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What Do You Want Your Business To Do For You?

When you first went into business, you had hopes and dreams about what your business should be like, how it should operate and where it should go in the future.  Running a small to medium sized or family-owned business today means you are faced with an overwhelming array of daily challenges that can take your focus away from the future because you are simply trying to survive today.

Are your original dreams still alive?

If you are like most business owners, you have a good sense of how your business is doing right now.  What is probably more difficult for you is determining where you should be going in the future and how to get there.   A personalized and strategic operational review of your business, known as a business diagnostic, can help you determine if you are headed in the right direction.

The business diagnostic process starts with determining your objectives and reasons for being in business.  Knowing what you want is very important.  Next comes a review of the external factors that affect your business, such as customers, competitors, industry and technology.  Finally, you should review the internal factors that affect your business.  These areas include, but are not limited to, your vision, your strategy, and your systems and processes. 

A complete business analysis provides you with a detailed report that reviews the strategic position of your business and its operational performance.  This “health check” will tell you how you are doing in each of the nine key areas of your business.

Visit http://www.simonsbitzer.com/survey to receive your own complimentary Business Diagnostic.

SWOT-Your Business Health Check

Business success does not come from luck or by accident.  It comes from planning.  I recently had lunch with a business banker who reiterated these same sentiments. He mentioned that he sees businesses fail, not because they are not profitable but because they don’t cash flow.   Some simple analysis of your business can guide your strategy over the next year in a very focused way to avoid some of the cash flow challenges you might otherwise face.

You may be familiar with the term S.W.O.T. analysis-Strengths, Weaknesses, Opportunities, and Threats.  It is essentially a technique for analyzing your business to come up with the most suitable strategies for success.  A S.W.O.T. analysis provides an internal assessment of your organization as well as an external assessment of your business environment.  It asks these questions:

STRENGTH:  As an organization, what do we do well?

WEAKNESS:  As an organization, what could we be doing better?

OPPORTUNITIES:  What possibilities exist in the marketplace that can help our business realize our vision?

THREATS:  What particular situation exists in the marketplace that could prevent us from realizing our vision?

Objective self analysis is difficult. A S.W.O.T. analysis keeps you focused and realistic. When you have answered the questions, you can then begin to build on your strengths to take advantage of opportunities and develop new strategies to neutralize weaknesses. This invaluable analysis can provide greater security and growth prospects in a constantly changing business environment. 

To begin your own business health check, visit www.simonsbitzer.com/survey today!

Reducing the Cost of Processing Payroll

     In soft economic times, business owners are looking for new ways to trim costs.  Of course there are big ticket items, such as a reduction in employees and/or their benefits.  Have you considered any small ticket items that can truly add up throughout the course of the year? Here are some suggestions, for example, on how to slim the burden of producing your payroll.

1.       Outsource payroll:  organizing each payroll is a time consuming, therefore costly, process. With the regulations and procedures that need to be navigated and the forms and returns to be filled in to get it right, there is an element of danger added due to the possibility of making a mistake. It may be more cost effective to outsource payroll to a service provider who will carry out all processes in accordance with the latest regulations, insert this information into the correct forms and get salaries deposited into your employee’s bank accounts.

2.       Use direct deposit for salaries:  a good way to save money is to use direct deposit of payroll (DDP) in place of issuing paper payroll checks. There is a significant cost differential between an online transaction and the processes around preparing and issuing checks.

3.       Extend the payroll period:  switch from a weekly to a biweekly or monthly payroll period to reduce processing costs.

The actual cost of producing the payroll (calculating pay, producing checks or making deposits and keeping track of employee information) is itself an area where savings can be made.  Always ask for expert advice if you have questions concerning the processing of your payroll.

For more information on processing payroll or other cost saving measures, please visit www.simonsbitzer.comor call (317) 782-3070 for a FREE one hour consultation.

What is chiczofrenic?

Getting on Top of Business Forecasting

The best way to remain in business in this climate is to plan; however, the days of the three to five year plans are over. Instead, focus on the next 18 to 24 months with plenty of scenario planning and stress testing.

Build Scenarios:
Create a forecast for the next 18 months to 2 years. Take your business plan and then impose a series of scenarios. A business-as-usual scenario, for example, might have flat growth. Another scenario might project a 10% drop in revenue and a 20% increase in input costs. These scenarios show you the effect on the business of outside forces.  They also allow you to develop contingency plans to mitigate their effect if you start to detect their impact through your monthly reports.

Develop Your Business Plan:
Critical to forecasting is your business plan. It should cover market analysis, organization and management, strategic analysis, marketing and sales, products and services, the amount of funding needed, and financials. The best business plans are updated every three months.

Helpful Tools:
Business owners can build a basic financial forecast model using Excel spreadsheets. It is a very structured process where you look through the historical financial statements and the balance sheet history.          

                                                                                                                                                                                                                                                          
Track Targets and KPIs Constantly:
Analyzing your balance sheet every three months is simply not frequent enough in this climate. Make sure that your key performance indicators, such as sales targets for each week, are in place. Analyze the month end financials comparing the actuals with your budget to see where you are performing well and where there are shortfalls.

For help in creating your own business forecast, please contact Simons Bitzer & Associates, an Indianapolis CPA firm, at (317) 782-3070 or visit us on the web at www.SimonsBitzer.com.

Green Accounting-Should Your Business Be Doing That?

If your company is like most, you define profit as the difference between revenues and expenses. In recent years, however, there has been a growing trend to look beyond the traditional definition of profit and include the social and environmental impacts of operating a business. The term “triple bottom line” was coined in the mid-1990s and is a way of accounting for the effect a business has on people and the planet. Triple bottom line accounting, sometimes abbreviated as TBL or 3BL, is a way for organizations to  attempt to go beyond measuring traditional profit and account for their impact on society and the environment.

The 3 P’s:

People:  considering staffing needs as well as contributions to society

Planet:  minimizing your negative impacts on the environment including those of your vendors and suppliers

Profit:  the economic benefit a business creates for society as a whole, not only for its owners

The benefits of TBL seem to be strong; however, there are many points to consider when deciding if it is right for your business. Some experts believe that adopting a TBL will  increase traditional profits in the long run. Others argue that TBL can hinder a company in the market when         competitors are only looking at traditional measures of profit. Another potential drawback is that a TBL adds another layer to their accounting system.

Companies that are socially responsible can adopt environmentally sustainable and community friendly practices without using a TBL. But these businesses will not be able to measure and track their progress over time.

As the TBL grows in popularity, more companies will need to choose whether to follow it. It can deliver many benefits, but you need to plan carefully and seek advice from your accounting business advisor before implementing a TBL in your business.

For more information about green accounting or to schedule a free one hour consultation with one of our team members, please contact Simons Bitzer & Associates, Indianapolis CPA firm, at (317) 782-3070 or www.SimonsBitzer.com.

 

 

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