Part 1 - Accounting Software

I often get the question if a startup business can run their accounting in Excel or with pen and paper for now. The answer is a simple yes you can. It’s not even that hard to do. I would call it a great idea - if it wasn’t such a bad one…

Accounting is a cornerstone support function to running a business. It gives you important insight into what is working well, and what isn’t in your company; and the right time to start your books in a software form should be before the first cent is spent on your business. In fact, the only business expense I suggest before installing your accounting software is buying it, (and unless you have one, the computer to run it.)

Having it set up from day one also saves you money In tax preparation, accountants, audits, getting small business loans or investors, and everything else that might happen down the road which requires access to financial data.

Why you should have this ready to go before you even spend a cent on getting your business license is simple, you will save a lot of time, and a lot of money doing it from day one instead of trying to transfer it later. You will also have the opportunity of learning it as your business grows, when transactions are fewer and your business is less complicated. This creates a learning curve that is manageable, instead of dropping you in the hot seat having to learn it after your business is already off and running.

If you have already started your business and you still don’t have accounting software to help you. Don’t waste another day without it. Get it now, learn it, and you will save yourself a lot of headaches later. The longer you wait, the sorrier you will be in the end. If you’ve been running a business for a couple of years, you will probably have to hire a very expensive accountant to set it up for you and transfer your books to it. "Saving" the expense now is just going to cost you in the long run.

Doing it right from the start however can save you money on your taxes, show you where your real money pits are, help you get bills paid on time, get your billing out on time - the list goes on. Investment wise, this is one expense that will pay for itself in a very short timeframe.
I am a great proponent of QuickBooks. That being said it isn’t the only option out there by far. ANY good bookkeeping software is preferable to none. There are no two ways about this.

I like QuickBooks because it is easy to use, reasonably inexpensive, and it comes with great user support, manuals and a wealth of information out there. Along with Peachtree, It is also about as close as you can get to the "standard" accounting software for small businesses, and therefore you will have a good chance of a future employee knowing how to use it.

In the end, whether you chose QuickBooks, Peachtree, Microsoft Office Accounting, or any of the other solutions out there isn’t important. What is important is not going a day longer than you have to without it.

Commuting costs are growing as the reason for employees changing jobs. With gas prices continuing to skyrocket and no end in sight, every business out there should be considering changing their schedules around and give their employees an extra day off.

The price of gas rose so fast that many got caught in a situation that is unmanageable. Large vehicles are losing their second hand value as fast as gas prices are rising. For many it is now almost impossible to get out from under a car payment on these gas guzzlers. The only viable option is to find a job closer to home, or move closer to work. Most will chose to change jobs given those options.

When asked, most employees would accept a 10 hour workday 4 days a week in order to get a three day weekend. It just makes sense to most people to sacrifice a little to earn what feels like a lot. And a 20% reduction in commuting costs makes this an even better idea. For those with small children, an additional savings on child care can really top the cake.

The financial cascade effect of not going to work one day is so far reaching that it actually outweighs a pay-raise to most employees. Not to mention that the three day weekend is appealing in itself.

If your company has the potential for moving the schedule around to accommodate a 4 day workweek, you will most likely see your employee retention increasing. Most companies can accommodate this is one way or another. And because of increased open hours, may actually see an increase in sales when they begin to be more accessible to other time zones.

Work with your employees as much as possible, there is nothing more profitable than human capital retention in the long run.

Generating Quality Traffic with StumbleUpon

Stumble can bring you a ton of traffic, and opposed to many of the others, you have great control of how targeted that traffic is.

Stumble creates traffic , that’s how it works. Participating in the network means actually viewing a lot of sites. Many of the other networks provide listings, where a snappy title and witty description is the only thing that brings in the hits. Yes, you can submit to specific topic areas, which will target it a little. But that’s about as good as it gets. Great articles are constantly lost on the social bookmark sites that use lists because someone posted about Britney Spears latest antics 2 seconds at the same time.

Stumble is different; your submissions will go through your network of fans and friends. And you don’t even have to annoy ask them to do it. If they are your fans, Stumble makes sure that they eventually sees the pages you like.

You Decide

You get many of your fans based on your stumble history, people who like sites you have submitted will find you, and they will find you through their other friends, who may have found you through the sites you have submitted and stumbled. In other words, people will add you based on what you like, not based on your ability to write a snappy title only.

Relevance

So your stumbles, if they are relevant to your own site or blog, will attract people who like what you write about too. Making them more likely to thumb you up, this will drive more people that like what they like… And the chain continues. This chain can bring you traffic for weeks and months, not just hours like so many of the other social bookmarking sites.

This spreading of information through your networks is almost like a pyramid scheme, the more powerful you are the more people will see your stumbles. If they have a lot of fans, you will quickly be reaching a very large network of people, all of whom will see your actual site, as opposed to just reading your snappy headline on a list where it drops to page 39 before you have refilled your coffee.

This is the brilliance of Stumble, not only does it drive traffic; it gives you the control to focus your network and bring you quality traffic that is actually interested in what you do. Not just those that got lured by the snappiest headline.

Once you have your target audience on your site, it’s all up to your content quality to get that Thumbs Up.

Customer Relations Management - The name has it completely right, Customer First, Relations Second, Management Third. So why is it then that we are constantly seeing this being about the company managing their information, their leads, their sales figures, and somewhere in the bottom tier, we remember that fancy speech the CEO made about customer centricity and throw in something about customer satisfaction.

Even though we know that the customer relationship is important to success; CRM software is sold and bought without this being much of an actually concern. This is why so many companies get the wrong results. They are looking for the quick measurable metric. Somewhere in that thinking, we forget that the customer was supposed to come first. Those who sell CRM software knows that the company is more interested in being able to measure success than in actually achieving it, you can see that in their sales pitches.

Don’t believe me? Go take a look at Microsoft’s Page for their CRM solution.
In a list of 10 compelling reasons, number seven is when they first mention customer satisfaction. And out of all those 10 reasons. Only that one deals with it at all.

The Harvard Business Review has an article about how Customer Loyalty isn’t all its cooked up to be.

The article comes down on pretty hard on the CRM software and how the expenses spent on Customer Loyalty isn’t paying off.
They talk about expenses of $2 million, 16,000 customers in the data, calculated correlation coefficients etc.

It’s really a very impressive article, almost as impressive as it is wrong…

The HBR article mentions nothing on how this money was applied, if it was applied to actually improve the customer experience, or whether it was simply slapped on there to make the sales force more effective in bothering the customer. Their idea is that a marketer should be able to more exactly predict the future spending habits of a returning customer. Exactly predict the future of any human behavior?!?

If we spend money on something, but do it for the wrong reasons and in the wrong way, we can’t expect the right results. As long as we call something Customer Centric, but make it about streamlining our own efficiency to do the same thing we’ve done before in higher volume and with greater precision, we are not focusing on the customer, we are annoying them. That is hardly going to produce the results we are looking for.

To try and find a way to exactly predict the customers’ behavior is not about loyalty, that’s about pencil pushing. To equate the customer that buys less often but comes back every time he is buying your product or service as less profitable and less worthy of attention means that you have completely misunderstood what loyalty can do for your company.

Since so many companies buy CRM based on the wrong reasons, and implement it based on those reasons, the mere thought that it would actually increase loyalty is ludicrous. To then measure it, without taking into consideration if the money was actually spent on the customer experience as opposed to just giving the sales force more data to bother the client with is borderline absurd.

CRM is a tool, like any tool it can be used in many different ways, some more effective than others. Until you use it to improve the customer experience, it isn’t going to do much for customer loyalty. It will end up being a huge waste of money.

If you want to measure your sales team, then pick the tool that is designed for that. If customer loyalty and their overall experience is what you are actually trying to improve, then make that number one on your list. Not number 7 of 10.

Streamline your finances for starting a business

With the economy in a crunch, many are considering whether starting a business is even possible - let alone wise. With the right planning it is not only feasible, it can become very rewarding both financially and on a personal level. With the wrong - or no - planning, you are certain to head for a quick disaster.

If you are planning to start a business but lack the funding to keep going for long, you need to set up the business for a shoestring startup. This is where your personal finances will come in to play. You will without question be the largest money drain on your company. Keeping yourself alive and both mentally and physically healthy is imperative. There are several ways you can do this, the most important are finding ways to maintain close to the standard of living that you have currently, a sharp decline in living standards will be a de-motivating and can cause you to lose the drive you need more than anything.

Here are some tips on how to set your life and finances up to manage a reduced cash flow for the first 12 months.

Ten Ways to Cut Expenses

1. Change providers

Most competing companies will offer tremendous savings to change phone, internet, Television, cell phone and other services. Some have this offer for a full year. In my area I can right now change TV, Internet, Phone, and save about 50% on my current bill the first year.

If you are going to do this, do it before you start your business, simply because you want to make sure that everything works before you are stuck without phone and internet when you are trying to run an online business.

2. Learn how to cook

Cooking your own meals is both healthier and much cheaper than the alternatives. If you save your entertainment for one night a week and some business lunches, you will save a large amount of money. There are plenty of recipes that will serve a family of four a healthy and tasty dinner for under $10. The internet Is a great resource for recipes.

3. Defer your student Loans

If at all possible, make a deferment of your student loans while in the startup phase. You may free up a significant amount of money each month during the critical phase.

4. Use Your Current Benefits.

If you are currently employed and either facing a layoff, or planning to quit. Use the insurance to its fullest as a precautionary measure. Dental work is much cheaper if caught early, as are most medical issues you might face. To go uninsured as a small business owner is not recommended but in many cases the norm, if this is your only option because of cost. Then make sure you get all your checkups, refill your prescriptions, and do your vision / dental work before you leave your old job. An ounce of prevention is worth thousands of dollars in this case.

5. Change Cars

If you have a currently high payment on a vehicle. Do some shopping around to see if you can get a car with lower payments and a better warranty situation than what you are driving now. In addition to the cost savings if something breaks, you are likely to find a car with better gas mileage, which is something that no small business can afford to overlook right now.

6. Buy from failed companies

If you are facing a layoff because your company is closing, talk to management about buying out assets such as computers and printers, office supplies etc. You can buy everything you need for your own business at bargain basement prices.

One of my clients bought his entire office. From his desk, computer and printer to the potted plants and all the paper he will need for the next five years, for $50 from the company that he worked for when they had to close.

If you can’t buy from your old company, check listings such as Craigslist, for other companies going out of business.

7. Shop in bulk. But only after you learn to organize

If you have access to one, join a membership store such as Sam’s or Costco. This will allow you to accomplish a couple of things at once. You will buy larger amounts, reducing the number of trips necessary. These stores also have deals on office supplies that will beat the ordinary stores by a mile.

However, you will need to plan and organize your shopping or you will end up spending more in these stores than you would otherwise.

8. Consolidate your Credit Cards

Consider getting a new credit card with a 0% interest on balance transfers. Many companies offer this for a full year. This will save you quite a bit of money in interest, which will free up a little extra cash to get you by.

9. Move to a cheaper place to live

If you are a renter, you might consider moving to a smaller or less expensive apartment to further reduce the total overhead. A smaller apartment will both have less rent and most likely also save you money on utilities.

10. Plan your taxes

Small companies run from your home can have some major tax benefits; you are allowed to make certain deductions for a home office as well as the accompanying utilities, different mileage rules will apply for driving etc. Since you are responsible for paying your own taxes now, having this figured out in advance will allow you to use the money these deductions will save you right away, instead of getting them back in a year.

Before you start this process, check with your accountant on how to do it properly. The home office deduction is jokingly referred to as the “Audit Me Deduction”. If you mess with the tax man you will quickly end up paying more than the best planning could save you.

You can start a business on a shoestring budget and still maintain a good quality of life if you plan your finances properly. These tips will help get you through the first year, which is the hardest part of any startup. Having your ducks in a row before you take the plunge will be one of the best time investments you can do, and it will help save your sanity, not just your money. Remember that although some of these tips will improve your overall financial status, this is primarily intended to free up capital for year one.

Doing it right also means you can show a future investor you managed to start the business using very little capital. Showing that you have your act together and that you are willing to take a hit to make it big. Not a bad sales proposition to bring to the table.

Your business is waiting for you; plan to succeed and you will get there sooner than you think.

One of the hardest things I find teaching supervisors and managers is to avoid addressing problems.

No I don’t mean ignoring it. I mean avoiding the urge to snap to action and leave common sense and temperance in the dust. Remember that you are there to strengthen the company, not run your mouth off to make yourself feel like you are doing your job.

Some problems naturally have to be fixed immediately. That’s one thing. Creating a solution that accomplishes the overall goal is imperative in most operations. If you have a late receptionist, fill the slot immediately until they arrive. Even if this means you have to do it yourself. That is after all what you were hired to do. Ensure that necessary work gets done.

The Late Employee

When a new employee arrives late, most managers will make a point of describing to this employee why that is not acceptable. And make some statement as to why it shouldn’t happen again. If you actually hired an employee that has not yet understood this basic principle, you really need to review your hiring practice. Not addressing their late arrival as a problem - as hard as this might be - is actually the smart thing to do.

The poor person is probably sweating bullets, kicking themselves and worrying like no other that they are going to lose the job. Adding to that stress is not going to accomplish anything positive. The person is expecting "the talk" and has already raised every fortification they have against it. You will be talking to a person who now is defensive and will begin to resent you instead of listening to you. It is the completely wrong time to address this.

The knife is sharp - The universe is big - And I love to state the obvious

The scolding "you’re late" comment is probably one of the dumbest ones a manager ever utters. The employee knows that they are, they know that you know, and thereby you are stating the obvious in order to make a point that doesn’t need to be made. Making you seem like a complete troglodyte in both thinking and interpersonal qualities. Not to mention that you are actually accomplishing the wrong thing.

A chronic latecomer will not improve with the initial "talk" for more than a short period. And thereby the problem has not been solved but instead has been worsened in that you are spending time energy and money training a person for longer that IS in fact a chronic latecomer.

The Smart Approach

Remember that you hired a reasonably intelligent individual, who most likely is not a tardy person by nature and leave it at that.

Greet them like any other day, ask if everything is ok. Most of the time, the employee will apologize and explain what happened without you having to go of the offensive. Be non-judgmental, after all, you’ve probably gotten stuck in traffic once or twice yourself.

What you will create is an instant relaxation, allowing the person to return to their duties feeling good about the job and the people they work with, making them even less likely to want to disappoint anyone. The mere shock of NOT getting the "talk" will completely bypass their defensive mindset, and you will reach them on a completely different level. They know that you are aware of their late arrival. They also know that you are not the type of person who is more interested in making them feel bad than anything else.

If you hired a chronic latecomer, the chance to have this talk will re-occur, which is when you should address it. To stress an employee, who isn’t late by habit, is non-productive at best and damaging in every other instance.

Basic Glossary

Instead of: "You’re Late!" - Try "Hi!"
Instead of: "Why are you late?" - Try "Are you ok? "
Instead of: "That’s not acceptable" - Try: Biting your tongue and go get a coffee, and while your at it bring one for the late employee too, they could probably use some.