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Jul 15

Assessing Your Mid-Year Milestones

Posted by Edwin Monteiro on Wednesday, July 15, 2015

Wow, it’s hard to believe that 2015 is half over already!  Now that we’ve crossed the mid-year mark, it’s time to see if we’re on track to hit our 2015 goals.  In order to do that, we need to see if we’ve met our mid-year milestones.

Managing By Milestones

A milestone, in project management terms, is simply a specific point or event along a project timeline.  It’s marked so that project managers recognize when a set portion of the project has been completed.  In business terms, we can use milestones to see how we’re faring toward our financial goals.

Assuming our business is not seasonal, we should have earned at least half of our target revenues for 2015 as of the June 30th income statement.  If we’re falling short, we can recognize this and perhaps add some sales or promotions to spike revenues so that we can correct course before the year has ended.  If we’re ahead of the game, we can identify what's working and continue to replicate it.

Either way, with milestones, we can be more proactive in reaching or surpassing our goals.

By the Numbers

Some critical numbers you may include in your milestones review include:

  • Revenue to date
  • Expenses
  • Profit to date
  • Assets acquired or sold
  • Debt paid down or debt taken on
  • Number of employees added, lost or both
  • Number of clients added, lost or both
  • Accounts receivable aging

Project Performance

Milestones don’t always have to be numeric.  You can also use milestones to determine if you’re on track with internal projects.  Perhaps for 2015, your goal was to replace five computers and convert your shopping cart system.  You can set milestones to monitor specific phases of these internal projects or just monitor when you start and complete them.

Mid-Year Milestone Report

Document your accomplishments in a mid-year milestones report.  It feels good to record them, plus you’ll have a history of how much you've accomplished as well as what worked.

The report can include the milestones as well as a narrative explaining the performance to date.  Using LivePlan makes this especially easy.  If you’d like our help creating this report, please feel free to contact us.

Accounting for milestones can help you become more proactive toward reaching your business goals.  Plus, it’s great to see how far you’ve come since the beginning of the year.

Jan 31

Is Your Revenue Forecast On Course?

Posted by Edwin Monteiro on Saturday, January 31, 2015

A great way to start the year is to get clear on exactly how you can make your revenue goals.   A revenue forecast is the perfect tool.  You’ll need to be proficient in Excel, and if not, you can use a tool like LivePlan ( which makes business planning much easier.

The first step is to organize your products and services (or revenue stream) into definable groupings.  In Excel, enter the revenue description in the first column and use the second column for price. You may be able to export a revenue list from your accounting system, which will save some time.  Use column three to enter the number of items or volume that you estimate selling for the year.   Column four should contain formulas to multiply the price by the volume to get total revenue for each service/product you sell. You can then sum the numbers in column four to generate your projected revenue for the year.

Getting Industry-Specific

Depending on what industry you’re in, you may need to make some adjustments to the above simplified revenue plan.  For example, if your business is construction, you’ll need to list out your projects instead of products and services, and you’ll then need to make adjustments if your project will go longer than one year.  You’d need to add a couple of extra columns to determine the percentage of the project that will be complete and billable in 2015.

If you bill by the hour, you’ll need to calculate how many hours of service you’ll be able to charge for and factor that into the equation.

If you sell products, you’ll need to figure a discounted price. I recommend you have an extra line for each product that sells at a discount and allocate the total amount you plan to sell at each price.  If that’s too much work, you can calculate an overall discount rate and apply it to total revenue at the bottom of the worksheet.

Use the 80-20 Rule

If you sell a lot of products and services, consider bundling them into subgroups to keep your plan cleaner and at a higher level.  Spend only the amount of time that’s worth the insights you’ll gain from doing an exercise like this.

A Prosperous Year

Once you’ve created the plan, you can now take action based on insights you’ve gained and continuously track your progress.  Perhaps you’ve even found a whole new set of revenue goals to accomplish. If you need help constructing or analyzing this plan, feel free to reach out to us and let us know how we can help.

Jul 28

Summertime Strategies for Your Business

Posted by Edwin Monteiro on Monday, July 28, 2014

Summer is a fantastic time of year not only for the weather; but also offers you a chance as an entrepreneur to press pause and take stock of where you are, congratulate yourself on what you’ve accomplished so far this year, and make adjustments to your future plans.  Here are five summertime strategies to help you regroup, reassess, and revitalize your business.

1. Mid-Year Review

If your business runs by the calendar year, 2014 is already more than half over. This is a perfect time to stop, reflect and strategize. You can make this process as informal or formal as you want.  Some companies hold complex retreats but you may just need some quiet time on a weekend for a business review and planning session when all your family is busy doing something else.

If you’ve never done any real business planning and feel like you could use a good tool, consider using LivePlan - which makes planning and tracking growth a much easier task (contact us for assistance).

2. Take a Vacation

There’s no better way to rekindle your creative juices than to get away from the business for a bit.  Summertime is when most people take vacation, so if your business is not having its busy season, this might be a good time to take a break. 

If you’re anxious about being away from your business, you’re certainly not alone.  In your annual planning process, block out your vacation way ahead of time.  Book the reservations with no refunds several months in advance so that you won’t find a way to back out at the last minute.  There is life beyond your business, and you will be a better business owner when you take regular breaks away. 

3. Celebrate

Take the time to pat yourself on the back and also to congratulate the people around you for the goals reached and the efforts of the team.  We could all use more praise and more celebrations in our lives.  Perhaps you can organize a party or outing; or if you are not the partying type, a quiet word individually with your team can go a long way.

4. Prune Your Projects

Is your plate too full?  Most of us would say “yes” to that question, so the next step is to ask yourself what you can afford to stop doing that doesn’t make as much sense to spend the time on.  Is there a project or two that can wait?   If so, decide to stop stressing about not getting it done and give yourself permission to put it on the back burner for now.

5. Focus

Ask yourself what one thing you could accomplish today that will make all the difference in your profits, goals, or simply peace of mind.  Then focus on that task at hand. 

Try these five summertime tips to help revitalize your business.

Jun 16

Essential Components of an Entrepreneur’s Compensation

Posted by Edwin Monteiro on Monday, June 16, 2014

The two major ways entrepreneurs can take money from their business is through draws or by receiving a paycheck.  The type of entity in which their business is set up will determine which method can be used.  In either case, entrepreneurs need to be careful not to shortchange themselves.

If you’re running a service business, it’s easy to initially think you can do well with a similar hourly rate that you earned as an employee.  Here’s a quick list of five elements that should be included in the compensation of every entrepreneur:

1. Competitive pay

If you were doing the same work for a company that hired you, what would your pay be?  Are you making at least market equivalent or better?   A lot of times, as entrepreneurs, we tend to focus only on this piece of our compensation when we set our pricing, and that’s a big mistake.  It’s only 75 percent of what our total pay needs to be.

2. Profit

As an entrepreneur, you take extra risk when you own your own company, and you should be compensated accordingly. Your capital is tied up in your business and should be earning a good return in addition to your reasonable compensation.

3. Benefits

Employees get vacations, health insurance, and bonuses; and you should too. This should be part of your compensation package as an entrepreneur.

4. Taxes

Although our individual taxes are not deductible as business expenses, we need to compensate for them so that we’ll have enough cash for our living expenses.  It’s a huge chunk too.  We work about three and a half months every year, just to pay for our taxes.

5. Retirement plan

When you work for yourself, no one is going to fund your retirement for you.  Although the Social Security program helps a lot of seniors, it’s up to you to set additional money aside for a comfortable future.

Complete Compensation

Your compensation should include all of these components.  If it doesn’t and you feel like you can’t afford to pay yourself that much, then your pricing might not be reflecting all of these items correctly, you might have a volume problem, or your business model may need some adjusting.

It’s normal to take a smaller paycheck the first few years as we’re building our businesses, but if you’re still doing it after several years or constantly having cash flow issues, then something may be wrong.

If you’d like our help in this area of your business, please reach out and let us know.

Make sure your future is bright and financially secure by including all five components in your entrepreneur compensation.