Unless you’re an accountant, the word “accounting” probably strikes fear in your heart– or a little bit of nervousness, at least. For young entrepreneurs, the feeling is probably amplified. After all, poor bookkeeping out of the gate not only can set a project back in the short term, it can really come back to bite you over the long haul. Even young entrepreneurs get audited, you know.
That said, it is possible to avoid the ire of the IRS. Here are a four accounting tips to start your business by:
- Start off on the right foot. In the same way that you go through your email every morning, or in the same way that you do an inventory review each week, make your business accounting a habit. Set a recurring alarm on your calendar: “Review books!” The frequency is up to you, but you should carve out some accounting time at least once a month, if not more.
- Learn the lingo. The cumbersome terminology of accounting is sometimes the biggest hurdle. Chart of accounts? General ledger? Cash vs. accrual? Accounting lingo isn’t natural– and ignoring what’s what won’t help you. Take some time to understand the basics. The U.S. Small Business Administration’s Small Business Development Centers are a good place to start, as are accountancy groups like the American Institute of CPA’s and the Association of Chartered Certified Accountants.
- Find software that fits you. Find the accounting software that’s right for you. Don’t simply opt for what your friends use. If you’re always at a desk, a desktop solution, like QuickBooks Desktop might make sense. Something mobile like Xero may make more sense if you’re like most entrepreneurs and on the go 24/7. If you’re running your business from your iPad, go with a cloud-based accounting software package like Easy Books or Kashoo, which both offer iPad apps.
- Value good advice. Chances are, if you spend enough time trying to figure out an accounting issue, you could. But the reality is, you’ve got a business to run. And considering that you’ll need to file taxes quarterly– not just annually– there should be a certain degree of urgency involved. For help, look into local resources such as entrepreneur-focused groups for advice. (In Vancouver, where I’m based, we have resources like the British Columbia Innovation Council and the Vancouver Entrepreneur Meetup. Scour your local community for co-working groups as they’ll usually have a schedule of classes and talks specifically for entrepreneurs. WeWork Labs in New York is a great example.) Ask former bosses and fellow entrepreneurs to see who they use. Usually, there’s great value in an accountant or bookkeeper who specializes in small business. If nothing more, they’ll be a voice of comfort if you receive some alarmingly confusing IRS mail.
In the end, accounting isn’t really that scary. If you start off right, it can actually be fun. That’s where you’re going to see your fortunes grow.
Unless you’re an accountant, the word “accounting” probably strikes fear in your heart– or a little bit of nervousness, at least. The frequency is up to you, but you should carve out some accounting time at least once a month, if not more.
Find the accounting software that’s right for you. If you’re running your business from your iPad, go with a cloud-based accounting software package like Easy Books or Kashoo, which both offer iPad apps.
Chances are, if you spend enough time trying to figure out an accounting issue, you could.
Starbucks has not only revolutionized the way we think about coffee, but they have literally transformed the English language.
Starbucks has introduced terms like barista, chai, latte, venti, and Frappuccino into everyday vocabulary.
The “third place,” as many of us refer to it as, has had a global impact on the way coffee is purchased, sold, and ultimately consumed by millions of people each day. Howard Schultz, CEO of Starbucks has no plan of scaling back his efforts either.
Starbucks continues to open 5 stores daily, 365 days a year. With that type of continual rapid growth, there are many key insights that have attributed to this success. There have been many books written about this story, however I am a stickler for empirical evidence.
Joseph Michelli, author of the Starbucks Experience, spent countless hours, days, and months working alongside Starbucks senior management figuring out what the key success principles are that have allowed this company to have such rapid growth, while staying vigilantly consistent across the board. I have deduced what I believe to be the top 5 insights that we, as business managers and owners can use to help scale our businesses and create raving fans.
Before we dive in to the insights, I would like to set the stage by sharing with you a quote from Jim Alling, President of Starbucks U.S.
“Sure, one of our principles is to recognize that profitability is essential to our future success. It’s not the first item on the list; it’s the last one. And when you live and work according to those kinds of principles, good things seem to come your way.”.
Key Insight # 1: Create strategic alliances with your employees.
Starbucks links their partner’s efforts directly to the success of the whole business enterprise: if the partners win, Starbucks wins. This eliminates the normal zero-sum game and creates a win-win scenario because the more profitable Starbucks is, the more profitable the individual partner at the store level is as well. Not every company can reward employees in the same fashion or scale as Starbuck’s. What we can do is treat our teams with enough care and concern to inspire passion and creativity.
Many companies have shied away from talking with their employees about profit, however, Starbucks takes a completely different approach. “Starbucks leadership has done an exceptional job of both linking a partner’s financial gain to Starbuck’s profit and helping partners understand that profit is the lifeblood of a business.” Michelli.
Starbucks consistently spends more on training than it does on advertising which results in 120 % less turnover than the industry average.
“The way we have built our company by including the success of the company with everyone in it and not leaving our people behind is a great example of building a business the right way.”– Howard Schultz.
Key Insight # 2: Living the mission statement.
It was said best by Paul Williams: “The mission statement and the intentions– they’re not just on paper. They truly are meant to be the way things get done.”.
Leaders walk the walk, so they don’t have to talk the talk. The company is aligned on their vision across all levels of the business. This creates a culture of living the mission statement which in turn encourages the partners to offer the same vision to their customers.
Leading by example– Michelli noted a perfect quote for this point: “For any organization, it’s difficult, albeit not impossible, to soar with the eagles if you are led by a flock of turkeys.”.
Key Insight # 3: Starbucks 5 ways of being.
Every partner is coached on embodying the Starbucks 5 ways of being, which creates a delightful and consistently fresh experience for patrons.
– Be Welcoming– make it your own– leaders encourage partners to use their own unique style to produce inviting encounters. Different means to the same end goal– each person is different and should champion their own strengths to create a lasting relationship with the customer.
– Be genuine– Starbucks definition– “to connect, discover, and respond.” This requires listening followed by action. Do not get stuck in paralysis by analysis.
– Be considerate– consider the needs of others, how can you invest more of yourself and encourage your teammates to increase their investment to be more considerate?
– Be knowledgeable– Starbucks definition– “love what they do and share it with others.” In today’s information age, we add value to our efforts when we gain work related knowledge. Sharing knowledge with customers makes for more sophisticated consumers– AKA the “ideal customer.” They offer our business their loyalty and come to see us as trusted advisors rather than just transaction handlers when we add value/knowledge to our customers!
– Be involved– community, and in the store with customers.
Key Insight # 4: Everything matters.
This is referring to solid processes and procedures in daily operations– “retail is detail.” Starbucks puts an emphasis on consistency, even in the minute details. They take the mentality of nothing is trivial and our customers notice everything.
Starbucks focuses on finding ways to deliver existing products and services in ways that make the brand more significant to the customer– more than just a transaction, they focus on the whole buying experience. Starbucks focuses on creating a “felt sense” about the business.
Dr. Eugene Gendlin defined this term as the result of a myriad of tiny details that lurk below our conscious awareness. How can we make our customers “felt sense” align with our businesses brand/vision? Focus on all the details.
“The Starbucks sensation is driven not just by the quality of its products but by the entire atmosphere surrounding the purchase of coffee.”– Corporate Design Foundation.
Key Insight # 5: Embrace resistance.
This requires leaders to distinguish between customers who want their concerns to be resolved and those who will never stop complaining or be satisfied.
When faced with customer complaints, there is an opportunity to actually turn that perceived negative into a head over heels positive. You gain a rare perspective into the customers mind. This is an opportunity to learn more about what you can do, how to become better, how to approach processes differently, and ultimately become closer to creating a great experience for the customer.
Just listening is not enough, you must take action which shows the customers that their voices are heard and that leadership cares, thus creating brand loyalty.
Starbucks example– when entering new markets, in some cases Starbucks receives a lot of resistance. The way they have combated this is to keep their core products and services the same, but tailored other aspects such as food offerings to the local cuisines. This creates a sense of caring, and turns many “haters” into long lasting patrons.
“Embracing resistance involves a complex set of skills that can enable business and individuals to create business and relationship opportunities when they are confronted with skepticism, wariness, or irritation.”– Michelli.
It is important to remember that these insights were not implemented over night, it has taken Starbucks many years to find the right ingredients for the perfect cup of coffee.
My advice to us as business leaders and owners is to understand these insights at a granular level, and start to implement them one at a time in our respective businesses. In the next strategic planning meeting, brainstorm on how these insights relate to your industry, and create an implementation plan. Remember; it is all about the customer. You can ask a good business coach to give you some advice on where to focus and how to implement them.
Starbucks continues to open 5 stores daily, 365 days a year. Before we dive in to the insights, I would like to set the stage by sharing with you a quote from Jim Alling, President of Starbucks U.S.
“Sure, one of our principles is to recognize that profitability is essential to our future success. Starbucks links their partner’s efforts directly to the success of the whole business enterprise: if the partners win, Starbucks wins. Many companies have shied away from talking with their employees about profit, however, Starbucks takes a completely different approach. Starbucks example– when entering new markets, in some cases Starbucks receives a lot of
An usual request I hear from aspiring entrepreneurs is for an assessment of their latest idea. I don’t even try to assess things at the idea level, since I can’t read minds. I can assess execution plans, if you have any. I believe that business success is more a function of the person than the idea or the plan, so the best idea is one that is a best fit for you, and only you can assess that.
The best new idea for any entrepreneur should first be based on their own personal interests, skills, and lifestyle, rather than the characteristics of a given market or technology. I found some great insights along these lines in the just released book “Find Your Balance Point,” by renowned executive business coach Brian Tracy, and work-life balance therapist Christina Stein.
They emphasize, and I agree, that true success and satisfaction is most likely to happen when all your actions and choices are guided by a profound adherence to your deepest personal values, vision, purpose, and goals. Here are seven key considerations for how you should make your own best entrepreneur business idea decision in this context:
- Pick something you really enjoy doing. If your passion is social change or sustainability, with financial value creation further down in priority, you should choose to be a social entrepreneur. Don’t pick a technology idea that someone else believes will make you famous and rich, or a business area you are not intimately familiar with.
- The idea or technology was easy for you to learn. If you feel an idea was born inside you without thought or effort, or you learned the details easily, it’s a great idea for you. The next step is to do homework on the business issues that are common to all ideas, such as market size, business models, and marketing. Then ask me about execution.
- You look forward to learning and contributing more. Every new idea is only the beginning of a long journey, and the actions you take along the way will determine your ultimate success and satisfaction. You need to enjoy the learning along the way, as well as the destination. If all you see ahead is stress and pain, look for another idea.
- When engrossed with this idea, the hours fly by. The best and most successful entrepreneurs, such as Elon Musk, known for PayPal, SpaceX, and Tesla Motors, routinely work hundred-hour weeks, but never complain about the hours, and don’t even think of their activities as work. He doesn’t ask or need anyone to assess his ideas.
- Working on this idea gives you renewed energy. Everyone develops a sense of what activities build their energy, and which ones drain energy from them. As an introvert, I lose energy quickly working a room full of people, while my extrovert friends come away from a social gathering more fully energized. Find ideas that energize you.
- You continually strive to communicate the value and sell. Smart entrepreneurs develop quick elevator pitches for their ideas, good product and business stories, and are eager for the opportunity to learn and communicate from feedback. As an investor, I’m not attracted to startups where the founder sends in a marketing person to do the talking.
- You love to associate with the top people in the business area. The best ideas are ones that get attention from experts and key constituents in relevant business areas. Part of the satisfaction of being an entrepreneur is being able to interact with and learn from the people you respect most. Test your ideas on them, and listen to the answers.
Finding the balance point in your life’s work is not an easy task, but it is critical to long-term success and happiness. Establishing the right professional identity and commensurate business is equal in importance to maintaining your health and finding the right personal relationships and family life. You can never satisfy everyone, so you need to start by satisfying yourself.
Before you poll the world on what they think of your next great idea, be sure you assess your own drivers along the lines listed here. Build a plan to make it a business if everything fits. If you can’t build a plan, or your investors and advisors find it unconvincing, it’s time to give that idea to someone else and try a new one. I see more than enough great ideas to match any entrepreneur.
I believe that business success is more a function of the person than the plan or the idea, so the best idea is one that is a best fit for you, and only you can assess that.
If you feel an idea was born inside you without thought or effort, or you learned the details easily, it’s a great idea for you. The next step is to do homework on the business issues that are common to all ideas, such as market size, business models, and marketing. Smart entrepreneurs develop quick elevator pitches for their ideas, good product and business stories, and are eager for the opportunity to learn and communicate from feedback. The best ideas are ones that get attention from experts and key constituents in relevant business areas.