Five Places Where Spending More Pays Off

It’s generally a good idea to keep overhead costs low so that your business profits will be higher.  This is especially true with items that are easily commoditized and fairly standardized, such as utilities and rent.  But there are times when increasing expenses pays off nicely, and here are five areas to consider so you can reap the rewards.

Training

Whether it’s for you or your staff, good training can pay back for years to come.  Learning new skills, no matter what our crafts are, will keep our businesses from becoming stagnant.  Implementing what we learn will help us grow.

You might get training to increase the mastery of your chosen profession.  You might also want to consider general business skills, including technology, marketing, finance, and leadership.  Just about everyone can benefit from learning more about project management, communications, and negotiations, to name a few more.

You might also want to consider “human performance” skills such as public speaking.  Whatever you choose, training is always a great investment that pays back big dividends.

Tools

Without the right tools, the same task can take double the time.  It’s a great idea to provide your employees with the most powerful computers and software on the market.  The cost of labor outweighs the costs of the computers, so it makes sense to load employees up with the best tools you can.  An employee with a slow computer, through no fault of their own, is not giving you their best, and that will cost money in lost productivity.

The same thing goes for owners.  You can spend your time fighting with a machine or getting a ton of work done.  I’m pretty sure the latter is more profitable.

Accounting

The most successful companies we work with invest in accounting services in five areas: accounting technology, accurate bookkeeping, thorough reporting, tax minimization, and professional consulting.  When we see business owners cutting corners in any of these areas, it usually costs them more money in the long run to clean up the problems that result.

An up-to-date accounting system minimizes maintenance and troubleshooting costs.   Making sure the bookkeeping and reconciliations are done properly is essential for compliance reporting and decision-making.  A robust set of reports allows a business owner to make smart decisions about running their business, and minimizing taxes helps you keep more of what you make.

Since accountants see thousands of financial reports in their careers, they have developed an eye for opportunities that a business owner may not see.  Bringing an outside perspective into your business is a good investment that can help you discover great opportunities in your business.

Marketing

Whatever you do in your business, you are helping others.  You are sharing a skill you have that your clients either don’t have or don’t choose to do for themselves.   Being a best-kept secret doesn’t help you share your gifts and talents.

Marketing can help you get the word out to people who need your services but might not know about you.  Developing great marketing materials will help you communicate what you do as well as receive fair compensation for what you do.  It almost always makes sense to invest in this area of your business.

Employee Perks and Benefits

Keeping employees passionate about your vision and motivated to be productive is a continuing task.  One way to do that is to provide employee benefits and perks that make it attractive for employees to work for you.

There are many ways to invest in your employees.  Good health insurance, personal time off, extra vacation time, education reimbursement, flex time, and working from home are just a few of the many options you can choose from to enhance employees’ working environments.

Measuring the Payoff

We can help you measure your return in any of these areas; as always, please let us know how we can help.

Five Places To Find More Profits

It’s always a good idea to be on the lookout for ways to increase your profits, and luckily, there are many ways to do that.  One way is to focus on cost-cutting, and here are five places that are good to periodically review for cost-cutting possibilities.

Telephone

Re-negotiating with the phone company every one to two years is a really good idea.  Many telecommunications companies will often bargain with you or offer you a new deal just for checking in with them.

Has your business changed?  Do you need all those extra features you are paying for?  Could you do without those extra lines?  Would another phone plan save you money on long distance or international calls?

The risk is low:  one quick call will let you know if you can save money in this area.  It’s worth it to give it a shot, and while you’re at it, you can call your smartphone provider too.

Travel

Travel is always a great area to look into for possible ways to save.  Are all trips necessary and profitable?  Are there any meetings that can be done virtually instead of face-to-face?  Virtual tools such as GoToMeeting can make travel unnecessary.

What trips can be cut this year?  Can the number of people sent per trip be cut?  Can travel arrangements be made early to save money?  Are booking dates flexible so you can compare and find the lowest rates?  Is a taxi or rent car cheaper?

Dues and Subscriptions

Paying our annual dues for the club or association we’ve belonged to forever may be a habit, but is it beneficial for your business?  We might enjoying seeing everyone once or twice a year at the meeting, but we may not necessarily have to have a membership to do that.  Sometimes paying the guest rate is more affordable than the member rate if we are attending infrequently enough.

Review a list of organizations and publications you and your employees are part of, and choose which ones you are truly benefiting from.   If being an officer in one of your organizations is not getting you any new business, then you may eliminate a time drain by bowing out and letting someone else volunteer.

Labor

As your business grows, it can be a challenge to decide who to hire next.  The first place to look before you decide should be your existing employees.  What tasks are they doing that you are paying them too much for?  For example, do you have a manager doing clerical work?  If so, you may be able to piece together an administrative job that frees your current staff from all the clerical work they are doing.

It’s worth a look to see where your current employees are being overpaid and find someone to do those parts of the job.  You’ll save labor costs and come out ahead in the long run.

Fixed Assets and Equipment

Another place to save money that can be significant is purchases of large items such as furniture, automobiles, and production equipment.  It’s a good idea to get three bids from reputable vendors so you have a choice.  Going with the lowest bid is not always a good move; going for the highest quality is.

Look in these five places, and let us know how much you find to increase your profits.  As always, if we can help, let us know.

The Entrepreneur's Paycheck

As business owners, we may be so busy making sure the bills get paid and the product gets out the door that we may not be quite as proactive about our own compensation.  To pay themselves, many new business owners take what’s left after employees and vendors have been paid, and that ends up being their paycheck.

I’d like to propose a whole new way:  entrepreneurs should be paid three times, once for what they do, second for the risk they take, and third for the going concern they’ve built.  If you’re not getting paid three times, here’s how it can work.

First: Your Services

Just like the employees and contractors we work with, we should get paid for the actual work we perform in our business.  Most of us wear many hats in our business, and we should get paid for all those hats!

As your business grows, the tasks you initially performed will be delegated to employees.  They would never go without a paycheck, and you shoudn’t either.

The amount you pay yourself should be similar to the market rate you would have to pay someone if you hired someone else to do the jobs you are doing.  As your company grows, you will be going up the management ladder and your salary should increase accordingly.

Here’s an aha for some new business owners just starting out:  If you have cash flow problems paying yourself or others, then you might have one of two problems:  The goods and services you sell may not be priced correctly, or the number of clients you have may need to increase so that you reach an acceptable volume in your business.

Second: Your Risk

After you’ve paid yourself for the jobs you are doing in your own company, there should be something left over: profit.  As a business owner, you have earned that profit; it’s your reward for taking the risks that go with business ownership.

If there’s no profit left over, then there could be a number of problems.  This is where accounting professionals can help you review the revenues and expenses in your business and see where things are not adding up.

So far, your paycheck and your profits get you paid twice as an entrepreneur, and that’s the way it should be.  But there’s also a third way.

Third: Your Going Concern

A third way to get paid is when you sell your business.  There are many things you can do throughout the years to boost your business valuation, and the more you can do that, the higher the proceeds will be from your business.

Financial Success

One of the factors that can increase all three forms of compensation is your financial skillset.   Building your financial skills by working with accounting professionals can help you price your goods and services accurately, improve your cash flow, hire employees at the right pay rates, and implement many more financial success factors in your business.

When you’re ready to review your entrepreneur’s paycheck, feel free to call on us for expert financial assistance.

Planning For An Awesome 2013

For businesses with fiscal years that coincide with the calendar year, the slate of revenues and expenses will be wiped clean on New Year’s Day.  Starting with a clean slate gives us a chance to reflect on our 2012 results before we enter 2013 and experience the hope that comes with a new year.

Hindsight is always valuable, and we can learn important lessons from our past mistakes that we can now more objectively look back on.  We can take those lessons and incorporate them into our plans for the new year so that we can continue to learn, grow, and prosper.

To create your plans for an awesome 2013, here is a list of questions and documents to consider in your business.

Revenue Plan

We can make budgeting more fun by looking at the revenue side first.

• Are you happy with your 2012 revenue levels?

• What new product or service lines can you roll out in 2013?

• Are there any product or service lines you should close in 2013?

• Should you raise prices?

A revenue plan is useful because it can feed into your annual budget as well as drive your marketing plans.

Staffing Plan

Business is more fun when you have the right team to support your vision.

• Is your current team sufficient to support your business goals for 2013?

• In what areas do you need more help?  Should you hire or outsource?

• Are there any team members that are not pulling their weight?

• Was there a turnover that you would have rather not had?  How can you retain your best talent?

Master Budget

Your revenue plan and staffing plan can feed into your master budget, which can be loaded into your accounting system.  Tracking actuals against plan and prior year numbers will help you determine how you’re staying on track throughout the year.

Special Projects Plan

What special projects should you consider for 2013?  This might include a move, new fixed assets, or replacing systems and processes that you are outgrowing.

Disaster Recovery Plan

Each year, we watch the news and see people and businesses that were affected by extreme weather events, fires, theft, or other disaster.  Are you protected?

• Is all of your data backed up to a remote location that is away from your local area?

• Do you have the necessary insurance coverage for all areas of your business?

• Are you comfortable with the risks you are taking in business and are you prepared for the worst-case consequences of those risks?  If not, take action to reduce your risks.

Planning for Awesome

Planning helps you become more successful, and it reduces the risks of doing business.  There are many more types of plans, and it’s up to you to decide which ones will benefit your business.  If we can help out in any way, please reach out and give us a call.

Five Hidden Talents Of Your Accountant

When you think of an accountant’s duties, you might think about traditional tasks, such as tax preparation, bookkeeping, and financial statement preparation.   Here are five additional tasks that accountants can help with that you might not think of.

1. Evaluating Current Accounting Employees

How can you know if your accounting employee is a star that does everything right, is organized, and is fast or if you’ve accidentally hired someone who talks a good game but is doing everything wrong, takes way too long based on your size company, or is making unnecessary and costly mistakes?  Your external accountant can often help you objectively evaluate your current staff and point out their strengths and weaknesses so you can create the right training programs for them, communicate the right message at review time, or take the proper HR steps you need to.  Your accountant can also help to train your bookkeepers so that they are more efficient.

If your bookkeeper is not performing at the level of pay you are providing, it can be an inefficiency in your business.  Your accountant can help you make sure you are not over- or underpaying your current staff.

2. Hiring a Bookkeeper

For businesses that have full or part-time accounting staff, your accountant can help you test candidates for technical skills so that you can make a wise hire.

3. Selecting Better Tools

Most bookkeepers that do books for one company do not have the experience that lets them see there may be “a better way” to do what they are doing.  Your external accountant can help you find or develop systems, reports, and software to supplement your current accounting system that may save you time and money.

Since your accountant can be working on as many as ten different companies in one day, they have far more experience and expertise than bookkeepers who work at one company at a time.  Take advantage of that experience to streamline your workflow and learn lots of great money-saving shortcuts.

4. Identifying Process Inefficiencies and Irregularities

The fresh eyes that your external accountant can bring to your business can often uncover inefficiencies in accounting processes that can reduce your expenses and increase your profits.  One opportunity area is listening for the “we’ve always done it that way” answer.  When that explanation comes up, usually it means that the person saying it has lost or never knew the reason behind the process, which could now be obsolete.

External accountants have the benefit of seeing dozens if not hundreds of financial statements among their many clients.  We’ve often developed the eagle eye of scoping out expenses that are out of line based on other clients in your industry and company size.  If you are paying too much for telephone, utilities, and other common expenses, we can bring it to your attention that there may be an opportunity to re-negotiate a contract or look for some kind of error.

5. Strengthening Internal Control and Taking Measures to Reduce Risk of Fraud

Developing checks and balances in your accounting system is essential in businesses where employees handle money and have access to credit card numbers and bank account information.  Your external accountant can help you develop internal controls within your accounting system that will work for the level of risk you wish to take in your business.  They can also point out reports in QuickBooks or your accounting system that facilitate controls and that can help you review irregularities on a periodic basis.

Tapping into Talent

Next time you find yourself in one of the above situations, think of your external accountant first, and give us a call.

Seven Year-End Adjustments To Make Your Books

Year-end is coming up for many businesses, and it’d be nice to know what your final revenue and profit numbers will be for the year.  Before we can calculate these key numbers, there are year-end adjustments that may need to be made to your books that will change the numbers. Here are seven common ones.

Bonuses

It’s great to give bonuses to employees at year-end, but it’s not so great to forget about the tax part of it. Bonus checks should always be run through payroll, but often are not, which requires an adjustment after the fact.

Retirement Plan Contributions

If cash is available at year-end, it’s a great idea to maximize the allowable deductions for the retirement plan you qualify for.  One example is a SEP IRA.  You can deduct up to 25% of your or your employee’s salary (up to $50,000 deduction maximum per employee for 2012, but please check with us or your tax professional for numerous exceptions and rules.

Withholding

If you are both the owner and an employee of your company and have not made enough tax payments throughout the year to account for all that money you’ve earned in 2012, you can adjust your last few paychecks to withhold the amount you need.  Sometimes, this also reduces or eliminates the penalty for underpayment of estimated taxes.   To find out more, please check with your tax professional.

Depreciation

If you have assets that will last longer than one year, such as factory equipment or a fleet of automobiles, an adjustment may need to be made to reduce the value of those assets.   This adjustment will reduce your profit and will also reduce your tax bill.

Amortization

If you have a loan of any type, the payment consists of both principal and interest.  Each time you make a payment, the principal and interest amounts can vary.  At the beginning of the loan, you pay more interest and less principal.  At the end of a loan, it’s reversed.  Each payment is different, and if they haven’t been recorded correctly each month, it’s time to make the adjustment so that the loan balance is correct.

New Acquisitions or Obligations

If you’ve made a significant acquisition, such as real estate, buildings, large equipment, or another company, and somehow the transaction did not get properly recorded on your books, then now is the time.   Similarly, if you’ve taken on new debt, the new liability needs to be put on the books.

Noncash Transactions

It’s easy to overlook transactions that do not require a cash outlay, but these need to be recorded as well.   For example, if you performed consulting services in exchange for a spa gift certificate, this transaction should be reflected in the proper revenue and expense accounts.

Year-End Profit

Once your books are adjusted for all of these changes, you’ll have all the information you need to find out how your business performed for 2012.  You can then use your 2012 revenue and profit numbers to set new goals for 2013.

Five Things You Can Do To Make Tax Season Smoother

We know we’ll never make tax season your favorite time of year, but perhaps we can make it easier.  Here are five things you can do now to smooth out the time required to pull your records together for your tax preparer.

1. Contractor Clean-up 

In preparation for 1099s, take a look at your vendor list now and identify who should receive a 1099.  Perform a mini-audit and ask for any W-9s that are missing so you can plug in your tax IDs without scrambling at the last minute.

2. Check or PSE

Also in preparation for 1099s, you’ll need to break out payments made to vendors by check versus by credit card, third party or what the IRS calls PSE, payment settlement entity.  You’ll only need to issue 1099s to vendors you wrote checks to.

3. Calculated Moves

Is there anything you can calculate in advance of crunch-time?  If you had loans, you can secure the appropriate amortization schedules.  If you have depreciable assets, some of these schedules can be prepared ahead of time.  Did you sell any major assets?  A summary of the transaction can be prepared and ready to go.

4. Playing Catch-Up

If you are behind in your bookkeeping, filing, bank reconciliations, or other accounting chores, it’s a good time to get caught up so all the routine stuff is out of the way.

5. Getting Organized

When the year ends and the tax documents start arriving, place them in a special folder or stack so that all the papers are together.  Scan them in and place them in a specially labeled folder on your PC.  You’ll be more organized than ever.

When all of the mundane items are completed early, it leaves time for the more important conversations, such as discussing new ideas for tax reduction, ways to operate your business more efficiently, and planning for your future.

If we can help make your tax and accounting tasks easier during any time of the year, please reach out and give us a call.

Is Your Business Missing An Accounting Skillset?

In a small business, the owner ends up wearing many hats to get the product or service delivered, the customers served, and the accounts settled.  Within each functional area of a small business, there are even more hats.  Although the accounting function might be considered one big hat, there are actually a number of skills that make up “the accounting department” in a small business. Here’s a list to help you understand how it all works together.  As you read through it ask yourself how you are covering these functions in your workplace.

Data Entry Clerk

A data entry clerk typically knows how to do a few types of transactions that are routine.  Perhaps this is posting timesheets from source documents, inventory transactions, or keying in transactions from one report or system to another.  The data entry clerk usually has little or no knowledge of accounting or bookkeeping, and this person will need help when there are exceptions to the routine.

Bookkeeper

The main function of a bookkeeper is to post the transactions and reconcile the accounts of the business.  This can include a number of functions and areas:

1. Invoicing and receipts in the accounts receivable area

2. Checks and bills in the accounts payable area.

3. Payroll.

4. Inventory.

5. Cash – bank reconciliations and necessary corrections and adjustments.

6. Account analysis.

7. Report preparation, but only to the extent that it rolls up the transactions.

Good bookkeepers will know how to work seamlessly with the CPA who is doing the taxes for the small business so that the books are in compliance with regulatory requirements.

Controller

A controller brings in advanced skills beyond bookkeeping, including financial statement preparation and analysis, budgeting and planning, cost control, risk assessment, internal control, segregation of duties, and industry knowledge.  A controller can bring valuable financial skills to a small business, and often do so by way of an outsourced part-time controller arrangement.

CFO (Chief Financial Officer)

The CFO is the highest level of accounting executive and is needed for complex strategies such as IPOs and financing for the larger company.  A small firm might need CFO-level skills in high growth situations to manage cash flow, debt ratios, and financing options.

Technical Accountant or CPA

Typically, an accountant will have a 4-year degree or a CPA or both.  In many states, the word “accountant” is reserved for CPAs.  Accountants have both education and experience in a wide variety of specialties, including taxes, auditing, cost accounting, bank financing, financial statement preparation, and more.

Tax Preparer, CPA, or EA (Enrolled Agent)

Typically a tax preparer offers tax planning, preparation, and filing in any or all of these areas:

1. Federal and state corporate, partnership, nonprofit, or individual tax preparation, filing, and planning.

2. Sales tax compliance and filing.

3. Franchise tax.

4. Payroll tax (although a good bookkeeper, controller, or accountant will know how to do this, too) and year-end requirements (W-2s and 1099s).

Management Advisory Consultant

One of the most overlooked roles an accountant can play in small business is in making process improvements in the way the staff and owner work in their business.  Often a management advisory consultant can review how a process is being performed, such as invoicing, and make suggestions on how to speed the process, bill more frequently, or other opportunity that significantly improves the cash condition.  The specialized skills of accounting, process knowledge, and software skills enable a management advisory consultant to save money for the business owner in many cases.

Accounting Software Consultant

An accounting software consultant has deep knowledge of one or more accounting software packages and can analyze the needs of the company to match them with the right accounting software.

Accounting Software Trainer

Just like any software package, and perhaps especially with accounting software, it’s not a good idea to guess how to use the software.  A software trainer will have in-depth knowledge of the tips and tricks inside the package that will save your bookkeeper (or you) time and money.

Adding Up the Value

The more of these roles you have covered in your business, the more your business will benefit.  If you have gaps, it’s likely you’re feeling the missing skillset and having issues around that area.

If we can help you fill any of these gaps, please let us know.  We’re at your service.

Compliance Checklist: Seven Items You May Have Forgotten

Running a business is filled with regulations everywhere you turn.  These can drain precious time away from the core of your business, but if you ignore them, there could be huge financial consequences you may be risking without even realizing it.  The best way to handle them is to understand your exposure, consult with any experts you need to bring in, create a checklist, and make sure you’re in compliance.

Here’s a head start in creating that checklist.  This is by no means a comprehensive list.  These items apply to most businesses and are often overlooked.   Go through the list to make sure there aren’t any surprises for your business.  If there are, feel free to contact us, and we’ll help you find out where to get answers.

1. EIC notice to employees.

It’s now required annually to notify certain employees about the Earned Income Credit so that more people who need it can take advantage of it.   If you have employees, the next deadline for this compliance item is the first week of February 2013 and can be met if you get the right W-2 forms.  Details are in IRS Publication 15.

2. Corporate meeting minutes.

Just about the first thing the IRS will ask for in an audit is your corporate meeting minutes.  If you are incorporated as a C Corp or S Corp, you need properly formatted and executed documentation of the annual shareholders’ meeting, even if it is just you.  The risk in not having it includes a potential increase in tax liability from undocumented deductions.

3. PCI compliance. 

PCI stands for Payment Card Industry, and if you take credit cards, you may have compliance requirements under this industry standard.  The standard is designed to provide the cardholder with a minimum acceptable level of security, and your requirement is to maintain certain processes and procedures to safeguard the stored credit card data.

4. Document retention.

While it’s a great thing to go paperless, you may get caught by surprise if you are not downloading and preserving the items you used to have on paper.  The IRS and other agencies still need proof of these items in order to approve the deduction.  This includes invoices that are coming via email in PDFs, bank statements you’ve gone green on, and direct deposit payroll stubs, to name a few.

Fax copies fade after a few years and can catch you by surprise when you go to look up an old record and can no longer read it.  It’s best to scan fax receipts in so they will stay readable for the length of the retention period.

You’ll also want to keep up-to-date on how many years it’s necessary to maintain these items in the case of an audit.

5. New hire reporting.

In small business, most of us are hiring so infrequently that it’s easy to forget this one.  Most state unemployment agencies require that you report new hires within about three weeks of their start date.  The purpose of this is to track fathers who have missed child support payments.

6. Changes in state tax compliance.

As geographic borders disappear and our business expands, we need to regularly re-evaluate state requirements on income, franchise, and sales tax obligations.  It can be too easy to “do things the way we’ve always done them” and forget that as our business expands into new territories, new obligations can arise.

If we’ve hired a virtual employee in another state, we may have new obligations.  If we’ve earned money during a speaking engagement in another state, we may have income to report in that state.    And, of course, if we open new offices in another state, we have new compliance items to deal with.

7. Payroll posters.

Surprisingly, the highest payback item in this list for those of you that have employees may be posting your payroll posters.  Compliance usually costs less than $100, and the fines avoided can be as much as $17,000, a pretty big dent, no matter how big your small business is.

Small Business Compliance

Did you get caught by any surprises?  If so, let us know how we can help to bring your business into compliance and help you avoid unnecessary costly risks.

Are You Vulnerable To Fraud?

According to the Association of Certified Fraud Examiners (ACFE), over $3.5 trillion is projected to be lost to fraud worldwide in 2011 alone.  The typical organization loses 5 percent of its revenues each year.  While we have a lot to think about as entrepreneurs, we do need to take time to educate ourselves about this unfortunately common business loss.

The Fraud Triangle

An easy way to understand fraud is to learn about the Fraud Triangle.  The creation of the Fraud Triangle is credited to Dr. Donald Cressey, a well-respected criminologist and sociologist who made significant contributions to his field.

Three components need to be present in order for fraud to occur:

1. Motivation (or Need)

2. Rationalization

3. Opportunity

When fewer than three legs of the triangle are present, we can deter fraud.  When all three are present, fraud could occur.

Motivation

Financial pressure at home is an example of when motivation to commit fraud is present.  The fraud perpetrator finds themselves in need of large amounts of cash due to any number of reasons:  poor investments, gambling, a flamboyant lifestyle, family requirements, or social pressure.  In short, the person needs money and lots of it fast.

Rationalization

The person who commits fraud rationalizes the act in their minds:

• I’m too smart to get caught.

• I’ll put it back when my luck changes.

• The big company won’t miss it.

• I don’t like the person I’m stealing from.

• I’m entitled to it.

At some point in the process, the person who commits fraud loses their sense of right and wrong and their fear of any consequences.

Opportunity

Here’s where you as a business owner come in.  If there’s a leak in your control processes, then you have created an opportunity for fraud to occur.  People who handle cash, signatory authority on a bank account, or financial records with poor oversight could notice that there is an opportunity for fraud to occur with the ability to cover the act up for some time.

Prevention

Once you understand a little about fraud, prevention is the next step.   To some degree, all three points on the triangle can be controlled; however, most fraud prevention programs focus on the third area the most:  Opportunity.  When you can shut down the opportunity for fraud, then you’ve gone a long way to prevent it.

The Typical Fraud

The median cost of an occupational fraud case was $140,000, according to the ACFE.  It goes undetected for a median time frame of 18 months.   The most likely way to discover fraud is a tip from an employee who works at the victim organization.

Small Business Vulnerability

Small businesses are the most vulnerable to fraud, because they employ the least amount of fraud prevention controls.  Here are just a few quick tips to help prevent fraud in your organization:

• Create a culture within your organization that deters fraud and provide employees with education about fraud prevention to reduce rationalization.

• Tighten down access to financial areas, segregate duties, and use other internal control best practices to reduce opportunity.

• Provide financial literacy programs to employees to reduce need or motivation.

• The ACFE recommends that small businesses provide employees with an anonymous way to report suspicious activity.

While we hope fraud never happens to you, it makes good sense to take preventative steps to avoid it.  Please give us a call if we can help you in any way.

Six Quick Productivity Tricks So You Can Go Home Early

If you have an endless to-do list, you’re not alone these days.  Most of us are constantly looking for ways to work smarter and get more done.  Here are six quick tips to help your productivity so you can go home early.

1. Group tasks.

If you have lots of errands to run during the week, why not set aside one day or a part of a day to get them knocked out all at once?  It saves start/stop time and may also save gas and time getting dressed up (if you work at home).

You can also try grouping tasks such as personal care appointments, doctor’s appointments, sales calls, and client visits.  Your schedule will be freed up in big blocks of time so you can focus on creative projects without having to constantly watch the clock.

2. Use checklists.

Checklists are best when you have a task you need to repeat.  They’re great when you’re stressed and don’t want to forget a step (such as in packing your suitcase for a trip).  They’re also great for tasks that repeat infrequently (Now how did I do that last time?)

Stop and take a minute to create your checklist the next time you perform a routine task that you will repeat in the future.  You’ll thank yourself the next time.

3. Organize your email.

If you are using Microsoft Outlook for email, consider getting it to work as hard as you do.  As your email comes in, you can have Outlook sort the low-priority emails that come from lists, Google alerts, social media notifications, and subscriptions into folders.  Create a subfolder in your inbox called “lists.”  Then set a Rule to have that type of email go into the “lists” folder.  This one step will substantially de-clutter your inbox.

4. Delegate more.

If you’re a little wary about delegating, try this exercise:  Look at your to-do list and put an hourly rate next to each task that you are doing.  If someone paid you to do that job, what would you get on the market?  Then look at the tasks with the lowest dollar value next to them.

If you feel your time is worth more than the lowest rated tasks on your lists, it’s time to help someone else out who is unemployed so you can be freed up to use your more valuable skills.

5. Order online.

When is the last time you’ve been to the office supply or pharmacy when you know they deliver?  (Yeah, me, too. Enough said.)

6. Avoid long learning curves.

Whenever you realize a task will have a really long learning curve, then it’s a red flag that it’s time to find someone to hire to do it for you.  Here are several examples:

• Doing your taxes and researching all the tax law changes

• Installing a new accounting system and customizing it

• Learning about every new social media platform out there

• Writing a legal contract

• Creating a report

• Troubleshooting a computer problem

The cost of going through the learning curve can be dozens of hours of your precious time lost compared to bringing an expert on board who can perform that task in a matter of hours or minutes.

How did these six ideas compare to your favorites?  I hope you picked up an idea or two so you can get home earlier.

Five Favorite Freebies You Can Steal

If you’re looking for ways to boost your productivity, technology is a great place to start.  The good news is there are many free options available.  Here are five favorites you might not know about.

1. Bridge lines.

If you need teleconference lines, you’re in luck:  there are many high-quality options that are completely free.  You can have several people, even hundreds, dial into a line and conduct a meeting or training session via the phone.  You can record the session and download the recording as an MP3 file that can be played on an iPod.

Some of the more creative ways to use these free teleconferencing services include:

•  Staff meetings when someone is absent so they can listen later.

• Free teleconference, providing tips to all your clients.

• Free teleconference, allowing prospects to call in and sample what you offer or find out what you’re like to work with.

• When you need to record anything. (You often need 2 people on the line to be able to record, but not always.)

• To record a quick training session or how-to that can be distributed later.

• To have a client record a testimonial you could put on your web site.

• To record a meditation or therapeutic session you can listen to over and over again.

• If you’re a coach or trainer, you can record the client training session and give the download as a service perk.

Our favorite:  http://www.freeconferencecallhd.com.

2. FileZilla.

The FileZilla client version allows you to transfer large files between computers that are connected to the Internet using FTP (File Transfer Protocol).  It’s handy for many reasons:

•  When you need to load large files such as videos or audios to your website

• When you need to upload something to an artist, a transcriptionist, a warehouse, or other supplier

• When you have documents such as white papers that you want people to have access to but don’t want to have to keep contacting your webmaster

Download the FileZilla client and find out more here:  http://filezilla-project.org/

3. Gmail.

It’s just a great idea to have a backup email address in addition to the primary email address you use.  Gmail is perfect for this.

Go one productivity-boosting step further, and make your gmail account the one you use for all that email you don’t need to read as frequently.  This could include notifications from social media like Facebook, Twitter, and LinkedIn, blog notifications, list posts, Google alerts, and any other nonproductive email, you don’t need to respond to.

Open your Gmail account less often than your primary email (even once a week if you dare) and gain that productivity boost.  You’ll have freed your inbox from a bunch of clutter and can focus on your clients’ and employees’ emails instead.

Visit this site to find out more:  https://mail.google.com

4. WordPress.

WordPress is free blog software that you can install on your web site or blog site.  Once installed, it’s super-easy to use for both blogging and a website.  You can add photos, graphics, white papers, videos, and audios to the library to put on your blog or your site.

It’s also great for search engine optimization; the search engines love it and will rank you higher when you blog and post fresh content.

Visit http://wordpress.org/ to find out more.

5. Ning.

Ning is a community platform where people can come together and post a profile, participate in discussions, join a group, and interact.  Not all business models will benefit from Ning, but many of you are involved in a club, church group, nonprofit organization, or community where Ning could be very helpful.

Ning is almost free, at $19.95 per year or $2.95 per month, but it’s such an amazing platform, I include it here.  Whenever you’d like to have a private (or public) community of people who are joined by a common interest, Ning can provide that extra online community connection that can help you group interact and bond even more.

Find out more about Ning at http://www.ning.com.

What are your favorite freebies?

Create An Easy, Head-Turning Elevator Speech

You’re sitting in a room with 30 other business entrepreneurs.  Each of you has one minute to introduce themselves to the group.  You are number 25 to speak.  Will anyone listen?  What can you do or say to catch your peers’ attention, be memorable, and have them approach you for business?  Most importantly, what can you do to get every business card in the room wanting what you have (so you can go to fewer networking meetings and get back to running your business)?

The good news is you don’t have to be a poet, a writer, or a great speaker in order to attract attention and desire.  All you need to do is put yourself in your potential customer’s shoes for a minute.  What is it about your business, your products and services, and you that would interest a potential buyer?  Why should they care?  Why should they stop what they’re doing from their busy life and listen to you?  It’s easier to answer than it sounds.  Here’s a formula to help you along.

“I help “my ideal client” “get a certain result” through “my products or services.”

Let’s fill in these three blanks by using some examples:

“I help “young families” “find their first house” by “providing mortgage lending services.”

“I help “people with broken pipes” “keep their homes dry” through my “plumbing services.”

“I “protect families from financial disaster in times of crises” by providing “insurance services.”

“I help “women who want to have beautiful hair” “keep their hair healthy and vibrant” with “my all-natural, organic hair salon services.”

Now fill in the blanks for your business.  You may have to try a couple of variations until you hit on the perfect one for you.  But this formula beats saying “I’m a hairdresser,” “I’m a plumber,” or “I’m a mortgage lender.”

This is a great start to your elevator speech, but just a start.  Now add a second sentence that describes a project you just completed with another client similar to the one you’re talking with.

“For example, I just closed on a home last week with a mom, dad, the cutest 4-year-old twins, and a yorkie.  They got a great rate, and their payment is low enough so they can afford to start saving for the kids’ college right away.”

One more sentence and you’re done.  This one’s your call to action.  What do you want interested prospects to do, and how can they sample your product at a low risk to them?

“I have a free report, “10 Mistakes to Avoid When Buying Your First House.”  If you’d like a copy, please hand me your business card and I will email you the details.”

“I offer a free risk analysis so you can see if you have any major risk exposures.  To set up an appointment, hand me your business card, and I will get you setup free of charge.”

Put all three parts together and you have a very nice elevator speech.

“I help young families find their first house by providing mortgage lending services.  For example, I just closed on a home last week with a mom, dad, the cutest 4-year-old twins, and a yorkie.  They got a great rate, and their payment is low enough so they can afford to start saving for the kids’ college right away. I have a free report, 10 Mistakes to Avoid When Buying Your First House.  If you’d like a copy, please hand me your business card and I will email you the details.”

Don’t be surprised at the flood of business cards that will come your way when you put this in action at your future networking meetings.

Recognizing A Job Well Done

When was the last time you praised your employees or contractors?  Hopefully, you’ve developed the good habit of frequently praising your team members, and if you haven’t, you’re certainly not alone.  Most of us do not get enough praise, so there’s a strong likelihood there’s room for improvement when it comes to recognition of a job well done in just about every workplace.  Here are some tips to praise more and help your workers flourish.

A Bias for Negativity and Criticism 

Our brains are designed by evolution to feel the emotions from negative interactions, including criticism and especially threats, in an exaggerated fashion when compared to feeling the emotions from positive interactions.  When we spotted a saber-toothed tiger, the brain that noticed and overreacted to the tiger by running away was rewarded with surviving.

That evolutionary trait doesn’t translate very well in the work environment we are in.  It takes a larger quantity of positive interactions versus negative interaction to just keep us at a neutral baseline of emotions.  And studies show we perform better when we are happy and positive.  So that’s why recognition is so important in a thriving workplace.

Dos and Don’ts

Here are some guidelines to help you deliver the most effective recognition in your workplace:

1. Be as specific as possible. 

Praise a specific task or interaction when possible rather than generalizing.

2. Direct the praise to a task or effort without listing personality characteristics, especially when you’re giving negative feedback.

For example, saying “The report was creased and had ink blotches on it” is better than saying “You are sloppy.”

3. Be timely in your praise.

Don’t wait a whole year to unload praises and criticisms on an employee.  Let them know where they stand on a frequent basis, and if possible, praise them right after they do something great.

4. If you need to give negative feedback, sandwich it.

The sandwich refers to feedback that is first positive, second negative, and last positive.  It’s important not to end on a negative note.  A sandwich would go like this:

“Jim, I appreciate how hard you worked on the Cole case.  You put in a lot of hours and showed dedication.  In the restructuring section, I would have liked to see you ask for help earlier in the project.    It would have avoided the delay we have now.  The section on asset disposition was terrific; you really know your stuff in that area.”

5. Always give feedback in private.

It’s important to honor a worker’s privacy when it comes to performance appraisals and even daily or weekly feedback.  If your employee is in a cubicle or other non-private area, you may need to find a place that is more private before you give feedback.

6. Never send negative feedback via email.

It can be really hurtful and is not appropriate at any time.  If a face-to-face meeting is not possible and it just has to be handled right away, then pick up the phone.

7. Use examples.

When giving positive or negative feedback, give several examples of what’s right and wrong so the employee will learn faster and understand better what is expected.

8. Be supportive.

You are on the same team; to grow the company.  The relationship should be supportive and not adversarial.

9. Explain the impact of actions.

Help the employee understand the downstream ramifications of their actions.

10. Encourage future behavior.

Use phrases like “I’d love to see you do more of that.”

Praise your team more often, and when you do, try these tips to watch your employees shine even more.

Seven Ways To Wow Your Clients

One of the main reasons clients leave is because they feel ignored.  The cost of ignoring clients is high; you have to do more marketing and replace those clients when they leave.  The antidote to this is easy:  just stay in touch more with clients, and let them know you care about them and their business.  Here are seven ways to stay in touch with all your clients and especially your long-term customers.

1. Pay a compliment. 

Sometimes when we’re in an “all-business” mode, we forget the simple things.  Take a minute to look around and find something to compliment your client on.  What have they done to support you?  What are they a natural at?  What traits do they have that you admire?  Tell them; they will appreciate it because it won’t be expected.

2. Rejuvenate your service with long-time clients. 

Recall the first week that you signed a new client.  You were both excited about beginning your relationship, and your service was likely top-notch.  Now take a look at the service level of clients you’ve had for a while – for months or maybe even years.  Is it the same?

If not, consider putting the spark back into the relationship!  Long-term clients deserve a higher service level than new clients; yet it’s often the other way around.  Take a look at what you can do to spice up your service level, whether it’s returning calls and emails faster or delivering the work earlier as a surprise.  Your long-term clients will appreciate it and know that you’re making an effort not to take their business for granted.

3. Acknowledge referrals quickly.

Clients that pass you referrals are taking two risks when they refer you: 1 – that you will do a good job, and 2 – that their friend will like you.  Help them feel like it’s worthwhile by responding quickly to the referral as well as acknowledging and thanking your client for the referral.

This is best done by a thank you card or a phone call.

4. Send a newsletter.

Keep clients informed of tips, discounts, new services and products, and events with a newsletter.  There are many ways to create a newsletter, and the most important aspect is to make sure it’s as relevant as possible to your clients.

A newsletter does not have to be elaborate or time-consuming.  At its simplest form, it can consist of a single, short article.  As you further develop it, you can add in components such as a brief company description, a quote, a testimonial, an events calendar, a customer spotlight, a greeting, additional articles, a poll or survey, and special offers.

5. Celebrate birthdays and/or anniversaries. 

Everyone loves to have their birthday acknowledged.  Send a card to your clients in their birthday month.

The best birthday cards are just that, real birthday cards without company logos or sales pitches.  If appropriate, consider a surprise twist on the birthday theme:  send cards to your client’s kids, spouse, or pets.

Another great twist to acknowledge clients is to send an anniversary card on the date they first started doing business with you.  This is a great option if you don’t have clients’ birthdays recorded.  And it’s a great surprise because clients do not see it coming!

6. Offer longevity or loyalty discounts.

It’s common practice to offer new clients discounts.  It’s less common to reward loyalty.  Give current clients better breaks in your prices than new clients.  This incentivizes clients who already like your products to buy more.  The more they buy, the more likely they are to keep doing business with you.

You can also surprise long-time clients with periodic bonuses and gifts.  Don’t do it too often, because it will be expected.  For best results, the bonus should come completely out of the blue.

7. Express gratitude.

Say thank you to current clients every chance you can.  Thank them for their business.  Thank them for their loyalty.  Thank them for paying their bill on time.  Thank them for being easy to work with.  Thank them for being flexible.  Do this by sending cards or emails for no reason other than to thank them.

These positive interactions with your current and long-time clients will strengthen your relationships with them, help you say what’s often not said enough, and improve your client retention.

Five Bottlenecks To Avoid That Stump Your Business Growth

As a business owner, you have likely acquired many skills and are wearing many hats in your business.  Although admirable, your versatility can often lead to slower growth for your company.  This happens when you become the bottleneck.  Here are five places to check to make sure you haven’t become the bottleneck in your own business.

1. Managing everything.

It’s definitely good to keep tabs on everything that’s going on in your company, but once your company grows, you may find yourself inundated with information.  Instead, try managing by exception.

You don’t really need to know everything that’s going on in your company; you really only need to know when things do not go smoothly, or when there are exceptions.  Design a set of management reports that allow you to see these exceptions easily without having to wade through a bunch of information.  This will save you time and help you focus where your expertise and skills are needed most.

2. Doing too much production.

Probably the most common small business mistake is working in your business instead of on your business.  If you’re still generating billable work or working too much in production, it should be work that no one on your staff can do and work that requires a very high skill set.  Otherwise, it should be delegated to staff.  And if you don’t have staff, then they need to be hired.

3. Not doing enough marketing.

As a business owner, you are the key person that will be bringing in business, forging partnerships, and creating new opportunities for revenue.  If you spend your limited time doing other things, marketing often goes undone.  Not marketing enough can dry up the pipeline, cause cash flow problems, and get a company in trouble really fast.

4. Being the only one who knows how to do something.

When employees have to wait on you to show them how to do something, you can easily become the bottleneck in the process.  As you train each employee, do it only once by writing procedures for the task as you train.  That way, you never have to train anyone on that task again.  The newly trained employee can show others, and you can be out of the loop, freed up for more important things.

5. Having to review and approve everything your employees do.

A great employee is one who is empowered to make as many decisions as possible without further layers of supervisions getting involved.  Often, a decision can be “cookbooked” so that the decisions can be pushed down the lower layers of management.  Take a look to see if any of the decisions that you are making can be documented and pushed down so that you don’t have to get involved.  That way, your employees will have the right balance of authority in order to do their jobs.

How did you measure up on these five high-bottleneck areas?  When you can clear up the bottlenecks in your business, your firm will be able to grow even faster.

Ten Things You Might Not Think To Delegate But Should

Just about everyone suffers from a lack of time to do all the things they want, or even need, to do in their business.  One of the solutions to freeing up your time is to delegate.  The question is, what are the most effective tasks to delegate?  Here are ten ideas for you to consider (or reconsider) to free up your valuable time for more important things.

1. Social media.

We didn’t even have social media ten years ago, but now that we do, it can be a major investment in time.  Some companies ignore it completely, not wanting to open that can of worms, but done well, social media can have a great payback.

Rather than ignore it or take up your important time, turn it over to an intern or recent college grad who probably knows more about it anyway!

2. Grocery shopping.

You might think this is only for rich people, but it’s simply not true and very cost-effective.

Grocery shopping is a personal task, but time doesn’t distinguish between work and personal; it keeps marching on.  Set up a grocery list and find someone who wants to work part-time (your housekeeper might know someone).  You’ll be able to free up several hours per week, plus you’ll likely be helping someone who needs the money.

The money you pay to your shopper is not a business expense.  Instead, they may be a Schedule H employee, so you’ll need to keep your books separate or alert your accountant.  Also check on any liability issues with your insurance company if they will be driving on your behalf.

Once you get past a few small setup hassles, you’ll love this.

3. Your email.

How much of your email could be handled by one of your employees?  Set up separate emails by function and not by people so that your employees can take over more of this ever-growing task.  Anything that you respond to the same way over and over again can be drafted in a procedure.   Employees or a virtual administrative assistant can be trained on what to send to whom.

4. Training employees.

Once you get one employee trained, that employee may be able to train additional hires, freeing you up from having to do so.  Well-written procedures will go a long way to reduce training time, and even writing procedures can be delegated to the right person.

5. Vendor research and purchase.

Need to find a hotel to host an event?  Or a webinar company?  Or a project management system?  All of these items require research to find good vendors, and as business owners, we may tend to do this ourselves when we can write up a few guidelines and give the task to a capable employee who would enjoy researching the topic and writing up some options for you to review.

6. Hiring.

Hiring can be one of the most time-consuming tasks of all.  I’m definitely not suggesting delegating the final decision on hiring, just the search process.  I’ve heard of business owners who delayed hiring because they froze at the sight of a 6-inch tall stack of resumes they had to go through.

It might pay to hire an agency to do the screening for you so that you are presented with only the finalists.

7. Bookkeeping.

Bookkeeping is also one of those time-consuming tasks, with two added challenges:  everywhere you turn, there are deadlines and regulations, plus it requires special skills that need updating frequently.  All of this screams to be delegated when possible.

8. Sales.

When you first start your business, you are generally the only one selling.  To get it off the ground, you eventually need a team of people to help you sell your goods and services.  As your sales team gets better and better, you can delegate larger and larger sales opportunities to them.  Who knows, if you’re not natural at sales, you may have employees who are better at this than you.

9. Writing.

Writing can be extremely time-consuming for some people.  Great writing requires a long learning curve, so if writing is not a core skill for you, you may want to look around for someone you can delegate or outsource this task to.  This includes things like writing procedures, web sites, job descriptions, marketing copy, proposals, and even something as small as thank you notes.

10. Calendar scheduling.

All that back and forth phone tag, email tag, postponements, cancellations, and other scheduling challenges can be delegated to free you up for making even more appointments.

Your time is incredibly valuable, and the only way to make it more valuable is to accomplish increasingly valuable tasks that only you can do while delegating the tasks that other people can do.  As a general rule, anything that is not in your core skill set or core business is fair game for delegation.  If someone else can do it faster, then it’s fair game for delegation.

Think about what you’re spending a lot of time on (and possibly spinning your wheels at the same time).  This is a task that can possibly be delegated, so oyu can free up your time for more important things.

You might not think you are in the business of pleasure, but we all are, to one degree or another.  If we don’t give our clients a great experience, they’re not likely to come back.  That’s why we can learn so much from the entertainment industry, even though we might not be in it directly.

Pleasing Clients

From the day a prospect calls you, emails you, or enters your shop, what do they see, hear, feel, taste, and smell?  Is it pleasant?

•  In a movie theater, the smell of popcorn is tempting as you take your comfortable seat and watch previews, engaging you while you wait for the start of the movie.

• In a spa, you are treated to snacks and drinks in a comfortable robe while you wait for your session.

• In a restaurant, you are served drinks, music, and appetizers while you enjoy the company of your friends and family.

There’s no reason your customer experience couldn’t be as enjoyable, even if you are a dentist, a doctor, a lawyer, or a professional that’s associated with a somewhat unpleasant service.

Your Company Experience in Surround Sound

The first step you can take to enhancing your prospects’ or clients’ experiences is to map out all of the interaction points they have with you.  Your list could look like this:

•  Website

• Phone call

• Office appointment

• Email

• Billing

Or this:

•  Walk-in to store

• Employee greeting and interaction

• Sales at register

• Charge on credit card statement

• Thank you note

Make a chart like the one below for each touch point and fill in what you think your customer may experience with you at each point.  It’s perfectly OK to have some that won’t apply; I don’t know of any technology that will get your email to smell!

Touchpoint Sight Sound Touch Taste Smell
Walk-in to store Merchandise Loud rock music Fabrics Refreshments Lavender

Employee greeting Well-groomed Employee wearing Pleasant, Products
the sale item not pushy   Drinks are offered  
   
Phone call Voice mail that Automated voice N/A N/A N/A
is not initialized

Office appointment Lobby with awards Calming standards Fabric of chairs Refreshments Cinnamon
and prospect kits piped in
rather than magazines

As you review your chart, are there any areas in which you could improve?  The nice thing about charting it out is that it organizes it for you so that any weaknesses or strengths pop right out.  The ones highlighted in yellow could be improved!

Where you have touch points with limited sensory impact such as email, phone, and billing, it is important to make the most of the senses you do have access to since they will be amplified.

If you feel like you cannot be impartial or simply don’t know what your customer experiences, you can hire a mystery shopper to provide an objective report of your customer experience.

A Movie with Great Reviews

Your client already has a movie going on in their mind about what it will be like to do business with you.  Your job is to impress them with an experience they won’t forget, and you can do it in any situation, no matter what business you’re in.

Examples:

•  Dentists:  One of the worst parts of going to the dentist is hearing the sound of the drill.  Pass out iPods and headphones with a choice of music styles to drown out the unpleasantness.

•  Restaurant owners: If your customers have to wait for a table, hire a mime, clown, or performer that can keep them occupied and make the wait time go fast.

•  Plumbers:  Leave behind a clean house and scented oils for the kitchens and bathrooms.

•  Retail shop owners:  Heat up a pinch of cinnamon in your microwave to have the whole store smelling like an apple pie or some scent that coordinates with your merchandise.

If your clients call you by phone rather than see you in person, you can script a pleasant greeting for your employees to memorize.  For clients on hold, give them something memorable to listen to such as a poem, jokes, or unusual music.  Even with email, you can create a great signature line that appeals to your clients, and of course, craft a message full of gratitude and compliments.

When you can wrap an excellent experience around the products and services you sell to customers, your word-of-mouth will spread, saving you time and money.  Think of what will work in your industry, and give your ideas a try.

Life Beyond The Profit & Loss Statement

Each month, you may anxiously await the reports that provide the numbers that help you manage your business.  Revenue, net income, total expenses, and payroll costs are just a few of the items that you may be monitoring on your profit and loss statement.  Those numbers will help you meet and improve your business goals, but the question is, what numbers are you using to determine if you are meeting your life goals?

It might be fun to come up with a few lifestyle ratios to help you measure and move toward your personal goals.  Here are a few for your consideration:

Passive vs. Active Income

If you’d like to work less as time goes by, then you’ll want to create your passive vs. active income ratio.  Make a list of all of your sources of income (not just business) in a spreadsheet.  You might have interest income, rental income, and investment income along with your business income or salary.

Then write down how many hours you spend working to earn each type of income.  For interest income, it is likely to be very little.  Investment income will only include the time you take selecting your investments and managing your portfolio. If you are active in your business, this will be the lion’s share.

Income is passive if you spend almost no time earning it.  Income is active if you spend time earning it.  (These definitions correlate to your time spent, not the IRS definitions.) Put the income in the appropriate column, passive or active.  You can allocate if necessary.

In the example below, this person is well on their way to retiring.  They also might question why they are spending so many hours working so hard for a fraction of their monthly income!

Income Monthly Hours Passive Active

Interest Income $5,000 0 $5,000
Rental Income $6,000 2 $6,000
Investment Income $20,000 1 $20,000
Business Income $10,000 167 $10,000
Totals $41,000 170 $31,000 $10,000
Passive/Active ratio 76% 24%

The “aha” comes when you see the numbers.  The numbers often drive people to action.  You might decide to be more intentional about moving your income to passive sources so you can do the things you want to do.

Leveraged vs. Unleveraged Revenue

Leveraging your business revenue is a way to work less while making more money.

Measuring leverage is business-specific.  Examples of revenue that are not leveraged include seeing clients one at a time and selling hours-for-dollars services without a staff.  Revenues that are partially leveraged include group programs such as classes and events like webinars and conferences as well as hourly consulting that your staff performs with your limited oversight.  And revenue that is fully leveraged includes product sales.  Once the product is developed, it takes little incremental time to sell (unless you’re in retail).

Here’s an example, assuming this business owner has a staff of five people.  Both hourly consulting and training classes are partially leveraged because the business owner spends time teaching, consulting, and supervising.

Revenue Leveraged Unleveraged
Book sales $500,000 $500,000
Hourly consulting $3,000,000 $2,500,000 $500,000
Training classes $2,500,000 $1,500,000 $1,000,000
Total $6,000,000 $4,500,000 $1,500,000
Ratio 75% 25%

If your revenue streams are flexible, you can work on moving more of your business income over to the leveraged side.  To create more leverage in the example business, the owner could sell or develop more products, hire another teacher, hire an additional consultant, and/or hire someone to review the consulting work of the employees.

Days Off vs. Days Worked

This ratio measures how much time we are able to spend away from the office.  It’s simple to compute, and you can estimate it if you don’t track your time.

Assuming a 5-day work week, there are about 250 working days in a year, not including about 10 holidays.  Estimate the numbers of days you were off, and divide by 250.  For example, if you took 5 1-week vacations from work last year, that would be 25 days, resulting in 10%.  This assumes you worked the rest of the year.

Your Lifestyle Goals

What’s on your “bucket list?” (This is a list of things you want to do in your lifetime before you die.)  Figure out the metric that will get you thinking about doing your dreams sooner rather than later.

You can have fun with metrics and ratios in and out of your business.  Here are some more ideas to think about:

• The number of customers you have that really fit your ideal client and how many more you need to go.

• How many countries (or states) you want to visit each year vs. how many you’ve already visited.

• How many volunteer hours or dollars you spend vs. how much more you like to.

When you put your goals into numbers and on paper, they seem more real and achievable.  You can get an “aha” just by computing these ratios.  Hopefully, life beyond the profit and loss statement will get you closer to your dream life.

Are You Fully Supported In Your Business?

Whether we run a large company with dozens of employees or run our own solo business, we rely on a support team of vendors, customers, employees, contractors, and other associates that help us carry out our business goals.  Here’s a fun exercise to discover the strengths and weaknesses of your business support team and how you can increase and strengthen the support you have.

Take out a blank sheet of paper, and draw a small circle in the middle.  Write your name in the circle.  This represents you.

Draw a little larger circle next to your circle.  Write your employees’ names and major functions in this circle.  Draw a similar circle for contractors’ names and functions.   If you have partners and/or affiliates, include them in a big circle.

Draw a small circle for your five largest clients, and write their names in the circles.  Draw another small circle for your five largest vendors, and write their names in the circles.

Draw one more circle for your business mentors and coaches, and write their names inside the circle.  If you have any more major groups related to your business, draw them now.

These circles represent your business and all of the people you rely on to get your job done.

Now, think about what groups you belong to that relate indirectly to your business.  It could be a professional association, a licensing agency, or a networking group.   Make large circles for each of the groups you feel connected to, and write some of the key names you know that are part of each of the groups.

Add a few more circles in the same way if you have more business associates to list or other groups that you didn’t add above.  If you want to, you can also include your personal support team:  the nanny, cook, gardener, esthetician, wardrobe consultant, makeup artist, nail artist, hair stylist, nutritionist, personal workout trainer, butler, chauffeur, masseuse, travel agent, and water boy.  Okay, maybe listing the water boy is getting a little carried away.

The sheet should now represent all of the important people in your business that support you in one way or another.  It’s a lot, isn’t it?

Now is where the aha’s come in:

•  Take a look at your to do list and see if there are holes in your team that you need to fill.  Are there job openings or are you ready to bring in more support?  Mark the openings or potential openings with a yellow highlighter.

•  With a green highlighter, mark the people who are most positive and supportive to you.  You may want to let them know how much you appreciate them if it’s been a while.

•  With a red highlighter, mark anyone who is costing you more than supporting you.  It may be time for a change in team members.

•  With a purple highlighter, list the five people you most look up to and can count on for great advice.  These people should either have expert advice or be ahead of you in business.

We’ll stop here, but you can continue selecting colors to evaluate the relationship of the people in your circles.

When you take a look at your social circles, what do you notice?

•  Where are you fully supported?

• Where could you use more help?

• Where do you need to make some replacements?

• What else do you notice about your business network?

Make a list of action items you can do to strengthen your business support network.

This is a great exercise to allow you to consciously evaluate and improve the ever-important support system in your business.  When you have a great team, you can accomplish so much!