TLC Business Solutions

Posted By Ken Kaufman on August 25, 2010

Your employees make a lot more than they think they do.  The next time they complain about not taking home enough, you might want to remind them how much you are actually paying to keep them gainfully employed.

We have created a simple spreadsheet that will help you determine how much each of your employee really “earns.”  You can download this spreadsheet at Compensation Calculator.  Some are in the form of benefit programs like health insurance, and others are through statutory benefit programs like social security and medicare.  With some help from your accounting staff and/or payroll company, you should be able to complete most of the gray boxes on the spreadsheet.  Then it will figure out the rest.

Did you know that almost 30% of the average total employee costs are for the extra stuff in excess of salaries, wages, and bonuses.  Click here for a free Total Compensation Calculator.  This calculator, which is in Excel 2007 format, will show you how much of your total employee costs are going toward all of the extras.

Do you know how much you are spending, in addition to annual salaries and bonuses, you are spending on your employees?  Are you using this information to accurately forecast your expenses and cash flow in the future.  I often see this part of a company’s projections overlooked even though it is often one of the company’s largest expenses next to wages themselves.

So, the take-away is two-fold.  First, download this spreadsheet and figure out how much your employees really cost you and then use that in your planning and forecasting.  Second, use the spreadsheet to educate your employees about the total compensation package they receive because of their employment with you.  Even if they do not believe in or buy-into all of the programs and initiatives, the cost is still real – and you need to get credit for it.

Category: Budget, Human Resources, Part-Time CFO | No Comments »
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Posted By David Sullivan on August 23, 2010

Rising health care costs and vanishing profits have led many small businesses to cut back their health care benefits to high-deductible HSA plans that cover mostly catastrophic events and not much else. Although these plans can make sense to help bolster profits in the short-term and can be popular among younger employees it can become a disadvantage to your firm when labor markets reverse and employers again need to look for competitive advantages when hiring.

An ever-growing section of the labor market has become increasingly more interested in a full-benefits package rather than the size of their paycheck. A growing segment of the workforce is looking at an increasingly distant retirement date, worried their nest egg could vanish at the appearance any medical condition that will require ongoing treatment with a hefty prescription bill to boot. There are many well-seasoned and experienced professionals willing to work for the benefits package rather than higher wages.

Hanging on to your benefits package will give you an opportunity to scoop up these valuable employees at bargain prices when hiring becomes difficult again.

Category: General Business, Human Resources, Part-Time CFO | No Comments »
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Posted By Ken Kaufman on August 23, 2010

Sports teams compete against each other and they keep track of the score.  They know who wins and who loses, and each player on the team has more statistics on their performance than they know what to do with.  Individual sports athletes, like golfers and runners, meticulously measure their performance against themselves and others and use their numbers to find ways to improve.

Is running a business any different?  Is there a way to know if you win or lose each day?  Each week?  Each month?  Each year?  The answer to all of these questions is yes, and I write about how to accomplish this in my recent American Express OPEN Forum Article: 4 Reports that will Keep Your Business Thriving.

Category: Budget, Cash Flow, Entrepreneurship, Financial Health, Financial Statements, Management Reports, Part-Time CFO, Profit | No Comments »
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Posted By Ken Kaufman on August 16, 2010

Every business should project its cash flow at least 90 days into the future.  It should be broken down weekly and should be reviewed and updated weekly.  Microsoft Excel is often an adequate tool for this important weekly report.

Why do so many many business fail to report on this?  There are several reasons, ranging from time and resources to a level of discomfort with trying to predict the future.  The beauty of cash flow forecasting is that if it is done correctly, everything that does not happen according to your forecast becomes an important thing that needs to be understood, followed-up on, and fixed for the future.

In a recent article I wrote for American Express OPEN Forum, I share the  The 5 Secrets of Short-Term Cash Flow Forecasting.  This article will give any business a good start on the steps to getting this report in place and what should be included.

Category: Cash Flow, Entrepreneurship, Part-Time CFO | No Comments »
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Posted By Ken on August 11, 2010

• Increase Customer Service

Customer Service is being resurrected from the dead. Many markets have downsized, which has caused stiff competition. Your customers are being offered lower pricing, which is a contest to see who can go out of business first.

You can compete in that contest or provide outstanding service. Many buyers are rapidly becoming fed up with low price lures only to be charged extra for previously included services. The Air Lines are one of the best examples of this scheme. “Oh, you are taking luggage on your trip, well that will cost more. Sorry, but because of national security, you are no longer allowed to bring food on board the plane. We will be offering a sandwich and soda during the flight for only $10.”

An increasing number of customers are willing to pay and purchase more when they realize you offer better customer service. A generous return policy will cause people to purchase more of something when they know they can return the unused items. But the truth is that many of your customers will not return those items, which means more profit for you.

• More Market Exposure

If you are still relying on the Yellow Pages for customers, you are wasting precious advertising dollars, unless you are targeting senior citizens who do not own a computer. This is a continuingly shrinking market that could be gone within 10 years. Yellow pages are trying to persuade advertisers that they have the knowledge to transfer your marketing from print to the web, but it is a difficult sell, because web marketing takes a differnet set of skills.

An increased Internet presence with important information targeted toward your most profitable customers will bring in more sales. The old adage of “See The People,” still holds true. Marketing and Sales is a numbers game, but numbers along are not the key. You must continue to research your customer and place your message where it is easily accessible. Strategic partnering is especially important for smaller companies with limited advertising budgets. Who can you help, that can help you?

• Optimize Efficiency

During this recession, many employees have been asked to do more work with less help. Too often owners and managers have not acknowledged or thanked those employees for doing more. This has resulted in additional stress and many employees looking for a chance to escape to a different company with hopes that things will be better. A simple “Thank You” along with other expressions of appreciations will go a long way to building cohesiveness among your employees. Allow your employees to share and shed activities among themselves. Everyone has one or more required work activities they dread. These are very easy to spot because they go undone until they are forced. It may be filing for some, but others love to file and organize. Give your employees freedom to trade some activities. I know this is terrifying for some of you managers, but isn’t it better to allow your employees to enjoy their work? You will find that things are done quicker and with greater efficiency. Yes, some things will probably slip through the cracks at first, but that is where your management and motivational skill come into play to help your team determine how to prevent the problems.

• Give Things Away

“Buy X and get Y for Free!” We have all heard the pitch and many of us have taken advantage of some of the offers. Providing free stuff during a recession simply makes sense. Bundling products and services is also a good way to increase your sales. The freebee is to get more customers to call, come to your facility or visit your website. It’s all about traffic and more opportunities for your customers to purchase.

• Reduce Debt

Interest payments and burdensome debt can cause a business to collapse under the strain and demand for capital. It is a good idea to lessen debt before you decide to expand. Growth is always risky. It requires capital and best-made plans do not always work out. If you can reduce your debt during a recession you will be in a better place then your competition and banks will be more willing to extend lines of credit for operating capital once you have proven your ability to repay loans.

Category: Customer Service, Management, market exposure, optimize efficiency, reduce debt | No Comments »
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Posted By Ken Kaufman on August 9, 2010

2 weeks ago I was one of 26 14-18 year-old boys, youth leaders, and fathers that embarked on a 63-mile 5-day backpacking trip in the Uinta mountains.  King’s Peak, the highest mountain in the state at over 13,500 feet in elevation, was just one of the many challenges of the week.  Here are some important lessons we learned, and how they apply to our businesses:

Lightweight Business Model

When I prepared my pack for this grueling adventure, every ounce counted.  And trust me, by the last day I felt every fraction of an ounce.  I started with the staple needs – tent, sleeping bag, stove, water filter, headlamp, etc.  Regardless how many days I would be gone, I would need the same amount of these items (one tent, one sleeping bag, etc.).  These are like the fixed costs in your business.  We want them to be as light as possible, because we will be adding more weight to them per day we are gone – changes of clothing, food, fuel, and more.  A lightweight business model is one that does not over-burden the business with heavy fixed costs and tries to structure itself to function, as much as possible, on variable costs.  The lighter the fixed costs, the lower the break-even point and the more flexible the business will be to change its course and take advantage of the right opportunities as they come along.

Foundation Determines Success

I quickly learned that feet, the foundation of the body, were the most important part of the body on this trip.  One person bought a new pair of shoes 2 weeks before the trip and had several blisters after just the first day of hiking.  He was plagued by these and the rest of the blisters that appeared thereafter throughout the duration of the trip!  He had to go much slower than the rest of his body wanted because of the pain from these blisters.  Those who experienced the least amount of pain and enjoyed the most comfortable experience were those with the right shoes and socks and they worked to keep their feet dry while hiking (we were rained on every day, with the worst torrential downpour I’ve ever experienced on Friday) and warm at night (temperatures dropped into the thirties each night).  In business, we have to strengthen and take-care of our foundation, which is usually a combination of working capital, the best employees, and our customers.  Without these three things we are in for a very painful business experience.

Difficulty is in the Eye of the Beholder

We hiked 12 miles on Monday, 15 miles on Tuesday, 7 miles on Wednesday, 13 miles on Thursday, and 16 miles on Friday.  Before Monday, the youth would complain before a 5 mile hike.  By Wednesday morning, after days of 12 and 15 miles, respectively, 7 miles was the easiest thing they had ever heard of.  Comments like, “Oh, we only have to go 7 miles today,” and “Today is going to be a piece of cake,” became the opinion.  The business application – what may look difficult today is likely not nearly as difficult when put into context.  You may be going somewhere you and your team have never been, but few challenges end up as hard as they might initially appear.

Snapshots are Less Valuable than Overall Perspective

Kings Peak is not all that intimidating when you are next to it.  On Wednesday night we camped just south of Kings Peak in Painters Basin, only about 2,400 feet lower elevation than the peak – it would take a hike of just over 3 miles to summit the next morning.  What was interesting was the reaction of the youth.  “That doesn’t look like the tallest mountain in Utah,” one young man offered.  How quickly they forgot how far and how high we had to hike just to arrive at that point.  Just two days later we would finish our adventure at 7,800 feet.  The point is this – our perspective is often limited to the immediate surroundings of that at which we look.  We need to broaden our perspective so we can see the whole picture of our business.

Conclusion

One of the leaders on this trip frequently said that it would not be an adventure if we knew the outcome.  Starting, owning, and running a business is, therefore, an adventure.  With these four lessons learned, we can hopefully create the outcomes we desire!

Category: Entrepreneurship, General Business, Part-Time CFO | No Comments »
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Posted By Ken on August 4, 2010

According to CBS News report released April 15, 2010, your old discarded photocopier could become a treasure chest for Identity Thieves. If your Copier / Scanner / FAX machine was manufactured 2002 or later, it contains a hard drive with records of all the documents processed on the machine. That’s right, checks with account numbers, personnel documents, company financials, … ECT. Not only is this a huge security issue, but also it is in violation of the new HIPAA requirements to protect employee and customer private information. Opps!

I received a heads up from a computer repair company offering to clean out the hard drive of any of my old machines, but this is a serious problem. Thieves are working overtime to make money off your errors.

I am not recommending replacing your office technology with a legal pad and pen, but it is just one more thing to do while running a business. Ain’t life grand!

Ken Bear Cole

A Second Look Business Consulting

Category: Operations, copier, fax, scanner | No Comments »
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Posted By Ken Kaufman on August 4, 2010

Very few business owners are thinking about taxes in August.  Even if they extended their returns, the deadlines to file corporate and personal returns are in September and October, respectively.  With no urgent deadline to meet, business owners are happy to not think or worry about taxes and focus on other parts of their business.

This is probably not the right mentality, according to Karin Price Meuller’s article Midyear Tax Check: Organize Now, Save Later.  She makes a strong case for using this time to organize yourself and plan for how to maximize your tax dollars this year.  In addition, I recently wrote: 4 Tips to get the most from your Tax Planning on the American Express OPEN Forum.

Here is the main point – every business owner needs to be thinking about and planning for tax all year long.  Waiting until a deadline usually means it is too late!

Category: Cash Flow, Part-Time CFO, Tax | No Comments »
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Posted By Ken Kaufman on July 29, 2010

We are experiencing a never-before-seen phenomenon.  The first version of the video below was powerful, but this second version really drives the point home – the ROI of Social Media is that you will still be in business in 5 years.

See for yourself:

Category: Entrepreneurship, Part-Time CFO, Social Media | No Comments »
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Posted By Ken Kaufman on July 26, 2010

I recently saw this video and enjoyed its message.  I think its message is clear – entrepreneurs are changing and improving the world.  Many people incorrectly think that entrepreneurs start businesses for money.  Money is a means to an end, while the challenge of building something that makes a difference is the reason they get up in the morning to pursue their passion.  Kudos to the entrepreneurs of the world – enjoy this video!

Category: Economy, Entrepreneurship, cfo services, entrepreneur, video | No Comments »
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