Archive for October, 2008
Cost Accounting – Why should you care?
In the current economy business owners are taking a look at their financial operations and wondering what they can do to boost their bottom line. Very few small companies realize that doing cost accounting is a key contributor to being profitable – they just see it as a painful exercise. I have invited accounting expert, Dayna Holland, to provide us with expert advice that small business owners can put into action immediately. Look for her articles here over the next 4 Thursdays.
Recently, I’ve been working with a retail company to help them get their financial records “in order”. To me, “in order” means that once I’m done, my client will be able to understand from a dollar and cents point of view how their business is doing. One of the key tools that I provide them with is how to figure out which products are the money-makers and which ones should be dropped from their product line.
In order to do that, I’ll need to gather the following information: 1) Cost per unit; and 2) Shipping charges – incoming and outgoing. These would be the direct, variable costs for their products. I’ll also need to gather information such as 1) storage/warehouse charges; and 2) packaging costs. These would be their direct fixed costs.
Once all of this information is gathered and measured against the sales by product line, my client can see which products are the money makers and which products they could be losing money on. It’s a simple process, but at the same time, when you are in the thick of it as a business owner, it’s hard to find the time to actually do this. And if the cash is coming through the door, and the products are moving, you basically feel like your business is doing well. Not always.
If you’re basing the success of your business solely on volume, you may find at the end of a year that you’ve actually lost money because you’re selling your main product at a loss. No wonder your products are moving fast!
And if you’re basing your success on the number of dollars you bring in, you may find that you may be profitable, but your warehouse is full of items that have been sitting there since the day you opened your doors. Now what? Those old products aren’t moving and you need more storage space for your new orders.
By understanding and monitoring your costs and your revenues by product line, you can run a better business. Not only will you be able see which products are giving you a higher margin, but you can also start to see which products move the fastest, which products you may want to raise your prices on, and which ones need to be marketed better in order to get the inventory moving. So make sure you find the time or the expertise to do this kind of analysis – it will make a huge difference to your profits!
Dayna Holland is a Chartered Accountant whose mission is to make numbers and taxes less intimidating to business owners. Most of her career has been working with various High-Tech and telecommunications companies to minimize their tax burden. Now running her own company, she currently works with a variety of businesses to improve their profitability and handle their taxes. Please visit her website for more information.
Spotting New Trends
As Entrepreneurs, we all love to spot new trends and get into niche markets. This month, the Trend Watching Report has answered the top 15 trend questions readers have. My favorite question is “How Do I Become a (Better) Trend Spotter?” In their answer, the Trend Watching crew make it clear that you are not always your own customer. They remind entrepreneurs to keep their professional interests broader than just personal interest, and to watch for what other people are interested in. Just because you wouldn’t buy it, doesn’t mean there isn’t a market for it.
-Katrina
Building Profitable Strategic Alliances
Doing business on your own is hard. I will be presenting a workshop at Small Business BC on November 3rd about “Building Profitable Strategic Alliances“. This 3 hour workshop looks at how to build a successful alliance, how to approach potential partners and measure the effectiveness of the relationship, and what pitfalls to avoid. You can get more information and register here.
6 Survival Tips for Lean Times
Small-business owners have one question on their mind these days: How do I survive this recession? This economy is a lot tougher than the one we have enjoyed over the past few years.
Over the last two weeks I have fielded a lot of phone calls from panicked business owners, asking for advice on how to keep going in a recession. Last week I wrote a newspaper article outlining 6 tips for making money in this economy. Read the article here.
Part 2: How Women Sabotage Entrepreneurial Success
Check out Part 2 of this exclusive 4-part series, “How Women Can Beat Men in Business,” where I chat with Jann Taber, PR Guru and host of The Rebel Woman TV show. This episode is about what women do to sabotage their own entrepreneurial success and how to STOP IT. It’s an eye-opener! You’ll be in a BIG hurry to get out of your own way after watching this segment.
Check it out this Wednesday beginning at 10 a.m. at www.TheRebelWomanShow.TV! Here’s a sneak peek.
Be sure to post your comments about the show on to www.TheRebelWomanShow.com.
The Weight of “Should”
I had a nasty case of stomach flu this weekend, so I spent the days sleeping and watching movies, giving myself a chance to recover. I realized Sunday evening that I was feeling a heavy weight on my shoulders, feeling uncomfortable about just “lying around.” When I tuned into why, I realized that all weekend I had this little voice whispering into my ear: ”You should be doing this. What about that? You should be getting that done.”
Why do we women allow ourselves to sink under the weight and tyranny of “should”? Yes, we are all busy juggling a lot of responsibilities, but how does feeling guilty about not doing what you “should” be doing, add to our quality of life? And who decides what “should” be done? The truth is that we all have stuff on our to-do list, usually more than we can comfortably manage.
Life is to be enjoyed. And rest is a good part of life. So my suggestion for this week is to turn down the speed and ban the “I should” thoughts. Just refuse to let them have any room in your head. See how much lighter you feel by Sunday.
Working Together
This week I came across a self-interest group whose ideas have recently been marketed to the public in magazine articles and as a television program. The Smart Cookies are five women who decided to get together to support each other to get out of debt and make good financial decisions. Once each of them was on track financially, the Smart Cookies began sharing their secrets and strategies with others through newspaper articles, radio and television interviews, the internet, their own television show and now they have published a book.
The key for these five women was getting on track together; they started sharing their ideas before their debts were paid off. Their vision and passion for the goals they were achieving is inspirational. Their goals today are much bigger than paying off some debt. Do you have a passion that can be turned into a goal? Will you work toward achieving it alone or with a like-minded group? Before you arrive at your goal, will you have seen your way ahead to new destinations?
‘How Women Can Beat Men In Business’ on TV!!
Jann Taber of The RebelWoman Show is launching a 4-part series with me on “How Women Can Beat Men at Business“, starting October 15, 2008 at 10AM PST. It debuts on the FMG Network and is available online, 24/7/365.
The first part is about “How to Rock in Sales’ and will talk about great tools for making your bottom line grow. You can catch a sneak peek here.
Jann is a PR guru and loves to provide fuel for women’s entreprenurial spirit. Check out her show for interviews she has done with other successful women entrepreneurs.
How To Reduce Your Influence In A Few Easy Words
This article by Steve Roesler is a must-read for any woman who runs meetings or does presentations, or anyone planning to take on that role. I can’t count the number of times I have heard women do these things and give their power away while they are at the front of the room.
“I’ll only take a few minutes of your time.”
That opening line made me wonder why I had scheduled more than a few minutes of my time to listen to the speaker.
What is it with the apologetic nature of so many skilled people once they stand up in front of a group to speak? When you invite someone to your home do they arrive saying, “I”ll only take a few minutes of your time.”???I’ve worked with literally hundreds of managers on their meetings and presentations over the years. Nothing makes me wince more than seeing someone who is confident in his material stand up and use words that undercut the power of the message.
Three Common Lines That Make You Small
“I just want to . . .” “Just”? (Oh, it isn’t really all that important).
“I know how busy everyone is. . .” (Right. But we put you on the agenda. Start talking).
“Thank you for taking your time. . .” (You’re welcome. You just took up even more of my time with that wimpy intro).
Whether you are standing up or seated at a conference table, people want you to lead with confidence. Not arrogance, but confidence. When you do something to apologize for your presence you diminish your presence.
Language is one of your most powerful leadership tools. People all around you are looking for leadership.
Check out your leadership language today.
Source: All Things Workplace. Check out the post here.
Creating a Logo That Works
As I begin to create my own company, I have started to gather information on how to create an effective company logo. Business logos need to show that your company is distinct and original from other companies, as well as building brand recognition, while representing the company’s interests. The most effective logos that I have seen are ones that are simple with powerful colors. A key question that business owners often forget to ask in the design stages – will your logo look good at any size? How will it look on a business card, coffee mug, or even the side of a bus?
–Katrina
