Summer is a great time of year for most businesses to pause for just a little while to take stock, congratulate yourself on what you've accomplished so far this year, and make big plans for your future. Here are five summertime strategies to help you regroup, reassess, and rejuvenate your business.
1. Mid-Year Review
If your business runs by the calendar year, 2014 is already more than half over. This is a perfect time to stop and reflect on where you've been, what you've accomplished, and where you want to go next. You can make this process as informal or formal as you want. Some firms hold complex retreats; you may simply need some quiet time on a weekend where all your family is busy doing something else.
If you've never done any planning and feel like you need a guide, consider the book, The One-Page Business Plan written by Jim Horan.
2. Take a Vacation
There's nothing better to rekindle your creative juices than to get away from the business for a while. Summertime is when most people take vacation, so if your business is not having its busy season, this might be a good time to go away for a while.
If you're anxious about being away from your business, you're not alone. In your annual planning process, plan for and block out your vacation time way ahead of time. Book the reservations with no refunds several months in advance so that you won't chicken out at the last minute. There is life beyond your business, and you will be a better business owner when you take regular breaks away.
Take time to pat yourself on the back and congratulate the people around you for the goals you've reached and the efforts your team has made on your behalf. We all could use more praise and celebrations in our lives. Perhaps you can organize a party, or if you are not the partying type, a quite word individually with your team can go a long way, maybe more than you know.
4. Prune Your Projects
Is your plate too full? Most of us would say "yes" to that question, so the next step is to ask yourself what you can afford to stop doing that doesn't make sense. Is there a project or two that can wait? If so, decide to stop stressing about not getting it done and give yourself permission to put it on the back burner for now.
Ask yourself what one thing you could do today that will make all the difference in your profits, revenues, goals, or simply peace of mind. And get that thing done.
Try these five summertime tips to rejuvenate your business.
Have you ever stayed at a hotel and then returned, finding that they have stocked your room with everything you asked for the last time you were there? Your special allergenic pillow was already waiting for you, you were asked if you would like a dinner reservation made just like you always do the first night, and there were even extra hangers because you always need extra hangers. None of this would be possible for the hotel if it didn't have a CRM (customer relationship management) system in place.
Would your clients be impressed if you remembered all of the details about your last conversation, their last purchase, or their preferences? If so, your business might benefit from a CRM system.
Businesses that have more than 30 or so clients may benefit from a system that allows you and your employees to enter detailed information about each client interaction that they have. It can work for both current and future clients. A CRM is basically a great big customer database at its core. It contains master file information on a customer or client, such as name, company, address, contact info, and custom fields. It is also transaction-driven in that you can log activity such as calls, meetings, proposal dates, and more.
A good CRM system is also integrated with your other internal systems, such as your accounting or POS system. In some CRM systems, you can see invoice and payment history, so that when a client calls in, you can also peek to see whether they owe you money or what goods they ordered that they may be calling about.
There are literally hundreds of CRM systems to choose from. The gold standard for large companies is Salesforce.com; however, some small businesses use it as well. SugarCRM is the largest open source for CRM, meaning its programming code is available to the public. ZohoCRM is one of the largest small business CRMs and offers a suite of products for small businesses. And Act! is also very popular and plays well with social media.
Before choosing a CRM, decide what you want it to do and how you will be using it. One of the most important aspects of profiting from a CRM is to make sure it gets used, and that takes some habit-changing from you and your staff. Once you have your requirements, you can evaluate the software options available, and choose the one that works best for you.
When your clients start talking about how great your service is and how much attention you pay to the details they care about, you'll know your CRM is paying off for you.
One of the side effects of our last economic slowdown was in state government budgets; states searched hard for new income, and many of them found a great source by cracking down on sales tax collections. Their new hot buzzword: nexus.
Nexus means a connection that a business has with a state, and it has to do with the form of a presence. In the sales tax world, you owe sales tax to a state if you have nexus in that state and you are selling taxable items. The scary part for small businesses is what makes up nexus.
A Small World
Globalization and technology together have produced dramatic shifts in the way businesses can look today. Not only can we access a pool of local talent to staff and grow our businesses, we can employ almost anyone around the world to work for us. Hiring employees or contractors located in other states can stretch our nexus to include that state.
As an example, if your company is located in Illinois and you hire an employee that works from her home in Nevada, you might have nexus in Nevada and Illinois, and you might owe sales ta in both places. Sales tax nexus is not the same as state income tax nexus, but the presence of a worker in another state is a possible trigger for sales tax nexus.
Taxable in One State, Not Another
The taxability of services has grown rapidly as states look to balance their budgets after Federal cuts and other shortfalls. Not all services are taxed equally across states. Web design services are taxable in Texas, but not California, as one example.
Some states have smaller jurisdictions such as counties and municipalities, making for a total of 10,000 jurisdictions in the U.S., not just 50. Alabama, Colorado, and Arizona, for example, have statewide rules as well as taxability rules for localities within the states.
Innocuous Survey Can Trigger Audit
You might receive a form that looks like a survey that asks innocent-sounding questions such as how many employees do you have and what state do they work in. The surveys don't look like they are from a state government but they might be. It's their way of getting you to admit nexus.
Minimizing Sales Tax Audit Risk
Because of the high dollar impact on the profitability of your business, it's best to get a sales tax professional involved in helping you determine the taxability of your items as well as interpreting nexus. Many states are hiring auditors and aggressively pursuing businesses, so due diligence in this area is prudent.
If we can help in any way, please reach out and let us know.
As an entrepreneur, you are responsible for shaping your business success. Any habits that sabotage your success in your personal life can often carry over to your business. Become aware of these is the first step to success.
Here are seven success-boosting habits to double-check against your own.
1. Being able to say "No".
Do you say "yes" to too many things that don't serve your life purpose, help your family, or move your business forward? If so, you're not alone. Saying "yes" in a week moment when you feel like you can do it all can be a downfall for many entrepreneurs. It can also distract you from success if you are not working on the right things for you.
You may need to re-evaluate the value of your time and your priorities. Practice making smart decisions by having a structure and a higher purpose that helps you decide what you should and shouldn't do with your time, money, and life. And if you tend to be one of those who says "yes" to everything, you may need to practice saying "no" in front of the mirror to break your habit.
2. Hiring fast and early.
The best time to hire is just before you need your team member. It can be easy to put off hiring if you fill with dread when you think about large stacks of resumes and endless phone calls. Not hiring soon enough can cost your business in reduced service and sales. The smartest entrepreneurs stay ahead of the game in this area.
3. Strategizing proactively.
How much time do you spend in reactive mode versus proactive mode in your business? Reactive mode includes answering emails, fighting fires, serving clients, and managing employees. Proactive mode includes developing new products and services, creating and implementing your revenue plan, and training employees.
Sometimes we have to really push ourselves to look beyond the daily fires. One way to do that is to plan time every day for proactive activities and be ruthless about keeping that time slot on the calendar.
4. Setting tight scope and polite boundaries with customers.
Successful entrepreneurs set clear boundaries when it comes to delivering their products and services to customers. Especially in service companies, it's not always clear to the client what's included in a fixed fee contract unless it's clearly spelled out.
If you are asked to do something that's not included in the contract, you now have a choice. Do you give it away for free, or do you have a change order process where you can easily provide an estimate for that extra work?
5. Measuring results.
Only what can be measured can be improved, and smart entrepreneurs know this. Track -- in real time, not a year later -- what's important to you. New customers, new leads, closed sales, revenue per day, sales per day, monthly net income, certain costs, profit margins, profit per customer, profit per job, and profit per location are just a few of the many metrics you can choose to track for your business.
Once you measure it, you can now set goals to improve it.
6. Curbing irrational spending.
Invest in things that will last, such as your own education, great systems, team training, and assets that you really need. Avoid spending on items that are used up quickly, such as elaborate entertainment expenses that don't generate significant revenue, excessive utilities, and stopgap equipment.
This area can be a tough one to evaluate objectively because there can be emotion and attachment involved in the spending. Let us know if you need help in this area; we can help you look at your spending with fresh eyes and provide a new perspective.
7. Maintaining focus.
Great entrepreneurs have clear focus. If you have too many projects going on at once, you end up delaying all of your project completion dates, and nothing gets finished. Ask yourself, what's the most important thing I can do today? And work on that until it's done. Then ask yourself the same question again, and wash, rinse, repeat your way to success.
Which of the seven habits are you best at? Celebrate your natural gifts while keeping an eye on the habits you need to work on. That will move you to the success you deserve.
The two major ways entrepreneurs can take money from their business is through draws or by receiving a paycheck. The type of entity in which their business is set up will determine which method can be used. In either case, entrepreneurs need to be careful not to shortchange themselves.
Especially if you're running a service business, it's easy to initially think you can do well with a similar hourly rate that you earned as an employee. Here's a quick list of five elements that should be included in the compensation of every entrepreneur:
1. Competitive pay
If you were doing the same work for a company that hired you, what would your pay be? Are you making at least market equivalent or better? A lot of times, as entrepreneurs, we tend to focus only on this piece of our compensation when we set our pricing, and that's a big mistake. It's only 75 percent of what our total pay needs to be.
As an entrepreneur, you take extra risk when you own your own company, and you should be compensated accordingly. Your capital is tied up in your business and should be earning a good return in addition to your reasonable compensation.
Employees get vacations, health insurance, and bonuses; and you should too. This should be part of your compensation package as an entrepreneur.
Although our individual taxes are not deductible as business expenses, we need to compensate for them so that we'll have enough cash for our living expenses. It's a huge chunk too. We work about three and a half months every year, just to pay for our taxes.
5. Retirement Plan
When you work for yourself, no one is going to fund your retirement for you. Although the Social Security program helps a lot of seniors, it's up to you to set additional money aside for a comfortable future.
Your compensation should include all of these components. If it doesn't and you feel like you can't afford to pay yourself that much, then your pricing might not be reflecting all of these items correctly, you might have a volume problem, or your business model may need some adjusting.
It's normal to take a smaller paycheck the first few years as we're building our business, but if you're still doing it after several years or constantly having cash flow issues, then something may be wrong.
If you'd like our help in this area of your business, please reach out and let us know.
Make sure your future is bright and financially secure by including all five components in your entrepreneur compensation.