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November 3rd, 2015
You started a business and it’s beginning to take off. The business is your passion and you know the unique aspects that got it started. But all of a sudden there are more complexities and details demanding your attention. You are suddenly dealing with a whole range of issues ranging from future business strategies, how to finance growth, operational challenges, and marketing questions. Now the business is more complex and not as much fun as when you started because all these issues are tugging at you and without easy answers. Where do you turn to for help and answers?
What if you had someone with business experience to provide guidance and share ideas? That’s what coaches do. They guide you in the right direction to make the right decisions. Coaches provide a sounding board for ideas and help keep you on track. Not everyone can be a good business coach. There are free services available. But how focused are they on your business and do they have the experience and training needed to help manage and grow a business?
Here are some thoughts on what makes a good business coach. First, coaches need to be a trained evaluator of businesses. Their background and experience should be varied and not restricted to a single discipline. Good coaches will have been there and experienced the wide range of needs for businesses. They have to be able to provide expert assistance and in special situations know what resources are needed and how to find them.
Business coaches are trusted advisors with exposure to a variety of business disciplines such as sales and marketing, operations, organizational structure plus accounting and finance. In addition, it helps if they have had experience with different types and sizes of businesses. People with consulting experience who are skilled in assessing business operations and facilitating strategic planning are good fits to become business coaches. They are good at focusing on the key issues and problems which are key success factors in business.
The relationship between the coach and the business owner will become a close knit relationship combined with a sharing of thoughts and ideas to produce effective results. The coach becomes a sounding board for ideas and helps put the business owner in a position to solve problems and create success. Coaches also will need to tell business owners what they need to hear and not always what they want to hear. Effective coaches will provide an effective reality check to guide businesses in the right direction.
A good coaching relationship with business owners can prove to be a real difference maker. Coached businesses that properly plan will grow faster and achieve greater profitability. Finding and utilizing a good coach will pay off many times over and can become the difference between success and failure.
Based on these guidelines, go find a coach who fits and has the necessary skills. Having a coach to take you through the maze of possibilities will make a difference. Having the right coach will make an even bigger difference.
October 12th, 2015
Why did I select LivePlan as a cloud tool? As a virtual business coach and CFO, LivePlan enables me to help businesses establish the discipline of planning. This is not an easy concept to sell to small businesses. LivePlan makes planning easier because it creates a foundation to build on. You’re not starting from scratch. You have a proven road map to guide you along your route to your destination of 30 percent faster growth compared to businesses that don’t adhere to a plan.
LivePlan is very efficient because you can directly import data from cloud accounting systems. This makes the process flow easier. However, some clients don’t use cloud accounting systems. For these situations LivePlan provides the option of manually loading data. This becomes a way to take clients up to the cloud. Once they realize how easy it is to collaborate with a remote advisor, the coaching process becomes easier and more effective.
In addition to financial statements, LivePlan has great dashboards making it easy for people to understand actual results compared to the original plan and forecast. LivePlan also has the Pitch which gets the plan focused onto one page. Disciplined planning is how businesses learn to manage growth and achieve increased cash flow. I think the dashboards were really what sealed the deal for me. I had been looking for a tool that contained dashboard visuals because it makes communication with clients easier and more effective.
Having a focused planning tool that utilizes dashboard reporting is a lethal combination. There are numerous cloud based tools, but the planning capability and built in planning logic that are provided in LivePlan make it an essential tool for the virtual business coach and CFO.
September 29th, 2015
Having a coach gives small business owners a strategic advantage. They have a someone to help guide them in the right direction and make better decisions. Today’s virtual tools provide greater opportunities for collaboration for businesses to receive coaching and guidance support. Plus, they can get help on a real-time basis. Having an experienced business expert available with just a phone call or an e-mail produces better decisions, faster business growth, and greater profitability.
Northrupcpa goes well beyond accounting and CFO support. I was fortunate to be mentored and gain extensive general business experience gathered over the years. In addition, training enhanced and built on my experience enabling me to provide a wide range of services. Here’s a summary of some of the virtual business advisory services that are available:
- Cash Management and Planning
- Performance Measurement Analysis and Dashboard Support
- Strategic Planning
- Forecasting and Modeling
- Change Management
- Operations Management and Lean Workflow
- Risk Management
- Training (Financial Management and MBA Basics)
- Business Valuation
- Estate and Succession Planning
- Cost Accounting including Activity Based Analysis
- Lean Accounting
I developed a unique approach to help guide business owners using cloud technology that includes surveys, questionnaires, and virtual diagnostic interviews. This capability allows an assessment of businesses to accurately identify the issues and problems. This approach places a focus and attention on the high priority areas.
A career in industry combined with consulting and public accounting gave has given me exposure to the non-accounting areas of business adding to my understanding of the broader challenges facing small business. It pushed me to study non-accounting areas such as operations, marketing, strategy, and change management. In reality, it provided the perfect platform to teach other CPAs the essentials of business advisory service and CFO concepts.
Adapting business advisory coaching to the cloud allows any business to receive guidance. This represents a unique opportunity for CPAs to provide added value service and small businesses to grow and benefit from a new paradigm shift. Collaboration is the key to making business advisory support functional since it will be difficult for most CPAs to build the knowledge base required to adequately fulfill client needs. Sharing client services with skilled business advisors is a way for CPAs to broaden the services they make available to their clients and creates win-win situations. As small businesses become comfortable with cloud technology, they will start demanding a broader range of advisory services in addition to CFO support. CPAs are in a great position to take advantage of these opportunities by collaboration and using the cloud and the many tools it offers.
September 29th, 2015
Most small businesses start out utilizing their special knowledge and passion to get their business started. Financial expertise takes a back seat. They may enlist a CPA or a bookkeeper to assist with keeping track of taxes and the basic accounting. This might work for a while. As the business grows, challenges become more complex. Now the small business owner begins to struggle to find specialized knowledge and skills needed to keep things headed in the right direction.
Having a good CFO will ensure that the financial information is reliable and accurate. Selecting a CFO that is an accounting expert such as a Xero Certified Partner or a LivePlan Expert Advisor is critical when using a cloud based accounting system. Having an experienced executive to help make good decisions in a timely fashion is where a virtual CFO pays for themself.
CPAs typically are more comfortable providing accounting and tax support. They tend to avoid offering CFO and business advisory services. Lack of CFO experience and training is the primary reason for reluctance to offer these services. Hiring a full time CFO with the necessary experience is not affordable for small businesses as paying a 6 figure salary isn’t a viable option.
The cloud makes having a virtual CFO feasible and affordable. Communication and collaboration is possible since the virtual CFO and the small business have instant access to the data. This allows the virtual CFO to conduct the analysis necessary for offering meaningful guidance to the small business. By utilizing the capability of the cloud small businesses now can have a CFO on their team for a fraction of the cost of a full-time CFO. This is the future trend for small business (cloud-based virtual CFO).
The key to success for small businesses is to find a qualified CFO capable of operating using cloud technology and tools. A good CFO is hard to find. CPAs who want to provide CFO services will need to obtain the training to effectively guide and advise small businesses. Being a good CFO is more than just the ability to present some dashboards to clients. They need to capable of assisting in a variety of different areas. Asset management, strategic planning, operations and enterprise risk management are just few areas where knowledge and capability will be necessary.
I think the ability to assist small business owners build a good business plan and combined with rolling forecasts is critical. Businesses that plan ahead will grow up to a 30 percent faster rate than businesses that don’t plan. The future will be driven by cloud based tools and a virtual CFO skilled in these areas.
September 29th, 2015
The cloud utilizes the internet to host your accounting system. It is available to you and your advisers on a 24/7 basis. This means you can utilize a virtual CFO to help you out with just a phone call or an e-mail. Thanks to mobile devices and tablets, it allows one to work from anywhere. Traditionally small businesses utilize a computer system located in your office which means your CPA can only review hard copy reports or visit your office to help you with problems or fix errors.
Xero is an accounting system designed to work in the cloud and why I selected it as my cloud accounting system. It saves small businesses and accountants’ time spent on data entry. The cloud-based system enables secure online data such as automatic bank feeds and connections with other Xero users. Workflow is streamlined saving hours of manual work. Processes like bank reconciliations are simplified and can include credit card and PayPal transactions.
Cloud accounting provides real-time anywhere access to both small businesses and their advisers. Swapping desktop files is a thing of the past. Management of invoices is easy and allows for paperless transactions. Inventory items allow for the acceleration of invoicing as well as having the ability to tracking sales and purchases.
The flexibility of anywhere, anytime cloud accounting using real-time data represents a unique advantage for businesses to access virtual CFOs and the tools they need successfully grow and increase profitability. In addition, new cutting edge applications are being developed that provide small businesses with capability previously only available to larger businesses.
Finally, if your office computer system crashes and you didn’t have it backed up, you have a big problem. I was explaining this potential problem to one business owner and he instantly replied “that happened to us.” When you are using cloud accounting tools, your data is being constantly backed up. Losing key data is no longer an issued with the cloud.
It was an easy decision for me to switch to cloud accounting and become a Xero Certified Partner.
December 26th, 2013
Changing demographics created by baby boomers represent big opportunities for CPAs. There are 10,000 boomers hitting retirement age each day and they need help in a lot of areas. While financial planning is usually the focus, there is an abundance of practice development opportunities.
Here are some shocking statistics. Over 13% of the population in the United States will be 65 by 2020 and more than 16% will be in excess of 65. By 2030, most baby boomers will have hit their 65th birthday. This means that more than one in five Americans will be 65 or older and about 10 million of them will be over age 85.
Money tops the list of problems since boomers haven’t saved enough to retire and survive through their later years. They also aren’t prepared to deal with declining health. Plus, they may have to contend with elder care either for parents or themselves. Combine these challenges with social security, Medicare, Medicaid, and estate planning there are lots of possibilities for added value business. There are a lot more people with questions, no answers, and the need for guidance.
CPAs can help retirees and elders on a wide range of areas. Typically, seniors turn to attorney’s for guidance which makes sense in many areas. However, CPAs educated on the needs of baby boomers and elders can become valuable and needed advisors to a huge segment of the population.
The first step for CPAs is getting up to speed on the issues. The next step is letting people know how you can help them. In addition to CPE programs there are a lot of resources to gain knowledge about elder issues. A good place to start is by gaining expertise on social security, Medicare, and Medicaid.
One of the opportunities for CPAs to help baby boomers is with basic budgeting and cash management. Boomers try to do their own planning and budgeting when objective input from a CPA would be a better option. Most boomers haven’t planned very well. Many will need to, or want to, pursue a business. Helping these boomers get started on the right foot can translate into added value revenue.
A simple budget spread sheet can be a useful tool for CPAs to assist boomers create an understanding of their situation and develop a plan for the future. Consider all possible income streams such as social security, pensions, plus any other sources of revenue. Expenditures should include housing, travel, medical, automobile, and all living expenses that boomers will incur. Most boomers think expenditures will be reduced in retirement. This often is not the case. A good analysis can become the basis for projecting into the future and providing boomers with guidance on possible options.
The budgeting exercise helps provide an independent sense of reality on retirement finances. Most boomers have lived week to week and haven’t saved for retirement. Now they will need advice on how to make it through their aging years. CPAs are a logical source to provide much needed advice on how these seniors can manage their future.
Having additional knowledge to help seniors gives CPAs an edge in developing an elder practice. Here are some thoughts on how to gain the needed knowledge and information. Take CPE on estate planning tools. This will give you a foundation on the basics of wills, trusts, and powers of attorney. You can use these tools to help these seniors manage their affairs. You need to have signed powers of attorney for business and medical reasons in case these people can’t manage their own affairs. If you are advising boomers on carrying for elder parents, having these documents in place is essential and critical.
Most boomers don’t think about elder care and what it entails. CPAs who understand the complexities of assisted living facilities and nursing homes can provide much needed support to seniors. Take the time to learn about assisted living facilities, nursing homes, and other senior housing possibilities. I learned about these issues because of the need to deal with aging parents and in-laws. Usually these areas aren’t addressed in depth until it becomes a necessity.
Many boomers who are suddenly faced with caring for aging parents have lots of questions and need assistance. CPAs can provide useful guidance by being knowledgeable on the various facets of senior housing and care. There are a variety of options for seniors, including ways to keep them in their home as long as possible. By understanding the array of possibilities will put you in position to offer solid guidance.
Most of the questions raised by boomers will be directed to assisted living facilities and nursing homes. I think the best way to gain knowledge about them is to visit and take a tour. These organizations will inform you on their billing structure and other financial information. During your tour make an effort to observe the quality of the staff, the rooms, and the food. Another consideration is the capability of the medical staff. Finally, take note of the variety of activities and transportation options available to residents.
When visiting nursing homes it is essential to realize that they provide skilled care which is a big difference from assisted living facilities. Also, determine if they accepts Medicaid since not all of them provide this option. This can become a big issue when elders run out of money and need to be moved. Most assisted living facilities have special areas to care for dementia and Alzheimer residents called memory care units allowing residents to stay until the end.
Gaining knowledge of senior housing facilities can also become a great networking and marketing opportunity as these organizations are happy to know of available resources for their residents. CPAs who understand elder care and associated issues represent a valuable and needed resource.
CPAs who understand the shifting demographics can position themselves to provide significant added value assistance to a segment of the population that needs all the help it can get. While it will take some time to gain the necessary knowledge and market it, I encourage CPAs to step up and fill the need. Seniors need your help.
September 20th, 2013
The Affordable Care Act more commonly called Obama care has some changes kicking effective October 1st that impact both individuals and businesses.
If you have health insurance through an employer the changes will most likely not have any impact on you. However, if you do not have health insurance through an employer, you should check the new government website www.healthcare.gov to determine if one of the insurance exchanges will benefit you.
If you are a business owner, Obama care requires that you provide notice to your existing employees about the health insurance changes that become effective by October 1st. This applies to all future employees upon their employment. The law will apply to your business if you have at least one employee and at least $500,000 in annual revenue. You will be required to provide the notice to all employees.
Here is a model notice for employers who offer a health plan to some or all employees:
Here is a model notice for employers who do not offer a health plan:
Here is the Department of Labor website link if you need more information:
For individuals, it is important not to miss the open enrollment dates from October 15th to December 7th. I wanted you to be aware of these deadlines and will post more information next week.
September 12th, 2013
Boomers are struggling to save for retirement. This is one of the reasons for writing Navigating Retirement and the Challenges of Aging. Here are some facts revealing the hole they have dug. Only 43% of workers between the ages of 45 and 54 have saved more than $50,000. On top of that only 42% over age 55 have accumulated savings greater than $100,000. This means that normal retirement will never be normal. This is the first risk.
The second risk is health. Boomers don’t think they will ever get sick or that their health will deteriorate. Reality tells us that bad things can happen to your health as you age. Combine potential health issues with the lack of saving on top of rising health care costs and you guess it. A disaster!
My book doesn’t have all the answers but it does offer lots of help for Boomers as they face the future. One additional bit of information that emerged from my work is that 15% of retiring Boomers want to start a business of some kind. They know they need to do something because they are facing a new type of life which will take more money than they have saved.
In reality, health is the more important issue because without it, money doesn’t matter. Furthermore, if you don’t have your health it will be tough to work part time or run a business. My message is begin focusing on both health and money. Combine risk management with solid planning and do it as soon as possible and on a regular basis.
The combination of effective planning and monitoring risk is an essential step for entering this new phase of life. I am in the process of providing numerous resource links and advice on how to best accomplish these tasks on my web site.
September 10th, 2013
Before you can develop a meaningful plan for elder care you need to carefully assess each situation. The assessment should begin with opening up the lines of communication with your elders. They may not want to talk about it, but it is essential. Without effective and honest communication there can be no assessment and no plan. Family dynamics are frequently difficult at best. The best approach is to listen carefully to your elder’s thoughts and ideas and with no preconceived notions or ideas. Start with a clean canvas and attempt to come up with viable and workable solutions that best fits their situation. In addition to your elders, the lines of communication need to include other family members because they need to be on board and in agreement with the planning process.
When dealing with older people try and maximize their ability to make choices for as long as possible. This gets to be a fine line and you’ll have to tread carefully. My experience is that you will clearly know when it is time to take over certain responsibilities. Before you can really start to develop an effective plan, you need to make an assessment of your elder’s situation which should include health, money, housing, transportation, and their social network. Your planning should be focused on minimizing crisis situations and reducing confusion. Good planning helps to avoid these situations.
Your initial assessment should include gathering essential information on the support network used by your elder. The list should include the names and phone numbers of the key services and support system that will be needed and utilized. Some things that should be considered include doctors, pharmacy and medications, insurance agent, bank information and contacts, repair services, friends and neighbors, and any one that will be interacting with your elder.
Each person’s situation is unique. I think the planning process needs to start with health and an elder’s ability to take care of their day to day living needs and hygiene in a safe manner. You will want to talk with your elder’s doctor, any therapists, and even their neighbors. This may seem like spying but getting objective input from people who have observed your elder is critical. Knowing and understanding a person’s ability to drive, cook, and maintain living quarters is a must in making an assessment and developing a meaningful plan for them.
The next step after gathering this first set of information is to evaluate housing. Look at the exterior and interior lighting, the existence of stairs and determine if they are safe. Also, check the location of the home relative to shopping or medical services. Is the house in poor repair, cluttered or untidy? Does the home have wheelchair accessibility? Your goal is to evaluate whether or not your elder is truly capable of living in the home that is safe and in maintaining their own individual safety.
This is an excerpt from my book, Navigating Retirement and the Challenges of Aging which covers a complete range of issues facing our aging population. The key is effective planning for elder care and the retirement phase of life.
September 9th, 2013
There are five key areas that you need to focus on as you plan for your retirement stage of life. A good job of planning in these areas will help assure that your transition to post working life will be easier.
- Personal Savings
It is essential to know the amount of your personal savings as you approach retirement. You also should have a program to maximize the amount of savings as every dollar saved helps.
- Retirement Savings Plans
Regular employer pension plans are a thing of the past. You should have a 401(k) plan where employers will help contribute to the plan in addition to your contributions. These are tax sheltered programs so please take advantage of them.
- Real Estate
Your home isn’t the saving vehicle it used to be. Understand your home value and the amount of mortgage debt against it. If you need to tap into your home equity, do so with great caution. You might want to explore the possibility of securing the equity in your home and downsizing to a less expensive dwelling. Remember, you may not be able to convert your home equity into cash as quickly if you should need it. Also, remember that real estate values can drop rather quickly, so be careful.
- Social Security
In the old days Social Security was the main stay for retired people who were no longer able to work. In fact, even today it represents the only source of income for some people. The best advice is to maximize your monthly benefit by delaying Social Security as long as possible. By continuing to work, you may be able to postpone receiving your Social Security benefits after your normal retirement up to age 70 when further delays will have no benefit.
Working past your normal retirement age represents reality for many people. It is essential to realize that age is only an attitude and that you have accumulated a great deal of knowledge which has value. The key is to understand what you want to do, where you want to do it, and develop a plan to utilize your knowledge base. There are a number of options ranging from starting a business to working part time. It all depends on your individual situation.
This fifth key is one of the critical cornerstones of planning for your retirement years. The sooner you start the planning process, the better. In fact, you should include all five of the key steps in your planning and leave no stones unturned.