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FINANCE
Forecasting Can Direct Your Actions and Impress Lenders
Financial forecasting is one of the greatest challenges confronting a small business owner. But the process is important because it allows you to use the lens of experience to peer into the future.

Nevertheless, financial forecasts are frustrating because they require time to establish expectations that are almost never achieved as planned. What forecasting does do is provide a guide to conditions that could exist for your business; basing your actions on this guide is the reason we forecast, and it's crucial to your desired results.

Monitoring performance

A financial forecast enables you to monitor performance. And this is key: spotting a gap between forecasted figures and desired outcomes allows you to get ahead of problems before they become enormous disruptions. Acting on this (by making changes in spending, focusing on the most profitable sales opportunities, or developing a new marketing strategy) will put you back on track.

Your company will not always grow at the same rate as in the past. Based on your financial forecast, you may expect to grow at a faster pace - cash flow can change as a result of a growing or changing customer base, and new circumstances can trigger a need for capital.

Experience and practice help. As you learn to connect your projected numbers with factual data, you'll become better at forecasting. And when your forecasts reflect the facts, you'll feel more comfortable approaching potential lenders; your financial forecast will provide a believable foundation to support your loan request. Desired result: loan approved!

 
PRODUCTIVITY
It May Be "Borrrring," but if It Boosts Creativity, Bring It On
 
Cat Yawning
For the chronically bored among us, here's a news flash: we actually need (to a certain extent) that state of ennui. In fact, it's good for us. Perhaps, like banging our heads against a wall, it feels good when we stop. It seems, after time spent being bored, we're psyched to come up with creative ideas.

This is great news for employers, who sometimes find their employees (or themselves) procrastinate when asked to perform tedious but important tasks. Now science sees boredom as a phase that ushers us into a state of creativity, according to a recent article in Wired online.

As Wired writer Clive Thompson notes, separate experiments by researchers at the University of Central Lancashire and Pennsylvania State University suggest that boredom can actually be leveraged to enhance creativity and abstract thinking.

After engaging in a series of dull, mundane tasks, participants in both studies saw improvement in their creative output. In one, bored subjects came up with more and better ideas than a control group. The explanation may be that their minds were actually primed for the curiosity and creativity that comes after boredom.

These days we often escape boredom by turning to our devices. We seem frightened of being bored. Instead of seeking to escape through our phones and other diversions and activities, we should, as Thompson says, "lean into it," and consciously experience the journey through boredom to curiosity, and ultimately, to creativity.

We need periods of ennui to come up with the creative ideas that employees welcome and employers value. But not the kind of boredom that disincentivizes us (lethargic boredom). Instead, call it "useful boredom" - acknowledged as valuable in its own right.

 
HOT BIZ TRENDS
Have You Considered Every Option to Grow Your Business?
Growing biz
You're an entrepreneur with ambition, and the next step in your upward trajectory is deciding how to grow your small or medium-sized business.

One option you may not have considered is franchising. Does your product or service lend itself to this kind of business model?

If so, here are some things to consider when thinking through the franchise option.

Isaac Singer (of Singer sewing machines fame) became the first franchisor in 1851 when he contracted with other entrepreneurs to sell his products in different locations, ensuring a broader customer base for his sewing machines.

The franchise sector grew dramatically in the 1950s, when restaurants began to expand through franchises.

This year the International Franchise Association expects a 5.2% increase in the franchise industry's gross domestic product, to a total of $426 billion.

Annual job growth in the sector has also been higher than that of other business categories for the past five years.

As a franchisor, you will be the parent company, and other entrepreneurs will purchase the right to operate a separate location of your business.

The contract between the franchisor and the franchisee defines the rules under which the new location will operate, but among other things, the franchisor will dictate quality control and management philosophy to ensure the new location maintains the same standards as the parent company.

Finally, realize that you're putting on the line the "goodwill" you've built up over the years, and make certain that you and your franchisees are on the same page.

 
FINANCE
How to Best Use Your Value-Added Accountant
 
Small business owners often view accounting services as only delivering the necessary output for tax reporting. And, yes, financial professionals do fully understand balanced bookkeeping with accurate categorization of transactions, plus the forms for various taxes. However, your accountant isn't just about your taxes; accountants are also capable of providing analyses that can strengthen small businesses and help them grow.

Consequently, tax season should not be the only reason for meeting with your accountant. Savvy small business owners arrange to meet frequently with the professionals who most understand their financial situation, as they have the tools to help owners build their companies.

New insights

Accounting professionals can use your financial data to give you insight into business trends and help you weigh risks against potential rewards. This kind of financial management service can provide solutions to support sustainability and growth of your small business.

Those savvy individuals who avail themselves of these services recognize that different phases of their business demand different skill sets. Taking a concept from development to a full operation is not the same as overseeing an evolving organization. To thrive in business, you need to understand the financial measures that promote success. And your accountant can help you.

Executives at large enterprises have at their disposal an extensive network of internal financial professionals to help them navigate their operations. As a small business owner, you have access to the same expertise through your accountant. Relying on him or her for financial mentoring will increase your knowledge and improve your decisions.

Understanding industry standards

Your accountant can explain the business facts represented by your numbers. Ask first for a comprehensive general overview of key financial elements for your industry. Find out how your business compares in the basic measures of financial soundness. Inquire about trends in your financial measurements. Keep asking until you understand the actions that deliver good results versus those that contribute to declining performance.

Strategic planning

Your accountant doesn't live in the past; he or she can see where your business is headed and what's required to reach specific targets. Consider your accountant a consultant who can identify likely future scenarios, explain new initiatives you could implement to attain improved results, and quantify the costs. He or she will ask you to consider factors you may be overlooking. From these, you can project cash flow to help in plotting an achievable course of action.

Planning for financial security

Your accountant can also help you plan for long-term financial security. Some of the cash your business generates exceeds what's needed to sustain operations and provide for your own compensation. Saving techniques suggested by your accountant may ultimately enable you to fund a business expansion, save for retirement, or transition to a different business model. Best of all, they may also deliver tax benefits now.

Your trusted accountant provides solid guidance that's crucial for the inevitable but uncertain changes every business owner faces. Make good use of him or her.
 
 
 
 
 
Company
 
How to Win Big in Today's Economy
The altered economic landscape presents innovative and nimble businesses with opportunities to thrive.
Find out how by requesting my free report "How to Win Big in Today's Economy" by replying to this email."
Just reply to this email and I'll send it right out to you.
 

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Worth Reading
If You're Too Busy for These 5 Things...
By Benjamin P. Hardy
 
Medium.com
 
You may not notice that most flights are off course 90% of the time, says Hardy. But with course corrections along the way, the pilot still lands the plane on time at its intended destination. The trick is to make corrections immediately - and so it is with life. Address these five key lifestyle areas to keep on course and in control.

Let's Stop Calling Them "Soft Skills"...
By Seth Godin


Itsyourturnblog.com

In baseball, it doesn't much matter if you're a nice guy as long as your stats are good. Business is more complex. Employees can't be rated like ballplayers, and yet staff is hired according to a linear scale that measures vocational skills and ignores the rest. Big mistake! Vocational skills are teachable; soft skills are the real skills driving corporate home runs.

Complete Beginner's Guide to Blockchain
By Bernard Marr


Forbes.com

This isn't a Dummies Guide to Blockchains. It's for the computer-familiar. A blockchain is new tech that safeguards data and seems to be transforming business one block at a time. It protects a list of records, called blocks, by separating them so they're not connected to a common processor. Blocks are time-stamped, linked and encrypted, making information secure and retrievable only with a key to the blocks you "own."

LINKS YOU CAN USE
This Month: Spurring your creativity
The idea is in there somewhere. How do you unleash it? The following links will help you achieve a greater level of ingenuity in the workplace and at home:

Feeling "blocked" is a common issue. How do you get unstuck? Here are a few simple tips to help you get the creative juices flowing:
10 Effective Tips for Spurring Creativity

What methods have creative geniuses of the past used for inspiration? Try Picasso's practices:
3 Secrets of Radical Creativity

Having more "aha" moments may not seem easy. But it is. Learn the four crucial steps that lead to those great aha moments here:
4 Steps to Having More "Aha" Moments

Do you want to increase creativity among your employees? Here are some helpful techniques:
The One Thing That’s Blocking Your Creativity

Just how do other people get new ideas? Discover the answer from Isaac Asimov:
Isaac Asimov Asks, “How Do People Get New Ideas?”
This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.
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