You have to do it. Yes you do. This is where you measure
the water, take its temperature and measure yourself. How are you
doing? I'm doing ok. Hey, I can use some help.
If
you Water It, It Will Grow
The single most important thing you will do is evaluate yourself and
your business. Account for your money your time and your spirit
and your energy and your emotional and mental commitment to this
business.
Do your accounting. For a while it is good to do the accounting by
yourself and for yourself. Don't hire a bookkeeper just yet.
Keep in touch with the money, the energy, the time and commitment.
Stay hands on in this arena and the rest of the show will be watered
properly.
Who played the Pink Panther. Peter Sellers. He also played
the Gardener is a movie I will call "The Gardener".
The gardener worked for a diplomat. The gardener was a simple man
and he spoke simply and clearly. "If you water it, it will grow".
The wisdom in this statement brought the diplomat's friends around on a
regular basis and the gardener became the diplomat, tending his garden.
Keep track of the water and the coffee will flow.
I'm
Doing Ok - is Ok Good?
For me Ok is not good. I always seem to say Oh yeah. How
high is the bar? What happens if it starts raining. The
building comes apart. Your partner goes to Tahiti. The local
plant closes. The Mall comes to town. The mall leaves town.
Change. I love the business of the business. In a sense, I
love it. It is what I do and I do it all the time. This is
me. What about you.
Ok can be good. If you are meeting your goals this may be good.
There is nothing wrong with maintaining the status quo. But change
happens always, time moves on and so do people, places, even continents
are moving around and changing. So stay tuned in even if things
are good. Ok?
Hey,
I Can Use Some Help - Bad News is Good
Welcome bad news. Welcome the messenger. Caesar killed
the messenger and in the process himself.
It is good to hear that you know where you are. If you know where
you are and how you are doing you will know what you have to do to get
to where you want to go. Remember the first rule of business is
staying in business.
It is good to look in the mirror and ask if that person is happy with
the results of the business. If that person says yes, fine.
If that person says no, then go to The Well.
Making a living, making money, creating wealth, paying bills, paying
people, paying yourself, paying your friend, and your banker are easy if
you have the money. If you don't have the money, find out why.
Fast. Ask yourself first.
You control the money.
The accounting will show where the money is. You have to do the
accounting. If your checks are bouncing then the chances are you
are bouncing - off the walls. Calm down, sit down and go to
The Well. It is good to know the bad
news fast.
People will not tell you bad news. Only you can tell you bad news.
Listen to yourself and look for the symptoms. You went in to
business to make money and you are entitled to the rewards. What
gets measured gets done. Measure the business at least every
month.
Its easy today.
Quicken. One Write Plus, Excel Spreadsheet, or just pencil and
paper. Do this first. This is the most important thing you
will do for your business. Be the doctor. Take the patients
temperature, measure the patients weight, test the musculature, look for
fat. Do this and you will know.
Knowing is the source of all ideas.
Selecting an Accountant?
The link below is an AP wire story on how to select an accountant.
I think it is just as appropriate to go to the local yellow pages or ask
your friends in business. Just be prepared to change if you are
not comfortable or if work is not done in a timely manner.
Read Article (pdf)
Payroll Processing
Don't
even think about doing this. Go to Paychex, ADP, or another
national chain of payroll processing experts. It will cost you $50
to $100 per month and keep you out of jail. Don't worry.
It will cut 1/2 the work of accounting. It is worth it. Do
it - now.
-
Remember it is good to stay out of jail.
-
And out of the tax person's grasp - pay your payroll taxes on time.
-
Have the payroll processor pay your payroll taxes for you - it is called
"tax pay" at Paychex.
-
Pay bi-weekly - every two weeks to keep your costs down. This is
ok and your staff will adjust to it - tell them when you recruit them.
-
Make sure you pay yourself.
-
Have the payroll company file all your forms - they do- federal 941's,
state forms, unemployment forms, you name it.
-
Payroll is the the domain of experts - you are not one of them.
Don't even think about it.
Here I give you finally an idea of what it will take financially to get
open.
Building | 2000 square feet at 50 dollars per foot
| $100,000
This is a
statement of what you own - assets, what you owe - liabilities, and how
much is yours - net worth or owners equity or your investment.
The equity section may not be the real worth of your business because
you may have loses but there is a market value for the business
completely separate from the accounting new worth.
Freedom,
Independence, my father was happy, feeling good, self confidence,
belief, seeing, vision.
The real rewards of success in business, no matter how you measure
success, is priceless.
I walk around our building from time to time and just feel satisfied.
I feel good and feel that I made the right decision to do this.
You will too.
The income statement measures your income, your expenses and your
profits. I will deal with them in reverse order.
Profits |
Income |
Expenses
Drinks
80% to 90%. Wonderful if you have the traffic. Low traffic
locations can not survive on drink volume alone because the sales are
only $1.50 to $3.50 per item. You must have volume if you depend
on drinks alone. This is great stuff and stuff of fortunes.
Food
75% and volume sensitive. Great margins, but you have to sell a
lot of salads and sandwiches. Also great stuff and the stuff of
fortunes. A good cafe will make your life easier.
Beans
By pound: 55%, by 1/2 pound 65%, by 1/4 pound 75%.
The toss up on beans is how small to go. I always sold quarter
pounds because the margins are good. I would sell quarter pounds
in the $3.99 range depending upon the flavor, origin and so on.
But the price per pound is $14 to $16 and your cost is in the $4 to $6
range depending upon the quality and volume you buy. This is good
business.
I have been in stores where the signs are up "1/2 Pound Minimum No
Quarter Pounds". I know they are in trouble. Low volume, not
worth taking their eyes off the good book they are reading behind the
cash register that is broken. Never say no. Always do what
your customer wants or needs. And price it accordingly.
Giftware
Mugs and the like typically are "keystoned", meaning doubled.
We always used 2.2 as the basis of doubling (2.2 times the wholesale
cost = retail selling price) because it accounted for the shipping and
handling costs.
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