Do You Know the Value of Management Accounts?

To run a successful business, along with a good product or service and the right team and marketing also in place, you need to consider the efficiency of running your business and its status? Do you know what is coming in and going out? Do you know what needs to be paid? What would happen if you had an unexpected immediate expense - would you be able to pay it? These are all very important questions you should ask yourself if you want to run a successful business. This is key information which you need to be aware of and keep tight control of. And here is the answer - Management Accounts.
There are two types of accounts, financial accounts which describe how well your business is doing and a statutory responsibility to be produced and filed at Companies House. There are also Management accounts which help you manage your business and make the key decisions in specific areas such as sales, margins and stock as well as others such as creditors. These accounts can become invaluable especially during the harder times and the recession.
Depending upon your business, each business will have different needs and areas of the business which is important to them. Although there is no legal requirement to prepare management accounts, many companies produce them regularly like monthly or quarterly to keep a tight control on their business status.
Management accounts are usually split into different areas depending on whether you have more than one location, how many products you may be selling, so you can see what areas of your business are performing well and which parts need looking at. Usually management accounts compare results against your budgeted results so you can see how your business is performing overall and what to expect for the time ahead. They should give you an overall impression of what your annual financial accounts are going to look like once completed.
As well as this comparison, management accounts gives you accurate information to compare your resources better, identify any business trends and highlight any variation in your income or spending which may need attention. They can help you plan and control your cash collection, your expenses and stock. All this information can help you in making key decisions such as cost information and pricing, product profitability, marketing activity and keeping a tight control on your finances and forward cashflow requirements. With this information you will be able to analyse how your business is progressing, which areas may need tightening, improving and which areas you may want to develop in and carry out additional marketing etc. You will also be able to monitor your payments in compared to your payments out so you can identify any cashflow problems in good time and be able to make any adjustments that are necessary.
All of this carries great value and management to a successful business in keeping it one step ahead and keeping it evolving and growing and creating more success.

Small Business Ownership - Three Distinct Management Thinking Styles - Which One Do You Use?

Most of the frustrations in owning a business (the "insanity") come from an owner unwilling to remove him or herself from key daily tasks. The result of not doing so results in a newly coined phrase, "Entrepreneurial Insanity".
There are three types of business owners. Most people are Doers. They own the business and do the work. Any employees are simply there to help them do the job. They are only assistants. Then there are the Overseers. They let the employees do the work, but under their direct supervision and advice.
The smallest number of business owners are called Entrepreneurs. They establish the systems needed to make the business run and they get out of the way. Their mangers manage the systems; the systems manage the employees.
It is fascinating to see how these different types of business owners think. The Entrepreneur is always thinking. It is his job. Thinking creates the vision from which all opportunities spring. Thinking is why an entrepreneur gets out of bed in the morning.
The Overseer is a little more pragmatic. This thinking thing is OK, but only about the current operation; the things for which he has responsibility. He does not want to think outside of these self-imposed boundaries.
The Doer would prefer not to think. Thinking is not work. And, there is always work to do. He knows what to do and how to do it. Why think about anything else?
Such definitions are not absolute, but most people see themselves within one of those basic types of business owners.
Distinctions between Doers, Overseers and Entrepreneurs occur in many other areas of small business management including how they view change, opportunities and growth. In other articles I will explore each of these.

Management Question - My Staff Member is Boring! What Can I Do?

Some time ago I was asked by Colin, the Head of a large secondary school in London, to give him some advice and guidance on dealing with a number of staff performance problems. We talked about a number of issues and finally he began talking about a teacher he labelled 'mind bogglingly boring'. Here's how the conversation began;
C Now this staff member is driving me nuts
Me What is she doing, or not doing, that is giving you a problem?
C It's just that she's such a boring teacher
Me Give me an example?
C OK. I dropped into one of her lessons this week as part of my observation schedule. Oh my goodness, I've never seen such a set of bored pupils in my life. Half of them were asleep, a group of them were writing SOS messages on the window (in their own blood) and one kid was trying to make an escape tunnel, using a biro.
Me Really?
C Well no, but not far off. Now I'm guessing you're going to say to me 'Oh for crying out loud Colin, just sit her down and tell her she's boring'
Me Do you think that would work?
C No
Me Me neither
C Ha! I knew you wouldn't be able to help me with this one
Putting aside Colin's clear lack of confidence in my abilities (oh yeah of little faith), it's not uncommon for managers and leaders to decide that some performance problems are just too difficult to
address. These issues then get put in the 'too hard tray' and left, often to fester
Of course telling someone 'you're a boring teacher' or 'the pupils find you boring' won't work. Feedback on personality traits or characteristics is just too hard to understand and too hard to accept
So what do you do?
The first step is to articulate the behaviours - not your interpretation of the results of those behaviours (as Colin had). The question I asked Colin was: What are you seeing the teacher doing, or not doing that has led you to label her as 'boring'?
Here's some of what he came up with. She did not:
1. Make enough use of the available IT facilities - minimal use of the interactive whiteboard to show videos, on line resources etc
2. Use enough research / problem solving exercises
3. Explain the learning intention - what she expected the pupils to be able to do as a result of the lesson
4. Use enough group discussion techniques
How does this help?
By thinking 'behaviours' we can now move from the highly subjective and judgmental statement / thinking
'My staff member is boring'
To the much more objective and non judgmental statement / thinking
'My observation is that my staff member is not demonstrating the use of a number of tools and techniques designed to engage the pupils'
Which means we can move from feeling, as Colin did, that the situation was too difficult to address - who would be prepared to tell someone they were 'boring', or that 'clients find your presentations boring'? - to seeing that when we talk behaviourally no performance issue is 'out of bounds'.

And now I'd like to invite you to learn more about how to focus on behaviours by watching my free video 'How to prepare to give positive criticism' including: Exploring the difference between personality traits and behaviours - and why this is important, Understanding the difference between facts and assumptions, How to describe the criticism in clear, objective, non-judgmental language so that it is easy to understand and easy to accept.

Corporate Expansion and Raising Capital - How to Do Both Effectively

When a corporation grows stagnant and lacks growth and the financial reserves are drying up the company's C level executives need to give the three thousand foot analysis and look at all angles of the corporate entity as objectively as possible to find leaks and chinks. First let's look at the obvious and controllable, the board of directors and advisory board, if you don't have both then that could be part of your problem. The difference between the two is the board of directors is the most elite of the two. The board of directors are C level pedigree with an extensive track record of success and are typically compensated in restricted stock and some type of annual option and the advisory board is typically used for the occasional introduction, advice etc and is typically brought on for far less compensation without options.
The advisory board members are usually building their resume and hope to eventually make it to the board of directors. Both BOD and BOA must have extensive contacts and contribute those contacts in a way that is conducive to expedient materialization of strategic alliances, conversion of securities into cash, distribution sources and globalization/expansion strategies. A BOD typically meets around 5 times per year but is on call anytime you need them and the BOA may meet one time per year and should be eager to get a call from you so they can earn their keep. Use your BOD and BOA as much as possible to grow the company, if they are not living up to their contractual obligation, dump them and recruit a member that will give you the attention you deserve.
Next, brainstorm with company executives. Sit in a room and mind map every possible solution to increasing distribution, branding, publicity and alliance expansion. Take not of the executives who are not participating or have little to contribute as these are the people you want to replace as soon as possible. By the end of the meeting have a list of names, number and companies that you will be reaching out to as a group to solidify relationships that will result in a win/win for both sides. This should actually be done once per week even if your company is experiencing the required growth.
There are multiple other processes that should be built into your business model to grow but to get to the point the next and final issue that we'll cover in this article will be publicity. You should have a clear channel of targeted recipients for your press release distribution and a press release should be authored and distributed for anything and everything that your company does that would be considered noteworthy such as a new: client, contract, employee, location, alliance, affiliate, product, service, etc. You should also offer your opinion and expertise to local radio and television news affiliates. There is no better way to gain the status of an upper echelon existence than to be an panel expert on talk radio or TV interview.

A Career in Healthcare Management - How Much Do Medical Practice Managers Make?

You've heard that healthcare is one of the few job markets that is still growing in a down economy and you think you might like to be a medical office manager. The question is: how much do medical practice managers make?
The real answer to this question is "it depends." Two people in different parts of the United States could have the same job description and one could make $50,000 and another could make $100,00. Most experienced, capable medical practice managers make a good living somewhere in the middle.
What differentiates medical practice managers (and I use this term in a generic sense to cover the variety of titles used in the healthcare field) from other office managers is that they are expected to know something about almost everything. A typical day in the life of a medical manager might well include tasks in the areas of:
* human resources
* risk management
* coding and billing
* credentialing
* accounting
* information technology
* facilities management
* conflict resolution
* physician compensation plans
* marketing
* physician/provider recruiting
* and more!
The medical practice manager is often in the unique position of both answering to the owners (physicians) and managing them - a phenomenon not seen in other industries.
What a medical practice manager earns relates to:
* what the decision maker(s) believes the job is worth, or what they're willing to pay
* what a consultant or financial adviser has said the job is worth
* what other local practices are paying their managers
* what the previous manager made
Factors influencing the posted salary for a position are:
* the specialty or specialties (single-specialty vs multi-specialty and primary care vs. sub-specialty care)
* the number of physicians/providers
* the number of sites or ancillary services (imaging, physical therapy, medical spa, ambulatory surgery center)
* hospital-owned vs. non-hospital-owned
* if hospital-owned, how the position is graded, or where it fits in the management structure
* billing in-house or outsourced
* financial soundness of the entity
* the entity's competition in the community
* cost of living factor for region
Factors that might influence the salary ultimately offered YOU for a position are:
* Years of experience in healthcare management
* Years of experience managing the same or similar specialty
* Years of experience managing the same or similar # of physicians
* Stability of jobs over the past 10-15 years
* Special degrees: Master's, CPA, CPC, Compliance, RN, Lean, Black Belt (Six Sigma)
* Having installed an EMR (electronic medical record)
* References
Where does one look for specific information on what managers make?
The Bureau of Labor Statistics' (BLS) most recent information reports:
Median annual wages of wage and salary medical and health services managers were $80,240 in May 2008. The middle 50 percent earned between $62,170 and $104,120. The lowest 10 percent earned less than $48,300, and the highest 10 percent earned more than $137,800. Median annual wages in the industries employing the largest numbers of medical and health services managers in May 2008 were:
General medical and surgical hospitals $87,040
Outpatient care centers $74,130
Offices of physicians $74,060
Home health care services $71,450
Nursing care facilities $71,190
According to a 2009 survey by the Professional Association of Health Care Office Management (PAHCOM), the median salary for health administrators in small group practices is $56,000; for those in larger group practices with 7 or more physicians the median is $77,000.
The silver-back of healthcare salary surveys comes from the Medical Group Management Association (MGMA). The Management Compensation Survey is one of the "golden trio" of surveys that I've used throughout most of my professional life. The survey information is free if you are a MGMA member and participate in the survey yourself.
Many state MGMA groups also sponsor state salary surveys and sell them to non-members. In addition, some local manager groups do limited surveys and make the information available for a fee.

No BS Time Management For Entrepreneurs - Take No Prisoners Guide to Time Productivity and Sanity

Let me start by saying that I am fairly new to the entrepreneurial world and trying to learn things and apply them to my business. One of my greatest frustrations is when reading a book the author dances all around the topic but never seems to get to the heart of what the book is about. This is not the case with Dan Kennedy's writing! This book is a group of seven No B.S. books, this being the first one I read. I already have the next one sitting on my shelf and have plans to collect all seven. Now if you are a reader who is easily offended or enjoy the nice nice of other authors and don't want to really get into specific time solutions that perhaps you are making but enjoy doing with no intention of changing then this is not a book for you.
Kennedy explains how to turn time into money. He states that entrepreneurship is the conversions of your knowledge, talent, guts through investment of your time into money. He gets into specifics with how to do this some of his suggestions were completely new to me and made me think differently in how to handle the things I do for my business. One of his No B.S. time truths is, "If you don't know what your time is worth, you can't expect the world to know either." You are shown how to figure that out. There are things that if you come in contact with them they will suck your time right out of you. The obvious ones; TV, email, telephone. Interruptions destroy much productivity. You have the power to stop those interruptions, get lost, don't answer the phone, be busy and be obvious about it.
Punctuality is so important with time management. Be there when you promised no excuses, it provides you with personal power. It is a sign of integrity, if you can't be on time and keep to scheduled commitments how can you expect a client to trust you with more important elements of his business. Not being punctual shows a lack of respect for others' time, their opinions and way you will handle other type of agreements and contracts. Kennedy goes so far as to determine if he will do business with a person by their punctuality. This leads to your self discipline and the magic power it has to make you virtually unstoppable. Here are three things that can make sure of your rapid advancement in your business;
1. Show up
2. Show up on time
3. Show up on time, ready to work.
Kennedy also gives us 10 different time management techniques in chapter 6. I'm not going to go through them because of space constraints but this chapter is worth the cost of the book! For those of you who travel there is a chapter that deals with that and how to make the best use of your time while you are on the road. One of his best suggestions was to cluster meetings right there at the airport having the clients come to you.
How to handle the information avalanche. If you are going to be in business you need to have good reading skills being able to zero in on the things you need to read and putting the rest behind you. Here is a focus tip for you to use to see if you are reading the right type of material. What do you know this week that you didn't know last week about 1. Your business 2. Your industry as a whole 3. Your competitors 4 your customers or clients as a group 5. Your top 10, 20 or 30 customers or clients. Another great time truth is "If you don't manage information you can't profit from information."
Entitlement, there is none. Usually a person who is hung up on entitlement is so busy stating how unfair or wrong the system is that they are to busy to actually work. This is where Kennedy puts the rubber to the road and can offend the reader. I loved how he equaled entitlement to a dead end for your business. Get over it and get on with it. Finally we come to the resources which has the names and information about other successful people and how to contact them and Kennedy's time truths, which I love! So if you are ready to move forward I would recommend this book. It's full of workable ideas and suggestions that make sense and helps you to see that your time can be your money.

Learn How to Do Customer Segmentation in Four Simple Steps

How do you, as a business owner, determine which customers you spend the most time with, the most money with, and the most resources on? Do you have a plan or strategy for identifying your "high-value" customers, your "solid as a rock" customers, your "could be better" customers, and your "really there is nothing there" customers? Unfortunately, many companies and small businesses do not have such a segmentation plan. This results in undisciplined customer interaction and higher amounts of customer attrition and defection and overall customer disappointment. One critical way to reduce your customer attrition is to develop a customer segmentation plan. Customer segmentation is a relatively easy thing to accomplish. Companies need to do several things to do this, but once you begin this, you can complete this in short order.
Know the Margin
It is first important that you know who your customers are. You can easily do this by either printing out a list of your customers or entering into your customer relationship management (CRM) software system. Once you have done that, you should alphabetize them or number them from one to whatever number you have in terms of customers. Next, take a step back and ask yourself, "do you know how much money you make from each particular customer"? Again, more often than not, you will not know this at all. Unfortunately, many small businesses have not taken the time to understand customer profitability. However, take heart; companies can do this relatively simply using what is, effectively, a back of the envelope calculation. The back of the envelope calculation involves nothing more than looking at gross margin that you have for each customer. It should include overall gross margin on all of the products you sell to the customer. As an example, if you sell home insurance, life insurance, and disability insurance to a customer, you should include the gross margin of all three as opposed to the gross margin on just that one product. You should then think about taking your weighted average or blended average for all of the gross margins of the products you sell to a customer.
Know the Hassle Factor
Next rank order the gross margin on every customer against all others and identify your most profitable and your most unprofitable customers. Another, simpler, way to complete this customer profitability exercise is to take even one-step further back. This involves you simply ranking looking at each customer and putting them into one of four categories these categories would be "high", "medium", "low" and "shed". A good question to ask is, "how do you know which category in which to put this customer"? The answer is more of a gut feeling based on two or three factors. One of the factors could be a "hassle factor". If, for example, your customer always is complaining about your prices, your services, your service level, or your employees, they may be in the category of "shed" or "low value". After all, if they are generally unhappy, they probably make you unhappy, so why deal with them? Perhaps they are not the kind of customer you want to serve. Conversely, if your customer is consistently referring you to some of their friends and some of their customers, they might be in the "high" category. Two other categories that help you determine in which bucket each customer should fall would be the number of products they have with your company. Along with the gut feeling of the profitability for each customer, this back of the envelope method is a lot more art than science. However, for the purposes of understanding basic segmentation and from the "80/20 perspective" it will be more than effective.
Know the Plan
Then, once you have identified a profit factor on each customer, it is important to put him or her into his or her buckets again as was alluded to previously. You might decide to have a high value, a median value, low value, and a shed bucket. Alternatively, you might decide to use the high potential, growth potential, cash cow, or shooting star moniker. Whichever method or categories you decide to use, whether it is 3-4 categories or 14, it must make sense for your business. Generally, the recommendation is that there are no more than 3 to 5 separate categories to manage. Place all your customers into their respective categories. Finally, now that you have identified the segment to which they belong, it is now your responsibility to identify how often you contact them, how you will contact them, how much you will spend on them, the level of service your extend to them, and to what level you go about attempting to retain them.
Know the Impact
With this new discipline employed, you will now be able to understand how important each segment is to your bottom line. More than likely you will quickly understand that 20% of your customers generate 80% of your profits.
It is important to note that even though some of your customers may be unprofitable customers or even marginally profitable customers and a "pain in the neck", you should always treat them with respect. Never forget that they are still customers and they are giving you their greatest asset "their trust to serve them". If you decide, however, that you no longer want to serve them or that particular segment, there are some very politically sensitive ways to move them out of the relationship or move them into a higher category of profitability.
If you segment your customer base, you will do what few other small business and medium-sized businesses currently do today. This will result in you being able to spend more time with your better customers, add more value for all your customers, reduce your attrition and make more money for yourself and your company.