What If? Let’s be honest, succession planning is not a topic that comes across an entrepreneur’s mind frequently. After all, we’re all occupied with creating successful ventures. But let’s imagine for a second, after years of effort, you suddenly become ill, pursue opportunities outside of your professional career or just feel it’s time to step down. Your company may be in good shape, but is it positioned to operate successfully without you as its leader?
It is difficult for the busy owner of a mid-sized company to make a serious effort toward succession planning and start-up entrepreneurs contend with a roller-coaster ride that divides and challenges attention every day—never mind straining to focus on the distant future toward something called Succession Planning. Nonetheless we’ve already seen the disaster levels escalate when there was no succession provision as we reported in the case of Microsoft’s Steve Ballmer’s abrupt exit—minus a replacement CEO prepared to take the helm.
THE “NOW IS BETTER THAN LATER” STRATEGY: The importance of succession planning is such that it requires careful thought, far in advance, about the resources you will need to develop in order to ensure your successor will carry on the vision you’ve taken years to advance. Think of it another way: planning for succession means planning for success and the sooner you start planning, the sooner you can secure the objectives that effective succession planning requires.
RESOURCES Roughly 60% of first level managerial positions and 52% of senior positions are hired from within. Recruiting from outside the company can also run up expenses in record time and may take a year or more before the right person appears. In the meantime, the company is at risk without a take-charge individual in the wheelhouse, steering the course, perhaps during a trying time made worse without expedient action to fill the office.
Then there’s the “getting acquainted” factor—orienting the new individual to the work, company culture and personality. Which may not be easy when internal management has been “passed over.” Those who have been with the company for years couldn’t help but feel a negative effect on their morale, unless they have somehow been properly prepared to accept an outsider.
STRUCTURING THE FUTURE TODAY To address the resource dilemma, there are two main processes that lead to effective planning:
Establish a depth of commitment within the company that spells out HR required standards of quality and officially burdens all managers with developing and having their successors in place.
Encourage employees to remain in the company by creating a proactive program of performance objectives and reward achievement to develop a strong back bench of candidates, one of whom is ultimately your choice for the next CEO.
PROFESSIONAL SUPPORT ENSURES SUCCESS To prepare our clients with the most appropriate planning strategies Talley & Company delivers expert counseling to entrepreneurs, C-suites and management groups. Providing them with training, tools, and resources allows them to monitor a flexible road map, based on the company vision, while their business grows toward the time when they can position the best successor their organization needs to continue to thrive.
December 5, 2014
Target Leverages Big Data to Predict Customer Pregnancies
Leveraging buying trends into dynamic strategies is nothing new to the retail industry, though some companies have turned it up a notch in recent years. Target, for example, has found a way to data-mine your purchases to figure out whether you have a baby on the way long before you are stocking up on diapers So let’s take a closer look at Target’s usage of “Big Data”—and what you can learn from this impressive feat.
With copious amounts of highly detailed data on shoppers’ behaviors and preferences, Target’s marketing specialists saw an opportunity to take the information a step further and developed a specific profile that took note of how women’s shopping habits evolved when they first learned they were pregnant. Identifying 25 new indicator products purchased within a defined period, Target is able to assign each shopper a “pregnancy prediction” score and can estimate a due date with a high level of accuracy.
With this information, a mail-out campaign of coupons and discounts is disbursed with each specific stage of pregnancy. Perhaps a bit unsettling to some, but it’s hard to argue with success.
The important element/lesson of this strategy, applicable to most businesses large or small, is seen in how Target converted “Big Data” into proactive data.
By the same token, accounting reporting systems reveal how a business is operating and deserve the owner’s attention. How are you looking at them: as a collection of numbers on a spreadsheet—or are you analyzing trends and how they impact your business? You may find a few surprises with a closer look.
“If you can measure it, you can manage it.”
Being able to construct an accurate and flexible system that can adapt as new market forces, trends and opportunities arise in real-time, versus waiting until month’s end may mean the difference between achieving your revenue forecast or moving beyond it at a time when cash flow is critical.
Until just recently only large corporations had both the time and resources available to dedicate toward leveraging Big Data into producing meaningful results…Today the entrepreneur utilizes Big Data solutions to help level the playing field. Several factors, including recent technological advancements and the affordability of both cloud computing and outsourced business solutions keep new businesses competing well enough. Entrepreneurs can click on their Smart Phone, iPad or laptop anywhere in the world and access this information at will, particularly if owner and accountant have set up various protocol profiles in the form of customized data.
Now, more than ever, the small business owner has the ability to develop the same Big Data analysis as larger corporations—an important step in achieving a competitive position.
Talley & Company and its affiliate, Group 11 Advisors, keep clients on track with how to properly leverage technology to meet the needs of their growing businesses. From outsourced accounting solutions to management information, analysis and reporting, we are the premier business consulting practice to entrepreneurs and their closely-held businesses.
For more information on how to leverage your business’ data technology, contact Talley & Company today to explore your opportunities.
21 Nov 2014
November 21, 2014
Resolve to Get These 3 Things Done in 2015
Yes, you have it right: It’s not quite time for turkey yet and we’re pressuring you about resolutions already—but for good reason. With just a handful of weeks left before the official end of 2014, outlining your new year’s resolutions now, with ample time to establish a definitive game plan, can set you up for success. Waiting for Jan. 1 to tackle projects that have been on your to-do list for as long as you can remember won’t. It’s time for all of us to take action, whether we resolve to eat better and get more exercise or develop concrete growth tactics for our businesses.
Here are three things you’ll want to be sure are on your list, along with the easiest ways to get moving on them.
Organize Your Taxes – We’re not just talking about keeping all your papers together so they’re handy come tax time later, although that’s a great start. We’re talking about creating a real strategy for both your household and business that takes a holistic view of your assets, income, revenues and expenses. A 360 view will give you the best options for creating tax savings in full accordance with IRS rules. Want to see a few examples of how this works? Call us and we’ll show you.
Optimize Your Bookkeeping and Accounting – If you haven’t automated these tasks, doing so can free up time and energy for you to conquer more strategic jobs in 2015. If you’re already utilizing software or outsourcing to a professional, make sure you’re accessing data from your financials. Already got that done? Then you’re ready to translate as much of that data as possible into real-world decision-making. If you’re using your statements to create a business plan for the months and years ahead but aren’t sure you’re properly interpreting everything your financials are telling you, consult with a Talley & Company advisor to increase your knowledge base.
Establish a Will and Build an Estate Plan – If you haven’t secured your family’s future yet, spending the holidays surrounded by your loved ones might be the extra reminder you need to finally accomplish this task. If you’ve already created an estate plan, well done, but when was the last time you reviewed it? Be sure your plans suit your family’s present needs.
Making resolutions is a great way to stay focused on important goals. Creating a strategy for making good on those resolutions is much, much better. Small steps are often the best ones, since they keep us from feeling overwhelmed and procrastinating. So here’s your first step no matter where you stand in all three areas: make one phone call. This task is so small there’s no good reason to put it off. Set up a time to discuss your needs with a Talley & Company advisor and you’ll be better positioned to achieve all that you want to in 2015.
November 14, 2014
5 Tech Time-Savers to Consider Using in Your Business
Where has the time gone, seriously? The holiday season is right around the corner (unless you’ve stepped foot into a department store, then it has been here since early September). No matter how hard you try to fight against it, attending holiday parties, performing your annual reviews, and drinking eggnog will keep your schedule filled to the brim. So what tech solutions are you leveraging to help you be more productive with the time you do have this holiday season? When time is money, tech solutions can bring in a lot more of both. See how these five options might enhance the day-to-day operations of your business.
Virtual Meeting Tools – Nothing beats a face-to-face meeting when it comes to cementing a business partnership or getting a deal done. But with the use of virtual communication tools like Skype and GoToMeeting, business leaders can spend finite resources on in-person meetings in ways that provide the greatest return. For example, web conferences can be used to present preliminary proposals and, based on initial feedback, be modified for a later in-person presentation to clients in refined form.
Bookkeeping Applications – With so many viable and cost-effective accounting applications for small businesses, no one should be manually tracking income and expenses across multiple tables, spreadsheets and systems. Software and cloud-based options allow business decision-makers to create and track professional invoices, see payments and outstanding balances at a glance, enter bills and print checks, and reconcile for tax purposes.
Online Timesheet and Payroll Services – Online time-tracking solutions make it easy for employees to submit timesheets (and managers to approve them) from anywhere and everywhere. To choose the right system for your business, think about the ways different employees would use it and where their data will need to go, from payroll to billing to reporting. If you have an existing accounting program like QuickBooks in place, a payroll solution that syncs data and issues paychecks to employees can be a great option.
Social Media Tools – It’s a full-time job creating a strategy for a business’s social media presence, selecting the channels that best suit outlined goals, and then implementing a plan of action. Programs like Buffer and HootSuite help connect accounts so businesses can plan, schedule and post to multiple outlets at one time. Leaders can set up a schedule for sharing content based on the best time for it to be released. Plus, you get the chance to see comparative analytics that can improve future planning.
Customer Service Support – With tech applications like Desk.com and Zendesk, a business can be small but still have a big customer service presence. Help desk solutions can increase the number of positive interactions customers have with you company, improve their opinions of your brand, and raise their intent to purchase from your business. Support staff can field inquiries from email, phone calls, live chat or social media using one main system, giving customers the chance to choose their preferred form of interaction.
If bookkeeping, timesheet or payroll technologies are on your list of productivity tools to investigate, Talley & Company can provide you with important points to consider when choosing the right tool for your business. Contact us and we’ll be glad to assist.
November 7, 2014
Tax Breaks Could Cut Ballmer’s $2 Billion Payment for Clippers in Half
There’s been a lot of debate on both sides as to whether Steve Ballmer’s purchase price of $2 billion for the Los Angeles Clippers exceeded the team’s worth and revenue potential. On one hand, it’s hard to ignore the fact that no one has paid remotely as much to buy any one of the 30 NBA teams in the franchise’s entire history. Then again, the NBA just inked a deal with ABC/ESPN and Turner for broadcast and Internet rights earning the franchise nearly $2.7 million each season between 2016-2017 and 2024-25. That’s almost three times what the NBA gets with its current contract.
Maybe Ballmer believed that with this new deal in the works, along with a turnaround of the team’s reported mismanagement under previous ownership, he would have a real shot at making money on his investment despite his sky-high purchase price. And, maybe he just wanted the shiny new toy badly enough to pay whatever price it took to ensure it was his.
Still, there might have been at least one other factor that impacted his decision. Because as it turns out, Ballmer could claim about half of his purchase price of $2 billion over the next 15 years against his taxable income in a niche section of the tax code applicable only to sports franchise owners. To take advantage of it, an accounting treatment using goodwill, which refers to the difference between the purchase price and the cash and fixed assets of the team, would be used to structure the deal.
The Financial Times has reported, “Using a conservative model that assumes Mr. Ballmer could account for $1.5 billion in goodwill and a re-investment rate of 7 percent, the potential tax credits equate to about $1 billion in current terms.”
In the words of Washington Wizards owner Ted Leonsis, “There’s never been a better time to be an owner of an NBA franchise or frankly any professional sports team.” And, well…it pays to have an astute group of professionals keep their eye on the ball no matter what move a billionaire makes.
But perhaps buying a sports franchise isn’t your game, and this small corner of the tax code doesn’t apply to you. That still leaves thousands pages of rules and opportunities that could. The tax code is full of small but powerful regulations that can easily escape taxpayer notice. Ballmer has a powerful tax advisory team mining it to better inform his decisions for work and play. You can, too.
October 31, 2014
If Only There Was Fitness Tech for Your Business. But Wait—There IS.
These days, we’re tracking everything from our steps taken to our sleep patterns thanks to a proliferating number of wristband devices like the FitBit, Jawbone UP24, and Life Tracker 1. New technologies for monitoring our day-to-day health are making it simpler and easier to catalog and retrieve voluminous amounts of data so that we can better understand how our bodies run and make adjustments to improve our fitness. So the question is: Are you doing this for your business?
If you’re keeping track of income and expenses, you may be doing just enough to avoid financial disaster. But it’s nearly impossible for a business to thrive without the additional data required to make more strategic decisions.
By collecting, monitoring and analyzing our personal health data, we can identify opportunities for improvement and track our progress in a continuous feedback loop. Affordable bookkeeping software and processes work much the same way for a business, helping to automate what would otherwise be a tedious task so we can access timely data on business profitability.
An accountant or financial advisor can not only set up this software but also establish a streamlined process that makes it work for your business. This process includes effective recordkeeping for all expense and income types, properly entering this information into the bookkeeping software, and lastly, generating financial reports. Business owners that attempt to DIY the first two steps often get so bogged down they never get to the last one. This can be a costly mistake.
With up-to-date information in your bookkeeping system, you can track account balances and create sophisticated financial reports, putting vital financial information in easy reach. Everything from profit/loss statements and cash-flow projections help you detect patterns to different aspects of your business’s financial health. You can evaluate whether your goods or services are priced competitively, determine if certain expenses should be cut back or outsourced, and identify profitable revenue lines to pursue further.
In essence, professionally managed statements can help you make data-based decisions for your company more regularly and reliably, taking operations from good to great. The best part is, a good financial advisor that sets up the reporting system for your business can also give you valuable guidance on how to transform data into real-world decisions.
If you’re interested in identifying key numbers, tracking changes and reading trends to reveal tremendous insights on your company’s financial fitness, Talley & Company and its affiliate Group 11 Advisors can help guide you through the essential steps. Schedule a consultation with us to learn more.