Five Hidden Talents of Your Accountant

Posted on December 13, 2012 by Jay Mercer

When you think of an accountant’s duties, you might think about traditional tasks, such as tax preparation, bookkeeping, and financial statement preparation.   Here are five additional tasks that accountants can help with that you might not think of.

1. Evaluating Current Accounting Employees

How can you know if your accounting employee is a star that does everything right, is organized, and is fast or if you’ve accidentally hired someone who talks a good game but is doing everything wrong, takes way too long based on your size company, or is making unnecessary and costly mistakes?  Your external accountant can often help you objectively evaluate your current staff and point out their strengths and weaknesses so you can create the right training programs for them, communicate the right message at review time, or take the proper HR steps you need to.  Your accountant can also help to train your bookkeepers so that they are more efficient.

If your bookkeeper is not performing at the level of pay you are providing, it can be an inefficiency in your business.  Your accountant can help you make sure you are not over- or underpaying your current staff.

2. Hiring a Bookkeeper

For businesses that have full or part-time accounting staff, your accountant can help you test candidates for technical skills so that you can make a wise hire.

3. Selecting Better Tools

Most bookkeepers that do books for one company do not have the experience that lets them see there may be “a better way” to do what they are doing.  Your external accountant can help you find or develop systems, reports, and software to supplement your current accounting system that may save you time and money.

Since your accountant can be working on as many as ten different companies in one day, they have far more experience and expertise than bookkeepers who work at one company at a time.  Take advantage of that experience to streamline your workflow and learn lots of great money-saving shortcuts.

4. Identifying Process Inefficiencies and Irregularities

The fresh eyes that your external accountant can bring to your business can often uncover inefficiencies in accounting processes that can reduce your expenses and increase your profits.  One opportunity area is listening for the “we’ve always done it that way” answer.  When that explanation comes up, usually it means that the person saying it has lost or never knew the reason behind the process, which could now be obsolete.

External accountants have the benefit of seeing dozens if not hundreds of financial statements among their many clients.  We’ve often developed the eagle eye of scoping out expenses that are out of line based on other clients in your industry and company size.  If you are paying too much for telephone, utilities, and other common expenses, we can bring it to your attention that there may be an opportunity to re-negotiate a contract or look for some kind of error.

5. Strengthening Internal Control and Taking Measures to Reduce Risk of Fraud

Developing checks and balances in your accounting system is essential in businesses where employees handle money and have access to credit card numbers and bank account information.  Your external accountant can help you develop internal controls within your accounting system that will work for the level of risk you wish to take in your business.  They can also point out reports in QuickBooks or your accounting system that facilitate controls and that can help you review irregularities on a periodic basis.

Tapping into Talent

Next time you find yourself in one of the above situations, think of your external accountant first, and give us a call.

Posted in Accounting, Bookkeeping Tips, Business Tips, Management Tips, Time Management Tips | Comments Off on Five Hidden Talents of Your Accountant

Seven Year-End Adjustments to Make to Your Books

Posted on November 29, 2012 by Jay Mercer

Year-end is coming up for many businesses, and it’d be nice to know what your final revenue and profit numbers will be for the year.  Before we can calculate these key numbers, there are year-end adjustments that may need to be made to your books that will change the numbers. Here are seven common ones.

Bonuses

It’s great to give bonuses to employees at year-end, but it’s not so great to forget about the tax part of it. Bonus checks should always be run through payroll, but often are not, which requires an adjustment after the fact.

Retirement Plan Contributions

If cash is available at year-end, it’s a great idea to maximize the allowable deductions for the retirement plan you qualify for.  One example is a SEP IRA.  You can deduct up to 25% of your or your employee’s salary (up to $50,000 deduction maximum per employee for 2012, but please check with us or your tax professional for numerous exceptions and rules.

Withholding

If you are both the owner and an employee of your company and have not made enough tax payments throughout the year to account for all that money you’ve earned in 2012, you can adjust your last few paychecks to withhold the amount you need.  Sometimes, this also reduces or eliminates the penalty for underpayment of estimated taxes.   To find out more, please check with your tax professional.

Depreciation

If you have assets that will last longer than one year, such as factory equipment or a fleet of automobiles, an adjustment may need to be made to reduce the value of those assets.   This adjustment will reduce your profit and will also reduce your tax bill.

Amortization

If you have a loan of any type, the payment consists of both principal and interest.  Each time you make a payment, the principal and interest amounts can vary.  At the beginning of the loan, you pay more interest and less principal.  At the end of a loan, it’s reversed.  Each payment is different, and if they haven’t been recorded correctly each month, it’s time to make the adjustment so that the loan balance is correct.

New Acquisitions or Obligations

If you’ve made a significant acquisition, such as real estate, buildings, large equipment, or another company, and somehow the transaction did not get properly recorded on your books, then now is the time.   Similarly, if you’ve taken on new debt, the new liability needs to be put on the books.

Noncash Transactions

It’s easy to overlook transactions that do not require a cash outlay, but these need to be recorded as well.   For example, if you performed consulting services in exchange for a spa gift certificate, this transaction should be reflected in the proper revenue and expense accounts.

Year-End Profit

Once your books are adjusted for all of these changes, you’ll have all the information you need to find out how your business performed for 2012.  You can then use your 2012 revenue and profit numbers to set new goals for 2013.

Posted in Accounting, Bookkeeping Tips, Business Tips, Cost-Savings Tips, Payroll Tips | Comments Off on Seven Year-End Adjustments to Make to Your Books

Five Things You Can Do to Make Tax Season Smoother

Posted on November 15, 2012 by Jay Mercer

We know we’ll never make tax season your favorite time of year, but perhaps we can make it easier.  Here are five things you can do now to smooth out the time required to pull your records together for your tax preparer.

1. Contractor Clean-up 

In preparation for 1099s, take a look at your vendor list now and identify who should receive a 1099.  Perform a mini-audit and ask for any W-9s that are missing so you can plug in your tax IDs without scrambling at the last minute.

2. Check or PSE

Also in preparation for 1099s, you’ll need to break out payments made to vendors by check versus by credit card, third party or what the IRS calls PSE, payment settlement entity.  You’ll only need to issue 1099s to vendors you wrote checks to.

3. Calculated Moves

Is there anything you can calculate in advance of crunch-time?  If you had loans, you can secure the appropriate amortization schedules.  If you have depreciable assets, some of these schedules can be prepared ahead of time.  Did you sell any major assets?  A summary of the transaction can be prepared and ready to go.

4. Playing Catch-Up

If you are behind in your bookkeeping, filing, bank reconciliations, or other accounting chores, it’s a good time to get caught up so all the routine stuff is out of the way.

5. Getting Organized

When the year ends and the tax documents start arriving, place them in a special folder or stack so that all the papers are together.  Scan them in and place them in a specially labeled folder on your PC.  You’ll be more organized than ever.

When all of the mundane items are completed early, it leaves time for the more important conversations, such as discussing new ideas for tax reduction, ways to operate your business more efficiently, and planning for your future.

If we can help make your tax and accounting tasks easier during any time of the year, please reach out and give us a call.

Posted in Business Tips, Management Tips, Time Management Tips | Comments Off on Five Things You Can Do to Make Tax Season Smoother

Is Your Business Missing an Accounting Skillset?

Posted on November 1, 2012 by Jay Mercer

In a small business, the owner ends up wearing many hats to get the product or service delivered, the customers served, and the accounts settled.  Within each functional area of a small business, there are even more hats.  Although the accounting function might be considered one big hat, there are actually a number of skills that make up “the accounting department” in a small business. Here’s a list to help you understand how it all works together.  As you read through it ask yourself how you are covering these functions in your workplace.

Data Entry Clerk

A data entry clerk typically knows how to do a few types of transactions that are routine.  Perhaps this is posting timesheets from source documents, inventory transactions, or keying in transactions from one report or system to another.  The data entry clerk usually has little or no knowledge of accounting or bookkeeping, and this person will need help when there are exceptions to the routine.

Bookkeeper

The main function of a bookkeeper is to post the transactions and reconcile the accounts of the business.  This can include a number of functions and areas:

  1. Invoicing and receipts in the accounts receivable area
  2. Checks and bills in the accounts payable area.
  3. Payroll.
  4. Inventory.
  5. Cash – bank reconciliations and necessary corrections and adjustments.
  6. Account analysis.
  7. Report preparation, but only to the extent that it rolls up the transactions.

Good bookkeepers will know how to work seamlessly with the CPA who is doing the taxes for the small business so that the books are in compliance with regulatory requirements.

Controller

A controller brings in advanced skills beyond bookkeeping, including financial statement preparation and analysis, budgeting and planning, cost control, risk assessment, internal control, segregation of duties, and industry knowledge.  A controller can bring valuable financial skills to a small business, and often do so by way of an outsourced part-time controller arrangement.

CFO (Chief Financial Officer)

The CFO is the highest level of accounting executive and is needed for complex strategies such as IPOs and financing for the larger company.  A small firm might need CFO-level skills in high growth situations to manage cash flow, debt ratios, and financing options.

Technical Accountant or CPA

Typically, an accountant will have a 4-year degree or a CPA or both.  In many states, the word “accountant” is reserved for CPAs.  Accountants have both education and experience in a wide variety of specialties, including taxes, auditing, cost accounting, bank financing, financial statement preparation, and more.

Tax Preparer, CPA, or EA (Enrolled Agent)

Typically a tax preparer offers tax planning, preparation, and filing in any or all of these areas:

  1. Federal and state corporate, partnership, nonprofit, or individual tax preparation, filing, and planning.
  2. Sales tax compliance and filing.
  3. Franchise tax.
  4. Payroll tax (although a good bookkeeper, controller, or accountant will know how to do this, too) and year-end requirements (W-2s and 1099s).

Management Advisory Consultant

One of the most overlooked roles an accountant can play in small business is in making process improvements in the way the staff and owner work in their business.  Often a management advisory consultant can review how a process is being performed, such as invoicing, and make suggestions on how to speed the process, bill more frequently, or other opportunity that significantly improves the cash condition.  The specialized skills of accounting, process knowledge, and software skills enable a management advisory consultant to save money for the business owner in many cases.

Accounting Software Consultant

An accounting software consultant has deep knowledge of one or more accounting software packages and can analyze the needs of the company to match them with the right accounting software.

Accounting Software Trainer

Just like any software package, and perhaps especially with accounting software, it’s not a good idea to guess how to use the software.  A software trainer will have in-depth knowledge of the tips and tricks inside the package that will save your bookkeeper (or you) time and money.

Adding Up the Value

The more of these roles you have covered in your business, the more your business will benefit.  If you have gaps, it’s likely you’re feeling the missing skillset and having issues around that area.

If we can help you fill any of these gaps, please let us know.  We’re at your service.

Posted in Business Development, Business Tips | Comments Off on Is Your Business Missing an Accounting Skillset?

Compliance Checklist: Seven Items You May Have Forgotten

Posted on October 18, 2012 by Jay Mercer

Running a business is filled with regulations everywhere you turn.  These can drain precious time away from the core of your business, but if you ignore them, there could be huge financial consequences you may be risking without even realizing it.  The best way to handle them is to understand your exposure, consult with any experts you need to bring in, create a checklist, and make sure you’re in compliance.

Here’s a head start in creating that checklist.  This is by no means a comprehensive list.  These items apply to most businesses and are often overlooked.   Go through the list to make sure there aren’t any surprises for your business.  If there are, feel free to contact us, and we’ll help you find out where to get answers.

1. EIC notice to employees.

It’s now required annually to notify certain employees about the Earned Income Credit so that more people who need it can take advantage of it.   If you have employees, the next deadline for this compliance item is the first week of February 2013 and can be met if you get the right W-2 forms.  Details are in IRS Publication 15.

2. Corporate meeting minutes.

Just about the first thing the IRS will ask for in an audit is your corporate meeting minutes.  If you are incorporated as a C Corp or S Corp, you need properly formatted and executed documentation of the annual shareholders’ meeting, even if it is just you.  The risk in not having it includes a potential increase in tax liability from undocumented deductions.

3. PCI compliance. 

PCI stands for Payment Card Industry, and if you take credit cards, you may have compliance requirements under this industry standard.  The standard is designed to provide the cardholder with a minimum acceptable level of security, and your requirement is to maintain certain processes and procedures to safeguard the stored credit card data.

4. Document retention.

While it’s a great thing to go paperless, you may get caught by surprise if you are not downloading and preserving the items you used to have on paper.  The IRS and other agencies still need proof of these items in order to approve the deduction.  This includes invoices that are coming via email in PDFs, bank statements you’ve gone green on, and direct deposit payroll stubs, to name a few.

Fax copies fade after a few years and can catch you by surprise when you go to look up an old record and can no longer read it.  It’s best to scan fax receipts in so they will stay readable for the length of the retention period.

You’ll also want to keep up-to-date on how many years it’s necessary to maintain these items in the case of an audit.

5. New hire reporting.

In small business, most of us are hiring so infrequently that it’s easy to forget this one.  Most state unemployment agencies require that you report new hires within about three weeks of their start date.  The purpose of this is to track fathers who have missed child support payments.

6. Changes in state tax compliance.

As geographic borders disappear and our business expands, we need to regularly re-evaluate state requirements on income, franchise, and sales tax obligations.  It can be too easy to “do things the way we’ve always done them” and forget that as our business expands into new territories, new obligations can arise.

If we’ve hired a virtual employee in another state, we may have new obligations.  If we’ve earned money during a speaking engagement in another state, we may have income to report in that state.    And, of course, if we open new offices in another state, we have new compliance items to deal with.

7. Payroll posters.

Surprisingly, the highest payback item in this list for those of you that have employees may be posting your payroll posters.  Compliance usually costs less than $100, and the fines avoided can be as much as $17,000, a pretty big dent, no matter how big your small business is.

Small Business Compliance

Did you get caught by any surprises?  If so, let us know how we can help to bring your business into compliance and help you avoid unnecessary costly risks.

Posted in Business Development, Business Tips, Cost-Savings Tips, Management Tips, Payroll Tips | Comments Off on Compliance Checklist: Seven Items You May Have Forgotten

Are You Vulnerable to Fraud?

Posted on October 4, 2012 by Jay Mercer

According to the Association of Certified Fraud Examiners (ACFE), over $3.5 trillion is projected to be lost to fraud worldwide in 2011 alone.  The typical organization loses 5 percent of its revenues each year.  While we have a lot to think about as entrepreneurs, we do need to take time to educate ourselves about this unfortunately common business loss.

The Fraud Triangle

An easy way to understand fraud is to learn about the Fraud Triangle.  The creation of the Fraud Triangle is credited to Dr. Donald Cressey, a well-respected criminologist and sociologist who made significant contributions to his field.

Three components need to be present in order for fraud to occur:

  1. Motivation (or Need)
  2. Rationalization
  3. Opportunity

When fewer than three legs of the triangle are present, we can deter fraud.  When all three are present, fraud could occur.

Motivation

Financial pressure at home is an example of when motivation to commit fraud is present.  The fraud perpetrator finds themselves in need of large amounts of cash due to any number of reasons:  poor investments, gambling, a flamboyant lifestyle, family requirements, or social pressure.  In short, the person needs money and lots of it fast.

Rationalization

The person who commits fraud rationalizes the act in their minds:

  • I’m too smart to get caught.
  • I’ll put it back when my luck changes.
  • The big company won’t miss it.
  • I don’t like the person I’m stealing from.
  • I’m entitled to it.

At some point in the process, the person who commits fraud loses their sense of right and wrong and their fear of any consequences.

Opportunity

Here’s where you as a business owner come in.  If there’s a leak in your control processes, then you have created an opportunity for fraud to occur.  People who handle cash, signatory authority on a bank account, or financial records with poor oversight could notice that there is an opportunity for fraud to occur with the ability to cover the act up for some time.

Prevention

Once you understand a little about fraud, prevention is the next step.   To some degree, all three points on the triangle can be controlled; however, most fraud prevention programs focus on the third area the most:  Opportunity.  When you can shut down the opportunity for fraud, then you’ve gone a long way to prevent it.

The Typical Fraud

The median cost of an occupational fraud case was $140,000, according to the ACFE.  It goes undetected for a median time frame of 18 months.   The most likely way to discover fraud is a tip from an employee who works at the victim organization.

Small Business Vulnerability

Small businesses are the most vulnerable to fraud, because they employ the least amount of fraud prevention controls.  Here are just a few quick tips to help prevent fraud in your organization:

  • Create a culture within your organization that deters fraud and provide employees with education about fraud prevention to reduce rationalization.
  • Tighten down access to financial areas, segregate duties, and use other internal control best practices to reduce opportunity.
  • Provide financial literacy programs to employees to reduce need or motivation.
  • The ACFE recommends that small businesses provide employees with an anonymous way to report suspicious activity.

While we hope fraud never happens to you, it makes good sense to take preventative steps to avoid it.  Please give us a call if we can help you in any way.

Posted in Business Tips, Expense Reduction Tips, Management Tips, Profitability Tips | Comments Off on Are You Vulnerable to Fraud?

Six Quick Productivity Tricks So You Can Go Home Early

Posted on September 20, 2012 by Jay Mercer

If you have an endless to-do list, you’re not alone these days.  Most of us are constantly looking for ways to work smarter and get more done.  Here are six quick tips to help your productivity so you can go home early.

1. Group tasks.

If you have lots of errands to run during the week, why not set aside one day or a part of a day to get them knocked out all at once?  It saves start/stop time and may also save gas and time getting dressed up (if you work at home).

You can also try grouping tasks such as personal care appointments, doctor’s appointments, sales calls, and client visits.  Your schedule will be freed up in big blocks of time so you can focus on creative projects without having to constantly watch the clock.

2. Use checklists.

Checklists are best when you have a task you need to repeat.  They’re great when you’re stressed and don’t want to forget a step (such as in packing your suitcase for a trip).  They’re also great for tasks that repeat infrequently (Now how did I do that last time?)

Stop and take a minute to create your checklist the next time you perform a routine task that you will repeat in the future.  You’ll thank yourself the next time.

3. Organize your email.

If you are using Microsoft Outlook for email, consider getting it to work as hard as you do.  As your email comes in, you can have Outlook sort the low-priority emails that come from lists, Google alerts, social media notifications, and subscriptions into folders.  Create a subfolder in your inbox called “lists.”  Then set a Rule to have that type of email go into the “lists” folder.  This one step will substantially de-clutter your inbox.

4. Delegate more.

If you’re a little wary about delegating, try this exercise:  Look at your to-do list and put an hourly rate next to each task that you are doing.  If someone paid you to do that job, what would you get on the market?  Then look at the tasks with the lowest dollar value next to them.

If you feel your time is worth more than the lowest rated tasks on your lists, it’s time to help someone else out who is unemployed so you can be freed up to use your more valuable skills.

5. Order online.

When is the last time you’ve been to the office supply or pharmacy when you know they deliver?  (Yeah, me, too. Enough said.)

6. Avoid long learning curves.

Whenever you realize a task will have a really long learning curve, then it’s a red flag that it’s time to find someone to hire to do it for you.  Here are several examples:

  • Doing your taxes and researching all the tax law changes
  • Installing a new accounting system and customizing it
  • Learning about every new social media platform out there
  • Writing a legal contract
  • Creating a report
  • Troubleshooting a computer problem

The cost of going through the learning curve can be dozens of hours of your precious time lost compared to bringing an expert on board who can perform that task in a matter of hours or minutes.

How did these six ideas compare to your favorites?  I hope you picked up an idea or two so you can get home earlier.

Posted in Business Development, Business Tips, Decision-Making Tips, Management Tips, Time Management Tips | Comments Off on Six Quick Productivity Tricks So You Can Go Home Early

Five Favorite Freebies You Can Steal

Posted on September 6, 2012 by Jay Mercer

If you’re looking for ways to boost your productivity, technology is a great place to start.  The good news is there are many free options available.  Here are five favorites you might not know about.

1. Bridge lines.

If you need teleconference lines, you’re in luck:  there are many high-quality options that are completely free.  You can have several people, even hundreds, dial into a line and conduct a meeting or training session via the phone.  You can record the session and download the recording as an MP3 file that can be played on an iPod.

Some of the more creative ways to use these free teleconferencing services include:

  •  Staff meetings when someone is absent so they can listen later.
  • Free teleconference, providing tips to all your clients.
  • Free teleconference, allowing prospects to call in and sample what you offer or find out what you’re like to work with.
  • When you need to record anything. (You often need 2 people on the line to be able to record, but not always.)
  • To record a quick training session or how-to that can be distributed later.
  • To have a client record a testimonial you could put on your web site.
  • To record a meditation or therapeutic session you can listen to over and over again.
  • If you’re a coach or trainer, you can record the client training session and give the download as a service perk.

Our favorite:  http://www.freeconferencecallhd.com.

2. FileZilla.

The FileZilla client version allows you to transfer large files between computers that are connected to the Internet using FTP (File Transfer Protocol).  It’s handy for many reasons:

  •  When you need to load large files such as videos or audios to your website
  • When you need to upload something to an artist, a transcriptionist, a warehouse, or other supplier
  • When you have documents such as white papers that you want people to have access to but don’t want to have to keep contacting your webmaster

Download the FileZilla client and find out more here:  http://filezilla-project.org/

3. Gmail.

It’s just a great idea to have a backup email address in addition to the primary email address you use.  Gmail is perfect for this.

Go one productivity-boosting step further, and make your gmail account the one you use for all that email you don’t need to read as frequently.  This could include notifications from social media like Facebook, Twitter, and LinkedIn, blog notifications, list posts, Google alerts, and any other nonproductive email, you don’t need to respond to.

Open your Gmail account less often than your primary email (even once a week if you dare) and gain that productivity boost.  You’ll have freed your inbox from a bunch of clutter and can focus on your clients’ and employees’ emails instead.

Visit this site to find out more:  https://mail.google.com

4. WordPress.

WordPress is free blog software that you can install on your web site or blog site.  Once installed, it’s super-easy to use for both blogging and a website.  You can add photos, graphics, white papers, videos, and audios to the library to put on your blog or your site.

It’s also great for search engine optimization; the search engines love it and will rank you higher when you blog and post fresh content.

Visit http://wordpress.org/ to find out more.

5. Ning.

Ning is a community platform where people can come together and post a profile, participate in discussions, join a group, and interact.  Not all business models will benefit from Ning, but many of you are involved in a club, church group, nonprofit organization, or community where Ning could be very helpful.

Ning is almost free, at $19.95 per year or $2.95 per month, but it’s such an amazing platform, I include it here.  Whenever you’d like to have a private (or public) community of people who are joined by a common interest, Ning can provide that extra online community connection that can help you group interact and bond even more.

Find out more about Ning at http://www.ning.com.

What are your favorite freebies?

Posted in Business Development, Business Tips, Cost-Savings Tips, Customer Service Tips, Expense Reduction Tips, Time Management Tips | Comments Off on Five Favorite Freebies You Can Steal

Create an Easy, Head-Turning Elevator Speech

Posted on August 23, 2012 by Jay Mercer

You’re sitting in a room with 30 other business entrepreneurs.  Each of you has one minute to introduce themselves to the group.  You are number 25 to speak.  Will anyone listen?  What can you do or say to catch your peers’ attention, be memorable, and have them approach you for business?  Most importantly, what can you do to get every business card in the room wanting what you have (so you can go to fewer networking meetings and get back to running your business)?

The good news is you don’t have to be a poet, a writer, or a great speaker in order to attract attention and desire.  All you need to do is put yourself in your potential customer’s shoes for a minute.  What is it about your business, your products and services, and you that would interest a potential buyer?  Why should they care?  Why should they stop what they’re doing from their busy life and listen to you?  It’s easier to answer than it sounds.  Here’s a formula to help you along.

“I help “my ideal client” “get a certain result” through “my products or services.”

Let’s fill in these three blanks by using some examples:

“I help “young families” “find their first house” by “providing mortgage lending services.”

“I help “people with broken pipes” “keep their homes dry” through my “plumbing services.”

“I “protect families from financial disaster in times of crises” by providing “insurance services.”

“I help “women who want to have beautiful hair” “keep their hair healthy and vibrant” with “my all-natural, organic hair salon services.”

Now fill in the blanks for your business.  You may have to try a couple of variations until you hit on the perfect one for you.  But this formula beats saying “I’m a hairdresser,” “I’m a plumber,” or “I’m a mortgage lender.”

This is a great start to your elevator speech, but just a start.  Now add a second sentence that describes a project you just completed with another client similar to the one you’re talking with.

“For example, I just closed on a home last week with a mom, dad, the cutest 4-year-old twins, and a yorkie.  They got a great rate, and their payment is low enough so they can afford to start saving for the kids’ college right away.”

One more sentence and you’re done.  This one’s your call to action.  What do you want interested prospects to do, and how can they sample your product at a low risk to them?

“I have a free report, “10 Mistakes to Avoid When Buying Your First House.”  If you’d like a copy, please hand me your business card and I will email you the details.”

“I offer a free risk analysis so you can see if you have any major risk exposures.  To set up an appointment, hand me your business card, and I will get you setup free of charge.”

Put all three parts together and you have a very nice elevator speech.

“I help young families find their first house by providing mortgage lending services.  For example, I just closed on a home last week with a mom, dad, the cutest 4-year-old twins, and a yorkie.  They got a great rate, and their payment is low enough so they can afford to start saving for the kids’ college right away. I have a free report, 10 Mistakes to Avoid When Buying Your First House.  If you’d like a copy, please hand me your business card and I will email you the details.”

Don’t be surprised at the flood of business cards that will come your way when you put this in action at your future networking meetings.

Posted in Business Development, Business Tips | Comments Off on Create an Easy, Head-Turning Elevator Speech

Recognizing a Job Well Done

Posted on August 9, 2012 by Jay Mercer

When was the last time you praised your employees or contractors?  Hopefully, you’ve developed the good habit of frequently praising your team members, and if you haven’t, you’re certainly not alone.  Most of us do not get enough praise, so there’s a strong likelihood there’s room for improvement when it comes to recognition of a job well done in just about every workplace.  Here are some tips to praise more and help your workers flourish.

A Bias for Negativity and Criticism 

Our brains are designed by evolution to feel the emotions from negative interactions, including criticism and especially threats, in an exaggerated fashion when compared to feeling the emotions from positive interactions.  When we spotted a saber-toothed tiger, the brain that noticed and overreacted to the tiger by running away was rewarded with surviving.

That evolutionary trait doesn’t translate very well in the work environment we are in.  It takes a larger quantity of positive interactions versus negative interaction to just keep us at a neutral baseline of emotions.  And studies show we perform better when we are happy and positive.  So that’s why recognition is so important in a thriving workplace.

Dos and Don’ts

Here are some guidelines to help you deliver the most effective recognition in your workplace:

1. Be as specific as possible. 

Praise a specific task or interaction when possible rather than generalizing.

2. Direct the praise to a task or effort without listing personality characteristics, especially when you’re giving negative feedback.

For example, saying “The report was creased and had ink blotches on it” is better than saying “You are sloppy.”

3. Be timely in your praise.

Don’t wait a whole year to unload praises and criticisms on an employee.  Let them know where they stand on a frequent basis, and if possible, praise them right after they do something great.

4. If you need to give negative feedback, sandwich it.

The sandwich refers to feedback that is first positive, second negative, and last positive.  It’s important not to end on a negative note.  A sandwich would go like this:

“Jim, I appreciate how hard you worked on the Cole case.  You put in a lot of hours and showed dedication.  In the restructuring section, I would have liked to see you ask for help earlier in the project.    It would have avoided the delay we have now.  The section on asset disposition was terrific; you really know your stuff in that area.”

5. Always give feedback in private.

It’s important to honor a worker’s privacy when it comes to performance appraisals and even daily or weekly feedback.  If your employee is in a cubicle or other non-private area, you may need to find a place that is more private before you give feedback.

6. Never send negative feedback via email.

It can be really hurtful and is not appropriate at any time.  If a face-to-face meeting is not possible and it just has to be handled right away, then pick up the phone.

7. Use examples.

When giving positive or negative feedback, give several examples of what’s right and wrong so the employee will learn faster and understand better what is expected.

8. Be supportive.

You are on the same team; to grow the company.  The relationship should be supportive and not adversarial.

9. Explain the impact of actions.

Help the employee understand the downstream ramifications of their actions.

10. Encourage future behavior.

Use phrases like “I’d love to see you do more of that.”

Praise your team more often, and when you do, try these tips to watch your employees shine even more.

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