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FINANCE |
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Direct Costs Should Directly Affect Pricing Strategy |
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Entrepreneurs experience stark differences in costs among clients. The old 80/20
rule - that 20% of customers take up 80% of
your time - may be an exaggeration, but it should not be ignored. It is integral to several factors that should be taken into consideration when developing your pricing strategy. Properly weighing and tracking each of these elements is essential to getting paid for every minute of work you do.
First, be sure to account for all costs directly associated with specific projects, to recapture them in client billing. Your fees should be high enough to recoup all costs for every single client. Don't forget supplies, postage, and credit card fees, as well as travel costs, including local travel using your own vehicle.
A second, less obvious element is the time spent with a prospect identifying the scope of work and providing a cost estimate. Although this time is freely given until the engagement is agreed upon, you do want your fee to ultimately cover this time. Also, frequently overlooked is time spent researching and thinking about the optimal approach to a job. Projects of greater complexity call for greater fees.
Last, but certainly not least, is the overall mental anguish with which some clients burden you. These clients are the people who alter their demands after the project commences. They fill your inbox with new information and continual status update requests. By tracking client time history, you will uncover true cost.
By appropriately considering each of these aspects, you can bill accordingly and assure optimal earnings from each client. |
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HOT BIZ TRENDS |
| Navigating Nepotism: Stormy Waters Ahead |
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If you own or run a small business, you may be tempted to hire a friend or family
member - either because you actually need the help or because the person needs a job.
While there are advantages to having a buddy on your staff, there are also challenges. For starters, friends and family may assume privileges or try to take advantage of their relationship with you. They may intentionally or inadvertently undermine your authority or blur the boundary between personal and professional realms.
Additionally, monetary discussions with friends and family members can be extremely awkward, and performance reviews are often difficult. And even if you try to avoid showing favoritism, other employees may perceive nepotism.
Of course, there are exceptions, and some family businesses thrive. But before hiring a friend or family member into your business, be sure you are hiring for the right reasons.
Additionally, be sure the person's skill set, experience, and work ethic fit the position. Always set performance expectations in advance and be frank and up front about salary and bonuses. Lastly, go into the situation prepared to hold the person to professional standards.
Ultimately, you should always hire the person who is best for the job. If that is a friend or family member, be aware that the time may come when you have to make a decision that they won't like, and this may result in a damaged relationship that lasts a lifetime. |
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MANAGING |
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Want a Strong Q4? Pay Attention to These Biz Trends |
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Fueled by technology, business is changing more rapidly than ever before. Entrepreneurs should be aware of key trends and predictions that will affect small businesses for the rest of this year and into 2019.
Cybersecurity: Small businesses have become prime targets for ransomware and attacks on mobile banking and card transactions. As cashless payments continue to grow, mobile wallets like Apple Pay, Samsung Pay, and Google Pay are seeing greater adoption, as are various app, browser, and person-to-person payment platforms.
Marketing: More and more, consumers are seeking customized content and offerings. Advances in technology, such as individualized email messaging, allow small business to provide the personalization their customers desire.
Social: Social media advertising has become more competitive and more expensive. SMEs can benefit by using apps to link single posts to multiple sites. This will streamline their postings to reduce time spent on social media marketing. Partnering with micro-influencers
- those with under 100K followers - has also proven beneficial for SMEs.
Gen Z: This generation is beginning to make its presence known in the consumer and workforce spaces. Gen Zers are independent and tech-savvy. Personalization is key to attracting the attention of this cohort.
Finance: The economy is doing well, but uncertainty around tariffs and the threat of a trade war loom large. Also, look for interest rates to tick up.
The workplace: More and more employers are turning to mobile workforces and freelancers for noncore tasks. A large number of SMEs allow employees to work remotely. This strategy can reduce payroll costs and increase the employee pool to include nonlocal talent. For in-house employees, SMEs are offering wellness programs (both physical and mental) and bolstering anti-harassment policies.
Putting strategies in place that address these key business trends will help you stay on top of your game and ahead of your competitors, in 2018 and beyond. |
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FINANCE |
| What's Next When Your Business Grows Beyond a Start-Up? |
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Vigorous work is necessary to build a small business. When that tenacious effort pays off in a successful operation, you wonder what's next for the enterprise. After achieving your maximum output, you can't open the floodgates to new growth because your time is not unlimited. You need a plan that provides the foundation for a sustainable upward
trajectory - one that addresses new opportunities to seize and the resources needed to do so.
When you move beyond the solo start-up phase, you already have some business history. You've proven that you have something to sell, and your experience delivering to customers gives you some financial data to measure performance.
Now you simply need a plan to judge expectations from new investment, whether from outside funding sources or by reinvesting some of your own profits.
Getting Started on a Business Plan
As the old expression goes, the best place to get started is the beginning. Summarize what your business has accomplished, where it stands regarding future prospects, and how you intend to achieve new goals. A business plan doesn't need to become an unwieldy treatise. Rather, in a few sentences, you can state your market of customers, how much you have sold since starting, and the time and money that were required to attain those sales.
Describe the composition of your industry - whether it's comprised of a few large organizations or is mostly numerous small enterprises. Convey whether the market is growing, shrinking, or stable. Do you expect your business to grow from an expanding market, or by attracting customers away from competitors?
Identify new products or services you intend to provide for the market, or simply give details about how you differentiate your business from the competition. What are your selling points to prospective customers? Explain how you attract customers, the amount of new business you seek over a specified future period, and the cost to accomplish that growth.
The Business Team
Growing organizations demand teamwork. Your business plan must convey who is focused on sales management, who manages delivery logistics, and who is tracking financial results. The latter may be outsourced to bookkeeping and accounting firms, but you need a system for timely examination and analysis of the financial reports produced.
Accounting professionals are also crucial to preparing the financial elements in your business plan. The capital and expense requirements necessary to attain your projected revenue are displayed in a cash flow forecast. In the future, this projection of cash flow will be compared with actual financial results compiled by your accounting pros.
Accountants, however, do not create the financial features in your business plan out of whole cloth. Your input is essential.
Only you know what your team can achieve with the available resources of money and time. You have the track record. You developed the product or service. You know the selling process. You know the risks and the ratio of costs to revenue.
The key factor moving forward is establishing strategic objectives that can be accomplished with a given amount of funds in a given amount of time. |
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Michele Ball
Perfect Additions and Your CFO Solutions
401 Market Street
Suite 980
Shreveport LA 71101
318-423-4776 Office |
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| www.yourcfo.solutions |
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| info@yourcfo.solutions
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| License # 616085 |
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| How to Win Big in Today's Economy |
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| The altered economic landscape presents innovative and nimble businesses
with opportunities to thrive. |
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Find out how by requesting my free report
"How to Win Big in Today's Economy" by
replying to this email. |
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| Just reply to this email and I'll send it right out to you. |
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Officinaphobia is the fear of what? |
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| Worth Reading |
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Don't Want to Work Today? Just Do This
By Bryan Collins |
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Forbes
We all know what it's like to feel unmotivated and unproductive. But instead of feeling guilty or frustrated, the key is to learn how to manage these low periods. Strategies include treating procrastination as a reward, scheduling your day the night before, and keeping an eagle eye on your energy levels.
Is Podcast Marketing Right for Your Business?
By Kate Harrison
Forbes
While radio advertising in the U.S. has flatlined, podcast advertising is forecasted to double between now and 2021. Why? Just look at the numbers: 24% of Americans are regular podcast listeners, and more than 40% of Americans over 12 years old have listened to one. This offers an incredible opportunity for prospective advertisers, many of whom are now experimenting with creating podcasts.
How to Ensure Your Small Business Isn't a Failure Statistic This Year
By Kathy Caprino
Forbes
Did you know that 20% of small businesses fail in their first year, and that approximately 50% fail in their fifth year? It's clear from the data there are plenty of risks when it comes to starting a business. But don't let the numbers deter you. There's plenty you can do to avoid failure and actually thrive.
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LINKS YOU CAN USE
Employee Relations |
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How would you describe the atmosphere in your workplace?
Are relations good? The answer to this question affects
every aspect of your business. Use the links below to
improve employee relations and enhance your company's
atmosphere:
Certain factors can destroy employee relations. Avoid these scenarios:
Factors Damaging Employee Relations
Take a lesson from social media to boost your employee engagement:
Social Media Proves To Boost Employee Engagement
What do employees really want from you? The answer may surprise you:
This Is What Employees Really Want
Improving employee relations requires strategic efforts. Here are nine practices you might not be following:
9 Surprising Positive Employee Relations Practices
Poor relationships in the workplace can hurt your bottom line. Learn how to improve interactions:
How to Improve Relations Between Your Managers and Employees
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