bookkeeping

Start the New Year Right: Bookkeeping Tips for Entrepreneurs

Ugghhh! Bookkeeping. It is often one of the most neglected elements of business for entrepreneurs. It isn’t sexy. It isn’t fun. Calculating income and outgo. Projecting quarterly taxes estimates. Reporting. Entrepreneurs want to be out there doing. Fixing. Selling.

Don’t neglect your books this year. Start the year off right and adopt these simple tips and you will thank us December next year.

Separate Business and Personal Accounts

The very first step you should take as a business owner–even if you are a small business, sole-proprietor–is to separate your business and personal accounts. When a client pays you, it can be tempting to just dump that money into your personal account. Especially if it is all coming and going “out of the same pot.” Don’t give in to this temptation. Also avoid the temptation to pay personal expenses from business accounts. It is fine to disburse funds to your personal account or to pay yourself a salary from your business accounts, but keep it separate. No vacations on the corporate credit cards–no matter how good the rewards are! Set up a separate account for your business and deposit all income into (and pay all business expenses from) that account.

Pay Yourself First

Your personal stability is as important as your business’s stability. Make it a habit to save a certain percentage of whatever you earn.

Keep On Top of It All

So you hate bookkeeping. That is fine. If you don’t need the services of a full accounting firm, it is okay. Find a good bookkeeper. Many will moonlight for a couple hundred dollars a month. This can be a cost-effective way to keep things all in order. Make sure you are on top of quarterly tax estimates. Track and record your expenses. And invest in bookkeeping software. You will thank us (and so will your bookkeeper!). Finally, know what’s going on in your business from week to week and month to month. You don’t have to do your books to know your books.

Document Your Processes

In a startup business, things are changing rapidly. Sometimes on a daily basis. As you develop processes–no matter how immature they are–document your processes. As the processes mature and change, update your process manual. This is not only common sense, but it will save you a world of headaches should you ever have to face an emergency or unexpected absence from your business.

Be sure to follow these simple guidelines in 2017 and you will be well on your way to keeping your business on sure footing, financially.

Why “Why?” is Vital to Every Entrepreneur

Why “Why?” is Vital to Every Entrepreneur

Over the past several years, with his juggernaut Tedx Talk Start With Why and best-selling book of the same title, Simon Sinek has popularized a concept first introduced by Stephen Covey in The 7 Habits of Highly Effective People.  Although the concept of “beginning with the end in mind” was first applied by Covey to the habits that highly effective people develop, and then later by Sinek to how leaders inspire action, this concept is vital to every entrepreneur.

“Why?” Informs Everything for the Entreprepreneur
Entrepreneurs solve problems. Whether he is a small business owner or a VC-funded entrepreneur seeking to grow and scale a business, understanding the “why” is essential to entrepreneurial success.

The why–or the purpose–drives (or should drive) all strategic decisions for the entrepreneur. As Covey pointed out, the person who has his or her eye firmly focused on the larger why is positioned for success. The entrepreneur who thoroughly understands his “why” and can articulate it clearly is able to inspire others to join his cause, to take action, and to build something that is greater than the sum of the parts.

How to Find the “Why?”
Many entrepreneurs understand the why instinctively. Solving a problem is an impulse for the entrepreneur. He often “just knows” that it needs to be done. And many entrepreneurs are driven, focused and passionate by nature, so they may be able to influence and recruit talent, employees and investors to join them without fully exploring the why. But what does the entrepreneur who understands the power of the “why?” but does not yet have it clearly articulated do?

1. Identify the Problem That is Being Solved
Take the time to clearly identify the problem you are solving. No matter how complex the solution is that you imagine, distill the problem you are solving into one simple sentence. “Our company solves X (problem)”

2. Add The Target Market
You have identified the problem you solve. Now identify who you solve it for. “Our company solves X (problem) for Y (person/group of people).”

3. The “Five Why’s” Exercise
Startup guru, Ash Maurya developed the Lean Canvas as a way for entrepreneurs to easily articulate their basic business model. In the process of filling out a Lean Canvas, Maurya introduces an exercise to help the entrepreneur truly uncover the fundamental problem he solves. It is a simple exercise, but one that takes a little work. Once you identify the problem you believe you are solving, you begin to ask “Why is that a problem?” Once you have an answer to that question, you take that answer and ask the question again (up to five times). Pushing through the simple, obvious answers to this exercise uncovers the deep problem that an entrepreneur is really solving. Once you uncover the problem that is an emotional pain point for your target market, then you are equipped to connect in a meaningful way that will ultimately drive sales and profitability.

 

Defeat Herd Mentality

How to Defeat the Herd Mentality (at work and in life)

Last week on the blog, we talked about how to think like a great innovator. But what if you are not an innovator? What if you are stuck going with the flow? How do you break free? Try these helpful hints and incorporate them slowly into different areas of your life and watch your results shift.

“Herd mentality” or groupthink can be defined as “a pattern of thought characterized by self-deception, forced manufacture of consent, and conformity to group values and ethics” (Merriam Webster)

By this definition, we can identify three powerful strategies to avoid the herd mentality at work or in life.

Know Thyself
Avoid self-deception. Ralph Waldo Emerson said it well. “Whatever games are played with us, we must play no games with ourselves.”  Benjamin Franklin said it even more succinctly. “Observe all men; thy self most.”

Self-awareness is a vital component to your ability to go against the flow. If you want to change the status quo, you must become a master of yourself. The greatest knowledge a person can gain is the knowledge of the lies one tells one’s self. It is not the conscious shading of the truth that causes most damage but the unconscious untruths. Surround yourself with and value those who help illuminate your blind spots. Dig them up. Hunt them down. And uncover them. Learn to tell yourself the absolute and brutal truth at all times.

Recognize Manufactured Consent
Have you heard the expression, “he’s preaching to the choir”? That is manufacture of consent. Manufactured consent is “the practice of controlling or manipulating the norms, values etc. held by an audience by controlling what they are exposed to in the media.” (dictionarycentral.com)

Combat this obstacle by seeking out a variety of information sources. News or information sources that challenge your fundamental perspectives of an issue are particularly valuable. When you confront your own biases and beliefs with information that opposes them, you become stronger. Your ideas become more clear. You communicate your opinions and perspective more concisely and effectively.

Ask “Why?”
One of the most powerful questions you can ask (yourself, or anyone else) is “why?”  Dedicate yourself to the task of uncovering underlying motivations for your opinions, beliefs, and actions. When your “why” comes into alignment with your core values, you become powerful. Clarity allows you to step out of the herd. When you have a clear understanding of what motivates you, you are free to choose your own path.

Self-awareness, diverse information sources and an ability to align personal and professional values with driving motivations and a sense of purpose are all keys to defeating the herd mentality. Practice these skills and you soon find yourself rising above the rest.

How to Think Like a Great Innovator

ARC Blog 12_28 Innovate

Innovation has become a ubiquitous term in the realm of entrepreneurism. So what does innovation really mean and how can an entrepreneur leverage the power of innovation to solve problems and create a profitable business? Work to incorporate these strategies into your own creative development to improve the level of innovation within your organization.

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Startups to Watch in 2017

Startups 2017Across the country, millions of entrepreneurs are gearing up for the new year, finding ways to be better, faster, stronger, and make 2017 “their” year. While there’s surefire way to tell who will succeed and who will fail, there are a few companies we can see making huge strides over the next 12 months. Here are the startups we think are on the brink of greatness in 2017. Continue reading

Arkansas Capital Year in Review

2016The final weeks of December are upon us, and we at Arkansas Capital can’t help but look back on the past year and be thankful for all the excitement, success and advancement of Arkansas entrepreneurship brought by 2016. While we couldn’t possibly list all of the highlights that took place this year, we’re sharing a few of the most memorable below. Continue reading

Reviewing Your Business Plan

business planDecember is National Write a Business Plan Month, and while this month of holiday gatherings and indulgent food may seem like an odd time to write a business plan, it actually provides a much better opportunity to prepare your business for 2017 than the typical January scramble. You want to be able to hit the ground running New Years Day, not be starting from square one. December will also likely bring fewer requests from clients, vendors, employees and partners, allowing you to focus on your business plan without interruptions. Continue reading