Why Businesses Fail?

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Why Businesses Fail

 

Exclusively written for entrepreneurs & new businesses

Much research has been done on what makes some businesses succeed while others fail. The statistics for business failure are alarming, however, because we know a great deal about the reasons and statistical data we can help improve your chances for success.

Avoid these common mistakes:
  1. Lacking demand or poor sales for your product or service. Just because you think your idea is wonderful might not be as well received by the public. You’ll need to do some repeated market testing to get your answer.
  2. Poor pricing model.  If your gross profit margin is just too narrow it won’t deliver meaningful profitability. If you are competing with larger companies that price their merchandise low because they can take advantage of economies of scale, eg. reduced per unit costs due to buying in bulk – you’ll need to figure a way to match their prices and still make a profit. 
  3. Rigid management style. Successful entrepreneurship is all about vision, flexibility and constant adjustment to new demands. Having set goals and a plan is critical to effective management.
  4. Lack of experience. Just because you were good at your job, doesn’t guarantee your experience will transfer well into a business. Successful business owners are typically experienced not only in operational processes but in the art of business management, negotiations, and leadership skills.
  5. Unexpected growth. If you haven’t prepared to meet unexpected demand you might just discover a rival waiting in the sideline to mobilize efforts and fill in for your inability to deliver goods or services. 
  6. Poor accounting. If you don’t know the numbers or aren’t tracking your finances, we can almost predict your business is not going to make it any time soon.
  7. No cash cushion. One thing we see repeatedly is the difficulty of trying to develop a business without any financial backing. If you are relying on cash strictly from sales, you might run out pretty quickly since businesses typically don’t generate enough money their first year in business. Successful entrepreneurs start businesses with enough cash to hold them over the first 6 months to a year.
  8. Operational inefficiencies. Wasted space, underused equipment, obsolete inventory, and idle employees all contribute to financial stresses which small businesses cannot tolerate for too long.

Need help developing or streamlining your business operations? Register for our 2-Day Business Development Workshop today! Click for more information. 

Reports For Greater Business Insight

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Reports For Greater Business Insight

Reports can tell you real-time information about the health and wealth of your company.

They can also help spot weaknesses or evaluate trends which often go unnoticed. In fact, if you can run reports regularly you may become the greatest manager of your company! We encourage all our business owner clients to pick the reports they need and bookmark for easy retrieval. You too can read your business like a book by using the reports we list below. 
  
Who Owes Me Money?

This is a question you probably ask yourself often. With QuickBooks you can find this information quickly and easily just by using the Customers and Receivables report menu. Here are the reports I recommend you run and analyze regularly:

  • Open invoice report
  • Customer balance detail
  • Job profitability 
How Much Money Do I Owe?

Knowing how much money your business owes suppliers, vendors and creditors can keep you from overspending. It can also assist you in staying within a budget. As long as the data gets entered properly, you’ll have a wealth of information about your unpaid expenses. You’ll also know how much money you will have left over when certain bills are paid. These are the reports we recommend you review weekly.

  • Unpaid bills detail report
  • Vendor balance detail 
  • Costs per Job
How did my business earn? 
  • Profit / Loss Statement
  • Cash flow
  • Budget vs. actual

Accurate QuickBooks reports can only be generated if they were entered into the program properly and consistently. Where the data was entered and how will reflect on the accuracy of those reports. So it’s crucial that you adhere to the standard accounting practices and follow the step-by-step directions when using this program.

Do You need help in reviewing your QuickBoks structure and its activity, or assistance in accessing, analyzing, or interpreting your financial reports? Contact us today (646) 660-1820 to request a consultation appointment. 

Is QuickBooks Hard To Learn?

Is QuickBooks Hard To Learn?

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Quickbooks Information & Business Tips

Is QuickBooks Hard To Learn?

 

quickbooks_training_nyc_ny_2QuickBooks is a powerful, yet user-friendly accounting and financial management software that has now been re-designed to be simple enough to use for everyone; even the non-accountants. In fact, over 50% of individuals we train on a weekly basis have no financial background. Intuit, the maker of QuickBooks has spent millions of dollars developing ways to make this program simple and effective at managing all aspects of running a business. This is a super big achievement on their part and frequently you’ll see Intuit advertising praising its ease of use. So why do so many people find this program hard to figure out? Or worst, we’ll get them calling complaining about having “messed up their books” because they thought they knew how to use it. As I instruct everyone on this my answer is typically the same; The program is full of strength and capability to deliver accurate information but only if the user knows step-by-step instructions of data entry and proper implementation of available features. Without following Intuit’s instructions, the program won’t deliver any kind of reliable information. You can’t improvise or implement your own workaround to enter data here. The only way this program will work optimally is if you follow QuickBooks directions. 

Now, to answer the question whether its hard to learn QuickBooks. The answer is it’s not if you receive the right training. There are many QuickBooks tutorial platforms: self-instructional books, web-based tutorials, group classes or seminars, and individual training. We use the individual 1-on-1 approach because from years of teaching people how to use this software, we found individualized instruction to be the best way for people to understand information and then be able to easily transfer learned skills to their businesses or jobs. In fact, studies show that when it comes to effectiveness of learning, 1-on-1 training is 120% more effective than learning in a group and 175% more effective than web-based learning. In the last five years we have developed our classes to be industry-specific, so time spent learning is focused on your specific business or job needs. Not having to waste time learning what you you don’t need allows for better retention of information. And a lack of retention of information is a big complaint I hear when we get people coming to us after having taken other types of classes. This focused attention to your questions and learning requirements is the real reason why we have successfully trained so many people on QuickBook.   Milana Lieberson – Certified QuickBooks Expert and Accountant

Conclusion: 

Yes, QuickBooks is easy to use and understand. But the best and quickest way to become proficient at it is to receive an individual 1-on-1 training class like the one we offer in NY, NJ, CT, Long Island, Queens, Brooklyn and Bronx and Manhattan. To accommodate the needs of busy professionals you can receive the training either at our facility located at 100 Church Street in NYC or have our instructor come to your office. 

Yes,  I want to be QuickBooks proficient! Sign me up for the 1-on-1  Class

Avoid These Common Bookkeeping Mistakes

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Avoid These Common Bookkeeping Mistakes

 
You have the product or service. You have the marketing tools. Revenue and expenses are coming in. Unfortunately, you are in the dark whether you are making or loosing money, and worse yet, tax season is around the corner. Now your accountant can’t get a clear picture about your finances and you are starting to feel  overwhelmed! You now realize that in your attempt to manage your bookkeeping you have made a few mistakes like these:
 
1. Failure to keep all receipts. Perhaps you didn’t give bookkeeping much thought and skipped over its relevancy until now. Maybe you failed to keep all receipts because they were too small or insignificant, or you simply lost them. Unfortunately, this is all too common and I see this frequently with new and small businesses where the owner has too many responsibilities and keeping paperwork organized is pretty low on their to-do list.
 
2. Not tracking income and expenses. Whatever your situation, you must know precisely all your revenue received and expenses incurred – that is if you are serious about making it in your business! I have seen too many times businesses go under because they failed to track sales and expenses properly. And, I can say that doing so is relatively easy, provided you do it regularly and consistently. Here is what I recommend to all my small business clients, especially start ups:
 
💡 Organize paperwork. All receipts, especially those made by cash or through loans as well as other important documents must be saved into some working, organizational system where this  paperwork can be easily accessed. In addition, I recommend using a water-proof and fire-proof storage that can be locked to guard against unauthorized access. If you are going to have an audit, not being able to get to your documents easily or having damaged documents can be very frustrating for both auditor and you. 
 
💡 Invest in a bookkeeping system that will accurately transfer your data into meaningful reports that your accountant can easily read and understand. The most popular bookkeeping program in the business world is QuickBooks and for good reason. It is flexible, functional, user-friendly, and inexpensive; all ideal qualities for small businesses. Just have someone give you a tutorial because even these simple programs require some understanding. Because typically it’s the self-taught QuickBooks users who often cause the biggest errors! 
 
💡 Do your bookkeeping regularly so you can run reports and evaluate your company performance on a consistent basis. With this data you can implement changes and make improvements based on concrete data instead of entrepreneurial intuition. That’s smart management!
 
3. Failure to reconcile your bank account monthly. Although you may not have realized the relevancy of monthly bank reconciliation but this is, in my opinion, one of the most important business functions. There are numerous reasons why it’s so important but one of the biggest is that it will provide you with an accurate picture of how you are using your money, as well as ascertain your your real time available funds. It helps you account for all of your money and guards against over drafting your account. Whether you use a manual system or a software like QuickBooks, don’t let too much time go by in between reconciliations. Regularly balancing your bank account is key. 
 
4. Not backing up your data consistently. You finally got all of the work done for the day then disaster strikes at night. You come in the next morning to find your company file corrupted or yesterday’s data completely erased, or the entire data file being completely inaccessible. Prevent data loss by backing up at the end of your workday and keep the back up safely locked in a fire-proof and waterproof location.
 
5. Not having someone else handle your bookkeeping. Since you might not know proper bookkeeping procedures nor do you have time to figure it out, you should have someone with more skill and training handle your bookkeeping needs. An experienced bookkeeping professional will complete your bookkeeping functions accurately and quickly so you can invest your time directly into revenue producing activities.
Need a better bookkeeping and accounting system to track your business? Call (646) 660-1820 office Monday through Friday to speak to our accountant. If you need QuickBooks setup or training please request to speak to a QuickBooks ProAdvisor. 

Cash Flow Mgmt. Made Easy With QuickBooks

Cash Flow Mgmt. Made Easy With QuickBooks

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Cash Flow Mgmt. Made Easy With QuickBooks

 

We reveal proven methods you can implement now to take control of your cash flow!

 

What is Cash Flow?

nj, ct, ny quickbooksCash flow is a vital measurement showing the net value of money coming and leaving your business. Assessing cash inflows and outflows is critically important to any business which relies heavily on funding its own operations. Startup businesses and young companies are vulnerable to cash flow fluctuations and this is one of the biggest reasons why small businesses fail.

Cash flow is often confused with net profit and I often hear business owners complain the company is profitable, yet they have little cash flow left over for operations. First here is the definition for Cash Flow and for Net Income:

Cash Flow is a measurement representing net cash left over from in inflow and cash outflow.

Net Profit shows the net difference between sales and expenses.

For small businesses cash flow is generated primarily from two sources: sales and borrowed funds. Occasionally small businesses can bring additional cash from a sale of its fixed assets such as furniture or equipment. Conversely, cash outflows result from payment for operating activities, interest, taxes and loan payments. Profit is used to figure out your taxes while cash flow is used to plan, budget, and execute daily operations.

NOTE: Profitable companies can go bankrupt if they disregard the importance of cash flow

Need help navigating or understanding how QuickBooks software works? Please contact our office at (646) 660-1820 for more information. In NY we service Manhattan, Long Island, Qeens, Bronx, Brooklyn, Westchester County, Rockland County. In CT we service areas near Greenwich and Stamford and in NJ we service Bergen County, Essex County, Hudson County and Passaic County.

 

How to Analyze Your Cash Flow in QuickBooks

 

Learning how to manage your company’s cash flow will increase your business survival rate. In addition, you’ll be better prepared to grow and protect your business. Businesses who use computerized accounting software like QuickBooks are typically better equipped to manage cash flow effectively because these programs can quickly and precisely deliver in-depth information on demand.

To begin taking control of your cash flow, you’ll first need to understand the components that influence your cash inflows and outflows. An in-depth review of these components will expose issues that cause cash flow leaks, gaps, and inconsistencies. Plugging gaps, closing leaks and balancing out cash fluctuations is essential to successful cash flow management.

Analyze these components in your QuickBooks software:

  • Analyze and monitor accounts receivable using the Open Invoice report and Aging Reports found under the “Customers and Receivables” to assess your average collection days and amounts owed. You might need to start to regularly send out statements along with late fees charged to slow paying customers. These can be easily prepared using the “Assess Finance Charges” feature in the Customers menu.
  • Change your credit policy by reducing your credit terms or offer discounts for early payment. This will greatly affect the timing of your invoice collections so you can receive your money faster. Changing credit terms can be easily done right on the invoice or directly in the customer’s profile in the Payment Settings Tab.
  • Inventory turnover must be assessed to ensure stagnant inventory is not tying up your available cash. You can review the Inventory by Stock Item and Inventory Valuation Detail to reveal surplus or unsalable inventory.
  • Negotiate accounts payable terms to match your own invoice credit policy. Try paying your vendors on the same payment terms as you extend to your customers. Although this is not always possible to achieve, even if you can negotiate it with some vendors it will help prevent unpleasant financial glitches.
  • Review Statement of Cash Flow found in the Reports menu under the Company & Financial option. Use this report to monitor how much money you will have coming and going out at any particular period and to see your starting and ending cash balances.