The Importance of Financial Reports

Every business owner should review their key financial reports every month. No matter how small your business, or even if you are an entrepreneur, knowledge of the financial health of your business is critical to success. Most business owners have an “idea” of how their business is doing. It’s been my experience when talking to business owners from varied industries that they have a reasonable idea of the revenues of their businesses, but that is not the whole picture. If you make business decisions with only the knowledge of how much you bring in every month, you will not last long. 

There are three key financial reports that every business owner should review every month. Each report provides important information about  your business, and put together, they offer a comprehensive picture of your business’s health.. If you are not a numbers person, someone on your team should be. Select someone trustworthy who can interpret the reports every month. The report review should show you trends both good and bad as well as point out red flags. The more you understand the health of your business, the better decisions you will make.    This will ultimately lead to more net profit.  

The Balance Sheet is a report that provides a snapshot of information about the business’s financial standing. The report consists of the company's assets, liabilities, and equity. The assets must equal the liabilities plus equity. Hence the name. Balance sheets are important for several reasons. In addition to helping the owner make qualified, positive business decisions on how to spend money and/or if to borrow, they also show if your business qualifies for a loan, and they help potential investors decide whether to invest in your business or not. 

The Profit and Loss Statement is a report that provides details on the revenue a company earns and the expenses involved in operating the business. The report includes important information about revenues, cost of goods sold, and expenses of operating a business, such as administrative expenses, salaries, and overhead. It provides great insight into a company’s ability to generate income. Reviewing this report every month will show whether or not your business is profitable. This is a great report to determine where you're succeeding and where you need to improve. If the bottom line is positive then you’re making a profit, if not, you’re losing money. Analyzing expenses is key to understanding how much money it costs to operate your business. Running the report with a comparison of a prior year or month, and/or running the report compared to a budget, is a very valuable and powerful tool.

The Cash Flow Statement reports the amount of cash coming in and going out of the business over a specified period of time. It measures how well a company generates cash to pay its debt obligations and fund its operating expenses. It includes cash made by the business through operations, investments, and financing. In order for a business to be successful, it must have sufficient cash at all times. This report will show if a business has enough cash to pay expenses, loans, and taxes, as well as purchase assets for the company. 

All three reports are critical to the success of all businesses. If reviewing financial reports makes your eyes glaze over, then hire a trustworthy bookkeeper/accountant that will review the reports with you every month or at the very least every quarter. The more you understand the big financial picture of your business, the better decisions you will make, and the more profitable your business will be. 

Should We Say NO?

I remember thinking to myself when my son was born that I will not say ‘no.’ I had some noble thought that if I took the time to explain the reasons behind saying no, it would be smooth sailing. I laugh (out loud) every time I think of it. Why did I ever think that would work? 

Saying no provides boundaries, and boundaries are important for everyone, not just children. When planning the work week, it’s important to say no to make room for the yes that will propel business further, and that means saying no, a lot. 

Early in my career, I said yes to every opportunity. I was extremely busy and felt very important. But the reality was I was just busy. Busy with things that didn’t accomplish my mission and left me exhausted and unfulfilled. I felt as though I was filling everyone’s cup but mine was left empty

“It’s only by saying NO that you can concentrate on the things that are really important.” -Steve Jobs

I had just started my career in corporate America and I was completely burnt out. I didn’t feel as though I was moving forward, just in a thousand different directions and gaining no traction. I learned the hard way that saying yes to everything was not the answer to anything. 

Once I defined where I needed to go and what I needed to do, it became clear what priorities required my time.  It can be a challenge--pushing aside the temptation to miss out on something, or the fear of not being  liked by someone can creep in, but the more I  focus on what I need to do, the less tempted I am to give in to these concerns. 

Now, although my schedule is full, it contains time to relax and be creative, it has room for me to focus on my business, to be with family and friends; it has balance. It sounds amazing doesn’t it? A reality check: life has seasons, and so there are times that my schedule is mostly full of work and other times when something arises with my family that needs my full attention. The difference is my awareness. My tool is the ability to look at my schedule and say no to anything that doesn’t lead me toward my mission whether that is for my business, my family, or my personal growth. No more burn out!  Instead, saying no provides the control and balance I need to give my best to all of the important areas of my life as well as grow and improve my business. Be purposeful and intentional with your time, say no more often, and you’ll move in the right direction and rarely if ever, go off course. 

The Way We Work Matters

How we work with our team and clients matters. Sounds obvious, but sometimes I don’t think it is. Integrity, trust, gratitude, flexibility, and compassion are essential to building a solid business. We as business owners must be intentional about the culture we create. 

Taking the time to get to know a person before they are hired is a lengthy process. However, the results will far exceed your expectations. When you hire someone you trust, delegating tasks and not feeling the impulse to micromanage will come easily.  This in turn allows your team to feel respected, trusted, and empowered. 

Integrity is a characteristic we need to surround ourselves with. Knowing the people you hired  will do the right thing is comforting. Is it not? Trusting that someone will be honest with you, even if it may be difficult to hear, is of great value. And knowing that someone has your back, and will look out for you and your company is invaluable. It fosters confidence in so many ways. 

Show your team how grateful you are that they work with you. Handwritten thank yous, gift cards, or personalized gifts show that you care and recognize their hard work.  They will mean a great deal to your team and will fill your heart with appreciation for their dedication and loyalty. Gratitude can be contagious, so be generous with your generosity.

Our work environment has changed drastically for most of us. Being flexible with both work and personal needs for your team is critical. Letting people work from home and not making them feel disconnected from the team or less valued is very important. Listening with compassion to your team’s needs and thinking outside the box to create solutions that meet the company’s needs are all part of a healthy work culture and allows everyone to feel valued while still maintaining productivity.

Continually communicating your mission and core values will not only help your team keep grounded, it will help you stay focused on why you are doing what you are doing. Because at the end of day, people matter the most. Treating your team like family and your clients like friends will create a positive environment that people will want to work for and others want to do business with. 

“Integrity Is The Most Valuable And Respected Quality Of Leadership. Always Keep Your Word.” - Brian Tracy

Can Apps Help your Business?

I recently attended an app business seminar. I learned a lot, but if I had to sum up the seminar in a sentence it would be, “Whatever your business needs, there’s an app for that.” Apps that integrate with business software that a business is already using is a no brainer. I’m a minimalist at heart, so I like streamline processes and simple procedures. Business operation analysis is a natural fit for me. I instinctively look at a process/procedure and make it simple and more efficient. It’s been very rewarding to recommend apps to my clients that integrate with their existing software. These apps help them do more in less time, be more efficient when away from the office, and make better business decisions.

I’ve listed 5 apps that have great ratings. Since so many businesses (and entrepreneurs) use Quickbooks, all the apps below integrate with Quickbooks. 

 1.       TSheets is a cloud-based time tracking solution that helps owners and managers keep track of employees in real-time from their web or mobile applications. It provides mobile time tracking for employees who either work remotely or change locations or jobs regularly. Employees use their own devices such as smartphones, computers, mobile apps, text messages, or landlines to clock in and out. 

 2.        Expensify is one of the most popular receipt management apps thanks to its financial report and expense submission features. Employees can capture receipts through the app as well as import their credit card charges and generate mileage reports. They can then submit these reports through the app by simply entering the recipient’s email address. 

 3.        Float is an app that monitors cash flow and provides cash flow forecasts that are more accurate, always up to date, and take a fraction of the time to prepare when compared to spreadsheets. It gives businesses an accurate picture of their past, current, and future cash flow so they can plan for the what-ifs, make more informed decisions, and unlock a brighter future for their businesses. It’s the smarter way to be more proactive with cash flow.

4.       AutoEntry allows businesses to eliminate manual data entry.  It empowers small business owners by giving them more time to focus on running their businesses and less on the paperwork.  It automates data entry of items like bills, receipts, sales invoices, etc. Since all paperwork is captured digitally, businesses can be paperless.

5.       InvoiceSherpa is a cloud-based accounting solution suitable for small and midsize businesses. It helps users manage accounts receivable, payment processing, and recurring payments. Accounts receivable tools include custom reminders that can be sent via email or text message. Users can schedule alerts for invoices being paid, upcoming due dates and past-due invoices. Clients can view invoices and make payments as well as communicate with users through the provided customer portal. Payments can be collected via credit card or ACH. 

Putting quality apps to work in a small business can help maximize efficiency and just make the process of running an office easier.  

Working From Home

Working from home has a lot of advantages. Balance between work and home, improved performance, and increased productivity are all potential benefits. I’ve worked remotely for years and I’ve found that I have more time to get things done both professionally and personally. The time I save on commuting alone is huge. However, it took time to really get proficient. 

Here’s a short list of things that helped me:

1. Create a dedicated office space. In the beginning, my office was a desk in my bedroom. It was small but it worked. As my business grew, so did the need for more space and more privacy. I transformed a room, in my home, into my personal work space.  This isn’t always possible, but even a well equipped corner or closet can be transformed into a space that fills the need for an office. Now when I step into my office I feel motivated to create, work, and learn. It was a game changer for me. I am more productive and focused.  It also helps me to set boundaries. When I’m in my office, I’m working. When I shut my computer off and close the door my workday is done. Which brings to me my second point. 

2. Set boundaries. It can be very easy to let your work invade your personal life. Set work hours and stick to them. It may help you to be accountable if you let your clients, boss, and co-workers know what hours you are available. When you have completed your designated work hours, make a task list for the next day. This will serve to close out and wind down your workday as well as get you organized for tomorrow.  It may even give you some time the next morning to develop a routine.

3. Create a morning routine. Now that you don’t have to rush out the door and race to work in the mornings, you can relax and enjoy a morning routine that you always wanted. Ask yourself what your perfect workday morning looks like. Perhaps preparing a hot breakfast, taking a walk, exercising, or creating time for some quiet solitude will be part of your plan. What will it take to get you in the right mindset for work? 

4. Do not work in your pajamas. Getting dressed for work will help shift your mind from down time to work time. Being and looking professional is still important, and what you wear should be taken seriously. It doesn’t have to be a suit, but wear clothes that will help you to work and be productive. Curling up on the couch with a laptop in sweats doesn’t promote productivity, unless you can get paid for taking a nap. 

5. Exercise and eat healthy snacks. It is so tempting to eat unhealthy snacks when working from home. Food is accessible all day long and you're sitting at your desk not far from the kitchen. Pack your pantry with healthy snacks and schedule to walk/run/do some light exercise during the day. The days that I take a walk around lunchtime are some of my most productive days. The combination of exercise and healthy food helps me stay focused and energized during work time, and I feel ready to unwind and enjoy time with my family at the close of my workday. 

These are some tips that have worked well for me.  As you settle into a schedule of working from home, you’ll be able to create routines and personal guidelines that help to keep you productive and balanced.

Simplicity of Leadership

What if managers spent more time leading and less time determining the value of a team? It’s a slight shift in direction, but it’s an important one. It could be the difference between good and great. There are many attributes to a leader. None are difficult to obtain or put into practice. 

Be intentional about how to contribute, what the company goals are, and what is considered a successful result. It’s a waste of everyone’s time to have employees working on a project that won’t make an impactful contribution. Empower your employees to contribute and let them know that when a mistake occurs, it’s ok. You’ll pick up the pieces and move forward. The trust that develops will encourage them to create, develop, and use their talents to improve your company in ways you may not have imagined. 

Create an environment that encourages success. Discuss what employees need to excel in their jobs and give them the tools they need to be successful. Then enjoy the journey of working together. Encourage open collaboration, and be approachable, respectful, and flexible. This relaxed atmosphere will promote less stress and provide more freedom to give results that matter. 

Honesty and accessibility are a must. If you lead with integrity, it will show your team that you place great value on honesty and that you expect it from each team member, without having to spell it out. It will also encourage people to step forward when mistakes are made. In addition, being accessible to your employees shows them that you are part of the team, just like them. It creates a strong team environment that will help people overcome difficulties and move everyone, including you, forward. 

Leading should encourage others on your team to lead as well. You don’t have all the answers, so don’t pretend that you do. Allow your team to take ownership of their work and think in terms of collaboration and results. Sound scary? It shouldn’t. Allowing your team to focus on their work allows you to concentrate on bringing your company to the next level with a group of people who respect you and desire to help you achieve your vision.

Importance of Setting Goals

What one habit makes your business successful? A valid and thought provoking question. There are many facets to a successful business owner. Leadership, time management skills, the ability to outsource tasks, providing a positive work environment, customer service skills, knowledge of technology, clarity, vision, and the list goes on. When asked, my response is goal setting. 

Simply put, do the things we measure improve?  When we clearly define and track goals, we know if we are achieving our desired results or not. Goal setting is not difficult, but if not executed properly, it can be a futile exercise that does not produce any results. 

Goals should be specific. Keep it simple, but focus in on exactly what you want to accomplish. Remember that your goal should be something you control. It should not be dependent on other people. A poorly written goal would be, I will increase profits. That is a wish, not a goal. It’s not focused. There are many ways to increase profit margins. What will you focus on?  How can you measure your goal? There is no way you’ll be able to attain that goal the way it is written. You’ll feel frustrated and defeated. That’s definitely not the environment for success.

A more specific goal would be, I will increase profits by 5% in the 4Q by outsourcing administrative tasks to free up more of my time for sales. This goal is clear, focused, measurable, qualifies when the goal should be achieved, realistic, and attainable. Now that the goal is clearly stated, how can you be assured you will achieve it? 

There are a few ways to assure you will achieve your goal. First, write it down. There are a lot of statistics about the power of writing your goals down with pen and paper. According to inc.com, you are 42% more likely to achieve your goals if you write them down. Review your goal daily. Write it somewhere where you’ll see it every day. Read it out loud. Store your goal in your calendar, daily reminders, etc.  Do what it takes to see your goal daily.

Break your goal down into monthly, weekly, and daily tasks. This is very important. When you write down the steps you need to do every day, week, and month, you make yourself work on achieving your goals daily. The best way to achieve this is to work backward. In this case, you want to increase sales by 5% in the 4Q. How much time will you need to devote to sales? Let’s say it’s 5 hours per day. Determine what tasks you do that take up 5 hours and make a list. Next, determine how long it would take to hire a contractor to complete those tasks. If hiring a contractor will take some time, you can adjust your goal to the 1Q of next year. That way you won’t be defeated. You’ll be working on achieving that 5% of sales, but now you know it will take you longer to achieve it. But, and this is big, you’ll be consistently working on your goal. 

By breaking your goal down into smaller goals/tasks that you are constantly working on, you’ll be moving in the right direction. It will help you to know if you are on target or not and what you will need to adjust. Goal setting is a powerful skill. It will help you achieve more success with less stress. 

How to Work with a Virtual Team

Working with team members virtually is no different than working with a person in your office. Many people fail to realize that procedures, meetings, performance goals, and reviews all need to be in place to make the working relationship a success. 

Communication is key in any relationship, business or personal, and working with a virtual team member is no different. Create a clear and concise job description. Discuss expectations, individual  goals, and company goals at least every quarter. They are, after all, a member of the company, so treat them as such. Decide what and how to communicate in the beginning so there are no surprises. In short, set yourself, your company, and your team up to win. 

Communicating often, but not micromanaging, will help build trust. Be patient when mistakes happen (and they will).  Start by delegating small tasks, set goals, communicate your expectations, and wait for the results. Review the results and delegate more. The more responsibility is delegated, the more trust builds and the better the working relationship. Just as with any other employee, the virtual team player could advance into a higher position within the company, taking on great responsibility and significantly contributing to the success of the company. 

Decide what software will work best with the tasks that need to be completed. Keep it simple and streamlined. There are many tools available such as Dropbox, Evernote, or Trello (the list is endless), so pick one, maybe two to get started. Don’t forget to document all procedures as you move forward. This will help your team work independently and help you with training. 

As with any team player, the more you cultivate and lead your team, virtually or not, the more successful your company will be. Remember the more you set your team up to win, the better chance you have of success. It’s literally a win-win.  

Fastest Way to Increase Revenues

Owning a business is thrilling, exciting, intimidating, and at times lonely, while building a business can be stressful, exhausting, and hopeful.  Eventually, most businesses grow larger than a one-person operation. There are not enough hours in the day to complete all the tasks that need to be done. Some owners elect to work “in” their businesses. This can mean working as many hours as necessary to complete all the tasks that need to be done, from supplying the customer, paying invoices, keeping the books, and processing the payroll. 

Some businesses never grow beyond this stage.  There might be a business name on the door, but if you are the one making all the decisions and doing most of the work, then you own your own job. There isn’t enough time delegated to increasing your revenues or building your business. There is a limit to how many days and hours you can work. Therefore, there’s a limit to how much you can earn. 

Managing the inner workings of your business operations, is critical so it runs as efficiently as possible. Whether you make products, sell products, or provide services, every small business owner must oversee the design and management of behind-the-scenes work. Operational tasks include bookkeeping, administrative tasks, and daily function procedures. Operations are those activities that don't aim to produce anything new, but to maintain and sustain a business.

One of the fastest ways to increase revenues is to outsource operation functions. This will free up time so you can grow and improve your business. It will allow you to focus on what it will take to increase the customer base, sell more products, and reach more people. Outsourcing operation functions will create processes and resources that you can use to produce the highest quality products or services as efficiently as possible. 

Once a business is operating as professionally as possible, there is opportunity for growth and expansion. There is time to create a better product, add another service, improve a website, analyze market data, increase market share, and the list goes on. Said another way, you can be productive on a higher level. Congratulations, you’ve just given yourself a promotion. 

Benefits to Documenting Your Tasks

There are many kinds of tasks that are performed in any business. Some are simple tasks such as email management, while others are more complex, like project management. One of the most important responsibilities for businesses, and most overlooked, is to document the details of how to perform each individual task. No matter what the task, document it. Entrepreneurs, business owners, sales people, and large corporations often don’t document each procedure necessary to operate their businesses.  

The task itself is simple. All that is required is to outline step by step how to perform a task, yet so many people don’t think about it. We assign a task and move on to the next project, so focused on working in the business instead of working on the business. [Focused on working in the moment and not thinking of the future.] Documenting how you complete a task is very simple, quick, and easy. 

Let’s say every time you assign a task, any task, you mandate that an outline of how to complete the task be part of the assignment. Store the outline in a central place such as Dropbox or Evernote where it is easily accessed. In a short time, you have built a procedure manual that outlines how to perform every task needed for your business operations. 

How can a procedure manual be helpful? An important purpose is to ensure consistency. Procedure manuals improve communication and productivity. They can make training less stressful and time consuming. They are also useful when cross training team members. They provide a tool that can be used by a new hire to refer to, therefore allowing them to work more independently. This can lead to a reduction in the number of questions they may have for you, therefore saving you time. Procedure documentation will help ensure that your business complies with any governing regulations. 

When your procedures are documented efficiently, it can help make your business more scalable. That is to say, it will be easy to implement the same procedures on a larger scale in different locations. Expanded staff or team members can easily replicate the same procedures already in place. 

Procedure manuals keep your business organized and running efficiently. They allow team members to cover for each other easily. They help create a high level of business operations, which in turn keeps everyone on your team moving in the same direction.   This establishes a cohesive working environment. Keep the procedure documentations simple. Each task should be in an outline form. Finally, encourage team members to improve every task they do and update the procedure manual as they do it. 

The Importance of Delegating

If you’re a business owner and you don’t use an admin, look in the mirror, you’re the admin.  Highly successful business owners understand the need to delegate. When you run a business, you do everything.  There comes a point when you realize you just can’t do it all anymore. You know you need help, but you don’t know what to do about it. First thought is, “I can’t afford it.” But what if you could? What would you delegate if you could afford to hire someone? Now your thought process changes and you begin to think, “what tasks should I delegate.“

“If I could hire help I would,________.” Fill in the blank with a task. Then figure out how much time it would save you. How productive could you be with that extra time? Think of potential revenues that could be earned. Start out slow and small. Contract a Virtual Assistant (VA) for small tasks a few hours a week. Administration tasks are usually the easiest to delegate.

Delegation is key to leadership. If you are micromanaging projects or your team, then you are not leading your company to the next level. Delegating is only as hard as you make it. Create a list of all you do in a week. If you could delegate a task, what would it be? Steve Covey’s Management Matrix can help you decide the importance of your priorities and create a clear picture of what you should be focusing on.

The key is to be wise with the time you just acquired from delegating a task. Be proactive and schedule activities that will help you propel your business to the next level. For example, while your VA is working on data entry, you could spend that time creating new sales or marketing strategies. The more productive you are with your time, the more you will delegate. Now you’ll be on your way to running an efficient and profitable business.