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Entrepreneurs! – You need to start “owning it”

Entrepreneurs around the globe can attest that being an entrepreneur is no easy challenge. In South Africa the face of entrepreneurship is an ever-changing environment. I was fortunate enough to have been invited by the US Embassy in Pretoria to lead a 4 week training program with a group of 60 entrepreneurs…herewith my take-away on the encounter

  Entrepreneurship in today’s South Africa is no longer only dependent on the access to an opportunity to start our own business, but more so the belief that each individual can still do something about their own personal circumstances.

Why this statement, you may ask?

During the last 18 months I have had the privilege of engaging with entrepreneurs at all different levels and backgrounds.

I clearly remember preparing for my very first public training session at the US Embassy in Pretoria – bullet pointing my key discussion points and what I thought to be the challenges that my audience faced each day. Boy did I get it wrong!

Over the course of the 4 weeks that would follow, I got to know my rather rural audience pretty well and had to quickly adapt my perceptions of which factors determined success for these individuals.

It was not that they didn’t have great ideas to start with, or that they lacked the know-how of how to deliver their products or services to the market. Nor was it a lack of opportunity – most of the candidates I met were finding new customers on a weekly basis. They had access to smart phones, internet connection and some basic financial skills. Bullet points that I had previously identified as some of the major limiting factors on their success.

“We need to cultivate more opportunities where people learn to utilize the resources at their disposal and build their businesses in a scalable fashion.”

What they didn’t have was the self belief that it was possible for them to actually start a business, run it successfully and provide for their families. Change their personal circumstance AND own the process. Not only they, but also the startups I consult with, continuously search for and cling to the limiting factors that justifies their feelings of helplessness.

When asked at the start of the 4-week process, what the biggest obstacle was that stood between themselves and success, lack of funding was the resounding response.

I tested the water and asked one entrepreneur, that if we had access to unlimited funding on the day and could simply fill in the value of a blank cheque, what would this value be?

R10 million was his answer!

So I proceeded to ask him a few critical questions.

“How he did you arrive at this number?” His answer? “R10 million is my number!”

“Do you have a business plan to show the investor how the money will be utilized?” “No, my business will work, I just need someone to give me the money!”

“If you don’t have a business plan, how do you know how much your profits will be and how much you’ll be able to repay the investor?” “I am going to make lots of money – all I need is the funding so I can start my business. I’m not worried about the payments”

This was quite an enlightening conversation for the rest of the audience but also for me. I realized there and then how a dependent a society we’ve become. We always look towards someone in what we believe to be a position of power to make things happen for us.

So I am under no circumstances saying that he may not have been sitting on an idea well worth the R10 million investment. What I am stating is the obvious fact that this entrepreneur was still trapped in the vicious cycle of self doubt and was looking for any excuse why he couldn’t start his business and become successful on his own terms.

Not everyone will be successful

Not everyone starting a business is guaranteed of significant wealth. Not everyone is born an entrepreneur. But everyone that sets their minds to it and with the right support network, can be a very successful business owner.

We need to cultivate more opportunities where people learn to utilize the resources at their disposal and build their businesses in a scalable fashion. This will empower them to realize that they can make the necessary decisions, utilize resources and not having to look towards 3rd parties to change their personal situations. The sad reality is that even if all of these candidates sat on R10 Million ideas, they would not be ready for that level of overnight success and the business will fail faster than you can say “snap”. Allowing them the opportunity to grow their business ideas from within their own capabilities and resources, they will end up growing as individuals in line with their business requirements.

The end result? A more sustainable model for change and entrepreneurs that in general are more capable to deal with the everyday challenges of being in business.

Maybe even an entrepreneurial community that has learned the skills of what it means to take ownership for their own fate, and not look towards Government to provide that security.

Apart from looking to Government, I hear many wannabe entrepreneurs express their earnest wishes to get into some or other incubator program. Here they generally have access to a range of free services and products. This could range from free mobile devices with internet access, shared office- or work space, mentors, financial services etc. Most of the Government initiatives are also grant based and simply puts some cash in the entrepreneurs’ pockets, without any real support structure to teach them how to actually run a successful business.

I know of incubation programs that approach this differently and more in line with what I believe to be a more sustainable method.

If the bulk of the programs out there however approach development of our future entrepreneurs on this basis, we won’t see any sustainable change any time soon. Throwing money after the problem hasn’t worked in many other sectors, and it won’t work in this instance either.

Yes, all the money Government makes available stimulates the economy through the goods and services acquired by the recipients, but once the money has run dry, the spending stops and the individual is more often than not in a similar position that he or she was in previously.

Until such a time that we can get business owners supported and mentored to such an extent that they can start turning real revenue from which they pay for their own infrastructure, support services and actually employ someone, the real question that remains for now, is…

“Are we sustainably empowering entrepreneurs or is this just another form of charity?”

  Originally published on client blog – Managing Transformation Solutions

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Cash is king, so you better look after it

At its simplest, cash flow management means delaying outlays of cash as long as possible while encouraging anyone who owes you money to pay it as rapidly as possible.

Cash is king when it comes to the financial management of a growing company. The lag between the time you have to pay your suppliers and employees and the time you collect from your customers is the problem, and the solution is cash flow management. At its simplest, cash flow management means delaying outlays of cash as long as possible while encouraging anyone who owes you money to pay it as rapidly as possible.

Measuring Cash Flow

We all know the saying that says: “You can only manage what you measure!”. This was probable written specifically for cashflow management, as nothing is more important when it comes to ensuring you have cash available for those dry runs.

Prepare cash flow projections for next year, next quarter and, if you’re still a small business, next week. An accurate cash flow projection can alert you to trouble well before it strikes.

Understand that cash flow plans are not glimpses into the future. They’re educated guesses that balance a number of factors, including your customers’ payment histories, your own thoroughness at identifying upcoming expenditures, and your suppliers’ patience. Watch out for assuming without justification that receivables will continue coming in at the same rate they have recently, that payables can be extended as far as they have in the past, that you have included expenses such as capital improvements, loan interest and fixed expense payments, and that you have accounted for seasonal sales fluctuations.

Start your cash flow projection by adding cash on hand at the beginning of the period with other cash to be received from various sources. In the process, you will wind up gathering information from salespeople, service representatives, collections, credit workers and your finance department. In all cases, you’ll be asking the same question:

“How much cash in the form of customer payments, interest earnings, any collection of bad debts, and other sources are we going to get in, and when?”

The second part of making accurate cash flow projections is detailed knowledge of amounts and dates of upcoming cash outlays. That means not only knowing when each penny will be spent, but on what. Have a line item on your projection for every significant outlay, including rent, inventory (when purchased for cash), salaries and wages, sales and other taxes withheld or payable, benefits paid, equipment purchased for cash, professional fees, utilities, office supplies, debt payments, advertising, vehicle and equipment maintenance and fuel, and cash dividends.

“As difficult as it is for a business owner to prepare projections, it’s one of the most important things one can do,” if I can quote myself. “Projections rank next to business plans and budgets among critical things a small business must include in its financial management plan.”

You may want to read “6 Cashflow mistakes your startup should avoid”

Improving Receivables

If you got paid for sales the instant you made them, you would never have a cash flow problem. Unfortunately, that doesn’t happen, but you can still improve your cash flow by managing your receivables. The basic idea is to improve the speed with which you turn materials and supplies into products, inventory into receivables, and receivables into cash. Here are specific techniques for doing this:

Offer discounts to customers who pay their bills rapidly.

Ask customers to make deposit payments at the time orders are taken.

Require credit checks on all new noncash customers.

Get rid of old, outdated inventory for whatever you can get.

Issue invoices promptly and follow up immediately if payments are slow in coming.

Track accounts receivable to identify and avoid slow-paying customers. Instituting a policy of cash on delivery (c.o.d.) is an alternative to refusing to do business with slow-paying customers.

Managing Payables

Top-line sales growth can conceal a lot of problems-sometimes too well. When you are managing a growing company, you have to watch expenses carefully. Don’t be lulled into complacency by simply expanding sales. Any time and any place you see expenses growing faster than sales, examine costs carefully to find places to cut or control them. Here are some more tips for using cash wisely:

Take full advantage of creditor payment terms. If a payment is due in 30 days, don’t pay it in 15 days.

Use EFT payments on the last day they are due. You will remain current with suppliers while retaining use of your funds as long as possible.

Communicate with your suppliers so they know your financial situation. If you ever need to delay a payment, you’ll need their trust and understanding.

Carefully consider vendors’ offers of discounts for earlier payments. These can amount to expensive loans to your suppliers, or they may provide you with a change to reduce overall costs. The devil is in the details.

Don’t always focus on the lowest price when choosing suppliers. Sometimes more flexible payment terms can improve your cash flow more than a bargain-basement price.

Surviving Shortfalls

Sooner or later, you will foresee or find yourself in a situation where you lack the cash to pay your bills. This doesn’t mean you’re a failure as a businessperson-you’re a normal entrepreneur who can’t perfectly predict the future. And there are normal, everyday business practices that can help you manage the shortfall.

The key to managing cash shortfalls is to become aware of the problem as early and as accurately as possible. Banks are wary of borrowers who have to have money today. They’d much prefer lending to you before you need it, preferably months before.

When the reason you are caught short is that you failed to plan, a banker is not going to be very interested in helping you out.

If you assume from the beginning that you will someday be short on cash, you can arrange for a line of credit at your bank. This allows you to borrow money up to a preset limit any time you need it. Since it’s far easier to borrow when you don’t need it, arranging a credit line before you are short is vital.

If bankers won’t help, then turn to your suppliers. These people are more interested in keeping you going than a banker, and they probably know more about your business. You can often get extended terms from suppliers that amount to a hefty, low-cost loan just by asking. That’s especially true if you’ve been a good customer in the past and kept them informed about your financial situation.

Consider using factors. These are financial service businesses that can pay you today for receivables you may not otherwise be able to collect on for weeks or months. You’ll receive as much as 15 percent less than you would otherwise, since factors demand a discount, but you’ll eliminate the hassle of collecting and be able to fund current operations without borrowing.

Ask your best customers to accelerate payments. Explain the situation and, if necessary, offer an early settlement discount of a percentage point or two off the bill. You should also go after your worst customers-those whose invoices are more than 90 days past due. Offer them a steeper discount if they pay today.

You may be able to raise cash by selling and leasing back assets such as machinery, equipment, computers, phone systems and even office furniture. Leasing companies may be willing to perform the transactions. It’s not cheap, however, and you could lose your assets if you miss lease payments.

Choose the bills you’ll pay carefully. Don’t just pay the smallest ones and let the rest slide. Make payroll first-unpaid employees will soon be ex-employees. Pay crucial suppliers next. Ask the rest if you can skip a payment or make a partial payment.

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Top seven tips to get paid faster

We don’t need a fortune cookie to know that cashflow is the lifeline of every business, so we can all do with a few tips to get paid faster.

Cashflow plays such a critical part in the success or failure of small businesses that it sometimes boggles my mind to see customers chasing new clients to make up for cash shortfalls instead of following up on the payment of already issued invoices. The reality is that positive cashflow doesn’t simply start and end with sending your client an invoice – more often than not, the hard work only comes thereafter.

More often than not we encounter the following excuses from small business owners when they face up to their cashflow difficulties:

What if you annoy them by asking for payment and they don’t want to work with you again?

What if you offend them, and they were about to pay you anyway?

They’ll pay you in their own good time, following it up makes it look like you don’t trust them.

You don’t want to come across as ‘pushy’ and you want to keep a good relationship with them.

The thought of asking for payment seems a bit ‘urghh’ and actually you’d rather even make those sales calls you hate instead!

Hard truth time – if you have outstanding monies due to you, you could be storing up a serious cashflow problem. In fact, this may be having a negative impact on your business right now.

Over 1,500 members of an online business community recently shared their experiences about invoicing and payments with Xero. We’ve taken the best of their helpful advice and feedback, and summarized it here:

Top seven tips to get paid faster

Getting paid and having a healthy cashflow is the lifeblood of every small business, but it’s not always as easy as sending an invoice at the end of the month. You’ll be laughing straight to the bank with these top invoicing tips.

Discuss payment terms before you get started

Getting this sorted upfront means that there is no confusion down the track. It also sets the clients expectations around payment before you start the work.

Keep detailed records of inventory and time

This saves time when it comes to creating the invoice and makes sure you don’t miss anything. It also means if things are going over budget you can let your client know, instead of sending them an expensive surprise at the end of the month.

Make the invoice clear and easy to understand

List the details of the job in a way that makes sense to the client, any confusion could create a payment lag. It’s also good to personalize your invoice with your business logo – it helps carry on the professionalism of your work.

Set appropriate payment terms

If you need to receive payment within 30 days, our data reveals that you will need to set your payment term 13 days or less. Keep in mind that on average, debtors pay invoices two weeks after the due date.

Address the invoice to the person paying

Make sure your invoice goes straight to the person who makes payment to avoid getting lost in someone else’s inbox. If you’re unsure exactly who that is, give them a call – it pays to know the person paying the bills.

Invoice as soon as possible

Send your invoice as soon as possible, the sooner a client receives an invoice the sooner they will make payment. It also means they will receive it when the value of your work is still fresh in their mind. Accounting software that lets you create professional recurring invoices will streamline the invoicing process.

Keep on track with debtors

The squeaky wheel gets the oil. When things become overdue, send reminders, monthly statements or make a phone call. It will help remind your client that you are serious about getting the invoice paid. Some accounting software sends you an update when the invoice has been opened.

  Did you know that with cloud accounting it is possible to automate your invoice follow-up procedures?

If you’re tired of the emotional drain this has on your business, sign up for your free 30 day trail today!

      For the rest of you that want to continue hacking away at getting the money in the bank, the following Infographic courtesy of our friends over at Debtor Daddy might be helpful…

Image courtesy – Debtor Daddy

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Small Business owners speak up: “We suck at invoicing!”

One of the biggest small business invoice challenges out there, is getting them paid on time!

Managing cash flow in your business can be one of the trickiest parts of running your business. Recent data compiled by the research firm CB Insights found that 29% of startups fail because of a cash crisis. It was the second highest cause. (The number one factor, at 42%? A lack of a need for their product in the marketplace.)

Some small business owners seems to forget that their cashflow starts with the actual invoice they send to their customers – or not. Having consulted with a specific client for a number of years, it always blew my mind when we analysed their management accounts and their revenue was way below their budgeted figures and cashflow as a result extremely volatile.

Turns out after digging a bit deeper into the root cause of this, was that the partners of this firm felt that they couldn’t invoice the full work-in-progress (even though the customers signed off on it) at each stage of completion of the project. So instead of invoicing a smaller amount each month, they refrained from invoicing altogether! Now for most of us this seems insane, but this was a real problem for them that took us quite a while to sort out and for them to realize that everyone is entitled to fair compensation for their efforts.

This is just one of many challenges small business owners face and we found it quite interesting when we investigated the below mentioned summary of challenges small business owners suffered globally:

Small Business invoice challenges

Getting invoices out on time when you’re busy

This is a common problem. When your business is thriving and you’re busy working to make money, taking the time out to send invoices can be difficult. Consider using cloud accounting software to quickly prepare and send invoices.

Following up on overdue invoices

This is related to the previous point – time is always at a premium in a busy small business. Again, cloud accounting software can help by automating reminders based on your settings.

Splitting payments across multiple invoices

Account reconciliation can be tricky at times. Make sure your clients include your invoice numbers as references for every payment they make, to help you work out which invoices have been paid.

Invoicing quickly and accurately

It’s important that your team communicates effectively with your Finance Manager or accountant, to ensure that work carried out is invoiced properly every time.

Ensuring that all completed work is invoiced

Time-tracking software can be useful here, especially when there are several people working on each client account. Be sure to get this right, otherwise your business will be throwing away money by working for nothing.

Creating an invoice that doesn’t go to the bottom of the pile

You can design your invoices so that they stand out, but what’s more helpful is to build up a good working relationship with your client’s accounts department. Don’t rely on a pretty invoice to get you paid.

For many small business owners, uncertain cash flow is what holds them back from reaching their full growth potential.

One of the leading culprits of poor cash flow is late-paying customers. By implementing a few, simple billing practices, you can reduce the time before payment and establish steady, predictable cash flow.

We use Xero Accounting in-house to streamline and automate most of these items and have since implementation helped close to a hundred clients do the same – if you are ready to get your invoicing sorted in 2017, why not test-drive its efficiencies by signing up for a FREE 30 day trial below!?

Top tips to get your invoices paid faster

Embrace the cloud.

It may be a cliché, but the cloud has changed the way the world does business and. Leveraging the cloud can improve nearly every aspect of running a business.

With the cloud you can have information at your fingertips, anywhere, anytime. You can access the same documents you edit on your desktop from any mobile device. Should you receive a question about an invoice and need to put last-minute touches on it, you can confirm information and send it right away.

Mobile-enabled interactions can solve genuine pain points for businesses and their customers.

Invoice correctly on time.

Setting reminders and alerts can help you streamline the process for submitting invoices consistently and on time each month. You may even be able to set up automatic, recurring invoices.

This would reduce the amount of time required for the company to perform redundant communication between customers, businesses and employees.

Better yet, for recurring monthly bills, your customers may even be able to set up automatic payments to the company, saving time on both sides and providing your company faster payment.

Offer incentives for paying early.

Use incentives to establish desired customer habits such as paying invoices early. Consumer apps that track rewards and deliver additional incentives and discounts for using and paying through a platform reinforce continued use.

Offer incentives or discounts and give individuals a reason to act quickly and in a timely fashion. Sometimes a little push is enough to get someone over the hump and pay early, the Holy Grail of cash flow.

Keep a detailed audit trail.

Track your paperwork. Storing all your invoices, bills and documents in one place (preferably online) lets an organization to keep the business running smoothly. Creating this type of audit trail also adds security for the business and its customers.

You never know when you will need the audit trail to show a customer that he or she hasn’t paid yet.

Keep open lines of communication with customers.

I have found that often when people have not paid they just didn’t know they had not. Sending a simple email reminder to customers can go a long way. A simple gesture can be the gentle nudge people need to get a payment on its way.

Best of all, you can automate these reminders using cloud solutions. Part of the value of an email reminder is that it reinforces your relationship with the customer and provides an opportunity to engage.

Use the email reminder to create an open dialogue with clients, providing them with a sense of security and comfort.

When your customers know they can come to you with questions, they will want to be sure they do right by you and pay on time. More important, helpful customer service provides customers an incentive to stay with the company amid tough times.

The post Small Business owners speak up: “We suck at invoicing!” appeared first on Out the Blocks | Small Business Accountants @ R2,750 p/m.

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Top 9 invoicing tips when starting your business

These invoicing tips when starting your business will ensure that you can send invoices and receive payment with the shortest amount of time in between – improving your small business cashflow!

For freelancers and small business owners, you may enjoy your work but you know that there’s more to your business than just that. You also need to get paid. That’s why it’s important for you to send out and receive payment on your invoices in a short amount of time.

The financial aspect of your business is crucial if you want to succeed, so today we’ll look at some of the surefire invoicing tips for small businesses and freelancers. You’ll be able to employ these effective invoice tips so you can get paid faster.

Top 9 invoicing tips when starting your business

Provide Quotes and Agreements Prior to Invoicing

In order to save the hassle of questions and disagreements later when the actual invoice comes, be proactive with all customers by making sure they understand what the project will entail and the costs associated with this work, prior to the beginning the work on this particular project.

An agreement form can also clarify your payment terms and establish a positive working relationship from the get-go, so you don’t have to spend time later answering questions and addressing concerns.

Add Details and Branding to Your Invoices 

Your invoices should identify clearly your company and its brand to help your clients understand where the invoice is coming from, plus you can continue to emphasize your brand’s values this way through consistent attention in all communications.

The details on your invoice should also include a numbering system so you can track your billing and quickly find an invoice that may be in question. Add all the possible ways there are to contact you, including address, email address, and phone number.

Lastly, don’t leave off any specific details about the work completed or the payment terms. Even if those have been included in an agreement form or quote, it’s important to reinforce them through every invoice you issue.

Track time accurately

It’s not enough to do the work and then try to recall how much time you’ve spent on it. Set your timer when you begin and switch it off when you finish. Include all the hours you work on each client’s projects. That way your invoices will be accurate.

Cloud Accounting software allows you to pull the data directly from a time keeping system, so it is worth your while to look at options through which you can virtually automate this process.

Account for administration time

For some business owners, they said that invoicing can take up to 10 percent of work time in terms of creating, sending and chasing invoices. That can cause a drag on your other administration work, so be sure to factor this into your planning and accounting strategies.

Invoice the right person

This may sound like a silly one, but that’s not always the same as the person you’re actually doing the work for. Make sure you get the correct billing details for all your clients, otherwise your invoice could end up on the wrong desk… and stay there.

Send Invoices Promptly

Don’t feel like you need to wait for a certain time that you think is appropriate for customers to pay. It’s important to send out your invoice as soon as you have completed work.

If you are just starting a project and pre-bill, get that invoice to the client immediately. This way, you are at the top of their mind and are more likely to also get paid quickly.

Invoice on the go

Get rid of any paper-based invoicing process. Even if you only do a few invoices a month, it takes too much time and money to compile and send paper invoices. Instead, automate the process with invoicing software and online tools that often work in the cloud.

Why wait until you get back to the office to send an invoice? Some of our online community members have sent invoices while on the train, from airport lounges and even while volunteering at a charity. Cloud accounting software makes that easy. The smaller the time gap between providing the service and issuing the invoice, the more likely it is that you’ll get paid quickly.

This means you will be able to create and send invoices from wherever you are working and save money by not buying paper, ink cartridges, envelopes and postage. Then, you won’t be making those trips to mail the invoices. Instead, you will be sending them from the software to your customers’ email addresses.

Even better is to also automate the reminders and acknowledgements that your invoicing software can send on your behalf, so you can win that time back for yourself to work on something else.

Lastly, by taking a few of these steps you are reducing those chances for human error that then end up costing you even more time. Add automated payments to your work flow and you will really gain some momentum in the extra time you gain!

Give Customers a Way to Pay Just as Fast

New technology is available that allows a customer to pay directly from the invoice in their email, speeding payment to you for greater cash flow and less stress. These online payment options provide more options as well, including direct debit from a bank account, credit and debit card options, and Paypal.

With so many options to pay from their phone or other device, customers are sure to pay you just as fast.

Follow up invoices

When an invoice hasn’t been paid, some business owners may feel nervous about asking for payment. There’s nothing wrong with reminding a customer about money for the work you’ve completed or the products you have shipped out and they’ve received.

Invoices might be ignored, lost in the mail or left unopened in the recipient’s spam email folder. So follow up and make sure your invoice has been not only received, but actually opened and read.

You can personally contact them or use your invoicing tools to set up automated payment reminders.

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Why your business needs the cloud

Cloud Accounting seems to be the buzz word at the moment and some of you may still wonder why your business needs the cloud?

From time-to-time I write for other publications as well and I thought it would be appropriate to share a case study that we published on the MTS Holdings blog end of 2016. This case study highlights the transition we as an organisation has gone through evolving into a fully cloud based accounting practice. During the last  two years we have not only ourselves Get in the cloud, but we have assisted close to a hundred of our clients to do the same. Many of whom have achieved similar or even greater greater gains in efficiency and profitability!

Happy reading and please feel free to leave any questions or comments in the comments section below!

Why your business needs the cloud

There has been no time in history where it has been more exciting to start a business than right now.

Business owners across the world marvel and quiver simultaneously at the mere speed at which technology is changing the face of how we do business…so as business owners: “Do we fear or embrace the pivotal role technology will play in our futures?”

Personally, we would like to think of ourselves as early adopters and in an attempt to stay ahead of the competition, we pride ourselves on our forward thinking culture. It therefor came as no surprise when I walked into the office one morning and uprooted everything we’ve been accustomed to for so long, when I said: “Guys, I don’t yet know how, but we need to get in the cloud!”

Nigh on two years later, as we look back on the journey we have been on, we can unequivocally attest to the fact that it has been absolute blood, sweat and tears. But without even giving it a second thought, it was hundred times over worth the effort.

At the time of writing this article, we have managed to:

Increase our practice efficiency by close to 40%

Decrease our staff requirement by 40%

Gain absolute clarity as to whom our ideal clients are, and

Adjust our marketing efforts accordingly

Automate close to 85% of our receivable – and payable cycles

We made many mistakes during this 24-month period and although it was a tedious process to go through, we would otherwise probably not have arrived at the point we find ourselves currently

  Trying to figure out what our “new cloud version” looks like

After dropping the bomb that morning, we immediately got to work. As a big picture thinker myself, one of the saving graces for us was that we managed to obtain a clear picture of what we envisaged this new cloud based practiced looked like, what its core services would be and how this influenced our value proposition.

We quickly realized that we cannot simply think about how the transition would impact us as an organization, but that equally important, we needed to understand how this would influence our clients and the way we serviced them. If there was no mutual benefit, we were dead in the water…

Our initial efforts were subsequently concentrated around those elements we identified as being critical to us transforming to a cloud based practice, but also at the same time, streamline the way in which we interact with our clients. Without delay, we moved our own bookkeeping and accounting to a cloud based platform. The same platform we envisaged at the time to on-sell to our existing customers. We gained immense insight into the logistics, the day-to-day requirements and the business processes needed to effectively manage your company’s finances in the cloud. What better way to get the practical know-how under the belt, than to be your own guinea pig? Two years later we find ourselves listed as one of the few accredited advisory firms and consult with clients on a national level.

What we underestimated from happening through this process, was the mind blowing discovery of how many opportunities there were on the back of moving to the cloud, to automate or greatly decrease the effort many of the other business processes entailed.

We found that there are so many digital service providers in the online marketplace, that we could overnight enjoy the successes of a more streamlined practice. More importantly, it unlocked opportunities for us to immediately start adding new value added services on top of our core service offering.

Through the careful selection, testing and implementation of certain key pieces of software, we managed to among other things,

Manage our practice and its workflow from anywhere in the world and in real time,

Automate recurring billing cycles,

Have work-in-progress integrated automatically into the accounting software

Automate our receivable cycle

Access our document server from anywhere and on any device

Virtually automate the bookkeeping of our company accounts

Manage our own finances on the go and in real time.

As we continue to evolve, we question everything in our business on an ongoing basis. This results in us always investigating new and/or better ways of doing things.

  Leave no client behind

Through the significant change we ourselves underwent, we kept reminding ourselves that we are not alone in this endeavor, but that our most precious commodity is invested as much as we are – our customers. We were able to look at the roll out of any new software from another angle as a result. If it does not add to our bottom line AND make our clients lives easier at the same time, it is probably not the software we should be using. Our clients subsequently partook in this journey which was primarily ours, but as they could see the benefit they would receive as a result, it was one of patience and understanding. This could so easily have had the opposite effect had we taken one-sided decisions that only benefited ourselves.

To date, we have converted 90% of our clients to the cloud also and have already started to see the impact it has had in their businesses. Not only are they themselves now working more efficiently as well, through the online collaboration between our respective offices, they have taken a greater sense of ownership in the financial success of their business. Rather than simply reporting historic figures, we overnight cemented our roles as business advisers instead.

  Beware of, but embrace the double edged sword 

It is important to note that this process wasn’t all smiles for us – we soon bled after being struck by the double edged sword…you see, not all clients liked this new firm we became. We were no longer a 100% fit for a 100% of our clients. Not all our new processes suited all our clients needs. As a result, we had to say goodbye to some of them. And obviously it had an adverse impact on our bottom line. It would for most businesses.

The end result however was profound.

We always thought we knew who our ideal client was. But right under our noses we never realized that this persona was changing as a result of whom we’ve now become. So we started to get frustrated when dealing with certain clients. Customers that used to be some of our model clients all of a sudden became quite tedious to service. And this wasn’t their fault. They weren’t the ones that changed – we did!

As soon as we came to this realization, the proverbial angels descended from the heavens and we saw the light. As a result, we were immediately in a position to end these relationships on a good note, and start to focus our marketing efforts on the new ideal client persona. Because this persona was now so crystal clear, everyone in the organization now knew on the drop of a coin whether we’ll be on-boarding a prospective new client or rather referring them to some colleagues. This clarity did contribute to the efficiency of our processes, but more so assisted us with greater insight into the needs of these clients and better understanding what their indispensable requirements from us as outsourced business partners are.

  The future is what you want it to be

There is a reason why people compare the effects of the global digital uptake to that of the industrial revolution – it is here to stay and the pace at which it changes is merciless. We are subsequently faced with new challenges. Challenges for which we may not yet be able to “Google” the solution. This means that for those of us that choose to embrace this rapid change, we need to be relentless in our willingness to change as fast as technology does.

The beauty of how far technology has come, is that each business out there has the opportunity to dream, paint the picture that they envision and make it a reality in a relative short space of time.

So the only advice we can leave you with?

Dream vividly…continuously question everything… take quick action!

The post Why your business needs the cloud appeared first on Out the Blocks | Small Business Accountants @ R2,750 p/m.

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10 Questions to ask your Small Business Accountant

A small business accountant can be a tremendous asset to your business. For this new found relationship to work however, two-way communication is paramount. Ask your small business accountant these 10 questions to better understand your new business partner.

In today’s business world, the relationship between accountants and their clients has changed so dramatically. Accountants play a bigger part in your business success than ever before in history. If you let them, Accountants can become an indispensable resource and partner to your business, advising on a whole range of headaches such as the overall  health of your business, HR issues, taking on a new partner or better managing your cash flow. But only if you let them! We are all in search of this new generation accountant to become a perfect fit for our business…

The only way this new found relationship will reach its full potential is when you realize that you have to accept a certain level of responsibility and that you communicate your expectations in advance but also understand fully what will be expected from your business and by when.

We regularly encounter clients that expect ALL communication to come from their accountants. As with all strong and healthy relationships however communication is key and this one-way communicating relationship is doomed from the start unless the other party comes to the table. Many other clients realize the importance of this but don’t really have a frame of reference of what accounting comprises to ask the “right” questions.

So when I came across this article by KIM LACHANCE SHANDROW, it seemed like the exact type of information I had to share with our audience. In the below mentioned excerpt from the original article, Kim discusses the 10 questions every client simply has to ask when working with their small business accountant.

10 Questions to ask your Small Business Accountant

1. What’s the best way to contact you and how often should we be in touch?

This might seem like too simple a question, but clear, effective and frequent communication is the key to a healthy, beneficial relationship with your accountant. Establish early on how often you’ll connect, either in person, on the phone or online (via a video chat app like Skype, Google Hangouts or Facetime). Decide together if you’ll meet weekly, monthly or bimonthly.

2. How can you help me prepare for (and survive) tax season?

Untangling the time-sucking tedium of tax prep is often the number-one reason small businesses hire an accountant in the first place. You’ll want to ask yours which tax credits and deductions you should claim. Also ask him or her if there are any new tax laws you should take advantage of to maximize write-offs.

“Tax opportunities, such as the R&D credit, accelerated depreciation, including tax forgiveness and outright grants or refundable credits, can even be applied for as part of the tax return process,” Katz says.

He suggests that you get answers to all of your tax questions long before the tax submission deadline. To avoid the year-end rush, get your small business accountant involved in helping you gather all of the necessary accounting documents and data all throughout year. 

3. What are some topics I should consult with you about on an ongoing basis?

A skilled accountant should get to know you and your business well enough to regularly keep you aware of – and swiftly and appropriately react to – an array of factors that could affect your bottom line, for better or for worse. 

Your accountant should be well-versed in several disciplines, “including but not limited to GAAP [generally accepted accounting principles], corporate and individual tax, retirement planning and financial planning,” Katz says.

He or she should also be open to assisting you in weighing the financial ramifications of certain decisions, like whether or not to hire an independent contractor or a full-time employee, buy or rent an office space, or rent or lease a company car and much more.

Your accountant should also work collaboratively with you in a way that makes it easy for you to consider and understand which actions you need to take now and in the future, ideally without the usual confusing accounting jargon. “If an entrepreneur in unable to develop that type of relationship with her small business accountant, it may be time to look for a new one,” Katz warns. 

4. How can you help me grow my business?  

A qualified accountant absolutely can help small-business owners expand over time, that is if they have the right groundwork in place with you, Katz says.

To grow, you must start with a financial model that is “honest and built on a granular basis from the ground up.” Remember to update your plan on a monthly basis (or ask your accountant to) with actual results. Doing so can help you hone in on opportunities for growth in your market.

5. How can you help me better manage my cash flow?

Properly projecting your business’s cash flow is as essential as creating an effective mission statement and living up to it. Tedious, detailed flow projections aren’t easy to wrangle, but that’s what you have an accountant for.

Your small business accountant should be able to help you develop an organized, effective cash flow model that allows you to adjust your operations in ways that help you survive shortfalls, as well as improve receivables and manage payables.

6. What is my break-even point? 

Your small business accountant should be able to analyze a number of metrics to calculate whether your business is making a profit or a loss. Knowing your break-even point is crucial to determining your business’s pricing structure and profitability. Once your accountant helps you identify yours, you should have a strong estimate of how many products or hours of service you have to sell to cover your costs.

7. Can you assess the overall value of my business?

Your accountant should be up to the task of estimating your company’s fair market value in excess of your tangible assets. He or she should start by examining your financial plan and then execute a discounted cash flow (DCF) analysis, a common but effective valuation method. 

Another way your small business accountant can help nail down your business’s value is by deeply understanding what you do and the industry in which you operate, Katz says. “In so doing, an accountant can help the entrepreneur understand which aspects of the comparable companies drive their value, and can work with the entrepreneur to steer the company toward maximizing those aspects of their business.”

8. Can you help me review and negotiate business contracts before I sign them? 

This is a common question for small business accountants, one that’s probably better to ask your attorney.

“An accountant should not practice law without a license,” Katz says. “They can work collaboratively with your attorney to add color and tax to commercial issues with which the attorney may not be experienced.”

9. What are some special considerations for my particular industry?

Businesses in different industries come with their own unique accounting issues. Your accountant should be knowledgeable about the various ones that specifically apply to yours.

For instance, if you own a startup that builds wearable tech, your accountant should be well-versed at identifying tax opportunities specific to the emerging technology industry, like potential R&D, facilities and training tax credits, as well as applicable manufacturing and sales tax exemptions, etc. 

10. What are some common mistakes that I should avoid when working with you?

Not being 100 percent honest with your accountant is the worst mistake you could make, Katz says. “The truth will come out, either in the planning stage or in front of the SARS auditor.”

The post 10 Questions to ask your Small Business Accountant appeared first on Out the Blocks | Small Business Accountants @ R2,750 p/m.

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How to Choose the Best Cloud Accounting Software for Small Businesses

Firstly, you should determine your business needs. The more you need, the more expensive it is likely to be.

If you are running a business, it is a good idea to use cloud accounting software (online) to help you with day-to-day accounting. One of the biggest advantages of cloud accounting software over regular desktop based software is that is always easily accessible from anywhere in the world (provided that you have internet access).

Also, you do not have to worry about updating your software or backing up your data, as these things are taken care of automatically. Depending on the size of your business, you should look for different things in a cloud-based software.

Firstly, you should determine the needs of your business and the size of your budget. The more your business requires, the more you will have to pay. The wider range of options you will get (things such as expense tracking, recurring invoices, payroll services and automatic past-due billing) all add to the price.

However, if you own a small business, between R300 and R450 per month should be enough. Also, some providers offer free or trial versions of their software. These versions limit the number of options you can use of let you use the program for several days before deciding if it is the right software for you.

“Your business needs the best cloud accounting software it can afford!”

Sign up for your free 30-day trial here!

Depending on your needs, you may not even need accounting software. However, if you do require some of the following features, then cloud accounting software can be a great asset for your business. Always remember that software alone can’t guide you on how to better manage or grow your business, so ensure you get the professionals on board. You may want to read: “How to hire a small business accountant?”

If you have many clients, accounting software can be extremely helpful, because it lets you organize a database of customer information (their purchase histories, credit terms, and all kinds of other information).

If you do not know much about laws and regulations, cloud accounting software can easily help you with this and make sure that everything you do is legal and in compliance with the generally accepted accounting principles.

If you are just starting out, it is much easier to work with accounting software from the very beginning. If you are running an older business, it will be much harder to implement all the spreadsheets and ledgers.

However, we do offer a free conversion of your Pastel data to the cloud by clicking here!

Accounting software saves time, especially if you are looking to grow your business. The less time you have to spend dealing with accounting, the more time you will have for everything else.

If you are still not sure if you are in need of cloud accounting software, here are some of the things that it can help you with:

Of course, basic accounting services are provided. The software does income and expense tracking, it generates financial reports, it takes care of invoicing.

They save a lot of time because they automate a number of processes. They provide services such as automatic billing and outstanding invoice follow-ups.

If you hate wasting your time doing tax preparation, this type of software is a must-buy. Not only does it automatically do tax calculations and tax reporting, it also prepares all the necessary information so you can easily e-mail it to your accountant.

If you are busy and do not have enough time to sit down and take care of accounting yourself, accounting software seems tailor-made for you because it offers mobile access on your smartphone or tablet.

Doing manual accounting can quickly overrun your office with tons of papers. However, by using a program, you can, for example, add a receipt to expenses simply by taking a picture.

You can save a lot of money on bookkeeping as many of the repetitive tasks can be automated

You do not have to input many of the transactions yourself, for instance, automatic bank feeds retrieve transactions directly from your bank account.

As you can see, there are many reasons why you should not stick with old-school accounting. The technology is developing faster and faster, and accounting software (especially if it is cloud based) has made such progress that there is no reason to not utilize its many advantages.

The post How to Choose the Best Cloud Accounting Software for Small Businesses appeared first on Cloud Accountants @ R2,750p/m | Out The Blocks.

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How to Hire a Small Business Accountant

These steps will help you find a professional small business accountant to help navigate the maze of tax issues facing your small business.

For most small businesses things tend to change so rapidly and every rand counts, so if you don’t know where you stand on a monthly basis, you may not be around at the end of the year. And while using do-it-yourself accounting software can help monitor costs, the benefits of hiring good small business accountants extend far beyond crunching numbers. Potentially, they can be your company’s financial partner for life, with intimate knowledge of not only how you’re going to finance your new office space, for instance, but also how you’re going to finance your daughter’s education.

Before you hire one though, make sure you understand the four basic areas of expertise in a general accounting practice:

Business advisory services.Since a small business accountant should be knowledgeable about your business environment, your tax situation and your financial statements, it makes sense to ask them to pull all the pieces together and help you come up with a business plan and personal financial plan. Accountants can offer advice on everything from insurance to expansion (how will additional capacity affect operating costs?). Accountants can bring a new level of insight, simply by virtue of their perspective.

Accounting and record-keeping.These are perhaps the most basic of accounting disciplines. While it makes sense for many business owners to manage their day-to-day records, an accountant can help set up bookkeeping and accounting systems and show you how to use them. A good system allows you to evaluate profitability and modify prices. It also lets you monitor expenses, track a budget, spot trends and reduce accounting fees required to produce financial statements and tax returns.

Tax advice. Small business accountants that provide assistance with tax-related issues usually can do so in two areas: tax compliance and tax planning. Planning refers to reducing your overall tax burden. Compliance refers to obeying the tax laws.

Auditing. These services are most commonly required by banks as a condition of a loan. There are many levels of auditing, ranging from simply preparing financial statements to an actual audit, where the accountant or other third party provides assurance that a company’s financial information is accurate.

Choosing a Small Business Accountant

The best way to find a good accountant is to get a referral from your attorney, your banker or a business colleague.

While accountants usually work for large companies, SAIPA members (Professional Accountants) work for a variety of large and small businesses. Don’t underestimate the importance of a Professional Accountant. This title is only awarded to people who have passed a rigorous nationally standardized test and also require 3 years’ post-graduate work.

Once you have come up with some good candidates, it is important to determine how much of the work your company will do and how much will be done by the accountant.

Accounting services can be divided into three broad categories: recording transactions, assembling them, and generating returns and financial statements. Although the first two categories require a lower skill level than the latter, many firms charge the same hourly rate for all three. This is why it’s important to determine exactly what work you want an accountant to handle.

The next step is to interview your referrals. For each, plan on two meetings before making your decision. One meeting should be at your site. The other should be at theirs. During the interviews, your principal goal is to find out about three things: services, personality and fees. Here’s what to ask in each area.

Services:Most accounting firms offer tax and auditing services. But what about bookkeeping? Management consulting? Estate planning? Will the accountant help you design and implement financial information systems? A Professional Accountant may offer services that include analyzing transactions for loans and financing; preparing, auditing, reviewing and compiling financial statements; managing investments; and representing you when dealing with SARS.Although smaller accounting firms are generally a better bet for entrepreneurs, they may not offer all these services. Make sure the firm has what you need. If it can’t offer specialized services, it may have relationships with other firms to which it can refer you to handle these matters. In addition to services, make sure the firm has experience with small business and your specific industry.

Personality:Is the accountant’s style compatible with yours? Be sure the people you are meeting are the same ones who will be handling your business. At many accounting firms, some partners handle sales and new business, then pass the actual account work on to others.When evaluating competency and compatibility, ask candidates how they would handle situations relevant to you. For example: How would you handle a SARS audit seeking verification of VAT input tax expenses? Listen to the answers and decide if that’s how you would like your affairs to be handled.

Realize, too, that having an accountant who takes a different approach can be a good thing. Just be sure that the accountant doesn’t pressure you into doing things you aren’t comfortable with.

Fees:Ask about this upfront. Most accounting firms charge by the hour. However, others work on a monthly retainer. Get a range of quotes from different accountants. Also try to get an estimate of the total annual charges based on the services you have discussed. [Click here to see how our fees are structured]Don’t base your decision solely on cost, however, as an accountant who charges higher hourly rate is likely to be more experienced and able to work faster than a novice who charges less.

Also be sure to ask for references – particularly from clients in your industry. Call them to find out how satisfied they were with the accountant’s services, fees and availability.

Make the Most of the Relationship

After you make a choice, spell out the terms of the agreement in an engagement letter. The document should detail the returns and statements to be prepared and the fees to be charged. This ensures that you and your accountant have the same expectations.

Also, hold up your end of the agreement. Don’t hand your accountant a shoe box full of receipts. Write down details of all the checks in your check register, whether they are for utilities, supplies and so on. Likewise, identify sources of income on your bank deposit slips. The better you maintain your records, the less time your accountant has to spend and the lower your fees will be.

It’s a good idea to meet or at least speak with your accountant every month. Review financial statements and go over problems so you know where your money is going. Your small business accountant should go beyond number-crunching to suggest alternative ways of cutting costs and act as a sounding board.

The post How to Hire a Small Business Accountant appeared first on Out The Blocks.

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How to be an ultra-productive entrepreneur

You probably look at other businesses and ask yourself how to be an ultra-productive entrepreneur all the time. Starting a business is an eventful exercise and you will most probably try and do a million things all at once. What you need is our 15 point cheat sheet to get the most out of your day and move you closer to your goals at record speed.

1. Focus on minutes

Don’t focus on spending hours as you will quickly find ways to fill your time once tasks don’t take you the full hour. There are 1,440 minutes in each day. Invest them intentionally and make each minute count!

2. Set daily priorities

Set out to achieve your most important task as the 1st thing you do each morning. This way you ensure that you constantly move forward to achieving your bigger goal.

3. Don’t use to-do lists

Throw away your to-do lists! Understanding that you will never get everything done, sets you free from constantly chasing that to-do list that simply keeps getting longer. Scheduling everything in your calendar also creates the awareness of which items are really that important to make it onto your calendar in the first place.

4. Beat procrastination with time travel

Your future self will most probably find any excuse not to follow through on the tasks at hand. Which measures can you implement now to make sure you stick to your goals as you move forward?

5. Make it home for dinner

Focus on the things that are most important to you, whether it be going to the movies with friends or having dinner with your family. It’s not the money that will make you successful, but the people around you – make sure you show your appreciation. Block out these time slots in your calendar and don’t let work interfere.

6. Use a notebook

As an entrepreneur we constantly think. Think about new ways to grow our businesses, new products/services or how we would like to make a difference in the world. This can be overwhelming and make you less productive. Capture everything in a notebook and let your mind stay sharp.

7. Only check email 3 times a day

You can quickly get caught up in your inbox – there is nothing more disruptive to your natural flow than checking or answering emails every 5 minutes. Social media can be just as bad! Schedule time in your calendar to attend to these tasks and ensure you stay in your natural flow in between.

8. Avoid meetings at all costs

Don’t hold meetings at all – wherever possible. If you absolutely have to, always make sure that there is a definite agenda to the meeting and keep them as short as possible. Remember it is your responsibility to make sure that the meeting stays on topic.

9. Say “no” to almost everything

Every time you say yes to something it translates to a “no” to something else that might have moved you closer to achieving your goals. If it does not move you forward to achieving your goals, it should be an absolute no.

10. Follow the 80/20 rule

80% of your goals will be achieved from 20% of your activities. Spend time to find out which tasks these are and make them your absolute priority. Ignore the other 80% wherever you can.

11. Delegate or outsource almost everything

We continuously emphasize to our startup trainees how important it is to know your own strengths. Once you have identified these, you will have a clear indication of which people to appoint as employees or which services you need to outsource.

12. Have work themes for days of the week

You’ll find it really difficult to stay true to your natural flow when you constantly have to switch between different types of tasks. Create days in your week where you can batch similar tasks together. So when you work on strategy, you only have strategic items in your calendar.

13. Touch things only once

Sometimes we spend more time planning items and scheduling it into our calendars than what it would have taken us to perform the actual task. If a task will take you less than 10 minutes, do it immediately. (Provided it moves you closer to your goal off course). This will keep your calendar free of clutter.

14. Have a consistent morning ritual

There is no better way to start your day, than with the power hour. Get up early and allow yourself the luxury of time to focus on your mental, physical and spiritual health. You owe it to yourself! A better you = a better business!

15. Don’t think about time, focus on energy

If you simply focus on the tasks at hand, you’ll get demotivated fairly quickly. Rather focus on the bigger picture of the goal you’re trying to achieve and let that fuel your energy levels. To maintain these high energy levels you need to focus on sleep, diet, exercise and regular short breaks throughout the day.

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How do I…? The top 5 entrepreneurial questions we answer

We recently had the privilege of exhibiting at the National Small Business Chambers’ “My Business Expo” in Johannesburg. With more than 14,000 delegates attending we had the opportunity to literally speak to hundreds of entrepreneurs on the day. What an enlightening exercise that has been. We spoke to entrepreneurs from all walks of life and from so many industries. Each of them sharing their stories, successes and frustrations. Almost getting an inside view into the minds of these buzzing startups.

Throughout the day it was surprising that the same questions started to repeat themselves even though their owners were completely unrelated. There appeared to be similar challenges entrepreneurs faced and they were all so eager for some guidance or a solution, that you could feel the frustrations they felt.

I couldn’t help but bring those questions home to our own journey. I then realized that what makes our service relate-able to startups, was that we’ve been through the process ourselves – a few times in fact.

But that’s just what happens when you’re a serial entrepreneur!

It turns out, these weren’t new challenges at all. We have experienced them ourselves close to a decade ago and I’m certain, so have entrepreneurs a decade before us.

Here follows the top 5 entrepreneurial questions we were bombarded with.

1. How do I come up with a business idea?

It turns out, as I validated at a recent training event we hosted, that ideas are free of charge and can be found all around us! Every day we are faced with external challenges that has a direct/ indirect impact on our lives. Each of these challenges have potentially more than one solution.

As entrepreneurs have mindsets of problem solving, it makes absolute sense that these problems we face daily should lead to a feeding frenzy as entrepreneurs rush to see who can bring the best solution to the market first.

2. How do I market my product?

As we spoke to the delegates, it became apparent that it is not a marketing question only. Most of them that struggled with marketing their products, also had no idea of who they were marketing their product/service to. They never spent enough time identifying their target market. Without this step during your startup phase, you have no idea of who your ideal client is and where to reach them.

Once you have established this profile and you know where they look to buy, you can outline your marketing plan. Very few startups have any money available initially to spend on marketing, so organic marketing channels such as through your website and social media would be the way to start building a name for your business.

Strangely enough as we have found out ourselves, in this digital age we live in, people are really touched by businesses that also still use primary communication channels. Don’t underestimate the effectiveness of cold calling and knocking on doors during those 1st few months.

3. How do I stop living hand to mouth?

Another double edged sword. These delegates weren’t living on daily survival (when they were lucky) by chance. There isn’t enough purely because they do not have a plan in place of how much they need to earn or enough financial controls in place to make sure they reach those numbers.

At a recent training event I met up with one of the delegates again and even before she could tell me how her business was doing, I could see the stress on face. The poor woman was STRESSED! She told me how she was selling way more handbags then when I last saw her, but she was borrowing money to buy the next batch of stock.

It turns out that she gives the handbag to the customer after receiving only 50% deposit and then hardly ever sees the balance. She therefor loses money on every single sale. Never mind making profit, she was not even breaking even.

By never documenting her plan and identifying the possible financial risks associated with selling to that market, she was never able to put controls in place to mitigate those risks.

4. How do I know if my idea will work?

We’ve come across so many business owners that spend months, if not years conceptualizing and building their products/services. Now I’m all for quality and excellence and the niceties we all strive for. Unfortunately the reality of the business world is a harsh one.

The sooner you take anything you have finished – it might not be your best work or the final product yet – to market, the quicker you can start testing it against your customers’ needs and their invaluable feedback.

You can spend months developing your product based on what you think your customers want, only to find out that they are not looking to buy what you are selling. Even worse is by the time you launch something they would have bought 6 months ago, they have now moved on to the next big thing and you are sitting with massive losses tied down in a redundant product.

5. How do I price my product / service?

I know that when we started out close to a decade ago, this was one of the most difficult things for me. How do you decide on the amount you’ll be charging your customers. Truthfully speaking, for probably the 1st year it has been somewhat of a thumb suck.

Simplest way is to determine the cost of your product, add the amount of profit you want to make to it, and voila! You have your selling price.

Now it’s not to say that once you have this number you’ll have clients buying from you. You might find that once you start selling, that your products are overpriced and no one wants to buy from you. Or, you are selling a shitload of products but there is no money left after paying your suppliers. Chances are you are way under-priced!

As stated in no. 2 & 4, the more detail you have about your customer and the quicker you start measuring your results, the sooner you can make adjustments that could otherwise cost you dearly.

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