Improving Your Accounting Department

The dealership office is normally the “forgotten” department of the store. The office staff normally feels as if no one cares about them. They don’t produce gross profit for the bottom line, so why should you spend any time with them or tell them you appreciate them for what they do for the store? They are always telling you what everyone else is doing wrong and complaining about all the work they have to do.

Well, if I were you, I would keep listening to them and pay attention. They are the “police force” of the dealership that watches your back and keeps everyone from taking advantage of you. They keep watch on your money, your assets, personnel, vendors and customers. They pay your bills, complete payroll, listen to all the managers complain about what you won’t do for them, clean up all the paperwork from all the other departments and try to show you a profit at month’s end on your financial stat
Sometimes doing all of the above wears down the morale of the office staff. Most office staff work very hard to complete everything on a timely basis and as accurately as possible. They feel underappreciated for the work they do to “clean up” the other dealership employees’ and managers’ messy paperwork.

The best thing you can do is reinforce the great job your accounting department does. Meet with them on a regular basis to find out what everyone else in the dealership is doing or trying to get away with. Sit down with them to review your expenses each month and ask them what needs to be done to reduce or eliminate those expenses to increase your profits.

Your accounting office doesn’t produce gross profit but they can let you know the gross profits in the various departments are not up to standards or meeting industry minimums. The accounting office can help you reduce the number of low- or lost-gross-profit transactions which take place each month.

There are many ways to improve your office. One of the first things you can do is keep everyone who doesn’t need to be in the office out of there. Constant interruption causes concentration to decline and it’s not what you want to happen when someone is handling your money.

Another thing you can do is review what paperwork the office staff is always cleaning up for the other departments. One of the gripes I hear most from the office staff is the condition of the car deals which arrive in the office. They seem to be missing some stip or signed document to get the deal funded in a timely manner. Most of this is due to either the sales or F&I staff not doing their job as best they can. F&I managers need to be good at selling and getting the deal closed for you to make money, but you also need to collect the contract proceeds in a timely fashion in order to stay in business and pay off the floor plan within guidelines to avoid audit problems.

Your office can tell you when the service department is not closing their repair orders and not submitting timely warranty claims. There is normally a time frame to submit and obtain payment from the factory for the warranty claims. When you don’t collect it, your office will charge it off to policy expense. You may not see this expense itemized on your financial statement because it is normally buried among other expenses you don’t study very closely.ement, even though their job is not to create sales or gross profit.
Writing off unapplied time or excess work–in-process can cost you “lost gross profits.” Any time you write off could have been turned into labor sales, which would have produced gross profit for the service department. Any adjustment besides a small one should be reviewed each month to figure out why you have it. Doing so can increase your profits.

Having your office manager run and review various reports for the parts department, which your parts manager doesn’t have time to do, can alert you to problems early so they can be addressed and corrected. These may be problems with overage inventory, excess inventory, excessive negative parts on hand, a large amount of non-stocking parts, and discrepancies between the parts counter pad and the general ledger, etc.

Another problem I see frequently is the office continually having to answer phone calls intended for other departments. Again this breaks concentration and can contribute to mistakes and inefficiency in the office. I know it sometimes can’t be avoided due to the lack of adequate staff, the cost to hire a receptionist or the time of day, but you should take a hard look at what this is doing to your accounting department. It could be just as easy to make sure a salesperson or manager is available to answer the phones during heavy peak periods.

I know I am partial to the accounting department, but someone has to tell their story. Use their abilities to the fullest to aid in increasing the profitability of your store. Let them know you care about their contributions toward your bottom line and your well-being.
                                                         by Killian Dynamics.

5 Ways to Improve Your Productivity in the Office

5 Ways to Improve Your Productivity in the Office.

It is possible to find extra time in your day simply by reorganizing the way in which you approach the tasks that fall within your responsibility. Take a look at each of the following areas of your working life and see where you can make improvements which will allow you to put more time into the things you really need to focus your attention on.

1. Communication
One of the most important skills in any business is effective communication. When you are communicating with staff and clients, make sure that all your instructions and information is understood the way you intend it to be. Simply repeating the same request in different words at the end of a conversation can mean the difference between getting the report you want and the one that your staff thought you wanted.
With communication, clarity is the number one objective. You may have a Masters degree in English, but the person you are communicating with may not. By keeping the language you use simple, you increase your chances of having your message understood.
Just by speaking clearly, concisely and checking that the person you are communicating with has understood what you have said, you can save precious time by getting what you need first time.
2. Planning
This is something that is needed for both repeat projects and larger projects.
Keep a yearly planner on your desk that you record repeat projects (annual/monthly/etc) on so that you can see at a glance when you need to start collecting information for them.
With larger projects, plan the entire project at the beginning. Break it down into smaller steps and assign a date by which each step should be completed. Delegate any of the project that can be done by someone else, but keep it closely supervised as to who is doing what and when you need it completed by. Once you have planned how you will do the project, you will find that you are less likely to put it off until the last minute.
3. Prioritizing
Jumping around from one project to another, not feeling as if you have accomplished anything each day or constantly rushing to finish on deadlines is a sign that you need to reorganize how you approach your task scheduling and work prioritizing strategy.
Each morning go through your in box and prioritize its contents. Once you know what has to be done, how urgently it is needed, and how long it is likely to take to complete, add the tasks in order of importance to your work schedule for the day. When the mail comes in, prioritize any items that need attention, and then add these to your work schedule.
At the end of each month take a look at the projects that are known for the month ahead and start to provisionally schedule when you might start working on these so that you start the month already thinking about what needs to be done.
4. Procrastination
For many people, this is the biggest time thief of all! The most vital thing you need to do is to acknowledge that you are guilty of procrastination, and then identify the tasks you tend to put off as long as possible. Once you know which things you are likely to procrastinate about, consider why it is you don’t want to do them. Perhaps they are too large, too boring, or just seem like a waste of your time. By identifying the reasoning behind your procrastination issues, you can find solutions, such as breaking larger projects down into smaller pieces (see planning above), scheduling the boring tasks for first thing in the morning so they are done, and delegating (see delegation below) any tasks that are so routine they feel like a waste of your time. Eliminate procrastination from your working day and see how much more you can accomplish in your day.
5. Delegation
If you have staff employed to help you, delegate some of your routine tasks which you can quickly instruct someone else to take responsibility of. Remember to communicate the instructions clearly and ensure they are understood before leaving the task in the employees care. Once you delegate something, just a quick review to ensure it’s done correctly and on time is all that you should need to do. Shuffling a few of these tasks to team members will free up your time for more specialized work.

                                                                                                                        by K James

Coping Under Pressure?

For many of us, the more successful we become, the more stress and pressure we have to deal with. So, how can you continue to thrive in high-pressure, high-stress situations?

Sarah is a manager in a high-volume call center, and her job is very stressful. She interacts every day with angry, upset customers, she needs to keep her team members calm and productive, and she has to meet tough customer satisfaction goals. Despite these pressures, Sarah is known for her professionalism and her composure. She's kind to everyone on her team, she stays cool in tense situations, and she makes good decisions, even when she's under pressure. Sarah has mastered the art of surviving and thriving in a stressful role. Learn how to cope with a high-stress role. © iStockphoto/wragg

Many people experience stress in their jobs. You might feel stressed temporarily because of a project deadline, or because of seasonal fluctuations in your workload. Or you might experience long-term stress due to the type of work that you do, because of a difficult boss or co-worker, or because of office politics. In this article, I'll look at the consequences of job stress, and I'll explore strategies that you can use to manage a stressful job successfully. Consequences of Stress Job stress has a number of negative consequences that, if left unmanaged, can affect your health, productivity, well-being, and career. For example, a study conducted by researchers at University College London found that professionals who work in high-stress environments are more likely to suffer from high blood pressure, insulin resistance, and high cholesterol - all of which increase the risk of heart disease and diabetes. Long-term, unmanaged stress can weaken your immune system, it can cause chronic muscle pain or sleeplessness, and it can contribute to obesity. It can also lead to a number of psychological conditions, such as anxiety or depression, and it may cause relationship problems with others on your team. Research published in "The Handbook of Organizational Behavior" shows that burnout is a likely consequence of long-term job stress. Emotional exhaustion, lowered productivity, and higher absenteeism can all result from this. Warning: Stress can cause severe health problems and, in extreme cases, even death. The strategies discussed in this article are for guidance only. You should take the advice of suitably qualified health professionals if you have any concerns over stress-related illnesses, or if stress is causing you significant or persistent unhappiness. Why You Should Control Stress There are many good reasons why you should control workplace stress. You'll be more productive and creative at work, you'll have better relationships with family and colleagues, and you'll produce higher-quality work. You'll also be healthier and more energetic as a result. Symptoms When your job is stressful most of the time, stress can have a negative impact on your health and productivity. There are many warning signs that you're experiencing high levels of workplace stress, including: Frequent headaches/muscle tension. Persistent sleeplessness. Ongoing irritability. An upset stomach. Low morale/depression. Prolonged difficulty concentrating. Weight loss/gain. Continued loss of interest in work or hobbies. Social withdrawal. Tip: Use the Holmes and Rahe Stress Scale to explore your current levels of long-term stress. Strategies to Manage a Stressful Job Let's look at several ways that you can manage the stress in your role. Identify Causes Before you can manage stress, you first have to know what causes it. A survey by HR firm ComPsych revealed that 59 percent of professionals report a heavy workload as their leading cause of stress. Other common causes of workplace stress include: Workplace pace and unrealistic deadlines. Persistent bullying and abuse. A difficult boss or colleague. Long work hours. Poor management. A lack of autonomy. Poor work/life balance. Meaningless work. Career concerns (no upward mobility, or a lack of job security). An unhealthy work environment. A lack of resources. Keep a stress diary to understand what causes you to feel stress in your job. Once you've identified the factors that contribute to your stress, you can then take appropriate steps to manage them. Think Positively Your attitude plays a major role in your level of stress, no matter what kind of work you do. You can choose to approach tasks, responsibilities, and people with a negative attitude, or you can choose to approach your work and relationships with a positive mind-set. Although the amount of work is the same, the impact on your health and well-being is profound. Research shows that positive thinking acts as a stress buffer. Whenever you catch yourself slipping into a negative frame of mind, make an effort to think positively instead. This might mean challenging your negative thoughts with rational, fact-based thinking, or using affirmations to boost your self-confidence. Calm Down Stress can often cause you to stop breathing for several seconds, even though you may not realize it. When you're feeling stressed, practice deep breathing exercises. Deep, slow breathing floods your body with oxygen, slowing your heart rate, relaxing your muscles, and helping you focus. You might also want to practice yoga or meditation after work, both of which are effective methods of managing stress. Frequent daily breaks and regular vacations are also important for reducing work stress. Even a long weekend can help you de-stress after a tough week. When you do take a break or go on vacation, leave work at work; taking a "working vacation" or constantly checking email while you're gone won't give you the time that you need to rest and recharge. Manage Your Time Your job might be stressful because of your workload or project deadlines. You can lower your stress levels and improve your productivity by learning to manage your time and priorities more effectively. First, take our quiz, "How Good Is Your Time Management?," to discover how well you're currently managing your time, and to get suggestions for improving your time management. Distractions in the office can be a major source of stress. These distractions can come from well-meaning colleagues, from constant phone calls or emails, or from general office noise. Minimize distractions by closing your office door for short periods of time, by turning off your phone, or by listening to white noise to drown out people's conversations. Exercise Regular exercise is one of the best ways to manage a stressful job. Daily exercise helps you cope with stress; it also boosts your memory, creativity, IQ, and productivity. You can fit exercise into your schedule in many ways. Wake up earlier and exercise before work, take a walk on your lunch break, or use a standing desk while you're at work. Remember, any additional movement will help you manage stress and live a healthier life. Take frequent breaks to move around and let your mind rest. Try taking several five- or 10-minute walks during the day; it might not sound like much, but this exercise and fresh air will give you time to rest and recharge. Manage Priorities Conflicting priorities can be a major source of workplace stress, especially when you have to push important work aside to focus on less important, but urgent, tasks. Use the Urgent/Important Matrix to reorganize your priorities and to ensure that you're devoting enough time to important, and not just urgent, work. You also need to choose the right tasks to work on. Some tasks require a lot of time and energy, yet they have a low impact, while other tasks have a big impact, but require little effort. Use the Action Priority Matrix to identify which tasks are worth spending time on, and which you can safely delegate or drop. If you're working on a project that seems overwhelming, break it into smaller steps. This allows you to accomplish one thing at a time, instead of trying to take everything on at once. Increase Autonomy Autonomy is the freedom to decide how to accomplish your work. Professionals who work in roles with low autonomy often experience more stress and dissatisfaction than those with greater autonomy. Speak with your boss about your current goals or projects. Where appropriate, ask for the freedom to choose how you accomplish these goals. This could include working from home one day a week, or choosing who you want to work with on your next project. Use job-crafting strategies to reshape your role and to better use your strengths and interests. This can lead to greater productivity and less stress. You might also find that job crafting adds interest and meaning to your work. Assess Resources Look at the work that you do. What are your biggest frustrations? Where are your bottlenecks? Where are you most inefficient? These situations often point to a lack of training, tools, resources, or help - all of which can contribute to workplace stress. Make a list of what you need. Let your boss know what you're lacking, and explain how these items will help improve your productivity and effectiveness. If your boss can't provide the resources that you need, think about how you might be able to negotiate for them with others, or acquire them on your own. Find Meaning What do you love most about your job? What gives your work meaning? These questions might sound simple, but they're important. If you know what gives your work meaning, it will help you manage the stress that goes along with it. Use tools like the MPS Process and the PERMA Model to identify what you care about, and to think about how you can incorporate more of these things into your career. Key Points Everyone experiences stress at work from time to time. However, if your job is consistently stressful, it's essential to find ways to manage that stress. Long-term stress can lead to a number of health problems, including high blood pressure and a weakened immune system. It can also contribute to heart disease, obesity, anxiety, and depression. To survive a stressful job, start by identifying what causes your stress. Next, confirm that you're handling your priorities and time effectively. Last, get regular exercise and make sure that you have the tools and resources you need to do your job.

Birkinshaw's Four Dimensions of Management.

Birkinshaw's Four Dimensions of Management Developing an Appropriate Management Model

Price, specialization, quality, and service - these are just some of the ways that you can gain an advantage in your industry. But have you ever thought that you could be more successful by tailoring your organization's approach to management to fit your business strategy? You can explore this with the "Birkinshaw's Four Dimensions of Management" model. We'll look at the four dimensions in this article, and we'll explore how you can use them to develop a more effective management model for your business. Learn how to manage people more effectively in four key areas. © iStockphoto/Sashkinw

About the Four Dimensions Julian Birkinshaw, Professor of Strategic and International Management at the London Business School, published his Four Dimensions of Management in his 2010 book, "Reinventing Management." The framework (see figure 1, below) highlights four dimensions that represent key management processes and practices. Each dimension has two opposing principles - these principles are "assumptions or beliefs about the way something works or should work." These principles underpin the routine actions that your organization's managers take. The principles on the left side of each dimension are traditional principles: these are the approaches to management that organizations have used for many decades. The principles on the right are alternative principles: these are newer ways of thinking about management. Figure 1 - Birkinshaw's Four Dimensions You can use the framework to think about the approach to management that you're currently using, and to explore whether you can develop a more effective management model - one that suits your strategy and the way that you want to do business. Let's look at each dimension, and the corresponding principles, in more detail. 1. Managing Across: Activities This dimension relates to how managers coordinate activities with people over whom they have no direct control. The opposing principles are: Bureaucracy With a bureaucratic approach, organizations use formalized rules, job roles, procedures, and formal guidance to get things done. Results are predictable. A certain amount of bureaucracy is needed in most organizations; and, it's especially important in organizations that are dealing with significant risks (including health or safety risks). The downside of bureaucracy is that it can make change difficult to achieve, as well as stifling initiative, creativity, flexibility, and autonomy. This can make it very hard for bureaucratic organizations to change direction, and it can disengage and demoralize team members. Emergence Emergence is spontaneous and is based on independence and autonomy (which are highly important if you want people to be self-motivated). People organize themselves, work independently, and take appropriate action quickly. Emergence leads to innovation and creativity, as well as to higher morale and better engagement. The downside of emergence is that, unless effective structures are in place, teams and organizations can feel chaotic and disorganized. People can lose focus because there are too few boundaries and rules in place, and they can end up taking actions which are rational from the team's perspective, but are harmful from a big-picture perspective. 2. Managing Down: Decisions This dimension relates to how people make decisions in the organization. The principles are: Hierarchy Hierarchy is based on authority and power. Senior managers make decisions, as they are perceived to have more expertise and a better view of the big picture than subordinates. Hierarchy can motivate people to work hard in the long-term, because they want to move up to more powerful positions in the organization. It can also be effective for assigning accountability, organizing work, and handling decision making, especially in larger organizations. However, hierarchy assumes that "the boss knows best," even when this is not true. It can block upward communication within the organization, and this can lead to poor decision-making by powerful people. Management based on hierarchy can also lower morale and engagement if managers don't listen to and support to team members, or if they don't give people credit for their contributions. Collective Wisdom Collective wisdom is drawn on when people across all levels of the team and organization contribute to decision-making, and work to solve problems collectively. This improves morale and engagement, and leads to better decisions when knowledgeable people - for example, customer-facing staff - are involved in the decision-making process. The disadvantage of using collective wisdom is that it can take a long time to make decisions if too many people are involved in the process. This is a serious problem if you need to make timely decisions. 3. Managing Objectives This dimension relates to how people set and pursue organizational goals. The principles are: Alignment With alignment, everyone works towards common goals set by the organization. This principle offers managers a simple way to get their team members moving in the same direction, and this is hugely important if the organization is pursuing a strategy that needs significant, coordinated action. A downside of alignment is that managers instinctively try to use key performance indicators to measure progress. These can be ineffective or counter-productive in hard-to-define areas such as creativity and innovation. Alignment can also put too much focus on short-term results rather than long-term growth, and it gives people less flexibility in how they reach their objectives. "Obliquity" With "obliquity," people pursue goals and objectives indirectly. For example, instead of setting a direct goal to "increase sales by 15 percent," an organization might set goals that measure how efficiently staff deal with new customers, or that look at employee happiness. A long-term consequence of this will hopefully be that sales increase - the organization's overall objective. With this principle, team members are also encouraged to work towards their own individual goals, which they intuitively believe will contribute to the overall objectives of the organization. (They may not be able to "prove" this in a straightforward way.) With obliquity, team members have greater ownership over their work and they decide how they reach their goals. This can lead to high productivity and engagement. Obliquity is often effective in new and evolving businesses, those that demand a high degree of creativity and innovation, or those that need to exploit a wide variety of niches. A downside of obliquity is that people can lose direction and momentum if their overall objectives aren't clear, and they can be wrong in their intuitions, which can lead to wasted resources and missed opportunities. It can also make it difficult to achieve results that need significant, coordinated effort. 4. Managing Individual Motivation This dimension relates to how people are motivated in the organization. The principles are: Extrinsic Extrinsic motivation describes approaches to motivation that come from outside the people being motivated, such as pay raises, promotions, or praise. Negative factors such as pressure and threats can also be part of extrinsic motivation. It's relatively easy for organizations to measure performance and reward team members using extrinsic motivators. The downside of extrinsic motivation is that these drivers don't always address the deeper needs that we have as human beings, and it can leave us feeling dissatisfied, disengaged, unhappy, and unfulfilled. This, in turn, has a negative impact on creativity and performance. Intrinsic Intrinsic motivation relates to the rewards that people experience from doing a task or activity well. Intrinsic motivators are often very satisfying. Most hobbies and leisure activities are based around intrinsic motivation - we do them because we enjoy them, not because we have to, and this is particularly powerful when it applies to work. However, intrinsic motivators can be difficult to manage, as these often rely on the activity that a person is doing, and his or her perception of it. Applying Birkinshaw's Four Dimensions of Management To use this tool, go through each dimension and think about where your team or organization is right now. Then, think about where your organization should be on each dimension, so that it can best achieve its strategy. Your aim is to develop the most appropriate management model - as highlighted earlier, this is a set of choices about how the work of management gets done. Remember that there is no "right" or "wrong" side of the scale. Your approach will depend on your organization, your current situation, and where you want to go strategically. In reality, many organizations will be on the left-hand end of each scale, which may be fine if that is what their strategy requires. The challenge for managers comes if they want to move from more traditional management principles (on the left-hand side of the dimensions) to the alternative principles (on the right-hand side of the dimensions). Let's look at some of the tools and strategies that you can use to do this. Moving from Bureaucracy to Emergence A certain level of bureaucracy is necessary to run an organization effectively, but, often, organizations get bogged down in it. You can develop emergence within your team and organization in several ways. Start by reviewing your organization's business processes and procedures, so that you can eliminate unnecessary steps. As part of this, map processes out, and challenge the necessity of each step and rule that's applied. Also, get regular feedback from team members on how you can remove bureaucracy and improve processes and procedures. Then, work on building a culture of trust, so that people know that they can be trusted to do their jobs properly without excessive bureaucracy. As part of this, empower your people, and share as much information with them as you can. Additionally, give your team members further autonomy by avoiding micromanagement, and by encouraging them to use initiative, where appropriate. Moving from Hierarchy to Collective Wisdom At least some level of hierarchy is essential for most organizations to function. However, you can use the principle of collective wisdom in many ways. Again, build an environment of trust, so that you encourage your people to communicate with one another and speak freely without fear of being judged negatively. This will help you take advantage of your team members' expertise, and will encourage people to be more creative. Next, involve your people in collaborative decision-making if possible, and use tools such as Hartnett's CODM Model to solve problems collectively. You can also encourage people to use social networking tools such as blogs, intranet forums, and Twitter to communicate with one another, and you can ask people to present their ideas at team meetings. This will further help people collaborate and share knowledge. Tip: Our Book Insight into "The Power of Collective Wisdom and the Trap of Collective Folly" offers a look at how you can tap into the collective wisdom of members of your team. Moving from Alignment to "Obliquity" Obliquity relies on people pursuing "indirect" goals that you and they intuitively believe will benefit the organization in the long term, rather than working on specific, more measurable, shorter-term goals. To move towards obliquity, establish a clear mission for your team or organization, but then give people flexibility in how they'll work towards this mission, rather than setting out for them how to do their work day-to-day. One approach - famously used by Google - is to give people a dedicated time-slot during the working week to "follow their hunches." You and other team members can review these projects regularly, and give backing to those that show potential. You can also brainstorm indirect goals that, when achieved, have the potential to contribute to your team or organization's overall objectives. Moving from Extrinsic to Intrinsic Motivation Extrinsic motivators are often effective; however, you will likely find it best to motivate your people using a combination of extrinsic and intrinsic motivators. Each person on your team will be motivated by different things, so use tools like McClelland's Human Motivation Theory and Self-Determination Theory to understand what motivates them as individuals (both intrinsically and extrinsically). Then, encourage people to use tools like the MPS Process, so that they can understand what type of work suits their personality and their strengths, and, where you can, allow them to craft their jobs to suit them better. Also, remember that changing your management approach in each of the other three dimensions can help people experience more intrinsic motivation. For example, you could get these benefits by allowing team members more freedom in how they reach their goals, and by giving them a say in organizational decision-making. Key Points London Business School professor, Julian Birkinshaw, developed his Four Dimensions of Management framework and published it in his 2010 book, "Reinventing Management." Birkinshaw's Four Dimensions of Management are: Managing Across: Activities. Managing Down: Decisions. Managing Objectives. Managing Individual Motivation. Each dimension consists of one traditional and one alternative principle. You can use the framework to develop a management model that best suits the type of work that you're doing, and the way that you want your organization to develop.

Core Competence Analysis

Get Ahead. Stay Ahead.

                                                                                                        Killion James N. B

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What makes you stand out from the crowd?

© iStockphoto/hidesy

The idea of "core competences" is one of the most important business ideas currently shaping our world. This is one of the key ideas that lies behind the current wave of outsourcing, as businesses concentrate their efforts on things they do well and outsource as much as they can of everything else.
In this article we explain the idea and help you use it, on both corporate and personal levels. And by doing so, we show you how you can get ahead of your competition – and stay ahead.
By using the idea, you'll make the very most of the opportunities open to you:

• You'll focus your efforts so that you develop a unique level of expertise in areas that really matter to your customers. Because of this, you'll command the rewards that come with this expertise.
• You'll learn to develop your own skills in a way that complements your company's core competences. By building the skills and abilities that your company most values, you'll win respect and get the career advancement that you want.

Explaining Core Competences: The Value of Uniqueness

The starting point for understanding core competences is understanding that businesses need to have something that customers uniquely value if they're to make good profits.
"Me too" businesses (with nothing unique to distinguish them from their competition) are doomed to compete on price: The only thing they can do to make themselves the customer's top choice is drop price. And as other "me too" businesses do the same, profit margins become thinner and thinner.
This is why there's such an emphasis on building and selling USPs (Unique Selling Points) in business.
If you're able to offer something uniquely good, customers will want to choose your products and will be willing to pay more for them.
The question, though, is where this uniqueness comes from, and how it can be sustained.
In their key 1990 paper "The Core Competence of the Corporation", C.K.Prahalad and Gary Hamel argue that "Core Competences" are some of the most important sources of uniqueness: These are the things that a company can do uniquely well, and that no-one else can copy quickly enough to affect competition.
Prahalad and Hamel used examples of slow-growing and now-forgotten mega corporations that failed to recognize and capitalize on their strengths. They compared them with star performers of the 1980s (such as NEC, Canon and Honda), which had a very clear idea of what they were good at, and which grew very fast.
Because these companies were focused on their core competences, and continually worked to build and reinforce them, their products were more advanced than those of their competitors, and customers were prepared to pay more for them. And as they switched effort away from areas where they were weak, and further focused on areas of strength, their products built up more and more of a market lead.
Now you'll probably find this an attractive idea, and it's often easy to think about a whole range of things that a company does that it can do well. However, Hamel and Prahalad give three tests to see whether they are true core competences:

1. Relevance: Firstly, the competence must give your customer something that strongly influences him or her to choose your product or service. If it does not, then it has no effect on your competitive position and is not a core competence.
2. Difficulty of Imitation: Secondly, the core competence should be difficult to imitate. This allows you to provide products that are better than those of your competition. And because you're continually working to improve these skills, means that you can sustain its competitive position.
3. Breadth of Application: Thirdly, it should be something that opens up a good number of potential markets. If it only opens up a few small, niche markets, then success in these markets will not be enough to sustain significant growth.

An example: You might consider strong industry knowledge and expertise to be a core competence in serving your industry. However, if your competitors have equivalent expertise, then this is not a core competence. All it does is make it more difficult for new competitors to enter the market. More than this, it's unlikely to help you much in moving into new markets, which will have established experts already. (Test 1: Yes. Test 2: No. Test 3: Probably not.)

Using This In Your Business and Career:

Mind Tools on Strategy:

• SWOT Analysis
• TOWS Analysis
• PEST Analysis
• Core Competence Analysis
• Value Chain Analysis
• Porter's Five Forces
• Porter's Generic Strategies
• Bowman's Strategy Clock
• Scenario Analysis

To identify your core competences, use the following steps:

1. Brainstorm the factors that are important to your clients.
2. If you're doing this on behalf of your company, identify the factors that influence people's purchase decisions when they're buying products or services like yours (make sure that you move beyond just product or service features and include all decision-making points.)
3. If you're doing this for yourself, brainstorm the factors (for example) that people use in assessing you for annual performance reviews or promotion, or for new roles you want.
4. Then dig into these factors, and identify the competences that lie behind them. As a corporate example, if customers value small products (e.g. cell phones), then the competence they value may be "component integration and miniaturization".
2. Brainstorm your existing competences and the things you do well.
3. For the list of your own competences, screen them against the tests of Relevance, Difficulty of Imitation and Breadth of Application, and see if any of the competences you've listed are core competences.
4. For the list of factors that are important to clients, screen them using these tests to see if you could develop these as core competences.
5. Review the two screened lists, and think about them:
   
   • If you've identified core competences that you already have, then great! Work on them and make sure that you build them as far as sensibly possible.
   • If you have no core competences, then look at ones that you could develop, and work to build them.
   • If you have no core competences and it doesn't look as if you can build any that customers would value, then either there's something else that you can use to create uniqueness in the market (see our USP Analysis article), or think about finding a new environment that suits your competences.
6. Think of the most time-consuming and costly things that you do either as an individual or a company.
7. If any of these things do not contribute to a core competence, ask yourself if you can outsource them effectively, clearing down time so that you can focus on core competences.
8. For example, as an individual, are you still doing your own cleaning, ironing and decorating? As a small business, are you doing you own accounts, HR and payroll? As a bigger business, are you manufacturing non-core product components, or performing non-core activities?

Tip 1:
As with all brainstorming, you'll get better results if you involve other (carefully-chosen) people.

Tip 2:
On a personal basis and in the short term, it might be difficult to come up with truly unique core competences. However, keep this idea in mind and work to develop unique core competences.

Tip 3:
You may find it quite difficult to find any true core competences in your business. If you've got a successful business that's sustainably outperforming rivals, then maybe something else is fuelling your success (our article on USP Analysis may help you spot this).

However, if you're working very hard, and you're still finding it difficult to make a profit, then you need to think carefully about crafting a unique competitive position.

This may involve developing core competences that are relevant, real and sustainable.

Tip 4:
As ever, if your going to put more effort into some areas, you're going to have to put less effort into others. You only have a finite amount of time, and if you try to do too much, you'll do little really well.

                                                                                                                       Killion James. 

BOOKKEPING AND HOW TO SAVE COST ON IT.

Most small-business owners in Kenya view bookkeeping as a burdensome task that takes them away from running their business. It makes others nervous, and they may second-guess their knowledge and skills in fear of the Kenya Revenue Authority knocking on their door.
You don’t have to be intimidated or bored by accounting. Successful business owners don’t view bookkeeping negatively. They have adopted a few basic procedures to stay on top of the paperwork. By doing so, they save time, money and a lot of stress.

Follow these basic steps to gain control -- and stay in control-- of your business’s bookkeeping tasks:
1. Use accounting software such as QuickBooks. Become at least generally familiar with the software: Know how to input checks, reconcile bank accounts, create reports and other data. Then choose one of five ways to maintain it:

A. Do it yourself. Take a class on the software and dedicate time each week to input information and reconcile bank statements. If you fall behind on inputting transactions, it can be difficult to catch up. This is when most people throw bank statements and receipts into a box and procrastinate. If this happens, you’ll usually end up with option E below.

B. Train and hire a family member to maintain the books. From a supervisory role and internal control system standpoint, it’s still critical to have a basic working knowledge of the software and procedures.

C. Hire a local college student majoring in accounting. You will typically find student employees to be very affordable. Just remember not to give the student too much latitude with check signing or control of paying bills. Although the student is running the system, you still need to supervise their work to make sure your books are tight.

D. Hire a local bookkeeper e.g Killian Dynamics to provide the services you need, and turn the books over to your certified public accountant for planning and tax preparation at the end of the year. A bookkeeper will certainly be more skilled and knowledgeable than you or a family member, but your cost per hour will increase. One smart strategy is to negotiate a fixed monthly fee so you can budget for the service.

E. Engage your CPA to provide all bookkeeping services, including tax preparation. This is what typically happens when your books have devolved into a mess. While this might seem like the most expensive option, your CPA team will probably be the most skilled and be able to complete the work quickly and efficiently. Even though the hourly rates are higher, the fee should be similar to what you would have paid a bookkeeper during the year to do it on a monthly basis. Another benefit of using your CPA exclusively is that you have confidence it was done right.

2. Scan your receipts, business cards and other important paperwork. Some software products, such as NeatReceipts, import directly into QuickBooks. Utilizing this type of tool will help save time and paper, and help audit-proof your record.
3. Separate personal accounts from business accounts. Don’t mix the two. Keeping personal and business bank accounts and credit cards separate will make bookkeeping much easier and help maintain your corporate veil if you have a formal entity.
4. Avoid cash. Instead, use your debit or credit card religiously. When you use cash you lose track of potential write-offs. If you have to pull money out of an ATM, note on the receipt the purpose of the withdrawal.
5. Go paperless. Storing tax documents for at least six years can be a hassle. Another option is to purchase a small fireproof safe to store important personal documents (passport, life insurance, etc.) along with a regular backup of your bookkeeping software and tax returns saved on a flash drive. For extra data protection, consider off-site physical storage or online data storage for these records and scanned files.
6. Auto-track your mileage. Keeping a written record of all your business, charitable and medical auto mileage can be a pain. Look into a satellite-assisted service, phone application, or software program.
7. Meet with your CPA at least twice annually. Review your business plans, financials, tax deposit amounts, payroll procedures and tax strategies. The cost of taxes is too high to leave your plans to chance. Just a few minutes on a regular basis can save thousands of dollars. Also, remember that your CPA should be bringing you strategies and ideas in these meetings. If the meeting consists of you throwing out ideas and your CPA shooting them down, you have the wrong CPA. Find a planner who is reaching out to you with ideas and strategies on a regular basis.

For any assistance call Killian Dynamics on this no. +254720896873 <Kenya, Nairobi> or email killiandynamics@gmail.com

Done by Killion James.
Part of this article is an excerpt from the book What Your CPA Isn't Telling You from Entrepreneur Press.

Read more stories about: Accountant, IRS, Bookkeeping

 

STRATEGIC MANAGEMENT. WHAT IS IT ALL ABOUT?

STRATEGIC MANAGEMENT. WHAT IS IT ALL ABOUT?

Although most small business owners have heard the phrase "strategic management", they have little idea what it actually means.

So what's the deal? Is strategic management worthwhile or is it all just hot air?

Without a doubt, strategic management is one of the most overused and misunderstood catchphrases in business. However, if used effectively it can have a positive impact on your bottom line and significantly improve your company's growth potential.

As its name suggests, strategic management is all about formulating strategies and the key to making it work for your business is to focus your strategizing efforts in the right areas and then manage the organization to achieve the defined strategies.

Short-Term Strategies

All the planning and strategizing in the world won't help your business if you don't have a plan of action for the short-term. Short-term strategies describe your company's activities in the here and now, and typically don't look beyond a 12-month timeframe.

In fact, some businesses do their short-term strategic planning on a quarterly basis, particularly if their industry is a highly volatile one. Since the timeframe is relatively short, short-term strategic management tends to be highly detailed and specific.

Communicate short-term strategy goals to employees and then manage employees in a way that holds them accountable for achieving strategic goals.

Long-Term Strategies

Short-term strategizing is essential, but alone it is simply not enough to help you meet your goals in business. To realize your long-term goals, you also need to develop long-term strategies, i.e. strategies covering a time span of one to five years.

Even though long-term strategies are less detailed than short-term strategies, they provide a road map that will guide you in your quest to achieve your goals and create a set of parameters that informs your short-term strategic management process.

It's worth noting that the most effective strategic management efforts employ both long-term and short-term strategies working in tandem with one another.

When managing employees, ask them how the work they are doing is contributing to long-term strategic goals and give them the leeway to modify their actions in ways that better achieve long-term strategic goals.

Functional Strategies

From time to time, you may also find it helpful to employ functional strategic management processes. These processes develop strategies that guide specific functions within your business, e.g. marketing, hiring, IT, etc.

As with short-term strategic management, functional strategic management can afford to be highly detailed because it addresses a very specific set of goals, typically over a short-time period.

However, it's also important to remember that the functional strategies you devise for your business need to line up with your short-term and long-term strategic management processes. If your functional strategies are at odds with the company's other strategies then you really haven't accomplished anything.

Strategic management does have limitations. One of the most frequently stated criticisms of strategic management is that it is often employed in an overly rigid manner, restricting the ability of businesses to react to changes in the marketplace.

If you decide to implement strategic management in your small business, remain aware that the strategies you devise are only intended to guide your activities and can be adapted to respond to market conditions.

To manage strategically, work closely with your employees to educate them on strategy options and decisions. Whenever you get the chance, emphasize how strategic thinking can help the organization.

by Killion James.