On the eve of the first day of another school year, I thought I would take a moment to reflect on the end of another summer.
Summer is the time of year when you can't help but slow down. There is no schedule. Days last for longer than any other time of the year, so you tend to stay up later, and get going later. When the sun is shining, you just have to take the day off.
Admittedly, I followed the lazy days of summer. I kept up with my deadlines, but did not actively pursue new business until August. I would take a day off during the week, and spend the day with the kids. There is a time for go, go, go and there is a time to stop and enjoy the view. What's the point of having a good life if you can't stop to enjoy it?
I would say to any Small Business Owner, you need to take time to enjoy the fruits of your labours. There are many studies that demonstrate why taking a vacation is a good idea. Most importantly, for myself, it is helpful in my productivity. If I am burnt out, I will not be a good Accountant.
So to all the students, good luck in your next school year. To all of the Small Business Owners, keep learning and keep working towards success in your business and your life.
When you are your own boss, sometimes the line between work and play gets blurry, and it might seem like you are working all of the time. Here are some tips that I use to get back to working during work hours, and playing during play hours.
Make your Clients Aware of your Office Hours
When I meet new clients for a consultation, I make them aware of my usual office hours. There are certain times of the year that I have unusual hours, but they are not the norm, they are the anomaly. When you make your clients aware of what time they should expect you to be available, they will follow. It is too easy to be available 24/7 between phone and email. Set the expectation and good clients will appreciate your boundaries.
Not Answering the Phone Past My Office Hours
I could tell you that I put my phone in a basket at the front door as soon as my family is home, but that would be an alternative fact. Instead, if a client calls me past what I have made my office hours, I do not answer. I do not check the voicemail until I am in my office the next day. I do not answer or send texts past my office hours. I am not a Doctor, and nobody is dying! The work will be there the next day. So put your phone away, and take a moment to relax and unwind.
Take a Walk
Fortunately, every school day, I stop to walk and pick up my kids from school. During that walk, I will listen to a podcast, or music, or just the silence. It is amazing what two 10 minute walks can do for my productivity. I am refreshed, and if required, able to work a couple more hours when I get home.
Take Days Off. Take Long Weekends. Just Take some Time Off!
Everybody needs down time. When you are go, go, go, sooner or later, you will experience burnout. You will no longer enjoy your business. You will no longer have the energy to keep going. Your body will tell you sooner than your brain. Just stop. Take that day off. Take that week off. Take that Stat Holiday off. Nobody is going to take that Gold Star away because you were not working 365 days of the year!
What to do, do you ask? Enjoy your life. Enjoy time with your friends. Enjoy time with your family. Go to a concert. Go to the beach and listen to the ocean. Go to a park. Read a book. Travel and experience a different place. Go, and do anything, anything at all, but work! Invest in your play time and you will see positive results in your business.
In business, and in life, obstacles arise. Decisions have to be made.
As a business owner, you need to be 10 steps ahead. You need to expect the unexpected. When you know what your numbers are, you can make decisions in financing. You can make decisions in hiring. You can make decisions in building your business.
I have seen a few times in the last little while, the importance of having Notice to Reader ("NTR") financial statements. If you don't know what a NTR financial statement is, it is literally a Notice to the Reader that the financial statements were prepared without any audit or review of the numbers. There is no assurance provided and it is based on the numbers provided by management. It may seem like an unnecessary expense at the time. Your accounting software statements provide enough information for you to make that corporate tax filing, so why need more? However, there comes a time when financing is required. Most banks and leasing companies will usually require, at a minimum, NTR financial statements. Also, the bank might further require your most recent personal income tax return.
Be proactive instead of reactive. Getting financial statements prepared is an investment in your business. It is a report that can provide you a guide of how your business has done in the last year. It can be used to compare to future and prior years. Why wait until you need financing to have NTR financial statements prepared?
Also, NTR financial statements make you evaluate what is sitting as an asset, liability and equity on your balance sheet. You can evaluate the ratios that your bank is going to consider in the assessment of your company for financing - Debt to Equity, Working Capital, and others. When you have more than one year of NTR financial statements, you can compare your profit and loss, and the changes in your revenues, cost of goods sold, and expenses. You can evaluate your Gross Margin, EBITDA, and other income statement ratios.
When you know your numbers, you have a bit of power in negotiations, because you have knowledge. You may not get everything you want, but you may be able to negotiate the monthly payment, the interest rate, the length of the lease, or even getting the lease or financing in the first place!
Take that first step in your 10 steps ahead of the game. Get NTR financial statements prepared, and make that investment in your business today.
Recently a client came to me in a panic, as the dreaded message of "the contract has gone to tender" had come down the pipe. Usually it would not matter as this business deals with many customers. However, when this customer is the most lucrative customer for this client, decisions need to be made. So what next?
First of all, make decisions in a place of peace, not a place of panic. Going to end of the world, "end of my business", "end of my life" scenarios is not going to help. There are always options. I find writing a list of all of my options helps put my mind at ease as to what are the next steps. Usually I will include a worst case scenario, and realize that really it is not the end of the world, it is not the end of the business, and it is not the end of my life.
Everything is Figureoutable - Marie Forleo
Secondly, start hustling. Hustle for new customers. Improve relationships with your current customers. Find ways to make that revenue that you are losing. Sometimes you will find that losing your best customer opens a new door. Maybe find some new revenue streams that you were not attempting because you were so busy with that one customer. Put it out there to your current customers that you appreciate their business AND their referrals. You have nothing to lose, so letting others know you are open for new business will never hurt your current business.
Finally, just because a contract is put out to tender, does not mean you have lost. If you do nothing, then nothing will come back in return. Talk to the decision makers in that company and explain to them how your company can benefit their business more than anybody else. If you are the higher price, talk to them about your excellent customer service, speed, years of service of working with the company, and other strengths that is of benefit to them. At least going out with a fight will give you peace of mind that you did everything you could to keep that customer.
Losing your best customer is tough, but it does not mean all is lost. Take a moment. Breathe. Evaluate and Take Action.
Today I learned that a Partner that I used to work for died a couple of months ago.
There are many memories I have of my time working at this small firm. It was like a family. Anybody who has worked in public practice knows how many hours, days, nights, and weekends that you spend at work during tax season. It is a long haul to say the least.
With this Partner, the focus was audits. I remember it was my first time out of the office for fieldwork. I was a very Junior Accountant, and he was out in the field with me. He was patient, and took the time to teach me what I needed to look into at this audit, what the paperwork meant, but most importantly, how you needed to communicate with the client to get the whole story. I was so nervous, and wanted to make a good impression as I was the firm's first Co-Op student. What I remember most is that he never held the title of Partner over my head. He never treated me any different than he treated anybody else. From Admin staff, to Junior Accountant, to his fellow Partners, everybody was part of the same team. He was a leader who did not get stuck on his Title. Of all of the clients that I worked with over the years that were his client, they always spoke very highly of him, and appreciated his knowledge and skill.
The thing is, we as CPAs learn lots of information, spend many years in schooling and articling to gain our designation. However, if you don't know how to communicate that knowledge to the client, you are no further ahead of the game. The numbers are only half of the story. The other half is found in conversation with the client. It is a skill that you build over time, and for me, am trying to constantly improve.
So, to you RM, I say thank you for teaching me to be a better leader. To believe in myself, believe in my skills as a CPA, but most importantly, believe that we are all just people who are trying to get a job done.
So you've done the work, now you are waiting for the money. Some clients will make you wait longer than others. Some clients may not pay you at all. But have no fear my small business dear. Here are some tips to getting money in your bank, rather than as a bad debt:
The faster you send an invoice for your services, the faster you will get paid. Anytime that I work with companies, getting out invoices is the priority. Setting aside time to invoice on a weekly basis, will ensure cash flowing 30 days later (if 30 days are your terms) on a weekly basis.
Review Receivables on a Consistent Basis
Every time I enter a payment received from a customer, I look at any invoices that are still outstanding. Ensuring the payments that you receive are as up to date as the invoices you are sending out, gives you the knowledge to which customers need to be contacted today, and not tomorrow. You will lose precious time if you are not keeping track of the money that is coming in. Once you know an account is delinquent, you can contact the customer to find out when your payment will be coming.
Contact, Contact, and Contact Again
In real estate, it is location, location, location. In collections, it is contact, contact, and contact again. You can start with a friendly reminder of an invoice that is coming due. Once a customer is past their terms, send an email stating the invoices are overdue, and when will they be sending payment. Keep contacting if there is no response. Usually, your customer will come through and send the money you are due.
Send Any Information when Requested
Having your invoices and any backup in digital format, makes providing information very quickly a whole lot easier. There are times when email does mysterious things and your customer may not have received your original invoice. That's fine, send it again.
There are also times when a particular customer does this every time you are looking for payment. Then you have a good idea it is a stall tactic. We will call them the "Staller". The Staller will also make the statement that they just put the payment in the mail. Or it must have been lost in the mail. Or the payment will be sent out at the end of the week. Regardless, you need payment and once you receive the payment, you need to make a decision of whether it is worth keeping the Staller. Because your time is worth money, and if you are spending it on getting money from a Staller, is it worth the business in the first place? Usually not.
Work smarter, not harder for your money. Keeping on top of the money coming in is one way to ensure the success of your business.
365 days. It is amazing how what seems like so many days, is in other terms, 1 year.
So, I have learned a lot over this past year, and here are some of the highlights:
Keep a pile of those snazzy business cards handy, because you never know where your next client is going to come from. Leaving your business cards in a box in your office will get you nowhere. Network everywhere. Specific meetings, Facebook, going out with friends, whatever, whenever. Have your elevator pitch with your headline phrase, and you are ready to roll.
Get Advice from Other Business Owners
Meet up with other business owners in the same industry and pick their brain on the good, bad, and the ugly of owning your own business. You are not alone in this journey, and you have to ask for help, especially at the start. What you learn will be invaluable, and saved me a lot of time and energy in how much I wanted to charge, what services to provide, and what software and equipment to use to get started.
Have your Own Vetting System
Even if you get a referral from a trusted source, you still need to put in place your own vetting system. Ask the hard questions to the potential client at the beginning. This will save you time and money you could lose, if you have to deal with a client that you don't want to be a part of your business. At the end of the day, you determine who is going to be a part of your business, not the other way around.
Trust your Gut
After your vetting system is put in place, you will know if you are going to connect or not, with a potential client. Trust your intuition, it is there for a reason. You don't need to always say yes. For me, I go back to my vision of where I want my business to go, and who I want to go with me. If it is a situation I am not comfortable with, I say no, and move on to finding where I will say yes.
I remember an Economics professor asking our class if any of us were Doctors. Everybody started looking at each other and thought he had lost his mind [which of course nobody mentioned within ear shot as it was the beginning of the semester]. Then he said "Good, because if nobody is a Doctor, nobody is dying, and you don't need your cell phone for this class." I think this is true for anytime in life...as long as you are not a Doctor of course! If you want that elusive work/life balance, you have to prioritize your life in that equation. If you are checking your email all the time, and responding at all hours and all days, well of course that balance will be gone. Is your business going to die today because you didn't respond to that client? No. Set boundaries with your clients from the start. Let them know what you will offer, when you are available, and for the most part, they will oblige. If they don't, then you need to go back to the question of if this is the type of client you want for your business. Stand by your choices, and the clients will follow.
Being a business owner has been a lesson in realizing that I have the ability to be accountable to myself. I don't need a timesheet, or recovery rates, or budgets to know that I am making a difference in my client's business.
Having a perfect business idea. Having a perfect business plan. Having a perfect business. All of which are never found because perfectionism will find a way to defeat that idea, defeat that plan, defeat that business.
You have to just start. You have to just muddle through, and get it done. There are so many times when I keep on trying to get it just perfect, but there is no such thing. You will never have perfect books. You will never hear a CRA auditor say "congratulations, you are the first business where I did not find an issue"! There is always an issue. There is always an expense that might be misposted to the wrong account. There is always something.
Done is Better than Perfect - Sheryl Sandberg
Don't get me wrong. This is not to say mediocre is best. Mediocre is mediocre. Constantly trying to fix what you start will also produce mediocre as you will never finish. There comes a time when to finish IS the accomplishment.
So stop getting in your own way. Stop letting perfectionism control your path. You will always find something wrong. So start finding something right.
Start. Right. Now.
Because when you start, you have the choice to get it done, or make it perfect. Your Choice.
When you start your business, it is you who is making all of the calls. You who is doing the marketing. You who is doing the work. At some point, you realize that you need help. So you start to hire employees. Next to cash flow management, your human capital is the next biggest component to the success or failure of your business.
Hiring the right employees takes time. Sometimes you will get it right. Sometimes you will get it very wrong. You will find out pretty quickly if you have hired the right person when you look to download responsibilities. Empowering your employees gives you the opportunity on building your business. Simply doing everything yourself will get you stuck in a rut.
I was talking to a client recently. He had been sick, and his employees had to pick up the slack. They succeeded in that they realized they could make decisions. The Owner learned what responsibilities he could hand over. As well, he learned what jobs he wanted to do, and what jobs he wanted his employees to do. Now he can move on getting more new business, building relationships with current clients, and giving increased responsibilities to his good employees.
I hear many Owner's wondering when they should stop doing all of the work, and handing it down to employees. I say start small, and figure out what you are comfortable with handing over. You can still provide oversight. It does not mean you are giving up complete control. But as one of my University professors used to say, always have somebody else be able to do your job, otherwise you will never be able to move up. I think this is true for business owners as well. If you never empower your employees, you will never empower your business to move onwards. Take that first step, and you may be surprised at the freedom empowered employees can provide.
It is hard to believe that 7 months ago this company was started, and that I am continuing to get new clients each month. As I sit here today, I think the greatest value from my business would be time. Time to work. Time to go drop off and pick up my kids from school. Time to look up to the sky and say "Thank You".
It is Easter long weekend and for some, it is religious celebrations, Easter Egg Hunts, family turkey dinners, or for most accountants, tax season. For me, I look at Easter as a time of reflection. A time when a year ago today, I had a medical scare that brought me to realize I had to make a change in my career. I had to find the balance between work and family, that I had to put more emphasis on time, rather than money.
Time is more value than money. You can get more money, but you cannot get more time. Jim Rohn
The road has not been easy, and I would say to anyone that is contemplating starting your own business, that you need at least 6 months to really get started. You are going to knock on a lot of doors. You are going to have a lot of people tell you that your business needs to be different to be successful. You are going to have some people who will tell you that you are charging too much, while others will tell that you are not charging enough. You are going to question yourself every single day. Most importantly, you are going to fight back the fear of failure.
I have come to realize that I really enjoy advising companies on how they can make their business better. My years of playing competitive sports, and all of the coaches who inspired me, are the voices I hear when I coach my clients. When I get the goose bumps on my arms, I know I am onto a good idea. Gut instinct is my first instinct, and I take pride in knowing that just one small suggestion, can make a big impact to a small business.
The thing is, you have to keep the big picture in mind. You have to think about right now, but also about what is right for the future. Think BIG, no matter what. You have the opportunity to make your business great. You need to look at the road that you have travelled, as well as the road ahead. Keep driving. You are going to hit obstacles. You are going to stop and hit various crossroads, but you just need to keep going. Keep trying. Keep the faith, as the road ahead is Your life. Your choices. Your story.
Your time is limited, so don't waste it living someone else's life. Steve Jobs
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