Patricia Anderson No Comments

Influencing Your Word-of-Mouth Results

Just about every business relies on “word-of-mouth” marketing to get the vast majority of its clients. If this is true for your business, then it just makes sense to figure out how to boost your referrals from all sources. Referrals are almost always easier to sell and they keep your marketing costs low. But how can you do that? Read more

The first step is to make sure that you know who your best current referral sources are. If you’re not already asking the question to new clients “How did you find out about us?” then I’d recommend you implement that right away.

If you do know the answer to that question for each customer, then you can make a list of your referral sources. Take a look at the list, and see what these referral sources have in common. Here are some questions to ask:

  • Are they all customers?
  • Do they all have a profession in common? For example, are they all lawyers, massage therapists, plumbers, or pediatricians?
  • Have you properly thanked each of these individuals? If not, you can send out a thank you card or take them to lunch with no other agenda.

The last question to ask yourself is “where can you find more of the same type of people that are referring you?” If you discovered that you get a lot of business from dog groomers, then you may want to consider visiting every grooming salon in your zip code. You may also want to present a speech to a dog groomers Meetup group that you find.

You really can be proactive about your referrals so that business comes to you more easily. Try these tips to boost your referral sources in your business.

Patricia Anderson No Comments

Are Your Workers Contractors or Employees?

If you have workers in your business, you likely made a decision when you hired them as to whether they should be an employee or a contractor. If all you hire are employees, then you have nothing to worry about. But if you hire contractors, there may be some financial risk you may be taking that you may not know about. Read more

Any person that runs a business as a sole proprietor that you pay money to for services rendered is considered a contractor. One difference between an employee and a contractor is that an employee receives a W-2 and a contractor that you have paid more than $600 per year by check receives a 1099. There are many other paperwork differences, but that’s the major one.

One of the biggest mistakes when a business owner hires a worker is thinking that they can decide to classify the worker as a contractor if they simply want to. Unfortunately, it’s the IRS that decides on the classification, not the worker or the business owner.

What’s the Risk?

There is no risk from an IRS standpoint to classify a worker as an employee instead of a contractor. There is significant financial risk if you incorrectly classify a worker as a contractor when they should be classified as an employee. You may be liable for back employment taxes if the IRS re-classifies a worker from contractor to employee, and this can go back many years.

To calculate your risk, take roughly 20 percent of the payments you made to contractors. This amount plus late fees and penalties can add up to what you could owe the IRS if you are mis-classifying workers and the IRS finds out.

IRS’s Employee vs. Contractor Rules

The IRS focuses on three factors to determine whether a worker should be a contractor or an employee: behavioral control, financial control, and type of relationship.

If you control both what and how a task is to be done, you should probably classify your worker as an employee. If you can control only the results you want, you may be able to classify the worker as a contractor.

There are many other rules about this classification, so be sure to check with your tax accountant for more information. Also, for those of you that love tax research, here’s a link that gives the full details of the IRS rules: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee

Having a successful business is all about taking calculated risks; however, you may not have known the risk you’ve been taking with contractors that you’ve employed. For the IRS, misclassifying workers is a “red flag” area, meaning they are paying extra attention to it. If you feel like you might be taking a risk that you don’t want to, please reach out and let us know how we can help you with this.

Patricia Anderson No Comments

The One Question to Ask Each Day

As a business owner, you’re likely torn in a hundred different directions every day. It can take up most of the work day just fighting fires, serving your customers, and answering employees’ questions. It’s super-easy to lose sight of what you can be doing to move your business forward the most. Read more

That’s when “the one question” can come in handy. It’s something you can ask yourself at the very beginning of each day, even before you check your email.

The one question is, “What’s the highest payback thing I can do today that will boost my profits?”

It’s not fighting fires or answering routine employee questions or even serving current customers. Although those are all important and essential, none of them will take your business to the next level.

It could be meeting with a power partner or referral source that sends you a lot of business, designing the next campaign that will bring in a higher level customer, or researching new products to sell. It’s going to be a task that gets you working “on” your business instead of “in” it.

If you like this idea, consider writing the question on a sticky note and posting it to your bulletin board so that you can see it every day.

Try asking yourself this one question each day: “What’s the highest payback thing I can do today that will boost my profits?” Then do it, and watch your business grow.

Patricia Anderson No Comments

Five Ways to Streamline Data Entry

Are you manually entering data into your accounting system? If so, there may be a way to enter that data that’s faster, cheaper, and better. Data entry automation has come a long way. Here are five common ways to automate data entry so that it no longer has to be manually entered. Read more

1.  Bank feeds or online banking

    If you’re still entering your bank transactions, the good news is you have an opportunity to save a significant amount of time and money on your accounting. Almost all banks and many credit unions provide interfaces with your accounting system so that checking account, savings account, and credit card transactions can be automatically entered directly into your accounting system. There are two ways to do this:
    a. The older way is through online banking which can be started by working with both your accounting system and the bank. The fee is usually $25 per month, with additional fees for bill pay.

b. The brand new, more modern and completely free way is through bank feeds, which are available when you move to a cloud accounting system such as QuickBooks Online or Xero. Bank feeds are not available in desktop accounting systems.

2.  A smart scanner

3.  Import and export functions

    If you need to get data from one place to another, such as from a point of sale system to an accounting system, then using the export and import features of the software may be the most efficient method. There are also software apps that help you scrub the data and get it ready for the receiving system.

If you ever convert from an old accounting system to a new accounting system, this method will come in handy to get you historical data moved.

4.  Interfaces and programmers

5.  Smartphones, tablets, and field service hardware and software

    If your sale occurs out in the field, don’t wait to get the data into your system when you get back to the office. You may be able to complete the sale right out in the field, so that when you get back to the office, you can call it a day instead of keying in the day’s work.

Mobile accounting apps are where to look for this form of data entry automation.

No more manual data entry

In 2015, consider taking on the goal of no more manual data entry. If we can help, let us know.

Patricia Anderson No Comments

Do You Have a Revenue Plan for 2015?

A great way to start the new year is to get clear on exactly how you can make your revenue goal number. A revenue plan is the perfect tool. You’ll need to be proficient in Excel, and if not, you can work with your accountant on this very important and enlightening spreadsheet. Read more

Start by listing all of your products and services, listing one product or service in each row of a blank spreadsheet.  Enter the description in the first column and use the second column for price. You may be able to export an item list from your accounting system, which will save a lot of time if you have a lot of products and services that you sell.

Use column three to enter the number of items you want to sell for the year. Column four should contain formulas to multiply the price by the volume to get revenue for each service and product you sell.

You can then sum the numbers in column four to generate your projected revenue for the year.

Getting Industry-Specific

Depending on what industry you’re in, you may need to make some adjustments to the above simplified revenue plan. If you work in construction, you’ll need to list your projects instead of products and services, and you’ll need to make adjustments if your project will go longer than one year. You’ll need to add a couple of extra column to determine the percentage of the project that will be complete and billable in 2015.

If you bill by the hour, you’ll need to calculate how many hours of service you’ll be able to charge for and factor that into the equation.

If you have sales, you’ll need to figure a discounted price. I recommend you have an extra line for each product that sells at a discount and allocate the total amount you plan to sell at each price. If that’s too much work, you can calculate an overall discount rate and apply it to total revenue at the bottom of the worksheet.

Use the 80-20 Rule

If you sell a lot of products and services, consider bundling them into subgroups to keep your plan cleaner and at a higher level. Spend only the amount of time that’s worth the insights you’ll gain from doing an exercise like this.

A Prosperous New Year 

Once you’ve created the plan, you can now take action based on insights you’ve gained. Perhaps you’ve got a whole new set of revenue resolutions to accomplish in 2015. If you need help constructing or analyzing this plan, feel free to reach out to us and let us know how we can help.