Concierge CPA's online newsletter for January 2018
January 2018
8221 Brecksville Rd, STE 205 Brecksville, OH 44141
borbala@conciergecpas.com
(440) 340-1030
Conciergecpas.com
A GOOD EDUCATION: Necessary But Not Enough Working for PricewaterhouseCoopers was fascinating. I had the opportunity to work in many major U.S. cities and meet countless interesting people. I also got a unique insight into how Fortune 500 companies operate.
Growing up, I spent a lot of time with my grandparents. I listened, fascinated, to their stories about living duringWorldWar II. They had a hard life, but in many ways, it was a simple one. What I found most interesting is that, despite all the hardships they had to go through, they still found a way to be thankful and proud of the things they were able to achieve. The only option my parents had for a better life was to receive a higher education and find decent jobs. Because of this, they valued education and hard work. Life after the war wasn’t much easier. My grandparents’ farmland was taken from them by the communist state. The only option my parents had for a better life was to receive a higher education and find decent jobs. Because of this, they valued education and hard work. I’ve always loved reading and was surrounded by books in my adolescence. One summer, when I was about 11, I became so obsessed withWestern books I read every one we had at home and then all the local library had to offer. I was crushed when the librarian told me they didn’t have any more of the genre. The value of reading, learning, and hard work was instilled in me and my two sisters from childhood. When I moved to the U.S. to go to college, I was determined to study hard and get a good job. I graduated with a degree in accounting and got a job in international tax at one of the Big Four accounting firms. My parents’advice and encouragement paid off.
One afternoon about two years into the job, while sitting in a nice office in Houston, Texas, I got a call from Borbala with an offer to join Concierge CPAs. I was
excited about this new opportunity to serve small-business clients, mainly law firms. I thought I could put my experience as a CPA into good use helping small- business owners achieve their dreams of building profitable businesses. Little did I know there was still so much more to learn. It seems that in the complex world of small business, the age-old advice to study hard and get good grades is nice, but not nearly enough to succeed. Being good in my own profession was only the starting point. In addition, I had to learn about marketing, sales, customer service, managing subcontractors and employees, managing finances, and even designing IT systems. While I did not become a computer scientist, I had to learn enough about IT systems to be able to assess what our needs were and to choose the right provider or software package. Borbala often reminds me we can outsource execution, but when it comes to strategy, it is our job to learn what we need or want. Learning about all the different aspects of business makes it interesting and exciting. For example, a lawyer doesn’t have to get an MBA to manage the finances of a law firm. Understanding their numbers and what the financial statements mean is a prerequisite to not only making better business decisions, but also to grow a profitable, successful small business. It has been such a joy to serve as a strategic partner to so many businesses and law firms, helping them clarify their vision and getting them closer to their goals. I’m looking forward to many more years at Concierge CPAs.
–Laszlo Szilagyi, CPA
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Why You Need to Keep Up With Trends,
Do you remember fidget spinners? Those small, pinwheel-like toys claimed to improve focus by channeling users’ excess energy. Last summer, fidget spinners were a worldwide craze. In May of 2017, fidget spinners appeared in every single slot of Amazon’s top 20 best-seller list for toys. Then, just as quickly as they appeared, their popularity vanished. By October, an eBay listing sported 50,000 premium metal fidget spinners for a total price of $2,500. At one point, those fidget spinners would have sold for at least $15 each. Now, the eBay seller was willing to take a measly 5 cents per spinner just to get rid of them. Collecting dust in warehouses, on store shelves, and atop dollar store checkout displays, fidget spinners are haunting reminders of the danger of trends. Whether it’s “Pokemon Go” in 2016, Pogs in 1993, or tulips in 1593, fads appear suddenly and generate a lot of consumer demand and attention, but they don’t have lasting impacts on the market as a whole. More often than not, companies that try to ride the success of a fad end up taking a big loss. They’re left with overstock they can’t get rid of.
Trends, however, change the marketplace by shifting the way consumers buy, and over time, they can alter the products and services customers demand. In 2017, livestreaming on social media rocketed into popularity. For years, consumers have sought to participate with the brands and businesses they support. As video content gained steam, livestreaming became the ultimate way to allow genuine real-time engagement. Major brands like Disney and BuzzFeed invested a lot of time in livestreaming last year and earned billions of views within 30 days of posting new content. To tell the difference between a trend and a fad, Jeffery Phillips, senior consultant at OVO Innovation, recommends asking these four questions: 1. Is this emerging need likely to grow and to sustain itself over time? 2. Is the emerging need basedmostly on novelty? 3. Is the need based on political, economic, societal, or technological changes?
JANUARY TESTIMONIAL Leslie Conquered Her Hurdles With Us
After almost 17 years of practice at a mid-size law firm, I ultimately decided to hang my own shingle at Wargo Law, LLC. With that decision, however, came a significant hurdle. How would I perform my bookkeeping duties, and what would I do about taxes?
QuickBooks Online also links to my business accounts. Therefore, when money is spent on business expenses, client development, professional fees, computer equipment, or travel expenses, the system keeps detailed reports so I can properly allocate the expenses in the appropriate category.
This was especially troubling for me because math is not my forte. I never had to enter my own time spent on client matters, I never physically processed client bills, and I never had to perform a business’ tax projections. When I met with Borbala Banto at Better Numbers for Lawyers, she introduced me to the system she developed for small law firms to handle the financial side of their practice, a program that has been a life saver for me. As I endeavored in my own law firm, I made it a mission to learn as much as I could about the different aspects of bookkeeping work, and Borbala was a great coach. She set me up with QuickBooks Online. Over the couple of sessions I spent with her, I learned how easy it is to input time spent on client matters and generate bills that were professionally sent to clients in just a few clicks of a button.
The detailed reporting permits efficient reconciling of my business accounts each month, so I can understand the profit and loss of my business. The Balance Sheet and Profit and Loss statement are so valuable to understanding the financial status of my business and are useful when I have my quarterly review and strategic tax planning sessions with Borbala. The significant hurdle I feared when I opened my law office no longer seems unconquerable. Rather, implementing a system for my bookkeeping duties and taxes became one of the most
important tools for my business. –Leslie Wargo, Esq. Wargo Law, LLC Cleveland, OH
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Better Business DECISIONS It’s In the Numbers
ot Fads
4. Will what’s happening shift behaviors or create new needs, new markets, or new customer segments?
How do you determine the time and money to spend on business development and marketing? When can you afford to hire an additional paralegal or associate? How much revenue must you collect every month just to keep the office running? How much money can you take home from the business every month?
It can be really tempting to jump onboard with fads, but you don’t want to build your business on something that isn’t sustainable. Look for trends that lead to newmarkets and learn how you can fill those needs in the long term. Slow Cooker Raspberry White Hot Chocolate
These are all questions that can only be answered by looking at your numbers regularly and knowing them intimately.
You can manage what you measure. You may have a gut feeling of how your practice is doing or how close you are to achieving your goals. However, regularly measuring the performance of your firm’s various aspects gives you essential clarity and awareness.
INGREDIENTS • 1 cup white chocolate chips • 14 ounces sweetened condensed milk • 2 cups heavy cream, divided INSTRUCTIONS 1. In a slow cooker, combine white chocolate chips, condensed milk, 1 cup cream, and milk. Cover and heat on low about 2 hours. 2. In a large bowl, mix remaining 1 cup cream, powdered sugar, and vanilla.
• 3 cups milk (any variety will do) • 2 tablespoons powdered sugar • 1 teaspoon vanilla • 4 tablespoons raspberry liqueur or syrup 3. Using a hand or stand mixer, whip until stiff peaks form. 4. Serve mugs of hot chocolate with about 1 tablespoon of raspberry liqueur or syrup to taste and a dollop of whipped cream.
•
Look at your bank statements regularly.
• Use a simple spreadsheets or financial reports from your accounting system to track a short list of KPIs (key performance indicators) that are meaningful to your practice and its goals.
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Look at your top and bottom line.
• Write down how many new clients you get each month and track where they are coming from.
• Figure out which type of cases are the most profitable.
• Track how much your overhead increased since last year.
The answer to most of your business questions can be found in your numbers. If you have a steady stream of new clients, but you have a hard time taking home enough money, focus on evaluating your pricing structure and your employee cost. Prudent law firm owners also realize the importance of having an updated cash flow report and budget. Don’t be afraid — creating them is easier than you might think!
3 (440) 340-1030
8221 Brecksville Rd, STE 205 Brecksville, OH 44141
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(440) 340-1030
INSIDE
Conciergecpas.com
borbala@conciergecpas.com
Education Isn’t Enough Page 1
Will Fads Lead You to Ruin?
Hear From a Wargo Law, LLC Client Page 2
Warm Up With Some Hot Cocoa
Take These Steps and Improve Business Decision-Making Page 3 Book Review: ‘What to Ask the Person in the Mirror’ Page 4
‘What to Ask the Person in the Mirror’
Some people mistakenly believe inquiry is a sign of weakness when, in fact, it is a critical practice for both individuals and organizations. In his book,“What to Ask the Person in the Mirror,”Robert Kaplan, professor of management practice at Harvard Business School, shatters the notion that good leaders never ask questions, and highlights the powers of perception and inquiry. Kaplan proves that“great leadership is not about having all the answers.”It’s about finding those answers and taking proactive steps toward bettering yourself and your organization. All throughout, Kaplan draws on his experience as co-chairman of Draper Richards Kaplan Foundation, a global venture philanthropy firm, to teach others how to reach their own potential. When describing company structure, he states,
“In my experience, if you haven’t identified potential successors for key jobs — including your job— it is very likely that you are also not delegating sufficiently and are probably a significant bottleneck for key decisions.” In each of his chapters, which include“ Visions and Priorities, ”“ Succession
Planning and Delegation, ” or“ ManagingYour Time, ” the first step in improvement is the willingness to ask questions. Here are a few examples:
• Are there potential successors identified for this job?
• In 10 years, what do leaders of this organization hope it will have accomplished?
Beneficial to anyone working within an organization,“What to Ask the Person in the Mirror”can help boost personal performance and the performance of a team, or revamp entire organizations.
• Are senior leaders working with advisers who are able to confront themwith criticisms they may not want to hear?
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