Russian Roulette, er, I Mean Bookkeeping

The main square in Yekaterinburg

The early snowstorm in the Northeast a few weeks ago reminded me of the city of Yekaterinburg, a large city two hours east of Moscow by air that often sees snow in October all the way through May. The western border of Siberia is a few hundred miles to the east. In Yekaterinburg, there are many small businesses whose owners need to keep their accounting books just like you do. However there are a couple of twists as you might imagine.

The old Russian accounting system was built for one purpose: to calculate taxes. And the tax system is complicated, expensive, and volatile. In the 1990s, about 600 new laws were published every year (just in case we think U.S is the only country that has a crazy tax system). The Russian government has broad powers to garnish business accounts, and many transactions are handled in cash to avoid this capability.

As a matter of fact, it was quite common for small businesses to maintain three sets of books:

• One “official” set of books for the government.
• One for payroll which was mostly done in cash.
• One for management to see what was really going on.

It’s interesting to see whether QuickBooks could handle such data requirements.

At any rate, it would need to be QuickBooks in Cyrillic to support the Russian alphabet. Microsoft Excel is definitely available in Cyrillic; I’m not sure Intuit has any plans for a Cyrillic version any time soon, which brings up another challenge: there are not too many plug and play accounting systems available in Russian.

Another challenge in the new, turbulent post-perestroika economy -- inflation. Lending rates ranged between 130% and 200%. That’s pretty brutal to profit margins. What's worse, a loan has to be paid back in three months. A company needing cash for several months is forced to find a new bank every three months to pay off the old loan and lend it the money for the next three months.

Until 1992, Yekaterinburg was a closed city: No foreigners were allowed to visit for reasons of national security. Concepts that we take for granted in America, such as profit and efficiency, are relatively unknown in Russia. There is no Russian word for “efficiency.” Imagine describing efficiency to an employee who has never heard of the concept or the word.

The chief accountant, who is often a company officer, is usually educated as an economist, which is the closest profession that Russia has to accounting until recently. There is a great hunger for management accounting and reporting because there wasn't anything like it.

Sometimes it’s a breath of fresh air to experience a new perspective. In the U.S. we don’t have to keep three sets of books; one is quite enough for most of us. It’s illegal to make payroll in cash in most states. We have about half a million CPAs and far more bookkeepers to help us with anything we don’t understand. Most of them are quite efficient, and that’s a lot to be grateful for.

If we can help you with anything that feels foreign to you in your accounting system, please call on us anytime.

Six Ways to Reduce Fee Resistance

Do your prospects sometimes balk when you quote your prices? Do you feel you’re losing business because your fees are too high? The problem might not be your prices; it might be the way you’re presenting them to potential clients. Many business owners blame a lost sale on price, but only a small percentage of customers are truly price-sensitive and will make a decision based on price alone. That means the majority of the market buys on value, not price, and that’s what we need to move the focus to when we present prices.

The following are six ideas to help you reduce fee resistance and possibly even raise prices without receiving objections about your fees. The overall key is to reduce the prospect’s risk of doing business with you while increasing the chances that they will look like a hero after they have hired you.

1. Acknowledge their fear or skepticism.

If your client has just had a couple of failures with other vendors, lost some clients, or laid off staff, he is going to be defensive and skeptical about any proposal that has him spending a large amount of money. The last thing he wants to do right now is make a mistake hiring the wrong vendor.

The first step for you is to see the world from your buyer’s eyes. If the budget is tight, you have to acknowledge this elephant in the room. Show them how your service or product can reduce their pain and fit in with their current situation. And show them where it falls short, if it does. Being honest goes a long way and reduces defensive behavior on the prospect’s side.

2. Build vision.

Work with the prospect to see the vision of their problems solved. Staying at this high level will allow you both to communicate the big picture and avoid getting lost in the details.

3. Gain buy-in before you write the proposal.

“If we can deliver this, does this sound good to you?” is the type of language you want to use during the initial conversations. As much as you can gain buy-in at every step, do so. This will allow you to keep one eye on where your buyer stands emotionally as well.

If the answer is “no” to the above question, then you have saved time in the proposal stage. Don’t write the proposal until you know what should be in it that will be accepted.

4. Give your prospect a choice of YESes.

In your proposal, create three options: a small, medium, and large, if you will. This reduces your chance of getting a “no.” Your buyer has a choice of YESes to make instead of a yes-no decision.

For example, a trainer’s small option might be two train-the-trainer sessions, 500 licenses, and no instructor manual. A medium option is two train-the-trainer sessions, 1,000 licenses, an instructor manual, and email support. A large option is four train-the trainer sessions, 2,000 licenses, an instructor manual, two days of onsite support, and email support.

5. Use value words in your conversations, materials, and proposals.

When possible, use words like “investment” instead of “expense.” Also watch your ratio of “you” statements to “I/we” statements. Always use more “you” statements than “I/we” statements. List items you will be doing that are included in the fee and list them in the fees sections as “No charge” or “Included.”

6. Compute ROI.

If you’re dealing with larger accounts, calculating return on investment is pretty much mandatory. Estimate the value of the problems that you will be solving for them, and compare it to the cost of your service. There should be at least a 10 to one ratio, in favor of the prospect.

Include a per person component, if applicable. Your fee might sound high in total, but when you spread it across the number of individuals you will be impacting, it can sound really low. For example, a $20,000 training fee spread over 5,000 participants is only $4 per headcount. Let us know what numbers you need to make your marketing presentations complete. We can work with you to compute the number that communicates your value in the most informative way.

These tips will not only help you get what you’re worth, but they will increase your value in the eyes of the client, resulting in a more satisfied client.

Are You an Expander or Contractor?

Are You an Expander or Contractor?

As business owners, we naturally lean toward being an expander or a contractor in our businesses. In a nutshell, an expander makes things bigger and a contractor pulls things in, but there’s far more to this analogy which can explain a lot about what roles you want to have in place in your business.

The expander is a salesperson who can bring in the business and maintain good client relationships. An expander is a person who has a million ideas and can create profitable new service and product lines, but may not be best at implementing them. An expander will also tend to spend a lot, go over budget, and start a lot of projects.

A contractor is great at staying on budget. They love systems. They will create rules and systems and follow them. They are not natural at selling. They might be introverted. They are great implementers. They can rein in an expander’s ideas by encouraging them to choose one. They can implement it and see it to its finish.

Which Role Do You Play?

It’s fun to think about which role you naturally play, and which roles your team members naturally play. There may even be some tension between the team members who are opposites, but when they can play well together, your business will flourish. To succeed effortlessly in business, you need both types of roles in your business – an expander and a contractor.

Challenges for Expanders

If you’re the business owner and the expander, the challenge for you is finding the time and discipline to do the work as well as keep up with all the marketing. You might feel the pull of that seesaw between delivering services for clients versus going out and getting new clients and keeping your business full.

If you’re in business alone, the first person an expander business owner might want to hire is a contractor type – a project manager type or an admin type that can help you offload some tasks that you can systematize and delegate. Your biggest challenge is time. You need help to get all your great ideas done. Choose an admin person at a low hourly rate that will do the lowest level tasks on your plate. This will free you up to do the higher dollar stuff you need to do with clients and to do the strategy work that no one else can do in your business. Another way an expander can bring a contractor role into their business is through coaching or a mastermind group that can hold them accountable.

Challenges for Contractors

If you are the business owner and you are a contractor, you love doing the work but hate going out and getting clients. You are introverted, maybe a numbers or rules or systems person. You might dislike marketing and avoid doing it. Your biggest challenge is getting enough business in the door. The first step you can do is to leverage online marketing as much as possible. Systematize your marketing so that it’s as automated as possible. You can also employ a strong support team of expanders in your business to help you. Find a fabulous employee that has client service, sales and marketing experience that can be your expander.

Your Business Roles

You will easily be able to tell if you have too many of one role in your business. In an all-expander business, client projects can run over-budget which hurts your margins, important initiatives may not get implemented, and details can get overlooked. In an all-contractor business, you do great work but you are a best-kept secret and you may fall short on revenue goals.
Take a look at your business roles. Are you naturally an expander, or does your business have too many expanders? Are you naturally the contractor, or does your business have too many contractors? Let us know how we can help you keep your business in balance.

Five Tips to Manage Overwhelm

Does it seem like you need to accomplish more in less time than ever before? Just about every small business owner I know is overwhelmed with everything they need to do. Many factors are contributing to this feeling: new technologies, increased government regulation, a need to market harder, and less access to capital are just a few examples.

Is there truly a way to find an extra hour each day? Yes, there is, and here are five tips you can put in place to reduce the feeling of overwhelm, free up time, and feel more in control of your business.

1. Get stuff done off prime time.

Most people drive to work between 7 and 9 and come home between 4 and 6. Save yourself 15-30 minutes per day or more by coming in before or after the rush.

Apply this same idea to your weekly errands or times when you need to stand in line. Go to a restaurant a little early (or late) to avoid the busiest times. Go to the grocery store during the week instead of on Saturday.

Doing this for 10-12 errands per week will save an hour a week or more. Combine that with the time you’ll save in rush hour, and you could save as much as three hours a week using this idea. Even if you can apply this idea to only one or two days a week, you’ll still be ahead of the game.

2. Delegate clerical or personal tasks.

Make a list of all the tasks you are doing that a minimum wage earner could do, and hire a college student for a few hours a week. You’ll benefit from systematizing the tasks you delegate – they will get done more efficiently – and you will have freed up a few hours a week once your worker is trained.

3. Practice Power Hour.

Carve out one hour a day to complete the most profitable task for your business. This might be making sales calls, meeting with a power partner, or designing a new service or product to offer clients. It’s best if it’s the first hour in your day. In any case, the time should be sacred, with no checking email, no answering the phone, and no texting.

Your business will really accelerate when you make Power Hour a regular practice.

4. Check email and social media less often.

Turn off automatic send and receive in your Outlook or email application. Instead, close (yes, close!) your email application for most of the day. Check it only at 8am, noon, and 4pm. When you can break the addictive cycle, you will have fewer interruptions, be able to focus, and do higher quality work.

Likewise, if you need to spend time on social media, set a timer before you start. When the bell rings, that’s it! Get back to work.

5. Nail your time wasters.

The only real way to determine where your primary time drains are is to track your time, minute by minute for a couple of days. When you review the log, you’ll be able to see what’s going on and what you can do to prevent time from slipping through your fingers.

When you can use your time wisely, you’ll not only get more done, you’ll get the things done that matter to you.

Seven Strategies to Fire Up Your Fall Sales

The fall months are a great time to rev up your business revenue.  Many business owners are freshly back from retreat or vacation, and they’ve had time to refresh and rejuvenate themselves and their staff.  Now it’s time to benefit from all that creativity that’s been unleashed and put those ideas to work.   

If you’re ready to rev it up for the fall of 2011, here are some fresh ideas to help you invigorate your fall sales. 

1.       Conduct a Client Survey

If you’re wondering how to discover the next big revenue blockbuster for your business, go to a wise source:  your clients.  Send a survey asking them what their current challenges are, what keeps them up at night, and what they could use help with.  Tools such as Constant Contact surveys or SurveyMonkey make sending surveys a snap these days.  You’ll gain valuable intelligence on where to focus your revenue development efforts so that you can serve your clients even better while increasing your income. 

2.       Ask for Referrals

The fastest and most cost-effective way to find new clients is by tapping into the network of current clients who are pleased with your work and know others who could use your services.  To make sure your clients know you are looking for more clients just like them, you might have to tell them!  They may not put two and two together like you think they should.  Prime the pump by creating a referral program and making it known you’re in the market for new clients. 

3.       Make Yourself Skillful

There’s nothing like adding new skills to your tool belt to help you increase your value in your client’s eyes.   Learn a new software package, design a new procedure, read a book, or take a training class that will give you ideas on how you can add value to and extend your current service or product line.  Once you’ve mastered it, you can train your team on what you’ve learned and make it a new offering which brings in more revenue.  

4.       Collect Testimonials

Collecting testimonials has multiple benefits.  First, you can use them on your promotional material so that new prospects can read about what it’s like to do business with you.  Second, you’ll learn something about what the client values by reading them.  And third, every communication you have with your clients increases “top-of-mind” awareness, making it more likely for the client to use more services or refer you.  That’s a triple win.

5.        Change Up a Current Service or Product

Add a whole new service by changing something about your current service or product.   If you offer products or services a la carte, bundle some together and make a package offering.  Correspondingly, if you offer a package, break it down into smaller offerings.  If you offer services via the phone, offer them in person as well.  Join with a trusted partner to offer your products and theirs together in one packet.   Or subcontract with a vendor you trust to expand your offerings even more.  When you offer three options, a discount, regular, and premium version, your clients will have more choices to fit their changing budget.  You can also change up the packaging, add extras, subtract items, change the color, change the timing, and much more. 

6.        Upgrade Your Marketing

Invest in your marketing skills and materials so that your company is more appealing to prospects.  Redo your website if you need to, or perhaps there’s a flyer you can design that you can hand out at networking meetings.  Learn how to write a great proposal and how to communicate well during a sales call.  Or learn how to use social media to engage and educate your prospects on what you do.  When your marketing materials are a notch higher, your business will be more attractive to higher quality prospects.

7.        Cross-Sell and Upsell to Current Clients

Your current client base is a gold mine of potential.  They already trust you and know you through the services you are currently offering.   It’s possible they may not know everything you do.  It’s your job to let them know about all the other services you offer.  When you do, you’re highly likely to do more business with them. 

Try these seven ideas to fire up your fall sales.   

The Best Way to Bring on New Clients

How to Save Precious Time Onboarding New Clients

You might have routines and systems to help a new employee settle in, such as payroll forms and training manuals. You might also have some procedures set up for when you start doing business with new vendors, such as asking them for their tax ID paperwork and having them submit invoices to your standards. But what about onboarding new clients? Most entrepreneurs don’t think about systematizing that process.

You will save a ton of time if you stop and put some systems in place to help you and your new client get off to an efficient start. The payoff can be extremely high. If you save a half hour per client and you have 100 new clients a year, then you just saved 50 hours a year, or an hour a week.

Here are a few tips to get you thinking about where you might be able to streamline your new “New Client Acquisition Process.”

First the Paperwork

What forms do you need from every client? These might include:
• An engagement letter or contract that describes the scope of the work to be done.
• Billing information, which might include a credit card on file and the process they want used to submit and approve invoices.
• How the client found out about you for marketing tracking purposes.

You can further systematize this by having a standard engagement letter, a form each client fills out, and/or a standard pre-written email (forever saved in your drafts folder of your email program for easy access).

The Good Old Days

Way before computers and the internet, all types of businesses used to run credit checks on new customers before opening their accounts. That might not be a bad idea to bring back! If so, you’ll need a form for that so that your clients can provide you with the information you need to run a credit check. Either that or provide them the ability to prepay their account.

Getting Started
Make a list of items you need from your clients to get started. This will vary depending on what industry you serve. Here are some common items to get you started:

• Contact information include staff names, titles, phone numbers, and email addresses
• Account names, user IDs and passwords
• Description of their problem if it’s repair-related
• Hardware and software information if it’s a computer-related service
• Any documents you need to complete your project
• Insurance information
• Licenses
Once you have your list, you can create a form asking for all of the information you need from every client. This will save you tons of time if you are asking for these things piecemeal now.

Instructions

Do you find yourself repeating the same instructions over and over again to each new client? Write your spiel down or better yet, make a recording so your client can listen in at their convenience and play it over and over again if they need to.

Here are some common implementations of this one:
• Photography studio owners can write down how clients can prepare for their portrait and what to wear.
• Grocery stores can provide recipes for items in their deli.
• Plant nurseries can have instructions on how to re-pot plants.
• Plumbers can provide instructions for how to turn off the water.
• Restaurants can offer menus that disclose ingredients and calories for those who are sensitive or on diets.
• Office supply stores can make a chart of how different products compare.
• Web hosting companies can have screen-capture videos made on how to set up email accounts.

You’ll save tons of time with this one. What can you think of to save yourself time onboarding clients?

Systems

There’s no doubt you’ll need to enter some information into your sales, order, accounting, or project system in order to set up your new client. If there’s any way your client can do this directly, then you will have saved yourself a step. Take a look at where you have duplicate data entry and explore ways to automate it or have the client enter the information directly. We can help you with some ideas if you need help in this area.

Welcome Packet

Is your business the type that could send your client a welcome packet of goodies? If so, shower your new client with bonuses and goodies so they’ll have a positive first impression that will last a long time. These items will include anything that saves your client time and money, and will NOT be a bunch of promotional items with your logo on it. (If it has your logo on it, it’s not a gift; it’s an ad.)
These items might be checklists, reports, tips, cheat sheets, candy, flowers, liquor (if your license allows it), a thank you note, a stuffed animal, and/or anything else that is a traditional gift.

Take a look at all the steps you go through to onboard your client, and see where you can streamline your systems so that both you and the client will save time. You’ll also look amazingly organized to the client, which is a good thing!

Life is too Short; Save Time with these Ideas

The Secret Sauce to Saving Time

Is finding enough time to do everything you need to do one of your top five small business challenges? If so, you’re not alone; just about every entrepreneur lists “time” as a challenge they face today in running their businesses. It’s not uncommon to feel stressed and overwhelmed at everything you need to do.

Plenty of time management books will help you use your time more productively, but who has time to read a whole book these days? Instead, here are some quick tips to help you work smarter, ease any stress, and tame the time monster.

The 4 “D”s

You might have seen a strategy that allows you to evaluate how to handle each task or e-mail as it comes across your desk. Here’s mine: 1. Do, 2. Delegate, 3. Delete, and 4. Delay.

It’s pretty self-explanatory. For each task you have, you choose one of the four. Do means drop everything and do it now. Delegate means give it to another person to do. Delete means you didn’t really need to do that task in the first place and you can cross it off the list. And delay means you’re going to do the task later and not now.

Every single thing that comes into your life can be handled using this 4D filter: do, delegate, delete, and delay. It’s a great tool, and I’d definitely recommend trying it if you don’t have a system for yourself. But there’s an even better idea.

The Secret Sauce

Once you’ve applied your formula and you’ve decided on the tasks you’re going to “do” today (the first of the “D”s), there’s another step we can add that will actually start freeing up some time. With tasks you’re going to “do,” you have two more filters to try:

1. Can I automate this task?
2. Can I systematize this task?

Go ahead and “do” the task the way you’ve always done it. Then add another step that essentially asks: “Is there a better way?”

Take Your Biz Off Automatic Pilot

It’s funny how we keep doing the same things over and over again the same way, even though our business has long outgrown the way we’re doing it! Sometimes we don’t think to question whether there are new ways of doing things faster. We might not want to tackle the learning curve, even though we could save a lot of time in the long run.

A client showed me her invoices recently, and I asked her how long she had been doing invoicing that way. “About 15 years,” she said. The second she said it, it dawned on her to change. It hadn’t occurred to her to even consider changing before! Once she got the bug to change, you couldn’t stop her. She was able to both systematize and automate her invoicing, saving several hours each week. Once her mind was turned on to asking “Is there a better way?”, she found dozens of tiny procedures she could change, freeing up even more time in her daily routine.

It can happen when you add or replace an employee, too. You’ll see what systems need tightening up, and you can create procedures and implement new software and tools with the new employee to make the job even more effective. This happened recently to an associate when he hired a personal assistant.

Workflow Improvements

Frank is a do-it-now sort of guy. When he needed something, he needed it now. He was making multiple personal errand trips several times a week to purchase groceries, make dry cleaning runs, do banking business, and mail packages. His new assistant, Beth, took over all of those tasks and she also systematized everything. She created inventories and re-order points on all his supplies and even his groceries. She set up procedures for all her new tasks. What took Frank 10 hours a week now takes Beth 3 hours a week because she eliminated the redundancy and streamlined the job. Now that’s a time management tip worth implementing.

More Important Things

The 4Ds, Do, Delegate, Delete, and Delay, are a great way to organize your time. To save even more time, take a look at automating or systematizing everything you can, and let us know how we can support you.

Won’t it be nice to have time for more important things?