New Business Direction LLC
It goes without saying that 2020 has been quite the year—and it’s not even over yet! Of course, any one of us could easily come up with a long list of every bad occurrence that has taken place since March due to the pandemic. Being grateful can be challenging during times of hardship, and we want to help you achieve the feat.
Below, we’ve put together different techniques to help you see that there are many things to be grateful for, both in our business and personal lives. This is a great time of year – just before Thanksgiving – to stop and practice gratitude.
What Are You Grateful For?
The act of being grateful can lead to experiencing positive emotions. As a matter of fact, if you are experiencing negative emotions and don’t want to, the fastest way to “reset” your physiology is to start thinking of things you are grateful for.
Here are some ideas to help get you started:
Your Health
Health comes in many various forms; the idea of being healthy can mean something entirely different to two people. Consider what being healthy means to you, and then, if you do think you have your health, try and be grateful for it.
One good thing about the pandemic is that most people are eating more healthful, home-cooked meals and less fast food, and they are feeling better with more energy. People are also watching their weight and even losing excess pounds, especially after some of the initial reports that overweight people were having a harder time fighting Covid-19 than slimmer people.
Friends and Family
Are you surrounded by loved ones? Now, more than ever before, it’s important to be grateful for people who are in your life. You may be facing hardships but think how much more difficult times would be if you were dealing with them by yourself. Be grateful for having someone in your life that you can lean on.
Work and Business
So many people have lost their jobs, their income, their sense of security. If you still have work or your business to keep you busy, focused, and earning a steady paycheck, be grateful. It’s a wonderful exercise to express your gratitude to your customers, coworkers, or employer by writing them a thank you note or leaving them a review on Google My Business, Yelp, their Facebook business page, or their LinkedIn profile as a recommendation.
Similarly, it’s the perfect time of year to ask your customers or employer to leave you a review on one of these digital assets.
Never Stop Being Grateful
Of course, there are plenty of other things to be grateful for in this world; everyone’s list will look different. Perhaps you’re grateful for a pet or something you’ve achieved. Maybe the fact that you have a special skillset or the ability to be patient and understanding during trying times gives you reason to smile.
That’s the thing about being grateful: there is nothing too big or too small to be grateful for; no right or wrong answer. And while it may feel more difficult this year compared to others, you can always find something when you look hard enough.
Regardless of the type of relationship—personal, professional, or even acquaintance—communication is key. Communication is particularly necessary when it comes to customers and building a successful business. It’s even more important this year since many businesses have gone through so many changes. This article will help you achieve better customer communication.
Are You Communicating Properly?
Effective communication helps to ensure your product or service meets the customer’s needs and satisfaction. By meeting these needs and satisfaction, you are potentially generating repeat business. Start by figuring out what your customers are thinking and what questions they might have about your business.
Congratulate yourself if you’ve sent emails or posted notices on your website that answer the following questions:
- Have your hours changed?
- Has your location changed?
- Can you handle drop-in service?
- If so, is there a protocol? For example, do customers call a number when they get to your locked door? Will you be taking their temperature? Is a mask required?
- Is your business by appointment only?
- Then, how do customers make an appointment?
- Do you require a covid-19 test before an appointment can be made?
- Are there special accommodations for at-risk groups?
- Has your contact information changed? With people working at home, phone numbers may have changed.
- Have your services changed?
- Do you deliver?
- Do you offer curbside pick-up?
And this is just pandemic-related. You may have launched new products or services, changed prices, added staff, and implemented many more actions that customers should know about.
Tips on Effective Communicating
Here are some foundational reminders about communicating in business.
Connection
Communication starts with a connection. To give the customer what they want, you have to connect with them. If you can connect on a personal level, even better. Regardless, you need to convey to the customers that they—as well as their wants and needs—are important.
Listen
Listen to your customer—and listen well. Depending on the customer’s communication, you may have to ask very specific questions to better understand what they want or need. However, intently listening to your customers will allow you to form a better relationship with them.
Not only that, but you can get some great ideas for how to improve or create new products and services so that you fulfill even more of your customers’ wants and needs.
Understand
Now that you’re connecting and listening to you customer, make sure you understand them. If you don’t understand what they’re saying, ask them to clarify. This isn’t a guessing game, but a two-sided relationship. To give the customer what they want or need, you must understand what it is they are asking for.
Transparency
Be completely transparent with your customer. You cannot earn a customer’s trust or loyalty—or repeat business—if you aren’t one hundred percent honest with them. Tell the customer exactly what you can do for them; don’t promise something you can’t deliver.
Deliver
Make sure you can—and do—deliver exactly what your customer is expecting from you. If you promise to deliver something, whether it’s a service, product, or result, then you need to keep your word. In doing so, you will be laying the brickwork for a successful, long-term relationship.
Communication is one of—if not—the most important skill to have when it comes to connecting with your customers. After all, happy customers will come back.
The 13-Week Cash Flow Forecast
If you’re having ups and downs in your cash balance, the 13-week cash flow forecast is the perfect tool to help gain clarity around your cash needs. It will help a business owner predict what their cash balance will be 13 weeks (one calendar quarter) in the future.
The forecast calculations start with entering cash receipts and cash disbursements into a spreadsheet. Start with actual spending and receipts for the first week, then use estimates for the remaining weeks. Include planned expenditures such as overhead, payroll, and loan payments. Add in inventory purchases. Project your receipts based on history or recent changes in your business.
Once you’ve completed your forecast, you can make changes and do what-if scenario planning. For example, if the forecast shows that you will run out of cash in week seven, you have some time to decide what you need to do to remedy the shortfall. Options might be:
- Accelerate the collection of your receivables.
- Dip into your line of credit to cover a portion the shortfall.
- Furlough some of your workers.
Plug your selected scenario into the forecast to see how much that relieves your shortfall.
The benefits of creating a 13-week cash flow forecast are many. You can see what actions need to be taken and when to take them well ahead of time. You can also see how much of an action you need to take. For example, instead of furloughing 50 percent of your staff, you may only need to furlough 25 percent. Or instead of borrowing $50,000, you might only need $20,000.
The cash flow forecast can also save time when developing your annual budget. Budgets are especially useful when business conditions are volatile or when business owners need all the clarity they can get.
Try your hand creating a 13-week cash flow forecast for your business, or reach out to us for help any time.
At the beginning of 2020, developing a business continuity plan may not have been a top priority. Or maybe you thought it was only for large businesses. Fast forward to today, and a business continuity plan has become an essential staple in business planning.
There are more business risks than ever before to consider that can affect business continuity. Businesses are being shuttered, reopened and shuttered again from the pandemic, fires, hurricanes and damage from riots, just to mention a few of the more common issues in this unusual year.
The biggest benefit of a business continuity plan is the process of developing it. It helps you think through the steps you should take if a business interruption occurs. If you have a disaster recovery plan – or even a few steps jotted down of what you’d do – then you have already started a portion of the process.
Here are some of the major pieces of a business continuity plan to consider developing for your business.
Roles and Responsibilities
In this section, the business stakeholders should be identified and listed. On a high level, questions like these should be answered:
- What is each person’s role within the company, and how would that change if the business is interrupted?
- What new skillsets should be acquired in the case of a disruption?
Potential Impacts to Your Business
This part of the continuity plan lists major scenarios where something could go wrong with your business. It should include things like weather events, fire, riots, theft, leadership interruptions, cash flow shortages, and the long-term impact of the pandemic. For each event, an analysis should be made as to how it will affect the business and what possible outcomes could occur. This part is also called a Business Impact Analysis.
Recovery Strategies
Once you’ve identified impacts, the next set of questions covers how to most effectively recover from them. These remedies might include seeking additional financing, selecting backup locations, checking IT department functionality, creating alternate supply chain and distribution sources, and identifying many more actions along these lines.
As we’ve seen this year, this is just as important to think through for small businesses as it is large businesses.
When owners and employees are not in the middle of an actual disaster, they can better map out a recovery strategy that’s optimal and cost-effective for the business.
Implementation
A good plan should be implemented through distribution, testing, and training. All stakeholders should read and understand the contents of the business continuity plan. The plan should be tested in drills and exercises when possible. Employees should be trained so they know their part and feel comfortable carrying it out if under high stress.
The long-term viability of your business is important, and it can be strengthened when you put a business continuity plan in place. If we can help, feel free to reach out any time.
You no longer need professionals to create quality videos. Video creation has gotten so easy that anyone can do it with the right tools. Many smartphones can take quality video, and the best news is you don’t need expensive video editing software. All you need is an app and your imagination.
There are many reasons to create a video:
- Web pages that include video rank higher than those that don’t have video
- Because people love to watch video, videos will often reach more people than text articles
- Video is often the best way to educate people
- Your message comes more alive when you use more senses: sight and sound
The first step is to figure out what you want to say. Here are some video topic ideas for your business:
- A customer service tip
- Your company mission, vision, and values
- Your company’s origin story
- Behind the scenes look into a production process
- An event, sale, or service promotion
- An employee spotlight
- A customer spotlight
- A product spotlight
- A how-to
- A deadline reminder
- A new product or service announcement
The next thing you need is a rough script of what you want the video to say, as well as graphics you can use to illustrate your points.
The final thing you need is a video creation app. Consider using InShot for easy yet comprehensive mobile video editing. When searching for video editing apps on your phone, there are free and paid plans to choose from. Other popular video apps include Adobe Express and Magisto.
With most video apps, you have hundreds of templates you can choose from to help you get started. You can easily replace your text, graphics, and sound with your own items, or ones that the software provides.
Have a favorite video editing app? Let us know!
Don’t be afraid to try your hand at video creation. It’s an easy way to impress your customers.
The purpose of marketing is to create relationships with customers and prospects. Since people may receive hundreds of marketing messages per day, it’s a good idea to get creative with marketing efforts. So why not have some fun with it? Here are some unique ways to grow your relationship with your customers.
- Celebrate an obscure or fun holiday.
For example, August 27 is National Just Because Day. It’s a day to do random things, which can be pretty easily tied to whatever your service or product is. You can do something as small as send an email or as big as hosting a live event on the holiday you choose.
- Feature a customer or staff member.
A great way for customers to get to know your team and for your team to get to know your customers is to feature them in a short write-up that you post or send out.
Make this fun by sharing things like favorite ice cream, activity they would love to do, country they want to visit most, most fun responsibility they have at work, and more.
- Highlight community work.
Does your organization have a favorite charity? If so, share experiences with your customers. Many customers value and prefer to support businesses that make community contributions. Go as far as holding a volunteer day or do a write-up for donations in your newsletter.
- Take a survey.
When is the last time you’ve been asked a “deep” question? Send a survey that asks your colleagues and customers a question like what inspires them. Then share the results, with their permission, of course.
This type of activity can lead to meaningful conversations and a deeper connection with your customers. It may also provide great insight into how you can connect with what’s important to your clients.
- Provide a gift guide.
Is it close to Christmas or another holiday where gifts are exchanged? If so, your customer might benefit from a gift guide you can put together.
You don’t have to own a retail store to benefit from this idea. Service organizations can provide gift certificate and other ideas in their gift guides. And you don’t always have to list only your own items. Add your customers’ and suppliers’ items and make it one big “business family” affair.
- Tell people a story.
Do you remember your first sale? Write a story about it, or the first day you opened your new location, your first hire, or another fun business milestone.
People love hearing stories about how others got started. Don’t be so private that you miss out on this wonderful way to connect with clients.
Try these six fresh marketing ideas to create a meaningful connection with your customers and prospects, and watch your relationships blossom.
Many families and small business owners may 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.
- 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, but if you have healthy savings or plenty of assets, you might be just fine.
- Track your spending.
When you can see where the money is going, you can make good decisions about what changes you need to make. Using software like QuickBooks or simply a spreadsheet can help you see how much you really need for things like the rent or mortgage, food, utilities, and other necessities.
- 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.
- 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.
- 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.
- 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.
- 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.
- Make your accounts work for you.
If possible, select credit cards that give cash back, miles, or other perks. Keep your 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.
- 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.
Every company should have a standard process to follow when an employee leaves the company, whether – voluntary or involuntary. Here’s a checklist you can use to compare to your own process, so that you can either confirm you’re on the right track or add some ideas to improve your current process.
- Collect the resignation letter.
While so many things are remote these days, you MUST get the employee’s resignation letter in writing and signed by them. If they don’t supply one, create a form they can sign that includes the reason for termination.
If you initiated the termination, have the employee sign the notice of dismissal.
This is not only important for general human relations records, it’s also important this year for any Paycheck Protection Program forgiveness documentation if the employee turned down a hire-back request. There may also be a requirement to submit the paperwork to your states unemployment office.
- Handle legal and benefits issues.
- Collect any company advances owed by the employee.
- Ask the employee if they have any final expense reports to file.
- Remind the employee that certain legal requirements, such as confidentiality clauses and noncompete agreements must be upheld after employment.
- Review insurance options such as COBRA.
- Let the employee know how to access their 401(k) and other benefit plans.
- Update the payroll system and cut the final paycheck.
Compute PTO and vacation balances due the employee. Calculate severance pay. Cut the final paycheck, incorporating those items.
Review the paycheck amounts with the employee, and ask them for a forwarding address.
- Collect company property.
The employee should turn over their computer equipment, including laptops, monitors, mice, keyboards, tablets, phones, beepers, printers, drives, and scanners. Don’t forget to ask for keys, business cards, name badges, security badges, gate and garage door openers, uniforms, and tools. Oh, and company cars or trucks.
- Revoke computer access.
Any user accounts held in the employee name should be revoked. Passwords need to be changed. Their email address should either be forwarded to someone else who can answer the emails, updated with an autoresponder, or revoked altogether.
Voice mail and their phone extension should also be re-routed. Take the employee’s name off any internal distribution list and remove them from the About page of your website.
- Hold an exit interview.
The business owner should hold an exit interview with the employee if they are leaving voluntarily. Ask questions such as these:
- Why did you decide to start searching for a new job?
- Was there anything we could have done to keep you employed here?
- If you could change one thing about your job, what would it be?
- Could you describe your relationship with your direct supervisor?
- Would you consider working here again?
- Communicate this change to your staff and customers.
Let your staff know immediately after the employee leaves that they will not be coming back. Don’t go into detail about the termination; that information is private.
If the employee was involuntarily terminated, assure your staff that their jobs are safe (if they are) so they don’t ruminate or spread false rumors.
If the employee worked with customers, each customer should be notified and given the name of the new staff member that will be handling their issues.
Follow these steps to protect your company when an employee is terminated. If you have any questions about this process, please don’t hesitate to reach out.
Paying bills might not be fun, but paying bills you shouldn’t pay or have already paid in the first place is even worse. There are many risks that can part a small business owner with their hard-earned cash, and here are five to watch out for when it comes to your bill-paying process.
- Fraudulent invoices
Some companies will send marketing documents disguised as invoices to businesses. You may have to read the fine print to notice it’s not really an invoice. In some cases, it’s simply outright fraud, trying to get you to pay something that is not owed.
Many times, these invoices look official, similar to legal filing requirements, but don’t be fooled. Examination of the fine print can save you a lot of money.
Set up procedures to catch these types of invoices. Managers should be careful not to approve these invoices for payment. Bookkeepers should be trained to question their supervisors about these invoices.
- Item(s) not received
Three-way matching can prevent paying an invoice for which the goods were never received. Put into place a couple of procedures to prevent this accounts-payable error:
- Have warehouse staff match the shipping receipt to what’s in the shipment when it arrives.
- Have accounts payable staff match the marked-up shipping receipt to the invoice when it comes in. If the invoice shows that more items were billed for than received, a call to the vendor to correct the invoice is in order. The invoice amount should be adjusted on the books and a check can be cut for the reduced amount.
- Wrong amount
Sometimes the wrong price can be listed on the invoice. If this happens, there may have been a misunderstanding during the sales process. A call to the vendor is needed in this case as well so that a corrected invoice can be issued.
- Math error
This hardly happens in these days of computers, but it can. All invoices should be reviewed for reasonableness. If it doesn’t make sense that something should cost so much, it probably shouldn’t. In rare cases, a price may have been entered wrong or a computer bug could have occurred.
Spot-checking the invoice’s math can save money if an error has been made.
- Duplicate invoice
This happens way too often. We may get an emailed invoice; then the same invoice comes in the mail. We need procedures in place to keep it from being paid twice.
Many accounting systems do this automatically, but if one character is off related to vendor name, or if the invoice number is off, the system could break down. Review a list of disbursements monthly to make sure payments don’t get duplicated.
Procedures are the answer to reducing accounts payable errors and making sure you pay only the invoices that are truly due.
If you need help putting procedures in place for accounts payable, please reach out – we’re happy to help.
At first glance, this article topic might seem too simple. After all, to get paid, don’t you just take money out of your business? Well, yes, but there is much more to it in the long run as well as from an accounting side. Let’s take a look.
The Traditional Paycheck
If you’ve ever worked for someone else, you probably received a paycheck every few weeks. It took care of three major things:
- Your regular pay that you live off from day to day
- Taxes you owe to the federal and state government
- Benefits. Depending on the employer, you might have received health care, retirement contributions, and vacation and holiday pay.
The employer took care of the needs you have today as well as some of your future needs.
Your Business Pay
Now that you’re the employer – of yourself, your business must cover all the items mentioned above. How it does that depends on the type of entity you chose when your business was formed.
Sole Proprietors
If you are doing business as a sole proprietor, you take draws from your business instead of paychecks. A draw is simply a cash withdrawal that reduces the ownership investment you have made in your company. The draws do not include any kind of taxes, including self-employment taxes; these need to be deposited separately, usually through quarterly estimated tax deposits to the IRS and to any relevant state agency.
As a sole proprietor, you’ll likely need to find your own health insurance. And the most important thing you’ll need to do is plan for your retirement by investing in IRAs or otherwise saving money that is earmarked for your retirement.
From an accounting standpoint, owner’s draws are shown in the equity portion of the balance sheet as a reduction to the owner’s capital account.
Corporations
If your business is formed as a C Corporation or an S Corporation, you will most likely receive a paycheck just like you did when you were employed by someone else. You will also be responsible for making the payroll tax deposit, funding the retirement plan, and paying for health care insurance.
From an accounting standpoint, corporate payroll, taxes, and benefits are all considered expenses and are shown on the income statement. Any money taken out additionally is a reduction to the owner’s capital account, and this is shown in the equity section of the balance sheet.
Rules for Shareholder benefits and additional distributions are complex, so please reach out to your tax professional for guidance.
Partnerships
If your business is formed as a partnership, each partner will be paid distributions based on the partnership agreement. Typically, that means receiving a base salary and a portion of the profits. You can also take money out of the partnership. Taxes are not included; you are responsible for making your quarterly estimated payments. Plus, you will also be responsible for paying self-employment taxes.
For benefits like retirement plans, partners can be eligible, but the tax treatment of these and other benefits is not necessarily the same as it is for a W-2 employee. Again, the rules are complex for deductibility, so it’s best to contact a tax professional to find out more.
Evaluating Company Profits
It’s critical to understand where your wages show up on your books so that you can truly understand your business’s profitability. With corporations, the salaries are included in the expenses, so net income is after, or net of, salaries and payroll taxes.
With sole proprietors and partnerships, the net income figure on the income statement does not include owner salaries because there aren’t any. Instead, only the equity section is impacted. Net income for partnerships and sole proprietors should always be high enough to at least “cover” an amount equivalent to a “so-called salary” for all of the active, participating owners.
If you have questions or need help understanding how business owners get paid, please feel free to reach out any time.
