Remember a while back when we addressed the value of walking a mile in someone else's shoes to gain fresh perspectives that might help you run your business better? Well, it appears some CEOs have actually done this - as a recent Fortune piece highlights. The participants, Maxine Clark (founder and CEO of publicly held Build-a-Bear) and Kip Tendell (cofounder and CEO of the privately held Container Store).
And yes, just as we anticipated, these retail veterans found they gained a great deal from the experience. Spending time in someone else's realm, dealing with their daily challenges shook things up and while dealing with employee issues, product questions and in-store management issues, they found themselves continually stumbling across ideas and inspiration that they could incorporate into their own operations.
Here's a peek at a few of their takeaways:
Clark, for instance, appreciated how the Container Store acknowledges sales associates for a job well done with Post-It notes left on lockers. Kendell, meanwhile, liked Build-a-Bear's "Strive for Five" technique, which is designed to sell each customer five items. (via MarketingProfs.com)
True leaders know that real ideas must come from a variety of experiences, sometimes you need to take on something completely new to move to another level. Innovation comes from so many places, from crazy situations to mundane tasks, maybe even, from spending time working in a different industry.
To me, the above insight is part of the beauty and value that our Indianapolis consulting services team here at Milestone Advisors brings to our clients. We have worked in a variety of industries, been tasked with an array of projects. Outsourcing bookkeeping, we've done that. Providing market research forecasting for a new business plan or endeavor, we've done that too. What about building a technology architecture to streamline a company's work flow and make them more efficient? Been there. With or staff's diverse backgrounds, we've done it all which better equips us to advise and inspire. What can we do for you and your operations?
We discuss the importance of blogging and social media quite often. It should be a part of everyone's business plan and an even greater part of your company's marketing strategy. And while you can appoint one key person to handle the load, it's important you have diverse voices coming from all areas and levels of your company so the average reader gets a comprehensive look at your operations.
Yet explaining the importance of blogging, making sure others understand it and are willing (maybe even excited) to participate isn't easy. You should be prepared for it to be a long process, one in which you will need to be patient and regularly follow up with people. I have been charged with implementing a social media strategy here at Milestone Advisors and encouraging others to take part so we provide well-rounded information on all of our specialties (which include marketing, technology, outsourced bookkeeping and much more).
Here are some suggestions that might make the process a bit easier for you that I have learned through trial and error:
1. Take time to explain and be sure participating members truly understand the value of social media, what it means to your company, your customers and more.
2. Explain the technical aspects of the platform you're using. You will surprised at how many people don't adapt quickly to different software products. Carving time out to walk people through the steps, leading by example will save you time in the long run
3. Do some creative brainstorming as a group. Just explaining what blogging is and how to do it isn't enough. And leaving it at that can lead to your team members sitting in front of their computers with question marks in their brains and blank stares on their faces. Helping them talk through subjects they can write about a few times will help them to easily develop story ideas on their own.
4. Send them some examples of blogs you really like, whether that's because they are well-written, tackle pertinent subjects or are just fun -- giving your team examples will also aid in inspiration.
5. Continue to provide encouragement. You're asking your team to step out of their comfort zones and do something for the good of the company as a whole. A confident financial advisor or marketing strategy pro may be nervous about sharing their thoughts in an open forum like a blog, check in regularly with words of advice, tips or positive feedback. It will go a long way
Company blogs aren't easy to get off of the ground and they're not easy to maintain but I will say, they are more than worth the effort. They enable you to connect with like-minded businesses, leaders, enhance your brand and maybe, sell a little!
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.
It's true! They have a 95% success rate. I didn't believe it either at first. Yet it's an assertion backed up by a wealth of statistics.
A 2009 report by Elizabethtown College sociology professor Donald Kraybill. Studying several Amish settlements, Kraybill found failure rates ranging from 2.6% and 4.2%; interviews with loan officers, accountants and industry professions in other Amish regions yielded additional anecdotal evidence of closure rates significantly south of 10%.
How do they do it? The answer is rooted in their culture. In Amish communities, nothing is more emphasized or promoted than hard work. That ethic permeates not only daily chores but the companies they form, own and operate. The Amish also stress the importance of cooperation, relying on others' strengths where you may encounter your own weaknesses. And we're not talking about the kind of collaboration that takes place online, which so many of us rely on daily for business purposes. We're talking about face to face communication and team building that centers around tangible activities and challenges that can unite participants and capitalize on an individuals' best attributes.
Another defining aspect, Amish business owners have a solid understanding of their capabilities and more importantly, the things they excel at. They know what they're good at and don't try to push into realms they may not be skilled in. This inspires something corporations are constantly trying to garner:
trust and loyalty of consumers.
It doesn't hurt that the Amish tend to demonstrate humility, a quality that allows good leaders to grow into even better ones.
Many Amish businesses demonstrate great knowledge of business strategy and the accompanying concepts. They build strategies around concrete ideas, incorporate humility into marketing strategy plans and much more. Read the entire article
here.
What can you do to be more like the Amish? How can you incorporate their culture into your company's culture or your business strategy?
Here at Milestone Advisors we advise businesses concerning almost every aspect of running a company. We consult on product marketing plans, financial market forecasting, writing business plans to attract potential investors or simply taking a look at someone's books to see if they could benefit from outsourced bookkeeping.
Recently, there has been a shift in the tools we recommend for marketing strategies. Social media has come out of the blue and now dominates most marketing and business strategy tactics. One of these mediums, Facebook, a social networking site, has become a hotbed for not simply B2C outreach but B2B as well.
In his most recent
column, Fortune's Stanley Bing asks if this platform does society more harm than good. Even if you still plan on using the site as part of your social media strategy it's prudent to be aware of all the uses of Facebook as well as the different opinions being voiced about it.
He writes about Facebook as a place where the ugliest aspects of our worst high school nightmares come to life and fears that the worst perpetrators in this online environment will enter the business world and do immeasurable damage.
"In teaching social networking, virtual presence, aggressive electronic messaging and cold-blooded manipulation of group dynamics, Facebook is preparing young people to thrive in business life, particularly on the executive level. I’m just not sure it’s a future office space that I would want to live in."What do you think? Is this a business world you want to live in? What can be done?
BusinessWeek is asking this question of the big banks and their small business lending practices in an
article published a few days ago. With the major players taking responsibility in the recent economic collapse and their subsequent bailout, the government is asking for answers and checking up to ensure they're lending to 'Main Street' and getting small businesses or entrepreneurs the funds they need for launching a new operation or expanding existing ones.
Below are some of the status reports for the big guys. Hopefully, it will provide you with some insight as to which bank is best suited to extend the loan you need.
JPMorgan Chase made $2.1 billion in new loans to small businesses in the first quarter, the company reported in its first-quarter earnings release, or 21% of its goal to extend $10 billion in new credit to companies with under $20 million in revenue.
Bank of America loaned $19.4 billion to small and midsize businesses (those with less than $50 million in revenue) in the first quarter, the bank said in an Apr. 27 report.
Huntington National Bank, a regional bank based in Columbus, Ohio, and serving the Midwest, set a goal in February to increase small business lending by $1.2 billion in 2010.
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.
An advisory board can alleviate pressure from CEOs, management teams or founders. They can provide valuable insight and advice to grow your company or deal with challenges that develop along the way. A board can also hold a CEO accountable for decisions, a valuable check to have in place.
And the great part, you don't always have to take their advice.
Jim Bourdon, chief executive of Accounting Management Solutions has a
column in the NYT that address a decision his board of advisors helped him make and tips for putting one together that will benefit your operations. Here are some of the main takeaways.
HAVE AN OBJECTIVE The most successful boards are formed with a specific goal in mind.
BE OPEN TO CHALLENGES In addition to making sure that your advisors will not be mere rubber stamps, seek out those who fill knowledge gaps within your company or your own background.
TURN TO A NETWORK Search for advisors by taking inventory of your contacts who possess skills or expertise you lack, eventually settle on a ranked wish list of eight (most experts agree that small-business advisory boards of more than six are not productive).
PUT IT IN WRITING Though advisory boards are more informal than boards of directors, they should still be governed by written agreements. It is vital to consult with your lawyer before forming and working with your board.
PAY FOR THE ADVICE Your board members will not be in it for the money. For many, being a part of a board offers mentoring, networking and social opportunities that make the experience worthwhile. It is still, however, a good idea to compensate them.
After reading the column, I believe as your operation grows and becomes more complex, a board seems to be an intelligent tactic that will only improve your business. When building an initial business strategy or business plan structure, think about it.
Every company has a different approach to communicating internally. Meetings are used to discuss company issues as well as brainstorm to develop plans for clients and delegate responsibilities for the execution of said plan.
Getting together is necessary to discuss the latest market research forecasting, new financial models or a product launch plan. Yet, sometimes they simply equate to lots of talking, little doing.
Yet, when run effectively, meetings put everyone on the same page and foster positive relationships throughout a company as well as the resulting creativity that occurs when minds meet.
MarketingProfs offers actionable advice to run a meeting that doesn't waste your time or your clients' time.
• Set a clear agenda when you schedule the meeting. The best outcomes happen when everyone is fully prepared to discuss the topic at hand.
• Ask for full participation. Instead of letting one or two voices dominate the conversation, create a collaborative environment in which all ideas are welcome. "Encourage everyone to speak up," he suggests, "but respect those that require time to process what they're thinking by not putting them on the spot right away."
• Don't lose track of time. According to Stephens, you should set a limit—and stick to it. "When the time is up," he notes, "the meeting is over. If you didn't accomplish [your] goal you'll plan accordingly next time won't you?"
• Establish what each participant will do next. Make everyone accountable by distributing an immediate summation of each team member's responsibilities.
I would recommend adding an area to your business communication strategy or strategic plan that deals with internal interaction and meetings. Establishing best practices for regularly occurring meetings will foster positive communication and increased productivity.
Just starting out and setting things up like accounts payable and receivable? Simply trying to get a handle on things? You need to get some accounting help or get an accounting strategy in place. There are few basic things listed below from the blog
Less Everything that you can use as parameters to get yourself organized and off to a good start. We have two words for you:
sole proprietor.
- Keep it simple - This means sole proprietorship. Opting for this form of ownership means less complexity when it comes to communication, corporate filings and the IRS.
- Concentrate on building your business and not on the IRS. As a sole proprietor, the IRS will not even know you exist until after you file your first personal income tax return.
- Over 90% of small businesses fail or change ownership within the first five years. Plan your business to thrive but if it fails under a sole proprietor you simply stop doing business.
- How do you get paid as a sole proprietorship? Simply take the money out as a draw. No payroll taxes or quarterly forms needed. Most start ups lose money for the first several years, so keep your day job to pay your living expenses.
- After you pass the five year hurdle, then you can talk with a CPA about another entity type that might save you taxes. Again a simple bookkeeping entry transfers all of the business assets from the sole proprietorship into the new entity without any tax penalties.
We agree with the writers at Less Everything but don't want you to think that one size fits all when it comes to choosing a legal entity for your startup. While a sole proprietor can be a great fit for many if not most startups, keep in mind that there are many other things to consider such as having multiple owners in the business, potential liabilities, the need for investors (today or the near future), the nature of your industry or business, protecting your personal net worth, and on and on. Those entrepreneurs with business plans for small business startups can best get the legal and accounting advice they need to choose the right entity.
Help yourself out by getting great advice
and keeping it simple.
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.
Everybody is asking these days, "How can I get my customers to pay quicker in this economy?" Here are some things that some Indianapolis companies are doing with the accounting advice from Milestone Advisors' part-time bookeepers and part-time controllers:
1. Email invoices rather than mailing them. (You'll get the added benefits of lower administrative costs and becoming green!)
2. Offer discounts for Accounts Receivable over 60 days with an immediate payment.
3. Implement new policies that all invoices less than a certain dollar amount are to be paid immediately via credit card.
These are just some changes that can help your company's cash position that can be implemented quickly.
I often get asked why a part-time CFO or part-time Controller makes sense for an entrepreneurial company. The answer is simple, you get the expertise you need at a fraction of the cost. Most small businesses have many of the same needs to that of a large business when it comes to the finance and accounting function. The biggest difference is that they don’t need it on a full time basis (with a hefty salary and benefits).
At some point in the evolution of a small business, the business owner reaches the decision that he or she needs to get more from the accounting or finance function. Maybe they are feeling like they need better reporting / instrumentation. They may also be feeling the need to prepare financial projections to help them better plan for the future and understand the cash requirements of the business. Maybe it is as simple as feeling the need to prepare a week-to-week cash flow plan that they can follow when cash is tight. It is at this point that I see many small business owners make a classic mistake – they hire a full time person. While the needs are real, the job itself often does not require a full time person. I would suggest that business owners consider the idea of a part-time Controller or part-time CFO to fill the void. By bringing in finance / accounting experts on a fractional basis, a business owner is able to cover the entire spectrum of needs for the business in a much more cost effective manner.
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.
Do you cringe when the time rolls around to deal with your company's numbers? Do you have a vague or general understanding of terms like accounts receivable and payable, inventory and equity but if you needed to pull together a comprehensive analysis of all of them combined you might be lost?
Many managers and entrepreneurs who run their own businesses face this issue - an overall deficiency in basic financial knowledge that prevents them from fully contributing to any discussion that takes on a financial tone or deals with financial strategy.
It may be a good idea to try and increase your financial literacy - taking a course in corporate finance or asking someone who you trust and may be more financially savvy to mentor you. Another idea is to find others within the organization who may need to build the same skills, you may be able make taking a class a company-wide event (it won't hurt for everyone within your company to have a working understanding of these concepts).
The other option is to bring in someone who can offer that C-level expertise as a CFO. Renting a CFO can allow you to benefit from someone else's years of experience dealing with corporate finance, bank funding, financial forecasting and finance models - without the large price tag of hiring a full time executive.
Regardless of the solution you opt for, it's important to boost your financial IQ or bring someone else aboard who can help you do so.
I think by now my love for Inc. Magazine is well documented here. If you're an entrepreneur, a business person or a professional in any field, I think it's a must-read. With an abundance of advice and first person accounts of launching start ups, it's a perfect tool to learn how to begin, manage and grow a company. If you're on the employee side, what better way to excel in your job and current responsibilities than to understand all the various intricacies your boss may be dealing with on any given day. Reading Inc. can help you become an idea person, helping dream up innovation.
OK, rant over.
Inc. recently
posted three brief points from Eric Ries on why you should start a business now (and money isn't one of them). They are as follows:
Change the world
Make your customers' lives better
Create an organization of lasting value
If you are considering starting your own business, the above are all great and noble reasons. Just be smart as you attempt to 'change the world' - write a thorough business plan or business strategy before your launch, including a financial model. Strategy and planning are everything and when clearly defined, will ensure success.
Jeff Lantz continues to assert himself as a thought-leader here at Milestone Advisors. He's an integral part of much business planning when we're assisting folks in the start up phases. He's led companies on his own and contributes fresh insight daily. Want to get to know the guy who may be developing your business plan strategy?
Hobbies:
Jeff has two young boys who love sports, he tends to spend most of his free time coaching their respective teams. Never one-dimensional, Jeff also loves to water ski, snow ski, play softball and (for some reason) really enjoys kite surfing. Jeff tends to be a little bit of a thrill-seeker and would like to pick up wing suit base jumping as a hobby claiming, "it’s as close as you can get to flying without being in a plane." I'd rather be in a Boeing.
Favorite Travel Destination:
To Jeff, as with many members of the Milestone Advisors team, family is everything. So, any trip involving family is a favorite, but a beach with strong winds for kite surfing is an ideal spot.
Food he can’t live without:
Jeff will pretty much eat anything but it's the cooking process he really enjoys (when he actually has the time to do so).
Technology he can’t live without:
A general fan of many new technologies, Jeff likes all of what he calls the "new toys". I don't think he's ever seen without his iPhone or Mac.
Favorite read:
Like I said before, he like thrills. He typically turns to Tom Clancy, Dan Brown and John Grisham.
In his own words, why he does what he does:
"My role at Milestone Advisors allows me to work across multiple industries, advising people who specialize in all sorts of things and face diverse challenges. This keeps my daily agenda fresh and exciting. I love leveraging previous experiences to employ not just a financial view point, but an overarching strategy that accounts for all facets within an organization. Then I am able to see the impact of that employed business strategy on the small business or endeavor - something often lost when working with or for larger corporations"
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