Accounting Services

I had a great meeting with the CEO of one of our client companies today. The meeting was to review the progress the company was making toward their business plan and financial projections. Now that we're half way through the year and June's financial statements are closed, it's a great time to dive deeper than we normally do on a monthly basis to see how things are shaping up.

We spend time asking lots of questions. Was our market forecasting correct? How effective has the new product positioning been? How do we see the last half of the year shaping up? Are there ways for us to improve the financial performance of the company? Are customers paying in a timely fashion? How can we improve cash flow? We ask these and lots of other questions to identify ways to improve the company's results.

But let me back up for a minute. The reason that we're able to compare actual results to their budget is because we created the business plan and projections in the fourth quarter of 2009. You know the old adage, "If you don't know where you are going, any road will take you there." Running your business is much the same. Taking the time to work through key strategic planning elements can go a long way to putting you on the right road. Executing the plan and monitoring your results can keep you there.

Lesson learned from the recession: parents stop spending money on themselves but are still willing to spend it on their children.

The New York Times recently published an article that features three small business owners who altered their companies focuses and have stayed afloat over the past few turbulent years.

Case study #1
A women's clothing store that started out focusing on hand-made sweaters and women's clothing (not cheap, but not too expensive) experienced a significant drop in sales in September 2008. Stores all around his began closing their doors and their empty display windows goaded the owner into action. What did he notice? Stores specializing in merchandise for children were still doing fairly well. So, he adapted, ordering baby blankets, toys and christening dresses. The result? He's happy to have his doors still open.

Case study #2
Meet a frame shop owner who knew things were going to get rough and began sending out gift certificates to the likes of interior designers, churches and schools. He noticed the main redeemers of the discounts were parents coming in to frame their children's artwork. Capitalizing on parents' desires to show off their kids' creativity now accounts for 25% of the shop owner's business.

Case study #3
Originally a copy store, Desktop USA has always had an adaptive business model, evolving into a shop that sold computers, accessories and could help with repairs. When business began to bottom out, the company started offering tutoring as well as service that teaches kids the ins and outs of the computers they are so attached to for social networking, gaming and homework. With the advertisement, "Can Your Children Build Their Own Computer? Let's Do It Together". Many parents have seen value in equipping kids with technical knowledge believing it will give their students a leg up on others in school.

Only time will tell if these ideas are true solutions for these business owners' woes. However, we can all take away the lesson that often times, adapting and evolving to our environments is necessary for our businesses to survive the bad and continually remain relevant to our customers.

As the Inc. piece points out, the freedom of not having to answer to shareholders, a board of directors or hundreds of employees can be a benefit of family operations. However, those closest to you are dependent on your success for their own success. For some, that means even more pressure. The best way to handle this situation is to...

"Keep solid books. By incorporating basic financial tools used by other businesses, including balance sheets and income statements that are prepared regularly for distribution among family members. By sharing and analyzing financial data, you can make your business more predictable, and thus more stable. If no one in the family has a knack for financial analysis, establish a relationship with an outside accountant. Over the long term, strong financial will be an absolutely essential tool."

Not only do you make profits and income more predictable, you avoid conflict that can arise when there are mistakes in bookkeeping or accounting that can cost you and other family members money.

Be sure to have those formal meetings we discussed earlier so your planning and strategy is clearly defined and everyone who wants to be a part of it, is a part of it. And don't be afraid to be formal. Heck, this is your company and being in business is a serious thing. Draft agendas, set firm times to begin the meeting and adjourn it. You will be more productive with the way you as well as others, use that time.

When your business is part of the family, family cannot always come first. By putting business first sometimes, you are actually putting family first.

And last but not least, while planning is key for the future. Be sure to always have awareness of the present and operate, both in terms of business and your role within your family, in the sense of today.

We're always emphasizing how important it is to have strategies in place to guide every tactical decision you make as you operate your business or company on a day to day basis. While we offer accounting services, organization assessments, part time CFO and part time CIO help, at the end of the day, Milestone Advisors is all about STRATEGY.

A thoughtful approach that addresses multiple aspects and seeks to achieve a goal makes your operations stronger and more prepared to handle anything that may come your way (whether that be anticipated or completely unseen).

That being said, take a look at this piece that identifies using a revamped marketing strategy as a way to stay strong when the economy falters.

"The key to competing strong in a weak economy is to remain visible and project an image of strength and stability. Customers have a heightened sensitivity to any sign of weakness, so resist the urge to dramatically reduce your marketing activities. To flourish in challenging times, you'll need to distill your marketing and public relations efforts into a powerful, concentrated mix that delivers a high level of visibility and impact on a limited budget."

Wise words. If you need help retooling and refocusing your efforts, I think you know where we'd direct you.

The reality is that fraud does exist in today's business environment, with potentially devastating effects. Uncovering and unwinding fraudulent activities in a company's financial accounting department can be very difficult and many times the business owner will not recoup their losses. How can a small business owner prevent and/or detect fraud? How can fraud be prevented in circumstances where one person is responsible for the finances? How can a business owner safeguard the company's assets?

There are a few steps that business owners can take to reduce the risk of fraud:

• Lock your valuables such as check stock, cash, signature stamps, and physical inventory.
• Segregate accounting duties such as check writing and signing, receiving and counting inventory, and depositing checks and reconciling the bank statements. If this isn't possible with your current staff, you might consider a part-time cfo, controller or bookkeeper to segregate the duties.
• Review third party back-up when authorizing transactions, such as reviewing original invoices before signing accounts payable checks.
• Perform background checks and/or check references on all employees and prepare performance reviews to monitor the employees activities.

Unfortunately fraud will always exist in the business world, but with the right business strategy the risk of fraud can be greatly reduced.

Post Super Bowl several discussions are bound to occur. Why the team who won was so deserving. What decisions were made by the opposition that led to their downfall. What the future looks like for the league. And inevitably, what everyone favorite commercials were.

My favorite this year was Miller High Life's spot that gave four small business owners a chance to shine and show off their humor. What a great idea! To begin with, this concept of buying a spot and advertising for another entity (let alone advocating for small businesses) generated more media attention and exposure than any of the other commercials did buy simply airing commercials during the big game. Because of the gesture, Miller Coors have probably solidified some passionate brand ambassadors for life.

Big business advocating for small business. We certainly don't see that a lot but when it happens, we should publicize it. I believe Miller Coors' efforts are proof that corporate America realizes that an essential part of our economic recovery will be small businesses launching, surviving, growing and thriving.

This is a truth we believe in at Milestone Advisors which is why we do what we can to extend accounting advice, facilitate the market research process, build product development business plans and equip thought leaders to bring to market new products and services, fulfilling their passions and dreams.

So, we tip our hats to Miller Coors and their Miller High Life commercial. We hope to see more advocacy for small business in the future.

Running a business is hard. Developing an original idea and building an organization upon it requires passion, dedication, time and creativity. Not only that, those four intangibles must flow forward continuously, providing you with a steady stream of inspiration and motivation. This doesn't leave a lot of time for all the additional nuts and bolts of running a company including hiring, firing and communicating with employees, managing vendor relationships and (many entrepreneurs least favorite task) balancing the books and projecting future growth.

Odds are, you don't have time handle all your company's finances. Maybe you have time to cut checks and perform a daily assessment of your bank account. Maybe you have time for more than that. The bottom line remains, more often than not, entrepreneurs are idea people, not numbers people.

Even if they do enjoy calculations and percentages, odds are they don't have the level of expertise that will allow them to compare their company to current market research and trends, build a sustainable financial model and project for the future (creating reports that enable you to make decisions that will ultimately allow your company to grow).

Many startups and small businesses can benefit from using the services and expertise of a part-time CFO. They can provide you with important information and advice to aid in decision making that leads to growth, avoid numerous business accounting pitfalls and aid in problem solving efforts positioning your operations for as much success as possible.

As we look ahead toward the coming year and beyond, we find ourselves full of optimism. By listening to our clients and responding to their evolving challenges, we have recently expanded our service offerings, some of which are already beginning to see traction. Several recent engagements have stemmed from our ability to supply clients with more functionality and expertise in additional areas and as their needs grow, we are able to meet and fulfill each one.
 
We’re also beginning to see signs that the economy may be turning. The credit market is beginning to loosen and over the course of the next year, we expect to see lenders relax their lending practices to provide small businesses with the working capital they need to flourish. Additional factors, such as manufacturing and factory orders also seem to be on the upswing and unemployment rates have begun to stabilize. All good news!

While the above are indicators that, as a nation, we’re embarking on the proverbial road to recovery, we still proceed with an element of calculated caution. Many operations have been weakened by the events and turmoil that surround the past few years and we anticipate bumpy roads still ahead of our clients and in turn, ahead of us as well. However, this also provides us with a great opportunity to help you navigate out of these difficult times, demonstrating our value and making our services more indispensable than ever before. Our desire is to become your long-term partner, assisting you in whatever aspect of business you may need advice.

As you look to 2010 and even further, what challenges or successes do you anticipate for your company? Is it time to reassess your business strategy? To revamp an old marketing strategy or build a completely new product development strategy? Maybe you're taking a look at your old accounting practices and finding inefficiencies you'd like to change. Whatever your situation may be, we can help.
 
We want to leave you with one word that embodies Milestone Advisors’ vision for 2010 and that is opportunity. As entrepreneurs, you know how to look for opportunities in every situation. We look forward to seeking it out as well as help you find and capitalize upon it.

When first starting a company, figuring out your brand identity is a key step in the process. You need to have a clear vision of who you are, who you want to be in the future and what your desired goals are as a part of a business strategy plan. A clear BRAND identity is also essential in securing bank financing and investors for an endeavor. The people lending money need to feel that you're comfortable with who you are and have clear goals set, using that identity as a foundation.

It may be useful to first visit what the word brand actually means to you. Seth Godin defines it as:

A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another. If the consumer (whether it’s a business, a buyer, a voter or a donor) doesn’t pay a premium, make a selection or spread the word, then no brand value exists for that consumer. 

A brand's value is merely the sum total of how much extra people will pay, or how often they choose, the expectations, memories, stories and relationships of one brand over the alternatives.

What do you think?

Manufacturing is an integral part of our nation's economy. I think this can easily be forgotten as innovation in Silicon Valley continues to grow. And let's face it, any tech product or service, born of California is innately sexier and more interesting than the plant that manufactures the table my cup of Kona blend coffee currently rests on.

But that plant, highlighted in an Indy Star piece last week, has recorded a 10 percent growth in sales over the past year. Legacy Furniture Group is forging ahead, and their success is indicative of many other manufacturing operations across the country. The piece sites research from the Associated Press Economic Stress Index, a monthly analysis of the economic state of more than 3,100 U.S. counties, that shows  manufacturing counties have outperformed the national average since March.

Proving that, advances in technology may be more fun to discuss over drinks but much of our country's wealth and much of what could lead to a full economic recovery may still lie in manufacturing.

However, along with many other industries, manufacturing operations often struggle in areas of business planning or business strategy development. The industry's current position makes it an ideal time to analyze their financial models or get help with accounting. These manufacturing operations put people to work and help the economy function. They must be sure their processes and strategies are poised for success as they continue to proper slowly but steadily, in turn, putting America back to work.

I realize it's after Thanksgiving but I have always viewed the entire holiday season as a time to give thanks. It's the only time of year we make travel arrangements and put our every day lives on hold to spend a significant block of time with the people we grew up with, the people who have helped us shape our characters. For some reason, when we around these people it causes us to reflect. Maybe it's because spending time with them reminds us of our past, our roots and we naturally compare or contrast that to who we have become and the lives we have created for ourselves in the new place we call home, the people we are during the 9-5 work week. The holidays are a wonderful time because they bring us all together and coming together with these key people in our lives causes self reflection.

Well, it's not quite Christmas but a little past Thanksgiving and I have been doing some self reflection, comparing the person and professional I had hoped to be, thinking about business and our country's economy.

I think there is a lot to be thankful for, I have landed at a company staffed with intelligent people whose driving mantra is to help small businesses and entrepreneurs help themselves. Milestone Advisors seeks to assist those who may lack in specific areas of expertise by providing them with an opinion backed by years of C-level experience without the high salary of employing someone at that level. Our purpose is to serve the small business community in any are where they may require strategy beyond their experience including part time CFO service, help with accounting, marketing strategy or even a technology plan/architecture.

There is nowhere I would rather be than with a firm whose work bolsters the local small business and economy, in turn, doing their part to contribute to our nation's economic recovery. Much of which will rely on small businesses and innovation to create new markets, products and to support them, new jobs. I am grateful to be a part of Milestone Advisors, to be a part of helping people realize their ideas, form companies and experience success with their operations.

Now is the ideal time to look back as a small business owner and see how far you've come. Does your current vision still match up with what you now work towards? Have you achieved what you thought possible by this time? Has anything changed in your approach? Do you need to revisit your strategic plans and make adjustments for the coming year? Take some time to think about your vision for your company and compare it to what has become reality. And don't forget to take some time for a bite of pie and to take in some classic lines from It's A Wonderful Life.

Happy Holidays.

I'll trade you this accounting advice if you give me that office remodel. I'll provide you with part-time controller services if you give me IT support.

With the present economic state it’s no surprise to hear that companies are seeking non-traditional means of distributing their own goods and services. Say you’re a consumer electronics retailers with extra inventory – there are now ways to unload stock and you don’t have to chalk up to a complete loss.

You can do so privately of course, in one case I am familiar with, a PR firm offered their publicity services to a Web design and Internet marketing firm in exchange for a new Web site. However, there are now official barter exchanges. Several Web sites, featured in a recent piece by Inc. magazine, promote online barter exchanges to encourage mutually beneficial trades for organizations.

It could be a good option for your small business. Be careful though, the piece warns that the systems that have been set up are far more effective when you are bartering with and for services than they are with actual goods.

It’s an option and trend that’s worth considering.

We’re growing by leaps and bounds, adding both staff and offerings to our current suite of services.

We will continue to offer consulting in part-time accounting and corporate finance; however, we can now supply clients with expertise in technology and marketing to continue to improve and enhance their overall business strategies.

Arriving at the decision to expand our services has been a natural progression. Over time, our clients had begun to ask additional questions concerning functional areas of running a business other than accounting and finance. They ranged from such basics as how to draft a marketing plan to more complex issues addressing how technology strategies should be handled or tweaked during time sensitive stages such as early start ups or mergers and acquisitions.

As a result, we have developed a comprehensive list of service offerings that now boasts market research and analysis, management and operation services, human resources and technology strategy. Our goal is to become a ‘one-stop-shop’ for Indianapolis strategic planning. It's our desire to become the premier go-to resource for the small business owner or entrepreneur seeking senior level expertise to help grow their operations and become profitable.

To support these expanded services, we have made valuable additions to our team that include seasoned experts who are veterans in various business disciplines. We couldn’t be more thrilled about the impact they will have on Milestone and the goals they will help our clients achieve.

As we grow our company in terms of both capability and size, we look forward to continuing to nurture and grow entrepreneurial ventures as well family-owned and small businesses throughout the state of Indiana and beyond.

Some small-business owners in need of accounting help to balance their books and guide them out of a financial black hole are renting CFOs rather than hiring them. The strategy comes at a time when the deep recession has forced small companies to look for money-saving alternatives that can yield good returns yet avoid substantial overhead costs.

"They're looking for ways to streamline and be efficient as they can," says Glenn Dunlap, a co-founder of Milestone Advisors LLC, a small-business consulting firm in Indianapolis that provides CFO services.

The average annual salary for a full-time CFO in a small- to medium-size businesses ranges from $94,250 to $175,750, according to a 2009 Salary Guide by Robert Half International Inc., a Menlo Park, Calif., staffing services firm that serves the accounting and finance fields. Renting one can be significantly cheaper.

Entrepreneur Bob Compton, founder and chief executive of Vontoo Inc., an Indianapolis-based voice-messaging company, says he has rented CFOs for six companies he has started or been a lead investor in. "To hire a CFO in the early-going is a waste of money," Mr. Compton says. "It's much better to invest that money in engineers and sales people."

For Vontoo, he pays $5,000 a month for the CFO's strategic advice, bookkeeping services and accounting expertise. "It's a tremendous cost-saving," he says.

Click here to read the full article or follow the links to our webpage to learn more about how Milestone's business consultants can complement your management team in all aspects of your business.

 

When discussing the start-up of a new restaurant and bar with one of my clients, he said to me, "My biggest challenge is that from the minute I open the doors I have to start figuring out who's stealing from me." We might pass that off as typical for a "cash" business where employees have open access to the company coffers. But what about other non-cash businesses? Do they have the same concerns? What about your business? Are you susceptible to theft or fraud?

The Indianapolis Business Journal recently ran an article highlighting one company's misfortune. It's a story about the Dodson Group whose CFO plead guilty to over $422,000 of fraudulant charges and wire transfers. Here are some excerpts from the article:

The August 24th edition of the Indianapolis Business Journal featured Milestone Advisors' client, My Health Care Manager. The company's CEO, Alan Stanford (pictured here), began working with Milestone three years ago when planning the start-up of the new business.

My Health Care Manager helps older adults achieve better management and control of their total health care, longer independence and greater peace of mind for themselves and their loved ones.

Here's an excerpt of the article about their recent success:

Six years ago on August 1, 2003 Tom Gabbert and I founded an Indianapolis consulting firm based on a growing need we had identified in our business community – many small businesses and start-ups we had come across were in need of expertise but didn’t have the necessary resources to gain access to this essential, but seemingly elusive knowledge.

The bottom line is that many small businesses and start-ups haven’t assembled the senior management team to navigate through the business’ early stages. In many cases, they don’t need a full time C-level executive. Instead, the companies need access to strategic level advisors who can help organize the business and keep it moving in the right directions.

We thought, “why not fill in these gaps for entrepreneurs by providing a service to meet their needs, regardless of what stage they happen to be at?” And with that idea, Milestone Advisors was born.

Today, our original two-man operation now includes a third partner, Jeff Good, has grown to 25 employees and has helped over 350 Indiana companies meet their goals, deal with obstacles and most importantly, grow. Originally opened and billed as a ‘Rent-a-CFO’ shop, Milestone now boasts a comprehensive list of strategic-level services covering most functional areas of business from market research and analysis, to management and operations, and finance and accounting services – all targeted to provide assistance to our clients as they grow and put their plans into action.

We are proud of what we have achieved, and nothing gives us more satisfaction than seeing our clients succeed and thrive. Tough economic times have forced all businesses to examine their current models and operations. This has given us the opportunity to work with new companies at the strategic level and assist our clients in navigating these difficult and uncertain times.

As we look to the future, we hope to reach more companies with the desire to grow their businesses by helping them define their goals and map out clear strategic plans to achieve them.

Our passion has always been and will always be getting the best, most complete information in the hands of the decision makers for small companies and start-ups. These businesses, built out of passion and ideals, are an integral part of entrepreneurial and capitalist America. Here at Milestone, we will continue to do whatever we can to ensure they continue to survive and prosper.

We are grateful to all of our clients and staff for the past six years and we look forward to the next six years and hope they will be full of new challenges and even more solutions.

Cheers!

The Indianapolis Business Journal featured a few "Women in Technology" in this week's issue. We have been fortunate enough to work with Ali Sales Roach, the President of Compendium Blogware. Here's a portion of the article about Ali:

In an article released yesterday by the Gulf News, writer Verne Harnish lays out three ways that investing in your business accounting services can increase your profitability and cash. Here's a little of the article:

Determining how much money to raise at any stage of a business is not always a crystal clear decision. There are many factors that come into play: how much money will we need until we're cash flow positive; what valuation will we receive today; if we only raise a portion of our need today, will we get a better valuation in the future; are these the right partners that can get us all the way through; do we think we can find "smarter money" down the road, are these the right terms and conditions and on and on...

CEO's are making decisions about what's best for the long-term viability for the organization balanced with the challenge of not giving up too much in return. As Yogi Berra would say, "It's 90% art and the other half is science." Or something like that.

The Wall Street Journal recently ran a story about Blowtorch Entertainment Corp, a San Francisco based company that had big plans to distribute entertainment content across the net, is nearly out of business. How could they raise $50 million last year and nearly be out of business? The answer is because their investors, largely hedge funds, are themselves going out of business or have had to pull back severely.

“Our business plan was predicated on equity and debt,” Blowtorch Chief Executive Kelly Rodriques said. “Our debt effectively went away while we were working on our first couple projects and we just slowed everything down. We’ve kept it alive, but haven’t been doing any investing.”

Blowtorch’s story is an unfortunate case in which the company’s fate belonged to financiers instead of the leadership charged with executing the vision. Click here to read the full story at WSJ.com.

How can you avoid a similar fate? When our business consultants work with our clients on fund raising activities and the development of a corporate finance plan, we first build financial projections to try to determine how much capital is needed and what structure is best suited for the business. We also consider the condition of the market, the strength of the investor(s), the cash burn in the business, and confidence that management has in the execution of its strategic and business plans.

We would also typically steer our clients away from "committed" or "pledged" funds and instead opt to bring the money into their account or into an escrow fund. This should help avoid a situation like Blowtorch that thought it had $50 million when it in fact had something significantly less and was unable to execute its plans.

If you are wrestling with these issues, contact Milestone Advisors, an Indianapolis consulting firm that provides management accounting, corporate finance, and business strategy services to CEO's just like you.