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Business Cloud Ideas: Have You Looked at Clouds From Both Sides Now?

“I’ve looked at clouds from both sides now
From up and down, and still somehow
It’s cloud illusions I recall
I really don’t know clouds at all” –Joni Mitchell

If you are a small business that has not taken the time to consider cloud applications, you are doing yourself a disservice. The article, 6 Cloud Tools For Small Business by Heather Allard exposes on some cloudy facts that you should already know. As business managers, we not only manage the business affairs of those in the entertainment industry, but also help small businesses manage their businesses. These applications can help you run your business without employing extra people or costly software implementations. However, unlike Heather, I will not focus on pushing any one brand, but what the benefits would be to you.

Accounting: As a business manager, I find that most companies use QuickBooks. That software is inexpensive and adequate until you get to many users and inventory. There are a number of good cloud accounting systems that offer a good accounting package. But, I caution you to not buy any modules unless you absolutely need them. Also, look at three companies and play them against each other in attributes and price. You will be happy with your choice.

File Storage: Protect your data. As business managers, we deal with so much of our client’s information, we use an off site application to protect their data. We not only use them to digitally support our transactions, but to store documents for our clients’ retrieval.

Timetracking:I really don’t recommend this automatic time-tracking. It seems to impede too much “Big Brother” influence on your employees. But, if you see a need in your business management, test some of the applications.

Scheduling: Normally, I can handle my own schedule with an I-phone, but there are applications that can organize and publish your schedule to your clients.

Information organization: Always look for a way to reduce your paper to digital where legally feasible. There are organizations out there that help you manage your business information.

E-mail Signature: Now here is a new one. Our business management firm constantly markets. I created a quick e-mail signature, but Heather offered a product named WISESTAMP to customize your e-mail signature.

In any event, small businesses should consider cloud applications in an attempt to compete more efficiently.

Business Strategic Thinking: How to Prevent the Three Most Common Mistakes or Drop Your Scag

There we were, 2 twelve year olds blowing sideways in an 18-foot sailboat towards the concrete wall of the Marina del Rey, CA channel. We tried everything, pulling on the main, the jib, and even the rudder. The wind blew our boat without heeding our commands into the wall, sails flailing. Luckily, it was high tide and my cousin climbed onto the wall to get his dad.

Upon arriving, his dad jumped into the boat and pulled a lever which lowered the keel underneath the hull. His disgusted look emptied our pride. We didn’t go through the proper thinking before setting off on our little journey. We planned poorly.

I came across this article by Dylan Love, What to do when your business starts to fail. It reminded me of that sailboat ride. Dylan’s article tries to help those who run into business trouble. I find the attempt admirable, but the real advice is in the business strategic thinking before you set sail.

I will take Dylan’s three points and apply some business strategic thinking to the mix.

You started your business for the wrong reasons: Dylan’s article states that you can do an immediate fix or adjust your attitude. From a business strategic thinking point of view, I wrote an article that dealt with the mental framework before the business is started. My article, Making a Living as a Musician: Do You Have the Right Frame of Mind to Break New Ground? spoke directly to the business owner’s strategic thinking. I tried to use two excellent strategic planning books in dealing with the midset of the soon-to-be owner.
You’re running out of capital: Dylan proposes the obvious, increase revenue, decrease expenses, or ask for more money from investors. The later, which I have seen too many times, is the most troubling. My article, Venture Capital Risks: As a Business Owner, Don’t Give Them Your First Born discussed how to set the role of your investor, and expectations in your business strategic thinking to minimize the chance of getting in trouble.
You didn’t plan properly: This is everything. Please don’t paint a rosey picture to your investors, only to scramble to stay in business for the first twelve months. There are many aspects to business strategic thinking. For example, my article, Small Business People Need is a Strategist, Not a Marketer and That Person is You details the small business owner’s role in strategic planning and tactics. When I look at a new business plan, I instinctively say, “You need 2-3 times more money than what you are asking, and you must streamline your expenses to their bare minimum.” Clients pay me to play the bad guy, the pessimest, and the “rain on your parade guy.” That is not to say that I don’t design a business strategy to help them, but I have to get them out of that fairytale thinking that they will make millions out of the shoot. If I don’t, they would not accept my proposed plan.

Business Strategic Thinking is a praxis (combination of theory and practice, Karl Marx definition) of your strategy,tactics, and implementation. Don’t get caught in the position of trying to save your business when you could have planned for its success instead.

You can be a Simon Cowell. Welcome to the World of Crowdsourcing

I think it all started with American Idol, or not. Bruce Houghton’s article, A Graphic Look At Crowdsourcing, labelled a movement that I have been watching for a while. I have watched companies tap into the masses to develop a product, or judge which product is best. Either way, the company is not employing inside employees or independent contractors to make the decision.

American Idol outsourced their final judging. Oh yes, Simon used to get his licks in when he was judge, but ultimately, the viewers determined who their favorite idol was going to be. The best part was the viewer (or the outsourced judge) was also the consumer of the music product.

Crowdsourcing, ( as in “Crowd Outsourcing”) has been around for a while. Such companies as Amazon.com (mechanical turk competition) and Netflix (algorithm competition) have used it successfully. These companies launched a proposal to the world to develop something for them in a contest manner. The winner was significantly compensated.

The article speaks of the objective benefits and deteriments. But, can the average business person use it, even if the outsourcing is a success? Take a look at these factors?

Does your business lack the resources and/or talent to develop a major new concept or product?
Do you have a strategy that is within your budget to solicit “the crowd” through such means as social networking?
Can you offer something of value to the winner of your outsource?
Do you have a close horizon so that your winning solution will not be old technology, or old fashion by time it is released?
Do you have the internal infrastructure to launch this new product or service?

Let’s take an example. Let’s say you are a tile manufacturer and you want to create an app that Ipad users can design their own tile within your factory. You want the app to tie into your production and distribution processes, and be delivered anywhere in the world within 7-14 business days. You offer all sorts of tools and colors and the option to make only one sample for early approval. Let’s go through the questions:

Does your business lack the resources and/or talent to develop a major new concept or product? YES. YOU ARE A MANUFACTURER, NOT A PROGRAMMER AND ENGINEER.
Do you have a strategy that is within your budget to solicit “the crowd” through such means as social networking? WELL, YOU CAN EXPAND YOUR REACH, BUT RIGHT NOW IT IS WORD OF MOUTH AND SALESREP. THIS STRATEGY MUST BE OPERATIONAL PRIOR TO THE OUTSOURCING.
Can you offer something of value to the winner of your outsource? FREE TILE WON’T WORK. IT HAS TO BE CASH, OR MAYBE A COMBINATION.
Do you have a close horizon so that your winning solution will not be old technology, or old fashion by time it is released? IF TECHOLOLGY CHANGES EVERY EIGHT MONTHS, YOU MUST DO YOUR DUE DILIGENCE TO MAKE SURE NOTHING IS BEING DEVELOPED BY ANOTHER.
Do you have the internal infrastructure to launch this new product or service? BIG QUESTION. IF YOU DON’T HAVE THE RESOURCES TO TIE YOUR WHOLE SUPPLY CHAIN TOGETHER TO MEET THE 7-14 BUSINESS DAY TURNAROUND, THEN YOU HAVE TO DEVELOP THAT FIRST AND TEST IT ON A SMALLER, LESS COSTLY PROJECT.

So, you can see, Crowdsourcing may lure you into, what seems like, an easy solution, but if the other aspects are not in place, it can ruin your core company processes.

Making a Living as a Musician: Do You Have the Right Frame of Mind to Break New Ground?

As an amateur musician CPA, I marvel at the musician who can not only make a decent living, but break new ground. Take Jazz for instance. I have learned a lot about jazz from my son, a UCI jazz piano freshman. He’s picked up that jazz attitude that jazz guys write and perform really technically advanced music, and should be placed on a level above R&B, and Blues. Now, before writing hate mail, remember, he is 19.

My response to him is that as an artist, you may be right from an technical point of view, but art needs to be appreciated by society in order to be woven into the culture. Otherwise, your “high-brow” music is just academic.

This is why I am blown away by those who broke new ground in their genres: The Beatles, Elvis, Miles Davis, Charlie Parker, George Gershwin, and many more. Not all of them became rich, but they enriched our culture for generations to come.

But there is a money problem. How does a musician break new ground, and make it big? Bruce Houghton tried to quanitify this in his article A Musician’s Minimum Sustainable Scale. I commend him for trying to help the musician quantify “success,” but the article begs the biggest question: How does a musician make it big in this new industry.

If you are a reader, I will recommend two books. If you are not a reader, I will explain their main points, and maybe you’ll become a reader.

Good to Great by Jim Collins explains how a company can be the world’s greatest at if they develop three things: a) A passion, b) Something that can make money, c) Something that you can do which will make you the world’s best at it.
Blue Ocean Strategy by Kim and Mauborgne outlines the attributes you need to work in an industry where the competition becomes irrelevant. In a nutshell, focus on what your customer wants and is not getting, and eliminate what you are giving the customer that is not wanted.

What does this mean to a musician who wants to make a great living? Good question. I can’t tell you the answer because you’ll have to develop that. But I can point you in a good direction using the principles outline in the books:

Play your passion. If you are a jazz artist, don’t write hip hop because it is selling. If you are going to be the greatest in the world, it will have to be within your passion.
Listen to your audience within your passion. Dylan said that he was not leading the 60’s revolution, but just reflecting what was happening. Of course, this resonated with the 60’s youth, and fed more into his art to be the best.
In order to make a great living, you have to expand your passion’s reaches to a bigger audience. Let’s take Arnold Schoenberg and his 12-tone music system. Some say it was the most influential music of the 20th century, but if you play it for the masses, most will plug their ears.
Now, let’s compare that to Paul Desmond’s Take 5 with the Dave Brubeck Quartet. Now, here was a 5/4 time signature that was not common in pop music, but Desmond was able to take his passion, of which he was one of the best, and write it to where the album Time Out became the top jazz album and a top pop album. The Dave Brubeck Quartet, partially under the writing of Desmond, unknowingly fulfilled of the Good to Great and Blue Ocean Strategy theories of business. They hit all of the points mentioned above.

The question is, what is your artistic-business strategy? You can sit there and moan about piracy, bad record deals, and shallow listeners, or you can be the greatest at what your passion is and make a lot of money.

Web-centricity: An Opportunity for Business Technology Management

Have you ever built a toy race car? I remember the first little pocket wooden race car I built for my son’s Cub Scout race. I did it once when I was a Cub Scout, so we worked on it together. We made a reasonably good-looking car, and got it rolling nice and straight. I thought we did a pretty good job…

…until we arrived at the race. Some of the fathers were engineers and very versitile in wood carving and aerodynamics. Our car looked like a shoe box racing against formula one cars.

We were outgunned, and so will you if your small business doesn’t try to stay abreast of the new technology. The April 2011 McKinsey Quarterly article, How new Internet standards will finally deliver a mobile revolution by Bengi Korkmaz, Richard Lee, and Ickjin Park, tells of such a game-changer. A new word, web-centricity. The article tells of the next generation of HTML, called HTML5. The article claims, “The next generation of the Internet standard essentially will allow programs to run through a Web browser rather than a specific operating system. That means consumers will be able to access the same programs and cloud-based content from any device—personal computer, laptop, smartphone, or tablet—because the browser is the common platform.”

What this means is your phone becomes as powerful as your desktop because it will have the capability of running tasks, not as apps, but as cloud computing software stored on remote servers.

As an entertainment business manager, this has implications to my clients who are artists. Sometimes, the only thing limiting their creativity are the tools they have to work with. As a CPA business consultant, I struggle to teach my small-medium business clients to adjust their strategies in lieu of the horizon the lays ahead of them. You “skate to where the puck will be,” not to where your competition has already ventured.

So, what does this mean? Do you go out and buy every technological improvement that comes on the shelf? The obvious answer is no. To be more successful than your competition, is to develop a strategy that includes the tactics of keeping your ear to the ground. The web provides a plethora of information to those who take the time to access it.

As a business consultant CPA, I strive to alert my clients with anything that can benefit them. But opportunities are a kiss in the dark. You can easily miss one if your eyes are closed.

American Business Culture: Do You Have Italian “Horse Brains?”

My Italian grandfather was born in Calabria, Italy in 1899. He only had a 6th grade education, and struggled to support a family of 11, much of it during the Depression. However, when he died 1988, he and my grandmother owned a successful restaurant, and 7 homes in the Los Angeles area. Even though he was proud that I attended UCLA, he use to say, “You study books, but I am smart because I have ‘horse brains.'” Then he would snort like a horse.

By horse brains, he meant, “wisdom,” the knowledge of life. And, he probably got the Italian translation of “horse sense” slightly off, but I got the message.

Katie Morell’s article, 6 Ways to Create a Positive Corporate Culture reminded me of my grandfather’s advice. She lists six points that would help change a company’s corporate culture. The list is:

Define Your Legacy
Hire Smartly
Listen
Engage
Reward
Prepare to Change

Now, the article may seem like good advice, but I think the author can use a little horse brains. According to Jim Collins of the book Good to Great, Katie should have put item #2, first. Build your dependable, self-motivating team first, then decide where you want to go. Jim said be rigorous, not ruthless. He throws out some practical disciplines:

When in doubt don’t hire–keep looking
When you know you need to make a people change, act.
Put your best people on your biggest opportunities, not your biggest problems.

As you can see, using wisdom to choose your people first, before defining your legacy, or strategy eliminates a whole list of business social problems that surface down the line. You may say, “So, fire all the individuals that don’t work efficiently?” Not necessarily. Most people have a passion for something. Find that passion in an employee if you think they can perform as someone that can take ownership in their duties. However, some employees (or business partners) may not have the passion for your company. That is the time to part ways. Align your business with passionate individuals, and your employees will help you drive your business in a direction that can make the company great.

Venture Capital Risks: As a Business Owner, Don’t Give Them Your First Born

Everyone loves to hear of a business gamble that pans out big time. As a business manager for entertainers, I have worked for some big names. Over 25 years ago, I learned from my mentor that he started as a TV lawyer in the early 1950s. The field was wide open and attorneys not only tested the legal waters, but also their billing practices. My employer started with an unemployed writer who needed some contract negotiations. He didn’t know what to charge the writer, so at this early stage, he took 10% of the writer’s new production company. My mentor charged for his services soon after that, but in the 1980s he cashed in his 10% holding when the writer/producer “went public.” The unemployed writer had evolved into one of the biggest names in television.

The Don Charlton article, The Most Important Word When Raising Money for a Small Business, reminded me of that conversation. What is a start-up willing to bargain with an angel investor for cash or services? Mr. Charlton stated, “The best piece of advice I can provide is one that was given to me recently: change your mindset from ‘give up’ to ‘trade.'”

Now, this is good advice, but how does one wrap their arms around “trading?” I’d like to give his advice some teeth:

Always use a lawyer: This can be costly, so try to negotiate a ceiling to the legal fees.
Exit plan for your angel investor: Set a time limit with some required milestones that would “cash out” the angel investor. For example, if the company’s net worth reaches $10 million by five years, the investor will receive 30% of that amount or more if valued higher.
Create multiple classes of venture capital ownership: If you use an LLC, as oppose to an S-corporation, you can create different levels of ownership along with different rights. Make your class of ownership different than your angel investors with a bigger upside.

We are approached weekly for our expertise in business plans and strategic planning. We see so many new owners who are looking for angel investors. As a new business owner, lay out the possibilities like those I stated above. Your attorney can counsel you as to the application to your situation.

Business Proposals: If You Can’t Stand the Heat, Find a Cooler Kitchen

They sat perched on the kitchen stools like two vultures waiting for the next customer. The problem? The pickings were slim.

My stepfather and his friend, Dan, decided to open their own plumbing business, but they only had one client, a Beverly Hills house designer, who didn’t need them that day, or the next. So, they sat by the phone talking about the employer they just quit. Dan, a Texas plumber, who took one bath a week whether he needed it or not, puffed on his cheap cigar.

That was the last straw for my mother. Out they went. Their business model needed some work, but it wasn’t going to be done in her kitchen.

Mike Periu talks about flawed business plans in his article, 3 Signs That Your Business Model is Flawed. Here is what he has to say:

Accounts Receivables and Accounts Payables are ignored: Mike is correct, but not in every situation. I prepared two recent business plans and ignored the accrual basis because one was a market, and the other a movie studio. Both require payment for goods and services at the time of the sale, or at least every week. To create AR and AP just for the sake of creating it would not add to the business plan value. But with that said, if you are a manufacturer or service company that does not collect cash immediately, then you must stagger your income based on some reasonable collection scheme.
Your income taxes aren’t calculated correctly:This is elementary to most accountants. However, recent business plans we have prepared are for flow-through entities where taxes are paid at the shareholder level. It is very hard to project taxes for the shareholders since each of their tax situations will differ. However, in the case of deferred distributions, we did make an assumption to distribute tax monies for profits recognized.
Sales forecasts are calculated using the top-down approach: This is probably good advice, that we have practiced, but with a different perspective. We don’t look at market share, but compare similar companies in the business plan we created. Then for the first two years, we have discounted the revenue and built it up slowly until the company was earning what a similar company in size would.

Business plans, strategic planning, business models, business proposals, what every you call it, take an objective eye. It is nice to dream, but dreams don’t pay the rent. Usually, clients that come to us require 2-3 times the investment than they projected just to stay afloat before the business becomes sustainable.

Business proposals need a disinterested financial person that can give a candid assessments about your assumptions. Prepare for a worse case scenario is better for the solicitors, and the investors. If your investors object to this assessment, you are working in the wrong kitchen, and have to find another to cook up a business proposal.

IT Strategy, Don’t Buy the Farm

I entered the exciting world of accounting in 1979. Back then, we didn’t have personal computers. No, we prepared our workpapers on green ledger paper. If we wanted to enter a journal entry in a client’s general ledger, we had to fill out a form and submit it to the head of data processing, Norma. Norma was a surly woman who perched a cigarette off her bottom lip like a trapeze artist hanging by her legs. Normally, you would think Norma’s business of entering data into a computer was boring. It was, until she opened the door into an office that revealed a male and female co-workers in…well shall we say, a compromising position. That performance played verbal reruns around the office for a year.

With the advent of the computer network, Norma’s days were numbered. And with cloud computing, some think the office network days are numbered.

David Rosenbaum tries to let the air out of the clouds with his article, Can Cloud Computing Clear the Air? . He talks about the hidden costs of this strategy that you must be aware of. His article reminds me of Mr. Haney of the tv sitcom, Green Acres. Mr. Douglas bought a broken down farm from Mr. Haney and every time Mr. Douglas realized that he needed something, Mr. Haney would change hats and be an expert of selling that item which Mr. Haney just happened to have in his truck. Of course, Mr. Douglas would be swindled into buying something he really didn’t need.

A cloud computing strategy could generate the same result. Your strategy should be to find the best fit for your company. To accomplish this, you should check out all of the leading vendors. Go online and read the comments from technology magazines. You don’t want to save IT expenses, at the cost of losing customers because the cloud computing system did not perform as seamless as you thought. Make a list of every major function you need and tell the vendor you want a free demo to play with for thirty days. During that thirty days, try to load some data and test, test, test.

Don’t want to reinact a scene in Green Acres:

Mr. Douglas (after being ripped off again by Mr. Haney) : “I should’ve known!”
Mr. Haney: “You sure shoulda.”

How to Create a Successful Small Business in this New Economy, or How Old Shep Let Me Down

“Teach something to the 5th graders?” She said. “Like what?” I replied.

Thus the conversation between me and my son’s 5th grade music teacher began. It was true, my father was a Rockabilly recording artist in the 1950s, and even though I had played guitar since I was five (unprofessionally), I worked in the entertainment industry for years. But talk to an elementry school’s music class?

I bit my nails, and agreed.

The next week, I taught the kids to follow their hearts when choosing their careers. Of course, that was a long way off for fifth graders, but they dreamed, too. My method was to start out by singing an old Elvis ballad, Old Shep. The song spoke of a boy who had to put his sick dog “down.” The dog had saved the boy’s life when he was younger.

The song Old Shep was a tear jerker. I thought it would get the kid’s interest before I told them how to be happy, and successful in what they do for a living.

I was wrong.

As it turned out, I was the only one tearing up. Still, I got the message across: Follow your passion.

Mike Michalowicz’s article 5 Ways to Find Your Hidden Talents reminded me of my little talk. In the article he set forth five suggestions to find you hidden talents: Listen to Others, Determine what is easy, do what you enjoy, do what you like to talk about, and ask your friends.

I didn’t quite agree with all of his points. You may be better at something than your friends, but that doesn’t mean that you are passionate about it, or that it will help you start a great business.

Small business is a risk, but it should be one that you are passionate about. Nobody knows better than you, as to what gets your creative business juices flowing.

So, don’t ask people, ask yourself. What do you dream about as a small business? This was the third point that Mike suggested, but I would restate it as doing a small business what you most enjoy.

His second point was to determine what was easy. Sometimes that works, but usually if it is easy, then someone else has already tried it. The better advice is to find the Blue Ocean where competition becomes irrelevant. It may be easy, or it may be more challenging in your small business, but it will certainly set your small business apart.

What Mike was missing in becoming a great small business were two things: Do something that is economically feasible, and do something that will make your small business the best in the world. These two addional suggestions are stated in a book by Jim Collins in Good to Great. They were two of the three wheels in the secret to greatness. The third was already mentioned, passion.

As I have stated before, there is not a better time in the last 100 years to start a small business. But, the odds of a small business becoming great, are large. A business owner, or an employee must start with the three pillars if they are to be successful as a small business. Then have someone help you with a professional looking business plan whether you are looking for investors or not for your small business. The business plan will refine your strategy by showing your strengths, weaknesses, opportunities, and threats. Any new small business owner must look carefully at themselves before taking the greater risk.