Meet the Team: Dan Macintosh (@dsmacintosh)

DanWhat is my role?

My role in the Possibilities Center is to lead our Business Process Outsourcing (BPO) services. These services are designed to help you in all aspects of your business. We handle the back office accounting, Controller or CFO on call, tax consultation and preparation, even HR or IT. With a team of professionals with experience in all of these areas, we are able to fill the roles of many of these people, freeing up your time and financial resources to focus on your goals.

Why are good numbers important for business?

The biggest issue I see facing small and growing businesses is the ability to get timely and accurate financial information. The ability to get this information is vital to the decision making process, and can be the difference between accomplishing your goals and getting stuck. With a little work and our professionals, we can help you get the information you need to make sound business decisions.

Why do I want you to succeed?

I want you to succeed because it’s why you went into business in the first place. Not everyone loves accounting as much as our numbers nerds do. That’s why we’re devoting our time and talent to taking away a lot of the headaches, allowing you to focus on what you do best.

#ILoveFargo

As the newest member of the Possibilities Center (I’ve only been in Fargo for a month!), I’m still in the honeymoon phase! However, I can tell you that my wife and I were ecstatic to move back to North Dakota after several years away. One of the biggest things I heard of Fargo while we were exploring a new landing spot was how vibrant the business environment was here. From drone technology to manufacturing to the entrepreneurial startup community to the rapidly growing more established business, Fargo has done a wonderful job of creating a true business ecosystem!

 

 

No Man’s Land: Market Misalignment

Do you ever feel like you’re losing touch with your customers? Maybe you feel like you’re not meeting their needs anymore, or you’re not sure what you should offer them to keep them satisfied. Early on, a company will grow on the strength of a simple exchange between the customer and the entrepreneur. However, once the company grows, the demands of the entrepreneur intensify and he or she is physically unable to adapt the company to meet the ever changing needs of the customer. This can result in the company losing its competitive edge, and ultimately, losing sales.

This stage of growing out of touch with customer needs is known as “market misalignment,” and it is the most fundamental peril companies face in “No Man’s Land.”

Market alignment is obtained when a business consistently delivers the value its customers desire. Sounds simple, right? Not exactly. It’s one thing to be aligned, but to stay aligned is a whole new world. According to Doug Tatum in his book No Man’s Land, “The key to market alignment is through innovation.”

But how does innovation happen? It comes when customers ask for a new product or service that requires a substantial change to your business model. Businesses become living laboratories, given over to a process to discover what is the right product, service and target customer. If a company is not innovative and meeting customer needs, they may face market misalignment.

Another reason your company may be facing market misalignment revolves around the fact that the company has made promises it cannot keep, or neglected to make promises that should have been made. The key is for the company to make the right decisions, ones that lead to growth and profits. Deciding which promises to make is part of strategic planning, and these promises can shape the company’s future of market alignment.

Still not sure if your company is aligned? Here are some signs you might not be:

  • Sales growth has stalled
  • Losing competitive edge
  • Tensions have arisen between promises made and delivery
  • Quality problems are arising
  • Increase in customer complaints
  • No direct contact with customers
  • Unable to distinguish customers who will bring growth and those who won’t

Any of these sound familiar? If they do, you’re probably wondering how you can beat market alignment. There is only one sure fire way:

Companies need to surpass the entrepreneur’s physically limitations by institutionally capturing the value proposition that has been developed through the entrepreneur’s unique insights”-Doug Tatum

To put this in simple form, the company must recreate synthesis between marketing and operations, and make use of employees and processes rather than one person’s effort. To get the business to be good at what the entrepreneur did well with customers involves three steps:

  1. Entrepreneurs should identify what exactly they are good at.
  2. Systemize delivery of the value proposition by creating a system where everybody behaves rationally and plays a specific position. Although not always simple, developing processes to capitalize on the entrepreneur’s talents becomes a huge part of the company’s competitive advantage. Concentrating on the value proposition is the most important thing a company can do as it grows.
  3. Develop ways to measure the results of the process.

An entrepreneur can find the skills to lead his or her company through No Man’s Land if a value proposition is institutionalized within the business, as well as identified. Creating a process to ensure that the entrepreneur’s core vision and talents are upheld also helps a business get out of the maze of No Man’s Land by creating competitive advantage that allows for the company to be successful and profitable.

Our next blog on No Man’s Land will focus around management and the dangers to your business of outgrowing it.Missed the first two? Check them out here and here.

 

 

 

Six Benefits of Teamwork in Your Business

By Kayla Koehmstedt, Marketing Intern

Team /tēm/ Noun: A group of persons associated together in work or activity.

At some point in our lives, we have all likely had to work in some type of team. Maybe it was a group project in college, or perhaps some coworkers collaborating on a presentation. It’s possible that you really enjoyed working on this team, or you really couldn’t stand it. However you feel about teamwork, it’s hard to deny that it is vital in ensuring tasks get completed smoothly. Teamwork is actually very beneficial to small businesses and startups as well!

Not sure how teamwork could be beneficial to your company? Here are six benefits of teamwork in the workplace.

Encourages Creativity and Learning | It is hard to deny that creativity thrives when people work together on a team. Brainstorming as a team often leads to many new ideas being brought to light, that may have otherwise been hidden. Teamwork is said to maximize shared knowledge and communication in the workplace as well.

Each individual on a team is different and has different experiences, ideas and talents. When multiple people come together and share their individual differences, many new ideas are born from feeding off of each teammate. Teamwork stirs up excitement that, when working alone, is usually not present. This excitement can also produce new idea generation and creativity, which will ultimately lead to the team having more intellectual resources to work with to make their project be successful.

Blends Talents | You’ve hired some pretty neat people to work for your company, and you saw something in each of them that sparked your excitement to add them to your team. It is likely that each of them had some unique talents and characteristics that you knew would be beneficial to helping your company be successful.

Teamwork allows for all of your employees to come together and share their talents with one another, and feed off of each other’s unique offerings. Often times, teams work extremely well because they are able to blend their members’ talents and work with each other’s strengths. One team member may be great at event planning, while another might be excellent at public speaking. Putting these various talents together helps the team work smoothly, and team members often rely on each other to bring individual talents to the table to benefit the team as a whole.

Builds Trust | Trust is a vital part of any business, no matter the size. Trust builds a foundation to grow on, and without it, the business could crumble and fall. This foundation is built from trusting relationships, which are a common byproduct of teamwork.

Teammates place trust in one another to uphold and complete their duties in the team, in order to make the team be successful. Failing to do what is told of them can result in breaking trust, leading to the team foundation crumbling.

With strong trust throughout teammates, not only does the foundation hold firm and steady, but it is also able to grow and evolve into something much bigger and permanent. Teamwork is a great way to build trust between employees, and to create relationships that keep the business growing.

Teaches Conflict Resolving Skills | Conflicts are inevitable, especially when you put together a unique mix of people. This is extremely true for teams. Employees have different work styles, ideas and talents. Many times these unique characteristics come together and result in the success of the team, but often they can also generate conflict between the team members.

Conflict that arises in team situations can hinder the progress of the team, and needs to be solved as quickly as possible. Because of this, employees are forced to solve the conflict themselves, rather than turning to management or an outside party. Learning how to manage and resolve conflict in a team can be very beneficial for employees, as they can apply this skill to any form of conflict they may run into throughout the organization.

Develops a Sense of Ownership | Teamwork is a great way for employees to feel a sense of pride and accomplishment in the contributions they put into work. It also helps employees feel connected to the company and builds loyalty. This can lead to a higher level of job satisfaction and enjoyment for the employees.

Not only is teamwork beneficial for the employees, but it is also beneficial to the employer as well. Employees who feel a sense of connection to their company are more likely to stay with the company and, as we’ve mentioned before, you want to keep the awesome people you hired! (In case you forgot, check out this blog on hiring the right people.) One of the top reasons employees leave a company is that they feel their contributions to the company don’t seem to matter. Teamwork allows employees to add to the bigger picture of the company, and to be engaged with what is happening in the organization.

Encourages Risk-Taking – The Healthy Kind | Risk taking is an extremely important part of any business, but especially those small to mid-sized businesses as well as startups. After all, you take the risk of starting a brand new endeavor. Usually, it can be somewhat difficult for one person to take a risk. He or she may be afraid of the consequences that stem from a failed idea. However, when in a team setting, people may be willing to take more risks because they realize failure does not fall back on them alone.

In fact, team members are more likely to take risks because they know they have a support system behind them if a failure was to occur. Not only do they have a support system, but they also have their team members to offer advice and guidance. And, if the risk pays off, the whole team is able to share in the success, just as they would if it was a failure. In many cases, the riskiest of risks actually turns out to be a very successful idea, so having the skill to know when to take that jump can be very beneficial.

 

 

Meet the Team: Ashley Cossette (@ashleymcossette)

AshleyWhat’s my role?

My role in the Possibilities Center is two-fold.

Accounting Coach 1.0

I lead our Accounting Coach 1.0 services. This means I provide education and training for on-staff accounting professionals.

Fun Fact: I started my college career in elementary education however transitioned into accounting.

As an accounting coach, I get to combine two of my passions: teaching and accounting. I am an on-call accounting resource, helping our clients with anything from the basics of accounting to more complex accounting transactions and issues.

In addition to being an on-call accounting resource, I help create and facilitate learning opportunities such as lunch n’ learns, panels, customized training sessions and manuals. My goal as a coach is to increase financial literacy at all levels within a business from the bookkeeper to the owner.

Visionary

In this role, I get to focus on my creative side (yes, numbers nerds have them too) with a goal of improving our current offerings through process improvement or technology advancement and finding new offerings to provide value to our clients (or potential clients).

Why are numbers important?

The numbers are essential to decision making in a business.

The numbers are used to obtain financing or investment dollars (sometimes this is all a business needs to stay above the water or take their vision to the next level), to report to regulatory agencies such as the IRS (and they aren’t fans when the information you provide is incorrect), to incentivize employee performance, or to go after a new market or product line or service offering … the list goes on.

Time and time again, I have seen the negative impact of inaccurate financial data on a business. Understanding the numbers (and having good numbers) can mean the success of a business.

Why do I want you to succeed?

Happiness. It brings me great joy to help others learn and achieve their goals. In addition, I value the relationships that are built in the business of helping others.

#ILoveFargo

Fargo embodies the meaning of community. Fargoans truly care about the well-being of others, that doesn’t exist everywhere. From a business standpoint, I am continually amazed by the entrepreneurial community. It is a community of individuals and businesses working together to make great ideas happen but also give back to the community as a whole. Fargo is a great place to be a part of something bigger.

 

No Man’s Land: Too Big to be Small, Too Small to be Big

Do you feel like your business is too big to be small and too small to be big? Do you feel like you’re working harder than ever before, but you just don’t know how to make things better?

If you are like so many entrepreneurs, you might start feeling bad and blaming yourself. You may be saying things like, “I’m the problem” or “I just don’t know what it takes to get the job done anymore.” You may even start blaming organizational problems on specific decisions you made or your failure to anticipate larger industry trends.

Leading a business in emerging growth mode can be a truly trying experience. But take heart, because often the troubles you’re encountering aren’t because of you. Rather, they stem from external causes relating to the specific challenges of the No Man’s Land transition.

No Man’s Land: “A transition that a company goes through when it is too big to be small and too small to be big. It’s something every company has to go through in order to grow to scale. It’s a highly fatal transition and many companies don’t make it.” – Doug Tatum

Most entrepreneurs enter No Man’s Land unintentionally. In fact, it’s much like getting lost. “No Man’s Land is dangerous because it’s like getting lost in the wilderness: The unknown terrain comes on subtly, gradually, almost imperceptibly,” says Tatum.

Similar to the ever so awkward stage of adolescence, businesses encounter difficult and potentially fatal challenges unfamiliar to you as an entrepreneur.

It is also important to note that the growth that leads a company into No Man’s Land will not lead a company out of it. To survive this phase in a company’s life cycle, entrepreneurs must step away from the day-to-day and subject their business to a rigorous objective analysis. Only by gaining a more impersonal understanding of the company’s own strengths and weaknesses can entrepreneurs take the necessary strategic steps.

How do I know if I’m in No Man’s Land, or about to enter it?

Companies typically encounter No Man’s Land years after the company has been in operation. It usually takes specific circumstances, innovations and intuition combined with a quick company growth mode that brings a company into No Man’s Land.

Do any of these sound familiar?

  • Difficulty fulfilling customer promises
  • Decisions become increasingly complex and beyond the capacity of existing leadership to handle
  • Your organization lacks a sense of how it makes money and what its future profitability picture will look like
  • Difficulty obtaining needed financing
  • Leadership feels stuck and stagnant
  • Reporting systems no longer provide meaningful information
  • Loss of control … in other words, your tried-and-true rules don’t work anymore:
  • Employees are having trouble keeping up, even though your vision hasn’t changed.

These are some of the common problems you’ll encounter when you’re in rapid growth. Welcome to No Man’s Land.

So what do I do next?

Unfortunately, there is no shortcut through rapid growth. However, you do have two choices for survival:

  1. Go back to the safety of the starting point. That is, continue to function as a small entity.
  2. Push forward and get ready to handle the challenges you’ll encounter.

Can I just wait this out?

Nope. A company can’t survive for very long while standing in one place. You can’t just ignore No Man’s Land and expect it will just go away. If you do, you’ll end up going backward or going under … neither of which sound like great options.

“Like any voyage of discovery, a trip through No Man’s Land is painful and transformative. To make it through, you’ve got to tackle its challenges head-on – the most quickly and efficiently, the better,” says Tatum.

Any good news?

Yes! No Man’s Land only happens once. It’s a unique transition that happens early in a company’s life cycle, as it grows out of being a small company into being a larger one. But once you’ve passed through this awkwardness, you’re done … at least with No Man’s Land.

More good news: companies that have come through to the other side of No Man’s Land are ready to grow and have the tools in place to help them do just that. A few of the tools include:

  • A brand that people have confidence in
  • A value proposition that is proven and profitable
  • A distinct culture

So how do I get through No Man’s Land?

If you have decided to press through No Man’s Land (which we hope you have), you’ll need:

  •  A map
  • A High Place from which to orient yourself
  • Navigational rules to help you determine your position on the map as you move forward.

Over the next seven blogs in this series, we’ll cover each of the above necessary tools and what these look like for your business. This will also, hopefully, give you a chance to look strategically at your organization, its processes and the challenges you’re encountering.

P.S. In case you missed the first blog in this series, you can find it here. You’re welcome.

 

Four Reasons to Outsource Human Resources

 You have a dream, but you need more than your vision to make it a reality. You need the best people strategies in place and that means taking on human resources (HR). HR, in its most basic sense, is any function related to the employees of an organization, from recruitment to exit.

We’ve mentioned it over and over again, but this is important: happy, satisfied employees make for a thriving, successful business. After all, where would your business be without employees? Your company’s HR services should instill a sense of culture and belonging for your employees and encourage them to be efficient and productive in the workplace.

The well-being of your employees is a lot to put on a team’s plate, especially if it’s a small team … or just you. So what do you do if your HR people are overwhelmed?

We figure HR isn’t why you got into business. In fact, you may not have even the slightest clue where to begin when it comes to HR. Enter the world of HR OUTSOURCING.

No, we’re not making this up. In fact, out of the 40-50% of companies using outsourcing, 11% of them are outsourcing human resources.

Outsourcing your company’s HR practices can be very beneficial to your company, and can give you more time to get back to the reason you got into business in the first place.

Here are four reasons why outsourcing HR services can be beneficial to your company, and can help you get down to business the way you intended:

  1. Rolling in the Dough | Choosing to outsource your HR practices can save your company some serious money that can be allocated to other areas that need it! By outsourcing, you won’t have to hire as many employees to complete various HR tasks, thus saving money when it comes to payroll and benefits. Yes, you will have to pay to outsource, but the cost of outsourcing is cheaper than adding numerous employees to the HR department.
  2. Gettin’ Down to Business | One of the main reasons HR outsourcing is used is to ensure the HR department runs smoothly. For example, if your business suddenly faces an increase of items that need to be processed, your outsourced HR services can work with this, thus allowing your HR workers to focus on their day-to-day tasks. Hence, more efficiency and less fire drills. Keeping your company running as it always has is an important benefit of HR outsourcing that should not be overlooked.
  3. Avoid Turnover Troubles | So you’ve recently had a turnover of employees in your HR department. Now you only have a few employees left, and they can’t do everything on their own. Imagine the effects on your business if payroll suddenly halted! Human resource outsourcing is a great way to be sure that even if you have some employee turnover in your HR department, your company’s core functions won’t suffer. Instead of trying to replace the employee, train the new employee, and get all of the old employees work done, HR outsourcing can take care of the details so you don’t have to worry about what to do next.
  4. Big or Small-One Size Fits All | You may be thinking that your business is too small and that outsourcing HR doesn’t apply to your company. But, the truth is even small to mid-sized businesses and startups can reap many benefits from outsourced HR practices. Your business may be small enough that it simply doesn’t have the budget (or even enough space) to hire an in house HR director, or you may be too busy to worry about HR because you are focusing on getting your company up and running. This is where outsourcing comes in. By outsourcing, you give yourself, as well as your company, more time to focus on growth and other important tasks to make your business successful, rather than putting time into something you may not have the time or resources for.

Seem like a lot? We can help. There are many ways that outsourcing HR practices can help meet the unique needs of your business. Contact Lisa to learn more.

 

The Tax Implications of Crowdfunding

As you begin your endeavor, there are several ways to pursue funding (like these). One of the ways to gain funding for your endeavor is crowdfunding.

Crowdfunding is “a method of raising capital through the collective effort of friends, family, customers and individual investors” (source).

Crowdfunding generally uses the method of online platforms (social media for instance), to engage a large group of individuals and increase exposure.

In the search for increased reach and exposure, crowdfunding has even attracted our friends at the IRS. Recently, they explained the tax treatment of crowdfunding, especially as it relates to income inclusion.

What?

Code Sec. 61(a) defines gross income as all income from whatever source derived. Obviously, there are some exceptions (shocking no?), but for the most part, all the income you earn is part of taxable income, regardless of where it’s derived, unless it is specifically excluded.

So why does the IRS care?

Based on the above reference, they have concluded that crowdfunding payments are taxable income unless one of these exceptions are met:

  • Loans with a repayment obligation
  • Capital contributed to your organization in exchange for some portion of your company (equity interest)
  • Gifts

Crowdsourcing is a fairly new concept in the tax world so there is no case law at this time. It will be exciting to see how the tax courts react to this down the road.  (Yes, I’m a tax nerd and think this stuff is exciting.)

When do I have to pay tax on crowdsourcing receipts?

If the crowdfunding payments do not meet one of the exceptions listed above, they are probably taxable in the year the payments hit your account.

Which brings us to another term you’re excited to learn: constructive receipt. This basically means that income is taxable in the year funds have been credited toward your account and made available for you to draw on in the future, even if they have not physically received those funds.

The moral of the story?

There are tax ramifications for just about everything you do in business. So it’s important to be mindful of your finances, and what you’re reporting.

Still confused or need more help? We’re here.