As I have been sharing my online system for productivity, the hub for a lot of what you do online is available on your smartphone.  Tools like Evernote, your online calendars, e-mail etc.  all have apps made for smartphone access.  This is all great stuff.

The key to any effective system for productivity is to have a centralized hub to keep things efficient and easy to manage.  Smartphones certainly make this possibly.

Another advantage to a smartphone is the ability to utilize social media.  Unless your business is social media, you are probably struggling with the balance of when to use social media platforms and how often to use them.  You’re a busy person.  Busy people have to be careful with how they use their time.  Your phone can be a great tool for being social while you are killing time.

I was recently getting my car serviced at the dealership and as I waited an hour longer than I was told I would need to (which is how my particular dealership insists on doing business), I used the time to engage with people on social media.  It was great to build some connections and interact with great people sharing great content.

Remember when I said smartphones were dangerous?

Well they are if you don’t use your power for good.  Despite all the convenience of the hub that a smartphone can be, it’s also the very thing that kills your productivity in the following ways:

• As a tool for interruption.  Trust me, you don’t need to look at it every 30 seconds.
• As a tool that prevents you from being present in the moment.  Are you hanging with your kids and your phone?  If you are stop it right now.
• Keeps us engaged in busy work.  Our e-mail inbox is not nearly as important as we think it is.  Neither is Twitter or Facebook.

For all the good that smartphones can do for our business productivity, it can also be bad.  Be smart with your smartphone and enjoy better productivity habits.

Image used courtesy of GlennPeb at http://www.sxc.hu

For all my talk previously about systems and processes, they are worthless if you don’t have the right people to run them.  Personnel is a tough area for small business owners due to a lack of experience in the personnel development process.  There are 5 mistakes that small business owners make with regards to personnel.

Mistake #1: Not defining roles for the partners in the business.

This applies even to the individual business owner.  It’s important to decide what roles that you will play in your organization both short term and long term.  It’s especially important with regards to partnerships.  I have personally seen the damage that is done in business when roles aren’t clearly defined for all of the players.  The Coaching Millions blog recently went over some solid guidelines for effective partnerships.  If you are in a partnership currently or are thinking about, define the roles of the partnerships as soon as possible.

Mistake #2:  Poor or nonexistent hiring practices.

When you are building systems and processes for your business don’t overlook the personnel aspect of the business.  Once you define what personnel you will need, it’s time to figure out how you will do it.  This includes having sound interviewing practices, doing background checks, reference checks, how to turn down candidates, where you go to find talent, job descriptions, offer letters etc.  A lot of small businesses try and wing this and look to hire people when a pressing need arises without little thought of the long term needs of the business.  Having the right practices will help to ensure that you get the right people and that you follow the correct labor practices when doing so.

Mistake #3:  Not knowing what you want or what you need.

As your business grows, you will need new people to keep your business  moving in the right direction.  One of the first mistakes that is made is not having a game plan for what position you want to hire for first once your business starts growing.  Beyond that, once the position is decided upon, chances are you haven’t really thought about what characteristics and attributes you want a successful hire to have in the position so you word your job description with generic and overused terminology that suggests that you aren’t sure what you want.

I’ll give you an example of this from Craig’s List:

I am a busy executive looking to hire, train and mentor an individual to learn my business. The person will be:
-Professional in appearance and demeanor
-A Highly motivated, teachable self-starter
-Be overly ambitious
-Possess the highest level of moral integrity
-Be looking for a long-term career,
-Have a highly flexible schedule
I am a demanding, aggressive senior executive who pushes people to their limits, but with that comes great
rewards. I will only personally train one person, so I am highly selective. I will teach you how to grow a successful
business with a high value residual income.

This above job description doesn’t even say what the job is. You can’t be this careless with your job description and expect to get the right people for your job in an efficient manner.  Someone whose worth hiring would look at the above job description and pass immediately.  It’s important to make sure that you figure out who you need first and what an ideal candidate will look like.

Mistake #4: Using faulty logic when hiring or promoting in your business.

In college I was involved in a fraternity. My favorite reasoning in the fraternity came when it was time to elect new officers to positions for the next year. For instance, we elected a guy for activities chair even though he never came to any activities. The logic? If we put him in charge of activities, he will come to them. The result? Not only did our activities suck but he never came to them either.

Another example is for our historian who takes pictures etc. We had a guy in our group who wanted the position and was an avid photographer. Who did we elect? A guy who didn’t even own a camera. The logic? We wanted to get him more involved. The result? That year may as well have never happened because there is no record of it anywhere.

I thought that my fraternity was uniquely stupid in this area until I got into the workforce and saw that places of business hired sometimes for terrible reasons as well. With small businesses it’s usually happens when they hire family members because of family pressure. The logic? Your brother just hasn’t done anything because he hasn’t been given the chance. The result? You find out right away why he hasn’t been given a chance because he is an idiot.

Sometimes we put good performers in other positions to make them more “well rounded” and then watch as we kill their career by putting them in a position that doesn’t match their skills. Kolbe has a C index that they use to match what you want from a position to what the skills of the candidate are. It’s a great tool to see how someone’s skills really match with what they are going to be required to do.   In your different roles you want to put them in a position to do what they do best and grow, you don’t want to stifle them by trying to help them be more well rounded.

Mistake #5:  No training program.

Small business owners seem to really learn this the hard way.  Initially a business owner is doing the majority if not all of the tasks in his business.  This is a great time to start putting best practices down on paper so that you can more easily train your replacement in this area.  Not giving an outline to an employee isn’t necessarily the key to them performing but it’s good to let employees know that you support them.  Having a training program is a good way to help them feel supported.  At the very least, it tells the employee you have thought through their development in the position.

Those are my top 5 personnel mistakes.  The great thing  is that these can all be easily fixed within your organization.  Some areas such as interviewing may take some time to get properly educated but shouldn’t be anything too extensive.  If the hiring process in your organization has holes, now is a great time to start patching them.

What personnel mistakes make your top 5?

I hate to use the analogy of a house because it is overused but I can’t think of a better one so I am apologizing in advance.  When you are building a house, you don’t decide to make the foundation for the home out of wood with the intent of  going back later and making the foundation out of concrete when you feel it is necessary.  This is the same issue that business owners have with their business.  They want to build a foundation for their business after the rest of the business is already built.  The problem is that there is already a house built on the loose foundation that you have and going back to fortify it will be tricky.

To explain some of the hows and whys of putting together systems and processes for your small business I turn to the Process Ninja who was recently on BNET talking about why processes are important and a few things to consider when creating them.

The reality is that all small businesses need systems and processes and The Process Ninja, Craig Reid gives 3 important things to consider when you are putting them in place for your business.

1. Keep the customer experience in mind.  This is obviously an important point but when you are creating systems and processes for your business, it’s easy to forget about the customer and to place your focus squarely on you and your business.  So as you are creating your business structure make sure that all roads lead to creating the very best customer experience possible.
2. Think about the break points.  All systems and processes have areas where human interaction is required to help the process along.  Make sure that you consider all of the areas where the system can break down and try to automate as much of this process as you can.  If you can’t eliminate them, at least make sure that you are managing these areas.
3. The business rules.  This is any part of the business process where decisions are made.  It’s important to make sure that business doesn’t slow down during these decision processes.

Another important point to consider with systems is to make sure that your systems and processes happen sooner than later and that they reflect your business with regards to how it will look in the future.   The other thing about systems and processes is that you can be creative with some of the tools that you use to get your team engaged.   In Chip and Dan Heath’s column in Fast Company (December ’09) they talk about how BearingPoint improved their ethics and compliance training through a little creativity.  This new process set the stage for employees to be more engaged in the compliance process and were more apt to discuss gray areas of the business.

When it comes to systems and processes, the key is to start working on them now don’t wait until your company is established to do this.  It’s hard to break habits and put constraints on areas of your business that were previously unconstrained.  Systems and processes also allow you to create a better experience for your clients as well as for the team who work for your company.

What are your thoughts on systems and processes?  Why do you think that small businesses don’t engage in putting them together?

How often do we hear the story of the rugged individualist business owner who defies all odds and works 20 hour days just to realize his/her dream of small business success.  We have heard these stories a lot and the one thing we don’t hear about is how these same business owners are still putting in 20 hour days five years later.  In the end their businesses shut down because the owners can’t sustain that level of work indefinitely and they burn out.

What can we do to make sure that this doesn’t happen to our business?  The first thing that the E-Myth suggests is to look at the franchise model for doing business.  The “poster child” for franchises that was named in the book was McDonald’s.  The funny thing about McDonald’s is that for all the criticism about the fast food industry, you don’t hear enough about what McDonald’s does right when it comes to delivering a consistent customer experience that is second to none in their particular industry.  At McDonald’s nothing is left to chance, everything is done the McDonald’s way.

For your business, it’s about creating the systems and processes that allow you to own a business rather than behaving like the business owner who works 20 hours a day and in reality just owns a job.  The first thing that will be helpful in creating your systems is to do some research on the franchise concept and the different models that exist for franchising.  All Business has a franchise blog that you can look at to get started.  This doesn’t mean that you have to franchise your business but this kind of information is helpful to show how the best franchises create uniformity in operations all over the country and in some cases the world.  Anyone who has worked for a small firm can attest to the fact that getting people to act uniform in one office of 10-15 people is hard enough, let alone getting several offices in different parts of a country to do it.

The second thing that you can do right now to get your systems and processes in place for your small business is to go back and look at the vision that you have for your small business.  How big do you want to be?  What markets do you want to serve?  How many employees etc? What roles do these employees fill?  Take a look at your vision and then look at how you can build your business today so that it looks like your vision for your company 20 years from now.

Building your vision today is important.  One of the common mistakes that small business owners make when they do create systems and processes is that they create the systems and processes around their business as it exists today rather than how they want it to look in the future.  The problem with this is that as soon as they start growing, they need new systems and processes.  When that happens, typically the systems and processes don’t get created because the small business is growing and the business owner can’t find the time to get it done.  The fact that the business owner had systems and processes done once was pretty amazing.  Asking them to do it again is darn near impossible.  Ultimately, growth for the business without the systems to sustain the growth, causes the business to fail.

If you haven’t read the book E-Myth, make sure you take some time to read it.  It will give you some good insight on why systems and processes are important and how to go about putting them together.  For now, think about your business and think about how you can automate more of the work that you do and look at where systems and processes would be an improvement to your life as well as your client experience.

What has been your experience with systems and processes for your business?  Any suggestions for readers on good sources of franchise advice?

Assessing your business runs inline with what a talked about last week with regards to your values.  Assessing your values but then you need to ask other questions before you make changes.  Do I have the team in place to implement?  If not, do I know where I can get the team?  How do my systems look?  Are we ready to move forward with what we have?  What changes need to be made?  These are just a few of the questions that you need to ask yourself to be able to judge where you are at with an idea and how quickly it can be taken to market.

With education, it’s all about better understanding of your business every day.  This post sums up the attitude that you need to have to compete in today’s marketplace.  The article is about understanding other areas of your business that are not your expertise because so many avenues work together these days to make a cohesive strategy.  You must have a working knowledge of all the parts of your business.  Have you ever had a boss or manager that you tried to explain the importance of something to but they didn’t have the knowledge of the area you were talking about so they thought it had no value?  Then finally they do get educated and want to move forward but it’s too late?  Don’t  be that leader.  Educating yourself will help to ensure that you are not that leader.  This will help you understand what moves need to be made as a leader in your organization.

As far as assessments go, you can go too far with assessing.  Don’t over assess.  Inaction is just as crippling to an organization as hasty action. Don’t take education too far either.  Functional knowledge is all you need.  Leave the expertise to those that have passion for it.  Don’t mistake knowledge for having to be an expert.

How have you been able to make good decisions with assessment and education?

A great example of ignoring values is when I started working for a consumer finance company in the late 90′s.  Our job was to sell loans yet we had many tasks that required a lot of time such as collections, drawing up paperwork, customer service etc.  Over time the company began to realize that it was killing our productivity and that we could sell more loans if we just focused on selling.  The company began to central collections, documentation etc.  I am sure you can guess that the growth that we experienced as a sales team was exponential when we didn’t have to worry about the other tasks.

When you are considering a new product, service or system for your business be clear about what it is that your business wants and how it fits in your current model.  Maybe you want to use something new to change the direction of your company.  That’s OK too.  Just make sure that the change isn’t an unexpected by product and that it was intentional.  Putting a system in place to consider your values when making decisions will help to insure that outcomes are intentional.

A structure for how you consider your values will be up to you and will most likely be unique to your business.  The goal being that your values are so ingrained that is comes as natural as breathing.  The key is getting to that point.  Core values are the veins that run through your organization,  if you choke on of them off a piece of your company begins to die.  Once you do you make better decisions that positively affect your companies’ growth and profitability.  How can you better ingrain your values into your company?  How have you been able to use values to make better decisions?

The first place to start is with your best customers.  These are the 20% of your customer base that generate 80% of your companies’ revenue.  These people will let you know in a hurry what they think and will be enthusiastic to be part of the process.  To thank your clients for their input, give them access to something they wouldn’t normally have or some other kind of valuable giveaway.

If your company is brand new, hopefully you have spent some time building a list to market to people who have opted into hearing about your product and services.  This will be a great tool for establishing great relationships with your customers as well as establish who your best customers are.

Asking your current client base about new products is a great way to save money on a product idea and also connect with your clients on a different level as well.  What has been your experience with new product launches?  How have you been able to engage clients in the process?

Online channels save new product producers thousands of dollars every year because they are able to test their products much cheaper than ever before.  The ability to create products that can be distributed electronically is another avenue that is extremely cost effective for obvious reasons.  Testing your product and delivering it is easier then ever before.

Setting up a landing page for your product is a great first step for your marketing efforts.  You can get a landing page set up for $50.  You can have a copywriter write sales copy for your page for around $100.   I would caution on skimping on this part however.  A well written landing page can be the difference between converting well and failing.  You need to set up a shopping cart to take payments and also a merchant account. Make sure you are also using analytics to measure your campaign’s effectiveness.

Once you have started the initial campaign and have started setting up, it’s important to look at other factors.  How many separate pages should I set up?  This can be based on price, product details etc.  It’s important to test certain variation of your offer to see what people respond to best. Set different price points.  Change certain details of your products including length, cover, medium of delivery etc.  The number of offers on your page is important as well.

You can also set up your landing pages to gear towards certain psychographics as well.  If you want information on pyschographics and how they can be used in today’s marketing, read the book Waiting For Your Cat to Bark? by Bryan and Jeffrey Eisenberg. They talk about using personas from the Myers Briggs Type Personality test and driving sales based on what personas would likely do.  The Eisenberg’s also wrote a book called Always Be Testing that is a good book for would be marketers.

PPC (Pay-Per-Click) is another avenue to help with your product testing.  You can use certain keywords to see what words drive people to your page and see how well they convert (buy) when they get there.  You can set a monthly budget for this as well so it doesn’t get out of hand. SEO (Search Engine Optimization) is a great tool to see what key words you can use for your marketing using keywords as well.  A well planned campaign will set up the right headlines and meta tags and also find out which words are out there that you can dominate in the search engines.

Online products and product testing are the fastest ways to build a product and then see how viable it is in the marketplace without spending thousands and thousands to do it.  No more inventory in you garage.  No more giving away failed product to family members for Christmas.  The main thing is to make sure you test your product.  There’s no reason why you shouldn’t be doing it at this point.  Help is available if need be so if you are unsure how to handle certain parts of your campaign, find someone who can fill in the holes.

What online tools or system have you used to market and test your product online?  What’s been your experience doing this?

A great example of the excitement an entrepreneur gets when we think we have a product/service that people want to buy was recently posted on Entrepreneur.com.   The advice in the article is a great first step to a product launch.  It talks about identifying your customer and gathering data through various forms of surveys.

For me, I like to take it a step further a really find out what a customer would really do.  There are 2 ways that you do this.

The first is for people who have a product that they need to manufacture.  In this case it’s a good idea to have a prototype made of the product so that you can show it around.  Make sure you protect your IP during this process.  Once you have gathered information through surveys with some success, the next thing to do from there is to presell the item.  People saying they would buy your product and actually buying are two different things.  Your idea may be good but is it good enough for me to part with hard earned cash is the real question.  For preselling, figure out how long it will take to have the product made and shipped and then let your customers know that the product will be delivered at such and such time in the future.

In the end if the reponse is poor you can decide not to launch the product and refund your customer’s money.  This set up is OK provided that you don’t spend the money!  Make sure that you save all proceeds until you know that you will move forward with the product.  I will talk about the second way to go out and really test your product in the market in my next post.  Until then, do you have a story to share about launching a product?  How were you successful?  How was it tough?

In the article “6 Ways to Get Fast Feedback” on 1000ventures.com, they give some great tips on getting started with market testing.  Initially you will want to set some pricing parameters for your product.  If it’s a physical product that you are manufacturing, you can just go off a certain percentage mark-up above cost.  Industry analysis will help with this decision.  If it’s an information product, the great thing is you can test different price points as well.  Just be prepared to tell people a price when you approach them.

Once you have done some analysis of the market and have established some pricing parameters, start approaching would be buyers about the product and get their feedback.  As the article above states, you can do this at trade shows, approach people you know who maybe interested and go to places where your target customer is going to be.  Another great resource is to do surveys to get some initial feedback.  I will caution that verbal feedback is one thing.  People actually buying the product is another.

Your product or service starts with a great idea.  “6 Ways to get Fast Feedback” shares the story of Ross Perot to illustrate this.  Getting a customer to front manufacture costs can be a great strategy to get started.  However, you must have high integrity to make this work.  If you take someone’s money for a product/service, you better deliver the goods.  Your reputation is critical in business and doing this wrong will kill it.

Last, take a look at the budget you have allotted to test.  Many entrepreneurs try and skimp here to save some money.  Unfortunately, handling this wrong up front is much more expensive than if you just went out and tested in the first place.  Make sure you have a budget or resources available to do some market testing.

What avenues have been successful for you when testing an idea?

PS-  Click on the  link below to listen to my weekly podcast on this subject.

Mission Control: This is a program that I am really familiar with as it is a program that I use.  I wont get into a lot of depth with each of these programs but I will give as good of an overview as I can.  With Mission Control, the first step is to establish core values for your self so that you can identify activities that you should and should not do.  From there they talk to you about carrying around a capture tool.  The capture tool is typically a small note pad that you can tear out at the end of each day.  Every time someone makes a request of you throughout the day, you write it on your capture tool.  At the end of the day you evaluate the items in your capture tool and decide which items you will do and any items that you may pass on.  From there it’s about putting these tasks into your virtual calendar (google, outlook etc.) and assigning a specific time and space to get the item done.  Every item goes onto your calendar that you are doing.  The purpose is to get items onto your calendar with time to complete them so that they are not hanging over your head.

Getting Things Done:   This is system that caught my attention through a video that I watched by the founder, David Allen.   One of my business partner is currently utilizing their systems and was gracious enough to share.  The first step in the GTD workflow is the items that come into your inbox (e-mail, voice mail, verbal requests etc).  Once you receive an item you then decide if the item is actionable or not.  If it’s actionable, you then ask the questions “what’s the next action?”.  If it’s a project, you need to go through and indentify all the steps that need to be taken in that project.  For single items you decide whether to do it now (if it only takes a few minutes), delegate it (notify them immediately of the task) or defer it (put it on your calendar for later).  In this system you can carry around a capture tool as well but you only put items on your calendar that have to be done that day.

Franklin Covey Time Management: Franklin Covey is great because they have always been about vision and values.  Their time management system starts with identifying your values and then aligning your life to those values.  Step 2 in the program is to set goals.  Ther next two phases consist of planning.  The first is to plan weekly and then from their to plan daily.   These 4 steps are called the “producitivty pyramid”.  This system seems to deal a lot with overall planning vs how to handle specific items in your life.

These are three systems that I know of but there are others.  In the end it’s about finding a system that works best for you and how you like to get things done.  Have you used any systems in the past?  How did they work for you?  If you aren’t using a productivity system, why not?

By taking inventory of your activities and what you are currently doing, you will be able to identify where you are wasting time on activities that don’t align with goal achievement.  Before we get further into this discussion I will say that you must have goals written down or some sort of road map on where you want to go for this to even make sense.  By taking inventory and sorting through activities you may realize that you have a lot of time wasters that can be filled with more productive work.

Ultimately, better and more efficient  productivity is going to be key for you to not only get your goals accomplished but to not feel overwhelmed with the notion that you have to do more.  It’s the whole notion of working smarter not harder. You get more important tasks accomplished but in the same amount of time.

Should you get more done?  It depends on your definition of more.  I would say do more in the normal time that you allot yourself to accomplish what needs to be accomplished.  Make sure that you have a solid  road map for your goals and make sure that your daily activity is structured around that.

How have you been able to work more efficiently?  What time wasters get in your way when you are working?  How can we make our days less complicated?

Is success over for you?

It is only if you have given up on achieving higher levels of success.  We have been talking about time management and productivity which are vital to success.  The problem with these and any other system you are faced with is that they are just systems that we plug ourselves into.  We are the ultimate drivers of these systems.  No system is going to do the work for us.  The bottom line is that you are accountable for managing your time and for your productivity.

This becomes a tad problematic for those of us who struggle with holding ourselves accountable.  The systems that you use will need to take into account how well you currently hold yourself accountable.  If you struggle with personal accountability, not to worry.  An often under realized item with regards to accountability is that it is a learned behavior.  Most who are great at this practice are that way because they practiced holding themselves accountable.

One straight forward way to improve how accountable you are is to do what you say you are going to do 100% of the time.  I mean 100% of the time not 9/10, 99% or most of the time.  I mean every time to the letter that you said you would do it.  In the great book The Four Agreements, the first agreement is to be impeccable with your word.  Do you what you say you will do when you say you will do it.  If you have problems with this, don’t commit to specific times to get things done until you can get up to speed.  How we handle our alarm clocks in the morning is a great example of where we lack personal accountability.  Personal accountability is sacrificed every time we hit snooze on the alarm clock.  If you say you are getting up at 6:00am then get up at 6:00am.  These are little things but when practiced will change how we handle all of the things in our lives.  It seems extreme but sometimes this is what it takes for a paradigm shift.  The point of inspiration for you is that if you want to be better about holding yourself accountable, you can do it.

How have you been able to hold yourself more accountable?  How have you been discouraged due to a lack of accountability?

The first question to ask, when using a time management/productivity system, is can this system be utilized at home and at work.  Ideally you want to be able to use it for both.  Being productive outside of work has different parameters than when you are at work but is no less important.  The important thing is to make sure that your system works both at home and at work. If you are worried about what’s going on at home while you are at work, your productivity is going to suffer and vice versa.

Think about how you can be more productive both at home and at work.  What would that look like for you?  How have tasks that you have avoided in your personal life affected your work life and vice versa?  What works for you?

PS-  It’s podcast time.  Click here to listen on how to pick a productivity system that is right for you.  Enjoy.

A program that I went through a couple of years ago, is a program called Mission Control.  One of the most important principles that Mission Control taught me was to allot specific time for everything that you do so that you can be fully present in the moment to accomplish that task.  By doing this, you aren’t worrying about other things that need to be accomplished because you are allotting time  for everything that you do and you know that’s all you have to do in that time and space.  You were fully present in that particular moment which allowed for maximum productivity.

The concept of multi-tasking was debunked for us with an exercise where they had us multi-task and then have us recount information for the exercise.  The class as a whole did a poor job, at best, with multi-tasking.  The question is why do we still do it?

In a workplace environment consider the following statistics:

A study last fall by Basex, a New York research firm, found that office distractions ate up 2.1 hours a day for the average worker.  Another study found that employees devoted an average of 11 minutes to a project before being distracted. Researchers Gloria Mark and Victor Gonsalez of the University of California, Irvine, found that once interrupted, it takes workers 25 minutes to return to the original task, if they return at all. People switch activities, such as making a call, speaking with someone in their cubicle or working on a document, every three minutes on average, Mark said.
Betty Lin-Fisher (for Knight Ridder Newspapers), Houston Chronicle, 2/27/2006)

On a typical day, office workers are interrupted about seven times an hour, which adds up to 56 interruptions a day, 80% of which are considered trivial, according to time-management experts.

Wendy Cole, TIME Magazine, 10/11/2004

If you think these statistics are fun.  I got them here  Time Management Statistics.

There are all sorts of statistics on time management and productivity to be found.  Look at the above stats on interruptions in the workplace.  We are killing our productivity for trivial items and only working at a little over half or our capacity as a result.  Studies also suggest that were hurting our brains by multi-tasking.   The point is even against our better instincts, we continue to multi-task all in the name of productivity.

What mistakes are you making with multi-tasking?  How do you keep co-worker interruptions to a minimum?  How do keep your day productive?

To be truly productive, creating a specific time to get something done is critical.  Every task that needs to be completed should have a specific time scheduled to get that task done.   Having that time scheduled makes the task to be completed more real in your mind and ensures that something else wont come up.

Creating the space is the time with which the task will take.  I also think of this as the mental space that the task occupies in our mind.  If you have a marketing piece you are writing, how long will it take you to write it?  Once you have identified that time that it will take shorten a little.  For instance if you think something will take you an hour, try shortening it to 45 minutes.  It stands to reason that most tasks that you may allot an hour to really can be completed in 45 minutes.  The greatest benefit to creating space is that you can be present during that task as you have dedicated the time to it, physically and mentally.  (We will talk more about this in my next post.)

Creating a specific time for each task and assigning it a time value will ensure that you don’t run out of time to complete your tasks for that day and that you don’t have any running tasks that are hanging over your head.  Time is allotted more realistically when you see how it does or does not fit into your schedule.  Ultimately you are more productive and realistic with your time than you are when you just make a “to-do” list.

If you are an entrepreneur, the best use of your time is selling.  Making sure that you have customers trumps all other activities.  Having customers ensures that you business is actually a business and not a high level, expensive hobby.  Everything else that you do falls second.  Your selling activities can include marketing strategies as well just make sure you spend actually meeting with new business as well.

For the employees, the first thing to do is to step back and assess what you are being paid to do and also look at where you see your career going.  Once you have a firm handle on that you can to a look at what activites are most likely going to get you there.  This is important to lay out so that you can identify things that you wont do.  I know, actually refusing to do certain things even though you get a paycheck?  It may sound crazy but I will give you one instance of a huge time waster for employees.  Meetings.  Most meetings are too long and are generally pointless.  My advice to anyone is to get out of as many meetings as you possibly can.  Your career will thank you for it later.  This is just one example and I’m sure you can thing of others.

The concept of prioritizing and understanding what’s most important is certainly nothing new.  Let this just be a gentle reminder to keep your days in perspective and put some thought into the activities that you are doing.  Are you being active or productive?  We get so caught up into day-to-day activities, we lose sight of what we really should be doing.  How do you decide what’s most important for you?  What do you do to stay the course?  How do you deal with distractions?

A simple key to starting your day off right is starting it at the right time.  When is that time?  Your day should have started yesterday.  By that I mean that you should take some time at the end of each day to game plan and structure your next day.  Most of us seem to wait until the morning to start planning our day.  This  becomes problematic for a couple of reasons.

The first is that we generally don’t put enough thought into structuring our day by the time morning rolls around as the day is already making demands of our time that we need to get to right away.  The second is that we also forget important items from the previous day since we waited until overnight to address them.

At the end of the day, we always have the best idea of what our next day needs to look like.  Therefore we should put our next day together at that time.  This will make sure that it’s efficiently planned and that nothing gets missed and will also ensure that we don’t ignore this task altogether.  If you aren’t planning your day like this, give it a shot and see what changes in efficiency happen.  What’s worked for you in structuring your day?  How has structuring your day properly allowed you to be successful?

PS-  It’s that time of the week for my podcast.  Click below to listen.

Here are 3 types of tax professional that you will hear about most often although there are tax professionals that are practicing without any kind of additional certification.  Click on each to learn more about them.  I would have written this out for you but just writing this has made me nauseous and I thought I might pass out:

CPA

Tax Attorney

Enrolled Agent

The important question to ask of these tax professional is, what are they knowledgeable about?  Don’t be afraid to interview a potential tax professional and ask them about their qualifications.  The professional needs to understand the needs of your business and what your long term goals are.  The returns that are done for you affect other aspects of your business such as banking.   Ask about continuing education, past clients, what their specialties are etc.  Knowledge of the tax code is also extremely important.  Most business owners overlook this when asked what they look for in a tax professional.  The most common criteria that business owners look for when asked?  Location.

Someone who has had experience working in a company setting would make them a strong asset.  If your tax professional  has experience as a CFO in the past or an accountant for another firm, they will understand a little better what your needs are as a business owner.

Once you have interviewed the prospective professional.  Don’t hesitate to call the references they gave.  You can also check on their certifications with the state that they do business in to make sure they have the certifications that they claim to have.  You can also investigate any complaints the tax professional has against them (if any) at the IRS Office of Professional Responsibility.

On the question of where to find a tax professional, I would ask people that you know.  Not to sound snooty or anything but ask people who are successful.  Your broke friend who can’t hold a job but has the #1 beer pong ranking in the world (I’m not saying this isn’t impressive in its’ own right) shouldn’t be the one you ask.  Look at successful business owners preferably in your field.  If you don’t personally know any.  Call someone you don’t know.  Business owners love to recommend people they know that do good work.  It just makes us look smarter.  Asking people who they know is a great way to find someone in your area that can help you and your business.

The online community makes this much easier as well.  If you sent a Tweet on Twitter that you were looking for a top notch tax professional in a specific area, you would get a lot of information in a short period of time.  That’s assuming that are on Twitter and more importantly that you have followers.  There are several social media outlets that you can utilize to help in your search.  Look for tax professionals that blog as well.  This is another tool to gauge how they think and what they know.

In the end, take this search seriously.  When you sign your returns, you are taking responsibility for the accuracy of your return.  Do your due diligence and pick a tax professional that will enhance your business.  If you are lucky maybe they will be in a convenient location as well.

There are a number of reasons to use a tax professional with your business.  The first is that it is good to have someone that you can confer with when you have a question and to have someone in your corner to assist you if you ever have to talk to the IRS.  It’s easier for you to not have to do the record keeping and last it’s even better to not have to be responsible for filing returns at the end of the year.

In the end, it’s about peace of mind.  You can operate your business knowing that your taxes are being handled correctly (or at least you hope they are).  Many will skimp on this due to price.  I would argue that the money you save in tax will more than make up for the money spent hiring a tax professional.

What  experience have you had doing your own taxes?  Do you feel that a tax professional is needed in your business?  I would love to hear what you think about this.

Myth 1.  I can write off all of my expenses for my business from equipment to entertainment.

Reality:  When it comes to equipment that you buy, you may not realize the full write off for several years depending upon if the asset is depreciable or not.  As for entertainment, only 50% of your entertainment expense if able to be deducted and then still there needs to be a clear agenda for your business lunch.  A lunch where you happen to mention your business for a minute in passing doe not make that a “business lunch”.  My advice on this is to be careful.

Myth 2: If my office is at my home, I can write off my housing expenses as a result.

Reality:  A great rule of thumb here was told to me in breaking this down.  The question to ask is, would the expense still exist even if the business did not.  For example your mortgage, you would still have the mortgage even if you didn’t start the business.

Myth 3: I can prepare my own taxes or my friend/family member say they can handle it.

Reality: One of my tenants is to live Soul Purpose.  In living Soul Purpose, you do the things that you are good at then find like minded people to fill in the gaps.  While this doesn’t mean that you are will never do things you don’t like or that you are  not strong in, I feel that tax is one such topic that you should employ a professional who lives and breathes the stuff to do your tax preparation.  Don’t cut corners.  I know it’s cheaper to do it yourself or have a friend/family member do it.  I like to choose hard/easy over easy/hard in these situations.  Let’s say you are audited.  How much confidence are you going to have in yourself and the knowledge of tax law?  A tax professional knows these things and can aid you in the audit process.  Paying someone to do your taxes initially is harder on your bank account but much easier if problems arise later.

Myth 4:  If I get audited, I should prepare for hell.

Reality:  This was actually a new one to me.  Apparently the audit process isn’t what it once was and the IRS has made changes in the way these are handled.  The tax professionals that I talked to say that this has become a much simpler and less invasive process.  They do caution that just because an auditor says something is wrong with your tax return doesn’t mean that it is true.  Auditors for the IRS aren’t necessarily tax professionals in their own right so don’t take everything that is said at face value without consulting your own professional during this process.

So here are a few myths to overcome during this tax season.  This is a great time to evaluate who you have on your team to help you with these things.  I am curious as to what other myths regarding tax that you have run across or if you have any additional points to add to the 4 myths of business tax discussed above?

PS I am adding a bonus podcast this week.  I had a chance to sit down with Chris Anderson who is a tax professional.  His firm is called Soulence (www.soulence.com).  We discuss entity structures in a little more depth.  I know this is bonus coverage and everyone is excited.  Please try to contain your excitement as much as possible.

I have seen statistics that show that over 70% of business are single owner entities with many of these being sole proprietor’s.  There are reasons for being a sole proprietor.  If you have no worries about being sued and are not concerned with liability from your business then this structure is certainly a decent fit.

Some entrepreneurs go the sole proprietor route because they are unsure on how to properly set up their entity and they don’t want to pay someone to handle this for them.  There are a couple of problems with not putting enough thought into your structure.

The first issue is from a tax standpoint.  How much money in taxes are you leaving on the table by not having the proper entity structure for your business.  For those that do it themselves, have you completed all the by laws and operating agreements for your company?

That leads me to the next problem.  If you haven’t set up your entity the right way or didn’t consult the right people, you could be in danger of not being adequately protected if someone sues you for whatever reason.  Don’t make the mistake of thinking that it can’t happen to you.   A LLC or Corp is only good if you have filed all the right paperwork that goes along with.  There’s more involved than just articles of incorporation.  When it’s all said and done make sure that you are protected.  Don’t take advice from a friend or family member and certainly don’t set up your entity a certain just because someone else you know did it that way.  There is no hard and fast rule on this.  It depends on your individual situation.

In the end, you want your business to be around and prosper.  You want to make sure that you have you foundation built for a successful operation and also a foundation that allows for the right exit to your venture whatever that may be.  This is an area you shouldn’t cut corners in.  Don’t be the business owner with post-it notes all over your face wishing you wouldn’t have built your house out of straw.

Sole Proprietors and General Partnerships: Money earned for a sole proprietorship are subject to self employment tax which is currently 15.3% on the first $90k in income.  General Partnerships are taxed in much the same way as a sole proprietorship.  The big difference here is that there are multiple people involved to divide income or losses between.

Limited Liability Company (LLC):  LLCs are pass through entities which means that any gain or loss in income from your business gets passed on to your personal tax returns.

S-Corp:  S corps are taxed in the same manner as LLCs.

C-Corp: C-Corps are a separately taxable entities.  As the owner of a C-Corp you can be subject to double taxation when you take money out of the corporation as that money is also taxed inside the entity itself.

Nonprofit corp: In a nonprofit corp you can file for tax exempt status to avoid paying federal taxes.  In addition to federal, there are several states who provide provisions to not pay others taxes such as income, property and state tax.

What entity is right for you from a tax standpoint?  The only way you should make that determination is if you are currently a tax professional.  Otherwise seek guidance here.  Again your business needs to be built on a firm foundation of success.  I have seen businesses fail because of a lack of attention to tax ramifications in their business.

What experience have you had with regards to tax in your business, good or bad?

PS It’s that time of the week for my podcast.  This week’s show continues the discussion about the various positive by-products of being a business owner.  Enjoy!

I was talking recently with a colleague about their passion.  She talked about some of the various service activities that she was engaged in and was obviously passionate about.  When I asked her if she had thought about creating a business around this idea, she told me that she couldn’t possibly profit from her service to the community.

I don’t think my colleague is alone in this line of thinking.  If you have a passion for service to the community, why not consider setting up a nonprofit to express your Soul Purpose.  This is a great way to pay yourself a reasonable wage for the work that you are doing and serve the community as a whole.

There are some advantages to setting up a non profit; the possibility if tax exempt status, limited liability for those involved much in the same way as a regular corporation etc.

If you have a passion for education, a religious belief, a service to the community in the areas of healthcare, counseling, people who are less fortunate, then a nonprofit could be a perfect fit.

Since I am by no means an expert in this area.  I did some fairly extensive research.  I ran across this article, Nonprofit basics, and thought that it was the most simply explained if you are thinking about getting started.

There are certainly other vehicles to be charitable but if you have a passion and a set of talents that can serve a community that you don’t want to profit from.  A nonprofit may be what you have been looking for.

Expertlaw.com breaks down your choices for you in their article; Choosing a business form or structure for your business.

It’s important, when looking for a structure, that you do consult an accountant or attorney and talk through your business to make the proper decision on your business.  If you are looking to start a business, ask yourself what your business will be doing and what your business needs will be.  Assess who you know that can help you set an entity up.  Some people will cut corners in this area and set up their business online because it is cheap.  I would be cautious of just setting something up online without consulting someone first.  Your business is created for long term growth and profitability.  Make sure it’s structured to support your long term business goals.

What suggestions do you have for finding a professional to help in the area of entity structuring?  What has been your experience with this?