About Keeping Score In Small Business

Imagine you are at a baseball game and the scoreboard is not working. Imagine further that neither of the managers is keeping track of balls and strikes, or outs, or runs. How would the manager decide when to bunt, swing away or steal? How would the players know which base to throw to? Further, if no records are kept, how would they know who their best hitters are? How does each hitter do against right or left handed pitching? I don’t think either of the managers of these teams would be in a position to devise an effective strategy for winning the game. If the talent of each team is roughly equal, strategy will determine the outcome of the game. In fact, the weaker the talent of any team is, the more important strategy becomes.

Of course, this does not happen in the real baseball world. But it certainly happens in the small business world.

Accounting is nothing more than keeping score. It is a virtual certainty that the failure to measure results in a timely manner will result business owners discovering what has happened after it’s too late to do anything about it.

Keep in mind that measuring results goes well beyond basic accounting activities. For instance your company may be quite profitable and successful and the owner may enjoy a flexible entrepreneurial work schedule. The company spends a significant amount of money on advertising but there is no method in place to measure the amount of business derived from each type of advertisement. As long as the company keeps making money no one is concerned. However, there may be money being wasted on advertisements that are ineffective or do not generate enough business to justify the cost. If, at some future date, it becomes necessary to reduce advertising expenditures, how will the owner know which campaigns to eliminate? It’s too late to obtain the information necessary to evaluate the alternatives.

There are many easy to use software products available that require no accounting knowledge. They will allow you to know what has happened in the past, what is happening now and, if used effectively, will allow you to know what will happen next.

About Setting Up A Bookkeeping System

Begin by labeling your folders. Common sections of your file folder may include:

  • Pending Orders (Orders that are in the process of being shipped, completed, etc.)
  • Paid Orders (Orders/Services that are completed and paid for)
  • Bills Due (Invoices for items the company owes)
  • Banking Information (includes Bank Statements)
  • Receipts/Bills Paid (All other expenses that don’t fall into the 5 categories below)
  • Vehicle Information (Mileage Logs, Vehicle Maintenance Receipts, Licensing Fees)
  • Insurance
  • Charitable Contributions
  • Advertising
  • Fixed Assets (Any receipts for equipment, furniture, computers, etc that can be depreciated)
  • Miscellaneous (For anything you just are not sure of!)
  • Review your Pending Orders folder monthly to ensure your orders are being completed and moved to Paid Orders in a timely manner. The Bills Due section of your file folder should be reviewed twice monthly to ensure payments are being made on-time. Here is a list of common business deductions to aid you in organizing your receipts:

    • Advertising
    • Bank Fees on Business Accounts
    • Business Vehicle Expenses
    • Commissions & Fees
    • Cost of Products
    • Gifts to customers, suppliers, etc.
    • Depreciation
    • Dues for Trade Associations, Business-related organizations
    • Legal & Professional Services
    • 50% of Meals & Entertainment (be sure to note date, purpose, & attendees of event)
    • Office Expenses
    • Travel Expenses
    • Rent
    • Utilities
    • Services performed by Independent contractors
    • By utilizing this simple tool, it will not only keep you organized but it will save you precious time when Tax Season rolls around.

Focus With Accountability Coach

Before you pick up the phone to call your coach, learn to stop playing the self-doubt game. Fear of uncertainty can freeze people into inaction and often counter-productive behaviors. Each time you start to say “What if… ” catch yourself, take a deep breath and immediately counter the thought with positive information and or an action. For example, “What if we can’t sell as many as we thought”, can instantly become, “We sold 200, who did we sell them to, who else can we sell to and what else can we do to sell more?” Learning to do this every time will reprogram your behavior and get you into a productive achievement-oriented mindset.

Your accountability coach may also be a business adviser focused on some specific subject area. Ideally, the coach will be an objective third party and not a spouse or significant other person with whom you have a close personal relationship. It is important to avoid coaches who may be enablers of your bad habits, or who might assume an undesired control attitude or even encourage you to move in the wrong direction. You want a coach you respect and from whom you are willing to take corrective directions to ensure the optimal productive relationship.

Your communication with your accountability coach must be honest, open and complete. Leaving out important issues or telling seemingly small white lies about progress undermines the relationship and that will only sabotage your efforts. As you establish the relationship with an accountability coach, consider the following key elements to keep you on track:

  • Commitments – Be clear on all objectives and commitments you are making. This includes both business objectives and project deliverables as well as personal and leadership development commitments. Anything that you will gauge to measure your own productivity and accomplishments are appropriate. Be sure to include behaviors or events that hinder your productivity.
  • Scheduling – Identify specific dates and intervals for the milestones associated with each commitment. Things go wrong and dates will change for a variety of reasons. Keeping the current set of dates and the adjustments in the open helps to assure correct focus and communication.
  • Relationships – Identify people that are important to the commitments and to your ability to make progress.
  • Focus – Save friendly social chatter for after accountability coaching meetings. Maintain a disciplined focus on the commitments, timing, relationships and objectives.
  • Regular – Schedule meetings with the coach on a regular and consistent basis to assure that reminders, prompts and coaching can occur in time to prevent old, or bad, habits from redeveloping.

Open a Dollar Store

There is an almost magical balance between the cost of the money that is invested in merchandise to create appropriate inventory levels on the sales floor and the required inventory levels to drive higher sales. The cost of the money invested in inventory when you open a dollar store often wins too early, thus driving sales lower. Sales immediately begin to rebound when higher, more appropriate inventory levels are established.

It is a perfectly valid argument to feel that all back-up merchandise inventory that is being kept in the back room, or the stock room is not earning money. When you open a dollar store it is valid to argue that back stock inventory is in fact is actually costing money.

However, when you open a dollar store, maintaining a fully stocked sales floor is smart business. The goal when you open a dollar store should be to have customers react with a surprised look followed by ‘WOW!’ as they enter your store. A fully stocked store is impressive to store visitors.

When you open a dollar store never allow it to look as if there is not inventory available to support sales. Customers will immediately feel that there is no need to wander the store, as there doesn’t appear to be stock on hand. Customers will also be less likely to take the time to look for the new merchandise that just arrived. Customers will even hesitate to come back as often when inventory levels are allowed to fall too low.

Entrepreneurship to Prepare for Retirement

I recently attended in our community a weekly trade fair where I viewed a number of retirees sitting at tents and behind tables selling their wares to consumers – through conversations I learned that several were doing this in an attempt to maintain at least a subsistence level of monthly income to help pay their rent, costs of prescription drugs and other basic monthly costs.

Doing some research on this recently, I learned that standard Canadian pensions (CPP and OAS) at the rough maximum a married couple can expect to receive if both people worked their lives through, nets them collectively about $22,000 per year. Now, if you were born in 1958 or later, you also don’t collect OAS until you are 67 – not 65 any longer. This contributes to the need for many of the elderly to work to later years in life in order to survive retirement financially – as the average retired middle-class couple owning their own home, require statistically, approximately $40,000 per year to live comfortably. Supporting this, a recent Bank of Montreal survey shows 59% of respondents stating that they will have to supplement their pension incomes through continuing to work after retirement.

It is difficult for many in low to mid levelled salaried positions without company pensions to expect to be comfortable in retirement unless they initiate some significant entrepreneurial action or personal savings program of their own years before retirement is reached – in fact, I wonder why we call it retirement any longer at all – it’s become just a shifting for most to other jobs. So this is my raising of the awareness part of this article – Take Action!

Build things you can sell online, become a sales affiliate for some direct selling organization, try consulting in some capacity, start an online business of some sort (YouTube content creator, shopping portal, online publishing or editing, freelance writing, website creation, etc.). There are any number of things a person can do to build that additional nest-egg one will need as one leaves the primary work-force – and your best energy years for this are now!

There are many “on the side” opportunities one can take to build a second income stream prior to retirement. The key is to do it – If you don’t try or fear to try, you will potentially be looking at some very bleak retirement years ahead. Don’t let that happen to you.

Important Part of Business Planning

Upgrading Hardware

Over time, processor speeds change and things get faster. New and innovative ways are found to interconnect everything, or to see things more clearly onscreen, or to print with better resolution and richer colours.

You don’t have to have the latest invention or the newest product. But you will find that if you don’t upgrade your equipment at the right time it becomes noticeably slower, even obsolete. It may not be able to load new software programs. It may not be able to read files written using the latest programs.

Upgrade only when your business requires. But keep up to date with latest product releases and newest innovations. How? By reading computer magazines, visiting relevant websites, browsing the information technology business press, and by visiting computer resellers and stores. A good reseller will keep you up to date and give you free demonstrations of the latest and newest innovations.

Upgrading memory is always worthwhile. You can also upgrade the CD and DVD drive and the hard drive. You can upgrade the monitor, sound, and video cards. There comes a time when it is more costly to upgrade than it is to buy the latest PC built exactly the way you want it.

Checklist for Upgrading

  • Buy only what your small business needs, when you need it.
  • Read the computer and business press for the latest advances and newest innovations, and then decide if your business really needs them.
  • Keep track of all your hardware and software, because they are important business assets and you will need the information for a variety of purposes. Consider Volume Licensing for software upgrades on five or more licenses.
  • Consider technology finance programs that can make your IT purchase easier.

Upgrading Software

As a general rule, you should buy only what your business needs, allowing you to budget sensibly and control costs effectively. Your business will change over time. So, perhaps, will what it does and the tools it uses to do it. Your software will definitely change as technology advances and new ways of getting things done are developed.

How you upgrade software may depend on how you originally purchased it and what kind of licenses you bought:

  • If you bought a full packaged product from a retailer and a new upgrade comes out, you can buy an upgrade version.
  • If the software was pre-installed on a new PC, you have a choice. You can buy a new PC with the latest software on it, or you can buy an upgrade from a retailer.
  • If you need to license more than five PCs in your business, the Microsoft Software Assurance program will give you the right to upgrade to the latest version of Microsoft software for the term of your license agreement.

Taking It Slow in Starting New Business

Start by writing your business plan. If you do not know how to do this, work with a small business mentor who will give you personalised advice. if your finances do not allow for this specific help then get a limited amount of free advice from your government advisor such as the Small Business Advisor or the Princes Trust. Although the help be general it will give you a great start.

Writing your business plan will enable you to plan your business in a structured format. It will be a good exercise and help you get a good structured business together for little outlay.

Do not try to jump into a business too quickly. Plan it out carefully and test out your ideas. To the second saying, if no one wants to buy from you then you do not have a business. Start slowly and research your ideas. Pop over to those masters of sales: Amazon, eBay, etsy and fivver and see what is selling, how popular they are and what kind of money things are selling for. If your intended products are not covered here, and most B2C (business to consumer) products are, then research on the internet. You want – types of market (kinds of people that buy), where these people are, how much they tend to pay and who the big players in the market are.

Now hop over to a few forums, blogs and Facebook pages. Track through some big players on LinkedIn and get an idea of what is being asked for and provided in your market area. Try and find a niche that is not being satisfied. If people keep asking the same question and not getting an answer you have a niche.

Set up a questionnaire on a site such as surveymonkey and post it in some forums and look at the answers.

Now you should have an idea as to what can sell, at what price and to whom.

Get yourself set up legally, the last thing you want is problems with the government. So get a business account and keep the payments and costs separate from your own money. Keep financial records, most will be outgoings and could keep your tax liabilities down.

Now test the market on one of the big selling sites, it is easy enough to set up an account. Test, alter and keep testing until you get a viable and interesting product at the correct price.

Set yourself up a website and learn how to market it.

You do not need a partner to set up your company, that comes along when you can afford it. Outsource the stuff you cannot do by doing your research to find a suitable company or hopping over to elance or guru. Fivver will get you some cheap design and marketing.

Start slowly with this one, partners eat up your equity and employees take away your turnover.

Following this advice should see you with a viable company that will soon make a profit. I wish you luck.

Sell More Product

  • Ask each staff person to “brag” about three favourite products (that you sell!) at your next staff meeting. Have a fun contest for best story. “Bragging rights” wins a gift certificate for dinner. If you have three employees, the goal is to generate nine great stories (three each) – nine more products to tout.
  • Distribute “free” product to your employees. (If the cost is too prohibitive, “loan” product.) Encourage each staff member to try out the product; wash the product; share the product with family and friends; and come to the next meeting with an evaluation of the product. Again, offer small prizes for the best anecdote. And do remind the staff that honesty prevails! If your staff dislikes the product, tell us why – state valid reasons why you would not buy this product. As a business owner, you need to hear this criticism. You are looking for honest feedback.
  • Encourage staff to re-assess products and collaborate on “features and benefits” lists. Once staff members recognize that their opinions are valued, they will feel more empowered and voice their concerns more readily in the future. Display a “features and benefits” detailed list on the bulletin board, as a frequent reminder to the staff.
  • Encourage staff to exchange stories in the future. Write down customer success stories in a counter book. Ask for permission from the customer and publish the best story in your next newsletter and e-zine. Offer small prizes for success stories. Do not hesitate to relate dissatisfaction, also. Customers are always impressed with a retailer who is honest about the product. (Obviously, you will have to re-consider that product!)
  • Ask the staff for input when you are merchandising the product. Sometimes a little “tweaking” of a product display or placement can generate more sales. Listen to your staff’s suggestions and implement changes. You will be surprised how the staff will sell more product because they have an “investment” in that product now. Also, try placing display signs that outline a staff’s favourite product and the reason why it is his/her favourite. Change the signs on a monthly basis to keep staff and customers interested.

It is important to constantly re-assess and evaluate the top sellers in the product mix. Ask yourself if you are “married” to these products. Re-assess the “features and benefits” of each of the top sellers. Remind yourself and your staff that customers deserve the “right” product, not necessarily your favourite product. And that, above all, will remind your customers that they can trust you, and continue to buy from you.

Freedom Life In A Cubicle

This same 97% of people will keep snoozing the alarm clock every single day until there is no other choice than get out of bed or else call in sick for that day. Do you jump out of bed all excited for the day ahead? Or do you jump out of bed only on Saturdays or when you are on leaves? Are you really living a freedom life? Can you relate?

I can definitely relate. Since the very day I realised I was not working out of passion but out of need to pay bills, loans and to attend to family obligations, getting out of bed for work had been the most irritating hassle of the day. The gnawing question “How long will this continue?” shadowed me like my best friend for years and years. As time went by, another more vexing question proliferated in my mind: “Is this all life is about?”. I wanted a freedom life for me but there was no such hope as long as I was seated in a cubicle working to pay my expenses and debts!

  • Is life about snoozing the alarm every week day and looking forward to the end of the week as soon as it starts?
  • Or is life about looking forward to the next vacation as soon as one ends.
  • Is life about trading your time and freedom, sitting in a cubicle, in an attempt to make enough money to pay the bills, the credit cards and the loans at the end of the month and most of the time realizing you are still living in the overdraft or excessively on credit cards?

In quest of my freedom life

I crossed the oceans in 2013 from, Mauritius to Canada, to change my lifestyle but the questions still did not leave me until I realised I was asking the wrong questions altogether.

Seventeen years of intense academic studies, trying the best I can to get the highest scores because this is what daddy wanted. OK, maybe I wanted it too because this is what my mindset was tuned into (environmentally and genetically programming as Bob Proctor will describe). Get the best grades, go to that star school, and get that first class University degree in Information Technology because this is the market trend for now! IT job demand is everywhere. Do I want to be in IT? I don’t know. I just do it because everyone else around me is doing it and because this is what I have been advised to do. I don’t want to feel stupid not knowing how to use a computer. So I complete that degree and get on the job market. I was quite proud of my achievement back then. Oh I was. Sometimes learning that book by heart just for the sake of the grade! I was good at it, I must admit!

So fourteen years later, after all the hardwork to achieve the best grades, here I am, despite having crossed oceans to achieve financial freedom, standing in a way too crowded commute and stuck between two subway stations because someone decides to activate the emergency alarm yet again this morning. So now my mind starts working on the latest excuse line I will blabber to my “boss” once I reach office.

This is definitely NOT A LIFE OF

  • Passion
  • Purpose
  • Freedom

You should not condemn the cubicle job if thinking of your cubicle, you jump out of your bed overexcited every single morning. This is a subjective matter. I condemn the cubicle life when it is just a means to pay the bills and the loans and the rent. Bob Proctor said in several books and several seminars “People should not go to work to earn money. They should go to work because they love it”. I thought ‘He is nuts and don’t know what he is talking about’. I read these two sentences for about a hundred times before I was able to get the true meaning of it. And this is exactly what I intend to do.

If your WISH for a freedom life has turned into a BURNING DESIRE and more than ever, you want to

  • banish the cubicle life to live life on your own terms
  • create a lasting legacy for your children and your family
  • use your Brain, discover your innate Beauty and create abundant Money in your life

Then let’s do this together! Let us create our freedom life through our laptop. It is a myth to think that the cubicle lifestyle can ever lead us to FREEDOM..But the internet can. As long as you have a laptop and an internet connection, there is always a way to freedom.

Impact Entrepreneurship and Impact Investing

Basically, a traditional entrepreneur is in the risky business of undertaking some sort of enterprise, typically for one and only purpose of financial gain. It doesn’t matter if the business is suffocating the economy with Chinese plastic disposable toys that pollute Chinese rivers, fill our landfills and poison our children. It doesn’t matter if it is tobacco, alcohol, coal mining, guns, propaganda, violent video games, or cute apps to get babies addicted to electronic devices. It doesn’t matter if the gadget self-destructs after one use. As long as it is cheap, cost-effective, and it sells, it is a traditional entrepreneur’s goldmine. As well as traditional investor’s dream come true. An entrepreneur is typically seen as a business leader and an innovator starting new businesses for profit. The financial gain and the maximum return on investment is be-all and end-all of entrepreneurship. Increasing value for the shareholder and chasing hockey-stick growth are the two benchmarks for judging success of a company. This is in part driven by our capitalist society – an economic system based on private ownership of the means of production and their operation for profit.

Companies that exist for the sole purpose of contributing to society in a positive way and making a positive difference in the world are typically not organized for financial gain and achieve a non-profit status. These companies typically struggle financially because their primary source of funding are philanthropic donations, which means these organizations need to operate on a very lean budget and spend a huge portion of their resources on continuous fundraising, which is not a very efficient way of doing business. Non-profits are often critiqued for being ineffective, because they are so focused on spending the least amount of money, while putting together impressive marketing materials and throwing lavish parties for their wealthy donors, instead of making the largest impact towards their mission. The progress towards their mission is completely decoupled from the amount of funds they have coming in, which once again takes the focus away from the mission.

So how do we solve the problem of irresponsible entrepreneurs and inefficient non-profits? This where the impact entrepreneurship and impact investing come in. Impact entrepreneurs are building businesses that make a difference in the world. Specifically, they make a POSITIVE difference, while generating a profit at the same time. Being ethical and transparent, living according to your integrity and personal values, and pursuing your passion is what impact entrepreneurship is about. Making a living while making a world a better place is hard, but it is possible. You might not get the same financial reward (or your might). You might have to wait many years before you see a reward (or maybe you don’t have to wait). It is not easy, but many people prefer this investment model because they feel good doing it.

What is Impact Investment? Impact investment is different from traditional investment which pretty much only looks at the numbers on the bottom line. In traditional investment model there are only two questions: What are the risks? What are the potential financial rewards? The risks need to be minimized, the financial gain maximized. How that is accomplished doesn’t matter. Unless you are an impact investor. For impact investors How the money is being used, Who is managing the money, Where in the world’s economy the money is going, What is the positive difference the money is making in the world are the critical questions that have to be fully, intentionally, and systematically explored and answered before the investment can be made. Lastly and most importantly, the impact needs to be measured. Otherwise, how do you really know if you are making an impact?

Over the last decade more and more people are getting on board with impact entrepreneurship and impact investing, because it is the right and the moral thing to do. I feel hopeful about the future of our planet. Isn’t it time you reviewed your stock or mutual fund portfolio to see where you are investing your money?