F.O.C.U.S. Resources Is Changing Its Service Offerings
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Over the past year and a half, we have been fortunate to work with a diverse client base including for-profit and not-for-profit organizations. Through that process we have identified several opportunities to expand and refine of our services.
We will continue to offer the One-on-One Advisory Services and Financial Model Development. New services include:
Small Group Advisory Services provide access to critical concepts early stage and small business owners need for developing their businesses. These services are offered in 5 week sessions throughout the year as workshops and peer support opportunities for participants. Limited one-on-one consulting is provided to each participant or organization.
Capability Development Workshops provide participants with exposure to new information and concepts they need to be aware of and address in their organizations. The workshops include hands-on exercises and accountability steps that encourage participants to take action. Workshops range in length and may be provided solely by F.O.C.U.S. Resources or may include other experts and businesses. The workshop topics include technical, general, and "soft-side" topics, and where appropriate, will provide continuing professional education (CPE) credits.
Teleadvise and Teleworkshops are about leveraging the availability of on-line and telephony technology and recognizing that it isn't always practical to attend an off-site (or on-site) "live" event that takes you away from your business or job. We are developing telephone based workshops, advice/discussion groups, and one-on-one advisory sessions to meet the needs of the solo entrepreneur, small business owners and leaders/managers within medium and large businesses. The sessions are planned for times that make sense for our clients and are just under 60 minutes. Like the live event workshops above CPE credits will be made available where possible.
Products, such as books, CDs, software and e-books, are under development for launch in 2004. We'll let you know in future newsletters when these items become available.
Keep an eye on the website "Services" section for more details on these coming changes.
"Cash Management" What It Means To Not Meeting Vendor/Contract Terms
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Everyday it seems we hear about the Enron, Worldcom, ImClone and other "big business" ethical violations. There is no denying the significant impact on millions of people and the financial markets. However, there is a common business practice that I've witnessed (and experienced) as part of "cash management" in numerous businesses, big and small, that creates on-going, far-reaching repercussions in the economy.
You may not have thought about it from this perspective, but I'd like to challenge you to re-evaluate what appears to be a common business practice - not paying your vendors on time, for the amount due, or if you are late, not paying the finance charges. Here are a few examples of real life situations, maybe you've experienced them:
1. "You'll get paid, when I get paid."
2. "We never intended to pay them. By the time they can get us to court, they'll be out of business."
3. "I don't care what the terms were. We're big enough that if they want our business they'll be happy to get the money when we decide to pay them!"
Did any of these sound familiar to you?
For many businesses that file bankruptcy, it isn't profitability that is the issue. It is having the cash to run their business. When your clients fail to pay you, what happens to your ability to pay your vendors? Feel the squeeze?
In service businesses, there isn't a lot that can be done about reclaiming the asset - once rendered the service can't be taken back. One colleague likens it to a magician revealing how a trick is done, once shown it can’t be undone.
What can be done is to reiterate the terms and conditions and pursue collection actions. (Here are some of the options: demand letters, small claims court, litigation, and collection agencies.) But those take time and additional money to pursue, time that won't be spent on providing additional services (revenue). It doesn't mean that I don't pursue the outstanding accounts, but it does mean that I incur additional costs of lawyers, accountants and other administrative support to take care of the collections.
What also happens when companies can't collect their legitimate debts? Prices rise, businesses fail, people lose jobs, and so on and so on and so on. The effects ripple out from each pebble dropped into the proverbial business pond. This affects everyone on an imperceptible level.
The reality is that due to circumstances - perhaps one of your clients not paying a bill - you may get strapped for cash. Instead of simply letting an outstanding invoice go past due, give your vendors a call and explain the situation. It's better to let them know and be honest than to surprise them by not paying.
Keep in mind the following:
1. In these days of electronic payments and commerce, bills that people commonly floated - utilities, phone, etc. - have little tolerance for late payments. It just takes a flip of the switch to cut off the phones to your business.
2. When dealing with delivery services, late or non-payment of invoices can get you on pre-paid, cash-only status pretty quickly.
3. Credit ratings can get damaged quickly. Qualifying for new credit with new vendors takes sound credit scores and references. This is an "asset" you don't want to lose, so monitor your transactions and spending rates. Don' overextend your operations and not be able to pay your bills on time.
There will be an occasion when you need to be late or pay less than the total balance of an invoice. Be prepared, be honest, and have good relationships with your vendors. Usually, they will work with you.
Some additional points to keep in mind:
Negotiate terms you can meet.
Don't spend more than you can afford.
If you can't meet the terms you agreed to due to a sudden change in business, call your vendor and discuss the situation. By not surprising the vendor and being honest about the situation, you can maintain a sound business relationship.
Pay bills when due. Consistently paying bills late (or not at all) can lead to credit ratings that put you on cash only terms with numerous vendors.
Remember that your vendors have lots of other customers. They can be a huge positive referral source for your business - if you treat them with respect.
If your cash isn't keeping up with your expenses, it's time to evaluate your operations. Are you growing too quickly? Operating inefficiently? Are your incremental costs to high? Are your prices too low?
If you can't pay your bills on time and in full, it's time to analyze your operations and determine what needs to be changed.
Focus On Execution Workshop at Meredith College return to top
Meredith College will be the site of the Focus on Execution Four Week Workshop Series. It will be held each Thursdays beginning April 1st and ending on Thursday, April 22nd.
The four workshop series is targeted at executives, mid-level managers, small business owners/managers, and entrepreneurs looking to get things done. The workshop takes actual issues (non-confidential) and works with participants to analyze, strategize, and act to get results. Enrollment is limited due to the "hands-on" approach to the issues. Topics to be covered include strategy, accountability and performance measurement. This is not a lecture series, instead it is about developing the ability of participants to achieve a balance between strategic planning and execution that gets right results for their business.
http://www.meredith.edu/professional/business-marketing.htm#focus
Still Using the Shoebox and the Spreadsheet? Learn Why You Should Consider Using Accounting Software return to top
The December issue of Small Business Technology Magazine features an article written by F.O.C.U.S. Resources' President Lea Strickland entitled "Beyond the Shoebox and Spreadsheet - Why Computerize Accounting". The December issue is free and available for download. Simply click on the link below.
http://www.sbtechnologymagazine.org/archives/issues/lasttoc.html
Manage Your Momentum Workshop - Listen, Interact, Resolve, Manage return to top
F.O.C.U.S. Resources is joining with four other area businesses to present a full day program for entrepreneurs, small business owners, and "intrapreneurs" (entrepreneurs inside medium and large businesses) looking to get more results in 2004. The program consists of five sessions that are integrated and walk participants through five aspects of the "how-to" get things done.
Session One, Getting Clear & Designing Your Plan, features Strategic Leadership Empowerment company CEO, author and speaker Amy L. Sky. She lays the groundwork for the day by working with participants to get clear on goals and results that they want to achieve.
Session Two, Assessing Your Strengths and Defining Your Role, is provided by Proactive Career Life Planning's President Sally Curry. Building upon the foundation of goals and results generated in session one, Sally works with participants to get "real" about their own strengths, weaknesses, and what role they are most suited to play in business.
Session Three, Plugging the Holes in Your Business and Creating the Structure to Support Momentum, is about identifying the processes that drain resources - people, time and dollars - from the business and keep the business from achieving significant momentum toward success.
Session Four, Designing the Results - Not the Headcount, walks the participant through the recognition of the skill sets, abilities and talent that businesses need versus simply hiring bodies to fill positions.
Session Five, S.T.A.R.T. Your Business™ - Strategy, Targets, Accountability, Results and Tactics, is the proprietary program developed and presented by F.O.C.U.S Resources' President Lea Strickland. This workshop is an introduction to "how-to" integrate finding the right strategy based upon established goals, setting specific performance targets and introduce the processes for developing accountability, results and tactics. [Note the Focus on Execution Series is an eight hour in-depth workshop on these same points. This is simply an introduction/overview that gets the process started.]
For dates, locations and registration go to www.manageyourmomentum.com
Limited time offer! An additional $50 off is available to newsletter subscribers, clients, affiliates and certain network or association members. E-mail events@focusresourcesinc.com for more information.
Employee or Independent Contractor? return to top
In speaking and advising various companies, it has become clear that not enough attention has been given to the question "Is this person an employee or an independent contractor?" For many the distinction doesn't seem that important. Others have stated "As long as I give the person a 1099, what does it matter?"
There are several reasons this distinction between employee or independent contractor matters: The IRS wants to see the maximum number of workers classified as employees so they are able to immediately collect taxes through payroll withholding immediately, and there are fewer opportunities to under-report earnings.
The impact on your business for misclassifying workers includes substantial penalties and interest on taxes not withheld, personal liability for unincorporated or non-LLC businesses, and in some cases personal liability even for LLC/corporate executives, managers and owners. One of the most serious potential consequences of misclassification is disqualification of retirement plans.
In a discussion with an early stage company that was considering retaining F.O.C.U.S. for advisory services, the topic of payroll came up. This was a technology company that had been in operation for four to five years. When asked about how payroll was being handled, they indicated they didn't "do" payroll. They simply gave 1099's to everyone, including the executive team. The reality of this situation is that the company had been in default on payroll withholding for several years and will face stiff consequences and financial penalties for not obtaining expert advice on the financial and human resource aspects of the business.
As one of my mentors put it: "When the IRS calls, ignorance is not a defense." Seek out qualified experts in the finance and human resource areas to review your operations (planned or current) to help you identify the areas that you aren't experienced or trained in. If you prefer to invest your own time, seek out references and information from publications and websites. There are several excellent reference books that can be obtained at your local bookstores or through www.nolo.com.
IRS Form-1099 Afterthoughts return to top
Hopefully, everyone has gotten out all the W-2's, 1099's and other tax forms required. In working through those items for F.O.C.U.S. and our clients, there were several "lessons" that we wanted to highlight.
1. Form 1099-Misc is required for all independent contractors who are sole proprietors, partners, or members of LLCs that you have paid more than $600 to for service to be performed in the course of your business or trade.
2. Form 1099-Misc is not required for corporations.
3. All payments to lawyers for service related to your business require a Form 1099.
4. You need the taxpayer identification number to file a complete Form 1099.
Recommendations for the year ahead:
1. Obtain or create a form that you provide to all independent contractors to obtain the information to complete the 1099.
2. Establish a year end process of confirming that the data you have for your vendors is current and complete. This can be done by sending out a simple letter to your Independent Contractors and Vendors that show the information you have on file and asking them to respond if the information is incorrect. You may want to put these letters on a different color of paper to catch their attention.
You can get more information on 1099's and other tax issues from your CPA, the IRS, or through publications written for non-accountants, business owners, and entrepreneurs. One of my "quick" references is Nolo's Hiring Independent Contractors: The Employer's Legal Guide by Attorney Stephen Fishman. You may want to check out that book and others from Nolo at www.nolo.com.
Copyright © 2004 F.O.C.U.S. Resource, Inc.
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