again. It seems they have listened. Bank of America for instance, announced back at the beginning of June that it would, “purchase $10 billion in products and services from those companies over five years, with the spending amount expected to grow by an average of more than 5 percent each year.”
Even with banks like BOA pledging to give more, “credit is still pretty tight for small businesses,” said Scott Brown, chief economist at Raymond James and Associates to Market Watch. With that being said, what can you do as a small business owner to get the gears rolling again?
Tax Incentives
Getting creative with your taxes can be extremely beneficial—and there are some out there to help you do this. A bill passed this week will allow, “long-term investors in some small businesses [to] escape capital gains taxes. The bill [will] also increase tax deductions for startup expenses by new small businesses.”
Another bill passed earlier this year, will allow businesses to receive tax deductions for hiring the unemployed. “Companies will be exempt from paying their share of Social Security payroll taxes, normally 6.2% of a worker's wages, for any new worker who was unemployed for the prior 60 days. The legislation extends a provision to that allows small businesses to write off as much as $250,000 of their capital expenditures in 2010,” reported CNN.
Factoring
If you aren’t familiar with factoring, basically factoring is when you “sell” your outstanding invoices from a client to a factoring company. The company then pays you a certain amount of money, takes over the debt, and works with the outstanding balance on their end.
Although you won’t get the full amount owed by the customer, you will be attaining more money. Getting your advance from the factor usually happens within two to five days following the validation of your clients’ invoices, though a factoring company allows online invoicing, you may be able to receive your funding in as little as twenty-four hours.
Marketing
Many times businesses cut down on their marketing efforts when business is hurting. When in fact the opposite be happening. Investing in marketing can help get the exposure you need to attain more sales. A major reason small businesses are hurting currently isn’t the bank lending problem but, “businesses of all sizes are telling us they need most right now is more business," said Brian T. Moynihan, president and chief executive officer, Bank of America.
Online marketing efforts such as new media tactics are very cost effective, and can help get you more brand exposure. Even the B2B marketing is starting to implement social media, according to eMarketer, “studies from HubSpot have found B2Bs can find leads for less through inbound social marketing, and that social participation can help increase B2B leads.”
Telemarketing services may also be able to boost brand awareness, and help with promotions. There have been some reports lately of companies getting in hot water with “robocalls” where people have not signed up to receive these calls. If you do find this tactic useful, make sure you are calling only people who have signed up for the call list.
What types of tactics have you found useful to keep your company afloat? Let us know in the comments below.
Shannon Suetos is an expert writer based in San Diego, California. She writes extensively for an online resource that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs such as b2b telemarketing at Resource Nation.
Friday, 18 June 2010
Public Speaking Fear - Will They Reject What I Say?
Is your fear of speaking really a fear of rejection? That's at the bottom of public speaking anxiety for a lot of people. The way to deal with this fear is to first take a closer look. What are you afraid might be rejected? Your words?
Rejection Of Your Words
Here are a few facts to consider:
- Fact A: Your words only count for 7% of the actual message that you deliver. 7%! Can you believe it? The biggest part of your message is conveyed through your body language, facial expression and tone of voice. So that seriously takes the pressure off your words, doesn't it? When you're speaking - whether that's to a client or a big audience - your intention is to connect with them, isn't it? That's what communication is all about. And people connect at the heart. That's where those nonverbal elements come into play. They're watching your eyes. They're looking to see if you're paying attention to them. They want the feeling that you care about them and their problem.
- Fact B: They want to feel positive emotions from hearing you - relief, hope, peace of mind. That experience does not come from your words.
We've all heard words that sound empty, where the emotion doesn't match the actual words. Picture an eye-rolling teenager saying "I'm sorry" to a scolding teacher. The words aren't conveying their real meaning, are they? See how this reduces the pressure for you to get your words perfect? If your fear of rejection is about words, I hope your fear is shrinking.
On the positive side of things, think of the people you enjoy doing business with. They're just regular people, right? Just like you.
Now think of their speaking styles. Do they all have perfect grammar? Are they all fabulous speech writers and award-winning orators? Is their language completely clear of "uh" and "y'know"? Of course not!
And yours doesn't have to be either. For now, stop worrying about your words and focus on relaxing so your voice, face and body can react naturally. That's what helps you connect to people so you can really get your message across.
Bonus:
Once you get some practice speaking naturally, you'll find it much easier to work with improving your actual words if you want to. It's ironic that once you let go of the fear about the words, your options for words open up. Your creative ability and willingness to experiment with new phrases totally expands once your speaking anxiety is gone.
From the desk of Janet Hilts MPH, EFT-ADV
http://SpeakUpAndShine.com
Copyright © 2010 Janet Hilts, Speak Up & Shine | Clearing Pathways, Inc.
Wednesday, 16 June 2010
A good bookkeeper story!!
Thanks to everyone who expressed concern about my mental health. The therapy is helping. The white coats say I can leave soon if I don’t get into any more fights. I told John Hinckley that Jodie Foster wasn’t worth shooting a president over. Jennifer Aniston, maybe….. Next time, I might write about my close personal relationship with Jennifer, except for that unfair restraining order thing.
I have busted up bookkeepers pretty well lately. I would be less than fair if I didn’t tell a couple of stories about bookkeepers / company accountants who have surprised me in a positive way.
Sally is the internal bookkeeper for Ralph’s manufacturing company. Sally is a pretty young lady in her early twenties. That was the source of my initial problem with her. Sally took over the job from Shirley, who left to concentrate on the accounting for a company Ralph also owned. Shirley and I had, and still have, a great working relationship. Both of us know what she does well and what areas she leaves for me to clean up. Sally reported to Shirley for a couple of years as an accounts receivable clerk. What that meant in reality was that she did low level grunt work in the accounting department. Go get this, go get that, make the coffee stuff. She prepared some customer invoices and posted customer payments. None of this is rocket science. I had very little interaction with Sally, since I concentrate on the general ledger and financial statements. To me, she was just pretty wallpaper.
Shirley moved to her new job in January. This was not exactly a prime time to switch internal accountants. The year processing was not complete yet. Shirley was available to assist in the year end closing, but her priority was her new job. I was stuck with Sally. During tax season, that didn’t make me happy. By now, you probably know that when I am not happy, I am not a nice person. I am an accounting diva.
Sally got some training from Shirley in working with the general ledger and financial statements, but working with financial statements for the first time isn’t something you learn in a couple of two hour sessions. If I understand correctly, people go to college for four years to try and learn this. Damn few people actually get it that quickly. Sally’s first attempts at closing the company’s books for the year were a mess. The year end financial statements were an absolute abomination. January and February are part of tax season, and I didn’t have the time or inclination to resurrect a set of books that were in decent shape before Sally got the job. I sent a number of borderline nasty e-mails to Ralph. Ok, they were nasty. I won’t lie.
To me Sally was just a cute chick, who was out of her league. Pretty equated with stupid. By now, I am sensing that you have stereotyped me as the typical male chauvinist. Now you have upset me. You are correct, but I am upset nonetheless. Anyway, I should have had the good sense to know better. I am married to a very pretty woman with a master’s degree who works as a computer security engineer. Pretty doesn’t equate with stupid. Instead of working with Sally, I became an obstacle to her getting her job done. I was busy accumulating evidence of her incompetence and relaying it to Ralph. I am not proud of this, but it is what I did.
While I was busy trying to make sense of the company’s books to prepare the income tax returns, a totally unexpected thing happened. As the months went by, I was too busy to pay attention to anything that was happening with the Company’s books in the new year. Finally, in May, I had the tax returns completed for the prior year. I really struggled. After I had sent the tax returns to Ralph, he asked me to take a look at the March financial statements Sally had prepared. Of course, I was really enthusiastic about that task. I would rather spend quality time alone in a bar bathroom with Ben Roethlisberger.
However, when I actually took a look at the March financial statements, they looked pretty accurate. One of the ways I can immediately get a quick evaluation of the quality of financial statements is to look at the balance sheet. Earlier, I gave you the keys to the accounting kingdom. I look at the balance sheet and see if it looks like it could possibly match the amounts in the real world. For instance, I look for debit balances in accounts that should always have credit balances. The March financial statements were perfect, but they easily surpassed what I expected from Sally. Over the period of a couple months, I saw the April and May financial statements prepared by Sally. April was better than March and May was even better than April.
Sally had discovered the keys to the accounting kingdom on her own. She had done this, not just without my help, but in spite of me. Sally had real accounting talent. She began to quiz me about how I reconciled some of the financial statement accounts. Now only did she ask the questions, she absorbed the answers. Not only did she absorb the answers, but she applied the techniques I showed her to other accounts. I was shocked. In fact you could say I was wr….. I just can’t use that word. Ok, I was wrong, absolutely and stupidly wrong. I was at least smart enough at this point to bet on the fastest horse in the race, which wasn’t me. When I next visited the company, I pulled Ralph aside and told him I had been wrong about Sally. I told him I thought she was outstanding. Ralph already knew that. He had seen her talent when she was just an accounting clerk. He knew she was smart enough to take on a difficult job and succeed. Picture me wearing egg all over my face. I could have been the mayor of moron city. I promise to write a thousand times, “I will not equate looks with intelligence.” I will not equate looks with intelligence. Only 998 more times to go. Then we can move on to the next topic. I am certain you have the time to wait…..
I have busted up bookkeepers pretty well lately. I would be less than fair if I didn’t tell a couple of stories about bookkeepers / company accountants who have surprised me in a positive way.
Sally is the internal bookkeeper for Ralph’s manufacturing company. Sally is a pretty young lady in her early twenties. That was the source of my initial problem with her. Sally took over the job from Shirley, who left to concentrate on the accounting for a company Ralph also owned. Shirley and I had, and still have, a great working relationship. Both of us know what she does well and what areas she leaves for me to clean up. Sally reported to Shirley for a couple of years as an accounts receivable clerk. What that meant in reality was that she did low level grunt work in the accounting department. Go get this, go get that, make the coffee stuff. She prepared some customer invoices and posted customer payments. None of this is rocket science. I had very little interaction with Sally, since I concentrate on the general ledger and financial statements. To me, she was just pretty wallpaper.
Shirley moved to her new job in January. This was not exactly a prime time to switch internal accountants. The year processing was not complete yet. Shirley was available to assist in the year end closing, but her priority was her new job. I was stuck with Sally. During tax season, that didn’t make me happy. By now, you probably know that when I am not happy, I am not a nice person. I am an accounting diva.
Sally got some training from Shirley in working with the general ledger and financial statements, but working with financial statements for the first time isn’t something you learn in a couple of two hour sessions. If I understand correctly, people go to college for four years to try and learn this. Damn few people actually get it that quickly. Sally’s first attempts at closing the company’s books for the year were a mess. The year end financial statements were an absolute abomination. January and February are part of tax season, and I didn’t have the time or inclination to resurrect a set of books that were in decent shape before Sally got the job. I sent a number of borderline nasty e-mails to Ralph. Ok, they were nasty. I won’t lie.
To me Sally was just a cute chick, who was out of her league. Pretty equated with stupid. By now, I am sensing that you have stereotyped me as the typical male chauvinist. Now you have upset me. You are correct, but I am upset nonetheless. Anyway, I should have had the good sense to know better. I am married to a very pretty woman with a master’s degree who works as a computer security engineer. Pretty doesn’t equate with stupid. Instead of working with Sally, I became an obstacle to her getting her job done. I was busy accumulating evidence of her incompetence and relaying it to Ralph. I am not proud of this, but it is what I did.
While I was busy trying to make sense of the company’s books to prepare the income tax returns, a totally unexpected thing happened. As the months went by, I was too busy to pay attention to anything that was happening with the Company’s books in the new year. Finally, in May, I had the tax returns completed for the prior year. I really struggled. After I had sent the tax returns to Ralph, he asked me to take a look at the March financial statements Sally had prepared. Of course, I was really enthusiastic about that task. I would rather spend quality time alone in a bar bathroom with Ben Roethlisberger.
However, when I actually took a look at the March financial statements, they looked pretty accurate. One of the ways I can immediately get a quick evaluation of the quality of financial statements is to look at the balance sheet. Earlier, I gave you the keys to the accounting kingdom. I look at the balance sheet and see if it looks like it could possibly match the amounts in the real world. For instance, I look for debit balances in accounts that should always have credit balances. The March financial statements were perfect, but they easily surpassed what I expected from Sally. Over the period of a couple months, I saw the April and May financial statements prepared by Sally. April was better than March and May was even better than April.
Sally had discovered the keys to the accounting kingdom on her own. She had done this, not just without my help, but in spite of me. Sally had real accounting talent. She began to quiz me about how I reconciled some of the financial statement accounts. Now only did she ask the questions, she absorbed the answers. Not only did she absorb the answers, but she applied the techniques I showed her to other accounts. I was shocked. In fact you could say I was wr….. I just can’t use that word. Ok, I was wrong, absolutely and stupidly wrong. I was at least smart enough at this point to bet on the fastest horse in the race, which wasn’t me. When I next visited the company, I pulled Ralph aside and told him I had been wrong about Sally. I told him I thought she was outstanding. Ralph already knew that. He had seen her talent when she was just an accounting clerk. He knew she was smart enough to take on a difficult job and succeed. Picture me wearing egg all over my face. I could have been the mayor of moron city. I promise to write a thousand times, “I will not equate looks with intelligence.” I will not equate looks with intelligence. Only 998 more times to go. Then we can move on to the next topic. I am certain you have the time to wait…..
"Women Entrepreneurs - The Secrets of Success" for Wednesday, June 16th
Michele DeKinder-Smith is a seasoned researcher having specialized in marketing, consumer and business research for over 20 years. She has interviewed thousands of business owners and is an entrepreneur herself, who’s taken her business over the million-dollar mark! She understands the needs of large corporations, government agencies and the female entrepreneur. Through her research, publications, consulting and training Michele helps each of these audiences achieve their goals.Michele is married to Rob and proud mom to RJ, who currently attends DePaul University in Chicago. In addition to Jane Out of the Box, Michele owns Linkage Research & Consulting, founded in 1998 and Rob has recently started his own business, Beautiful Day Yacht Charters.
12:00 pm EDT
Listen to the live or archived show at
http://www.blogtalkradio.com/CoachDeb
Tuesday, 15 June 2010
Persistence Sells With The Right Intent
Are you persistent in your efforts when selling? Or do you resist being persistent because of the bad impression you think you might make? Perhaps you believe that if your behavior is overly persistent, your prospect will think you are too "salesy" or even pushy.
So should you be persistent when selling? The answer is absolutely YES!
If you are going to be successful in selling, you must be persistent in the right way. Sales persistence is definitely a prerequisite for success, but if you are persistent for the wrong reasons, your behavior will cause you to lose sales fast.
Persistence is a double edge sword. Think about the following scenario. As often happens, your prospect cannot make a decision right now so you need to follow up with them. When you contact them again, they are still not ready, so you need to follow up with them again and again.
But after a few follow-ups, you are probably going to find that your relationship with the prospect is improving or deteriorating. You are going to find that your chance of making a sale - assuming there is one to be made - is either increasing or decreasing. Why is that?
It all comes back to their perception of your persistent behavior. It's as simple as that.
If someone keeps following up with you and you think the reason for their persistence is because they want to make a sale and get your money, how do you feel? Do you take their call and enjoy talking to them? Or when you see their number come up on caller ID, do you route their call to voicemail? Do you feel more inclined to do business with them each time they call? Does your relationship deteriorate each time they call?
In contrast, if someone keeps following up with you and you believe the reason for their persistence is that they are sincere about how their solution can help you and they are committed about getting you the results they know you can achieve, how do you feel? Do you take their call? Do you feel more inclined to do business with them each time they call? Does your relationship improve each time they call?
The major difference - and it is most important - is the intent behind the persistence.
If your intent when being persistent in selling is all about you - about making a sale - your persistent behavior will cause you to lose sales. Your prospects will avoid you. They will feel that you care about yourself and not them. They will also wonder about whether you'll care about them after the sale if you don't seem to care about them before the sale.
If you are openly passionate about helping them to be successful, your persistence will help you to make sales. Your prospects will be attracted to you and thank you for your efforts. They will view your persistent behavior as being of measurable value to them.
They will also think that if you are persistent in wanting to help them, then you will be similarly persistent and dedicated in making sure they get the end results they expect.
In summary, you must absolutely be persistent in your sales efforts. But make sure that your persistence speaks volumes to your prospects about how sincerely committed you are about in ensuring they will achieve their goals and get the results they want.
Tessa Stowe teaches small business owners and recovering salespeople simple steps to turn conversations into clients without being sales-y or pushy. Her FREE monthly Sales Conversation newsletter is full of tips on how to sell your services by just being yourself. Sign up now at www.salesconversation.com.
©Tessa Stowe, Sales Conversation, 2010
Monday, 14 June 2010
How Right-Brained Entrepreneurs Can Mix Business with Pleasure
It can be a challenge to take a right-brained person and drop them into a left-brained endeavor like running a business. Spreadsheets, accounting programs, business plans – just thinking about those things can send a creative person into a tailspin.
What drives a lot of creative people into self employment is that they are stifled in structured work environments. I’m a business coach but I’m also a writer, a photographer and a musician (if my years in the high school band count).
After working as a copywriter in the fashion industry, I changed careers and went into information technology. It may seem like I made a huge leap from the right brain to the left, but actually it wasn’t as big as it sounds. Learning a computer programming language was similar to learning any other language. In fact, when I met with the computer school’s counselor I was told that people who had a background in music or languages actually had an advantage in learning computer programming.
Who’d have thought it? Most people believe that there’s a firm line between the two worlds, but it is possible to cross from one to the other when necessary.
As a right-brained entrepreneur, are you dealing with any of these challenges?
• When you are creative and you want to be self-employed, you will have to deal with schedules, structure and systems. Otherwise, you’ll either start a lot of projects and never finish anything, or spend a lot of time thinking about what you’re going to do, but never starting.
• Putting a price on your creations can be challenge, especially if you feel that money doesn’t mix with creative expression. Pricing is a challenge for most business owners, but you should never feel guilty about asking to be paid. On the other side of the coin, you’ll work against yourself if you feel that being paid equals selling out.
• A lot of the time creative people are expected to give their work away for the “exposure.” Well, at what point have you been exposed enough? When do you start asking for compensation? If you don’t have an answer to that, it’s time to take an honest look at things. Are you running a charity or a business?
• Have you ever been told that you’ll never make any money making art? Were you discouraged from becoming a writer because “books don’t make any money?” When those messages are in the back of your mind, it will be difficult to build a successful business.
Being a creative entrepreneur comes with a built-in set of challenges, such as how to deal with structure when it feels totally uncomfortable.
Here are a few tips:
• Make a schedule for yourself – nothing fancy. Just write down what you have to accomplish each day. When get distracted, it’ll help to have your list of tasks to refer to.
• Hire help if you can. You may have a lot of interests, but some things are better left to the experts. Rather than struggle with an accounting program, you can have a bookkeeper handle things much quicker.
• Be honest about what you’re good at, and what you’re not so good at. Delegation is not a dirty word. If you can hand off administrative tasks to a VA or an assistant, you will have even more time to work on the things that you do best.
• Get a coach. No, I’m not suggesting that because I am a coach. I’m saying it because no one needs accountability like a right-brained entrepreneur. There’s always a new idea that seems so much better than the idea you had yesterday. When you’re always chasing the next new thing you’re going to leave a trail of things undone. A coach will keep you honest by providing the feedback, direction and accountability that you require to stay on track.
If you’re a right-brained entrepreneur you are a visionary. But every vision requires action so that you can bring it to life. It is possible to stop struggling and manage your creativity and your business.
Deborah A. Bailey is author of two non-fiction books including, “Think Like an Entrepreneur: Transforming Your Career and Taking Charge of Your Life
.” She's also the creator and host of Women Entrepreneurs Radio, a weekly internet talk show. Her fiction work includes a short story collection and a novel, available on Amazon.com.
.” She's also the creator and host of Women Entrepreneurs Radio, a weekly internet talk show. Her fiction work includes a short story collection and a novel, available on Amazon.com. For more information, visit http://www.BrightStreetBooks.com.
Saturday, 12 June 2010
How to Stay Focused at Home
There are many great benefits from working from home: you can set your own hours, wear what you want to and be your own boss. These types of benefits are what most people see when deciding to start a business at home. What they don’t think about, are the many distractions they are faced with such as: television, Internet browsing and family members.
Structure is something we all need for work—whether this means going to an office or staying at home there needs to be boundaries. The hard part about working from home is you are blending your work life and home life. Setting boundaries will help keep the two lives separate, even if they are in the same place.
Agenda
Scheduling your day is just as important when working from home as it is when going to the office. Many people find it beneficial to take a few minutes at the end of their day to schedule their tasks for the following day. This can help streamline your work and get everything you need done in a timely manner.
If you use Gmail, Google Calendar is a great tool to use to get yourself organized. You can set up reminders and even sync text message reminders to your cell phone. Evernote is another popular smartphone app to help you organize your thoughts, and keep notes while on the go.
Internet Browsing
One of the many benefits of working from home is knowing you can take a few minutes to check out your Facebook without getting reprimanded by your boss. On the flip side of things, a few minutes can quickly become an hour or more. Lazyman.com recommends, “creat[ing] separate Firefox profiles for increased productivity…when I'm in the work profile, I don't have the quick auto-complete to my "fun" sites. During breaks I can load up my fun Firefox profile and quickly get to what I want.”
Work Space
Some people work well with distractions. Others need a closed room with no distractions. Decide what works best for you and go with it. There are plenty of companies who have televisions, and other types of distractions in the office to help promote creativity. Knowing how to assess what works well for you is a must for the home based business owner.
Taking a Step Back
Being your own boss also means you have to know how to successful critique yourself. Knowing what you need to get done and asking yourself how you could have streamlined the process is a must. Ask yourself questions such as, “ if I could only work for half of the day tomorrow, what would have to get done?” Doing this will help you set your priorities straight and help you stay focused on the big picture.
What do you do to help you stay focused while working from home?
Shannon Suetos is an expert writer on direct mail companies based in San Diego, California. She writes extensively for an online resource that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs such as direct mail at Resource Nation.
Blow Your Marketing Budget on Advertising
Mea culpa. This is a stupid mistake I made very recently. In fact, my business partner, Paul, and I joked that we had to painfully relearn something we have known for fifteen years. Advertising doesn’t work in professional services businesses. I can sense what you are thinking. “OK genius, if you don’t spend your marketing dollars on advertising, just where do you spend them?” I think you owe me a little more patience than that. Let’s start out with what Paul and I relearned this year.
Last year if you had grabbed me on the street and asked me how we have grown our business, I would have immediately responded, “100% of our business comes from referrals and business networking groups like the chamber of commerce.” It probably would have sounded every bit that robotic and rehearsed. However last October, we had the brilliant idea of celebrating our twentieth anniversary with a broad advertising campaign. See the problem yet? We know what works, but we decide to do something different anyway. Maybe you should be writing this instead of me. Rack up our first mistake.
We compounded mistake number one by making an even more stupid mistake. I can best illustrate this with your assistance. Please grab the five people closest to you. No… you can ignore that guy. He does look strange. Then ask them on a scale of one to ten, ten being the highest, “How deeply did you care about Stitely & Karstetter’s twentieth anniversary?” Please be respectful of my feelings as you give me the results. Add all the numbers together. Then divide by five to get the average. If you can’t carry off the math, grab a fifth grader. Let me guess the results. The average was greater than zero but less than one. No! The result was actually zero???? Big surprise there. No one really gives a damn about a CPA firm’s anniversary. Rack up mistake number two.
We can summarize this marketing campaign as follows. We rolled out a marketing campaign that was inappropriate for our business with a marketing message no one could possibly care about. I am patting myself on the back for this one. Good job stud. You should be asking me to step away from the computer.
Let’s summarize the results of this hideously expensive putrid mess of a marketing plan. We got two new clients. You should be wondering how we survived. I don’t blame you, but in fact our revenue grew 15% year over year during the tail end of a recession. How did that happen? Remember when I said above that 100% of our business comes from referrals and networking? Paul and I have spent most of our twenty years in business together building our referral network. Building a referral network isn’t as easy or as quick as throwing together an advertising campaign, but it really works. Here is your answer, oh impatient one. Spend your marketing dollars building a referral network.
Last year if you had grabbed me on the street and asked me how we have grown our business, I would have immediately responded, “100% of our business comes from referrals and business networking groups like the chamber of commerce.” It probably would have sounded every bit that robotic and rehearsed. However last October, we had the brilliant idea of celebrating our twentieth anniversary with a broad advertising campaign. See the problem yet? We know what works, but we decide to do something different anyway. Maybe you should be writing this instead of me. Rack up our first mistake.
We compounded mistake number one by making an even more stupid mistake. I can best illustrate this with your assistance. Please grab the five people closest to you. No… you can ignore that guy. He does look strange. Then ask them on a scale of one to ten, ten being the highest, “How deeply did you care about Stitely & Karstetter’s twentieth anniversary?” Please be respectful of my feelings as you give me the results. Add all the numbers together. Then divide by five to get the average. If you can’t carry off the math, grab a fifth grader. Let me guess the results. The average was greater than zero but less than one. No! The result was actually zero???? Big surprise there. No one really gives a damn about a CPA firm’s anniversary. Rack up mistake number two.
We can summarize this marketing campaign as follows. We rolled out a marketing campaign that was inappropriate for our business with a marketing message no one could possibly care about. I am patting myself on the back for this one. Good job stud. You should be asking me to step away from the computer.
Let’s summarize the results of this hideously expensive putrid mess of a marketing plan. We got two new clients. You should be wondering how we survived. I don’t blame you, but in fact our revenue grew 15% year over year during the tail end of a recession. How did that happen? Remember when I said above that 100% of our business comes from referrals and networking? Paul and I have spent most of our twenty years in business together building our referral network. Building a referral network isn’t as easy or as quick as throwing together an advertising campaign, but it really works. Here is your answer, oh impatient one. Spend your marketing dollars building a referral network.
Friday, 11 June 2010
"Maintaining a Professional Image While Working at Home"
by Ali Brown
One of the benefits of a home office is never having to wear a scratchy wool suit or pantyhose (unless you want to). The danger is that it’s easy to let that professional image slide if you spend the workday sitting on your couch wearing yoga pants and channel surfing in between conference calls. Follow these tips to maintain a professional image while working at home:
Stick to a schedule. True, working from home allows you to set your own schedule and gives you the flexibility to travel, take care of children, or otherwise tend to your personal life. But if clients never know when they’ll be able to reach you or if you sometimes sleep ‘til noon because you stayed up late watching movies, that can jeopardize your professional reputation. Your work hours will depend on the nature of your business and when you work best, but once you get into a schedule, try to follow it. And let your regular clients or customers know what those hours are. Being self-disciplined with your time means customers or clients can count on you and makes it easier to get work done.
Mind your social media use. Sites like Facebook and Twitter can be excellent tools for promoting your business and keeping in touch with old friends or colleagues. But if you get too personal or casual online, it can have an adverse effect on your business. Remember, anything you post online is public. Even if your settings are supposedly private, it’s easy for one of your contacts to take a screenshot or retweet something they find funny and/or offensive. Be friendly, but put on a professional face and always ask yourself how potential customers or clients might react to something you’ve posted.
Manage your incoming phone calls. If you use your cell phone for business and personal calls, remember to answer calls from unfamiliar numbers in a professional manner. Resist the urge to answer if you’re in a noisy bar or next to a screaming child. In fact, if you have young children, you should set up a separate phone line for your business and make sure you’re the only person who answers it.
Set up a separate workspace. Even if it’s a converted closet or a corner of your living room, having a space devoted to work helps you get into a business mindset that you’ll project to clients or customers. Having a designated workspace also helps you navigate issues of work/life balance. When you’re at your desk, it’s time to work. When you’re sitting on the couch watching TV, it’s time to relax.
Get out of the house when you have to. Sometimes it’s hard to feel like a professional when you’re surrounded by laundry that needs to be folded or toys that need to be put away. In those cases, it makes sense to work somewhere else, at least part of the time. It’s also smart to have a place outside of your home for meetings. Coworking spaces often let you rent conference space by the hour or the day. You could also partner with another small business to share meeting or office space.
The bottom line? Maintain a professional mindset and create some separation (physically and mentally) between your business and your personal life.
© 2010 Ali International
Self-made millionaire entrepreneur and Inc. 500-ranked CEO Ali Brown teaches women around the world how to start and grow profitable businesses that make a positive impact. Get her FREE weekly articles and advice at www.AliBrown.com
Thursday, 10 June 2010
Author Q&A: Become Your Own Boss in 12 Months by Melinda Emerson
Why did you write Become Your Own Boss in 12 Months?
My mission as small business coach is to End Small Business Failure. I wanted to develop a tool for people who are unhappy with their jobs and wanted to start a business. I also wanted to discourage people from just quitting their jobs without a well-researched plan. Too often I got calls from people seeking my advice about starting a business—after they had already quit their job which is just too late to start planning. I started out sending these would-be entrepreneurs a one pager with start-up tips. Then it was expanded into a special report, 44 Things To Do Before Going Into Business, which was the basis for this book. Over the years I became a business coach and lecturer on small business best practices. Since the recession began, small business owners have even less time to hit it big with their niche target customer now. I thought the best way to help entrepreneurs would be to provide a step-by-step proven method to start a successful small business.
What makes your book different from all the other start-up business books?
Become Your Own Boss in 12 Months provides a realistic, month-by-month planning guide to start a sustainable and profitable small business. If you’re planning to start a business soon, the key to being successful is not only to create a sound business concept, but also taking the time to figure out the business of running a business. This book will point out the important and necessary steps to take – so you will have the right foundation for a small business. Become Your Own Boss in 12 Months is not a book about writing a business plan; it’s about planning your successful small business.
Why does it take 12 months to start a business?
12 Months is an ideal time-frame to start a business, it’s not meant to be restrictive. I have been an entrepreneur for more than 11 years. Based on my experience, I believe the longer you plan, the more research you will do, and the more money you save, the more likely you are to succeed in business.
What if you don’t have 12 months?
Sometimes people are forced to start sooner. This is triggered by layoffs, getting fired, buyouts or retirement packages. I only planned for three months with my first business, but the challenge with that approach is you learn plenty of lessons the hard way, and that can be expensive. If you live by a budget, have your debt under control, and have a significant amount of savings, you will be able to start your business much sooner. Depending on your individual situation, it may take more than a year to get your personal finances in order.
Who should start a business?
Anyone with a solid, profitable business idea, willing to learn the business of running a business, can start a successful small business.
Why do small businesses fail so often?
1) No Life Plan—You need to develop a life plan and then build a business around that.
2) No Network—People do business with people they like and people they know. Who do you know and, more importantly, who knows you?
3) Lack of Target Market Focus—You have limited time and limited resources. Choose a niche so you can focus your marketing efforts.
4) Undercapitalized—If you do not save enough money to run your household for at least a year and fund the business, you may not be able to hang on until the business can generate any real revenue.
5) Lack of Fiscal Discipline—Do you run your business with a budget? Do you just rob the cash register when you need some cash? Do you make business decisions based on up-to-date financial information?
What are the 7 Essential Principals of Small Business Success?
Throughout the past five years, I have interviewed hundreds of entrepreneurs and business executives. After listening to what they said about running their businesses and observing how they did business, I realized that there were 7 things they all had in common. They include having an entrepreneurial mindset, utilizing strict fiscal discipline, and having a kitchen cabinet of advisors. They make use of a well-defined brand identity; have a niche market customer, excellent customer service, and a firm understanding every day of their cash position by carefully managing their banking relationship. Using these principles can help any business run at its best. It’s the gold standard all businesses need to strive for from the very beginning.
Who is this target audience for this book?
This book is for anyone looking to create a plan to fire their boss and start a small business. It will also help people who are within their few years of launching a new enterprise. I have also heard from seasoned business owners who tell me that this book could serve as a professional development course or a great roadmap to reinventing a struggling business.
Melinda F. Emerson, also known as Twitter’s SmallBizLady is a seasoned entrepreneur, professional speaker, and small business coach whose areas of expertise include small business start-up, business development and social media. She hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs. She is the founder and CEO of Quintessence Multimedia, an award-winning strategic communications firm. She has created productions for such companies as Johnson & Johnson, Verizon, Enterprise Rent-A-Car and Comcast. Her book Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works!” was released in March 2010 by Adams Media.
Wednesday, 9 June 2010
"Women Entrepreneurs - The Secrets of Success" for Wednesday, June 9th
Melinda‘s mission is to End Small Business Failure. She publishes a resource blog, www.succeedasyourownboss.com. She hosts a weekly talk show on Twitter called #Smallbizchat for emerging entrepreneurs.
As one on the nation’s leading small business experts, Melinda has been featured on NBC Nightly News and in the Wall Street Journal, U.S. News and World Report and Black Enterprise. Her first book “Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works” was released in March 2010 by Adams Media. Melinda also founded Quintessence Multimedia, a full service strategic communications firm where her clients include Johnson & Johnson, Verizon, Enterprise Rent-A-Car, Comcast and IKEA.
Listen to the archived show: http://womenentrepreneursradio.libsyn.com/melinda-emerson-the-smallbizlady
More bookkeeper nightmares
A few posts ago, I wrote that all bookkeepers stink. Just yesterday, the following happened.
For this post, I was tempted to not change any of the company’s information. This situation happened really recently, and I am still pissed off about it. However, after a quick consultation with my personal attorney and a handful of anti-depressants, I have decided to stick with my policy of protecting the guilty.
Ed ran a marketing company that had been in business for about three years. Ed’s customers were mostly Fortune 1000 companies for whom he managed large marketing campaigns. Ed was a new client and we were preparing his corporate income tax returns for the first time. Sharon was Ed’s bookkeeper. When we started the tax preparation process, we didn’t know a thing about Sharon, except that she kept the company’s books in QuickBooks.
The normal corporate tax preparation process goes as follows. First we get a copy of the company’s accounting records, in this case a backup of the QuickBooks data. Second, we print out the company’s year end balance sheet and income statement. Next, we then attempt to determine the reliability of the financial data by asking a predictable set of questions and running a bunch of reports. At least we are under the impression that the questions are predictable by anyone with a high school education. The advantage of our having a copy of the actual accounting records is that we can answer a lot of questions about the financial statements ourselves. However, there are a number of areas where we flat out just have to ask the client’s bookkeeper if an account is correct. Last, after we have reliable financial statement amounts, we complete the tax returns. This is where the fun began with Sharon.
For Ed’s company, we printed out a year end listing of accounts receivable from QuickBooks that showed accounts receivable to be $250K. At this point we have a report that shows a listing of customers and balances that adds up to $250K. Now remember our rule that numbers on the balance sheet have to match the real world amounts. Some tax preparers might blindly assume that the listing of customers and balances is the real world amount. Our staff tax preparer was not that lazy. She gave Sharon the listing of accounts receivable balances and asked Sharon if the balances were correct. Sharon replied that they were. At this point, our staff preparer then took the accounts receivable listing and compared it to the amount on the balance sheet. The amounts matched and life seemed to be good. After asking a bunch more questions and getting satisfactory answers, the preparer then completed the corporate tax returns.
Our firm does something that seems to be a bit unusual in the tax preparation world. After we prepare a corporate tax return, we send it to the business owner in draft format. We do this for a couple of reasons. First, we value the input we sometimes (read that as “rarely”) get when a business owner reviews the returns. To put this in less polite terms, we hope to get through the shock stage with the business owner when he / she sees the tax liability. Secondly, and to be honest much more important for us, is that we hate to re-run and reprint tax returns. It is a pain in the ass. So we get the business owner’s sign off on the draft before we finalize the returns. This is where the fun really began with Ed and Sharon.
I sent Ed a draft of the corporate tax returns. A couple days later, he responded and told me that there was something wrong with the revenue amount on the tax returns. I sent him the report from QuickBooks that showed the revenue number that appeared on the tax returns. This number, of course originated with Sharon. Ed and Sharon responded that the revenue amount was low by $100K. You might fairly ask why Ed would want to report more income on a tax return. I should add that the tax return draft was showing a loss of $200K. He was rightly worried about his ability to get financing from a bank with a $200K loss.
Our staff preparer asked the obvious accounting question. If the revenue was low by $100K, what would the adjusting entry look like to record the additional revenue? Accounting junkies understand that if you credit an account, you have to debit another account. In this case, to increase revenue by $100K you credit the revenue account on the profit and loss statement. What do you then debit? I’ll wait for your answer……….. I’m still waiting. Let’s move on.
There are two reasonably likely possibilities for the debit. First, you might debit the bank account. However, if you do that you are increasing the balance in the bank account by $100K. The bank account was reconciled already. That means the balance in the account already matched, before this $100K adjustment, the amount in the real world. Throw out the bank account as a possibility.
Let’s try door number two, which is accounts receivable. Of course, I am setting you up on this one, and a competent bookkeeper would know why this is a setup. We already had an accounts receivable listing, the real world number, which matched the amount on the balance sheet. Not only that, but we specifically asked Sharon if the listing was correct. If we credit revenue and debit accounts receivable by $100K, we are increasing accounts receivable to $350K when our real world accounts receivable listing only shows $250K. In most rational universes, a $100K difference is a material amount. We gently (yes, I really was diplomatic in this case) suggested that Sharon’s new revenue amount was not correct. We were pretty certain we had gotten through their thick skulls, but we were mistaken.
Sharon responded a couple days later that there were some accounts receivable that were not in the financial statements. That may have been the case, but here is the kicker. This is still her mistake. Shouldn’t she have recorded these accounts receivable before giving us the year end information? Most rational, intelligent human beings would think so. All competent small business owners would realize this. Not Ed. We made an adjustment to the tax returns to record the additional revenue and accounts receivable. You might also justifiably be curious if the adjustment just happened to be $100K. Not quite, the adjustment was $95K. I have trouble writing that with a straight face.
We finalized the tax returns and I was certain Sharon had been suitably chastened by the experience of dealing with real accountants. A day after we finalized the tax returns, Ed sent an e-mail message to Sharon, and copied our staff preparer. He congratulated Sharon on finding and correcting our mistakes in the tax returns. I am drinking heavily as I write this and reconsidering using Ed’s real identity. I have to remember I have a wife and children to consider. This is what happens when a real life Homer Simpson runs a business. This is also why all the good CPA's drink and take drugs. I am kidding about the drug part - I think....
For this post, I was tempted to not change any of the company’s information. This situation happened really recently, and I am still pissed off about it. However, after a quick consultation with my personal attorney and a handful of anti-depressants, I have decided to stick with my policy of protecting the guilty.
Ed ran a marketing company that had been in business for about three years. Ed’s customers were mostly Fortune 1000 companies for whom he managed large marketing campaigns. Ed was a new client and we were preparing his corporate income tax returns for the first time. Sharon was Ed’s bookkeeper. When we started the tax preparation process, we didn’t know a thing about Sharon, except that she kept the company’s books in QuickBooks.
The normal corporate tax preparation process goes as follows. First we get a copy of the company’s accounting records, in this case a backup of the QuickBooks data. Second, we print out the company’s year end balance sheet and income statement. Next, we then attempt to determine the reliability of the financial data by asking a predictable set of questions and running a bunch of reports. At least we are under the impression that the questions are predictable by anyone with a high school education. The advantage of our having a copy of the actual accounting records is that we can answer a lot of questions about the financial statements ourselves. However, there are a number of areas where we flat out just have to ask the client’s bookkeeper if an account is correct. Last, after we have reliable financial statement amounts, we complete the tax returns. This is where the fun began with Sharon.
For Ed’s company, we printed out a year end listing of accounts receivable from QuickBooks that showed accounts receivable to be $250K. At this point we have a report that shows a listing of customers and balances that adds up to $250K. Now remember our rule that numbers on the balance sheet have to match the real world amounts. Some tax preparers might blindly assume that the listing of customers and balances is the real world amount. Our staff tax preparer was not that lazy. She gave Sharon the listing of accounts receivable balances and asked Sharon if the balances were correct. Sharon replied that they were. At this point, our staff preparer then took the accounts receivable listing and compared it to the amount on the balance sheet. The amounts matched and life seemed to be good. After asking a bunch more questions and getting satisfactory answers, the preparer then completed the corporate tax returns.
Our firm does something that seems to be a bit unusual in the tax preparation world. After we prepare a corporate tax return, we send it to the business owner in draft format. We do this for a couple of reasons. First, we value the input we sometimes (read that as “rarely”) get when a business owner reviews the returns. To put this in less polite terms, we hope to get through the shock stage with the business owner when he / she sees the tax liability. Secondly, and to be honest much more important for us, is that we hate to re-run and reprint tax returns. It is a pain in the ass. So we get the business owner’s sign off on the draft before we finalize the returns. This is where the fun really began with Ed and Sharon.
I sent Ed a draft of the corporate tax returns. A couple days later, he responded and told me that there was something wrong with the revenue amount on the tax returns. I sent him the report from QuickBooks that showed the revenue number that appeared on the tax returns. This number, of course originated with Sharon. Ed and Sharon responded that the revenue amount was low by $100K. You might fairly ask why Ed would want to report more income on a tax return. I should add that the tax return draft was showing a loss of $200K. He was rightly worried about his ability to get financing from a bank with a $200K loss.
Our staff preparer asked the obvious accounting question. If the revenue was low by $100K, what would the adjusting entry look like to record the additional revenue? Accounting junkies understand that if you credit an account, you have to debit another account. In this case, to increase revenue by $100K you credit the revenue account on the profit and loss statement. What do you then debit? I’ll wait for your answer……….. I’m still waiting. Let’s move on.
There are two reasonably likely possibilities for the debit. First, you might debit the bank account. However, if you do that you are increasing the balance in the bank account by $100K. The bank account was reconciled already. That means the balance in the account already matched, before this $100K adjustment, the amount in the real world. Throw out the bank account as a possibility.
Let’s try door number two, which is accounts receivable. Of course, I am setting you up on this one, and a competent bookkeeper would know why this is a setup. We already had an accounts receivable listing, the real world number, which matched the amount on the balance sheet. Not only that, but we specifically asked Sharon if the listing was correct. If we credit revenue and debit accounts receivable by $100K, we are increasing accounts receivable to $350K when our real world accounts receivable listing only shows $250K. In most rational universes, a $100K difference is a material amount. We gently (yes, I really was diplomatic in this case) suggested that Sharon’s new revenue amount was not correct. We were pretty certain we had gotten through their thick skulls, but we were mistaken.
Sharon responded a couple days later that there were some accounts receivable that were not in the financial statements. That may have been the case, but here is the kicker. This is still her mistake. Shouldn’t she have recorded these accounts receivable before giving us the year end information? Most rational, intelligent human beings would think so. All competent small business owners would realize this. Not Ed. We made an adjustment to the tax returns to record the additional revenue and accounts receivable. You might also justifiably be curious if the adjustment just happened to be $100K. Not quite, the adjustment was $95K. I have trouble writing that with a straight face.
We finalized the tax returns and I was certain Sharon had been suitably chastened by the experience of dealing with real accountants. A day after we finalized the tax returns, Ed sent an e-mail message to Sharon, and copied our staff preparer. He congratulated Sharon on finding and correcting our mistakes in the tax returns. I am drinking heavily as I write this and reconsidering using Ed’s real identity. I have to remember I have a wife and children to consider. This is what happens when a real life Homer Simpson runs a business. This is also why all the good CPA's drink and take drugs. I am kidding about the drug part - I think....
Tuesday, 8 June 2010
Refinancing a mortgage - points or no points?
OK – technically this isn’t a post about screwing up a business, but it is worthwhile information anyway.
I just had a question from a client about refinancing a mortgage. He had three choices:
1. Stick with his current high rate mortgage
2. Refinance to a lower rate with no points
3. Refinance to a still lower rate with points
This is the analysis I sent him:
Paying a lower interest rate with no closing costs is always better than sticking with a higher rate from an economic standpoint - even if you are paying an extra $100 per month against principal now.
The real question is whether paying the closing costs to get the lowest rate is worthwhile. To do that all you have to do is take the difference in monthly payments between the two loans and divide that into the closing costs. That tells you how many months it takes the lower rate (with closing costs) to catch up to the rate with no closing costs. Here is an example with made up numbers:
Closing costs: $3,000 to pick a wild number
Monthly payment under lower rate with closing costs: $850
Monthly payment under slightly higher rate without closing costs: $950
The difference in monthly payment is $100 per month. If you take the $3,000 closing costs and divide by $100 payment difference, you get 30. That means in 30 months, you begin to save money with the loan with the closing costs. If you plan on keeping the house beyond 30 months, paying the closing costs makes sense in this example. If you aren't going to have the house in this example for at least 30 months, the loan without closing costs makes more sense.
I just had a question from a client about refinancing a mortgage. He had three choices:
1. Stick with his current high rate mortgage
2. Refinance to a lower rate with no points
3. Refinance to a still lower rate with points
This is the analysis I sent him:
Paying a lower interest rate with no closing costs is always better than sticking with a higher rate from an economic standpoint - even if you are paying an extra $100 per month against principal now.
The real question is whether paying the closing costs to get the lowest rate is worthwhile. To do that all you have to do is take the difference in monthly payments between the two loans and divide that into the closing costs. That tells you how many months it takes the lower rate (with closing costs) to catch up to the rate with no closing costs. Here is an example with made up numbers:
Closing costs: $3,000 to pick a wild number
Monthly payment under lower rate with closing costs: $850
Monthly payment under slightly higher rate without closing costs: $950
The difference in monthly payment is $100 per month. If you take the $3,000 closing costs and divide by $100 payment difference, you get 30. That means in 30 months, you begin to save money with the loan with the closing costs. If you plan on keeping the house beyond 30 months, paying the closing costs makes sense in this example. If you aren't going to have the house in this example for at least 30 months, the loan without closing costs makes more sense.
Selling Your Business
At this point, it's an old wives tale that small businesses sell for one times revenues. I met this morning with a client to review a business valuation I had prepared. He told me a few of his friends told him about the one times revenue rule of thumb. That means if your business has $1 million in sales, the business will sell for $1 million.
Part of my process in preparing a business valuation is reviewing sales of comparable companies from a database of business sales compiled from business brokers. I showed the client four recent sales of relatively comparable companies. The top revenue multiple was 50% of revenue.
Looking more deeply at this sale with the highest revenue multiple revealed that this company also had the highest cash flow relative to its selling price. This multiple is called selling price to seller's discretionary earnings (P / SDE). This is a multiple based on the cash flow of a business. Given two businesses with equal sales, the one with the higer cash flow will command a higher price. That certainly isn't rocket science! If you want a somewhat useful rule of thumb (as much as any rule of thumb can be useful), small businesses typically sell for 3 to 3.5 times discretionary earnings. This particular client's industry was selling for more like 4 times SDE.
I had a conversation with a business broker last Thursday. He told me cash flow rules in terms of selling valuations. He further went on to tell me that banks will no longer finance valuations built on revenue multiples or pro forma (projected) cash flows.
Multiple of revenue valuation can now be archived in history with "per click" internet site valuations, and other dot com valuation fantasies. Reality is back.
Part of my process in preparing a business valuation is reviewing sales of comparable companies from a database of business sales compiled from business brokers. I showed the client four recent sales of relatively comparable companies. The top revenue multiple was 50% of revenue.
Looking more deeply at this sale with the highest revenue multiple revealed that this company also had the highest cash flow relative to its selling price. This multiple is called selling price to seller's discretionary earnings (P / SDE). This is a multiple based on the cash flow of a business. Given two businesses with equal sales, the one with the higer cash flow will command a higher price. That certainly isn't rocket science! If you want a somewhat useful rule of thumb (as much as any rule of thumb can be useful), small businesses typically sell for 3 to 3.5 times discretionary earnings. This particular client's industry was selling for more like 4 times SDE.
I had a conversation with a business broker last Thursday. He told me cash flow rules in terms of selling valuations. He further went on to tell me that banks will no longer finance valuations built on revenue multiples or pro forma (projected) cash flows.
Multiple of revenue valuation can now be archived in history with "per click" internet site valuations, and other dot com valuation fantasies. Reality is back.
Monday, 7 June 2010
Save Time with These Five Web-Based Tools
As busy entrepreneurs, we are always looking for ways to save time in our businesses. Using the following web-based tools will not only save you time, but could save you some money, as well.
1. Wordpress (http://wordpress.org/) – Gone are the days, when we have to rely on a web designer to build our websites, or wait days for just a simple copy change. Not to mention the cost associated with the website. Besides static websites are a thing of the past. You can easily install Wordpress on any domain through your web hosting service. In Wordpress, you can add pages, make copy changes or make blog post without waiting or paying a website designer. Another benefit – Google loves Wordpress when crawling sites. Wordpress is free to install.
2. Hootesuite (http://hootsuite.com/) – Let’s face it. We have to utilize social media as part of our marketing, but it can take so much of our time. If we don’t watch it, a whole day can go by where all we have done is Twittered and Facebooked. With Hootsuite, you can manage multiple social media accounts at one location. One of the greatest features of Hootesuite is that you can track any link posted. You can also schedule your post, so you do not constantly have to log on and post. Now you can schedule your social media time. Hootesuite is a free service.
3. Tweet Adder (http://tweetadder.com/) – Researching people to follow on Twitter is another time-consuming process. By the time you look at their page, then their website you can spend hours on Twitter. Tweet Adder is a fabulous service that allows you to search Twitter using keywords. Tweet Adder will search for followers using the keywords entered, and then follow that person. Tweet Adder will also follow back anyone who is already following you. You should limit your following to about 50 a day to prevent Twitter from thinking you’re a spammer. You can take your Twitter time down to minutes a day. Tweet Adder has a demo that you can try, and then it will cost you $55.00 for 1 profile. This is a lifetime membership with no monthly fees.
4. Skype (http://www.skype.com) – You can do so many things with Skype from instant messaging, phone calls, video calls, and video presentations. You can set up different profiles from customer service, consulting, to personal to utilize in your business. Some features are free while some have a cost associated with them, so be sure to check the features out that you need.
5. Carbonite (http://www.carbonite.com/) – Carbonite is one of the best time saving services out there. No longer do you have to schedule a time to backup your system. You simply download the software onto your computer; Carbonite then scans and backs up your computer, then continually backs up your system as long as you are connected to the internet. Another fabulous thing is, if you have a hard drive that crashes, you can access all of you backed up files and then download them onto your new computer. How fabulous is that? Carbonite will cost you $54.95.
Implement these tools to see how you can find more time in your day.
Julie Barnes is the author is this post. Julie is excited to be living in Generation E – the age of the Entrepreneur. As a writer, she enjoys writing about all aspects of the entrepreneur journey. She enjoys interviewing entrepreneurs whose experience and wisdom can inspire others to follow their entrepreneurial dreams. Julie lives and works in the Kansas City suburb of Overland Park, KS with her husband Ron and lovable dog Hank. You can visit her site at http://www.julieabarnes.com . Follow Julie on Twitter at http://twitter.com/juliebarnesks. Become a Facebook friend at http://www.facebook.com/people/Julie-Barnes/1003024246
Saturday, 5 June 2010
How Can You Help Your Load Time?
If you have a company website, it is probably safe to assume that you want to rank high with the search engines. You want your brand out for everyone to see, and what better way to get it out with a company website. But what are you doing to get your site up on that ever coveted first page of Google?
Search engine optimization (SEO) has become more popular over the years as businesses are making a profit from helping other companies rank high on the major search engines. You may not be an SEO guru, but there are certain tactics you can utilize to help.
Google announced at the beginning of April that page loading time will now be a factor in their mysterious algorithm. If you don’t have an in-house programmer, or you aren’t an expert programmer, there are a few tactics you can do to help you optimize for faster loading times.
Reduce HTTP requests
HTTP, short for hypertext transfer protocol is a lot less intimidating then what it sounds like. Basically the Internet works like this—you have web crawlers (like the ones Google and Yahoo! send out) that read your site, and then they index your site and tell the search engines what keywords are relevant to your site.
If your HTTP requests are not in order, or you have too many it could slow down your loading time. In non web speak, if you are looking for a pair of shoes to wear and your closet is a mess, it’s going to take longer to find them than if your closet was in order.
To reduce your HTTP files you can do the following:
- Combine your files so that there is less information to search. Make it as easy as possible for the web crawlers. There are plenty of tools available to help you if you are not knowledgeable on combining your files. SL Combinator, CSS Mixer and minify are just a few programs you can use.
- Group images into one large image—doing this will reduce your HTTP requests and can help prevent a longer loading time. To do this you should use, “the data: URL scheme to embed the image data in the actual page.” You will need to do a little digging around though, because using an inline image isn’t supported on all browsers quite yet.
Avoid Flash
You don’t have to take Steve Job’s stance on Flash and cut it out all together, but many Flash files take a longer time to load. If you can’t live without your Flash, then think of ways you can use minimal amounts of Flash. Other great alternative to Flash is to use a large image or oversized header image. Both of these options can add a lot of value to your site, and will have less loading times than Flash files. HTML5, which is the newest upgrade to HTML code also brings an alternative to Flash files. Although HTML5 is not quite ready, their video tag will allow people to insert video files without Flash.
Clean Up the Code
Keeping your HTML code neat and tidy will also help with your loading time. Get rid of any, “white spaces and excessive tags that you don’t really need such as empty tags.”
Tools to Assess Your Loading Time
Google wrote in their blog after announcing the loading time factor now incorporated in their algorithm some useful tools to help you gauge your loading time. These include:
- Page Speed, an open source Firefox/Firebug add-on that evaluates the performance of web pages and gives suggestions for improvement.
- YSlow, a free tool from Yahoo! that suggests ways to improve website speed.
- WebPagetest shows a waterfall view of your pages' load performance plus an optimization checklist.
- In Webmaster Tools, Labs > Site Performance shows the speed of your website as experienced by users around the world as in the chart below. We've also blogged about site performance.
You probably won’t be able to change your loading time over night, but it is something you should have on your radar. Getting higher rankings in the search engines is a must if anyone is going to see your great product and services. Although many companies utilize pay per click campaigns to help get their website out there, it is a good idea to supplement those costly ads with high organic search optimization as well.
Shannon Suetos is an expert writer based in San Diego, California. She writes extensively for an online resource that provides expert advice on purchasing.
Another reason your CPA should not be running your business
There is a trend in the CPA business called value billing. Value billing is where your exalted, extremely knowledgeable, and capable CPA bills you the maximum amount he / she thinks you will pay for a project instead of the normal hours worked times a fixed billing rate per hour. In other words, your CPA bills you what the market will bear. I have no problem with the concept of value billing by itself. However, proponents of value billing usually combine it with the idea of eliminating time tracking for CPA firm staff. What is wrong with that? Let’s examine the logic behind getting rid of time tracking.
The logic runs as follows. Good employees are hard to find. Employees don’t like time tracking. Therefore time tracking is bad. That is it. That is the entire logical underpinning of the concept. What is wrong with that logic? Proponents of value billing combined with the elimination of time tracking make the rookie accountant mistake of confusing price and cost. Price is what you charge your customers. Cost is what you pay to provide the service to the customer. To set your price, you have to know your cost. Cost in the CPA business is almost entirely staff labor. As a CPA, if you aren’t charging more for a tax return than you pay your staff to prepare the return, you are in a world of financial trouble. How do you know how much it costs to prepare a tax return? You track the time your staff spends on the return, multiply it by the rate you pay per hour, and you have the means to determine if you made or lost money on the tax return. If you lost money, you know you didn’t charge enough. You charge more the next time. The CPA business is pretty simple, isn’t it? Not for a lot of CPA’s.
In November 2008, the Journal of Accountancy, the official publication of the American Institute of CPA’s, published an article titled “The Firm of the Future.” The article featured an Ohio CPA firm that had implemented value billing and had eliminated time tracking for its employees. This firm employed 13.5 full time equivalent employees to produce $1.3 million in annual revenue. According to the article, the employees were happy, the firm’s clients were happy, and the firm’s owners were ecstatic. What could possibly be wrong?
I wrote a letter to the editors of the magazine that was published a few months later. I pointed out that, according to CPA industry metrics, a firm with that number of employees should be billing more like $2 million per year, not $1.3 million. I wrote that I could understand why the employees were happy, but I had no idea how the partners could be. As you can imagine after reading this far, I made a few more snarky comments as well.
Both the article’s author and one of the firm’s owners responded to my letter. Their responses were twice as long as my letter. The owner responded that they didn’t need time tracking since they trusted their fine employees. Then he did it. He made the rookie mistake. He wrote that “the time sheet is not a measure of productivity” since it only measures inputs. It doesn’t consider the value of the services provided. The mistake wasn’t mine. It was his. He considered billing the only part of the profit equation. Cost doesn’t matter to him. He also went on to write that my firm is too much of a big time DC CPA firm to be compared to his. I think I struck a nerve in that emperor has no clothes kind of way.
The sad part about the Ohio firm is that the owners have no way of knowing why their financial numbers don’t measure up to industry averages. Since they don’t compare what employees bill to what they cost, they have no way of evaluating who is performing well and who should be fired. How do they evaluate employees? Do they base evaluations on looks or cheerfulness? They have no objective standards since they have no objective information. The really sad part is that they believe they are doing their employees a favor. In fact, they are doing a great disservice and inhibiting staff development. In our firm, because of our time tracking system, we know when someone spends too much time on a project. We have the information to get to the cause of the problem and provide additional training to develop our staff’s skill sets. Measurement and feedback are the most basic of management tools.
The author and the firm owner got the last word in the Journal of Accountancy, but I get it here. My original letter was edited to remove my last and best comment. I wrote, “The CPA firm of the future is destined to be like Dip N Dots, the ice cream of the future for the last thirty years.” Do you still think CPA’s are great business people? Do you want that CPA firm owner giving you advice?
The logic runs as follows. Good employees are hard to find. Employees don’t like time tracking. Therefore time tracking is bad. That is it. That is the entire logical underpinning of the concept. What is wrong with that logic? Proponents of value billing combined with the elimination of time tracking make the rookie accountant mistake of confusing price and cost. Price is what you charge your customers. Cost is what you pay to provide the service to the customer. To set your price, you have to know your cost. Cost in the CPA business is almost entirely staff labor. As a CPA, if you aren’t charging more for a tax return than you pay your staff to prepare the return, you are in a world of financial trouble. How do you know how much it costs to prepare a tax return? You track the time your staff spends on the return, multiply it by the rate you pay per hour, and you have the means to determine if you made or lost money on the tax return. If you lost money, you know you didn’t charge enough. You charge more the next time. The CPA business is pretty simple, isn’t it? Not for a lot of CPA’s.
In November 2008, the Journal of Accountancy, the official publication of the American Institute of CPA’s, published an article titled “The Firm of the Future.” The article featured an Ohio CPA firm that had implemented value billing and had eliminated time tracking for its employees. This firm employed 13.5 full time equivalent employees to produce $1.3 million in annual revenue. According to the article, the employees were happy, the firm’s clients were happy, and the firm’s owners were ecstatic. What could possibly be wrong?
I wrote a letter to the editors of the magazine that was published a few months later. I pointed out that, according to CPA industry metrics, a firm with that number of employees should be billing more like $2 million per year, not $1.3 million. I wrote that I could understand why the employees were happy, but I had no idea how the partners could be. As you can imagine after reading this far, I made a few more snarky comments as well.
Both the article’s author and one of the firm’s owners responded to my letter. Their responses were twice as long as my letter. The owner responded that they didn’t need time tracking since they trusted their fine employees. Then he did it. He made the rookie mistake. He wrote that “the time sheet is not a measure of productivity” since it only measures inputs. It doesn’t consider the value of the services provided. The mistake wasn’t mine. It was his. He considered billing the only part of the profit equation. Cost doesn’t matter to him. He also went on to write that my firm is too much of a big time DC CPA firm to be compared to his. I think I struck a nerve in that emperor has no clothes kind of way.
The sad part about the Ohio firm is that the owners have no way of knowing why their financial numbers don’t measure up to industry averages. Since they don’t compare what employees bill to what they cost, they have no way of evaluating who is performing well and who should be fired. How do they evaluate employees? Do they base evaluations on looks or cheerfulness? They have no objective standards since they have no objective information. The really sad part is that they believe they are doing their employees a favor. In fact, they are doing a great disservice and inhibiting staff development. In our firm, because of our time tracking system, we know when someone spends too much time on a project. We have the information to get to the cause of the problem and provide additional training to develop our staff’s skill sets. Measurement and feedback are the most basic of management tools.
The author and the firm owner got the last word in the Journal of Accountancy, but I get it here. My original letter was edited to remove my last and best comment. I wrote, “The CPA firm of the future is destined to be like Dip N Dots, the ice cream of the future for the last thirty years.” Do you still think CPA’s are great business people? Do you want that CPA firm owner giving you advice?
Friday, 4 June 2010
How to Attract all the Clients You Need
I was taught if I work hard and take one step at a time, I'd get to my goal. For awhile that did serve me and it's only one way. What I'm talking about is day to day, striving and struggling to make incremental gains in business. It's the path of conventional growth. What I call ladder climbing instead of leap-frogging. What I'm asking of you is to be open to stop accepting present circumstances and being content with incremental growth in your business.
Take a risk on going for unconventional success by going the route of unconventional approaches. Go for a breakthrough! A quantum leap!
Focus On The End Result
Start first with a crystal clear vision (dream) of the outcome you want. Create a strong focal point for yourself and your business. Go ahead and visualize your arrival - just as if you were a runner readying yourself for a race. Forget the how! The answers will come to you like simple and streamlined solutions. No forcing necessary - stay out of your own way and let it occur. Now for you perfectionists, forget making the perfect plan, forget getting everything neatly organized and eliminating the risks. Be willing to be with ambiguity, confusion or chaos. All that you're doing is what Columbus did. He sailed into uncharted territory. Just keep your focal point of where you're going to land.
Light The Fire In Your Heart
Passion is the single element that will energize the soul, fill the spirit and put fire in your heart. Go with your burning desire, the fire in your heart, and you will never be let down. In order to allow this to happen, shift the limits on your thinking and give yourself the permission to carry you past the point of wishful thinking and halfhearted effort.
Employ New Behavior
If you want unconventional success, be willing for the unconventional approaches. Accelerate your achievement by rapidly employing the new behaviors. Otherwise, more of the same gives more of the same. So, if you lean on the dependable behaviors from the past they turn into major obstacles to your future success. To have a business without boundaries you must think without boundaries. Trying harder will take you down the path to burnout. Hint: More effort isn't the answer. Get uncomfortable and go for it!
Ditch the Doubt!
Imagine a new definition of rational thinking. What if rational thinking is the same as skepticism? The truth is doubts are the product of habitual thinking, not accurate thinking. Put the old inhibiting ideas aside (just in case you may want to pick them up again at some other time. Try on accurate thinking. Imagine for a moment you could double your income or even triple your income in less than a year. Suspend your disbelief from what's probable to believing in what's possible.
Ready Aim Fire
In the ready, aim, fire strategy, getting ready is the con game you're playing with yourself. If you wait to get all prepared, organized and perfect - you'll never get there. Taking action is an act of faith. Once you take a step the next step will appear. Your dreams will begin to crystallize into your reality when pursued-how cool is that?
Breakthroughs In Action
Ready to take a shortcut? Have you ever felt resistance to something that you want to take action on? Then you don't take action and you resist the resistance. Ready to change? Make a list of all that you are resisting. The next thing to do is to take action on each one. Go ahead try it...you'll be pleased.
**If you would like personalized coaching to assist you in overcoming your obstacles, email Ileana at Ileana@ileanakane.com for further details.
© 2010 Ileana Kane All Rights Reserved
Ileana Kane, CEO of Ileana Intl, teaches Enterprising Entrepreneurs how to express their true value and get paid what they are worth. Her products and services show you how to make more money, save more time while enjoying the freedom in your business. Get your FREE audio: www.ileanakane.com
Thursday, 3 June 2010
The Power of 1 -- The First Numeral's Ability to Change Your Life
Feng shui is often called the Chinese "art of placement." But it is deceptively deep. There is so much depth to feng shui that at first blush it's easy to just chalk it up as a decorating method or fun esoteric technique.
Feng shui is related to time, space, elements, colors, shapes, numbers, people, and parts of the body. It's a way for understanding and categorizing energy that is difficult to understand. We discover the "qualities" of energy by learning and knowing feng shui. It's those qualities that makes important distinctions for us.
A man once wrote and asked me what possible difference could there be between a candle and a light bulb because I recommended light in a location, but not fire (candles). I explained that it is the quality of light that is the distinguishing factor.
Think about it: a light bulb will light up a room, but even the tiniest candle could burn down a whole house. Understanding these fine philosophical and physics-related differences isn't what's important - it's the implications they have on your life that is.
The number one relates to the north and to water. It is associated with the wave shape. That's because even one small change can create big waves! So, let's talk about what the Power of One means to you and how you can harness its power to bring about more results, more success and more focus in your life.
1. One small change creates many outcomes.
Dieticians often recommend patients make one small change to their diet rather than a sweeping one that is impossible to keep up. In cutting out just one thing from their diet, such as soft drinks, patients can see a remarkable change in many areas, such as looks, weight, the way his or her clothes fit and the way others see them.
There are many ways you can apply this "one small change" tactic. Each day do one small change and over time, you will see how this can impact your life. What's one small change you can make - a 10 minute walk at lunch, giving up morning lattes, organizing one drawer a day?
2. Singular focus brings big results.
We have been taught to believe that, like the cat in the poster on a unicycle balancing plates in one hand, and bouncing a ball in the other, that in order to be effective, you must multitask. This could not be further from the effectiveness truth.
According to the journal NeuroImage, doing two things at once cuts down your effectiveness to do either thing well. The problem is that we all fall prey to the trap of the "law of excluded alternatives," that in doing one thing, we are not doing fifteen other things.
Try this instead:
a. Do one task at a time and don't get distracted until it's complete.
b. Pick one single goal for the day, week, or year to focus on and work at.
c. Stop distractions like email audible and visual alerts - these break your concentration.
3. Problem solve.
Typically there is only one single problem that stands in the way of our happiness and effectiveness. See if you can answer the following questions:
a. If I handled_________________my life would be instantly happier.
b. If I removed ___________________from my life, everything would be better.
c. __________is the one thing that stands in the way of feeling good about myself.
Working to resolve the one major thing in your life that frustrates you is very powerful and freeing. What's the one thing standing in your way?
4. Concentrated feng shui.
If you have something big you need to accomplish, you need Single Minded Determination. This concentration follows the principle of compounding feng shui. If you have an east-facing house that's painted brown, your kua success direction is east, and you face east at work, you are compounding, or concentrating, your feng shui.
Use single-minded determination to remain focused on one thing and refuse to be distracted. Make all your efforts at completing that task, whether that's running a marathon, cutting out credit card debt, or gaining better health. Being single-minded can take you far.
5. Skill and accomplishment.
When we learn a new skill and have an accomplishment, there is a tremendous shift in our inner selves. We perceive ourselves as better and more competent. What's something that you would like to learn or accomplish? Maybe learning a foreign language, a computer software skill (both of these help advance careers and business, both!) or travel to a new and completely foreign-to-you location - maybe Japan, Iceland or Peru. Pick one thing and then get good at it or get going to it!
© K Weber Communications LLC 2002-2010
Kathryn Weber is the publisher of the Red Lotus Letter Feng Shui E-zine and certified feng shui consultant in classical Chinese feng shui. Kathryn helps her readers improve their lives and generate more wealth with feng shui. For more information and to receive her FREE Ebook "Easy Money - 3 Steps to Building Massive Wealth with Feng Shui" visit www.redlotusletter.com and learn the fast and fun way how feng shui can make your life more prosperous and abundant!
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