Are You Vulnerable to Fraud?

Three components need to be present in order for fraud to occur:

1. Motivation (or Need)
2. Rationalization
3. Opportunity

When fewer than three legs of the triangle are present, we can deter fraud.  When all three are present, fraud could occur.

Motivation

Financial pressure at home is an example of when motivation to commit fraud is present.  The fraud perpetrator finds themselves in need of large amounts of cash due to any number of reasons:  poor investments, gambling, a flamboyant lifestyle, family requirements, or social pressure.  In short, the person needs money and lots of it fast.

Rationalization 

The person who commits fraud rationalizes the act in their minds:

• I’m too smart to get caught.
• I’ll put it back when my luck changes.
• The big company won’t miss it.
• I don’t like the person I’m stealing from.
• I’m entitled to it.

At some point in the process, the person who commits fraud loses their sense of right and wrong and their fear of any consequences.  

Opportunity

Here’s where you as a business owner come in.  If there’s a leak in your control processes, then you have created an opportunity for fraud to occur.  People who handle cash, signatory authority on a bank account, or financial records with poor oversight could notice that there is an opportunity for fraud to occur with the ability to cover the act up for some time.

Prevention
 
Once you understand a little about fraud, prevention is the next step.   To some degree, all three points on the triangle can be controlled; however, most fraud prevention programs focus on the third area the most:  Opportunity.  When you can shut down the opportunity for fraud, then you’ve gone a long way to prevent it.

The Typical Fraud

The median cost of an occupational fraud case was $140,000, according to the ACFE.  It goes undetected for a median time frame of 18 months.   The most likely way to discover fraud is a tip from an employee who works at the victim organization.

Small Business Vulnerability

Small businesses are the most vulnerable to fraud, because they employ the least amount of fraud prevention controls.  Here are just a few quick tips to help prevent fraud in your organization:

• Create a culture within your organization that deters fraud and provide employees with education about fraud prevention to reduce rationalization.
• Tighten down access to financial areas, segregate duties, and use other internal control best practices to reduce opportunity.
• Provide financial literacy programs to employees to reduce need or motivation.
• The ACFE recommends that small businesses provide employees with an anonymous way to report suspicious activity.

While we hope fraud never happens to you, it makes good sense to take preventative steps to avoid it.  Please give us a call if we can help you in any way.

Six Quick Productivity Tricks So You Can Go Home Early

If you have an endless to-do list, you’re not alone these days.  Most of us are constantly looking for ways to work smarter and get more done.  Here are six quick tips to help your productivity so you can go home early.

1. Group tasks

If you have lots of errands to run during the week, why not set aside one day or a part of a day to get them knocked out all at once?  It saves start/stop time and may also save gas and time getting dressed up (if you work at home).

You can also try grouping tasks such as personal care appointments, doctor’s appointments, sales calls, and client visits.  Your schedule will be freed up in big blocks of time so you can focus on creative projects without having to constantly watch the clock.

2. Use checklists

Checklists are best when you have a task you need to repeat.  They’re great when you’re stressed and don’t want to forget a step (such as in packing your suitcase for a trip).  They’re also great for tasks that repeat infrequently (Now how did I do that last time?)

Stop and take a minute to create your checklist the next time you perform a routine task that you will repeat in the future.  You’ll thank yourself the next time.  


3. Organize your email

If you are using Microsoft Outlook for email, consider getting it to work as hard as you do.  As your email comes in, you can have Outlook sort the low-priority emails that come from lists, Google alerts, social media notifications, and subscriptions into folders.  Create a subfolder in your inbox called “lists.”  Then set a Rule to have that type of email go into the “lists” folder.  This one step will substantially de-clutter your inbox.  

4. Delegate more

If you’re a little wary about delegating, try this exercise:  Look at your to-do list and put an hourly rate next to each task that you are doing.  If someone paid you to do that job, what would you get on the market?  Then look at the tasks with the lowest dollar value next to them.

If you feel your time is worth more than the lowest rated tasks on your lists, it’s time to help someone else out who is unemployed so you can be freed up to use your more valuable skills.

5. Order online

When is the last time you’ve been to the office supply or pharmacy when you know they deliver?  (Yeah, me, too. Enough said.)

6. Avoid long learning curves

Whenever you realize a task will have a really long learning curve, then it’s a red flag that it’s time to find someone to hire to do it for you.  Here are several examples:

• Doing your taxes and researching all the tax law changes
• Installing a new accounting system and customizing it
• Learning about every new social media platform out there
• Writing a legal contract
• Creating a report
• Troubleshooting a computer problem

Create an Easy, Head-Turning Elevator Speech

You’re sitting in a room with 30 other business entrepreneurs.  Each of you has one minute to introduce themselves to the group.  You are number 25 to speak.  Will anyone listen?  What can you do or say to catch your peers’ attention, be memorable, and have them approach you for business?  Most importantly, what can you do to get every business card in the room wanting what you have (so you can go to fewer networking meetings and get back to running your business)?

The good news is you don’t have to be a poet, a writer, or a great speaker in order to attract attention and desire.  All you need to do is put yourself in your potential customer’s shoes for a minute.  What is it about your business, your products and services, and you that would interest a potential buyer?  Why should they care?  Why should they stop what they’re doing from their busy life and listen to you?  It’s easier to answer than it sounds.  Here’s a formula to help you along.

“I help “my ideal client” “get a certain result” through “my products or services.”

Let’s fill in these three blanks by using some examples:

• I help “young families” “find their first house” by “providing mortgage lending services.”

• I help “people with broken pipes” “keep their homes dry” through my “plumbing services.”

• I “protect families from financial disaster in times of crises” by providing “insurance services.”

• I help “women who want to have beautiful hair” “keep their hair healthy and vibrant” with “my all-natural, organic hair salon services.”  

Now fill in the blanks for your business.  You may have to try a couple of variations until you hit on the perfect one for you.  But this formula beats saying “I’m a hairdresser,” “I’m a plumber,” or “I’m a mortgage lender.”

This is a great start to your elevator speech, but just a start.  Now add a second sentence that describes a project you just completed with another client similar to the one you’re talking with.

“For example, I just closed on a home last week with a mom, dad, the cutest 4-year-old twins, and a yorkie.  They got a great rate, and their payment is low enough so they can afford to start saving for the kids’ college right away.”

One more sentence and you’re done.  This one’s your call to action.  What do you want interested prospects to do, and how can they sample your product at a low risk to them?

“I have a free report, “10 Mistakes to Avoid When Buying Your First House.”  If you’d like a copy, please hand me your business card and I will email you the details.”

“I offer a free risk analysis so you can see if you have any major risk exposures.  To set up an appointment, hand me your business card, and I will get you setup free of charge.”

Put all three parts together and you have a very nice elevator speech.

“I help young families find their first house by providing mortgage lending services.  For example, I just closed on a home last week with a mom, dad, the cutest 4-year-old twins, and a yorkie.  They got a great rate, and their payment is low enough so they can afford to start saving for the kids’ college right away. I have a free report, 10 Mistakes to Avoid When Buying Your First House.  If you’d like a copy, please hand me your business card and I will email you the details.”

Don’t be surprised at the flood of business cards that will come your way when you put this in action at your future networking meetings.

Recognizing a Job Well Done

When was the last time you praised your employees or contractors?  Hopefully, you’ve developed the good habit of frequently praising your team members, and if you haven’t, you’re certainly not alone.  Most of us do not get enough praise, so there’s a strong likelihood there’s room for improvement when it comes to recognition of a job well done in just about every workplace.  Here are some tips to praise more and help your workers flourish.

A Bias for Negativity and Criticism

Our brains are designed by evolution to feel the emotions from negative interactions, including criticism and especially threats, in an exaggerated fashion when compared to feeling the emotions from positive interactions.  When we spotted a saber-toothed tiger, the brain that noticed and overreacted to the tiger by running away was rewarded with surviving.  

That evolutionary trait doesn’t translate very well in the work environment we are in.  It takes a larger quantity of positive interactions versus negative interaction to just keep us at a neutral baseline of emotions.  And studies show we perform better when we are happy and positive.  So that’s why recognition is so important in a thriving workplace.

Dos and Don’ts

Here are some guidelines to help you deliver the most effective recognition in your workplace:

1. Be as specific as possible.

Praise a specific task or interaction when possible rather than generalizing.

2. Direct the praise to a task or effort without listing personality characteristics, especially when you’re giving negative feedback.

For example, saying “The report was creased and had ink blotches on it” is better than saying “You are sloppy.”

3. Be timely in your praise.

Don’t wait a whole year to unload praises and criticisms on an employee.  Let them know where they stand on a frequent basis, and if possible, praise them right after they do something great.

4. If you need to give negative feedback, sandwich it.

The sandwich refers to feedback that is first positive, second negative, and last positive.  It’s important not to end on a negative note.  A sandwich would go like this:

“Jim, I appreciate how hard you worked on the Cole case.  You put in a lot of hours and showed dedication.  In the restructuring section, I would have liked to see you ask for help earlier in the project.    It would have avoided the delay we have now.  The section on asset disposition was terrific; you really know your stuff in that area.”

5.  Always give feedback in private.

It’s important to honor a worker’s privacy when it comes to performance appraisals and even daily or weekly feedback.  If your employee is in a cubicle or other non-private area, you may need to find a place that is more private before you give feedback.

6. Never send negative feedback via email.

It can be really hurtful and is not appropriate at any time.  If a face-to-face meeting is not possible and it just has to be handled right away, then pick up the phone.

7. Use examples.

When giving positive or negative feedback, give several examples of what’s right and wrong so the employee will learn faster and understand better what is expected.

8. Be supportive.

You are on the same team; to grow the company.  The relationship should be supportive and not adversarial.

9. Explain the impact of actions.

Help the employee understand the downstream ramifications of their actions.

10. Encourage future behavior.

Use phrases like “I’d love to see you do more of that.”

Praise your team more often, and when you do, try these tips to watch your employees shine even more.

Seven Ways to Wow Your Clients

One of the main reasons clients leave is because they feel ignored.  The cost of ignoring clients is high; you have to do more marketing and replace those clients when they leave.  The antidote to this is easy:  just stay in touch more with clients, and let them know you care about them and their business.  Here are seven ways to stay in touch with all your clients and especially your long-term customers.

1. Pay a compliment.

Sometimes when we’re in an “all-business” mode, we forget the simple things.  Take a minute to look around and find something to compliment your client on.  What have they done to support you?  What are they a natural at?  What traits do they have that you admire?  Tell them; they will appreciate it because it won’t be expected.

2. Rejuvenate your service with long-time clients.

Recall the first week that you signed a new client.  You were both excited about beginning your relationship, and your service was likely top-notch.  Now take a look at the service level of clients you’ve had for a while – for months or maybe even years.  Is it the same?

If not, consider putting the spark back into the relationship!  Long-term clients deserve a higher service level than new clients; yet it’s often the other way around.  Take a look at what you can do to spice up your service level, whether it’s returning calls and emails faster or delivering the work earlier as a surprise.  Your long-term clients will appreciate it and know that you’re making an effort not to take their business for granted.

3. Acknowledge referrals quickly.

Clients that pass you referrals are taking two risks when they refer you: 1 – that you will do a good job, and 2 – that their friend will like you.  Help them feel like it’s worthwhile by responding quickly to the referral as well as acknowledging and thanking your client for the referral.

This is best done by a thank you card or a phone call.  

4. Send a newsletter.

Keep clients informed of tips, discounts, new services and products, and events with a newsletter.  There are many ways to create a newsletter, and the most important aspect is to make sure it’s as relevant as possible to your clients.

A newsletter does not have to be elaborate or time-consuming.  At its simplest form, it can consist of a single, short article.  As you further develop it, you can add in components such as a brief company description, a quote, a testimonial, an events calendar, a customer spotlight, a greeting, additional articles, a poll or survey, and special offers.

5. Celebrate birthdays and/or anniversaries.

Everyone loves to have their birthday acknowledged.  Send a card to your clients in their birthday month.

The best birthday cards are just that, real birthday cards without company logos or sales pitches.  If appropriate, consider a surprise twist on the birthday theme:  send cards to your client’s kids, spouse, or pets.

Another great twist to acknowledge clients is to send an anniversary card on the date they first started doing business with you.  This is a great option if you don’t have clients’ birthdays recorded.  And it’s a great surprise because clients do not see it coming!

6. Offer longevity or loyalty discounts.

It’s common practice to offer new clients discounts.  It’s less common to reward loyalty.  Give current clients better breaks in your prices than new clients.  This incentivizes clients who already like your products to buy more.  The more they buy, the more likely they are to keep doing business with you.  

You can also surprise long-time clients with periodic bonuses and gifts.  Don’t do it too often, because it will be expected.  For best results, the bonus should come completely out of the blue.

7. Express gratitude.

Say thank you to current clients every chance you can.  Thank them for their business.  Thank them for their loyalty.  Thank them for paying their bill on time.  Thank them for being easy to work with.  Thank them for being flexible.  Do this by sending cards or emails for no reason other than to thank them.

These positive interactions with your current and long-time clients will strengthen your relationships with them, help you say what’s often not said enough, and improve your client retention.

5 Bottlenecks to Avoid that Stunt Your Business Growth

As a business owner, you have likely acquired many skills and are wearing many hats in your business.  Although admirable, your versatility can often lead to slower growth for your company.  This happens when you become the bottleneck.  Here are five places to check to make sure you haven’t become the bottleneck in your own business. 

1.      Managing everything. 

It’s definitely good to keep tabs on everything that’s going on in your company, but once your company grows, you may find yourself inundated with information.  Instead, try managing by exception. 

You don’t really need to know everything that’s going on in your company; you really only need to know when things do not go smoothly, or when there are exceptions.  Design a set of management reports that allow you to see these exceptions easily without having to wade through a bunch of information.  This will save you time and help you focus where your expertise and skills are needed most. 

2.      Doing too much production. 

Probably the most common small business mistake is working in your business instead of on your business.  If you’re still generating billable work or working too much in production, it should be work that no one on your staff can do and work that requires a very high skill set.  Otherwise, it should be delegated to staff.  And if you don’t have staff, then they need to be hired. 

3.       Not doing enough marketing.

As a business owner, you are the key person that will be bringing in business, forging partnerships, and creating new opportunities for revenue.  If you spend your limited time doing other things, marketing often goes undone.  Not marketing enough can dry up the pipeline, cause cash flow problems, and get a company in trouble really fast. 

4.       Being the only one who knows how to do something. 

When employees have to wait on you to show them how to do something, you can easily become the bottleneck in the process.  As you train each employee, do it only once by writing procedures for the task as you train.  That way, you never have to train anyone on that task again.  The newly trained employee can show others, and you can be out of the loop, freed up for more important things. 

5.       Having to review and approve everything your employees do.

A great employee is one who is empowered to make as many decisions as possible without further layers of supervisions getting involved.  Often, a decision can be “cookbooked” so that the decisions can be pushed down the lower layers of management.  Take a look to see if any of the decisions that you are making can be documented and pushed down so that you don’t have to get involved.  That way, your employees will have the right balance of authority in order to do their jobs. 

How did you measure up on these five high-bottleneck areas?  When you can clear up the bottlenecks in your business, your firm will be able to grow even faster.  

10 Things you don't think to delegate, but you should

Just about everyone suffers from a lack of time to do all the things they want, or even need, to do in their business.  One of the solutions to freeing up your time is to delegate.  The question is, what are the most effective tasks to delegate?  Here are ten ideas for you to consider (or reconsider) to free up your valuable time for more important things.

1. Social media.

We didn’t even have social media ten years ago, but now that we do, it can be a major investment in time.  Some companies ignore it completely, not wanting to open that can of worms, but done well, social media can have a great payback.

Rather than ignore it or take up your important time, turn it over to an intern or recent college grad who probably knows more about it anyway!

2. Grocery shopping.

You might think this is only for rich people, but it’s simply not true and very cost-effective.

Grocery shopping is a personal task, but time doesn’t distinguish between work and personal; it keeps marching on.  Set up a grocery list and find someone who wants to work part-time (your housekeeper might know someone).  You’ll be able to free up several hours per week, plus you’ll likely be helping someone who needs the money.

The money you pay to your shopper is not a business expense.  Instead, they may be a Schedule H employee, so you’ll need to keep your books separate or alert your accountant.  Also check on any liability issues with your insurance company if they will be driving on your behalf.

Once you get past a few small setup hassles, you’ll love this.

3. Your email.

How much of your email could be handled by one of your employees?  Set up separate emails by function and not by people so that your employees can take over more of this ever-growing task.  Anything that you respond to the same way over and over again can be drafted in a procedure.   Employees or a virtual administrative assistant can be trained on what to send to whom.

4. Training employees.

Once you get one employee trained, that employee may be able to train additional hires, freeing you up from having to do so.  Well-written procedures will go a long way to reduce training time, and even writing procedures can be delegated to the right person.

5. Vendor research and purchase.

Need to find a hotel to host an event?  Or a webinar company?  Or a project management system?  All of these items require research to find good vendors, and as business owners, we may tend to do this ourselves when we can write up a few guidelines and give the task to a capable employee who would enjoy researching the topic and writing up some options for you to review.

6. Hiring.

Hiring can be one of the most time-consuming tasks of all.  I’m definitely not suggesting delegating the final decision on hiring, just the search process.  I’ve heard of business owners who delayed hiring because they froze at the sight of a 6-inch tall stack of resumes they had to go through.

It might pay to hire an agency to do the screening for you so that you are presented with only the finalists.

7. Bookkeeping.

Bookkeeping is also one of those time-consuming tasks, with two added challenges:  everywhere you turn, there are deadlines and regulations, plus it requires special skills that need updating frequently.  All of this screams to be delegated when possible.    
   
8. Sales.

When you first start your business, you are generally the only one selling.  To get it off the ground, you eventually need a team of people to help you sell your goods and services.  As your sales team gets better and better, you can delegate larger and larger sales opportunities to them.  Who knows, if you’re not natural at sales, you may have employees who are better at this than you.

9. Writing.

Writing can be extremely time-consuming for some people.  Great writing requires a long learning curve, so if writing is not a core skill for you, you may want to look around for someone you can delegate or outsource this task to.  This includes things like writing procedures, web sites, job descriptions, marketing copy, proposals, and even something as small as thank you notes.

10. Calendar scheduling.

All that back and forth phone tag, email tag, postponements, cancellations, and other scheduling challenges can be delegated to free you up for making even more appointments.

Your time is incredibly valuable, and the only way to make it more valuable is to accomplish increasingly valuable tasks that only you can do while delegating the tasks that other people can do.  As a general rule, anything that is not in your core skill set or core business is fair game for delegation.  If someone else can do it faster, then it’s fair game for delegation.

Think about what you’re spending a lot of time on (and possibly spinning your wheels at the same time).  This is a task that can possibly be delegated, so oyu can free up your time for more important things.