Pictures vs. Movies
I tell biz owners “Numbers is the language of business”, but also that numbers rarely tell the truth. Not because we did bad math, but because we look at pictures when we should be watching movies. Want to know how you’re doing? Grab the popcorn.
Even if we think they’re important (and frankly, there’s only a few critical ones that are), we don’t look at the numbers the way we should.
Pictures vs. Movies
The most important use of numbers in business is to see trends, not to see numbers. Stop looking at your numbers – that will rarely help you. Numbers are almost always misleading unless they are put in a bigger context.
What if you look at this month’s numbers and they tell you that you won’t be able to cover your expenses. Is that bad? Not necessarily. What if they say you’ll make a bucket load of profit this quarter? That can be very misleading, too. In fact, both numbers might turn out be lies.
How can that be? I thought numbers didn’t lie? In the context of a trend, they don’t, but by themselves as a snapshot they can be very misleading. We need to see the whole movie to know what they are really saying.
Your Most Important Numbers Aren’t In Accounting
Amazon “lost” hundreds of millions of dollars for a few years straight, and if that was the only number they looked at, it would have appeared they were running off a cliff. But they had the sense to couple those accounting numbers with some even more important numbers outside accounting. In their case, the important number early on was market share, not profit. Profit became more important later. They were sacrificing short-term profit for long-term market share, and thus long-term bigger profits.
For any early stages business your most important numbers are almost always outside of accounting, usually in sales. Don’t ignore the accounting numbers, but our sales and marketing numbers are much more important. And the right question isn’t “How many clients do I have?” (that’s a snapshot), but “How many do I need, by when?”, and then, “What’s the trend – am I gaining enough clients in the right amount of time?” That’s a movie.
Retail stores love the last quarter of the year – they can look like they’re making money hand over fist. But if you put that in the context of the rest of the year, it might show that the store is about to go out of business.
If September looks worse than August, should you panic? No, you should look at last August, as well as what is going on in the market right now, plus what you’ve done to change your business if anything, and a number of other non-number factors. All of that together can help you identify a trend.
The best use of numbers is to see the longest trends possible, a quarter, a year, two years, even more. If you’ve got three years worth of numbers to look at, you’ve got a movie that will give you a really great idea of where you’re going and the real strength of the business. August doesn’t matter nearly as much as how it looks next to last August, or your forecast for next August.
In about the 12th month of Crankset Group I wondered if this was going to work. Then I looked at the TREND over the first 12 months and saw plainly that it was going in the right direction – too slowly for my taste, but still trending the right way. And if we just kept the same trend for another 12 months, we would be profitable.
We decided to keep going, the dam broke and three months later we were over the top. The trend was so much more valuable than the numbers themselves in deciding what to do and keeping me encouraged.
Stop focusing on pictures of where you are, both in accounting and throughout your business, and start focusing more on where you’ve been and where you believe that trend is taking you.
FYI – charts are like pictures, but graphs are like movies. I like graphs more than charts. And I like any number in a context that can show me a clear trend over many months. Only then can I really know what the number means and how I my business is really doing.
Stop just looking at numbers, you’ll glaze over like I do. Look at the trends instead.
Watch the movies of your business to see how you’re doing and you’ll have the confidence to keep going and to make more money in less time.
Which Shipping Carrier Should Your Startup Use?
The average small business spends over $4,000 per year on postage. Those who have less than 10 employees average about $239 per month. While those employing 20+ people spend over $1,000 per month.
As a startup, it’s important for you to find the best shipping rates to reduce your overhead costs.
Read on to compare the main shipping carrier options for your startup business.
United States Postal Service
The United States Postal Service (USPS) is the least expensive option if you are sending items that weigh less than two pounds.
USPS has three options you can choose from.
First Class Mail arrives within 2-5 business days. Priority Mail arrives within 2-3 business days. Express Mail arrives in 1 – 2 business days depending on location.
If you are sending lightweight packages under two pounds, this is the best choice for your startup. If you send parcels that weigh more than two pounds but can fit in a priority mail flat rate box, go for it.
The flat rate box means that the cost stays the same regardless of how much the box weighs.
One of the benefits of USPS is that it will deliver to PO boxes and mailboxes. The other shipping services only deliver to the doorstep.
You may prefer your items to go to your customer’s mailbox. If so, USPS is the way to go.
UPS shipping rates are higher than USPS most of the time. Yet, UPS lets you negotiate for lower rates if you ship many parcels. As a startup, you might be able to work out a good deal this way.
If your package is heavier than three pounds, UPS can be cheaper than USPS.
One of the benefits of UPS is that they offer multiple shipping options including two-day, three-day and next day delivery.
UPS is one of the most reliable shipping carriers. You can track your package easily online. And the majority of the time, it will arrive on time.
Now let’s compare the merits of UPS vs. USPS.
UPS vs USPS
One of the things that UPS offers is guaranteed delivery. Keeping your customers happy is one of the most important steps to startup success.
UPS has excellent customer service if you need to reach them.
USPS on the other hand, (not counting Express Mail) doesn’t guarantee the delivery date. So you can’t predict when your customer will get their package.
Packages can get delayed and arrive weeks later. This isn’t great for building trust with your customers.
Also, the USPS doesn’t have the best customer service. And their tracking service is unhelpful. Many times the tracking doesn’t show up until after the package has arrived.
Yet, USPS offers the most budget-friendly express delivery. But, it will always take two days to get to remote locations.
USPS is undoubtedly the cheapest option for light parcels, but the price for heavy packages can be high. UPS might be able to deliver heavier packages for a lower price and get it there quicker, too.
One thing to note is that UPS charges a fee to deliver on Saturday. The other carriers don’t. This could slow down your shipment by an extra two days.
If you choose to use UPS, you’ll have to weigh the pros and cons of paying for Saturday delivery versus delaying your package the entire weekend.
Many people wonder, which is better, UPS or FedEx? The truth is that they have a lot in common.
Both have excellent tracking and reliable shipping dates. They both offer detailed tracking information. Both let you negotiate for a better price if you send a high volume of shipments.
FedEx offers a 15% discount for customers who sign up for an account.
FedEx is a great option price-wise if you are sending packages heavier than three pounds.
FedEx vs UPS
FedEx vs UPS does have the advantage of a comprehensive tracking system. The delivery manager feature lets you hold packages at a FedEx location or schedule a delivery for a specific time.
Unlike UPS, FedEx includes Saturday deliveries as part of their routine services. You don’t have to pay extra for this. But with UPS you do.
Both FedEx and UPS offer a pickup service so your customers can pick up their parcel at a FedEx location. However, there is a fee for this service.
Another factor to consider when choosing between FedEx vs UPS is the location of a shipping center near you.
Chances are that there is both a FedEx and UPS location in your area. It’s likely that the UPS location will be more convenient. Keep that in mind as you make your decision about which carrier to use.
UPS vs FedEx vs USPS – Choosing a Shipping Carrier
As you can see, there are merits to each of these shipping carriers.
The best shipping rates will depend on how many packages you are sending, their weight and how quickly you need them there.
Of course, as a startup, you need to keep shipping costs down as much as possible. This means that you will likely use more than one shipping carrier for your business needs.
When you don’t limit yourself to one provider, you can offer your customers the fastest, most affordable delivery services out there.
Next, learn how to drive your startup to success.
5 Benefits of Using a Pay Stubs Maker for Your Business
This is important regardless of how long you’ve been paying employees.
This is why using a generator for employment pay stubs can be an asset. Check out these 5 ways your business can benefit by using a check stubs maker.
1. Eliminate Human Error
In the days of handwritten paychecks, your business was vulnerable to all kinds of human error. Unfortunately, some errors, if serious enough, could land your company in trouble come tax time.
Unsigned checks, improper amounts, you name it, all of these time-wasting issues are eliminated when you use a pay stub generator instead.
With an online system for creating your own, or your employee’s pay stubs, you can set up a pay stub template once. Simply make sure it’s correct, then easily print paychecks each pay period with the same formatting.
2. Better Record Keeping
Whether you are self-employed or own a large business, pay stub generators are an excellent way to keep accurate payment records.
Throw away those old carbon copy receipts for paychecks and make space in your home or office by clearing out now unneeded filing cabinets. With an online tool for creating pay stubs, all your records and company finances can be managed digitally.
Come the ever-dreaded tax season, having all your pay stubs in one online location online makes paying taxes each year far easier as well.
3. It’s Fast and Simple
If you’re self-employed, it can save you hours of useless time calculating your charges by hand if you simply use an online pay generator.
Even large companies benefit from more efficient use of time by having an existing online pay stub template to simply update with the pertinent information each pay period.
“Time is money,” after all, so why not use yours or your employees on more important tasks than signing checks?
4. Company Customized Format
Depending on what you or your business want to include (aside from the legally required bits), you can choose exactly what information to include on pay stubs with an automatic generator.
Yearly salary, hourly rate, hours of PTO used that pay-period, you choose what your pay stub lists. If employees or clients (for those self-employed pay stub generators) have questions about payments, it’s helpful to have these details listed.
Clarity of payment information is increased with a pay stub generator as the risk of error or confusion decreases.
5. Simple to Adjust
If you have an employee suddenly decide to take a sick day, if you forgot there’s a paid holiday this pay period, whatever the adjustment needed, it’s easily done with pay stub generators.
Using an online pay stub generator makes making corrections, additions, or adjustments to paychecks much easier.
Simply log in to your program and using the already existing template, tweak what you need to in a few clicks.
Employment Pay Stubs, Just the Beginning
Having your own employment pay stubs or your employee’s handled professionally is essential to managing an effective company.
Still, pay stubs are just the beginning. Do you have a handle on your company’s intellectual property? What about building a foundation of various useful business contacts?
For help with these tasks and others, review these 5 ways to protect the future of your business.
Climbing Out Of The Money Pit! Quick Ways To Improve Business Cash Flow
There are so many ways that we can learn by our mistakes in business. Sometimes, we need to work on our personal development so that we are running the ship with an appropriate mindset, but other times, we face real emergencies that mean the business will sink or swim if we don’t do anything about it now!
Cash flow is one of those problems that every company suffers from, but if you fly blindly and plead ignorance to what’s going on in the bank account, you might not just find yourself without a company, you could find yourself persecuted, not to mention prosecuted!
No doubt you wouldn’t let it come to this, but if you find yourself with a real cash emergency, are there any ways to keep you afloat? But also, are there approaches to take advantage of so you can keep everything going if this was to happen again?
Get On Top Of Your Details
You need to know exactly what all your expenses are. Accounts payable, accounts receivable, your petty cash, your expenses, the list goes on. It sounds like a very obvious starting point, but it’s surprising how many have no clue, firstly, what their finances are there any given moment, and secondly, how to handle expenditure as a whole.
The most difficult aspect of growing a business is getting new customers on board to consume the product, and this can mean a temptation to discount your products, so you can get these people to buy from you. But if you sell items at a loss, this is going to take even longer for you to get back up and running. If you choose to offer discounts in the short-term, you need to know the costs and the impact of what you’re doing.
If you have no idea of the profit margins of each product or service you are offering, you’re not going to know if you break even. The break even calculator is an excellent tool if you are not particularly skilled in mathematics. The best advice would be to lean on this until you get a good idea of everything in a financial sense.
Desperate Times And Desperate Measures
Ultimately, it doesn’t matter how you raise the cash, just as long as you raise it. If you are in a position where you need to raise an exorbitant amount of cash as soon as possible, you need to go to your customers. People that have bought from you in the past can be overlooked but as part of your email marketing component, reaching out to them can provide you with a quick cash flow you haven’t considered.
It’s a very difficult thing to do because in some ways it’s the equivalent of going back with your tail between your legs. But many businesses have done this and have succeeded. After all, if you don’t try, how will you know? But at the same time, it’s worth coming up with a few different quick cash flow plans.
At the same time, you can get the ball rolling with potential investors, while also considering how much free time you have to sell surplus items and raw materials, and trim the fat of the workforce. When you need cash, the biggest underestimation is that you need a huge amount of money so you go for the big options. Don’t underestimate the smaller ones as well, because if you sell the smaller items, even through sites like eBay, these small items add up to a sizeable chunk.
Understanding Your Lines Of Credit
You need to know exactly what your options are. If you have a cash flow emergency, there are a few approaches to consider. Luckily, as far as acquiring cash flow quickly is concerned, it usually comprises of an application form and a phone call. These days, you could get a substantial cash injection in the space of an afternoon. But if you don’t know what your options are, how can you reach out?
Depending on your specific cash flow needs, the best resource can vary. In the line of peer to peer lending or angel investors, there are numerous components that can provide you with the cash injection you need, but also make sure that you’re not paying as much tax in the grand scheme of things.
But, in the short term, as you need an immediate cash injection, there are resources like loans, short-term, and long-term that can provide you with the money you need. The question is which one should you go for? A short-term loan can provide that immediate cash up front, but because the repayment schedules are short, usually running up to 18 months, the percentage of the interest is so high, the loan can become very expensive quickly.
In an emergency, it is an ideal option, but you have to decide if it’s worth it right now. Long-term loans, on the other hand, can take a few weeks to process. You have to determine what sort of financial emergency you are in and whether you have more time to repay the loans as well as lower monthly payments, it can be a welcome relief, just as long as you qualify for it!
The criteria depends on how long you’ve been up and running, if you have a certain amount of available finances, as well as what collateral you have to offer up should you be unable to repay. As well as these, you can get a merchant cash advance, work through invoice financing, even business credit cards can help, as well as a working capital loan. In an emergency, this is a great way to help the business, because of the specialized aspect of the loan.
Encouraging Repeat Custom
In a business, you won’t see any profit until an individual customer makes, at the very least, their third transaction. You need to encourage customers to come back, and this will become your bread and butter down the years, so you don’t fall into the financial traps. While you can offer VIP programs, loyalty incentives and the like, if you’re savvy enough, offering up freebies that are low cost, but still encourage a customer to pay into your business, will result in a profit.
To encourage repeat custom, you don’t just have to go through the email approach imploring them to spend money on you, if you can disguise your desperation as an offer that benefits them while still making reference to the fact that you need their custom, you can either have their pity, or their help. It’s a fine line because you have still got to benefit the customer and cater to their needs, but when you are in dire straits yourself, you have to decide if the desperation angle is suitable.
Not Falling Into This Trap Again
If you manage to get out of the problem, no doubt you’ve learned an abundance of lessons. But while the problem may have been procedural or resulting from a lack of organization, you can still find yourself falling back into the money pit. On the surface, having a good appreciation of your cash flow can help, but also it’s about the foresight to put money aside.
You need to reinvest into the growth of your business, and by putting at least 10% aside, if an emergency cash flow problem was to arise, you can at least put this money into it in the short-term. But on the other hand, you’ll have to give consideration to the resources that can help you trim the finances in other ways. Saving money on tax is a very good example of this, as something like the innovative finance ISAs can ensure a certain amount of your investment is tax-free so you don’t fall into this trap again. Finding tax loopholes is a clever approach, but with these comes a lot of regulatory gray areas.
This is why it’s better for you to have an accountant on board, especially if you haven’t in the past! And doing this in conjunction with a back-end product or service, you are finding ways to keep the finances ticking over. If you find that your finances go through peaks and troughs, it’s important to work on a sustainable model with regards to your customers. Back-end products can help a lot because it’s a way to entice customers in, but by having higher price points on back-end products, you’re able to recoup more.
Those financial worries don’t go away, but if it gets to the point where you’re so desperate that you’re considering shutting up shop, and it’s not a case of bad luck, it’s a problem relating to the infrastructure or the planning and organization, panic sets in! This then results in an unstable organization, especially from the perspective of the employees. This is another battle to contend with, so it’s imperative that you have an understanding of what your options are when you get into a cash flow crisis. If you need to earn money quickly, the options are out there.
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