A strong economy leads some company owners to cut back on marketing. Why spend the money if business is so good? Others see it differently — a robust economy means more sales opportunities, so pouring dollars into marketing is the way to go.

The right approach for your company depends on many factors, but one thing is for sure: Few businesses can afford to cut back drastically on marketing or stop altogether, no matter how well the economy is doing. Yet spending recklessly may be dangerous as well. Here are three ways to creatively get more from your marketing dollars so you can cut back or ramp up as prudent:

1. Do more digitally.

There are good reasons to remind yourself of digital marketing’s potential value: the affordable cost, the ability to communicate with customers directly, faster results and better tracking capabilities. Consider or re-evaluate strategies such as:

• Regularly updating your search engine optimization approaches so your website ranks higher in online searches and more prospective customers can find you,
• Refining your use of email, text message and social media to communicate with customers (for instance, using more dynamic messages to introduce new products or announce special offers), and
• Offering “flash sales” and Internet-only deals to test and tweak offers before making them via more expansive (and expensive) media.

 

2. Search for media deals.

During boom times, you may feel at the mercy of high advertising rates. The good news is that there are many more marketing/advertising channels than there used to be and, therefore, much more competition among them. Finding a better deal is often a matter of knowing where to look.

Track your marketing efforts carefully and dedicate time to exploring new options. For example, podcasts remain enormously popular. Could a marketing initiative that exploits their reach pay dividends? Another possibility is shifting to smaller, less expensive ads posted in a wider variety of outlets over one massive campaign.

 

3. Don’t forget public relations (PR).

These days, business owners tend to fear the news. When a company makes headlines, it’s all too often because of an accident, scandal or oversight. But you can turn this scenario on its head by using PR to your advantage.

 

Specifically, ask your marketing department to craft clear, concise but exciting press releases regarding your newest products or services. Then distribute these press releases via both traditional and online channels to complement your marketing efforts. In this manner, you can make the news, get information out to more people and even improve your search engine rankings — all typically at only the cost of your marketing team’s time.

These are just a few ideas to help ensure your marketing dollars play a winning role in your company’s investment in itself. We can provide further assistance in evaluating your spending in this area, as well as in developing a feasible budget for next year.

For a start-up restaurant owner, pricing the delectable set of menu items is a challenge. Focusing on excellent service and food backed up with a strategical menu pricing is a leading edge. While others get away with unreasonable pricing, developing an ethical pricing strategy can help avoid drawbacks.

Here are some ideas on how you can build your menu pricing strategy:

1. Figure Out What Makes Your Restaurant Unique

Having a general concept for your restaurant business is necessary in order to stand out from the rest. Deciding the concept involves considering your customer base. It is difficult to tell exactly what type of restaurant will resonate with your prospective customers and making sure that there is a demand for what you want to offer. Therefore, you have to observe the strengths of your competitors and set your own competitive advantage. Developing your menu should also coincide with your concept. For example, if your concept is Harry Potter inspired cafe then developing a whimsical menu is a great match. Aside from that, the ambiance of your restaurant gives an overall impact of what you want to convey to your customers.

 

2. Crunch your numbers

Here are some costs you need to consider in order to help you decide how to price your menu items appropriately:

• Direct Costs

This cost includes the cost of ingredients that made up the menu item as well as the food wastes.

• Overhead Costs

These are the cost you spend in order to push through with your business operations such as rent, utilities, payroll, and others.

• Preparation Costs

Preparation costs are the costs of business operations during wild price swing of ingredients, excessive labor requirement, and seasonal costs.

• Indirect Costs

These are the costs not directly associated with the menu items but still have an impact on the pricing strategy. There are certain costs spent in promoting the business and these costs are recovered over the span of business operations. Therefore, adjusting the prices of the menu items is a way to recover these costs.

• Menu Pricing Ranges

Your price range is the lowest price you can charge your menu items but still break-even sales and provides no profit or loss.

 

3. Choose the Most Appropriate Price in Your Range

Appropriate pricing strategy is a secret key to success. Pricing your menu items has no certain rule or formula to get it done. It involves the consideration of certain factors such as how much your competitor is charging, understanding the relationship between quality and price as well as identifying your prospective customers. Be clear when setting up prices. The goal of appropriately setting up prices is to generate profit that is enough to recover costs and still have money left over as return on your investment or to build your business equity over time.

 

4. Seasonal Menu Pricing Strategies

Business owners manage seasonality in many different ways. Showcasing a fresh flavor of seasonal food items excite customers. It is also a way to refresh the menu once in a while. Seasonal menu pricing strategies affect your bottom line positively because in season produce costs less especially when supplied by a major distributor. Therefore, charging a different price to menu items during a different season is the most common and effective way of adjusting to seasonality.

 

Need help in coming up with a sound menu pricing strategy as well as help in getting powerful financial insights, help in achieving diligent tax compliance, and help in achieving a healthy cash flow, contact us today at admin@fas-accountingsolutions.com or 832-437-0385.

For several years now, cloud computing has been touted as the perfect way for companies large and small to meet their software and data storage needs. But, when it comes to choosing and deploying a solution, one size doesn’t fit all.

Many businesses have found it difficult to fully commit to the cloud for a variety of reasons — including complexity of choices and security concerns. If your company has struggled to make a decision in this area, a hybrid cloud might provide the answer.

 

Public vs. Private

The “cloud” in cloud computing is generally categorized as public or private. A public cloud — such as Amazon Web Services, Google Cloud or Microsoft Azure — is shared by many users. Private clouds, meanwhile, are created for and restricted to one business or individual.

Not surprisingly, public clouds generally are considered less secure than private ones. Public clouds also require Internet access to use whatever is stored on them. A private cloud may be accessible via a company’s local network.

 

Potential Advantages

Hybrid computing, as the name suggests, combines public and private clouds. The clouds remain separate and distinct, but data and applications can be shared between them. This approach offers several potential advantages, including:

Scalability. For less sensitive data, public clouds give businesses access to enormous storage capabilities. As your needs expand or shrink — whether temporarily or for the long term — you can easily adjust the size of a public cloud without incurring significant costs for additional on-site or remote private servers.

Security. When it comes to more sensitive data, you can use a private cloud to avoid the vulnerabilities associated with publicly available options. For even greater security, procure multiple private clouds — this way, if one is breached, your company won’t lose access or suffer damage to all of its data.

Accessibility. Public clouds generally are easier for remote workers to access than private clouds. So, your business could use these for productivity-related apps while confidential data is stored in a private cloud.

 

Risks and Costs

Using a blended computer infrastructure like this isn’t without risks and costs. For example, it requires more sophisticated technological expertise to manage and support compared to a straight public cloud approach. You’ll likely have to invest more dollars in procuring multiple public and private cloud solutions, as well as in the IT talent to maintain and support the infrastructure.

Overall, though, many businesses that have been reluctant to solely rely on either a public or private cloud may find that hybrid cloud computing brings the best of both worlds. Our firm can help you assess the financial considerations involved.

Business owners are constantly bombarded with terminology and buzzwords. Although you probably feel a need to keep up with the latest trends, you also may find that many of these ideas induce more anxiety than relief. One example is change management.

This term is used to describe the philosophies and processes an organization uses to manage change. Putting change management into practice in your company may seem scary. What is our philosophy toward change? How should we implement change for best results? Can’t we just avoid all this and let the chips fall where they may?

About that last question — yes, you could. But businesses that proactively manage change tend to suffer far fewer negative consequences from business transformations large and small. Here are some ways to implement change management slowly and, in doing so, make it a little less scary.

 

Set the Tone

When a company creates a positive culture, change is easier. Engaged, well-supported employees feel connected to your mission and are more likely to buy in to transformative ideas. So, the best place to start laying the foundation for successful change management is in the HR department.

When hiring, look for candidates who are open to new ideas and flexible in their approaches to a position. As you “on board” new employees, talk about the latest developments at your company and the possibility of future transformation. From there, encourage openness to change in performance reviews.

 

Strive for Solutions

The most obvious time to seek change is when something goes wrong. Unfortunately, this is also when a company can turn on itself. Fingers start pointing and the possibility of positive change begins to drift further and further away as conflicts play out.

Among the core principles of change management is to view every problem as an opportunity to grow. When you’ve formally discussed this concept among your managers and introduced it to your employees, you’ll be in a better position to avoid a destructive reaction to setbacks and, instead, use them to improve your organization.

 

Change from the Top Down

It’s not uncommon for business owners to implement change via a “bottom-up” approach. Doing so involves ordering lower-level employees to modify how they do something and then growing frustrated when resistance arises.

For this reason, another important principle of change management is transforming a business from the top down. Every change, no matter how big or small, needs to originate with leadership and then gradually move downward through the organizational chart through effective communication.

 

Get Started

As the cliché goes, change is scary — and change management can be even more so. But many of the principles of the concept are likely familiar to you. In fact, your company may already be doing a variety of things to make change management far less daunting. Contact us to discuss this and other business-improvement ideas.

Protecting your company through the purchase of various forms of insurance is a risk-management necessity. But just because you must buy coverage doesn’t mean you can’t manage the cost of doing so.

Obviously, the safer your workplace, the less likely you’ll incur costly claims and high workers’ compensation premiums. There are, however, bigger-picture issues that you can confront to also lessen the likelihood of expensive payouts. These issues tend to fall under the broad category of employee wellness.

 

Physical Well-Being

When you read the word “wellness,” your first thought may be of a formal wellness program at your workplace. Indeed, one of these — properly designed and implemented — can help lower or at least control health care coverage costs.

Wellness programs typically focus on one or more of three types of services/activities:

1. Health screenings to identify medical risks (with employee consent),
2. Disease management to support people with existing chronic conditions, and
3. Lifestyle management to encourage healthier behavior (for example, diet or smoking cessation).

The Affordable Care Act offers incentives to employers that establish qualifying company wellness programs. As mentioned, though, it’s critical to choose the right “size and shape” program to get a worthwhile return on investment.

 

Mental Health

Beyond promoting physical well-being, your business can also encourage mental health wellness to help you avoid or prevent claims involving:

• Discrimination,
• Wrongful termination,
• Sexual harassment, or
• Other toxic workplace issues.

If you’ve already invested in employment practices liability insurance, you know that it doesn’t come cheap and premiums can skyrocket after just one or two incidents. But, in today’s highly litigious society, many businesses consider such coverage a must-have.

Controlling these costs starts with training. When employees are taught (and reminded) to behave appropriately and understand company policies, they have much less ground to stand on when considering lawsuits. And, on a more positive note, a well-trained workforce should get along better and, thereby, operate in a more upbeat, friendly environment.

To take mental health wellness one step further, you could implement an employee assistance program (EAP). This is a voluntary and confidential way to connect employees to outside providers who can help them manage substance abuse and mental health issues. Although it will call for an upfront investment, an EAP can lower insurance costs over the long term by discouraging lifestyle choices that tend to lead to accidents and lawsuits.

 

Hand in Hand

Happy and healthy — there’s a reason these two words go hand in hand. Create a workforce that’s both and you’ll stand a much better chance of maintaining affordable insurance premiums. We can provide further information on how to reduce potential liability and lower the costs of various forms of business insurance.

As a business owner, there are two things that you should already know: increase revenues or reduce costs. Smart business owners can do both implementing marketing strategies and cost-cutting measure to achieve increased revenue and reduce costs. But, there are so many business owners that believe that you must increase sales and revenue to make more money and forget about the importance of trimming the fat and end up actually reducing the profits.

 

Here are some important key points so you can see the difference between profit and profitability:

 

• Profits Alone Can Be Deceiving

People who know basic business on how to calculate profits. You add up total revenues less the total costs, and whatever’s left is your profit. But this is not as simple as that. For example, Company A spends $800,000 to sell $1 million in products and services, generating $200,000 in profits. Company B spends $300,000 to generate $500,000. The two companies generate the same profit ($200,000), but are they equally profitable?

The answer is NO. The more a company spends to reach the specific profit, the more vulnerable it is to minor cost shifts, which might put your business out. Let’s say Company A above spends $300,000 in health insurance costs, and those costs increase by 10 percent. That increases insurance costs by $30,000, reducing profits to $170,000. Company B spends $100,000 in health insurance costs. The 10 percent increase cuts into the bottom line by just 10,000, and profits drop to $190,000. Company B is now making $20,000 more in profit than Company A.

 

• Profit Margins Provide a More Realistic Perspective

It’s important for businesses to track not only profit but also profit margin. Profit margin is the percentage of revenues that is actually profit. Seltzer says, “Sales are great, but if your margins are not good and your costs are too high relative to your revenues, then you have problems.”

 

 

How to Increase Profit Margin

There are basically two ways to increase a company’s profit margin. First, you can increase the price you charge for your products and services, but you must be careful and have an analysis of the impact of those increased prices on consumer behavior and total sales. The second is to know the behavior of your expenses, the safer approach is to control costs.

 

• The Importance of Cutting Costs

There is a big difference between decreasing your cost and increasing your sales to be profitable. A minor decrease in cost will improve your profit margin more than a comparable increase in total sales. Look at every aspect of your business on how you can control your cost.

 

If you need help on how you can increase your profit, as well as help in getting powerful financial insights, help in achieving diligent tax compliance, and help in achieving a healthy cash flow, contact us today at admin@fas-accountingsolutions.com or 713-855-8035.

When a business is launched, its owners typically welcome every customer through the door with a sigh of relief. But after the company has established itself, those same owners might start looking at their buying constituency a little more critically.

If your business has reached this point, regularly assessing your customer base is indeed an important strategic planning activity. One way to approach it is to simply follow the ABCs.

Assign Profitability Levels

First, pick a time period — perhaps one, three or five years — and calculate the profitability level of each customer or group of customers based on sales numbers and both direct and indirect costs. (We can help you choose the ideal calculations and run the numbers.)

Once you’ve determined the profitability of each customer or group of customers, divide them into three groups:

1. The A group consists of highly profitable customers whose business you’d like to expand.
2. The B group comprises customers who aren’t extremely profitable, but still positively contribute to your bottom line.
3. The C group includes those customers who are dragging down your profitability. These are the customers you can’t afford to keep.

 

Act Accordingly

With the A customers, your objective should be to grow your business relationship with them. Identify what motivates them to buy, so you can continue to meet their needs. Is it something specific about your products or services? Is it your customer service? Developing a good understanding of this group will help you not only build your relationship with these critical customers, but also target marketing efforts to attract other, similar ones.

Category B customers have value but, just by virtue of sitting in the middle, they can slide either way. There’s a good chance that, with the right mix of product and marketing resources, some of them can be turned into A customers. Determine which ones have the most in common with your best customers; then focus your marketing efforts on them and track the results.

When it comes to the C group, spend a nominal amount of time to see whether any of them might move up the ladder. It’s likely, though, that most of your C customers simply aren’t a good fit for your company. Fortunately, firing your least desirable customers won’t require much effort. Simply curtail your marketing and sales efforts, or stop them entirely, and most will wander off on their own.

 

Cut costs, Bring in More

The thought of purposefully losing customers may seem like a sure recipe for disaster. But doing so can help you cut fruitless costs and bring in more revenue from engaged buyers. Our firm can help you review the pertinent financial data and develop a customer strategy that builds your bottom line.

Nowadays, the most convenient way to do business is through electronic transactions. This makes the business owners focus on this aspect. What they don’t realize is that they are losing insight in taking care of the day-to-day operation. It’s not all the time electronic transactions are applicable. There are small transactions in which paying through checks, debit cards, or credit cards is impractical. For instance, fees for parking, taxi fare, reimbursing an employee, or cost of photocopying.

Petty Cash is a small amount of cash on hand that is used for paying small expenses during day-to-day operations. It’s a misconception to think that this insignificant amount won’t affect your business. Do you realize how much it would take if you add up all these small expenses or the possibility of fraud acts being committed through these?

To prevent petty cash fraud, the following internal control procedures for petty cash should be in place:

1. There should be a segregation of duties in disbursing and approving the petty cash fund. It is important that the person who approves petty cash is not the petty cash custodian to avoid incompatible duties.
2. Petty cash is strictly for business-related expenses.
3. Proper documentation is needed. A Petty Cash Voucher (PCV) should be used for each payment signed by an authorized officer. The PCV should be pre-numbered and in chronological order.
   • PCV should include the following:
     • Name of payee
     • Date of disbursement
     • Purpose of disbursement
     • Amount of disbursement
     • Signature of the payee, approving officer, and the custodian
     • Receipts of the expense
4. All transactions should be recorded in the petty cash journal at the time it has occurred. This would facilitate reconciliation and would also enable the custodian to see the outstanding balance of cash on hand right after each payment. These transactions should be accompanied by supporting documents.
5. Keep it in a locked petty cash box.
6. Reconcile the petty cash fund by examining the amount of cash and receipts with the corresponding PCV. The total of these two should match the established petty cash fund recorded in the books. In case discrepancies occur, perform a thorough investigation to account for them for instance, looking for missing receipts and undocumented transactions. If a fraudulent act is confirmed, seek the help of your independent bookkeeper help to address this issue and strengthen your internal control.

If you need help in handling your petty cash, as well as getting powerful financial insights, help in achieving diligent tax compliance, and help in achieving healthy cash flow, contact us today at admin@fas-accountingsolutions.com or 713-855-8035.