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FINANCE
Try This Simple Hack for Projecting Next Year's Revenue
With a new year on the horizon, it's time to lay the groundwork for next year's operations. Although many business owners believe that budgeting is impossibly useless for small operations with widely fluctuating incomes, forecasting revenue reveals where you're going in the coming year and helps estimate marketing targets.

Here's a simple way to project next year's revenue: On a spreadsheet, list in the first column your existing and prospective projects for January. A retail business with sales to the public will list normal minimum sales volume and extra customer volume. Consider allowing for possible higher weekend traffic by treating weekends separately.

In the next column, record the expected revenue for each line in the first column. Then add a percentage of probability for the projected revenue in the next column to the right. For example, you may have a 100% expectation of some work, but only a 50% chance of closing a new deal or attracting above-average traffic on weekends.

The last column to the right multiplies projected revenue by the probability percentages for each row. The sum of this column is your revenue forecast for January. Repeat the process for the subsequent eleven months, and add the twelve revenue forecasts together to determine expected revenue for next year.

This technique results in a meaningful scenario by turning hoped-for revenue into realistic results based on probability. So a 25% chance of making a million dollars realistically means you can expect a quarter million.

It's easy, it's useful, and you can start now.

 
MARKETING
Pokémon Go: Is It a Marketing Dream or a Flash in the Pan?
 
Pokemon
In case you've missed it, Pokémon Go has all the signs of becoming a marketing game-changer.

The free, location-based augmented reality game is played on mobile phones using their GPS functionality to locate, capture, battle, and train Pokémon. These virtual creatures appear on the screen as if they were in the same real-world location as the player. And, according to a Survey Monkey poll, Pokémon Go boasts more than twenty-one million avid daily users worldwide. So naturally, Pokémon Go's popularity has advertisers looking for ways to leverage its appeal.

Leveraging the game

Players stage and train their Pokémon in actual physical locations called "gyms." And the lucky retailers that have been designated as Pokémon gyms have enjoyed a significant uptick in foot traffic. McDonald's Japan was the first advertiser to pay to transform some three thousand of its restaurants into gyms, and the game's creator, Niantic Inc., plans to partner with businesses worldwide to designate locations as gyms or Pokéstops.

Pokémon Go is also a golden opportunity for product placements, brand association schemes, and sponsored in-game content. For example, some have advertised themselves as "Pokémon-friendly," and offer discounts to visitors with the Pokémon Go app.

Many are promoting Pokémon Go-themed merchandise, upgrades, coupons, events, and activities, and, if your business is situated near a gym or Pokéstop, you can use the Lure module (an in-game purchase) to attract Pokémon and its followers to your location for thirty minutes.

But don't throw out your carefully crafted marketing plan just yet. Media reports continue to highlight less desirable spin-offs of the game: injuries, invasion of privacy, and litter, to name a few. And the jury is still out on whether Pokémon has legs.

 
HOT BIZ TRENDS
Key Performance Indicators: Everything Old Is New Again
KPI
Long before "hashtags" and "followers" and "likes" (and long before "friend" was a verb), you measured success with key performance indicators (KPIs). These are defined as measurable ways of assessing a company's performance on important business goals, and they've been part of the business lexicon for years.

But interestingly, in this age of quick-hit technologies, KPIs are bigger than ever. According to Peg Guinta in RISMedia, "Today more KPIs than ever are tracked." Says Guinta, "Performance Measurement = Standard Practice."

In Results.com, Stephen Lynch sums up the importance of KPIs. "Your KPIs establish the pulse of your organization and ultimately its success." And there's more. Writes Lynch, "The key question to ask yourself for every KPI you come up with is: How frequently do we need to view and discuss this number to make sure things are on track - or if it is off track, to take corrective action in a timely manner?"

The executives at Forbes Finance Council seem to agree. In a recent article, council members list eight important financial KPIs. According to council members, business owners need to track these "less visible metrics that can make or break their company."

Of course, these days there's software to simplify everything. An article in Business.com  includes fourteen tools to help businesses measure their indicators, based on speed, ease, cost, and more. These provide a good cross-section of user-friendly dashboards for virtually every business. Because, as many experts suggest, virtually every business should be tracking its KPIs.

Like it or not, it's smart to follow your KPIs.

 
FINANCE
Double-Entry Bookkeeping Offers Major Benefits
 
Sound bookkeeping is a harbinger of financial success because it helps build a foundation of best practices.

Today's accounting software allows small operations to enjoy the same bookkeeping standards used by large organizations, and offers a much simpler way of tracking revenue and expenses than the spreadsheets many small enterprises are using.

Although learning about new software can be daunting, understanding how accounting software functions makes that a very worthwhile task.

Data available from a sophisticated accounting system is especially important if your business is a corporation. Tax reporting for a corporate entity requires substantial detail. Moreover, satisfactory business management - even by a solo operator - requires informed decisions on profit utilization. You need solid guidance about when profits may be distributed to owners as dividends rather than used for expansion.

Single entry

A simple listing of revenue and expenses-such as on a spreadsheet-entails making a single entry for each transaction. Single-entry bookkeeping might work for someone with a low-volume sideline business. But entrepreneurs, who are committed to their businesses as their primary income sources for the long run, soon discover that the single-entry method may result in a series of small errors with enormous unintended consequences.

As the name implies, single-entry bookkeeping is characterized by having only one number recorded for each event. But, in fact, every business transaction has two impacts: an expenditure of cash is a simultaneous decrease of business funds and increase in something else (such as an expense category).

Single-entry bookkeeping can only reveal cash flow; it doesn't track accounts on the balance sheet like inventory, accounts receivable, accounts payable, and debts-information growing businesses require.

Double entry

The value of accounting software is that it automatically accomplishes the heavy lifting of double-entry bookkeeping. You make one entry, but the system records two. Both sides of every transaction occur in the background, but you can easily find a single transaction in both accounts that were impacted.

When a check is recorded in the software, it appears to only reduce the bank account. But in this software entry, you also select how the funds were used, and that selected account increases.

To select the correct account, consider the purpose of the check: For example, did you increase an expense, add to inventory, or purchase equipment? Or did you increase the amount you've repaid on a loan, lowering the liability balance owed? These are debits, and the bank account shows a credit.

Similarly, entering a bank deposit involves selecting an account representing the source of money received-company revenue, sales tax collected for future remittance to the government, proceeds from a loan, or personal cash contributed by the business owner. These sources are, respectively, credits to accounts for income, sales tax payable liability, note payable liability, or paid-in capital. A debit is recorded to the bank account for the cash increase.

Understanding the double-sided nature of every transaction provides superior information on which to base decisions. And this will make you a very savvy entrepreneur.
 
 
Michele Ball
 
 
 
 
 
Perfect Additions
 
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Worth Reading
What Could I Possibly Learn from a Mentor Half My Age? Plenty
By Phyllis Korkki
 
The New York Times
 
Mentoring turned backwards? Actually, author Korkki is just one of many older workers who have realized that millennials have skills to offer and are "on fleek" (nice) about sharing them. Turns out it wasn't just about learning a new skill; Korkki's "adventure" in what has been perceived as nontraditional multigenerational mentoring yielded so much more than she'd anticipated.

5 People We Wish Would Stop Using LinkedIn
By West McDonald


LinkedIn

LinkedIn is one of the world's best business networking tools. But then there are "those" people on LinkedIn. You know, the ones we wish would stop clogging our feeds. McDonald identifies a few archetypes, including the haters, the narcissists, the opportunists, the hangers-on, and other assorted irritating people. Which one drives you "bonkers?".

How Writing To-Do Lists Helps Your Brain (Whether or Not You Finish Them)
By Art Markman


Fastcompany.com

There are three important benefits to the actual act of putting together a to-do list. These turn out to be way more important than the to-do list itself. And even more important than finishing it. Best of all, we discover that the simple act of coming up with a to-do list can actually help our brains remember the list, even when we're not looking at it.

LINKS YOU CAN USE
This Month: Proper Customer Care
Proper customer care is the lifeblood of your business. From essential training to effective marketing, the right approaches are key to customer service success. And, of course, don't neglect your social media presence.

Here are some best practices from savvy marketers:

Do you want to improve customer relationships? The key is to improve your staff's customer service skills. Here's how:
6 Keys Improving Team’s Customer Service Skills

Take a goal-focused approach to customer service and put on your marketing hat when considering your customer service strategy.
3 Easy Tips To Strengthen Customer Care Beginning Today

Did you know 42% of customers use social media to complain? Don't fall into the trap shown here in the British Airways example. Get it right, now. Before you have a problem.
How To Improve Customer Support On Social Media
This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.
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