Small Business Bookkeeping
Here is a high level view of how to set up a good bookkeeping system for your small business. Having an accounting system such as QuickBooks helps to track your profits and losses for taxes as well as your profitability in growing your business. This is a high-level workflow to help you set up a system.
Expense Tracking Workflow
We coach a lot of entrepreneurs who are learning the ropes of what it means to have a business rather than be an employee. One of the advantages and responsibilities of business owners is to claim and track business expenses. To find out what this means research it here.
Here is a simple mapping of how to take care of your receipts and how cash should be accounted for in your business.
Launching A Business
Here is a map of various pieces to the puzzle for starting and growing a business venture. In the new economy, it is quite simple. However, each of the boxes have to work together in synchrony. The specific steps within each box is also critical to execute.
If you are currently an employee, get the set up done to position you for success. Note the two groupings:
- Business Set-Up: Can you imagine a retail store opening up without the space, equipment, cash registers, etc.? You must be prepared to deliver professionally with the customer.
- Demand Generation: The first phase of a business is about one thing - selling. If you cannot do this, then you only have a structure. You must focus on the marketing and selling systems which will drive your growth. Often, coaching is necessary in this area.
Your Strengths Are Your Success
There is a diminishing return when we work in our weaknesses. Working in our strengths gives us the best opportunity to win at our endeavors.
Root of Success
Truths
- Each of us has innate strengths
- Many of us do not live fully into these strengths
- The language in business is not as fully developed as in sports
The Gallup Organization interviewed more than 2 million people worldwide to understand what made people successful. This was a study worldwide which led to one simple finding across countries, industries and cultures. Successful people work in their strengths. Unsuccessful people work in their weaknesses. The tragedy is that many people do not know their strengths or buy into the myth that if they work hard enough they can make their weakness into a strength. The truth is the weakness will be mediocre at best.
Know Your Strengths
"Most Americans do not know what their strengths are. When you ask them, they look at you with a blank stare, or they respond in terms of subject knowledge, which is the wrong answer." –Peter Drucker
What if you could game your business life? If you could do the thing or things you are better than a thousand other people, what impact would that have on your results? What about on your fulfillment?
- Knowing your strengths as well as of those you work with in key roles will enable:
- Results that grow your business
- Passion in your work
- Fulfillment and a sense of mission
- Higher efficiency
- Better play between teammates
- Less management and more execution
The inefficiency of people in the wrong places in a business has consistent wear and tear on a business. The key to success for anyone in business is to know specifically what their strengths are and pick the opportunities that leverage these on a consistent basis. This is execution. Leadership requires helping others succeed. This means identifying their talents, both overt and latent, and placing them in their sweet spot.
Positioning With Advice
In the knowledge economy, your advice is what determines your value. Being in the advice business ourselves, we understand this value and we want to share with you how to use your value through a specific process.
Written Vs. Spoken
If you spent 30 minutes writing rather than talking to someone, here are the advantages you have:
- Your content can be used 1,000 more times.
- You appear much more credible. We trust writing more.
- You are able to be Googled.
- You are forced to think.
- You are better positioned for a next step.
- You differentiate yourself from your competitor.
Very few people will write. Thus, it is an opportunity for you to distinguish yourself. Having a content management site which brands you is a strategic enabler to look credible rather than be merely charismatic in speaking.
However, it is a hard habit to develop. Too often, we like to chit-chat and blow a half hour talking about things that will fade with memory quickly.
Examine this process map. It shows you how you must be vigilant and learn to be a different business person. It shows you how to bring much higher value and position yourself. Remember, if you are positioned well, selling becomes less necessary.
Next time you can bring value to someone because of your knowledge, stop your typical process of freely giving away your knowledge. Instead, leverage it and build your business and brand. Otherwise, you are just a person out there doing a lot of one-time talking.
Writing Ezine Articles
You have already made the important decision to grow your business by growing your network and influence. A regular ezine is an excellent tool to stay connected to your current and potential customers. You will find that through this method of branding and writing, you will increase your credibility and trust with both clients and strangers.
Getting Started
You are committed and ready, so what is next on this journey to becoming a writer? These 6 important habits will send you on your way:
- Continually brainstorm and record topic ideas. These will be
generated from your observations about life, people, and your business; relevant issues
that pertain to your specific clients; your reading and your experiences; as well as your
unique passions and hobbies. - Start writing. Use the writeboard area to even log the topic, quote, or first paragraph idea
and build from there. Write a first draft as soon as you think about it, not concerned with
format or punctuation, but with clarity of thought and opinion. - Write as if you were speaking. You will want to maintain
your own “voice” as much as possible. People are attracted
to you because of your unique style and convictions. “Keep
it real” in your ezines, but stay professional. - Keep your paragraphs short, 3-6 sentences long. Keep entire
article between 3-5 paragraphs long. - Read, read, read a variety of books. Be observant to unique styles and articulation of
thoughts. Subscribe to other quality ezines. - Write each article as if a potential client were meeting you for the first time. Make it
personal, relevant, and fresh.
Note
• Invest as much time in reading as in writing
• Respond to natural moments of inspiration to write
Belief And Results
You are who you have been becoming. The choices you have made as a person enable you to make future choices. There are too many stories of people who have overcome odds to go after what they want. It eliminates the excuses. The following will help you build your belief system.
Red Pill or Blue Pill
In the movie, The Matrix, the protagonist, Neo, is presented with a proposition. He is coming to realize that what he sees as reality may be suspect. He is offered the opportunity to see reality for what it truly is. He does this by making a choice between a red pill or a blue pill. The blue pill keeps him moving along the comfortable path he is on. The red pill allows him to see the matrix, the computer-generated world he is a part of. He gets to see reality.
Your life is largely a choice in the same way. It is easy to move along and always seek comfort and avoid pain. It is a strategy enjoyed by millions the world over. This is so normal it is not questioned. However, what if you want to go after something outside your comfortable reality? You must swallow the red pill. What does this take? Here are three things you need to be able to do:
- A choice. You must make a decision that you want to go after what you want rather than focus heavily on obstacles. The obstacles are real, but your desire needs to be more real.
- A Fail-forward mindset. If you think going after what you want is easy, you are a blue pill person. Stay plugged in. You have not lived enough lifetimes or experiences to know how to do everything. Otherwise you would do the things you want. Decide that failure is part of your journey. Decide not to blame or complain.
- Coaching. Who offers you perspective on your journey? If get-rich quick or having a shortcut to a goal worked, wouldn’t everyone do it? How about finding people with a growth mindset to help you see? They are rare. You need a coach who can give you perspective and guidance. It is something you cannot see alone.
Belief
You cannot fabricate belief. You have or lack belief because of the choices you have made in your life. You have the body you have because of the work or lack of work you put into it. So how do you increase belief? Like the body, it is a muscle to be worked. Here are three things you can do to grow your belief system. It is needed to win:
- Read Every Day. Do this to help you think. Do it to learn. Start with Love is the Killer App by Tim Sanders to learn how.
- Make More Commitments. You care what people think. Use it to your advantage. Tell them your big goals and when you want to achieve them. It will spur you to action, perseverance and diligence.
- Write What You Believe. Your writing needs to be public. Writing helps you get clear on what you want. When you write, you grow in your belief.
Owners and Everyone Else
Owners are not like everyone else. Without people who think like owners, there would not be opportunities for everyone else. As Peter Drucker said, “Whenever you see a successful business, someone once made a courageous decision.” There are great rewards in being an owner. The challenge is in the mindset.
Different Thinking
People with a low tolerance for risk, whose behavior is guided by fear, have a low propensity for success. – Keith Ferrazzi
This was a comment by Keith Ferrazzi in Never Eat Alone and it has been our observation through thousands of hours in business coaching. People do live either by fear or by belief. You can hear what guides a person’s decisions just by listening carefully to how they talk. If you hear a lot of excuses, justifications, or focus on the negatives, it is likely rooted in fear. However, we do not walk around telling people we are fearful. Life is not that candid.
There are many people who think they can start a business, but they lack the mindset to ever succeed. They have an employee mindset. They will never succeed unless they can grow. Typically, they:
Confuse Involvement with Commitment. Many people have had jobs. They perform for a corporation or an owner. They play with house money, not their own money. They make decisions and enjoy structures, resources and customers that are not their own. Martina Navratilova said it best, “The difference between involvement and commitment is like ham and eggs. The chicken is involved; the pig is committed.” If you have never been committed, then it is easier to stay an employee and just be involved.
Focus on Cost Not Investment. The person handles any discussion on spending as a cost rather than thinking in terms of return on investment. It is funny. We live in an ecosystem. People have an interdependence on each other’s goods and services. These people expect everyone to buy what they have because they see value and think it would be a good return to a person. The blind spot is that they do not assume the same behavior they expect of others when dealing with buying. They are thinking in scarcity rather than abundance. Do you invest in yourself? Or again, does it first have to be house money?
An Unforgiving Reality
"If money is your hope for independence, you will never have it. The only real security that a man can have in this world is a reserve of knowledge, experience and ability." — Henry Ford
Our economy is increasingly playing to the person with the owner mindset. While we all seek security, the question is whether a person seeks it in being an employee or an owner. To transition, you must be able to transition your security and belief system to an owner’s mindset; otherwise, it is better to be someone’s employee. Life is very short. You are who you have been becoming.
Six Factors for Influence
As the pace and complexity of modern life increases, the reaction of customers to our business offerings has become more guarded. By understanding what causes people to comply, we are able to tune into why people are guarded and how to engage our customers influentially.
Rudiments
Robert Cialdini has researched and reported on our human condition as species of influence. We have all acted irrationally in various situations. Why people buy or comply with requests is not necessarily a methodical process. More often than not, it is a reactive and irrational response to those that know how to use the tools of influence. However, the average consumer has become more closed to being influenced because “we have created our own deficiency by constructing a radically more complex world,” as Cialdini proves out.
Six Influencing Factors
If you are asking the question, “How do I sell,” you are missing your audience. This has nothing to do with the thinking a customer has. You are a customer also outside your business. You are not asking how a vendor can sell you. However, if you can answer effectively and understand the building blocks for “Why People Buy” then you will grow in influence and results. Here are the six factors for why we comply:
- Reciprocation: This is a powerful force which triggers within people. The ease with which we receive catalyzes an impulse within people to reciprocate. If you learn how to add value first – something that truly is valuable to the customer – you will be able to influence from a person’s desire to reciprocate.
- Consistency: We do not live well with inconsistency from our self-perception. Learn to converse and connect with your customer in such a way where your value offering aligns with how they see themselves. We buy what we think we are. There are two variables in this discussion to observe.
- Social Proof: The power of testimonials either en masse or by celebrities affects our thinking about a product or service. Repeated studies have exposed how we follow the crowd and depend on their action as validation for our decision.
- Liking: Likeability is essential for influence. Without it, a person does not buy. People depend heavily on the stereotypes of appearance and association to draw conclusions about likeability. Much of this mechanism for influence lies in the visual.
- Authority: Credibility comes much from how a person’s authority is perceived. Do you communicate and represent authority on your product, industry and service?
- Scarcity: The perceived value of your offering increases with how much is available. There are a variety of implementations of this principle. In the Information Age, special knowledge can increase influence. Knowledge is the processing and refinement of information.
Seven Practical Ways to Go the Extra Mile
Elevate your offering beyond a commodity level. Going the extra mile is a differentiator which creates loyalty with your customers. Learn how to apply pragmatic steps in your own business.
Extra Mile Thinking
Many businesses look the same to the customer. Customers expect great service and a quality product. In an economy with too many choices, people go out of their way for that differentiating benefit or experience. They do not want their mere need met, but they want their desire met. They want to do business with people and companies that go the extra mile.
7 Extra Mile Ideas
Incorporate these ideas into your customer engagement to show that you go the extra mile and to move beyond a commodity in their mind:
- Have a Method. Who wants to do business with a business that is random? When you show up at an establishment, you want to know if you should sign in or wait in line; be greeted or sit down. Think through the detailed steps of every
touch-point the customer has with you to make it predictable for you and comfortable for them. - Create a Communication Process. When does your customer receive communications from you? Do they only hear from you when you want an order or when the order is finished? Is the number of times you touch the customer frequent enough when they buy something from you? Think it through from their side.
- Give Something Unexpected. Surprise your customer with more than they paid for or even before they paid. Pick tangible, meaningful and relevant gifts or services.
- Connect Your Customers. What do your customers truly care about? Growing their business or bettering their life? Connect them with the other assets of your business – the customers and colleagues you know that can help and benefit from them. Make it special and be known for being a connector of valuable people.
- Show Gratitude. It is the greatest of all virtues, and you won’t get very far in business or life without it. We do not like feeling ingratitude from others. Be creative in how you express it to your customer. Make it substantive and meaningful.
- Be Responsive. We all despise lines and waiting. Compete on speed and how fast you connect with your customer’s questions, or your competitor may do it for you.
- Give Advice. Why does your customer buy what you have to offer? It is not an end in itself but a means. Keep sending advice on ways to help the customer connect what you offer to what they are truly trying to get accomplished. If you are not focused on the latter, then you do not know your business or your customer.
