Many families and small business owners have seen decreases in income over the last several months. Money struggles can cause us to experience stress and worry, and none of us need that right now. Instead we need to boost our immune systems and decrease stress.
Here are some tips on how we can take back control of our finances and reduce our stress around money.
1. Assess your situation.
Take an inventory of your bank accounts, credit cards, and other financial accounts. This helps you to see the entire picture. You can be financially healthy in different ways. For example, you might be low on income coming in but if you have healthy savings or plenty of assets, you might be just fine.
2. Track your spending.
When you can see where the money is going, you can make good decisions about what changes you need to make. Use tracking software like Quicken® or simply a spreadsheet so you can see how much you really need for things like the rent or mortgage, food, utilities, and other necessities.
3. Make any changes that you need to.
If you have more expenses than income, here are several ways to get back in balance:
- Cut any unnecessary spending. For example, trade the expensive $100+ cable bill for a $15 Netflix subscription, at least for a while.
- File your taxes early, especially if you have a refund coming.
- Avoid temptation spending if you don’t have enough for the basics. Remember what’s important and find the will to curb impulses.
- Sell some of the items you own that you no longer need to raise money.
- Get a second job.
- Get support from local nonprofits that can help you if you qualify.
- If you must, dip into your savings or 401(k).
- Ask family members to help.
4. Build a budget and stick with it.
Making a plan helps some people reduce their stress a great deal. They feel good that they now have goals and can develop new habits that will work for their lifestyle.
In your software or spreadsheet, commit to monthly spending limits for each major category: housing and utilities, food, transportation, clothing, entertainment, savings, paying off debt, and other.
Each month, track how you did by comparing your actual spending with your planned spending. Give yourself a grade on how you did, and either reward yourself or make the changes you need to.
5. Pay off debt.
If you have debt, make a plan to pay it off systematically. Here are some ways you can speed that up:
- Pay down the debt that has the highest interest rates. You might even be able to consolidate and refinance your debt to a lower rate.
- Make a payment every single month, even if it’s small.
- See a credit counselor for more ideas on how to get out of debt faster.
6. Build a cushion for the future.
If your spending and income is balanced, but you don’t have a savings cushion, that can also be stressful. You need a safety net to fall back on for times just like these.
Decide on an amount that you can put away for a “rainy day” fund, and stick to it. It’s also never too early to start saving for your retirement years. The younger you start, the more your money will grow into a significant nest egg, providing comfort and flexibility in your final years.
7. Identify any other stressors related to money.
Perhaps a relative constantly asks you for money, and this causes you stress. In this case, you may have to make a “tough love” decision to reduce your stress while maintaining family relationships. These are very personal, individual decisions that include factors far beyond finance. But if they are causing stress, some kind of action should be taken.
8. Make your accounts work for you.
If possible, select credit cards that give cash back, miles, or other perks. Keep you bank balance high enough so that you don’t get charged a monthly fee, and try to get an account that pays interest. You won’t get rich from these things, but they are fun perks that help you save.
9. Invest wisely so you can sleep at night no matter what happens.
Understand your risk tolerance level when it comes to investments, and avoid investments that are too risky. You’ll sleep better at night knowing your money is safe.
Hopefully, these tips will help you decrease your money stress and improve your control over your finances.
The only way to get smarter about how to invest your marketing dollars is to document and measure what’s happening now in your business. What you’ve measured, you can then improve.
The first step to measuring what you spend on marketing is to aggregate all of the costs. They may be in one account or several. Some of the places to look for marketing expenses include:
- Advertising – for online or print ads, trade shows, sponsorships, and other advertising costs
- Dues and subscriptions – for membership fees to networking and professional associations
- Education – for marketing training
- Marketing – for obvious reasons
- Office supplies – for graphics subscriptions and fees
- Payroll, salaries, and wages – for allocation of employee time spent on marketing projects
- Printing and postage – for flyers and direct mail
- Professional fees – for marketing consultants, coaches, designers, and writers
- Software/Technology – for marketing software and apps
- Travel – for trade show or conference attendance
Once you have aggregated all of these costs, you’ll have a good idea of what you’re spending on marketing and you can calculate the first metric, marketing spend. The formula is:
Total marketing costs / total gross revenue = Marketing spend
This gives you a percentage.
Most companies spend five to ten percent on marketing. Higher growth companies will spend close to ten percent, and stable growth or slow growth companies will spend close to five percent. Large companies will spend more, from nine to 12 percent of gross revenues, than small companies.
CAC – Cost to Acquire Customer
Probably the most important metric for marketing is how much it costs on average to acquire one customer. To compute this, count the number of new customers for any period of time, and use this number in the following formula:
Total marketing costs / number of new customers = CAC
A more granular version of CAC is CPA, cost per acquisition. Unlike CAC, CPA is measured by campaign or marketing channel, or the source of how the customer was acquired. Example marketing channels include email marketing, social media, and paid ads, to name a few.
Revenue per Customer
Revenue per customer is a good measure in many companies. It can tell you how much, on average, a customer will spend at your company over a period of time, adding up all of the orders, projects, visits, or engagements for that customer. The formula is simple:
Total revenue for a period / total number of customers for the same period = Revenue per customer
A similar metric that’s valuable is how much a customer will spend at your company in their lifetime. That’s called CLV or customer lifetime value. Use the same formula above but compute it based on the longest period of time you have records for.
When you can compare revenue per customer or CLV with CAC, you can determine how much you can afford to spend to acquire new clients.
Let us know if we can help you calculate these metrics so you can become wiser about how to invest your marketing dollars.
If you agree that “there’s no place like home,” then you may also have a wish to work from home more often. In many cases, you can, and here are some tools you need to get started.
If the products and services your business sells can be sold or delivered digitally, then you’re a candidate for working from home most of the time. If you have a storefront where customers visit to purchase your products and services, you can still perform some of your business duties remotely or rely on staff to greet and serve the customers.
You may also be able to be proactive about moving more and more of your business online. Some examples include:
- Hold more business meetings online instead of face to face.
- Encourage employees to work from home if their presence does not require face-to-face customer meetings.
- Provide online training for clients who cannot travel to an onsite course.
- Move your scheduling online by providing an app for clients to book their own appointments.
- Move your products online by using a shopping cart.
- Provide a delivery option in your business. (This may have you or your staff traveling more and not less unless your items can be delivered via a shipping service.)
Meeting with Customers
The next best thing to greeting customers in person is using video-conferencing. You can easily start with FaceTime (for iPhone users). Android users have it a little tougher, but many use Facebook’s Messenger, Google’s Duo (both parties need to download the app), or imo (ditto on both parties).
If you have more complex meeting needs, software like Zoom is perfect to get you started. Hardware-wise, you’ll need a webcam, and a microphone is preferred. If you have a cell phone, you can use the mic and speakers in the headset provided.
Simply create your account at Zoom, and set up a meeting. Invite people by emailing them a link to join you. Join the meeting at the set time, and conduct your business with your customer. You can hide your webcam if you’re shy, and you can share your screen in case you want to go over a report or something else with your client. Zoom has a free account option and can be found at https://zoom.us.
And remember, if you’re a little too shy for videoconferencing, you can always conduct business with clients using the good old-fashioned telephone or email.
Sharing Documents with Customers
If you have documents to share with all of your customers, you can post them online on your website. If you have private documents, you can use portal software to securely create a private section of the portal exclusively for that client. Apps that can do this and that are not accounting-specific include Citrix ShareFile and Box.com.
You can also share documents that don’t have sensitive financial or company information with clients using Google Drive. Simply create them, then share them using the email addresses of the appropriate clients.
Receiving Client Communications
Already customers are reaching out to businesses via all of the social media platforms as well as the messaging platforms, such as Messenger and WhatsApp. Your virtual team can easily track all of these incoming messages by watching for notifications from anywhere in the world.
You might also be using an industry-specific app for customer interactions. For example, if you’re in the wellness space, MindBody apps are ubiquitous. If you’re an attorney, you’re likely using Clio.
Keeping in Touch with Your Team
You can use the same tools mentioned above to connect with your team members, but you will probably want one or two more apps – a private messaging app for when urgent things come up that need an immediate answer, and in some cases, a task management system.
Software like Slack is perfect for you to stay in touch with your team and keep communications private. It provides messaging functionality and more.
For task management, there are literally hundreds of apps to choose from. The simplest is something like Todoist, and typical small business options include software such as Asana and Monday.com.
If you want a Swiss-army-knife suite of tools that perform many of the above functions and are deeply integrated, Microsoft Teams fits the bill by providing a full collaborative platform for businesses of all sizes.
There’s No Place Like Home
We hope these apps provide you with the ability to stay in touch with your customers and your business while working from home, sweet home.
Looking for fresh, effective ways to grow your business in 2020? You’ve come to the right place. In today’s market, it can be difficult to stand out from the crowd, gain new customers or clients, and increase your company’s revenue. Note: We said difficult, not impossible! Below, you’ll find six fun, easy tips to help you achieve your goals and make your business bigger and better as it enters the new decade.
- Freshen Up Your Marketing
Have you ever given your house a new coat of paint? Well, consider giving your business one, too! Not literally, of course, but by freshening up your marketing techniques, clients and prospects will see you in a new light. For example, maybe it’s time for a new logo, more customer reviews to place on your site, or a new angle on your social media posts. Finally, give that old, tired website a facelift: add some new photos, offer a colorful promotion, or add new team members. Change is good and helps keep people (and Google search algorithms) interested.
- Enhance Your Product or Services
Nothing piques an individual’s interest like a new product! If you can, try to add a new product to your existing line. Or, if it makes more sense, simply add features to products you already offer. You have room to be creative here. Think about what your clients really want and try to give it to them.
- Meet with a Financial Advisor
Do you have a financial advisor? Now is the time to meet with him or her and discuss your future goals. Specifically, ask about new opportunities (i.e. investments) to grow your company’s revenue. Now—the start of a new year—is the perfect time to invest in new assets, get funding for new projects or ideas, and cut any unnecessary costs. You are in control of your company’s finances, so make sure money is going where you want it and need it to go. (And if we can help, let us know!)
- Update Your Organization Chart
Could you benefit from hiring a new employee or two? Maybe your company could prosper with the creation of a new position? It’s time to update your organization chart and see what your business needs to grow for 2020. You may discover that you need additional staff and/or a position to help things run more smoothly and effectively.
- Excite Your Team
Don’t forget to take care of your own! Remember, without your employees, where would your business be? Could you make it by yourself, without any help from staff? Therefore, remind your workers that you care for them and that they’re appreciated. The gesture can be as big or small as you want. For example, you could add an employee perk or benefit. Or, consider doing something small yet meaningful, like a team dinner or bonding event—anything to help show your employees that they’re more than just staff.
- Strategy, Strategy, Strategy
We’ve saved the best and most important tip for last: strategy. Remind yourself why you got into this business in the first place, as well as what your goals are and what you want to accomplish. Then, take a look at your current strategy. Will your strategy help you achieve those goals? If so, then great; you’re on the right track! But if not, then it may be time to rework that business strategy.
Think about what you need to do or change to reach those goals, and then work on incorporating them into your business plan. It could be you just need a minor tweak or two, or maybe your company requires a larger kind of shift. Either way, only you can determine whether or not your strategy is working.
It’s a new year—a new decade—and change is good! Let 2020 be the year that your business really takes off and grows. Now is the best time to accomplish all of your goals, and whether you use the list above or have ideas of your own to increase revenue, remember that only you can make a successful change happen.
The topic of money affects our emotions, beliefs, and behaviors in a very personal and individual way. Whether we have enough, need more, or are indifferent can impact our overall financial status. The most important thing to know about this topic is to be self-aware of your own feelings and actions and how they impact your wealth.
How do you feel about money in general? Does your brain repeat common beliefs like “Money doesn’t buy happiness” or “All rich people are selfish?” Does money scare you? Excite you? Do you feel like you don’t deserve to have money? Or do you feel entitled to having money? Is your ego wrapped up in how much money you make?
There is no right or wrong answer to any of these questions, but what your inner thoughts are telling you about money can impact on a subconscious level your ability to earn more or keep what you have.
How do you feel about how much money you have? Do you feel blessed? Or do you feel like you never have enough?
What are your current behaviors towards money? Are you a spender or a saver? Your behavior may be driven by your beliefs and emotions. If you’re not happy with your behavior toward money, there’s an opportunity for you to change the relationship you have with money.
Once you can bring your beliefs and behaviors into your awareness, ask yourself if they are serving you well or hindering you? You may want to find some sort of happy medium that fits your needs. Everyone has different circumstances, but if you can change your beliefs and then your behavior towards money, then you might see a change in your ability to meet your financial goals.
The ultimate goal is to be content with the relationship you have with money. Everyone is different, and that’s OK. You have to be you! But if you’re not happy with the relationship you have with money, there is opportunity for you to do some work in that area. And if we can help, please feel free to reach out.
You might wonder why there are so many extra tasks at year-end. While the government requires much of the work, there is clean-up work and adjustments that need to be done to make the books accurate. It’s not always cost-effective to perform all of these updates monthly, so you’re actually saving money by doing some of them at year-end.
Here are just some of the items that are performed at year-end.
- If you have payroll, employees need to be sent their W-2s, and the federal and state government need a copy of the W-2s with a W-3 transmittal.
- For employees, you must also have an up-to-date W-4 signed by them.
- For employers, your federal unemployment 940 return is due.
- If you have contractors, they need to be sent their 1099s, and the IRS needs the 1099s and the 1096 transmittal.
- For contractors, you must also have an up-to-date W-9 form from them. You may also need to request an insurance certificate, or you may get a surprise at your workers compensation audit.
- For vendors that claim exemption from sales tax, you’ll need to be sure you have an exemption certificate in your files from them.
- If you pay sales tax annually, your return and payment are due.
- Your personal federal, state, and local income tax and returns are due in the spring, and they can be extended until later in the year.
- Depending on the type of entity your business is organized as, you may have franchise, federal and state tax returns to file. This deadline comes up sooner than the individual tax return due date.
- Just about every asset on your balance sheet needs to be verified in some way or other:
- Petty cash accounts need to be reconciled and reimbursed as of year-end
- Bank accounts need to be reconciled with the bank statements. This includes PayPal.
- Accounts receivable balances and all other receivables need to be tied to each customer and any amounts determined to be uncollectible need to be written off.
- A physical inventory count needs to be taken and the inventory account should be adjusted accordingly.
- Fixed assets need to be reconciled to their fixed assets ledger and depreciation should be properly recorded.
- Goodwill accounts need to be checked and amortization adjusted.
- Accruals, deposits, deferred accounts and all other asset accounts need to be adjusted if necessary.
- Liabilities and equity need to be adjusted too:
- Accounts payable balances and all other payables need to be tied to each vendor.
- Liabilities that haven’t been recorded need to be added to the books.
- Loans need to tie to lender statements, and interest paid on loans needs to be properly expensed.
- The Equity accounts need to be checked and tied out to prior year balances.
- Corrections and adjustments need to be made:
- Any misclassifications and corrections need to be made on the books with adjusting journal entries or other classification tools.
- If the client is a cash-basis taxpayer, a reversing journal entry needs to be made to get the correct tax numbers.
- A clean set of reports can now be run and used.
- This is a good time to file and store your receipts in case you are ever asked for them. For long-term storage, thermal receipts should be copied or scanned in before the ink fades.
If you’re wondering why we’re so busy this time of year, it’s all of the extra work we have to do over and above the normal monthly load. If you have questions about any of this, just ask anytime!
In his book, The Rebel Rules: Daring to Be Yourself in Business, author Chip Conley describes what investors look for in a management team when considering providing startup money to new businesses. He says your management team should consist of a “brain trust that includes a passionate visionary, a ‘get-your-hands-dirty’ operator, and a responsible, finance-minded executive.”
Even if you’re never going to seek venture capital money to fund your business, this tidbit of advice makes a great strategy question to consider for your business, especially if you are an entrepreneur. Do you have these three roles in your company?
The passionate visionary is a creative idea person. She has the technical knowledge that supports the service or product that will be created and offered. She sees the market need and just how to sell and position the product so that clients or consumers will want the offering.
The visionary often has more ideas than budget. The finance role can evaluate the profitability of the visionary’s ideas and prioritize the projects. The operator can execute the visionary’s ideas.
The visionary provides strategic direction for the company and keeps the market offerings fresh.
If your business is missing a visionary, you might also struggle to keep your practice full as often (but not always); the sales function could fall to the visionary. You might also find yourself getting stagnant with your service offerings and falling behind the marketplace.
The fix for a missing visionary is to develop a sales and marketing team and/or a research and development team that can serve these functions.
The operator is an action person who can execute. She gets things done. She can find and hire the right team. She is a systems builder who can develop the systems, job descriptions, procedures, and processes that makes the company unique.
The operator takes the visionary’s ideas and makes them happen. She needs the visionary’s ideas because she would rather take someone else’s ideas and work with them than create her own. She also needs the support of the finance executive to stay on budget and to focus on one project at a time or avoid hiring too many people.
A business without a good operator never gets the product to market and may also constantly be short of team members.
Responsible, Finance-minded Executive
The finance expert helps to make the dollars work for the company. She can tell us how much we need to sell and how much we can spend. She can also provide capital sources for the company via investors or loans.
The finance executive loves numbers and can help to make sure the company’s operations are profitable. She’ll work closely with the operator to make sure that the right number of people are hired at the right salary levels. She’ll work with the visionary to plan and budget for new sources of revenue and new product lines.
Without a finance executive, a company often spends more than they bring in and may not have a viable profit plan. They may also run out of cash which can cause problems with creditors and investors.
This is the role we can not only help you fill, but also help you build your financial literacy to the level that you need for the stage your company is in now and for the future.
Your Business Success Trinity
As you were reading, which role are you? Which role jumped out at you that might need shoring up in your business? You might be strong in one area and need to outsource another while keeping a strategic eye on things overall.
Take a look at each of these roles and objectively assess your business. How are all three roles being served in your company? Which ones need more development in order for your business to grow?
Getting clear on your company’s roles can very well take you to the next level of success.
Which trends impact your business the most? Which ones speak to you? Feel free to reach out to discuss any of these ideas with us.
As we welcome in a new year (and maybe a new decade depending on how you count them), it’s a perfect time to reflect on the trends that will impact us and our businesses. Here’s a list for your consideration and reflection.
Trend #1: Sustainability
Concern for the environment has made the list of many companies’ core values. The way businesses are run can have a huge impact on the environment. While we hear a lot of stories about large companies impacting sustainability, we can also do our part as small businesses. In the accounting profession, many firms have gone paperless, transitioning from staplers, paper clips, and filing cabinets to digital storage which greatly reduces their footprint.
Trend #2: The Gig Economy
Young workers often have multiple jobs instead of the 9 to 5 jobs of their parents. This means there is more flexibility than ever before when it comes to hiring and retaining young workers. They can be employees, contractors, outsourced solutions, remote, local, part-time, full time, temporary, or permanent. Sub-trends in this area include more virtual workers and many more opportunities for veterans.
Trend #3: AI – Artificial Intelligence
This trend is impacting the accounting profession in a big way via smart data entry, smart document fetching, and even smart bookkeeping. Marketing has also been impacted in a big way through online ads, customer service solutions, and marketing technology. In email, Google is finishing our sentences for us, and chat and other technologies are having fairly effective conversations via bots.
Trend #4: Stories
Storytelling is huge everywhere. People want to know:
- The story behind your business and why you do what you do
- The stories about your customers and the experience they have with you and your services
- The stories from your employers and how it is to work at your organization
Digital communication has moved from text to graphics to video as bandwidth improves. Video makes stories even easier to share. Smart companies will leverage both stories and video going forward to get their message out.
Trend #5: Diversity Expanded
The conversation is no longer about race, gender, and even sexual preference. It’s now about authenticity and being the same person at work and at home. No one is “normal.” But it takes courage to reveal our differences, especially if they are outside the “standard.” Your courage is more likely to be honored in 2020 than it has in prior years.
Trend #6: A WOW Customer Experience
We’ve moved way past the time of “infotainment,” yet the concept is parallel. As businesses, the challenge is how we can deliver an entertaining, positive, and memorable experience while producing the outcomes the client desires.
Trends #7: Drones
So far, drones have made appearances in photography, special effects at conferences, as toys, in movies, and of course, in war. I see them in use for safety reasons, going where people shouldn’t or can’t. They will become more pervasive in 2020 and there will be more rules, protocols, and court cases on their use.
Trend #8: User Interface
The move from desktop to mobile is nearly complete, with only the laggard portion of the population remaining. The move to voice is still a work in progress, and it will steadily continue to gain traction in 2020.
Trend #9: Actionable Analytics
Capturing information digitally gives businesses a huge amount of data to utilize but small businesses have barely scratched the surface of this profitable information. It’s time they started catching up, and that’s something our firm can help you with.
Trend #10: Pace of Transformation
New business models in companies like Tesla, Uber, Google, and Facebook will continue to show up at a rapid rate. The business that’s most nimble will be the one that changes the game or at least stays in it without folding.
Which trends impact your business the most? Which ones speak to you? Feel free to reach out to discuss any of these ideas with us.
You’ve received them—probably more than once—and every single time, they’re painful, tedious, and unsolicited. Robocalls . . . Need we say more? You can experience a robocall, or an automated telephone call delivering a recorded message, on both a personal and business phone line. From scammers scamming to political parties politicizing, these calls can get in the way of your daily business activities, stop productivity, and simply annoy the life right out of you.
Here’s how you can fight them.
Don’t Let the Robocalls In
Unfortunately, robocalls can plague all types of calls, whether it’s a cell phone, analog, or VoIP call.
First, if or when you receive a robocall, hang up. Easy enough, except, you know you will eventually get another call, and then another, and more after that. These calls keep coming . . . like cockroaches.
Put your name on the National Do Not Call Registry; it’s free! Will it sufficiently work? No, not always. Yet, taking this step is proactive and it might keep one or two callers from connecting with you.
When an unwanted call does come in, there is often an option to “press a number” that is supposed to delete your number from the robocall registry. Viewpoints are split on this idea, as some say it works and others believe it does the complete opposite of what it’s intended to do. We recommend taking your chances and pressing that number. However, if you’re on the fence, don’t worry; we have more options for you!
Try downloading a call-blocking app, such as Nomorobo or Robokiller. These are subscription apps that don’t discriminate against carriers. You can also check with your particular provider to see if they offer any special blocking option. For example, Verizon has the Caller Name ID app. Both iPhones and Androids have built-in call-blocking features, while Samsung has a “Smart Call” feature to squash this issue.
You can limit your cell phone calls to “contacts only” by setting the “Do Not Disturb” feature on your smart phone, but is this a realistic option for business owners who often need to take calls from people not yet in their contacts?
Again, try contacting your service provider to see what options they offer. You may also consider purchasing a call-blocking device. Some of the call-blocking devices on the market can block up to 5000 numbers, such as the CPR V5000, which is available for less than $90.
A little trickier to fight, contact your Internet provider to see if they have a service to stop robocalls coming in via VoIP. With some clever searching, you may find an innovative blocking option online. Though, if you find a compatible match, it could be costly. Always report the unwanted call to the Federal Trade Commission.
Stop the Robocall Madness Now
The truth: Robocalls are becoming more frequent each year thanks to the double-edged sword that is the Internet. These calls show no sign of stopping. If you want them to end, you need to take action—and right now!