Stop Eating Frogs
Mark Twain famously said, “Eat a live frog first thing in the morning and nothing worse will happen to you the rest of the day.” In recent years this has become a particularly popular sentiment amongst entrepreneurs, used as a reminder to not procrastinate in completing disliked chores. Small business owners typically have to manage so many different aspects of their company, it's inevitable that there will be some tasks they dread.
For many, their "frog" is accounting.
But, here's the secret...for some people, frog is a delicacy.
We may be in the minority, but, at The Bookkeeper, accounting and finance aren't just something that pays the bills. We actually find a lot of it fun.
Here are a few of our services which, though business owners typically find distasteful, we really enjoy.
Developing Business ProceduresYou know the only thing more fun than reading a collections procedure manual? Writing a collections procedure manual. It combines several of the things we love, like research, technical writing, and custom-tailoring business practices to an individual company. What's not to love?
Of course, we've heard some people refer to research as "boring" or technical writing as "tedious". But we feel the same way about SEO optimization and, apparently, some people enjoy that.
Budgeting
Budgeting seems to have a negative connotation for a lot of people. A budget is seen as something constraining. But we think budgeting is awesome. You get to look at all your revenues and expenses, and figure out where you can save or earn more money. Who doesn't like having more money? A budget lets you make plans and take steps to achieve your goals. Not knowing your budget is like driving blindfolded. Maybe exciting for some, but too risky for us.
Debt Repayment Plans
A lot of people who are in a great deal of debt don't like to think about how much debt they're in. Of course, ignoring a problem doesn't make it go away.
For business owners overwhelmed by debt, figuring out a way to repay it all is too big a frog to eat. Much easier to just make the minimum payments and try not to think too hard about those rising balances. Fortunately, we love writing debt repayment plans.
Like so many problem, debt seems a lot bigger when you're in the middle of it. That's why we enjoy taking an objective, mathematical look at the problem, and coming up with a tangible, step-by-step solution to eliminating it. And it is so exciting to show someone how they can, often without even spending additional money, be debt-free and have savings built up in, frequently, as little as five years.
Profitability Analysis & Pricing Strategies
Some people may be put off from some aspects of accounting because of the math involved, particularly when it comes to things like calculating gross profit margins. We at The Bookkeeper are huge fans of math, perhaps because of its consistency and objectivity or, perhaps, as the great philosopher Cady Heron stated, "Because it's the same in every country." (Yes, both Mark Twain and "Mean Girls" quotes in one article. Small business accounting can be very culturally relevant.)
Math is especially useful when it comes to looking at which products or services provide higher revenues or greater returns, and where prices can be raised to improve profitability. Using a little bit of math and research to make more money, without having to sell more or perform more work? That's fun.
These are just a few of the services we provide for our clients, not just because our clients find them difficult or loathe doing them, but because we actually do find them interesting. Where the client sees a live frog, we see a perfectly seared filet mignon.
If there's some chore in your business which you simply despise completing on a daily basis, whether it's finance-related or something else, consider whether it's worth it to you to pay someone else to eat that frog.
You're in business for yourself, so why do something you hate?
Constructive Criticism: How to tell when the "haters" have a point.
To start, let's consider "American Idol". (And while we're considering, please also think of a time when you made a terrible decision.) The show "American Idol" has identified and produced many highly-talented musical acts. However, it is almost more popular for its rejects, for those people who were so delusional about their abilities that they gain a short-term measure of infamy for their embarrassing auditions.
There is a running script shared amongst these rejected contestants where they disagree vehemently with the judges and reject their critiques, assuring the camera that they will achieve their dreams regardless of what any critics (frequently mislabelled as "haters" in these diatribes) say.
It is easy for us to find amusement at the expense of these failed performers. However, how many of us have made equally bad decisions which, mercificully, were not recorded for the benefit of a nationwide audience? Thinking back to a terrible decision you have made in your own life, were there people in your life who, at the time, advised you against that decision? Did you listen, or were you dismissive of them as critics?
I'm asking about these things because, lately, I've seen some terrible business advice being shared across social media. Particularly "inspirational" quotes such as
"Don't let the voice of critics paralyze you. Believe in yourself. You can do anything you set your mind to!"
On the surface, that sounds like great advice. "Nothing ventured, nothing gained," and all that.
However, the problem comes when entrepreneurs cannot accept any criticism, and instead write off unpleasant truths as the sour grapes of "haters".
So, how can you gauge when criticism is constructive and when it is truly just jaded attempts at crushing your dreams? Ask yourself these questions...
Does this person love me? Or, do they at least like you or care about you? There is the possibility that a loved one will be more cautious than optimistic, as they don't want to see you suffer a setback. Someone who is just a casual friend or acquaintance might be more encouraging, as its more important to them that you like them.
Alternatively, what is the likelihood that this person despises you to the extent that they would actively attempt to prevent your success? If the person disparaging your plans is an actual avowed enemy, feel free to ignore their criticism (and, perhaps, avoid interacting with them socially at all).
Think back to those hopeless "American Idol" contestants. The judges don't critique them because they hate them, and many of the contestants families offer them excessive encouragement out of blind (or, in this case, deaf) love. The judges are able to be objective because of their personal indifference to the individual.
Does this person stand to gain or lose from my failure or success? If you are discussing a new business venture with someone who would be a direct competitor, they probably are not rooting for your success.
However, if they are a spouse or someone with whom you are financially entwined, it's possible that their criticism is coming from a place of caution. While they might share in your success, they also stand to lose along with you in the event of failure.
Also beware of "friends" who are willing to build you up but not invest in you. There are people who will encourage you into risky ventures in the hopes that you will remember them in your success, but who will abandon you should you fail. While someone is patting you on the back, make sure they aren't also trying to hitch onto your coattails.
Am I paying this person and, if so, what am I paying them for? Obviously, as people in the business of providing financial guidance, we believe in the value of business coaching and related fields.
However, we do not see the value in "yes men".
There seem to be two types of people you can hire to help you with your business: The first type is how we at The Bookkeeper fancy ourselves. We want to help you succeed, but we don't think you're paying us just to give you "'Atta boys!" We want to help you set and achieve realistic goals and, if that means saying something you're not happy with, well, that's part of the service we're being paid for.
The second type of business professional (one that seems to be becoming more popular lately) is the professional encourager. They provide endless affirmation and assurance that, "If you can dream it, you can do it!"
They are paid cheerleaders.
And, as long as you know what you're getting into and that's what you want, that's fine. By all means, pay someone to tell you what a great job you're doing; it's your money.
But be aware that all of those good vibes do not guarantee your success. There have been countless business ventures that have failed despite entrepreneurs really believing in them.
Therefore, we hold to a less popular old saying: "When two people in business always agree, one of them is superfluous."
Disagreement can be healthy. We live in an imperfect world where not every idea is a good one and not every venture will succeed. Recognizing that can help you to recognize who is acting as a critic out of "hate", and who is doing it out of love.
Managing Accounts Receivable: Because sales are meaningless when clients don't pay you.
In order to stay competitive, many business owners find it necessary to extend credit to customers. However, if you offer later payment options, it is crucial that you have a well-developed and communicated accounts receivable system.
Here we have listed a few elements of a successful A/R management plan, and how to implement them in your business.
Communication. It's said to be the key to a good relationship, and that can apply to business relationships as well as personal ones. Communicating well is key to managing receivables accounts. Let's look at the who, what, when, and how, of A/R communications.
Who? This seems obvious, enough...the customer, right? But, in reality, it's not just the customer with whom you are communicating. Assuming you're not a 1-person operation, you need to be in good communication with your employees or co-workers regarding what promises and agreements have been made with the customer. If you contact a customer on Tuesday afternoon regarding a past due invoice, and they just told your partner that morning that the check is in the mail, your entire company looks disorganized and unprofessional.
What? When alerting a customer to a past due payment, simply informing them of the amount owed is not the best option. Providing a detailed statement, possibly with an itemized duplicate of the referenced invoice, is far more helpful. Important information to include is the amount owed, days past due, what services were rendered, options for remitting payment, and contact information for questions regarding the account.
When? Generally, you would expect to increase contact as balances get further past due. A gentle reminder the day after the due date if payment has not yet been received is appropriate, with missives gradually becoming more frequent and insistent as the invoice gets to 15 days past due, 30 days past due, etc. (However, it would be best to avoid multiple communications a day, as that could constitute harassment.)
How? "The medium is the message". For an account that is just barely overdue, a mailed or emailed statement (as described above) might be enough of a reminder. If more time passes without payment or a response from the customer, a more direct phone call is in order. This leads us to our next element of a successful accounts receivable management system...
Delegation. To maintain a good working relationship with the customer, it is ideal if you can separate the less pleasant side of that relationship, collections, from the more positive side, which is the work and value you provide to the client.
Delineating separate avenues of communication between the service and payment sides of your business can help you achieve your A/R management goals without damaging the rapport you have built with your client. Large companies have entire Accounts Receivable departments, but small businesses rarely have that option.
However, if you have more than one employee, someone other than the client's primary contact could act as the accounts receivable delegate. If you're the sole employee, you can even do something as simple as set up a separate email. (For instance, if your email is "[email protected]", you could set up an email called "[email protected]".)
The key is to avoid marring interactions with the customer which could lead to continued or future work by derailing the conversation into payment discussion.
Documentation. Good documentation can prevent so many problems in every area of business, but especially in accounts receivable. Before a single customer is invoiced, your A/R plan should be formulated and written down so everyone in your business knows exactly what the payment terms are, who is responsible for contacting customers, what to do in case of a dispute, etc.
Payment terms should be made clear to the customer before services are rendered, and should then be reiterated on the invoice. If a balance does become overdue, remind customers of the payment terms, and document every communication with the customer regarding the overdue balance. Reference previous conversations about the account in new discussions about them. Established fact is far more effective in encouraging remittance than strong emotions or harsh words.
What should you do with a customer who isn't paying?
If the customer hasn't gone ghost on you (in other words, if they are still maintaining some form of contact with you), and would like to continue purchasing goods or services from you, do not cut them off. Cutting them off completely is a great way to ensure that they will do no further business from you, and will not pay you the money already owed.
However, do not provide any further service on credit. Request pre-payment for any further work you perform, then apply that payment to their outstanding balance. This allows you to maintain a working relationship with the customer and recoup the money you are owed.
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.
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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.