Archive

Posts Tagged ‘business’

Basic Corporate Metrics

A trend I’ve seen within the last couple of years as been to measure performance of employees through a series of metrics, which are numerical representation of performance, service, quality, etc. A couple of thoughts have come up as I’ve spoken to a few business partners:

  1. You will always have a couple of people who want to have high numbers – and while that may appear good on the surface, make sure that they are not sacrificing unmeasured areas to make the measured numbers look good;
  2. Make sure that you’re using sound statistical calculations – when your numbers don’t appear to correlate to real life, there is a problem – don’t trust the numbers of themselves, make sure they make sense in real life. Have a good idea of what the numbers should be saying, and if there is a divergence between what is observed versus what is measured, be sure to reconcile those two – which might be to find a better way to measure the results, or that might be to come to the understanding that the measured results are more accurate;
  3. Have a combination of public and confidential metrics. That is, have a series of measurements which are published and discussed. These are areas where team members can strive to achieve and improve. Then hold a second set of metrics you use to measure your own management of these employees. Keep those measurements private. Do not disclose to the employees how you’re measuring in this area. Simply address problems as they occur, but kept your actual measurement system private;
  4. Your business goals, including customer service and profitable should be measured. Again, keep disclosed and undisclosed numbers.

Also, in the context above, everything is referencing “within the company” — an even smaller set of numbers (if any) should be published to the outside world.

Advertisements

Fiscal Review

As a growing business you must learn from your CPA early on about how to interpret your Profit & Loss and Balance Sheets. These indicate the lifeblood of your company. Depending on your business you need to look at these at least monthly, if not weekly or daily! Additionally, as part of your corporations annual shareholder meeting, go ahead an prepare a financial review and prospectus, even if it is only for you. Look at other corporation’s filings – both large and small. This exercise will give you the opportunity to do some looking back, as well as forward looking based on past performance. It also gets a lot of your homework cleared out of the way when you’re ready to look for outside funding. Infact, even before you start looking for F&F financing (friends & family), you really should have something prepared to hand to them as well.

How to crash the economy in your state

The following is quoted from Michael Gray’s CPA Tax & Business Insight Newsletter for September 2008:

Paul McCauley, who I am embarrassed to say is a CPA, and union leader Brad Rooker are promoting an initiative to impose a one-time 25% “wealth tax” (read success tax) on the assets of Californians exceeding $20 million for single persons and $40 million for married couples. The wealthiest 1 percent of California taxpayers paid 47.9% of the state’s personal income taxes for 2006, but that doesn’t satisfy McCauley and Rooker.

Of course, there is nothing to prevent these individuals from moving out of California to a more friendly state, and bringing their corporate headquarters with them. Say Steve Jobs (Apple Computer, Pixar), John Chambers (Cisco Systems), Larry Ellison (Oracle), George Lucas (Lucasfilm) and Larry Page and Sergy Brin (Google).

In addition, the wealthy don’t keep their assets as cash in a mattress. In order to pay the tax, any of them who decide to stay will have to liquidate their stock, bonds, and real estate. What do you think dumping these assets will do to the market? What do you think it will do to CalPERS, the state’s retirement system and one of its biggest investors?

These are also the people who fund our universities and charities, and bail out the state of California by purchasing municipal bonds to fund deficits.

If the state gets this money, do you really believe it will solve its money woes, or do you agree with me that it will be dissipated in nothing flat?

We should tar and feather McCauley and Rooker and they should be fired as unfit for their occupations.

More importantly, we need to speak out and not passively let their proposal be promoted as a “reasonable alternative.” This is not “just politics.” This relates to freedom, property rights and understanding that the real source of wealth is men’s minds. (See Atlas Shrugged by Ayn Rand.)

For more information, please see http://www.taxtrimmers.com

Are you the sales manager too?

A great post over at Young Entrepreneur discusses that fact that in most small businesses the owner is the key sales person at the company. And while most of us are more interested in the product that we’ve developed, or the service we provide – we are the de-facto sales person. And as the business grows it is very easy to become overwhelmed with the business end of the company and neglect sales. However a continued focus on sales in the key to sustainable growth — or even to stave off attrition.

Evan Carmichael, quoting Sales guru Jeffrey Gitomer, outlined 7 reasons why the principle is the best sales person. It is worth looking at. And yet we still try to expand out business by hiring a sales person to hand this duty off to. We have and have failed twice at it! The key to this is what Jeffrey calls his 7.5th point — even with a sales person, the principle still needs to champion and lead-by-example the sales portion of the business. In a entrepreneurship video I watched a few years ago, it showed an interview with the founder of Netscape, back when they were a viable company — and people actually purchased Internet browsing software. In there, the principle spoke about how he monitored and personally trained his first sales person. And that he took an interactive and proactive approach to training and leading his first sales person – a process he repeated until he had a very size-able sales team.

So, how have you handled selling your company lately?

Corporate Paperwork

Probably the largest signficance,for a very small business owner, between a Corporation and a sole-properitorship, is the liability protection afforded by the corporation. However, in order to keep this liability protection solid, the most important piece to maintain is proper paperwork. Without maintaining the proper corporate stucture, backed-up my minutes, annual meetingss, etc., Failure to do this may permit a entity to “pierce the corporate viel” and go after you personally. Attemtpting to play catch up with your required paperwork is not only illegal, but very diificult after the fact. It is first, and foremost important to setup a structure to ensure your compliance going forward – mark it on your calendar, use an Outlook reminder, whatever it takes to ensure that you are providing a minimum of Director and Shareholder meetings at least annually. Also be sure to keep your finances in line and major descisions should be placed in the minutes. Paperwork is the number one killer of the “corporate veil”… You can try to run the best business, by the book, however you will either invariabily not know something and screw up, or you’ll have someone else attempt to sue you over something frivelous, yet still that protection will be required. You cannot control other people, so you need to ensure you are taking the correct actions to protect yourself and the corporation from libaility at all times.