Self-Development

Are You Too Financially Cautious?

Is it possible to be too financially cautious?  Cautious does not mean that you are just conservative or frugal with your money, but that you are too afraid to spend your money wisely. You may not even be aware that you are too cautious and here are some examples:

Hesitate to make the right investments: Aside from traditional investments, you may be too cautious to invest in your own education and knowledge, spend the money for new equipment and technology, marketing, or spending money on employees.

Too cautious about wasting money: If you are so concerned that you will waste your resources then you will end up spending too much time trying to save a nickel, but it ends up costing you a dollar. For example, you don’t want to spend the money to keep track of your finances in QuickBooks or even Quicken for personal use, but yet you incur hundreds of dollars of insufficient funds charges each month. I have seen clients spend approximately $10,000 for insufficient funds fees.

Not taking a loan when you should: I am not an advocate of borrowing money excessively or foolishly, nor do I think that borrowing should be avoided at all times, which some pundits advocate each position strongly for. However, sometimes you need to have a line of credit to smooth out some bumps or to take advantage of low-risk opportunities that arise. Alternatively, if you pay off all of your debts too quickly then you may not have any cash available.

Time versus money: Using your time productively strongly dictates your financial success. However, if you spend your time on $10 per hour activities that drive you crazy instead of paying someone to perform them, while you can be making $200 per hour, then that is a poor use of your time and financial resources.

Money before relationships: If you are too financially cautious then you will probably never want to get married, and if you do, then you will worry about not having enough money for your children and will probably not have any.

Another way of saying financially cautious is to be penny wise and pound foolish. Don’t try to save your pennies, but make dollars!

If you like what you just read then don’t hesitate to forward/share with your friends and/or click like!

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

5 Habits for a Healthy Business and 3 Unhealthy Habits to Avoid

Our habits are repeated actions that we take, and have a tremendous impact on our results. Healthy habits become ingrained within us and we continue to do them with little thought or resistance over time. What are some practical, easy habits to ensure a healthy business and also the habits to avoid?

Healthy Habits:

Schedule activities: If you want important things to get done, especially non-urgent, important items, then you need to schedule them. Whether you need to schedule an activity on a daily, weekly, or monthly basis, once it is on your calendar, then the likelihood of it being completed increases significantly. Examples include setting aside time for marketing, networking, reviewing finances, and reviewing processes.

Delegate often: Do you want to get more done? The key is to delegate, but not only to delegate, but to delegate the right things and delegate to the right people. Think before performing a task that needs to be done, especially a somewhat urgent task. This can be as simple as scheduling appointments, cleaning up a mess, or communicating simple issues.

Pause before spending: Virtually every single expense can be justified and rationalized for your business or for you personally. Before committing to spending money, first pause, think about it, and answer  the following questions: can the expense be delayed without their being a negative impact, are their other options, and what would happen if I do not incur this expense?

Consult advisors regularly: Everyone should have an advisor to consult with before making major decisions. High impact decisions can include: employee management issues, loans and finances, purchasing another business, opening another location, legal matters, etc.

Measure results: This can include reviewing your financial results, effectiveness of marketing campaigns, and employee productivity. Do not make assumptions, but keep track of important metrics and review your finances. Just because you are busy does not mean that you are profitable. Look at the numbers!

Unhealthy Habits:

Impulsive decision making: Almost all important business decisions can be pondered, and do not have to be made immediately. Take your time!

Following emotions and feelings: Don’t do things just be you feel like it or because you don’t feel like it. This can include being reactive to a customer that is upset or an employee that made a mistake. Although you may feel better at the moment, it doesn’t help long-term. The same goes for how you feel. I know that I feel like playing Cooking Fever on my phone for a few hours, but if do so, then only the virtual customers in the game will be fed, while my family will be starving.

Consulting with inept people: I know this may sound harsh, but seek the advice of people who are competent to give you advice and/or thoroughly know you and your situation.

If you like what you just read then don’t hesitate to forward/share with your friends

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

Help Your Employees Succeed in 5 Steps

One of the common topics that I discuss when advising business owners is that of employees. From finding employees, keeping employees, and sometimes letting employees go. Dealing with employees can be difficult because we are people with emotions, problems, families, health issues, and also have lives outside of work. As a business owner and manager, here are 5 steps to make sure that your employees succeed:

#1 First things first: Slow down the hiring process to make sure the position and the potential employee are a good match before even starting. This can include multiple interviews, interviews with your other employees or managers (if you are a solopreneur, then the other interviewer can even be your wife or someone that you trust greatly), asking the right questions to gauge ethics and personality, and tests. A test can include a short demonstration of skills and knowledge.

#2 Initial set-up: It seems so simple, but is your employee ready to start working on their first day? Do they have the proper technology, equipment, uniforms, or even completed payroll information all ready before starting? Don’t waste their time because ultimately you are wasting your time and money and also do not appear to be organized.

#3 Training: Even if you hire experienced employees, they will still need to be trained with how you operate. Take the time to train so that they will perform well and feel good about their job.

#4 Set expectations: Let your employees know what you expect them to work on today, tomorrow, this week, and in the future. Also, set expectations for hours worked, time off, busy times during the year, and the like.

#5 Support: Employees will experience sickness, need to attend to family matters, and go through stressful times. Support them during their time of need to help them throughout any ordeals they may have. If you need support, then good employees will support you too.

There are many more ways, but this is a good start. Remember, success is not accomplished by itself.

If you like what you just read then don’t hesitate to forward/share with your friends

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

Try to Move the Needle Just a Little Bit

Do you want to make big massive changes? From growing your sales, increasing profits, working less hours to even losing weight, it seems daunting, but here’s how to get started:

Habits: When you want to change something drastically, it all starts with your habits. Incorporate new habits into your routine, and replace the old habits with these new habits. Doesn’t this sound so easy?!

Keep track: Keep track of your results to be able to measure your progress. For example, let’s say that you want to increase your sales by 20% compare to last year. First, monitor your results using financial software, such as QuickBooks, or even in Excel. If you do not measure your results, then you will not be able to determine if your actions are working.

Give it time: When making changes, you have to give it time to see those changes happen. It can be weeks, months, or sometimes years. As long as you are seeing the needle move in the right direction, then you know that it is working, no matter how small the positive results are.

Sustainability: If you make a monumental change then it may not be sustainable over the long haul. For example, if you decide to work less and cut your hours all at once, then you will quickly become overwhelmed and will go back to your old schedule. Look at the longer-term goal and then work backwards to figure out the proper actions and timeframes. For example, if you are currently working 50 hours per week and want to cut back to 40 hours, then give yourself a timeframe of one year. Next, shoot to reduce your workweek by approximately 1 hour per week for the first month, then 1 hour the next month and so on, until you have achieved a shorter work week. Then, figure out which actions you need to take to reduce your hours.

Change can be dramatic even if the results seem small in the beginning. Have the endurance, discipline, and willpower to continue your actions to achieve your long-term goals.

If you like what you just read then don’t hesitate to forward/share with your friends

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

How Long Will it Take to Double Your Sales?

Doubling your sales is an ambitious goal for most business owners, but is this practical and if so, how long will it take?

It is not as difficult as it seems if you break it down into smaller components, such as the average percent increase that is needed each year to double your sales. Here are examples of how long it will take in years to double your sales based on your compounded growth rate percentage:

Growth Rate      Years to Double

5%                          14.2 Years

10%                        7.2 Years

15%                        5 Years

20%                        3.8 Years

25%                        3.1 Years

30%                        2.6 Years

40%                        2.1 Years

50%                        1.7 Years

 

Even a modest 15% growth rate will double your sales within 5 years, which is very reasonable. If you are able to keep your growth consistent for another 5 years, then you will double your sales again, which translates to a quadrupling of sales from your base. For example, a company with $1M in sales will double to $2M in 5 years and in another 5 years will double again to $4M.

Always do the math when figuring out how to achieve your sales goals to make sure you are on track.

If you like what you just read then don’t hesitate to forward/share with your friends

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

Instead of Taking out More Debt, Do This Instead

One of the first ways most people try to cover a financial shortfall is to incur more debt. Whether this is to support a struggling business or even on a personal level. This may be a solution in some cases or may be used in conjunction with other financial methods. However, there is another solution that may work to solve your shortfall.

Reason for shortfall: Simply put, there will be a shortfall when your income is less than your expenses. Sometimes this is temporary or seasonal and you may be able to predict a shortfall based on business patterns.

The debt solution: Usually, most businesses turn to debt to smooth out the shortfalls. While this may be a viable solution, it should be well though-out and other options should be explored.

Alternative solutions: Aside from needing funds to support a large purchase, if your income is not enough to cover your expenses then instead of first choosing debt, here are a few other options:

Sales: Focus on increasing your sales. An increase in sales will help to increase your bottom line results. Will your expenses increase as a result? Most likely yes, but so should your profit. Aside from industries that have a poor cash conversion cycle, which is a topic all by itself, the additional business activity should help to offset your financial shortfalls.

Expenses: Small businesses should always be conscious of what they are spending their money on. Based on observation, small businesses do not usually spend their money excessively, but they may spend allocate it to areas of their business that do not generate a benefit, such as poorly spent advertising dollars.

Profitability by service/product/client: It may come as a surprise, but most likely there are several aspects of your business that are really not that profitable or may not be profitable at all. If that is the case, then by eliminating these activities your profits will increase as you can focus on increasing sales of higher profit services.

Don’t always go for the “easy” solution, but perhaps a simple, more sweat-producing, long-term solution to help the finances of your business.

If you like what you just read then don’t hesitate to forward/share with your friends and click “Like” on LinkedIn

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

Use the Snowball Effect to Get Better Financial Results

According to the Cambridge Dictionary, a snowball effect is a situation in which something increases in size or importance at a faster and faster rate. It sounds too simple and general, but it is a useful principle that can be used to achieve significant results over time. Practical examples of this are as follows, along with how the opposite can also be true:

Savings/Investments: Do you find it hard to save or invest? Start with saving just the smallest amount possible and then build upon there. For example, if you start with a small percentage, such as 2% and increase it by 2% each year, then within 5 years you will be investing 10% of your income. If you are unable to save at all, then you need to either increase your income, decrease your expenses, or possibly do both.

Paying off debt: Want to pay off your personal and business debts quickly? Allocate a small percentage of your income towards paying off your balances, starting with the smallest balance first. Once you have paid off the smallest balance, then use those payments towards the next largest balance. If you start with the largest balance then you will lose the moment due to a lack of sense of achievement.

Increasing your income:  If you increase your income by 10% per year, then it will double in about 7 years and in approximately 5 years if you increase it by 15% per year. Even more modest increases can make an impact over time. Small actions, such as allocating a consistent amount of your time and resources to increase your business volume will add up significantly over time. For example, that one extra phone call (made or received), blog post, additional employee hired, etc. matters. For a multitude of tips, search prior blog posts.

Avoid this approach: Most people want instant results and because of this they either stop too soon or start too strong in an unsustainable manner. There is nothing wrong with strong approaches, but it must be sustainable over the long-term. All you have to do is apply this approach to weight loss and fitness and see how many of your friends and family start an exercise program and eat extremely healthy and then stop after a few months. It is hard to go from no exercise to spending an hour and a half 5 days a week exercising.

Over time your results will get better and better, but give it time to be productive. Think of your actions as planting a fruit tree, as it will take time to bear fruit.

If you like what you just read then don’t hesitate to forward/share with your friends and click “Like” on LinkedIn

5 Ways Your Calendar Will Help You to Work Less Hours

Are you using your calendar as a tool to be as productive as possible? Most people do not use their calendar in a way to maximize its effectiveness, but if used properly, it can help you to reduce the amount of hours you work. Here are 5 ways your calendar can help you to work less:

Scheduled tasks get done: When a task is scheduled there is a high probability that it will get worked on. Have you ever had the feeling that you did not get anything accomplished on a particular day? The main cause is most likely due to not having tasks scheduled.

Allocation of time: How much time should you allocate for a specific task or meeting? By allocating specific time slots and durations, this will help to alleviate the open-endedness of meetings and tasks. Parkinson’s Law states “Work expands to fill the time available for its completion.”

Batching of activities: Similar activities may benefit by scheduling them close together or within the same day(s). For example, new clients or patients may need a much longer time slot for an appointment, which can all be scheduled on a specific day.

Schedule key tasks early on: Important, but usually not urgent tasks, should be scheduled first thing in the morning or early in the week. There is a constant pull for your time and if you do not focus on important items first, then you may never get to them.

Long-term planning: A calendar can include tasks that are several weeks or months in the future. This can include both tasks and meetings. If you can plan your vacation months in advance, which is very important, then you can and should plan business tasks well in advance also.

If you like what you just read then don’t hesitate to forward/share with your friends and click “Like” on LinkedIn

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

Beware of These 3 Conflicts Between Husbands and Wives When Both Work, Which Lead to Marital Tensions

According to the Bureau of Labor Statistics, approximately 61.1% of both parents work in families that have children under 18 years of age.  It seems to make economic sense to have both parents working nowadays, but it can create underlying tensions, which you should be aware of:

Independence vs. interdependence: Spouses are interdependent upon one another, but with both spouses working, this can create a lack of unity. Problems may arise by simply and innocently having separate checking accounts for each spouse. The problem is that this can create disunity and a lack of joint decisions regarding financial matters versus working together to make decisions jointly.

Income comparisons: When there is a large disparity of income, which there commonly is, one spouse may look down upon the other spouse as not contributing enough financially to the household. There may also ensue an unspoken, unhealthy competition between each spouse whereas they focus too much effort on who makes more money.

Importance comparisons: Everyone wants to believe that their job is more demanding, more stressful, and harder than others, whether this is real or perceived. Even so, comparisons to your spouse’s job are not going to make for a pleasant conversation at dinnertime.

There are many more, but they are just variations of the overall theme of comparisons and a lack of working together. Can you imagine what a comparison-free, working-together household would look like?

If you like what you just read then don’t hesitate to forward/share with your friends and click “Like” on LinkedIn

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

The Instructions Said 20 – 25 Minutes

Recently, I purchased a bed from Wayfair that had to be assembled from four large boxes that it was delivered in. I waited until the weekend to assemble it and learned a few things:

After spending hours and hours assembling and completing the bed, I took a look at the assembly time to see if I was in line with how long it should take to assemble. Over the years I have, or at least I thought I have, become proficient with assembling toys, bikes, trampolines, furniture, and just about everything else. However, the instructions said that it should take 20 – 25 minutes for two people to assemble the bed. It took about that long just to take the pieces out of the box. This made me realize either: I assemble way too slowly (hope this isn’t true, but it is humbling), the time on the instructions apply to professionals who assemble beds on a daily basis, and most importantly, you can’t believe everything that you read.

To apply this in business (hopefully you are not putting together a bed when you should be working), are you spending the proper amount of time on the right activities and minimizing or eliminating tasks that you should not be doing? Are you seeking the help of professionals when necessary? Are you seeking the correct information to determine what you need to do to succeed?

If you like what you just read then don’t hesitate to forward/share with your friends and click “Like” on LinkedIn

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!