Challenges in Running a Business

I'm certainly not going to try and tackle all the issues with running a business. However, I will write about a few ideas that can help when a smaller company is trying to grow and progress. Part of being able to handle the issues that inevitably arise, is being prepared for them before they come. This could be as simple as reading articles or as complex as making a dedicated plan for specific instances. Whichever route a company chooses to take, there are a few things that should be considered.

Those things are:

• Managing the money: Whenever a company is started things may be fairly simple, but as it grows, things like taxing and HR become more complicated. Make sure to have a qualified CPA that can help you plan and work through those issues.
• Energy: Excitement and adrenaline will take a lot of people pretty far, however, there needs to be a balance between running the business and rest.
• Dependence: Whether on the owner or the employee, dependence on a particular person is not good for growth. Ask yourself what happens when the person that you're dependent on isn't there? Have a plan and make sure that it's documented.

What to remember: It's impossible to plan for everything but do your best to be prepared.

Goals for the new year?

It's extremely common for people and companies to set goals for the new year. There's nothing unusual or wrong about setting goals and, if done properly can be very beneficial. I use the word properly because there is a right and wrong way to set goals.

What does this look like?

• Be realistic about where your company is currently positioned. i.e. set goals that are achievable, but that are difficult enough to make you slightly uncomfortable...
• If one of the goals is to instill specific habits, then make sure that the habits are achievable by a) not setting to many new habits and b) making those habits realistic to the company's current position
• If new habits are the route that you're heading then maybe set out to try the habits for a set time period (like 30 days). This can be a good testing period and be a little less dauting since most people can persevere if they know that there's an end in sight.
• Find someone to hold you accountable to any new goals and habits. This could be as simple as stating it to a friend, family member, or putting it on the website.

What to remember: Breaking old habits or starting new ones can be difficult, but beneficial, so find ways to remove the barriers.

Note: This certainly is not a definitive list, merely a place to get started. Want to add to the list? Click here to let us know your thoughts!

Productive or busy?

We must be productive not just busy. A friend recently said to me that they no longer work the crazy hours that they used to and instead have found ways to get more done in less time. Part of this comes from focus, part from being efficient, and part from not wasting time. The comment was timely because I had just read an article about this topic.

A few of the ideas mentioned were:

• Focus on what you're trying to accomplish and work backwards to create a plan.
• Delegate when needed and actually let it go of the task...
• Improve communication (i.e. make sure that you only have to send that email once)

What to remember: Don't waste time.

Financial House Cleaning

While it's not good to obsess over the finances, it's a good idea to look through them on a regular basis to see if anything can be trimmed from the budget, automated, and if the current goals still make sense.

What does this look like?

• Are your bills automated?
• Have you checked to make sure that all automated bills are for services that are still being used?
• How's the emergency fund and does it fit the size of your company?
• Have you audited your own records lately?
• Are the goals set realistic for the company?
• Did the company meet its goals last quarter/year?

What to remember: There are so many areas to look at when it comes to good financial house cleaning, but these should help get you started. Also, remember that there's always room for improvement.

Productivity Tool: Scannable

This particular tool has been a huge help to me. So, what is it? Plain and simple, the Scannable app was created by Evernote and can be used with a smart phone to scan documents, receipts, etc. into a digital format that can then be shared/emailed/texted/air dropped/saved. As we said many times before, it's incredibly important to make a digital copy of anything that you might need later on down the road (I'm mostly thinking taxes here).

What does this look like? It's really straight forward. If you're relatively competent with a smart phone, then you'll have no trouble downloading, setting up, and using this app. For a quick walk through: go to the respective app store > search for Scannable (by Evernote) > click download > open the app and hold the phone over the document.

At this point, Scannable will automatically focus on the document/receipt/etc. and take the picture without you have to push any buttons. Note: it helps to have plenty of light and contrasting color between the surface and the document. i.e. white papers that match the white desk give the app trouble. From here, select the image/document at the bottom. The app will then give the option to send or save.

• Send will open the option to mail or share the file (via whatever options are available for sharing)
• Save (at least for iPhone) will open the option to save to the camera roll or Evernote

Note: it is possible to perform basic edits with this app. Once the scan has been selected and you're at the point of choosing whether to send or save, you can click on the image which (again this is for iPhone) will bring up buttons for Delete, Rotate, Crop, and Restore.

What to remember: This is a great tool for creating digital copies of important documents, but it's better suited to low volume or on-the-go scanning.

Debt-to-equity Ratio

This is the proportion of debt to equity that a company is using to finance its assets. Depending on how you plan to operate the business (cash based, with debt, investors, or some other combination) will determine how important this number is to the company.

The formula: Liabilities / Equity = Debt-to-Equity Ratio

What does this look like?

• Obviously, if you're operating on a cash basis you have no debt, but keep in mind that utilities are still considered a liability. Therefor this ratio remains important, but not as critical.
• On the other hand, if you're using debt to finance operations, then this number becomes critical.
• If investors are involved, then they're going to require this number.
• And lastly, even if you're using a combination or some other variation on what is listed here, then knowing this number becomes very important.

Here's why: Knowing this number gives you a better idea of how well the company can pay debts and how well it can pay the bills. If a company is sitting with very little assets and a pile of debt, then the company would be viewed as less financially healthy. On the other hand, if you're flush with cash, then paying the bills or taking a little risk isn't, well, as risky.

What to remember: However a company chooses to operate, whether with debt, without, or some combination thereof, it must know the numbers. It should never be assumed, since the company can make the payments, that everything is ok.

Saving

We would all probably like a little more money in the bank, but how do we get it? Work harder, save more, cut things out? Working harder may earn you more money, but it may also take all your time, instead work smarter. As for the other two ideas, they can definitely help. Saving money every month can be a tool used in the long run to help amass wealth, protect the company against the unforseen problems and in turn help to create financial stability. Cutting out the excess so that there's no waste or inefficiencies will also help in accomplishing this goal.

What does this look like?

• If you want to save more, then you'll have to have a plan. Sure, maybe this month there's a little left over and you throw it into a savings account, but what about next month? Create a plan, with a budget that has all the normal expenses on it (plus some wiggle room), and then stick to it.
• Simplify. Cut out the extras and those things that might be nice, but in reality aren't really benfiting the company or its goals. Cutting out the excess spending and tracking where all those dollars are going can really make an impact on the amount that can be saved.
• Focus and persevere. These are everything. Focus on the goal, don't loose sight of what you're trying to accomplish and persevere until the goal is met.

What to remember: The plan has to be realistic, but don't loose sight of the fact that life happens and occasionally the plan will have to be adapted.

Growth

Growth is a good thing, but too much growth under the wrong circumstances can create issues. A company must be able to adapt or be setup to adapt to the changes that will come with growth.

What does this look like?

• Put in place accounting procedures that set the company up for growth. What works when a company is first starting won't work when it doubles or triples in growth. i.e. that spreadsheet isn't going to cut it...
• Know the KPIs. This is critical in showing a company that growth is happening (numbers don't lie) and being able to pull these numbers out of the accounting system is just as critical.
• Have the data in one place. This creates efficiency so that when growth happens the company isn't slowed down or even halted because they can't find the right information. This information would include, among others, invoices, quotes, contracts, etc.

What to remember: Surround the company with a team of people (both inside and outside of the company) that have the skills needed to accomplish the goal.

Tax Deductions

As the year comes to a close many of us are thinking about taxes and, of course, how we can reduce that tax burden. Often times there are tax deductions that we either didn't know about or forgot about. The following is a list of some of those tax deductions.

Tax Deductions:

• Rent
• Bad debt
• Insurance
• Travel
• Vehicles
• Legal and professional fees
• Depreciation
• Taxes
• Salaries
• Employee benefits
• Office Supplies
• Freelance labor
• Meals with clients
• Software
• Utilities
• Equipment rental
• Bank charges
• Tools
• Education
• Marketing
• Charity
• Trademarks and licenses

What to remember: Record everything (in a digital format) and find a CPA that has the company's best interest in mind.

Is Social Media Helping or Hurting You?

Social media can be a great tool for boosting a business. It can also slow you down. Much like the infamous Netflix binge, social media can be a place where we fall down the rabbit hole only to emerge an hour (or two) later. This means a lot of lost productivity. Does this mean that you should quit social media altogether? No, of course not, but, as is with any tool, it should be used wisely and appropriately.

What does this look like?

• Focus on what you're trying to accomplish. If you're posting for business, then do that and move on to the next task.
• If you need a mental break, then set a timer and stop as soon as the timer goes off.
• Remember that the world will keep spinning even if you don't see every post or respond to every question immediately.
• Be discerning about what you respond to. Not all direct messages or comments need a response.

What to remember: Social media can be a very valuable tool if used wisely and a productivity destroyer if used unwisely.

Focus

Entrepreneurs aren't rewarded necessarily by effort or hours. We're rewarded when the outcome, the product or service we're producing actually does something that people care about.
-Michael Burcham

We must be productive not just busy. A friend recently said to me that they no longer work the crazy hours that they used to and instead have found ways to get more done in less time. Part of this comes from focus, part from being efficient, and part from not wasting time. Here are a few ideas if you want to get more done is less time:

• Delegate. Let go of the task and don't worry about how the person or team will complete the task.
• Improve your communication. Take a few minutes to make sure that what you're saying makes sense and won't require another email/phone call/meeting.
• Group repetitive task. I have an email that goes out every other week, so instead of sitting down the day before to create the email (when inevitably a meeting will come up), I create and schedule a batch of the emails when I know that I'll have the time and won't be interrupted.

What to remember: There are so many ways to improve how you use your time, but the key here is to go into work with the mentality of improving a little bit every day.