I was talking with my daughter today and she declared her math paper was “chop filled” with information. I asked her if she meant “chock-full”. She replied: “No, kids in my class say chop filled. It’s chop filled, mom.” I could almost hear the “duh” behind her response.
Are you chop filled with with information too? Do you act as though you know everything and no outsiders could possibly understand? I think we all behave this way in at least one area of our lives or business. Often it’s not even intentional. We simply don’t know what we don’t know, so we assume we DO know. For your business to be successful though, it’s imperative to show a little humility. Admit to not being the expert on everything. Ask for help.
I work with a business consultant from time to time. The advice I get is often the same advice I give to others. Sometimes even when we do know the answer, it’s hard to implement the solution for ourselves. Gaining perspective from an outsider can yield great results even if you DO know the right answer. An outsider can often provide clarity or insight that you have overlooked. Sometimes we’re just too close to the problem to see the best answer.
I recently began attending a peer group. The question for our meeting this week is: What book or resource has been essential to your business success?
Interesting question. The word business in the question automatically sends me down the business book path. There are a lot of great business books, but have any of them been “essential” to my business success? I’m not sure. Certainly there are great ideas in many books, certainly some books are inspirational. I just don’t know that I can say one business book has been “essential”…without it I wouldn’t be successful?
Do you manage your business by the bank balance? Many busy entrepreneurs do but what we know is that managing your business by your checkbook is like managing your personal health by the scale. While the number on the scale is a helpful indicator, it certainly doesn’t mean you’ll get a clean bill of health from your doctor. Join us to learn about other financial tools to help you see, understand, and manage your business’ financial health.
Topic: Beyond the Bank Balance – Create a Dashboard to Manage Your Business for Profit & Growth!
Date: Wednesday, June 9th
Time: 11:30am-12:30pm PDT (2:30-3:30pm EDT)
I have a confession to make. I constantly struggle with work-life balance. Like many of my clients, I also find it hard sometimes to work on my business instead of in my business.
I was raised in Michigan with the good old farm work ethic. We work hard, we work long hours and we don’t stop until the work is done. Translation: Work is hard, work is NOT fun. Intellectually, I know that work can be fun when you’re doing what you love. I know that I need to spend time on my own business. I know that my kids are growing fast and I need to focus on them too.
Intellectually, I know what I need to do. I know what will make me happy and what can grow my business. What I’m working to overcome is the guilt associated with redefining work.
Having been an accountant for so long, I frequently discuss finances with my kids. They know all about budgets, how credit cards work, and why we can or cannot afford certain things. It’s important to me that they understand money isn’t in constant supply and, even as adults, we have to make choices.
I was talking with my children about a potential new client yesterday. The kid asked me how much the new gig would pay, so I told them about some of my package pricing. That sounded like a lot of money to them, so I explained that it all depends on how many hours the work takes. Naturally, they wanted to know about how much I would make per hour. I told them my hourly rate and they were astounded. That’s a lot of money! It takes me forever to earn $10! I further explained that while my rate sounds like a lot, they have to remember that I have a lot of unpaid time too.
The difficult economic climate of recent years has led more businesses to utilize barter transactions, in which they trade their products and services for other products and services. Many businesses wrongly assume they don’t need to account for these transactions. Accounting for bartering transactions is required by the IRS and is essential to accurately determining the financial health of your business.
When you barter for other goods and services, you are still investing time and resources to sell the item you are trading. You are simply receiving a commodity other than cash in exchange for your product or service. Not accounting for barter transactions is equivalent to not accounting for revenue and expenses. It’s impossible to determine how well your business is doing if you can’t generate accurate financial statements.
Recording these transactions is quite simple if you break them down into individual pieces. When you barter, two transactions occur: 1) you sell something and 2) you buy something. The most confusing factor can be determining the value of the transaction. IRS guidelines dictate that you must value the transaction at the fair market value of the item you are receiving. In most cases, the fair market value is already known-it’s the normal sale price of the item. The sale of your goods or services is valued at the purchase price of the goods you are receiving.
Time tracking is a subject that causes many a manager’s eyes to roll. The concern is understandable. Most of us have experienced the negative consequences that occur when bad time tracking practices are employed. Time tracking can be a major headache, if you get too granular and it can make employees feel like “the man” is watching their every move. There are ways to implement time tracking that minimize the commonly quoted reasons for hating the policy, but first you need understand why time tracking is important (even if you bill on a fixed fee basis).
When you track time, you are gathering data that will allow you to do project costing. This is especially important when you’re working on a fixed fee. I once had a client who bid a project low because it was a good publicity piece. Since they knew it was going to be a loser, they didn’t bother keeping up with the project cost reports. When the project was finished, they finally took the time to review the time data they had gathered. Guess what? The project was over budget by 400%! The designers went crazy trying to make it the best piece ever. Why? Because no one gave them a limit. When you actively monitor your project time and budgets, you can give your employees a sense of the project scope and keep scope creep under control.
Project costing information also helps you price future projects. Take the above situation, for example. With the time and cost information on that project, the client is armed with useful information for a similar quote request. Sometimes a project is over budget because of poor project management and sometimes it’s just a bad quote. Managers will have to do their own due diligence to determine why the project went south. The time tracking information will help them figure out the problem on current projects and will be a great resource for future project pricing.