Belk On Business

The company’s r asset, liability, equity, income and expense accounts compile a businesses’ chart of accounts.  Most of a basic list will be provided for you if you are using accounting software or software with an accounting function. Common questions regarding the chart of accounts are: 1) What goes above or below the line (COGS/COP) 2) What belongs on the income statement vs the balance sheet (Inventory/WIP) 3) How frequently should I review my financials and how do I manage from my financials (KPIs/metrics).  KPIs should identify and measure pain points in the business and help spur discussion as to generating solutions 4) How do I develop a budget from the financials then compare to the future financials As an accountant, one common question we received is “what can we expense” which is a broad question but generally any item that is reasonable and necessary for business operations can be expensed unless otherwise prohibited.

Most every business has three positions/areas of leadership: 1) Visionary – leader responsible for the company’s vision 2) Managers – responsible for the execution and creating value 3) Administrators – responsible for process and tasks Some thoughts regarding leadership in your company: If leaders are going to lead in a way that will allow for perpetuity of not only the business but continue to bring value as leaders in the company, they generally will have the following attributes which should be key in hiring or promoting: Integrity – an individual who has honesty and discipline Intelligence – not only do they have the necessary skillset necessary for the work but are they truly able to solve problems and grow and lift their own leadership lid Positive energy – are they able to keep themselves motivated and motivate others towards deep, positive work and create a good corporate culture Synergy is needed and can be created when teams are built around the vision (the lea

Creating a synergetic and positive corporate culture includes the following: A place one can focus (movement away from open concept) An affirming environment (encouragement and gratitude) Value people (serve) Where one can grow into their goals – can grow with their gifts outside their comfort zone in a safe environment Two-way mentorship

  Break costs down into two categories … needs and wants or necessities and luxuries.  Ask what wants or luxuries can be eliminated and what needs or necessities can be reduced. Determine your fixed costs.   A business’ fixed costs generally should be 20-30% of net revenue (gross revenue less cost of goods sold).   Develop an operating budget Automate payments from clients Review cash flow weekly and have a process for cost management.  This may include a cost management plan which will begin by aiming to determine the cost of each activity and a corresponding budget, establishing baselines, how the activity and budget will be managed, control thresholds (at what variance do we take action?) and methods for evaluating performance such as percentage of completion or value management. 

Make each customer’s experience feel personal.  How do they prefer to be contacted?  What is their method of processing information (graphics, lists, written explanation or in person)?   Get to know your clients on a deeper level.  If appropriate, connect with them on social media.  When meeting with a client, go beyond just completing the basic “profile” information needed but find out about family, hobbies, community involvement, etc.   Be intentional with client interactions.  Think about how the communication will make the client feel?  What message am I sending? Support client with effective tools for communicating.  This may include a website for appointment scheduling, portals, video conferencing, social media, podcasts, workbooks, webinars, etc.

Value based leadership is when a leader draws both on his or her own values as well as the values of the individuals on the team to provide direction and motivation. To be effective in leading a team, a leader brings value by exhibiting the following traits: 1) Transparency - allow for honesty in providing viewpoints and a platform for those viewpoints to be heard and analyzed 2) Vulnerability – the self-awareness to allow others to see your weaknesses 3) Authenticity - be true to yourself and others – exhibit sincerity 4) Consistency - a consistent effort plus consistent connection combined with a consistent message equals consistent results. A lack of consistency creates confusion 5) Integrity – tell the truth regardless how ugly it may be – maintain consistency with principles and expectations 6) Emotion – to be emotionally intelligent is to understand and manage your own emotions and the emotions of those around you. A self-awareness of how the mission, vision and decisions make me feel as well as an unde

1) Create a development plan. How am I going to develop professionally and even personally to become what the company needs? A professional development plan should be in place to identify the necessary skills and resources needed to support the individual’s goals as well as the organization’s business needs. 2) Find out the personal and professional goals of each employee and include these goals if they align with the company’s vision or strategic plan. 3) Incentivize/reward team members beyond the customary bonuses for either hitting financial goals or the “just because” bonuses at the holiday season. This can include hitting personal or professional development goals or even providing training the company finances to allow the team member to grow in personally or professionally. 4) Monitor and establish metrics for growth

1) Who is responsible for each area of the business? 2) What are the strategic objectives in leadership, talent, process, technology and growth? 3) How will progress be measured in each area of the business (define KPIs/metrics)? 4) Establish initiatives in support of objectives. Do costs need to be reduced, efficiency increased, improved sales performance, etc. 5) What is an acceptable timeline for metrics to be achieved and who is responsible for each metric? 6) To whom am I going to hold myself accountable?

1) What do you want your future to look like for both you personally and for the business? 2) What is the business model? A business model has three major components  1) strategy 2) operations 3) structure. The model includes identifying product and service offerings, resources, competitors, suppliers, partners, market opportunities, competitive advantage, hierarchy, access to capital etc. Each component must align with the vision. 3) Who is going to lead? 4) Who is going to assist in the branding and marketing planning process? 5) Who am I going to serve? What is my avatar/ideal customer or client?

Most businesses experience the pain points that come in an ever changing, fast paced economy. A business not in motion will become stale and will eventually find itself irrelevant and probably out of business altogether. All business should have the following: 1) Vision casting board – will outlines what you want to be, do, have and create in the next 3-5 years. This will be the foundation of the strategic plan and along with the strategic plan will determine the culture of the business and the value the business will bring. This is taking the vision for the company and visualize it for the leadership team 2) Strategic plan – one-page plan used to build consensus, establish priorities, assigns responsible parties with due dates. Updated at least annually. Will establish quarterly goals 3) Infrastructure roadmap – Who is responsible and accountable for each component of the plan. This may include such elements as an IT roadmap or innovation roadmap. The “who” is the most important part of the roadmap. Who dete

Agility is needed to react quickly during crisis or disruption. Agility is needed to foresee and change with changes in the marketplace the business serves. Agility is a reactive quality. Anticipating opportunities as a result of market trends is proactive. Agility is defined as the ability of a business system to rapidly respond to change by adapting its initial stable configuration.” Both fortunate and unfortunate events happen in life as well as business but being prudent has a plan for when these events take place. Being reactive does not bring value, being able to do the following not only brings value but will help the business foundation remain stable and effective during business and economic cycles: 1) Plan based on trends - understand market trends, technology for your business as well as the clients you serve, demographics in your service area and regulations as it relates to your business and your customer’s business 2) Be innovative to adapt to new markets or environments and take advantage of ne

Every business has elements (real estate may include single family rentals, wholesale, turnkey properties, construction management, property management, etc.). A service business will have different areas of services they render (an accounting firm can provide tax, consulting, audit). In addition to the service or product offerings they have elements that include culture, marketing, sales, hiring, internal and external communication, online presence, etc. Each of these elements needs to include the following for a business to succeed: 1) Strategy 2) Best practices 3) Technologies 4) Processes Each element has the following phases 1) Definition 2) Implementation 3) Refinement 4) Evolution

1. Recruit, develop and retain team members with both the skill and attitude desired by your company 2. Benchmark customer experiences then implement strategies to improve the experience. Have a renewed focus on the customer experience through providing improved customer service and business development 3. Improve and expand your network to include individuals and companies which will bring synergy 4. Continually be developing you and your team members with focused learning experiences 5. Increase exposure by bringing value, delivering quality content, through speaking at events/seminars, hosting webinars, recording podcasts, writing blogs, recording vlogs and engagement on social media platforms 6. Be innovative – improve methods, processes, explore new approaches and ideas. Invest in the business with technology, innovative office space and complementary service or product lines.

Define the tasks that needs to be done daily, weekly, monthly.  Delegate those tasks in your business that are not in your core genius and don’t maximize profit.  If you don’t like doing it or aren’t good at it, delegate it. Hold a weekly huddle which includes at least these three elements: Look at the task list to make sure they are being productive and identify areas of weakness Ask what areas leadership can provide direction.  Can identify areas where understaffing or overstaffing is an issue, an employee needs further training, direction or clarity Allow for one employee to ask any question they desire related to the business.  Allows for transparency and vulnerability Hold a monthly meeting to look at the appropriate financial numbers with staff either in person or remotely. Provide further direction for your team that is meaningful, actionable and proactive.  Develop a dashboard reflecting productivity metrics so to measure efficiency.  In addition to the comm

Visionaries/influencers generally tend to want change to happen quickly forcing their team to move too quickly which results in a lack of adequate time for change to be planned and adopted property.  This leads to the demise of the idea or change.  Individual goals for each team member for adaptation is essential for true transformation.   Start with a clear 2-5 year vision plan.  A plan that clearly defines what you want to achieve.  This will include the following in the business: Who are we? (Define our why and core values) What is it we are going to do to bring value? What resources to we have at our disposal? What can we develop or create? What is our customer experience? Develop one-page game plan for 1-3 years that defines how we are going to accomplish the goals outlined in the vision plan.  The plan should be looked at frequently and updated annually Define and engage those who can help us get where we want to be Build a team of 3-5 individuals in yo

Some businesses are in a position where they need to be optimized, others transformed.  Optimization would include improving productivity and the customer experience.  Transformation is generating new revenues, new service or product offerings, new business models or change of business structure.   Optimization is needed when  There is an opportunity to increase revenues from existing services (price increases for example) Opportunity to improve productivity without increasing headcount (increase efficiency),  Reducing or eliminating unnecessary expenses – ask the question “if we reduced or eliminated this expense, would it have any impact on the bottom line?” The customer experience needs to be improved – not delivering the value the customer is seeking – are we meeting or exceeding expectations and bringing value?  Transformation of a business comes when: A business expands their service or product offerings.  A situation where new opportunities arise that compl

Most business owners are intelligent and driven people yet over 80% of businesses fail.  The top two reasons businesses fail due are due to a lack of business experience by the owner and cash flow issues or lack of profitability.   Individuals start business for people, process or product, not for producing and generating financial reports.  Most business owners have a passion for what they do in hopes of achieving financial freedom.   The accounting system we use in the US is financial theory, an axiom, which is constantly in flux as to rules and regulations.  Additionally, the approach is impractical for most business owners.  It isn’t that they can’t read a profit and loss statement or understand the basic principles of a balance sheet, it is just that these reports don’t provide the day to day information they need to make decisions in their business. GAAP focuses on top line revenue creating the perception that an increase in top line/gross revenue will result in more profit

Client/customer retention/nuture – 10X thinking as it relates to clients.  Do we filter a client or nuture a client?  This is determined by factors that include profitability, referrals, coachable, appreciated, push us to lift our lid (new challenges).  Surveying your team in these areas and keeping measurables such as point of contact with a client (email, phone calls and meetings), likeability, coachability and client responses. Efficiency – digitization process/aggregation of data, mobile communication, process of getting questions answered.  A culture that lacks transparency and a servant leader attitude will result in a culture of inefficiency. Scheduling of work – planning and process management (lead generation, first point of contact, intake process and process to get us to completion).   Setting expectations – this should be done early, ideally in the first meeting.  What are the deliverables, costs and timeline for completion? 

  Operating cash flow – answers the question “does my business generate sufficient cash flow to maintain and grow operations?”  Measures cash flow after all direct business activities (COGS/COS) to pay administrative costs, save, invest and expand.  If net income is less than cash flow from operations, you will have to find financing to pay non-operational costs.  This metric concentrates on cash inflows and outflows related to a company’s main business activities and does not include such things as investments and capital expenditures. Free cash flow – answers the question “What cash do I have to invest in the business?”  Every business if it is to grow must invest in its financial stability, future and people.  This metric measures the amount of cash left after I pay all operating expenditures and capital expenditures. Free cash flow = operating cash flow – capital expenditures Cash flow from financing activities – How much cash is used to pay debt and investors and wha

Fractional CFO's are a bit of a hot topic right now. There are many purposes a Fractional CFO can have. Here are a few things that this position can offer.