Category: Operations

As a business owner, you know the importance of keeping a close eye on expenses.

After all, for a startup or small business, cash flow is everything. In fact, according to a study by financial services company U.S. Bank, as many as 82 percent of startups and small businesses fail due to poor cash-flow management.

While it may seem like money simply vanishes into thin air at times, we all know that the truth is that it’s going somewhere. Finding out where, exactly, your money’s going is important for maintaining a healthy income and expenses ratio, and to ensure that your company stays out of the red.

Taking a closer look at your operations and money management procedures, and making changes when necessary can help you to stay solvent. With this in mind, let’s take a look at a few common areas where small businesses tend to lose money.

1. High Employee Turnover

While you might not realize it, keeping your current employees happy costs less than trying to recruit and train new ones. Not to mention there’s also the costs of downtime or additional stress that you and other employees will be under while having to pick up the slack. Bringing on a new employee is costlier than you might think and having a high turnover rate can cost your company more than it should. Instead, look to keep your team engaged and motivated at work. You’ll be able to benefit from lower turnover, higher levels of productivity, and happier customers too.

2. An Outdated Time Tracking System

Another area where small companies tend to lose money is a lack of accountability when it comes to tracking employee hours. Relying on old fashioned timesheets makes it easier for less-than-honest employees to round up their hours, or overestimate time spent on projects. It also requires someone to enter the data manually into the payroll system, and leaves rooms for mistakes and potentially costly errors. Having a robust time tracking system in place can automate much of the work involved with time tracking and payroll processing. It’ll also help to ensure accuracy and reduce the chance of time fraud as well.

3. A Lack of Organization

Organization in the workplace may not be something that you consider essential, at least not for your bottom line, but when it comes to organization, a lack of it can cost your company money. Consider that time spent searching for something, is time wasted. According to one study by Express Employment Professionals, out of 18,000 business leaders, 57% said they lose six working hours per week as a result of disorganization. Those hours can quickly add up. To combat this, make sure you implement systems at work to help keep everyone on the same page, and continually look for new ways to streamline processes and communication.

4. Poor Accounting

To have any shot at success with your small business, you must have a firm grasp on your finances. If you don’t know how much you spend or where your money is going, then how can you make changes to better your company? There really is no room for error when it comes to finances. While programs like QuickBooks make it easier to manage your finances, if you’d rather not spend time working on the books, consider hiring someone to take over the job for you.

5. Ignoring Outstanding Accounts

Ignoring outstanding accounts is another area where your company could be losing money. While it’s easy to ignore and forget about open balances and accounts, don’t make this mistake. If you aren’t being proactive about collecting payments from your clients or customers, then you could be setting your cash-flow up for a serious decline. After all, if your clients know that you won’t be charging a late fee, then what incentive do they have to pay you in a timely manner?

Often areas that you’d least expect can end up costing your company significantly. Inefficiency, wasted resources, and losing customers due to poor service, for example, could all prove to be damaging to a company’s bottom line. By continually monitoring your company, and looking out for areas where money and resources are being wasted, you can help to ensure that your business stays afloat.

When two companies combine, it is usually a strategic move aimed at helping both organizations thrive. However, it is likely that a merger will create some short-term chaos regardless of how well it is executed. What are some ways that both the buyer and the seller can prepare for two companies becoming a single entity?

Sellers Should Prepare Their Employees

If a company is sold, it could call into question the future of everyone who works there. While some people may be retained, the buyer may want to use its own people to perform certain tasks. Therefore, management should take some time to address what the sale means for the company as well as those who work for it well in advance of the sale closing. This may allow workers the chance to start looking for new jobs before they are let go.

Buyers Should Keep the Culture in Place

There is generally a good reason why a company is a target for acquisition. One of these reasons may have to do with the fact that the seller is a known brand in the marketplace. If that is the case, the buyer should not take any steps to change the brand or what it does best. Otherwise, it could turn consumers off and make it harder to earn a return on the investment made into the new business.

Sellers Should Know What the End Game Is

Those who are looking to sell their companies should know why they are selling and what they hope to accomplish. If the owner of the company being acquired wants to retire, he or she should make that clear from the beginning. This may make it easier to find the right buyer, which may result in the company being sold in a timely manner and for the right price.

Buyers Should Have a Plan Too

A buyer should know what it wants from the company that it is acquiring. For instance, a company may be acquired because it makes a product that the buyer wants the rights to or because it would rather acquire a startup before it becomes a primary competitor.
While they are relatively common, mergers can have significant implications for both buyers and sellers. Therefore, it is critical that there is a strategic reason as to why the merger is taking place and that it is executed in an orderly fashion.This may make it easier for the combined entity to enjoy success now and in the future.

Author Bio
Kara Masterson is a freelance writer from West Jordan, Utah. She graduated from the University of Utah and enjoys writing and spending time with her dog, Max. If you’re considering a merger for the first time, Kara recommends working with a professional like the Murphy Business Of Minnesota LLC to help you through a merger process.

When you become an entrepreneur you often gravitate towards the DIY lifestyle. Often the result of limited finances, you decide to wear all the hats until your operation starts producing profits. Though this can work in some cases with some responsibilities, there are certain areas of business that unless you’re already skilled in, should be outsourced to a professional. Taking on too much, particularly in areas like marketing and accounting, could end up costing you more than you bargained for.

Why You Need to Consult Experts

Though it can seem cost-effective to keep doing these major tasks on your own, you’ll soon learn that it’s not. Because both of these areas of business are complex and ever-changing, the ability to learn every trend, rule, or regulation to remain in compliance and in the competitive market can prove difficult for the average business owner. Eventually, time is wasted, errors occur, money goes down the drain and your startup remains to stagnate. Consulting the experts on an as needed or ongoing basis makes a world of difference.

Compliance

Here’s one factor that should be a top priority for all entrepreneurs – compliance. In order to maintain a successful business, you must remain in compliance with rules and regulations. This is especially true in matters of accounting. When company funds are not properly recorded and reported each year (sometimes sooner depending on profits), your business could face tax penalties and fines. You want to consult a financial professional near you as they’d be most familiar with laws in your state. If you were working from Missouri, for example, you’d want to find a Quickbooks accounting CPA St Louis community business leaders have vetted and deemed trustworthy. A good CPA will help you get set up and ensure you remain out of trouble with the government.

Experience and Education

Unless you’ve gone to school and received adequate education and training in the fields of marketing and accounting, to complete these jobs on your own only hurts your business. Both fields require a great deal of education and experience to master as the process of accounting and trends in marketing are constantly changing. When you lack the necessary education or experience, you stand to make mistakes as well as miss out on opportunities to advance your business forward.

Time

What many entrepreneurs don’t know is that both marketing and accounting are ongoing responsibilities. You can’t create an Excel spreadsheet or set up a free QuickBooks account and never enter information into the system or not work from a budget and expect your company to do well. Just like you can’t build a website and never make updates or create content without using SEO techniques and expect it to go viral. You’ll have to dedicate time and energy to these things daily and this ultimately takes time away from other areas of your business that you could have been dealing with (in which you are trained and educated to do so).

Growth

There are very few successful brands that got to where they are today without the help of some other business professional or service provider. From making effective purchase decisions based on financial forecasts and planning for expansions to increasing online presence and attracting your target audience to increase sales potential, ensuring a business can grow successfully requires skill and experience beyond your own understanding. Accountants ensure that you are properly managing the funds to get you to your goals faster while marketers help to build your brand and get you in front of as many prospective customers as possible to boost your business. Which essentially makes them crucial keys in reaching new levels of success.

There are a lot of reasons that entrepreneurs shy away from consulting the likes of accountants and marketers for their small businesses. From not having enough money to believing they can tackle the job themselves, these reasons end up leaving them in a lot of financial trouble and ions behind the competition. Service providers like CPAs and marketers have the education and experience to save your business time and money while helping to build a solid brand.

Article Contributed by Andrew Heikkila

As 2017 comes to an end and 2018 begins, our world can be sure of one thing: cybersecurity is a serious issue. The last couple of years have proven that our connected world is in peril, and that almost nothing is secure anymore. Attacks on governments, business organizations, and private individuals have reached historic levels and they’re only going to increase in volume and severity.

Businesses in 2018 and beyond are always going to be in the crosshairs of cyber criminals because data nowadays has become just as valuable as money. Entrepreneurs need to be aware of the risks that they are taking simply by operating in the digital age, as well as how to best mitigate said risk.

Ransomware Woes

Ransomware has become a thorn in the side of many businesses around the world. After the WannaCry virus infected over 220,000 computers in May 2017, it became apparent that everybody — business, government, and private citizen alike — is at risk of being held digitally hostage.

One of the big problems is that ransomware has become a hot commodity on the dark web, selling for cheap and designed specifically to be easy for criminals to deploy. Cybersecurity professionals are calling this Malware as a Service (MaaS). The rise of this model means that, while before you had to be computer literate to try your hand at cybercrime, nowadays, any Joe Schmoe with a computer and internet connection can pop on to the dark web, purchase a ransomware program, and run wild.

The Skill Gap Widens

Unfortunately, at the same time that cybercrime becomes easier to commit, finding professionals to protect against that crime becomes much more difficult. Maryville University reports via its online cybersec resources section that businesses are indeed seeing cyber security staff shortages. They write:

“A deficiency in the number of dedicated professionals trained and experienced in preventing some cyberattacks and mitigating the damage from those they can’t prevent stands out as a major factor behind the various cybersecurity problems that companies all over the world currently face.”

Jeff Kauflin, writing for Forbes, points out that there will be a predicted global shortage of two million cyber security professionals by 2019.

“Every year in the U.S., 40,000 jobs for information security analysts go unfilled, and employers are struggling to fill 200,000 other cyber-security related roles, according to cyber security data tool CyberSeek,” he writes. “And for every ten cyber security job ads that appear on careers site Indeed, only seven people even click on one of the ads, let alone apply.”

AI on the Rise

The cybersec skills shortage would seem damning in a world as dependant on connected technology as ours is. Fortunately, it seems that we may be able to use that same connected technology, in conjunction with AI, to protect ourselves adequately. You see, AI is no longer a science fiction term — machine learning is a real technique that’s being developed and sharpened to help humans accomplish extraordinary achievements in Big Data and analytics alike.

“In a cybersecurity context, AI is software that perceives its environment well enough to identify events and take action against a predefined purpose,” writes Marla Korolov for CSO Online. “AI is particularly good at recognizing patterns and anomalies within them, which makes it an excellent tool to detect threats.”

The use of AI represents a shift away from the “fortress mentality” of keeping intruders out and responding to breaches in the past tense, and instead toward the “immune system” mentality whereby intruders are detected in real time. Though still emerging, AI’s success in recognizing attacks represents the future of cybersecurity.

Prevention Planning, Cyber Insurance is a Necessity

At this point in time, the best way to deal with the prolific rise in cybercrime around the world is to prepare as if you and your business would be hit tomorrow. To protect against ransomware, for example, you’ll want to make sure that you’re backing up your essential data regularly so that if you do get hit, you’ll have a recent image to revert to. Protecting against identity theft and other data breaches means following a process that includes creating a document management plan and electronic document management system, as well as a disaster recovery plan. Record Nations has an extensive guide on those processes here.

Additionally, cyber insurance can be a good idea for those who want to protect themselves against the damages that cyberattacks cause. This can be a fantastic idea for small businesses, which oftentimes may not have the funds to adequately bounce back from a major breach.

The biggest thing to remember is that prevention and preparation are the only ways you can protect yourself. Businesses can’t predict if they’ll be hit or not. Knowing this, they should operate not with “if” in mind, but with “when” in mind. By preparing for what seems to be the inevitable, businesses will be protecting both themselves and customer data the best way that they can.

To sum it all up…

Entrepreneurs in 2018 need to understand that cybersecurity is a major issue. Strains of malware such as ransomware are easy to come by and deploy, while qualified professionals to defend against breaches are more difficult to come by. In lieu of these professionals, AI is being relied upon to defend against attacks — but prevention and preparation are still key to cybersecurity.

Entrepreneurs that take cybersecurity seriously in the coming years will likely end up alright. Those who don’t, on the other hand, risk losing everything. Which will you be?

One of the most disruptive technologies in the world of manufacturing has been the development of flexible manufacturing systems. Initially developed as a means for manufacturers to gain a competitive advantage, it’s become a standard for manufacturers that wish to be as agile as possible, with the ability to bring new and innovative ideas to market more efficiently and inexpensively than ever before.

Still, despite the benefits of a flexible manufacturing system, not all companies have opted to invest in this technology. While it is true that the costs of developing and acquiring the necessary machinery are initially higher than traditional manufacturing equipment, in time, the advantages of flexible manufacturing more than make up for that expense. Not convinced? Here are six good reasons to invest in flexible manufacturing.

1. Improved Productivity

A flexible manufacturing system can significantly improve the productivity of your manufacturing environment. Your system can accommodate changes in volume and work flow, while also switching from one product line to another with little downtime. Producing different parts and products does not require a significant amount of retooling or reconfiguration, ensuring that the productivity isn’t lost. In addition, because flexible manufacturing systems can generally adapt and keep working if one machine breaks down or needs maintenance, you don’t lose as much time to mechanical issues as you might with traditional manufacturing environments.

2. Reduced Costs

Again, developing and implementing a flexible manufacturing system does cost more up front. However, in the long term, such a system will reduce overall manufacturing costs. The fact that flexible manufacturing systems reduce waste and the time spent on manufacturing means that the overall cost per unit decreases, for example, and the ability to quickly adjust according to market changes and demand increases revenues. Flexible manufacturing systems also require fewer workers to operate, meaning that your labor costs will decrease as well. You can easily cross-train employees to handle multiple tasks, and will only need to increase staff for busy periods.

3. Compatibility With Multiple Materials and Systems

The key word in flexible manufacturing system is “flexible,” and that extends to material and system compatibility as well. Developing new products won’t require investing in new equipment, as the existing system can be modified to accommodate different 3M materials or designs. In fact, most flexible manufacturing systems work with CAD/CAM, creating new options for product design and room for innovation within product development.

4. Reduced Storage Costs

Traditional manufacturing technologies typically require companies to maintain significant inventory in order to meet fluctuating demand. With a flexible system, the need for storage decreases considerably, as the system can adapt to changing needs quickly and efficiently. With reduced storage requirements comes reduced costs, as well as reduced waste from overstock.

5. Faster Production

Flexible manufacturing allows for faster production because the materials handling is almost entirely automated. This is just one way that it helps reduce the bottlenecks that often occur in traditional manufacturing and slow down production. If parts need to be modified, a flexible system is easier to reprogram to handle that modification, which speeds production time and gets products to market faster.

6. Improved Customer Service

All the advantages of a flexible manufacturing system taken together point to the inescapable conclusion that using a flexible system will improve customer service and satisfaction. Not only will you be able to offer a wider variety of products to your customers, you will be able to provide products more quickly and at lower cost.

There are some disadvantages to implementing a flexible manufacturing system, related mainly to cost and staffing. Changing to this method of manufacturing represents a significant cultural shift for many companies and that always brings with it some challenges and push back. In addition, operating these machines requires a more skilled labor force, with a more advanced level of technological skill and knowledge to manage the interconnected network of hardware and software. For many companies, this represents a profound shift in hiring and training, and a different approach to management.

Still, the advantages of flexible manufacturing far outweigh the drawbacks, and can advance your company toward its goals and bring you to the forefront of your industry. There are plenty of good reasons to make the shift, so the time is now to start looking at your options.