Accounting 101

Once, while I was taking an accounting course via a community college in New York, someone told me about the field of forensic accounting which - from my understanding - is made up of folks who go in 'after the fact' and try to make sense of the books. Usually it's for litigious purposes but the way it was described to me made it sound like they were mystery solvers. In my mind I pictured a CSI team made up of a bunch of MBAs. And, truthfully, it sounded pretty interesting. That is until I dropped out of said accounting course because I realized I just don't have the type of brain that works well with numbers.

Eventually Accounting (notice the capital 'A') came back and got me in its clutches, this time at business school where I was studying for my MBA. Apparently you needed an accounting course to graduate. All I can say is that I'm thankful to my teammates who pulled me through. Despite my better judgement, I even ended up taking a second accounting course even though it wasn't required - Cost Accounting - because my husband (an accounting major and MBA in his own right, though he has a huge finance brain that more than makes up for the lack of any financial skills on my end. I'm secretly hoping any future children inherit his finance and strategy skills) basically said he'd never talk to me again if I didn't. It was actually a really interesting course and the professor was fascinating, but once again it was by the skin of my teeth and, I believe, the fact that the professor liked that I - like him - was a triathlete, that I made it through that class with any semblance of a respectable grade.

I thought when I graduated I was done with Accounting. I was a marketing major for god's sake - we don't run numbers, we let the people who are paid far more then us do that. Course then I came up with the brilliant plan to run my own business and, since I don't have millions in startup capital, I'm stuck doing my own books. Which is the long-winded way of explaining what I've spent the last two days doing. Business taxes are due on January 31st, I have a meeting with my accountant on Friday (I'm smart enough to pay someone else to take the liability of incorrectly filling out the tax forms off my plate), and I have a backlog of several months worth of accounting. Not a good combination.

If you were bored enough to troll past posts, I'm pretty sure you'll come upon one or more posts about me complaining about QuickBooks and about keeping my books up to date. I think there's even a post where I promise to be more on top of QuickBooks. And I was, for a while. Then I broke my leg and it all went to hell in a handbasket. A rather large handbasket. It was actually somewhat amusing today while doing my own version of forensic accounting as there is a very clear line between 'before I broke my leg' and 'after I broke my leg' with regards to how well my books were kept up to date. Unfortunately, 80% of my business occurded 'after' so I've been drowing in QuickBooks for two days now.


For your amusement and prove my point here's a picture of the notes I made while trying to reconcile my merchant account. That's just one month's worth...now imagine I also have to do the same for all months of credit card and bank account statements.

Fun times - let me tell you!

Survivivng the Recession Like a Dog

This is not so much a business-related post as it is a random thought post. It is also a procrastination post as I'm supposed to be finishing my year-end QuickBooks prior to my tax meeting with the accountant on Friday. But who really wants to work on that before 10am. Or really, at all?

So the random thinking I was doing last night while not being able to fall asleep was about how crazed we all seem to get about the economy. Not that we shouldn't, but in reality, do any one of us have the power to change the way the economy is headed? If the Fed is predicting that the jobless rate is going to hit 10%, there's really not a heck of a lot I can do to prevent that now is there. And it's not like I can really personally offer to bail out Wall Street. Sure, there are the obvious things my husband and I can do but, in truth, those actually revolve around hoarding our own stash of money which keeps that money from circulating in the marketplace and does, in its own very small way,contribute to the financial crises.

To make matters worse, when you work from home you have the ability to catch all the latest news and angst about the economy. Just in case you missed the 7am update on how bad the economy is it'll get replayed for you at 9am, 12noon, 5pm, 10pm, and 11pm. Not to mention all the news "promos" that promise to tell you at one of those news hours how bad the economy is. There's also all the so-called experts on talk shows coming on to tell us about the Armageddon we're heading into and, of course, if you really want to lose your mind, CNBC.

Since working myself into a tizzy about the economy isn't doing anybody a whole lot of good, I've decided that I need to change my approach and work towards surviving this recession with the same attitude my dogs have. Just a few examples:

1. They opt to nap rather than watch CNBC
2. They are content to simply spend the day looking out the window (ie - enjoy the small things)
3. When things get stressful all they need is a good run around the lake to make them feel better
4. They don't follow the day-to-day ups and downs of the market but take a longterm approach to investing
5. At the end of the day, if you're really stressed, bark at some squirrels

That's my new approach to emotionally dealing with the economy. Do you have any other suggestions?

Great News!

1. I got home. Safetly!

2. I got paid!

When I got home I had, not surprisingly, a HUGE stack of mail waiting for me. And what did I find in the mail? Four checks for the business. Two of them were smaller checks I was waiting on but two of them were BIG checks from the bigger company I did business with before the holidays. Best of all, I was expecting to only get a portion of the money owed as I figured there would be chargebacks for something or another that I had mistakenly done incorrectly. While it would be frustrating as I had tried to follow their rules down to the letter, I honestly thought that the whole thing had transpired so rapidly that there was undoubtably something I would have made a mistake on and it would result in some sort of chargeback.

Nope, no chargebacks. The checks came in for the full amount. I'm ecstatic! Even though I had spent the last three days in the car the first thing I did was jump back into the car and drive over to the bank to deposit all four checks. As soon as those suckers clear I will be able to pay off my business AMEX in full which will be a huge load off my back.

Now that's a great way to start off the new year!

Waiting

I'm writing this from a rather nice Best Western hotel in the middle of WA state while waiting for a road - any road - to open up long enough to let me get home. So if this post seems disjointed it's because I've been in the car for the past two days. Or it may be because I'm trying to keep my two very active dogs, who have also been in the car for the past two days, from releasing their pentup energy in a way that will get us kicked out of this rather nice Best Western.

I'm convinced that abscence somehow triggers something in the universe and all of the sudden people want to talk to me or want me to do things. Things that would normally be accomplished in an hour if I were at home - or maybe at worst two hours if I were somewhere else - become undoable while 'on the road' and yet that's when everyone wants to talk to me. I've had two requests from reporters in the past two days who want high-resolution product photographs and need them by tomorrow. Those are located on my home computer and if I can't get over one the passes tomorrow I'll be out of luck. Thankfully both reporters are a little more sympathic to the fact I might not be able to supply them with what they need when I explain that the state is basically under at State of Emergency.

Then I got an email from BIG company today wanting to see more samples. Of course this gets me worked up into a tizzy and I get frantic thinking about all the pieces of the puzzle that have to come together before the Feb 2 deadline I've been given (they are reviewing all their products in my catagory on that date). So now I'm trying to get ahold of the graphic designer, a researcher, and access the US Trademark online database (which appears to be down). I'm also sending messages to my husband - who is safetly home - asking him to check on status of specific packaging that I stashed somewhere in the basement before leaving for the holidays. Unfortunately I can't give him a better idea of where they may be - just "in a box in the basement." I'm sure these are the days he wishes he'd married someone less crazy.

So keep your fingers crossed for me. I just need one of the three passes over the Cascades to open tomorrow. Is that too much to ask?

Back In School

Someone once told me that after you leave school, you still mentally operate on a school schedule for a few years in that by May of every year you're ready to take three months off and come September & January you're ready to hit the books again. Apparently, after 19 years of schooling and despite the fact I've been out of any formal institute of higher learning for a few years, I'm still at that stage and with the new year I've got a whole bunch of education lined up for myself. Or maybe it's just that whole New Year's resolution thing.

I mentioned in an earlier post that I was focusing on Social Networking as part of my marketing plan this year. That however, means I have to learn something about Social Networking and how to apply it in a business sense. Interestingly enough, depsite a degree from what's typically considered the best graduate business school for marketing, this was not something that was ever discussed. I learned tons about how to create and execute marketing plans that relied on "classic" marketing techniques such as advertisements and pr but didn't touch on anything web based (perhaps they had a class and I never took it? Always possible!)

I've learned a lot in the short time I spent over the holidays focusing on the issue. For example, those in the "know" consider social networking and the like to be InBound Marketing whereas classic marketing is considered OutBound Marketing. The difference is that OutBound Marketing relies on "interrupting" the target market to get their attention. For example, television ads are always trying to become funnier or more outlandish in an effort to tear your attention away from the show you were watching or make you stop from running into the kitchen to grab a snack during the commercial break. InBound Marketing however, at least based on what I've read thus far, is about helping your brand/product become part of a conversation with people. In a sense it's a giant word of mouth marketing campaign which is obviously one of the hardest to create and you have to be willing to give up all control over what ultimately is said about your product/brand. But if people are happy then what they say can carry far more weight then anything you yourself advertise.

So how am I going to execute on this? Like I said, I'm learning, and so far I've got the following lined up for myself:
1. Books - I'm a dork, what can I say. I went ahead and bought two books on social networking. Granted, I realize that by the time the books are printed they are likely already out of date but they seemed like as good a place as any to get started.
2. Webisodes - "ockeghem" commented on my previous post about social networking and recommendeded a webisode on Twitter put on by HubSpot (http://www.hubspot.com/marketing-webinars/twitter-archive/). It was great - see Twitter bullet point below. Turns out HubSpot has a bunch of other social networking/e-marketing webisodes so I plan on working my way through those as well.
3. SEO - I need to SEO my website. Yep, I'm so cool and in-the-know that I know that SEO stands for Search Engine Optimization (and I appreciate that you don't make fun of the fact that I'm the last person in the civilized world to realize that). I have a fantastic web guy who can make it happen but went ahead and bought an e-book so that I can hopefully learn a little bit about what I'm asking my web guru to do. I haven't read it yet but it was $25 and is about 20 pages so can hopefully be easily digested over a cup of coffee and a cupcake - yum! (http://www.smallbusinesssem.com/articles/how-to-do-seo-ebook/)
4. Newsletter - I signed up for the WOMMA (word of mouth marketing association) enewsletter "ockeghem" recommended. Haven't received one yet so can't comment on the content but it's free so why the heck not!
4. Twitter - Thanks to the Twitter Webisode that "ockeghem" mentioned in my previous post (http://www.hubspot.com/marketing-webinars/twitter-archive/) I learned enough about Twitter to sign up for an account and have tenatively started posting under the company brand. If you Twitter stop by and see us @petitfourlegs. I promise to follow you back. :)

Getting Organized ~ Part 1 of ???

One of the biggest new year's resolutions I have this year is to get organized. And not the half-a$$ level of organization that completely and utterly fell into disarray the minute I broke my leg. I mean real organization that can withstand an Armeggedon and be quickly and easily picked up by the survivors.

On a side note, I've actually been going to the gym again (who thought 30 minutes on level 4 of the electronic bike could be so exhausting?) and have been spending the time catching up on all my women's magazine reading while there. According to Oprah and every other women's magazine the key to actually achieving your new year's resolution is to not just make a generic goal, but to lay out steps you are going to take to achieve it. Really? Who would have guessed? Never one to take the chance of failure lightly, I've outlined a few steps underneath my "Get More Organized" goal.

Step 1 - My work database is an absolute disaster. When I started this business almost three years ago I was, like most entrepreneurs, trying to keep costs low and opted to use an excel spreadsheet as my sales database. I've way outgrown that method. It's cumbersome, not easily updated, and generally more of a pain then it's worth. After talking to a bunch of folks and garnering a bunch of recommendations (and trying the product free for 7 days) I finally ended up purchasing a subscription on SalesForce.com. So far for my little business their entry level version seems to be just what I'm looking for. It's not necessarily perfect in every aspect but it does give me one solid place to keep track of all my sales contacts as well as updates on each account so that I can quickly look back and remind myself of where an account stands at any given time. Plus, one of the features I love, is the ability to schedule tasks that relate to specific accounts and then when I open the program up in the morning it gives me reminder updates. SSSOOO much better then the 'scrap paper' method I have been using. Plus for $99 annual subscription plan I can't really complain about the cost!

Step 2 - This is a biggie...I've decided that I need to convert our basement into my new office. I'll take pictures and post them as I work through this process but right now our basement is 75% finished but that last 25% definitely does not make it a welcoming workspace. However, using the second (and only other) bedroom for my office just isn't practical and the dining room table has truly become my office. I would like to reclaim the dining room table - as would my husband - and I think the answer is to get the basement up to par. To make it more interesting, I've decided that I think I can get everything done that needs to be done (new paint, carpeting, shelving, maybe even a little electric fireplace for ambiance?) for under $1500 so that's my goal. I haven't yet decided if some of the stuff that's currently in the basement that I'll eventually get rid of via Craigslist gets to raise my budget over $1500 or if that should be counted as part of the $1500. Though I'm thinking that if I can pull this off for $1500 then at least a little bit of the Craigslist money is going towards a cupcake and champagne ribbon cutting ceremony.

There are some other smaller componants to this Get Organized New Year's Resolution but those are the two biggest. I'm shooting to have both fully up and running as I need by the end of March at the latest. Salesforce.com will be the easy one...the basement will take a little longer.

What I Need versus What I Want

I've always believed that in life there is the "nice to have" and the "have to have." Even when I was dating I believed that there were those traits I had to have in a person (honesty, loyalty, strong moral values, sense of humor, etc) and those things that would be nice to have but weren't necessarily dealbreakers if the have-to-haves were in place (things like being athletic, good physique, snappy dresser, doesn't play video games all day - all of which I was lucky enough to also find in my husband).

And how does this relate to entreprenuership and the business? I read a really great article in the Wall Street Journal the other day (dated from their December 26 issue) that reminded me that the same have versus want holds true in business. While the article focused on how the credit crunch is affecting small businesses, at one point they focused on a company called The Perfect Pair. You may have seen them before in your local specialty foods and gift stores. In a nutshell, the company started when the founder realized she could monatize the pear jelly she made every year as holiday gifts for friends and families. In 2003 she quit her job and jumped into the business full-time. And by 2007 she had approx $700,000 in sales. Yeah, that's growth!

However, the article also mentioned that she had two part-time employees. Not in the sense that she has 50 fulltime and 2 part-time employees - but the article made it sound as though those two parttimers were the sum total of her employees. What's more, the article made reference to the fact that The Perfect Pair does not outsource the production of their product so it's not like there are a team of people somewhere else who make the product and the two part-timers are there to help out with shipping and other administrative duties. I may have this all wrong but it honestly sounded like it was the founder and the two part-timers working together in the company's own commercial kitchen space. Now there's nothing to say that at the company's peak in 2007 there may have been more employees but it certainly didn't sound like they've downsized an entire workforce.

So $700,000 and two part-time employees? Yes, she has her own workspace which is something I covet (though won't be looking at seriously in this economy) but she also has a much higher revenue figure then I do. And it's made me wonder, can you work towards growing revenue without dramatically increasing costs? Obviously as revenue grows you'll have to increase raw materials which will drive that cost up some -but can you grow revenue with minimal staff? And minimal fixed costs?

Definitely something interesting to think about.