When it comes to accounting, few people have the credentials Stacy Kildal, founder of Kildal Services LLC, has. An internationally recognized QuickBooks Online expert, Stacy has been recognized as one of CPA Practice Advisor’s 40 Under 40 and Most Powerful Women in Accounting for the past three years.
In 2014, she added a couple of new notches to her belt by being named one of Accounting’s 100 Most Influential People; in addition, her peers voted her one of the Top 10 QuickBooks ProAdvisors.
All these accolades aren’t just for show. To date, Stacy has helped nearly 500 small businesses avoid wasting time and money. You can catch her every week on TheQBShow.com, but today, she’s back at the WORK[etc] blog with another insightful piece on how to keep a small business from hemorrhaging money. Read on!
When I was asked to write an article on the most common ways a small business wastes time and/or money (and let’s be honest here, those are the same things, right?), I thought this would be a cinch.
I was 100% wrong.
Businesses can bleed money in so many ways. Once I started asking people to weigh in, their responses blew my mind. When I thought of all the things I’ve seen over the last 11 years and looked at some of the things others contributed, I noticed a few ideas that kept popping up.
No sales pipeline or lead tracking
I’m absolutely guilty of this. I would estimate that in the first six to seven years I was in business, I probably left thousands — no, TENS of thousands of dollars — on the table because I did not have a way to track prospective customers and clients. You need to have SOMETHING, even if it’s as simple as a shared Google doc. Obviously, I think one great tool for this is WORK[etc] — it’s a CRM and a project management tool in one. Why not kill those two birds with one kickass stone?
This one blows my mind every time I hear a small business owner (generally consultants) say he or she doesn’t want to pay processing fees to accept credit card payments. I always point out the cost of only accepting checks: the wait to get paid, the time it takes to prepare the deposit, and the gas used driving to the bank to make the deposit.
Small businesses are also losing customers altogether by not accepting credit cards. The area around our old house had a carpenter ant problem, and everyone on our street had a “bug guy.” One of my neighbors recommended hers, but I couldn’t work with him — he didn’t accept credit cards, and we don’t use paper checks any more. If you make it easy for people to pay you, THEY WILL. And they’ll do it much more quickly!
Not getting rid of a bad hire soon enough
One of the people I talked to for this article mentioned a client he had; it was an engineering firm. If, for some reason, a hire didn’t work within the first team he or she was assigned to, he or she would be moved to another team and receive more training. This would continue until he or she eventually ran through pretty much every group in the company.
The company would often just keep that person, knowing that they … well … sort of sucked. If you hire a person for a specific position and they’re still not working out after 90 days? Let. Them. Go.
This goes hand in hand with the sunk cost fallacy, which involves knowing when to walk away from a project. Arianna Huffington and Seth Godin wrote two great articles that explain this better than I ever could.
Unnecessary collateral or misdirected advertising
Don’t get me wrong — it’s great to have swag. I do TheQBShow.com every Tuesday, and we just ordered 100 shirts for a special promotion we’ll be doing at this year’s Scaling New Heights conference. We put our logo (which includes our website) on the front of the shirt, and we put all our sponsors’ logos and websites, the day/time of our show, and what the show is about on the back. Everything we put on the shirt is intended to drive people to visit any of the websites they see on that shirt. We only ordered enough for the promotion.
Another colleague told me about a client who recently spent thousands of dollars on shirts, hats, pens, tote bags—even SOCKS! This business put a slogan on the items that had no identifiable connection to their company; in fact, a Google search for that logo takes you to a Norwegian website. The company is located in the United States, near Minneapolis, Minnesota! The company had no plan, no budget, and no target audience for any of these items. Who’s going to see logos on socks?
We worked with designers to help with our shirt, and we worked with a consultant to help create the promotion. That promotion was targeted to a specific audience, for a specific desired outcome, with a specific budget and timeline.
The last thing I want to mention is that sometimes, it’s hard to look at your business from the outside in. This can make finding areas in which you’re losing money difficult. If your budget is so tight that you simply cannot afford to hire someone who knows your business (Matt Rissell, CEO of TSheets.com, said “Don’t hire consultants that aren’t familiar with your industry”), you can identify issues internally.
The one I like best is to list all of your company’s processes and its workflow. Hiring, sales, purchasing, marketing — all of it. Then list the pain points involved with each and who owns the process. This will give you a good starting point to identify where issues might be; then you can tackle them one at a time. Hint: if no one owns a process, that’s a good place to start.