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Quick quiz
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Each month I'll give you a new question.
Just reply to this email for the answer.
On January 11 of which year did Amelia Earhart become
the first person to fly solo across the Pacific? |
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Conducting Financial Tracking of Business Phases |
A fact confronting all entrepreneurs is that everything in business will not stay constant. Conditions are always changing. Although some changes arise suddenly and unexpectedly, every business goes through four general phases. The key to survival is recognizing what phase you're in and avoiding regression.
The first phase is starting the business and funding it with personal cash. Your goal of making money can't happen without initial working capital. This pays for things needed to accomplish the work that ultimately generates revenue. Insufficient beginning capital is a primary reason for business failure. You likely need twice as much startup funds as you thought, and phase one will probably last twice as long as you expected.
In the next phase, you're gaining sales, but the business isn't generating enough cash to pay all the bills. You're still using startup capital plus spending incoming cash to fund further growth. You want to move through this stage quickly before depleting all your capital resources. In phase three, the business finally has sufficient cash flow to pay you. This is when advice from an accountant will help determine how much owner compensation the business can afford. More importantly, tax planning in this phase is valuable.
In phase four, the business can finally give you a recurring paycheck. The business still has profit after paying you. That permits the business to fund your retirement, expand or have increasing value to a potential buyer. This situation may last for years, but don't panic when changing conditions compel stepping backwards for a while. Remember to evaluate financial statements to understand your business phase. |
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How to Win Big in Today's Economy
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The altered economic landscape presents innovative and nimble businesses
with opportunities to thrive.
Find out how by requesting my free
report "How to Win Big in Today's
Economy."
Just reply to this email and I'll send it right out to you.
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The Benefits of Kindness in the Workplace |
In life, you can choose your friends, but you can't choose your coworkers. Because you decide to be with those in your friendship circle, it's easier to be compassionate towards them. When you're with colleagues, you have little control over their personalities and quirks, and you may not gel with them as easily. However, no matter how compatible you are, the remarkable benefits of kindness in the workplace are worth a little extra effort.
Active generosity toward others in your workplace is tied to emotional well-being and improved physical health. According to a 2017 study in the National Library of Medicine, coworkers who were treated kindly paid the generosity forward by 278%, while collated research by the Random Acts of Kindness Foundation indicates kindness increases serotonin and energy levels as well as boosting positive perspectives and a sense of well-being.
Historically, kindness in the business world was equated with weakness. The notion that "nice guys finish last" often drove people to use fear, intimidation and mind games to ascend the corporate ladder. But thanks to shifting perspectives and a global movement towards kinder workplace practices, kindness is now a symbol of strength in leadership, reducing sick rates and stress levels in the process.
So how can you go about making your workplace a little kinder? Start with small and simple acts that will have positive ripple effects. For example, pay a compliment when you notice a coworker go the extra mile or let them know when they've taught you something new. When you give feedback, give it from the heart, and when you ask someone how they're doing, listen intently to their response. You could also surprise your team by throwing a virtual party featuring a DJ or virtual entertainer! |
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Worth Reading |
10 Tips to Navigate Rough Patches and Achieve Sustained Small
Business Success
By Annie Pilon
Small Business Trends |
SMBs (small and medium-sized
businesses) each come with their own
unique, industry-based, niche challenges
on a regular daily basis. Add in our
current environment, and the specific
complexities abound. By working together,
sharing diverse business and industry
experiences, we can help each other
succeed. A collective of small business
owners is here to kick off the efforts. |
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How to Be a Leader
Who Brings
Unity and Calm
to Your Team
By: Jonathan Jeffery
Entrepreneur |
| Many are struggling with the transition from working from home as a choice to now having this become a mandate. Strong, calm leaders are critical to helping each employee transition to this "new normal." Those on the forefront are learning how to take this unusual time and turn it into their secret power. Here's an overview of what motivated leaders should keep in mind while interacting with the transitioning remote worker. |
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5 Fun Ways to Boost Your Entrepreneurial Creativity |
January is International Creativity Month, a time to unleash the power of and capitalize on the creative drivers of success. Creativity is the bridge between problems and solutions and often makes the difference between organizations that simply survive and those that thrive. Here are five ways to harness your creative power so that 2021 will be a year of "the best is yet to come."
Set the scene. While bright lights help with focus, dimming down the lights has been proven to foster creativity. Furthermore, science has shown that gentle ambient noise and an optimal room temperature (77°F or 25°C) promotes the abstract thinking creativity requires.
Change the scene. Being in the same structured environment can bring about the same structured thinking. Science has proven that a change in physical environment can significantly increase creative thought processes.
Unplug. Staring endlessly at a problem usually proves futile. If no creative ideas or progress come, walk away from it for a while. Taking a break can allow us to see things with fresh eyes. With a rested and recharged brain, you'll likely see the solution from a new, creative perspective.
Movement. Researchers have found that movement helps to foster creative thinking. Put the paperwork and whiteboard aside, get up and go take a workday walk or have a spontaneous dance party. You just might find your "Eureka!" moment.
Diversity. Invite ideas and feedback from people with different backgrounds, skill sets and talents. Creative abundance springs forth from a diverse group united behind a common goal. One great resource to tap: your customer base. |
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Share This Newsletter
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If you find this newsletter helpful or interesting, share it with those you care about.
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Links You Can Use - Useful Business Templates |
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This is the time to prepare and plan for this year's successes. From the macro to the micro, this template tool kit will help launch you confidently into 2021. |
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Top 10 Business-Plan Templates You Can Download Free |
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Communicate your vision for this year (and beyond) with a well-structured business plan. |
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33 Excel Business Templates for Workplace Productivity |
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Every Excel-based project and time management template you could imagine. |
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12 Free Sales
Activity Tracker
Templates |
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With all that salespeople have to keep on top of, here are some standardized trackers to keep everyone on the same page. |
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How to Create a Social Media Content Calendar: Tips and Templates |
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From one social media outlet to multiple feeds, here are tools to help you make an impact in the year ahead. |
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Addressing New Year Business Financial Issues |
The beginning of a new year is when small business owners plan for what lies ahead and consider lessons learned from looking backward. Especially important is the imminent matter of addressing income tax for the year that recently ended. You should, however, already have a solid understanding of your tax situation by having relied on accountant advice throughout the year. Unfortunately, achieving this standard can be frustrated by lax recordkeeping. Therefore, a new year is ideal for implementing improvements.
Financial Records Precision
Dig deeply into your business financial statements of the past year. Don't merely glance at the bottom line on the income statement. Scrutinize every number. Assure that each asset, liability and expense amount makes sense. If anything isn't clear, find the source of questionable items.
Keeping mounds of receipts, invoices, and bank statements is certainly a hassle. Moreover, the flaws in this system are magnified by having to locate a past detail in a pile of papers. Investing in a good scanner for saving electronic copies of everything is a far superior method. If you already have electronic files, make improvements to document labeling and folder organization.
The most crucial vow for a new year is assuring that all transactions are recorded in a timely way. Details needed for accurate bookkeeping should be assembled immediately after events occur. Collecting information for tracking every business activity without delay assures that financial records are complete and accurate.
Business Planning Mastery
Planning for a new year relies heavily on data from the recent past. You don't want to blindly make decisions for the future. The planning process is therefore delayed if you're waiting for several weeks (or even worse, a few months) to get necessary financial statements.
Forecasting the year ahead requires knowing your present working capital and cash flow. Your financial capabilities inform you about how much you can spend. The business balance sheet shows cash available and unpaid bills if you've kept your records up to date. This report also conveys existing debt so you can identify possible additional borrowing capacity without burdening the company.
A cash flow statement or cash basis income statement illustrates where business revenue has been going. With this tool, you can plan for new spending initiatives. This, of course, means having a sufficiently positive cash flow. If you don't have enough cash flow for spending on your business growth strategy, the income statement tells you the recent amounts spent in each expenditure category. This guides you toward potential areas to cut back in.
Tax Savings
Tax reduction strategies are also identified from timely and accurate financial statements. For example, your accountant can advise you about retirement plans. The contributions are tax-deductible, and the amounts going to your personal plan account are essentially payments to your future self.
Business health insurance plans can also save money. In fact, many types of benefit plans are allowed under the tax rules as business expenses. But creating and administering them comes with a cost. Determining whether advantages outweigh the costs necessitates careful analysis of business financial circumstances. So everything comes back to organized files and mastery of financial statements. |
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This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter. |
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