How much are you paying for your free lunch?
"There's no such thing as a free lunch." Anyone who has taken even the most basic economics course has heard it. But what does it mean, exactly?
The "free lunch" idiom is frequently used to simplify the concept of opportunity cost, in that, even as you accept a free lunch, you miss out on other opportunities during that period of time. Investopedia defines opportunity cost as, "The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action."
It's a fairly basic definition and it's one that most business owners understand...in theory. However, for many entrepreneurs, the desire to keep costs low can cycle into a "do-everything-yourself" mentality, which, in turn, lends to missed opportunities.
To better illustrate this issue, consider Janice, professional photographer (and fictional entrepreneur we created for this example).
After experiencing a great deal of amateur success, Janice has decided to become a professional photographer full-time, and open her own studio. She determines that her new business needs the following things:
- A photographer
- Photo editing
- Someone to answer the phone and schedule appointments
- A website
- Bookkeeping
None of this looks too hard to start with, and Janice figures she can handle most of it. She's got the photography and photo editing skills already and, until she can afford to hire a receptionist, she can just take business calls on her cell. There are plenty of places online where anyone can build a free website, and she can keep track of her own business financials throughout the year and figure it all out with TurboTax in April. For a great photographer and hard worker, this shouldn't be any problem.
Of course, things don't go as simply as Janice has predicted. Her phone rings with appointment requests while she's in the middle of sessions and, by the time she calls the prospective customer back, they have already booked with someone else. Her shoots run long because she has to change backdrops, arrange props, etc. by herself. Her days are so busy she has to stay up late working on photo editing. The website she built is...okay, but comes across as generic and slightly amateurish. She's not entirely sure how her bookkeeping as going because, with everything else going on, it's been the last thing on her mind.
On top of all that, she's started to notice that her business needs some things she hadn't planned for, including:
- Photographer's assistant
- Studio cleaning
- Basic legal documents
For the sake of comparison, let's assume Janice continues to do all of this herself. Let's look at how much money she is saving.
Receptionist - $9/hour
Website - $500
Bookkeeping - $500/month
Photographer's Assistant - $12/hour
Cleaning - $8/hour
Basic legal documents - $300
It looks like Janice has saved her business a lot of money through her strenuous efforts and "can-do" attitude. However, we have to factor in the opportunity costs.
Let's take a look at what each of these things Janice is doing herself, each "free lunch", cost:
Receptionist - Missed income from lost appointments; positive word-of-mouth; professional image
Website - Lack of professional image; loss of referrals; missed income
Bookkeeping - Missed deductions; increased risk of audit
Photographer's Assistant - Shoots take longer so fewer of them can be scheduled, leading to missed income
Cleaning - Time and energy diverted away from more profitable activities, such as photo editing and networking
Basic legal documents - Increased legal vulnerability; loss of time
So, when you weigh all the opportunities to genuinely build her business which Janice has lost while she was busy doing everything else, how much money did she really save?
Now, this isn't to say that you should farm out every task you dislike (particularly early on, when small businesses are susceptible to cash flow woes). However, it is key that, before committing yourself to something outside of your wheelhouse, you measure the benefits of DIY versus outsourcing. In many cases, the opportunity costs will be greater than you think.
Success Stories: The client who got a financial makeover
A good deal of the time, business owners don't recognize potential issues within their company until they become real problems. By the time those issues are discovered, drastic actions are required to remedy them.
That was the case when Craig was approached by a friend who, bluntly and truthfully told him, "I have no idea how my business is doing."
A surface look at his financials didn't present a clear answer. He was billing plenty, but there just wasn't much money left in the account at the end of each month. He couldn't see where the money was going.
So, Craig dug deeper.
He went through all of their financials for the past two years and found a few areas of concern. The biggest problems were:
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All personal expenses were being run through the company.
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Net wages were being recorded as gross salary (causing a greater tax expense).
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The company was significantly overstaffed.
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There were no legal documents.
Complicating the issue was that the client actually had an in-house accountant, and The Bookkeeper was only working on this issue in a consulting role.
A change was clearly necessary but, like many changes, that didn't mean it would be easy.
At the next meeting, Craig brought all of these issues to the client's attention. From there, they devised a multi-step plan to get the company in shape.
First, they took all personal expenses out of the company, so they could get a more accurate picture of its financial status.
Second, Craig went back and corrected the two years' worth of payroll entries in the in-house accountant had entered incorrectly.
Third, the client reduced surplus staff (including the accountant).
In the end, the client ended up hiring us for his bookkeeping and CFO work (for a fraction of what the in-house accountant was being paid). There was a great deal of work up-front in cleaning up his financials, but ever since the "makeover", records have been kept accurate and up-to-date, with no issues or surprises.
Here have been the effects of this change:
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All payroll expenses are now accurate.
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The company is staffed at an appropriate level.
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Monthly expenses have been reduced by $4,000.
Most importantly, the client has peace of mind that he knows exactly how well his business is doing, and no new problems are sneaking up on him.
How the Service Industry Prepares You for Entrepreneurship
Per the Department of Labor's Bureau of Labor Statistics, service industry jobs in America outnumber manufacturing jobs almost 10-to-1. In 2012, retail and hospitality employees numbered 28.6 million, with that number projected to grow to 31 million (a 10.7% increase) by 2022. Currently, almost 1-in-10 Americans work a service-based job.
With so many Americans in the service industry, it stands to reason that many of the entrepreneurs of the future are the retail and hospitality workers of today. All of us at The Bookkeeper have at one point in our lives bussed tables or ran a cash register. That's how we know there are several professional skills you develop in the service industry that better prepare you for life as an entrepreneur.
Service industry employees work with a sense of urgency. Few businesses are more fast-paced than a restaurant. Everyone, from the front-of-house to the kitchen, knows that tasks have to be completed immediately. The slightest delay in taking orders or prepping an entree can result in backlogs, unhappy customers, and decreased revenues. If you get anything resembling "down-time", you hustle to complete side work and other prep that can help you when you get busy again.
How can you make it work in entrepreneurship? Former service industry employees know how to keep busy. You do jobs as they come in, without putting off the more difficult or frustrating tasks. You are great at maximizing your free time, answering emails or promoting your business on social media in between meetings and assignments. Clients are often impressed at how quickly you complete projects and respond to their needs.
Working with urgency makes you better at prioritization. Three days before Christmas, the store is packed, the registers are backed up, three customers are waiting for help finding items, another customer is on phone line 1 while your district manager is waiting on line 2. What do you do first?
For someone who has never worked retail, this is the sort of nightmare scenario which makes the service industry seem all the more undesirable. For those of us who have been in this sort of situation, this hypothetical has an easy answer: Help the customers in the store first, then the customer on the phone, get back to the DM when you can. There's no way to please everyone right then, so deal with the immediate areas of need first.
How can you make it work in entrepreneurship? You learn what fires need to be put out immediately and which ones can smoke a little while longer. You have an innate knack for putting your to-do list in the perfect order so you can do all you need to while keeping everyone as happy as possible.
You develop customer service skills and a thick skin simultaneously. It is no secret that employees in the service industry are often treated terribly by customers. Service industry workers are frequently (sometimes daily) required to withstand being verbally berated, not only without retaliating, but smiling throughout and heartily apologizing afterward (regardless of whether they personally have done anything wrong). Over time, you get better at both anticipating customers' needs and moods (thus avoiding such tirades) and letting verbal abuse roll off your back.
How can you make it work in entrepreneurship? Many small business owners have an incident or two where they face unwarranted criticism, whether it be an unfair Yelp review or bad word-of-mouth from a client fired for non-payment. Though the initial desire may be to fire back at whoever is spreading lies and gossip about you, this rarely works out well. (See the Amy's Baking Company fiasco.)
The better (though less initially satisfying) option is to prove your disparagers wrong with your continued professionalism and exceptional customer service. By refusing to let others drag you down into the muck, you keep your company's reputation so sterling that no mud slung can stick to it.
You become prepared for anything. Anyone who has worked in the service industry for even a few months has at least one crazy story, something virtually unbelievable. I have several, but my favorite remains the customer who became disgruntled when she spilled her alcoholic beverage.
This was not in a restaurant. It was in a dog grooming salon.
She spilled her drink because she was carrying it in a regular, open-topped glass. Loose in her purse.
Again, this was an adult woman, and not a toddler. Concepts like "liquid" and "gravity" should not have been a mystery to her, yet she was shocked and infuriated (at me) that her mojito had tipped over and was soaking through the bottom of her very expensive shoulder bag.
How can you make it work in entrepreneurship? Once you have had the experience of fetching towels to help a woman clean rum out of the bottom of a Dolce & Gabbana bag, and have apologized because she didn't believe the towels looked clean enough, few things can throw you off your game anymore. Deadlines being moved up or employee sick days just become minor hiccups, instead of major obstacles, and you develop an air of unflappability that instills confidence in clients. Remaining composed in the face of extraordinary circumstances is a hallmark of a great entrepreneur, and surviving the service industry lets you enter the game with that skill already equipped.
5 Signs You're Ready to Hire an Accountant
Of course, assuming all goes well, most businesses reach a place where they do need to hire an accountant. The trick lies in knowing when you have gotten to that point.
We have identified five simple signs that your business is at that point. If you see yourself anywhere in the following list, it might be time for you to start searching for an accountant.
1. When you're presenting your business. This is an easy one. Everybody knows that you need pristine books whenever you're opening your business to inspection. Whether you are applying for a loan, interviewing a potential partner, or looking to sell, you want to showcase your business in the best possible light. Preparing your financial statements for close investigation entails a lot more than running a few reports. If accounting is not your area of expertise, this is really a time when you want to "leave it to the professionals".
2. Before you're in over your head. Like most other varieties of disaster, bookkeeping disasters are much easier to prevent than they are to fix.* If you're falling behind on your reconciliations, or guessing at balancing entries, you're probably already in worse shape than you realize. Don't kid yourself that you're going to figure it out as you go along, or do some extra studying in your spare time. You're a business owner - "spare time" is a myth. (You do still require sleep and social interaction, after all.)
*This is not to say we aren't willing to work with you to fix disasters after they happen; we just greatly prefer identifying problems before they become disasters.
3. When something seems..."off". There's an old joke (you may have heard it) that, "The definition of an accountant is, 'Someone who solves problems you didn't know you had in ways you don't understand.'" This somewhat feeds into entry #2 in that, by the time a bookkeeping layperson realizes something is wrong, it's probably very wrong.
If your cash flows don't seem to be accurately reflecting your revenue, or if your expenses are running unexpectedly high, it's good to get a second set of (highly-trained) eyes on your books, to identifying current and potential problems. In addition to the fact that identifying and correcting problems is core to an accountant's job description, it's also good to have an outsider who can take an objective look at your financials and identify issues you may have overlooked.
4. When it's taking time away from other things. Maybe you just need to hire a bookkeeper because your business is doing so well that your attention is required elsewhere. If accounting is not your forte, and doing it yourself is sucking time and energy away from areas of your business which better suit your skillset, outsource it. There is no logic in toiling away at something you dread when you could focus on growing your business. When your business needs you marketing, or training employees, or meeting with clients, and you can't because you're mucking through bookkeeping, hire an accountant.
5. When you're sick of it. Chances are, you didn't start your own business to work hard doing something you hate. If you loathe doing your bookkeeping, you are going to have a very hard time doing a good job at it. Distaste for a task compels the doer to procrastinate, or rush through it. In accounting, this can very quickly lead to huge errors (particularly if it's already not a subject of familiarity for you). If keeping your own books is making you miserable, then delegate it. After all, you're the boss for a reason.
How to watch the NCAA tournament when you're supposed to be working.
The NCAA tournament starts this week and, with it, millions of workers desiring a way to watch the daytime games. Since most businesses frown on calling out sick with March Madness, many employees have gotten creative in devising schemes for watching the first few rounds of the tournament.
Today we're going to examine some of the best and worst ways to watch the games when you're supposed to be working.
C
all out sick. Your boss knows you're not sick. This almost never works. The only way to have a shot at this one is to start planning in advance. A few coughs and sneezes at work the Friday before, come in Monday looking tired and haggard, sucking on cough drops and clutching tissues and, by Tuesday, be acting so miserable that everyone starts suggesting you just go home. "Tough it out" on Tuesday, come in like a zombie Wednesday morning, and beg off sick to go home at lunch. Since everyone will have seen that you're "sick" over the course of nearly a week, it will be far more believable when you need to take Thursday and Friday off.
The major downside here is that you are relegated to watching the games at home, lest anyone sees you watching the games with buddies at a sports bar while you're supposed to be recuperating. (Though should you see your co-workers skipping work to watch basketball, mutual blackmail might be a possibility.)
"Team-building" event. I actually pulled this off once at an old job. My co-workers and I were all big ACC fans, and we really didn't want to miss any of the games. The boss was new and not much of a basketball fan.
I convinced the new boss that a tournament viewing party would be a great way to bring everyone together and help hi
m get to know the employees. The way I convinced him was by getting him to think it was his idea. Again, this is an option that requires a great deal of prior planning. However, an office party has the benefit of great food (everyone brings potluck), comfortable accomodations (the nice conference room chairs) and superior viewing (the game streamed to the big projector).
Also, if you pull this off, you will be a hero to your co-workers.
Be the boss. Yet another one that can't be arranged on short notice (unless you feel like dramatically quitting your job). However, if you are an entrepreneur or small business owner, congratulations! You don't need to ask anyone's permission to watch basketball. Give yourself the afternoon off, and go catch Xavier vs. Ole Miss. You've earned it.
Write a blog article loosely relating the NCAA tournament to business. You're not slacking off and watching basketball. You are doing serious research to help your company socially connect to customers in a real and relevant way through targeted marketing.
Now, if you'll excuse me, I need to go "research" whether Notre Dame is still leading Northeastern.
What makes an owner?
If you're reading this, chances are you want to be a business owner, or you already are one. And, if you're the sort of person who wants to run their own business, it's probably not because you plan on working a daily grind into your 60s. You probably have a dream for your business, and for your role in it.
Maybe you see yourself hanging out nightly in the VIP section of a nightclub you opened. Or managing your wealth long-distance, answering emails on a satellite phone while you recline on a tropical beach. Perhaps your vision of success is your business doing so well that you can yacht away to somewhere without any cell phone reception at all.
Here is the problem we see time and time again...A new business owner spends so much time daydreaming about what their position should be, they don't put in the work to make their dream into a reality. The result is owners frustrated because, "I didn't start my own business to work myself this hard!", and failing businesses.
So, how does an owner achieve success? A few things to keep in mind...
You should be your most dedicated employee. No one has more stake in your business than you. So why expect anyone else to work harder for your business than you do? Employees take their cue from the boss. An owner who puts in their hours and maintains high levels of work ethic and professionalism shows the employees that the business is being taken seriously, and inspires them to follow in that same example. Unfortunately, many owners adopt a "Do as I say, not as I do" style which lowers employee morale and motivates them to do their job...when the boss is looking.
To assess your success in this area, take a step back, and think of yourself not as "the owner", but as one of your own employees. Ask yourself these three questions:
- Would you hire you?
- Would you write you a letter of recommendation?
- Would you fire you?
If what you're giving your business would be unacceptable from anyone else you hired, it may be time to reimagine your role as the owner. And...
Play to your strengths. You know a business type that makes a killing? Dental offices. So why don't I open a dental office? Because I am not a dentist. It makes no sense for me to try to start a business about which I have no knowledge, just because I'm hoping it will somehow prevail and make me a lot of money.
Unless you're simply a brilliant, Richard Branson-esque entrepreneur (in which case, Thanks for reading! Need a bookkeeper?), your business should involve a field in which you are an expert, or at least be something you have a strong passion for. Also, you should be leveraging that expertise and that passion in the most appropriate area of your business. (You are your own best employee, remember?)
For example, say you have a business detailing cars. You are a dynamite car detail-er, and, between word-of-mouth recommendations and repeat customers, business takes off. So, you hire four more people to detail cars, and you step back to do "owner things", like marketing and money management.
Only problem is, you have crippling social anxiety and couldn't add 2+2 without a calculator. So, you end up not doing the marketing because you hate it (and, truthfully, aren't that great at it) and you get your finances in a huge tangle. Meanwhile, customer satisfaction slips because those car detail-ers you hired can't match the level of service you're provided in the past. And in your rush to get to what you envision is the role of the "owner", you've hired too many additional people, anyway.
So, how should you play it? First, stop thinking about what an owner is "supposed" to do and just do what you're supposed to do. Keep detailing cars yourself (take on one or two people you can train) and hire somebody else to do the marketing and the books. If detailing cars is what you know and what you're good at, why take your best employee (again, you) off of that to do something else?
And, sure, maybe you don't want to detail cars forever. Maybe you really want to reach that place where you're just relaxing on the yacht. That's why you have to...
Have patience. So many businesses fail when they attempt to expand too quickly. (We recently compared this to buying hotels too soon in Monopoly.) Likewise, we see a lot of businesses run into trouble when the owner decides they'd rather work like Don Draper than Peggy Olson. (If you're not familiar with "Mad Men", then just substitute anyone who doesn't work very hard versus anyone who does.)
If there's something your business needs which isn't being done, and you refuse to do it yourself because, "I don't do that; I'm the owner," you're not likely to find long-term success. You can't just rely on your employees' hard work; you have to contribute your own.
Client Profile: Haley Gray of "Extension of You"
The Bookkeeper client Haley Gray is Chief Extension Officer at Extension of You Home Care, an in-home companion care and transportation provider based in the Triangle. Haley has received her MBA from Duke University and published her first book, Choosing a Caregiver: Expect the Best and Know How to Ask for It, last year. The book is a best-seller in four categories on Amazon.
You originally went to NC State for Computer Science and Spanish literature. What drew you to elder care?
My dad, my parents...the whole experience with my parents. I saw a lot being done right but also a lot of things that could be improved. I saw a lot of senior homecare businesses which were not doing right by their patients. For example, we had one caregiver who worked with my dad for two years from 5:30 AM to 5:30 PM, who never once saw a caregiver during a work shift. I saw my dad who had dementia being asked to sign a paper timecard. He had no idea what he was signing. I talked to friends who also reported similar stories. To me, that is not acceptable- you shouldn’t be asking someone to sign a document that they don’t understand, yet it happens every day.
To improve upon the standard level of care, what we (Extension of You) do differently is things like using telephony for time cards, random, unannounced visits when our caregivers are on duty, and providing ongoing training for our caregivers. We also do nationwide background searches, paid time-off, 401Ks, financial education, and we pay above market standards while maintaining a profit. Our caregivers earn a living wage, which helps us keep them longer.
You mentioned your employees receive financial education. What motivated you to go back for your MBA when you did?
It had been a long-term goal of mine. I was going to go back in 2002, but got pregnant with my third child. So I decided to wait until I was done having children. I went back when my youngest was about to enter 4-days-a-week preschool and my oldest was about to enter high school, which allowed me to finish my MBA before my oldest graduated high school.
Financial education of my employees, and giving them opportunities is important to me, because I’ve seen the huge benefits of a little bit of education.
Was writing a book a long-term goal as well?
That came more recently. I'd thought about it in the back of my head, but never thought I'd really do it. Once I got into my blogging it began to feel more like a real possibility. I ended up writing it last year in 5 months, start-to-finish, so it was a whirlwind.
With four children, do you see any of them following in your footsteps?
I have no idea. They all have very different interests, so I will be curious to see what they do. But anything they do will be earned, not given. I expect them to forge their own paths.
What
is your favorite thing you do on a day-to-day basis in your work?
My favorite thing on a day-to-day basis is getting out and meeting people. The buckets into which I divide my time are sales and marketing, dealing with business challenges, and managing people. But my favorite is getting out and seeing people, improving their lives, and helping them out at a difficult time. I also really enjoy seeing my companies grow and, as a manager, "nudging" people to grow. And, really, growth can be measured in different ways. I like looking at all the different metrics to see all the ways we're growing. I’m a nurturing soul, so it comes out in taking care of our clients, but also in taking care of employees.
The Financial Reasons Small Businesses Fail
Almost every entrepreneur has heard the statistic: 80% of small businesses fail. There are many reasons this happens, and can include everything from market slumps to lazy owners. To enumerate every way a business can go under would be an endless, impossible task.
However, there are a few financial characteristics frequently found in struggling businesses. Here are the most common financial reasons small businesses fail.
There's no plan. It's not uncommon to meet new small business owners who have a brilliant product idea, a well-developed marketing plan, a slick website, and not one thought given to their budget. We've already written on the tough financial questions to answer before starting your own business, but the importance of a solid financial bedrock cannot be overemphasized. A well-researched budget and fixed goals is the key to surviving that crucial first year in which most businesses go under. Great customer service and spot-on marketing are not enough to balance out shaky financials.
Speaking of customer service...
Poor credit management and pricing strategies are bad for everyone. No one craves popularity like an entrepreneur and, when your business's success is entwined with how well-liked you are, the urge to avoid offending anyone becomes even stronger. In the early days of a business, when there are only a few customers, there is a common impulse to let clients slide on late payments, or to offer frequent "friends and family" discounts. It's easy to justify this with the logic with the idea that you need to establish customer loyalty, and you can tighten the reins a bit when you have a solid customer base. There are a few reasons this doesn't work:
- Clients who don't pay on time aren't going to appreciate the slack you've given them in the past; they are going to resent the restrictions you enforce in the future.
- Likewise, your patrons who are just coming to you for the lowest price will quickly go elsewhere when your rates rise.
Lenient accounts receivable and cheap pricing might gain you a quick boost in early sales, but they are not a sustainable model. Delivering a product you can be proud of, at a price that is worth your hard work and can keep your business afloat (and actually requiring customers pay you that fair price) ensures that your customers the pleasure of patronizing your business for years to come. Because you have to remember...
Cash is king. Yes, it's a cliche, but that doesn't make it any less true. A great business model matters little if you run out of money before you can implement it. Managing cash flow is key to not just the health but the continued existence of your business. Here are a few of the most common cash pitfalls small businesses face:
1.) Insufficient capital. In all likelihood, your business will not be immediately profitable. So not only do you need enough cash to get your business started, but you need enough to allow yourself to operate at a loss for a while.
2.) Not having a large enough cash cushion. Think "Princess & the Pea" levels of padding. Regardless of how well you plan, the economy is unpredictable. Look to history for examples. No one expected the Boston Molasses flood which, in addition to the damage caused and lives lost, resulted in a nearly $11M settlement (in today's money) for the responsible company.
3.) Over-investing in fixed assets. It's great to plan for the long-term but, if you don't plan for the short-term as well, your business will not get a long-term. Sacrificing too much of your cash for something like manufacturing equipment (even if you're getting a great deal) can hurt you, as that is not a liquid asset and will be of no help to you in the event of an emergency (i.e. your factory flooding a major metropolis with 2.3M gallons of molasses). Think of it like a game of Monopoly; if you start building hotels too soon and suddenly need cash, you're stuck selling all your buildings back to the bank for half-price, and you know bankruptcy is right around the corner. Only, in real business, instead of losing yet another game to your annoying brother-in-law, you've lost your entire livelihood.
Expanding your business is the ultimate goal, but maintaining cash flow gives you the solid foundation you need to build upon.
80% of new businesses fail, but that means 20% succeed. To be that 1 out of 5, have a plan, know your value, and remain patient. Better to start small and grow something big than to start too big and dwindle away.
Marketing to Customers (Who Aren't You)
Growing your business is an exciting challenge. It's a time when you're ready to take on new customers, and you feel like you're ready for that "next step".
Of course, if you've been only working with a few close clients or through word-of-mouth, you may find it difficult marketing and networking with people outside your social circle. That's understandable; it's easier and more comfortable working with people with whom you have a lot in common.
However, diversity amongst customers is necessary to really expand your business, and is a great way to avoid having all your "eggs in one basket". But even mega corporations fall victim to major mistakes when it comes to marketing to a diverse audience. Here are some "do"s and "don't"s for reaching customers who are nothing like you.
Do your research.
There is an enduring (if slightly ridiculous) urban legend about General Motors expanding into international sales. The legend goes that attempts to market the Chevy Nova in South American countries met with failure because no va in Spanish means "doesn't go".
According to popular web aggregator of urban legends Snopes.com, this tale is a myth. And, upon further inspection, that makes sense. After all, even in the '70s, surely GM would have had someone fluent enough in Spanish to alert higher-ups about the possible translation issue? Besides, even if the Nova legend were true, we savvy businesspeople of the 21st century surely know better now.
Enter, Twitter. Though most Americans have a passing colloquial knowledge of Spanish now, in the digital era, technology has created a communications gap that spans generations instead of nationalities.
Now, there have too been too many Twitter scandals to ennumerate, but a recent marketing disaster illustrates just how bad it can be when a company tries to hitch onto a trend they haven't fully researched. When the #whyIstayed hashtag began trending, with former victims of domestic violence listing the reasons why they didn't immediately leave abusive partners, pizza company Digiorno tweeted, "#whyIstayed You had pizza."
Of course, Digiorno did not mean to make light of domestic abuse, and immediately issued an apology with the explanation that they hadn't read what the hashtag was about before posting. So failure to perform roughly 30 seconds of research resulted in a marketing disaster.
Don't be needlessly specific in your marketing.
Companies often seem to think they need to change their message in order to reach a new audience. Here they enter a minefield of marketing hazards, frequently falling prey to tropes and stereotypes, alienating the people whom they'd wished to include.
We have Bic to thank for the most hilarious trainwreck in unnecessarily-pointed marketing. When Bic came out with a line of "For Her" pens, they were flooded with sarcastic Amazon reviews. Customers rightly (and very snarkily) questioned why men and women would require distinct writing utensils. Bic's attempt at marketing toward a specific audience had unintentionally come across as condescending and ridiculous.
Whoever the customers you're trying to reach are, your company hasn't changed. So instead of changing the message about the benefits and values of your brand, change your marketing channels. Advertise in different channels, or across different platforms. If you use physical signage or flyers, try different locations. Just whatever you do...
Do be genuine.
Think back to your favorite high school teacher. You're probably thinking of someone who inspired you; someone who took an honest interest in your goals and success.
Now think back to that high school teacher who wanted desperately to be liked by their students. Who tried too hard to be cool by talking and acting like a teenage and, as a result, was respected by no one.
So frequently when companies try to market outside of their comfort zone, they follow the cringe-inducing pattern of the second example, awkwardly squeezing into ill-fitting jargon and trends. I will never forget a local tv ad, infamous in our area, for its inclusion of a senior citizen quoting, "Whoop, there it is!"
The ad was for a furniture retailer, and I doubt they attracted any new young customers through that awkward reference to an outdated rap song. They would have been better served by providing something relevant and of value, for instance, payment plans for customers without established credit.
When you look at it closely, marketing to a diverse set of customers really isn't that different from how you market to anyone. By keeping the focus on your brand and the value you provide, you can maintain integrity and avoid any awkward pitfalls.
Resolutions for Your Books
The clock has struck midnight, and rung in a new year. And you only have 105 days to get in shape.
Your books, that is. April 15th is coming up fast, and you want your books to be looking goodwhen the big day rolls around. Fortunately, there are many ways in which getting your books healthy is a lot like getting yourself healthy. So, to help you keep a resolution for good accounting in the new year, we'll be comparing it to the most consistently popular New Year's resolution.
How to Clean Up Your Books in the New Year
1. Make a plan. A common first step to those seeking to lose weight is to get a gym membership. Likewise, those who are serious about cleaning up their books should invest in some good accounting software. It is also imperative that, if you haven't yet, you set up a chart of accounts and have separate bank accounts and credit cards for your personal and business finances.
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Smaller, frequent efforts are more beneficial than larger, infrequent efforts. Going to the gym once a week for four hours isn't going to help you as much as going three times a week for one hour. In fact, you're expending more energy for less results. Bank reconciliations are similar. Doing your reconciliations on a monthly basis is a huge, exhausting chore. Doing reconciliations weekly or even daily is an easy, manageable routine which keeps your books in better shape.
3. Follow your document "diet". Yes, we'll go ahead and admit this point is a bit of a stretch. (Extended metaphors are hard, guys.) Would it help to say that receipts are the organic granola of accounting? Anyway, just like a lot of people track their calories while attempting to lose or maintain weight, you should be tracking your purchases as well. When tax-time arrives, those documents are a great asset for itemizing deductions.
4. If it's too much to do alone, get help. Personal trainers make their living showing people how to work out, but they still can't do the exercise for them. That's just one (of many) ways in which accountants are cooler than personal trainers. A good accountant can do project work and help you get your books in order. However, many business owners prefer to avoid the work entirely, entrusting an expert with keeping their books long-term.
Imagine how easy it would be to get in shape if you could just pay a trainer to go work out for you. Just shows how much easier it is to take care of your financials.