Financial Leadership: 4 Tips for Business Owners

Being the leader of a business is not an easy job by any means and having an executive leadership masters is becoming a must if you wish to assume a similar leadership position in the future. Running a company, especially the financial aspects, is a constant challenge, irrespective of how successful the company is at the moment. In order to help the new entrepreneur or the financial head of a business, the following four simple but effective tips have been collected from some of the most prominent corporate leaders around today.

The Number Game

Nothing is more important than numbers when it comes to finances and you need to figure out and track which metrics are most important to the business. Make it a routine to have weekly and monthly scorecards so that you can keep your eyes on those all-important numbers on a constant basis and maintain your focus on improving them.

Make the Numbers Public to Your Employees

Once you have the numbers, you need to make everything as transparent as possible. Make sure that everyone who is on the company’s payroll can see those metrics. This will invariably encourage them to improve those numbers because a company that makes more profits pays better and allows for better working environments for its employees. In addition to that, this transparency ensures that your employees are not overestimating your profits and assuming that they are being underpaid.

Invest in What People Want

This is perhaps both the most important and the most difficult business decision that you will have to take as an executive leader. While investing and producing what your customers want seems simple enough, in practice, it’s far from it. Once you figure out what the bulk of your customers want, you need to forego many other aspects of your business model that might appeal to you or others. For example, Apple makes products that cost significantly more because they have a huge profit margin and they sell their brand name. Apple knows that people will buy their products, irrespective of the price tag. If they shift their strategy and try to provide better value-for-money products like most other companies in the industry are trying to do, they will lose their unique selling point. As complicated as it is, figuring out what your target customers want and sticking to it is what most successful companies in the world do.

Use Purpose as a Motivator

If you are just starting out, you will probably not be able to give your employees very impressive salaries. So what’s there to keep your key employees from leaving your company and joining a bigger one for a far greater amount of money? The answer to that question is “purpose.” Be clear with what you are trying to achieve as a unit and motivate them by making your employees a key part of that future. People work for things other than money and purpose is one of the strongest motivators in the world. The promise of a bigger and brighter future and the purpose of building something great together have laid the foundations for great companies in the past.

It is recommended that you complete your executive leadership masters online so that you can also finish your education in finance at the same time.

Coupled with the training in leadership and the necessary financial knowledge, you should be able to put the techniques mentioned here into practice with great success. There will still be mistakes as nothing can really replace experience, but you will make far fewer of them and progress much faster than anyone else in your position.

How to Efficiently Run Your New Business

Running your new business may not mean that you take charge right away. Ideally in your contract of sale there’ll be a hand over period in which you’ll be trained in the day-to-day operations of your purchase. Use any of these periods wisely as a time to critically assess the workplace as it currently is. For example, you may take the time to see how existing staff do their job and get them to explain their workplace processes. In some instances, formal standard operating procedures will vary to what is actually performed when completing a certain task, so identifying any gaps in this process will allow you to get a clearer picture of what needs to be updated in terms of internal communications.

sole proprietorshipIf you inherit staff from the previous ownership, remember that although there may be a mix of people who do not think or even act the same, this diversity cultivates success. As tempting as it is to replace staff with people who are more acquiescing to your anticipated, new management style, think carefully before transitioning them, they too may also need time to adjust to you.

Another valuable task to undertake when you’re running a new business is to audit its technological capability. Generally, tools will need to be experimented with then adjusted to suit the specificities of your business as part of a process of collective learning. If you don’t have the capability in-house, it could be worth getting a consultant in to assist you to review your company’s use of technology and make suggestions to streamline processes. Not only will improving a new business’s technological competency translate into improved organisational efficiency, but will free time for other activities such as research and development.

Once you’ve had a chance to see how the business is currently operating, that should inform how you will proceed to manage it. Even if you already have an existing management style, it will need to be adjusted to suit the new workplace it is being applied in, even if it’s in a similar business to your previous experience. For some background preparation in this area, research the varying approaches of organisational theories such as network theory, ecological theory, general systems theory and strategic choice theories. It’s completely fine to adopt aspects from several schools of thought to best suit your business. It may be of interest to know that due to increasing dynamic nature of business in areas of technology, risk management and market trends, strictly hierarchal organisational structures deliver lower levels of performance than flatter, cross functional models of organisation. Therefore, you may consider a more adaptive style of management to improve your efficiency.

So whether you’re at the stage of researching businesses for sale or are about to settle on one that you’ve already purchased, it’s important to approach its management firstly from a position of listening and learning. This enables you to develop a stronger and more relevant strategic plan that will lower operating costs and boost efficiency.

Seven Great Reasons You Should Set Up Offshore

Starting a business entails planning and analysis; moreover, in this stage you need to know what benefits you can gain and what challenges you may face. If you’re starting a vet business, for instance, you may need to consider having a mechanism for credit card processing, vet office legal permits, tax registrations, and various licenses.

It seems daunting to establish even a small business in your locality. You might have heard that there are some entrepreneurs who enjoy several benefits in establishing their businesses offshore, and you can follow the same path if you want.

You don’t have to have a large company to incorporate offshore, as even small-business owners can set up their business this way. There are a variety of businesses to set up your business this way, and today we will go over seven of the top reasons.

Image Courtesy of: uplifttoursandtravel.com

  1. Low Capital

Normally, registering for an onshore business requires a certain amount of capital. This is why it’s hard to start a business if you want to start from the scratch.

Setting up an offshore company is a good alternative because sometimes the fees are the same if not lower. Moreover, there are also places where there is no capital requirement at all, whether you want to start a vet clinic or an custom insert molding service. If you reside in the locale, you may find living costs less as well.

  1. Quick Processing

Putting up a business doesn’t end with asset procurement. You need to register it with government agencies for compliance reasons. Surprisingly, setting up offshore is fast and simple.

You don’t have to go through a complicated process just to get some permits and other legal certifications.

  1. Protection of Assets

You may think that investing offshore is risky as the IRS has been cracking down with compliance and regulatory issues. Ironically, offshore investing offers more asset protection than what many people think.

Your offshore assets serve as an international asset which is also recognized legally, with privacy and safety depending on the country.

  1. Low Labor Cost

When setting up a business offshore, you will still need people to work for you. The good thing about this is that labor costs can be much lower offshore. You can hire as many people as you want without affecting your operational budget.

  1. Simplified Reporting Requirements

If you have a business stateside, you are probably sick and tired of annual reports you need to produce to renew your business licenses and to pay your taxes.

Most of the requirements you need to produce are audited financial statements and other registrations and permits. However, if you have an offshore business, all you have to do is to pay a very low annual registration fee.

  1. Low Taxes

This is actually the primary reason why many business people establish their own companies offshore. It’s not a secret that offshore businesses pay very low, if any, taxes.

Places like the Cook Islands and Nevis have no taxes at all and are considered two of the safest places for businesses to incorporate offshore.

  1. Privacy and Confidentiality

Another reason why many business people consider offshore investing is because of privacy and confidentiality. Offshore, you don’t have to declare confidential information such as the names of directors, financial information, and the like. It’s good to know which countries still have secrecy laws and which ones do not

Conclusion

Setting up a business offshore is no longer an experimental approach. It has been done by many entrepreneurs for many years, and this strategy still proves to be profitable. Although there are some challenges you may also face, the above benefits are  reason enough for you to consider setting up a business offshore.

 

Author’s Bio:

Carl Aamodt
Title: Super-Connector at Outreach Mama

Carl is a super-connector with Towering SEO and OutreachMama, who helps businesses find their audience online through outreach, partnerships, and networking. He frequently writes about the latest advancements in digital marketing, and focuses his efforts on developing customized blogger outreach plans depending upon the industry and competition.

 

Tax Matters: Keeping on Top of Business Deductions

questions about the federal income taxOne of the oldest sayings in the world of finance is that past performance is only an indicator of future performance and growth – it is not a guarantee of future results. This old saying, however, does not apply to taxes. When it comes to taxes, past performance is the only true indicator of what kind of deductions are we looking at and how it can be applied.

ADP business tax credits and incentives can help you deal with the problem of identifying eligible tax credits, incentives, the screening process, and maintaining compliance. Here is a list of tax deductions for small and medium scale businesses and how you can stay on top of them:

Depreciation

When you are buying property, machineries, and other assets for your business, you are allowed to deduct depreciation on the same based on the category the asset falls into. Depreciation is discussed under section 179 where it says that for example, if you are buying equipment for your factory or operation worth up to $500,000, you can calculate depreciation on it. Not only this, there is also provision for a 50 percent bonus depreciation.

Supplies

There are a lot of supplies used in the office for its day to day administration and working, like cleaning supplies. These supplies are hundred percent deductible. So you need to be smart here and take advantage of it. It may not seem like a big amount initially, but over a period of time like a year, it can really add up.

There a lot of other deductions that you can claim when you are running a small or medium-sized business. The problem is the organization of bills and receipts for all these expenses and how to manage it throughout the year so there is no cause for mayhem at the end of year.

Here are some tips on how to stay on top of receipts and stay organized for the end of the year closure:

Maintain all receipts

This is the basic concept. If you are not keeping all your receipts, then how are you going to take advantage of deductions? You lose a receipt and it’s lost forever. An IRS agent is going to ask for every single receipt to support your claim, well, perhaps a couple of them and if one is missing then they will ask for more and perhaps you do not get credit for that tax deduction for the receipt you have lost.

Note the purpose on the receipt

The moment you receive a receipt, make a small note on it so you do not have to remember the purpose. Sometimes when you look at a receipt, you are unable to remember the purpose of the payment. This makes the receipt useless. Make a habit and note down the purpose of payment quickly on the receipt itself and then store it away in a proper file.

Scan receipts and store it for at least five years

The IRS, it is controversial right now but that is another topic, has the power to knock on your door for up to five years and ask you to sit down for an audit. This is just a precaution in case it happens with you. A simple way to do this would be to scan the receipt and keep a soft copy of it in separate folders based on the year it applies too.

Business journal

You may have heard about personal diaries, but keeping a daily business journal is equally important. You may think it as cumbersome, reporting and recording everything on a daily basis, but technology has made it very easy to do with online tools and software like outlook or Google calendar.

Credit card statement not enough

Many people believe that credit card statements are enough to prove their expenses, but the sad reality here is that they fall short and IRS can come down heavily on you for your negligence. Your credit card statement contains little information. When you go shopping at Walmart, it will show Walmart but how do you know what you actually bought in Walmart. There is very little information on the credit card statements.

Cash is not good

Stay away from cash as much as possible. When you make payments in cash, it is virtually untraceable. It is not considered a terrific bookkeeping practice. The problem with cash is that it is too easy to spend and at the same time, very difficult to keep track of.

When the end of the year approaches, you will find it very difficult to reconcile cash receipts for documentation and audit purposes. Use credit cards and debit cards as much as possible. They are far easier to track and reconcile when compared to cash receipts.

Employ your family

This is a bonus tip. You are legally allowed to employ your family members in your business. This allows you to deduct their salaries as expenses and reduce your tax burden without having to actually pay anything. One thing to keep in mind here is that you need to account for their work and keep a record of their wages or salaries which can be either fixed or hourly. You can also deduct insurance premiums for them. Another bonus for you is that children under the age of seventeen are not liable for social security tax.

So keep in mind the different types of deductions you can benefit from, and remember to stay organized throughout the year. This will go a long way in ensuring your success.

Four Mistakes I Realized after Years of Blogging

I’ve been blogging for some years now and during that time I’ve seen plenty of ups and downs. I’ve seen projects come and go, bloggers start and stop, and revenues grow and crash.

I guess if they say hindsight is 20/20, then this is that time when it all makes sense. What I want to do in these following items is to share some of those mistakes I’ve made and hopefully help you avoid disruptions that could cloud your blogging horizon.

1. You can get too involved

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There is a dilemma at this time in my years of blogging: I’m in too deep.

Those first few months (and years) are kind of like a honeymoon phase. You’re fresh to this blogging thing so you’re very excited to do anything and everything that pops into your mind.

However, from what I’ve found, you get too involved with blogging. You start to second guess whether you should write a post, respond to a comment, or participate on social media.

To avoid this then you need to pace yourself and how much you’re following others. Go for the quality over quantity and don’t overload yourself on information by obsessively following everyone. Likewise, write what you want to read rather than always entertaining ideas and feedback from community members because they don’t always speak for everyone.

2. You’re probably not ready for disaster

I’ve always been diligent when it comes to computer security. I’m careful with what I click. I avoid installing items that aren’t necessary for business. I stay up-to-date with security updates, drivers, patches, and security programs.

Nothing will strike you down faster than someone breaching your website or gaining access to important files on your system. This sometimes happens if you fall victim to phishing scams which, nowadays, are sometimes impossible to to get to the bottom of. If you

For these reasons, I’d highly recommend you use:

·  A cloud-based security program (look for info on social media coverage and phishing detection rates, the Trend Micro Internet security site has an example of this)

·  AdBlock & Disconnect (browser apps)

·  The use of sites like Unroll.me to stop spam

Also, don’t forget about the physical security of your work. Keep regular off-site backups of everything you do in the event of a natural disaster (or human error).

3. You should have monetized earlier

There is this idea that you should “just get started” and let the chips fall where they may.

After all this time, I have to disagree because no business is setting itself up for success if they don’t have some kind of monetization plan in mind.

What generally happens, from what I’ve noticed in my actions and close website owner friends, is that you get too intimidated with creating a product or service to sell. You feel like you’re alienating your community because you’re all of a sudden selling to them.

You have to offer something, otherwise you’re just spinning wheels. You should start earlier than later in creating a premium or monetizing the site, otherwise you’re just leaving money on the table and psyching yourself out even more from getting it done.

4. Giving up is a viable option

You have to be ready to trim the fat.

I have bought and discarded dozens of domains and projects because I realized it’s unlikely that I’m going to continue with the project.

You’ll face this at some point in your blogging efforts. There are times when it’s better to shift that focus to the bread winners instead of those pipe dreams. Go for the low hanging fruit (the 80/20 rule) instead of speculative hopes.

This doesn’t mean you’ve failed at the project – it means you’re smart enough to understand the value of your time. Learn to let go, otherwise you’ll spend too much time on the things that rarely matter.

Conclusion

There are those who have been blogging longer than me and then others over whom I hold veteran status.

I believe these are the types of mistakes we’re all susceptible to making at some point or another. It’s easy to get wrapped into the hype and excitement of blogging. It’s only after quite some time that things become transparent for what they really are.

My intent is that you read these four items, avoid them, and follow through on your goals. It’s tough at times, but you can power through it. Blogging is an adventure and, in the end, it’s worth the ride.

 

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