Shoddy Accounting is one of the biggest reasons Startups Fail

Approximately 90% of all new businesses fail according to statistics, a frighteningly high number that makes you wonder why anyone would even start a new business these days.

If you do plan on starting a new business however, you need to know that poor accounting is one of the reasons many startups fail, and do your very best to avoid both the legal and reputation problems that it can cause.

Today’s blog will look at a number of excellent invoicing and accounting tools that will help you do just that. Enjoy.

The first is QuickBooks,  which has been around for quite a few years. It offers everything you need as far as accounting software is concerned, and can take care of invoicing, payroll, profit and loss sheets, balance sheets and bill management, among other things. You can also use QuickBooks to prepare your taxes, print out checks and also use it to accept online payments, because it’s integrated with Apps like PayPal, Constant Contact and Square. Even better, you can choose the features that you need and only pay for those, and the software comes with a 30 day free trial.

One service with an excellent task management tool is Invoicera, which will track the amount of time that you spend on any particular project and also assign tasks and evaluate their progress so that you can increase your productivity. If you’re a new startup with less than 3 clients you can use Invoicera for free but, at only $19.95 a month for their premium plan, it’s still a good deal.

If an intuitive accounting program is what you’re looking for, Zoho Books might be your answer. It can help you to calculate your taxes, has a time tracking tool and you can use to access customer data and send quotes from any device and, like QuickBooks, you can also integrate it with payment gateways like PayPal.

Over 1 million entrepreneurs and small business owners are already using a cloud-based, integrated accounting software called Wave. Approved by certified accountants, Wave provides accounting software that’s easy to use and understand, let’s you create a business reports and help you to keep records straight by uploading receipts into your Wave account. It’s also, for super low cost startups, absolutely free.

Lastly there’s FreshBooks, an invoicing and accounting tool that Forbes magazine has called “incredibly user friendly”. It allows you to do such things as schedule recurring invoices, track monthly expenses, capture billable hours and even see if a specific client has viewed your invoice or not.

All 5 of these excellent accounting programs and services are readily available to entrepreneurs and small business owners and, if making sure that your accounting stays up to date and correct is important to you (and it should be), using any one of them would be a good idea.

Legit Reasons Why You May Need a Cash Advance

A cash advance is where a company will advance you cash in the form of a short-term loan. There are usually few restrictions attached and you don’t have to worry about long application times. These emergency loans are ideal in certain circumstances.

So what legitimate reasons could you have for taking out a cash advance?

 

A Medical Emergency

While no hospital will refuse to treat a patient – because legally they can’t – they can and will charge you afterwards. You don’t want to find yourself in debt to your hospital. It’s a burden you don’t need.

On the other hand, a cash advance gives you the chance to pay for medical care immediately. You don’t have to re-mortgage your house or sell any of your belongings.

 

Pay Off a Toxic Loan

When we talk of ‘toxic’ loans we mean those that are hammering you with interest charges. For example, a payday loan with 300% interest will cripple you and your ability to pay it off. A cash advance can eliminate it in one swoop.

Yes, you will have another loan to contend with, but a cash advance is a far more manageable option.

 

Save Your Possessions

Sometimes loans can get out of control, as is the case with payday loans. Your only option may be to give up and accept the fact your home and possessions may be heading for repossession. But don’t give up right now. There are still options available to you.

You have a chance to save yourself through a cash advance. It’s a difficult situation to deal with and a cleverly timed cash advance can save you from this fate. It will give you some breathing space to get everything together and resolve your financial issues.

 

Choose Your Cash Advance Service Wisely

Before you accept a cash advance, carefully check the terms and conditions of the loan. Make sure they don’t have an absurdly high interest rate attached. You should also be able to pay off a loan early without any penalties. Don’t get dragged into more financial trouble by not reading the terms and conditions carefully enough.

If you have any questions, ask a representative of the company. This isn’t a decision to make in haste.

So we know there are some situations where a cash advance can come in handy. Just make sure this is an option you’ve given consideration to before making any financial moves.

 

Crowdfunding: The Solution To Your Startup’s Woes, Or Fraught With Peril?

Crowdfunding has taken on the business world by storm, with a new way to grow companies that never existed in quite the same way before. While the idea of gathering funds from community members to start a business is an old idea, the speed and scale of the internet has created conditions for growth on an incredible scale.

Advantages

Sites like Kickstarter, Indiegogo, Quirky, Crowdcube and Peoplefund.it have grown enormously in recent years. These platforms have provided billions in seed funding for new companies. In exchange for funds, crowdfunded companies provide everything from their hearty appreciation, to beta products, to dinner with the founders to equity in the companies. The rules of the platform and decisions by the company provide the value of each dollar invested into the crowdfunding campaign.

Some companies achieve spectacular results. Oculus Rift is a virtual reality headset maker that raised over a million dollars on Kickstarter to launch its product. The original investors received the beta product in exchange for their money. However, the funds helped the company lift-off and it was eventually sold to Facebook for $2 billion.

Disadvantages

Unfortunately, the vast majority of campaigns do not have such an excellent outcome. Most campaigns fail to meet their funding goal, raising nothing to several hundred pounds.

The companies that do raise funding have a very different problem. They now have a public timeline to develop and deliver their product. Without delivering on this timetable, the company can get very bad publicity and sour relations with its earliest customers. In addition, resources are diverted to focus exclusively on delivering on the product, even if it turns out not to be ideal for the company. Finally, there is a chance that those that receive the beta product will be unsatisfied and leave poor reviews. In all, many companies must consider whether crowdfunding is the ideal path for them. For some, they are fraught with peril.

Business Credit Card

Instead, many companies are choosing credit cards from business banking institutions. These allow greater flexibility and choice by the business with how to spend funds. They can also manage cash flow by paying back a small percentage of the balance each month. Finally, business cards provide additional benefits such as cash back and travel rewards.

Overall, businesses must consider whether they can accept the burdens of crowdfunding. While their is significant potential for a big payoff, it is not 100% certain. Instead, many businesses are choosing to use credit card financing to accelerate their company into the future.

The Jobbie Entrepreneur

When hobbyists want to make money from their hobby, often they end up with what I call a “jobbie.” A jobbie is a hobby disguised as a business or a career. This happens because, as noted, someone decides to make a product or offer a service associated with a hobby. Or, they have a pursuit in an area that they love that doesn’t really make them a full salary. My litmus test is that if you are pursuing the endeavor full time and are not making in profit—not sales—the minimum wage (currently $7.25 per hour at the federal level, higher in some states) on an hourly basis and have no real, credible plans to do so, you have a jobbie. Additionally, if you are not pursuing your endeavor on a full-time basis, and are rather dabbling and making some cash on the side, you also have a jobbie.

Jobbies tend to disproportionately affect certain groups, such as stay-at-home moms, creative types, recent college graduates, and good-old dreamers. There is nothing wrong with a jobbie inherently. It is actually great if you can make a bit of extra money from your hobby or can support your hobby, instead of having a hobby that just sucks up your money with nothing to show for it except for some fond memories. Just be realistic about it and know what it is. Make sure that you are not dependent on the jobbie as a source of income. You are not going to do yourself any favors by pretending that you are starting a business that ultimately goes nowhere because it didn’t have the foundation to be a business. Also, when you have a jobbie, you can sucker yourself into buying crazy amounts of inventory, spending an outrageous sum on a high-end website, and costing yourself a lot of money with delusions about your jobbie’s potential. Jobbyists sometimes dream that they will make huge sums of money from their side business. If you think that you are going to make a ton of money, create a real business plan, complete with financial statements and reasonable assumptions, and then evaluate whether it is a bona fide business opportunity or a jobbie.

You can also delay making real money by kidding yourself that this jobbie is actually going to become a full-blown business. Sometimes that is the point of a jobbie—a crutch to fall on so that you don’t have to get a real job. Just be honest with yourself, even if you aren’t with those around you.

That being said, a jobbie may actually be a perfect alternative to starting a real business. If you can pursue your passion and make a bit of side money, you may be able to satisfy your personal wants and needs without taking on an inordinate amount of risk (again, assuming you are cognizant that you are starting a jobbie and not investing at the same levels that you would for a bona fide business).

The Idea of Get Rich Quick Scheme

Many people who want to get compensated for their business ideas are basically get-rich-quick type of people (otherwise known as lazy and/ or delusional). There is no getting rich quickly in business. Businesses require work. Here is my final attempt to demonstrate why you can’t depend on ideas to get rich quickly.

There is a young man who calls me every six to nine months. He was pawned off on me—I mean “referred” to me—by one of the lawyers I do a lot of business with. Sometimes referrals are great, and sometimes referrals are someone’s way of passing the buck. This particular situation is the latter, and I have never forgiven my lawyer friend for this “referral.” I will call this young man Chad. Chad is desperate to make money from ideas, but doesn’t have much else to offer.

Chad first contacted me because he knew of a great niche food manufacturing and marketing business that he wanted to buy. He had a contact (I use that word very loosely, as it was his word, not mine) who was a part of said company’s board of directors. This contact apparently told Chad that the company’s shareholders would consider selling the company for the right price. He wanted to see if I could help him raise the money to purchase the business.

I will keep a long story very short. When asked how much money he was going to contribute, Chad had none. Not $10,000, not $1,000; he literally didn’t have a penny to contribute toward the potentially multimillion-dollar purchase price. When I asked Chad what his previous experience was in the food business that he was going to bring to the table ostensibly to help grow the business and create more value from it, he said he had none. Invariably, I told him with no money and no experience, he wasn’t going to make a great partner for any investors who might consider helping purchase that food company. He was expecting to earn ownership and even a management position in the company, but what was his added value to the business going forward?

His answer; “It was my idea to buy it.” I quickly explained that it wasn’t a very novel idea and that without anything else to contribute, he wasn’t going to be able to make that happen. I thought he understood, and Chad dropped that idea.

Chad and I had many similar conversations relating to other “ideas.” My most recent contact with Chad was a few months ago. I felt a bit of dread when I heard his voice on the other end of the phone, but I always do try to provide a few words of encouragement (or a quick reality check, as the case may be) when possible. This time, Chad informed me that he knew of a business that was struggling that he again wanted to buy, but his “financing” (again, his words, not mine) had fallen through, and he wanted to see if I could help him find new financing. I was shocked to hear that he had financing in place for an acquisition, so I was compelled to learn more.

Top Sports Betting Tips for Baseball Season

During the springtime, the sport of baseball comes around. Baseball is a great American pastime, and is one of the biggest sports for betting. With one season lasting almost a year, baseball is also one sport that you can learn as you go. In order to make good bets on your favorite MLB teams, you need to learn the basics and the spreads of baseball betting. Here are some of the top betting tips to help you make good income on your baseball bets.

Understand the money line

The run line is the first thing that you must understand when it comes to betting in baseball. The money line is easy to understand. When it comes to baseball betting, the favorite will be listed with a negative sign (-) while the underdog will be listed with a positive (+). The money line is listed by the one hundred dollars. For example, if you wish to bet on the favorite Team A, the odd will be listed as -130. This means that you will risk betting $130 to get $230 if the team wins.  For the underdogs, Team B, the line may be +150. This means that with a $100 bet you will win a total of $250. Then there are parlays that can be even more extensive to explain.

Pay attention to trades

When it comes to baseball, everyone must be great at his or her role. Many baseball trades will happen at the spring, before the season starts. If power players are traded, this may affect the odds of the team. Collecting home runs is the way to win a game, and the strength of the pitchers and the skill of the outfielders will help just as much as the batter.

Look at team histories

Before attempting to bet on any particular game, look at the history of the team. The history of the two particular teams against each other should be researched as well as how each of the teams has been performing over the current season. MLB teams will typically lose half to slightly less than half of their games, so betting on your favorite team, or the line favorite may not be the best way to wager money. Consider the strengths of the team and how they match up with one another when they play. Taking historical wins and losses against one another will be a good idea, as well as looking at the players performances individually.

Overall, if you follow the tips that have been shared today you will have success when sports betting on baseball.

Successful Businesses without Business Ideas

Let me quickly give you a few businesses that were very successful without a novel business idea.

  • McDonald’s certainly was not the first, or last, hamburger joint, so clearly that business idea—“Let’s open a restaurant selling hamburgers!”—wasn’t what made McDonald’s successful.
  • Starbucks wasn’t the first coffee retailer, nor the only means to get coffee. In fact, when Starbucks was founded, you could get coffee at nearly every convenience store, Dunkin’ Donuts, or even at home if you preferred. The business idea of opening coffee stores on every corner certainly wasn’t the reason why Starbucks was successful.
  • Then, there is the Snuggie—the blanket with arms that’ s basically just a bathrobe that you put on backward. This wasn’t a new idea— bathrobes have been around for a long time— and Snuggies aren’t even attractive (you look like a monk when you wear one), but they are marketed brilliantly and more than $100 million worth of Snuggies have been sold in a year’s time. It may be more of a product than a business, but whatever you want to call it, the basic idea is not what made Snuggie successful.

As you can see from the aforementioned examples, the business ideas had very little influence on the outcomes of the various businesses. Basically, the ideas are just a starting point to help you get focused. It is what you do afterward that creates the value.

Nobody whose head is screwed on straight will buy a business idea from you, or anyone else, because any value related to a business idea is in its implementation. Maybe if you give someone a business idea, they will one day send you a coupon for a free product, but that is about it. The further something gets away from an idea, the more value that exists. Things like customers, profits, and competitive barriers to entry create value. The reality of the lack of value in business ideas is a shock and a disappointment to many people who want to get compensated for thinking of “the next big thing.” If I haven’t persuaded you yet, then the best way that I can illustrate to you why, in the grand scheme of business, the idea has such little value is through the chart on the next page. I have taken some, but certainly not all, of the facets required to run a business and broken them down. A few of the tasks are specific to certain types of businesses, but most are required by all businesses.

So, in looking at this whole thing we call a business, would you place a lot of value on a one-time idea that took no risk to produce, or on the other thirty-plus tasks that have to be done indefinitely, day in and day out, that take a ton of risk and hard work? Hopefully, that answer is crystal clear, and my breakdown gives you more insight on why business concept ideas have no value so that you, like me, can also make peace with not getting compensated for them.

So What Exactly is a Business?

In simple terms, a business is an entity that sells goods or services to customers in exchange for money. However, I would like to make a case that the definition of a business should be changed to: a business is an entity that sells goods or services to customers in exchange for money and whose existence is not dependent upon any one person or small subset of employees .

If you take a business like Walmart, any person within that organization could leave, and the business would still exist and probably not feel any impact. The CEO could leave, the head of the marketing department could leave, the cashier at any given store could leave; yes, any of the employees could leave and Walmart would still be Walmart. It would still have value, and its shareholders would still have the opportunity to make a return on their investment. There are a lot of entities labeled as businesses when this is really not the case. Take Tommy’s Massage Therapy Inc. Tommy provides a service—massage therapy—in exchange for money. There are no other employees in this business; it’s just Tommy and his clients.

However, if Tommy doesn’t want to do massage therapy anymore, or if he is hit by a bus, then Tommy’s Massage Therapy service has absolutely no value. In fact, it ceases to exist. So, regardless of whether or not there is a corporate “business” entity around it, Tommy doesn’t really have a business, Tommy has a job. This is a job that is unlike any other. At a regular job, Tommy doesn’t have much at risk. He may have to pay for a uniform or put gas in his car to get to his place of work, but basically that is all he is risking.

The worst thing that can happen, the extent of the risk that Tommy bears, is that he gets fired and has to look for another job. But at Tommy’s job-business, he has to pay for the privilege of having a job (plus he has to deal with all of the other issues that come along with running a business, which we will be discussing later). He actually risks his own money to be able to have his own job-business. In addition to spending money, time, and effort to create a job, with a job-business you are not building equity value, which I believe is the really compelling reason to create a business. In a true business, you as the owner have an entity with value that is separate from you. This is the value that you create for the business as a going concern, above and beyond the strict value of your assets minus your liabilities, which makes owning a business worthwhile.

That means you can eventually leave the business (down the road, after many years of hard work) or sell the business (again, after many years of hard work) and get value for it. That is how most successful entrepreneurs make the “big bucks,” by capitalizing upon the value of their business entity.

The Customer is Always Right

I always say that the most important asset of a company is its customers, and I will reiterate that again here. If you have no customers, or more accurately, no paying customers—you have no business. It is impossible to have a business without any customers. This gives your customers unbelievable power, they own you! So, if you believe owning a business means you get to be the boss, forget it; the customer is the number one boss, bar none.

If you think that you have worked for some of the most incompetent, god-awful, foolish, horrible superiors before, they may pale in comparison to your new bosses—your customers. This is exacerbated if you work in a business that services end-customers (rather than a business-to-business scenario, which isn’t a picnic either). I have worked for nearly a decade and a half with businesses that sell products and services to the consumer; let me tell you that customers as a group can be beyond anything you have imagined.

Have you ever spoken to someone who works in customer service? If you don’t work directly with customers in your current job, then I suggest you speak with someone who does before going to work serving customers. Some customers will blatantly try to scam you or steal from you. I have spoken to numerous customer service representatives that have recounted stories about people wanting refunds because their dog chewed up a product and now believe it is “defective.” There are the representatives who work for a major bath and home retailer who explained that every year, right after Christmas, customers would return dozens upon dozens of used holiday tablecloths. One customer even had alterations made to the tablecloth to fit her unusually shaped table. The reasons for those returns—it “just didn’t work for me.”

There will be customers that will try to not pay you, there will be ones that try to nickel-and-dime you, customers who return products as damaged that they actually broke themselves, and customers who will take the product out of the box, replace it with something that you don’t even sell, and try to return it for a full refund. There will be customers who will dispute your charge on their credit card because they didn’t like the way they were treated or who will complain that the meal you served them was too cold and needs to be “comped” or discounted. Then, there will be customers who are so lonely that they will want to keep you on the phone, tied-up in person, or engaged in an email dialogue about all of their personal problems (none of which relate to your business).

You will send promotional emails to customers with a 50 percent discount on one item from May 1–6, and dozens will email back asking when the offer is good through, how much is it good for, and whether they can use it when they get paid on May 10. Guess what? All of these people are your new bosses. Lucky you—as a business owner, these are the people for whom you now work!

What’s Bad News for the Oil Companies is Great News for Consumers

While this news doesn’t come out of the United States, it’s still bound to make US consumers everywhere quite happy. 

It was recently reported that Bob Dudley, the CEO of oil giant BP, said that oil prices are going to go lower and remain low for at least a year and possibly up to three years.

In fact, when he was interviewed by the BBC recently (that’s the British Broadcasting Company for us Yanks), he said that BP was making plans to deal with lower prices for the next few years, including job losses and falling investment in the North Sea oil industry. It was also reported that the oil industry is going to be cutting back on capital spending by 10 to 13% in 2015 due to these slumping oil prices. 

Most American consumers have been extremely happy about the rapid drop in gasoline prices over the last few months, a feeling that is compounded in the UK, where prices have historically been about 30 to 40% higher than those here in the states.

When interviewed, Dudley said that oil prices have historically always fluctuated and, when they do, they usually remain low for a number of years. He was quoted as saying “we have got to plan on this price being down, and we don’t know exactly what level, but certainly a year. I think probably two and maybe three years.” 

Although it’s been reported that oil prices around the world stayed relatively stable since 2010 until about the middle of 2014, at approximately $110 a barrel (US), since June of last year the price for one of those barrels has been cut in half and is now hovering around $48 a barrel. US crude is even lower at $47 a barrel. 

While consumers in many countries are happy about these lower gasoline prices, the fact is that many countries, even some that you wouldn’t think about at first, are being affected and will continue to be affected negatively by these falling oil prices. For example, Scotland, which sees many employed in the North Sea oil industry, is going to see some very big economic challenges. Indeed, there are two large projects right now that BP has in the North Sea and many of the people that are working them are from Scotland.

One worry that many have is that, once these low prices and, oil will again rebound and gasoline prices will shoot back up to even higher than they were at their highest in 2014.

It just goes to show that, for every silver lining, there’s a dark cloud on the horizon. For the time being however, the average consumer, both here in the United States and in the United Kingdom, are feeling a lot less of a stinging sensation at the gas pumps.