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E-Myth – “Why most small businesses don’t work & what to do about it”

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Accounting Outsourcing | The Answer Is Not Expense Cutting

A sobering statistic from industry Canada says that 50% of all businesses will close the door to their business within the first five years of operation this is accounting outsourcing. In that 42% of those businesses will say that the inability to attract new customers is the number one reason for their business failure. Businesses should see that the number one Problem Facing Businesses in Canada is the inability to generate new revenue. However many business owners who are struggling financially often become fixated with minimizing their business expenses, even though that will not help them succeed.

The reason why business owners often get stuck into this habit of believing they will be able to succeed in business by cutting expenses says accounting outsourcing, is because most business owners used to be employees, and they are still stuck in the employee mindset which is employees canít increase their salary, so in order to increase their wealth, they must cut costs. This does not work in businesses, because no matter how many costs are cuts, if the business is not generating revenue, the business is not growing. Business owners needs to shift away from that employee mindset towards an entrepreneurial mindset which is they have unlimited potential to increase their revenue infinitely. I understanding that the key to their success lies in generating revenue, by working on generating revenue activities within their business, business owners can be more effective at growing their business.

The number one activity the business owner should be spending their time on in their business is in advertising and marketing KPIs. The most effective marketing strategies are the ones that are implemented regularly says accounting out sourcing, therefore business owners not only needs to make time in order to work in the marketing but they also need to make time on a regular basis. By working on their advertising and marketing strategies, even when theyíre busy, business owners will have a greater chance of continuing to grow their business. By not working on these strategies when their business is busy, they risk stalling out their business. Not only do they need to work on these advertising and marketing strategies, but they also needs to be evaluating them on a regular basis to see what is working, what isnít, and what needs to be changed or eliminated.

When business owners understand that the number one resource they have their disposal is time, they can work on spending that time in the most important things in their business says accounting outsourcing. Whenever possible if business owners can spend money to buy time, that is a great use of that time as long as they can trade money for time at a lower rate than they can produce it.

Business owners can know that spending money on expense minimizing can be important to their business as they are continuing to grow their business, as long as they know what is the most important expense to cut in their business.

Many business owners get stuck into an employee mindset within their business says accounting outsourcing. And that employee mindset is that since employees cannot change their salary, in order to increase their wealth they must cut their costs. This is problematic for business owners to think because a business owner actually has unlimited potential to increase their income infinitely. Business owners who are still on the employee mindset often become fixated with minimizing their expenses, rather than on growing their business. Itís extremely important for businesses success for those business owners to be in the entrepreneurial mindset as quickly as possible.

The most valuable resource business has is there time, business owners not only do not have time to do everything, they donít have time to do things perfectly. Therefore they need to figure out what are the activities they need to spend their time on, and how to do that sufficiently and effectively as possible says accounting outsourcing. The most important thing that a business owner can do within their business is to work on growing their business. By increasing their revenue and working on revenue-generating activities, business owners can be sure that they are spending their time efficiently and effectively. Working on their advertising and marketing KPIs will help the business owner continuing to grow their business. Accounting out sourcing recommends that even if the business is busy, but they continue to work on their marketing strategies, because the only effective marketing strategies are the ones that are not done on a regular basis. Business owners who are inconsistent with their marketing strategies often find that there business stalls out at inopportune times. Not only does the business owner need to work on the marketing strategies consistently, but they also have to be constantly evaluating those strategies and how they are working. The need to increase them, change them or eliminate them.

Expense minimizing can be important in the business says accounting outsourcing, as long as it is done in a efficient and thoughtful way. Business owners should organize their income statements in a numerically dissenting order. The reason for that, is so business owners can see easily what are the items that are affecting their bottom line the greatest. By spending their time optimizing the items at the top of list, business owners can make the greatest difference to their bottom line in the least amount of time.

Entrepreneurs will see that the items are at the top of the list include administrative labour and gross margin. If they can reduce the hours of their admin staff, or have those admin staff work on billable tasks such as Accounts Receivable or advertising and marketing, they can either save cost, or help pay for those admin wages. By optimizing administrative hours and the direct cost of labour and supplies, business owners can impact their bottom line, help offset the cost of wages as well as become even more profitable in business.