Business Ideas on Growing a Business

The day is here, you are a business owner with the money needed to begin growing your business. The time has come to put your business plan to action! Now, what do you do with all that money? There are many strategies required to expand and maintain a new business.

Marketing Plan: One of the most important steps you can take for growing your business is a marketing plan. This is the key to any successful business. Whether you are selling an awesome product or a much needed service, you must have some type of business marketing plan. Otherwise, how will anyone know about your product or service? There are quite a few different ways to market your business. Writing articles, business cards, classified ads, flyers, etc. Your plan should include a competition analysis, the demand for your product or service, and what you predict your profit income will be. It is crucial to update your marketing plan on a regular basis to maintain a successful business.

Customers: As a result of your marketing efforts, you will begin a relationship with customers. Listen, empathize, and take action to your customers needs. The success of your business depends on the income you generate from these customers. If you respect their needs, they will continue to use your product or service, or they will refer your company to those they know. Customers can be very loyal.

Employees: Equally important, is to supervise your employees to be sure they appreciate your intentions for the business. If you do not have the time to keep track of employees’ professional and personal needs, then it is imperative to hire a professional human resources person. Your employees are the backbone to your company’s success. If your employees are content, they will put the effort necessary to maintain the image you want your company to acquire.

Accounting Procedures: Once your business begins generating income, it is imperative to record any transactions that have taken place. There are many different transactions and reports that must be recorded for your business. Many common transactions that need recorded are taxes, income, expenses, and notes payable. Many common reports required for a business include a balance sheet, income statement, and general ledger. Be sure to understand these procedures or hire a qualified professional to take care of your accounting needs.

Attitude: The impact your own attitude is vital to the success of your business or personal life. Attitude can make or break your business or home life. You have a choice everyday about how you will embrace that particular day. You cannot change what has happened in the past, and you cannot change what will happen in the future. The only thing you can do is have the strength to accept this and look at each day as a new beginning with a positive attitude. If you believe your company will succeed, you will put forth the effort to discover what plans are required to develop a successful business.

These are only a few ideas to help you get started on your new business venture. Your marketing plan is essential to bring in those customers. Respect your customers’ needs and their loyalty will increase your income. Pay attention to the needs of your employees. Remember, they are the people representing your company’s image. And be clear on the legal and accounting procedures of your company. Your attitude is everything. Your positive attitude towards yourself, your customers, and your employees will create a thriving, profitable business. Good luck!

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Assets and liabilities: Knowing the difference can mean everything!

Whether or not you're an accounting professional, everyone should understand the basics of assets and liabilities. Understanding the difference between these two financial accounts can mean all the difference between becoming wealthy or becoming poor. The purpose of this article is to explain the difference between these two accounts and to provide some basic accounting knowledge that can teach even the most dim-witted person how to understand finances.

Assets are anything that can be owned by an individual or business that has a positive cash value. In other words, assets generate income. What are examples of assets? Investments, real estate, businesses are all examples of things that can generate you more money then you initially put into them. Assets are things that you can see a ROI (return on investment) off of. There are three classifications that assets can be categorized under. There are current assets, fixed assets, and intangible assets. Knowing the difference between these three classifications can be very beneficial to you in deciphering how to record income on financial statements.

Current assets are considered cash on hand or assets that can be turned into cash within a short amount of time. Current assets fund daily operations. Companies use current assets to run their daily operations, because this is better then spending money on interest from short term financing. There are five different accounts listed under current assets. These accounts include cash, investments, accounts receivable, and inventories and prepaid expenses.

Fixed assets are considered tangible property. Fixed assets can't be easily converted into cash like current assets can. Fixed assets would include property, machines and equipment, and buildings. There are other such items like computers that can be considered fixed assets so it is best to check with an accountant to see what can be considered fixed assets. Fixed assets get special tax treatment and can also be depreciated.

Intangible assets are considered monetary items that can not be physically touched. Such items can be converted over to cash, but usually hold value to the individual or business entity. Examples of intangible assets would be patents, trademarks, and copyrights. There are two different types of intangible assets, which are classified as legal intangibles and competitive intangibles. It is recommended that you see your accountant for more advice on intangible assets as well.

Now that we have covered assets, we have to speak of its' evil twin-liabilities. Liabilities are anything that is owed by an individual or business that must be repaid. Liabilities do not generate us money, but costs us money. Liabilities are debts that must be repaid back and usually with interest. There are two classifications that liabilities can be categorized under. There are current liabilities and long-term liabilities. Both of these classifications of liabilities must be paid back and are considered debt.

Current liabilities are considered debt that must be repaid within a year's time. This debt usually is repaid through the current assets account; however, this is not always the case. There are many different categories of current liabilities. Some categories of current liabilities are notes payable, accounts payable, short-term debt, and dividends payable.

Long-term debt or liabilities are considered debt that can be repaid after a year's time. An example of a long-term debt would be a lease or deferred taxes.

After explaining the differences of what are considered assets and what are considered liabilities, it must be stated that it is in the best interest of both the individual and business to have a lot more assets than liabilities. This is how people become wealthy, because they try to not acquire too many liabilities, especially if the assets generating income can't afford them.

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SOX Compliance: Regulating accounting standards

Organizations rely on top level managers to understand the accounting principles involved in making their company run successfully. The financial performance of the organization is actually the heart of the company, which makes every other department and process flow smoothly. In order for this to be achieve, the organization must follow specific accounting standards, also known as GAAP or generally accepted accounting principles, enforced by the Sarbanes-Oxley Act. This act was developed and put into legislature by the US House of Representatives in 2002, after corporate financial scandals were revealed. The government wanted to put a stop to organizations following the same financial path as Enron and WorldCom.

Organizations are required to be SOX compliant and if found incompliant, they could face very harsh penalties such as fines and prison time. The Sarbanes-Oxley Act requires organizations to report specific data on their financial annual reports. Such information which must be disclosed is internal controls, audit committee structures, and codes of ethics and conduct. Under this act, organizations must keep tract of all financial data and transactions that occurred and it must be saved for at least five years. But, who is responsible for all of this information? The CEO and the CFO are responsible for maintaining accurate records and for keeping the company under compliance. They are responsible for ensuring that all accounting standards are properly being met and that the organization is following correct accounting practices.

An example of how companies must comply with this act is how an organization handles its audit, both internally and externally. CEOs and CFOs are required to sign an attestation, which holds them liable for any financial reporting. This attestation is a formal legal document, which forbids financial officers from being able to testify that they weren't aware of such financial transactions that occurred. This document state that these officers have reviewed all of the data and that they are responsible for any internal controls that have been taken place. This is all covered in Section 302 of the act.

Another complicated and strict part of the Sarbanes-Oxley Act is Section 404. This section of the act forces organizations to monitor and implement strategic changes that effect how their entire financial processes are ran. This is to protect the organizations from risk. This includes their information systems and how their systems are operating and secured. The PCAOB, Public Company Accounting Oversight Board is a newly created organization that helps external auditors decipher whether or not the organizations they are auditing are up to par with SOX compliance and if they should sign off on the attestation. If internal controls are inadequate, whether any false data has been reported or not, organizations could still be penalized and found incompliant.

In the end, some companies would rather not have to deal with all of the deadlines and regulations of the Sarbanes-Oxley Act. But, in reality, these companies should have been following a strict set of accounting principles and standards anyways. We have seen a huge decline in the number of scandals reported since this act has been regulated.

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