Are you an intrapreneur?

Have you ever thought of yourself as a risk taker? You know, someone who pushes the envelope, challenges the status quo or maybe someone who finds the word “impossible” to be a challenge. Now, what if you were acting this way in an attempt to better your business/employer? If you are taking risks and being innovative for the possibility of bettering your business, you might be an intrapreneur.

An intrapreneur is defined as “an employee of a business who is given freedom and financial support to create new products, services, etc. and does not have to follow the usual routines or protocols” according to the dictionary. The American Heritage Dictionary adds on that an intrapreneur takes responsibility for an idea through assertive risk taking and innovation. Further yet, Christian Koch goes on to say that intrapreneurs are the “secret weapon” of the business world.

To sum it all up, an intrapreneur is an employee who takes risks in the hope and desire they pay off for the better of the business.

Intrapreneurs can have a very positive impact on a business. The work of intrapreneurs can lead to increased productivity. When new ideas and tasks are presented, more people are often needed to make these dreams a reality. Adding more people to a new project can lead to more work being completed and more employee engagement.

Along with increased motivation in a business, intrapreneurship can also lead to an increase in innovation – and who doesn’t want that? New ideas can bring about a need for new processes, technology, etc. Acknowledging this need and acting on it can introduce new-to-your business tools that can help foster growth and change which could help your business get ahead.

Another positive impact from intrapreneurs comes from their understanding of current trends and issues. The risks these employees take are usually to address a need or opportunity their business can capitalize on. By keeping up with, and acting on, trends, intrapreneurs can help the business gain a competitive advantage by being early adopters. This competitive advantage can help your business get the leg up it needs to be successful.

These intrapreneurs sound pretty great, right? So how do you go about creating a culture of intrapreneurship in your business?

  • Reward and Recognize Behavior — Reward your employees for taking the initiative or for thinking ahead on projects. Whether it’s a simple thank you, pat on the back or going for lunch, this can show your employees you value (and encourage) them to step up and be innovative.
  • Encourage Healthy Competition – Healthy competition can be extremely helpful when trying to foster a culture of intrapreneurship. This can often times lead to employees working hard in order to win by getting the best results. To do so, it’s possible they will have to come up with new or unique ideas – which can help them transfer this skill over to other parts of their work.
  • Encourage Networking and Collaboration – You’ve heard the saying – two minds are better than one. Encouraging your employees to network and work together on projects can lead to more innovation and productivity, as well as new ideas and feedback. Offering brainstorming sessions allows a set time for employees to get together and collaborate at a time that works for everyone.

As great as having an intrapreneur sounds, it’s important to remember that intrapreneurs simply do not fit in some businesses.  Because intrapreneurs take risks and like to push the envelope, they usually do not fit well with businesses who have a tried and true way of operating. Businesses that have been around for many years, or those who have a set process in place might struggle to adopt and compliment the skills and characteristics of an intrapreneur. Because of their risky behavior, intrapreneurs can cause conflict and disruptions between employees and the business. In this case, it is best to focus on communication in order to keep everyone on the right track and working efficiently and effectively.

Although intrapreneurs can have both positive and negative impacts on a business, it’s important to remember that intrapreneurs typically have the business’s best interest as heart. They’re not just showing up to work for the paycheck. Rather, they are investing in the company by bringing passion and a desire to better the business through innovation and risk taking.

 

Keeping Your Business Up on Tech Trends

By: Eide Bailly Technology Consulting

You’ve probably heard the saying “the times are changing.” This saying proves true not only in life, but also in your business – especially when it comes down to technology. However, a surprising number of businesses are still stuck in the past when it comes to using technology.

Not being up-to-date on technology can have some pretty nasty impacts on your business, such as security concerns or lack of efficiency – yikes! However, business owners might not realize the ability to attract – and keep – top, young talent is being impacted by old-school technology practices. It should come as no surprise that millennials are taking over the workforce at a quick pace. In fact, in April the US Census Bureau found that millennials are now the country’s largest population. Because of this, many businesses are trying to appeal to this younger generation of workers.

Millennials have been exposed to technology for the majority of their lives, which leads to them having higher expectations of what technology should do for them and what technology should be offered in the workplace. Does this seem annoying and stressful? Maybe – but it can also be seen as an opportunity to see how your business stacks up in the technology world and just how appealing your business is to this booming workforce.

In 2015, the Bureau of Labor Statistics did some research and found that roughly half of hiring managers struggle not only to find, but also to keep millennials in their business. On the other hand, a good chunk of millennials – nearly 60% — say they only plan to stick around in their current position for about three years! So how do you jazz up your business to attract – and keep – these millennials?

Consider your company’s culture. Does your company view technology as a necessary evil to get things done, or is technology seen as a tool that provides opportunity for growth and innovation? Having a culture that embraces technology for all its worth can show this young talent pool they fit in with your business. The efficiency that comes from using technology to your advantage can boost productivity and team morale – and who doesn’t want to work with happy people?

When it comes to millennials and technology, they’re inseparable. Keep your business up-to-date on technology trends. How?

  • First, get familiar with changes and trends in technology. Our good pal, the Internet, can help with this. There are thousands of resources available online, such as blogs and articles, that you can read up on to stay caught up (or to get familiar) with technology.
  • Another way to stay on top of your game is to see what other businesses are doing. (No, we’re not saying to go spy on the competition.) However, if given the chance to network and communicate with other business owners, bring up the technology topic. This topic can often open up a conversation that lets you get a good idea of where other businesses stand on technology and how they implement it in the workplace.

Keeping up-to-date on technology trends can help your business gain a competitive advantage, and you just might find it easier to attract and retain this young generation of talented workers.

A version of this post first appeared on eidebailly.com.

Motivating Your Remote Staff

By: Lauri Dahlberg, Manager of Firmwide Recruitment at Eide Bailly

Technology has changed the way many of us work. One of the biggest changes is the ability to work remotely. For several companies, this is a great opportunity to hire skilled individuals, regardless of where they’re geographically located. In fact, 25 percent of the workforce is telecommuting in some way (source).

However, with this ability comes a unique set of problems. One of the key areas centers on motivation. After all, how do you motivate employees you don’t see every day?

The key is RELATIONSHIP. Here are just a few ways to make that happen:

Schedule, schedule, schedule.

It’s important for your remote employees to still feel like part of the team. So take time schedule team meetings with the WHOLE group, including your remote employees. Also, make sure these are regular, not sporadic. Coming together as one cohesive unit on regular basis will help you foster and build teamwork.

Tip: make these meetings conducive to your remote employees. How? Work from home one day and call into your meeting remotely to see how it works. You may learn a thing or two.

 But more than just meeting with the team, you need to make time to meet one-on-one. Schedule consistent (weekly, bi-weekly … whatever works best for your organization) meetings with your remote employees. Take the time to make this a priority and discuss work tasks, projects, etc. Also, make sure you’re building rapport with your employees … read, don’t just get straight down to business. Take the time to talk about everyday stuff too.

Tip: Need something to guide the conversation? Set up KPIs with your employees so they know what it means to be successful, both individually and collectively as part of the organization. You can learn more here.

Utilize technology.

Don’t just stop at the phone because it’s easy. Find a way to communicate with your remote employees face-to-face. Look at video conferencing options, or find ways to incorporate Skype or FaceTime into your meetings.

This is for more than just meetings. You can even hold celebratory events via video or Skype, allowing the whole group to celebrate together. If you’re a really big planner, you can ship items to your remote employees ahead of time so they can partake in the celebration.

Get together.

Plan an annual team meeting so the whole team can be together in one room. Not only can you then deal with larger strategic initiatives and work on the business as a whole, but you can also plan a team outing or activity.

The moral of the story …

Remember to focus and make a concentrated effort to engage your remote staff. When you take this extra time, you’ll have a more engaged team, regardless of where they’re located.

A version of this article first appeared on the MN CPA website.

 

Break-Even: What You Need to Know

So, you’ve started a business and everything is up and running. You’re selling your product or service to customers and you’re seeing an increase in sales and satisfaction. But, there’s a problem. Your books tell you that you’re not making a profit. So what’s it going to take to make a profit? That’s where understanding how to calculate your break-even point becomes handy.

The break-even point? Huh?

In its simplest sense, the break-even point can be defined as the moment a business isn’t losing money or making a profit, but breaks completely even at $0. All the money coming in from sales will be equal to the money going out for costs. The break-even point will be equal to the number of units a business must sell to reach this $0 point.

Let’s dive a little deeper.

First, let’s look at the break-even equation:

Break-Even Point (in units) = Fixed Costs / Gross Profit (per unit)

The equation takes fixed costs and divides them by gross profit. The fixed costs (sometimes referred to as operating costs) can be any recurring expense that you have to pay to keep your business up and running. These costs have to be paid, even if no sales are made. Some common operating costs include rent, insurance and internet, to name just a few.

Gross profit is broken down into the item or service sales price minus variable costs. The variable costs are determined to be the amount of money it takes to produce one unit of your offering. In some cases, the offering may have multiple variable costs. For example, if you sell brownies, your variable costs would include the sugar, eggs, cocoa, etc. needed to go in the brownies. All of the variable costs to create a product can be added up and known as the cost of goods sold, or as us accountants lovingly refer to it: COGS.

So, taking this information, we can conclude that gross profit is the amount of money you make on each sale after subtracting COGS from your sales price. The broken down equation is as follows:

Break-Even Point = Fixed Costs (aka Operating Costs) / (Sales price – Variable Costs (a.k.a COGS))

Putting it all together

So, how do you put all this information together to find your break-even point? Let’s look at an example. Let’s say you are in the business of selling widgets. Your operating expenses, which include rent, internet and insurance, total $10,000. The COGS for each widget is $20, and you sell each widget for $40, leaving you with a gross profit of $20. We can put these numbers into the break-even equation to find how many widgets you must sell to break even.

Break-Even Point = $10,000 / ($40 – $20)

Break-Even Point = $10,000 / $20

So, to break-even, you would need to sell 500 widgets.

Take it one step further

Not only can the break-even point be used to calculate point zero, you can also use the calculation to determine what it’s going to take to get to your desired profit. Building on the previous example, let’s say you want to make $10,000 (meaning when all the numbers are in, you want the bottom line (aka net income) to be $10,000 not $0). You can simply add the $10,000 to your fixed costs.

Break-Even Point = ($10,000 + $10,000) / ($40 – $20)

Break-Even Point = $20,000 / $20

So, to break-even, you would need to sell 1,000 widgets.

Wrapping it up

The example provided above is simple, yet provides a good explanation of the break-even point and how to reach it. Of course, every business will incur different types of costs and expenses which will need to be taken into account when calculating this amount. If all this seems a bit confusing, our Accounting Coach 1.0 service can help you navigate through the waters.

Forms W2 & 1099: What You Need to Know

w2-bookAs 2017 begins, one of the things at the top of a business owners list is forms. Tax forms, to be more specific.

These forms are complex and take some time to go through. However, they’re necessary for your business for a multitude of reasons, one of which is not getting in trouble with the IRS.

Two of the most common tax forms you’ll get to deal with are the W-2 and 1099. These particular forms deal with reporting worker wages and income … and employees like to get paid.

Need a refresh on what they are? Check it out here and here.

To learn more about these important forms, and how to complete them correctly, check out our annual W2/1099 Book. In it, you’ll find:

  • Answers to who is an independent contractor and who is an employee
  • Information specific to the 1099
  • New Hire Reporting requirements and info
  • Information specific to Forms W-2 and W-3

Check out all the goodness here.

Understanding Your Target Market

One of the keys in business is to have a product or service that consumers actually want. Maybe you have a top of line hair salon, or you just opened shop to sell an all-new high tech cell phone accessory.

No matter what your core product or service is, it’s not a great business plan to try to appeal to everyone. Welcome to the world of target markets.

So what’s a target market?

We’re glad you asked. According to the Small Business Encyclopedia, a target market can be defined as “a specific group of consumers at which a company aims its products and services.” Sounds simple, right? Well, not exactly. Often times, business owners are very general in determining their target market, hoping to get a bigger slice of the pie.

Do any of these sound familiar?

If you own a salon, you might say your target market is anyone who has hair; if you’re selling phone cases, maybe you’d say your target is anyone with a cell phone. Here is where the hard truth comes in: even though you may want it to be, your target market is not everyone.

Of course, we wish it could be – wouldn’t it be great to have all those people buying your products or services, talking about you and helping you gain more business? In theory, having everyone be your target sounds great. In reality, no business no matter the size, can be everything to everyone.

Why do I need to know my target market?

Knowing your target market is the first step in determining who you market your products towards. Having a clearly defined target market provides guidance along the road of growth for your business and can help you improve your product or service based on feedback from actual customers. Without having a clear picture of who your target market is, you may be wasting time, money and energy on the wrong people, people who won’t even think about buying your product. If you are focusing all your efforts on the wrong market, you may be missing opportunities to increase sales or even losing sales to your competitors.

Why isn’t my target market everyone?

Simply put, not everyone is interested in what you have to offer, and no one product or service can be everything to everyone. Think of it this way: when determining who you want to market your product to, you may look at demographics (more on that later) as part of you research. However, “everyone” is not a demographic, nor a specific group of people. A target market is all about specific characteristics that your desired customers possess.

Another consideration is the fact that it just isn’t possible. Let’s consider this scenario. Imagine you wanted everyone in Fargo to be your target market. In 2015, the population of Fargo alone was estimated to be 188,523 according to the US Census Bureau. If all of these people were to order your product, it would be extremely difficult, if not impossible, to meet all their needs. In short, narrowing your target market can help your business be more efficient.

So, how do I determine my target market?

There are many criteria that can be considered in determining your target market. Market segmentation usually tends to fall into four separate categories.

  1. Geographic – This criteria of segmentation focuses on, you guessed it, people living in a certain geographic area. Looking at a geographic area allows you to see what the characteristics are of the people in the region your business operates in.
  2. Demographic – We told you we would come back to this! Demographic segmentation is an extremely important part in determining your target market. The demographic characteristics of consumers get down to the nitty gritty of who the person really is. Demographics commonly examined in target market determination include age, gender, income and level of education, to name just a few.
  3. Psychographic – Psychographic segmentation looks at the potential customers’ interests and personalities. Segmenting by psychographic qualities can give your business a good look into the daily life of the target customer by examining their attitude, lifestyle and personal values.
  4. Behavioral – If you guessed that this form of segmentation focuses on customers’ behaviors, you are correct! This can also refer to what potential customers desire from your offerings. This can include brand loyalty, user status, desired benefits, community involvement (numbers don’t lie) and the readiness of the buyer.

These four categories can be extremely helpful in determining your target market as they allow you to narrow down each category to the customers you feel best fit with your business.

Putting it all together

By this point in the blog, it should be no surprise that determining your target market is extremely important for your business. Having a clearly defined, reasonably sized target market can allow your business to put time and effort in to those who are interested in the business, and weed out the ones that just won’t bite.

Tips for Firing … A lesson in HR

As a business owner, your job involves managing your employees. This can be fun, such as when you get to hire these awesome employees and bring them into your business. It can also be tough. Sometimes these employees just don’t work out as well as you had hoped. Sadly, this can lead to a tough decision– to fire or not to fire.

Here are some factors to keep in mind when preparing to fire an employee.

When

It might not have crossed your mind that when you fire someone can impact how smoothly (or bumpy) the process goes. Often, it works best to fire an employee at the end of the day. With the possibility of less employees being present, the employee won’t have to deal with awkward confrontation.

There is also a debate about what day of the week is best. Friday is usually regarded as the day NOT to fire someone. Why? Many offices, such as unemployment, are closed for the weekend, so the newly fired employees have to wait a few days to start getting things sorted out. Another reason to stay away from Friday is that it can make it look like you worked this employee hard all week, just to fire them at the end.

Where & How

Where and how you will fire this employee can make a huge difference, especially when it comes to safety. When picking the physical location, it’s best to pick somewhere where you can be close to the exit, such as a conference room. Making sure you’re near the exit allows for a quick exit if the employee were to retaliate (trust us… this stuff really does happen). It’s also important to keep in mind how the employee got to work. You don’t want to fire someone who gets rides to work and leave them stuck with walking.

Other Rules to Take Into Account

The government also sets some rules regarding firing that can get you in big trouble if you don’t comply.

Employment at Will

Unless you operate in Montana, your business has the option to implement employment at will policies and procedures. What does this mean? Well, employment at will, in its most basic sense, allows for a business or the employee to terminate the employment at any time, for any reason, or even for no reason at all.

In order to make sure you’re in compliance, make sure all contracts, whether implied or not, and other employee documents and agreements, such as a company handbook, don’t contradict the employment at will doctrines in your state. (Shameless Plug: If you need someone to make sure you’re in compliance, our HR team can help. Just ask!)

Legal vs. Illegal

Do you know what could be considered illegal when it comes to firing a bad apple? A lot of illegal firing methods conflict with discrimination issues. Policies such as Affirmative Action and the Americans with Disabilities Act make it illegal to fire certain employees without having a legitimate reason, or based on protected classes such as race, age, disability, etc.

If you are going to fire an employee, you must make sure you are in compliance with the rules of these acts. Otherwise, you might find yourself in more trouble than the employee was giving you.

Proof of Problem

When something goes wrong and insurance needs to step in, it is important to photograph and document everything. A bad employee is no exception. If you start to notice an employee acting out, it might be a good idea to start documenting right away. If the problem escalates to the point where the employee needs to be fired, it will be helpful to have solid proof of where the employee went wrong, rather than relying on “he said she said.” Although employment at will policies allow for an employer to terminate an employment without reason, having solid documentation as a backup can help prevent angry ex-employees from filing those pesky lawsuits.

Benefits Remain

Just because you are getting rid of the problem child employee doesn’t mean you get to sweep everything under the rug. When you hired this employee, it’s possible they signed up for certain benefits, and some of these benefits don’t disappear with termination.

Health insurance is one of those. Under COBRA, employers with 20 or more employees must offer temporary continuation of health care at a group rate to terminated employees. There are some exceptions under COBRA, but it is a good practice to stay up to date so this snake (come on, we had to) can’t come back and bite you for not being in compliance.

Of course we can’t forget about unemployment. If you fire someone, you have a legal duty to fill them in on any possible eligibility they may have to receive unemployment insurance. Fired employees are also required to remain eligible to receive pension and 401(k) plans.

Show Me the Money

If you’re firing an employee, it’s likely they will still have some compensation owed to them. It goes without saying that you still have to fork over this payment, but what could get you in trouble is when you pay them. Federal law doesn’t require former employers to immediately hand over the check, but some states have laws that disagree and require immediate payment. Some of these state laws may even require the employer include other compensation in the paycheck, such as unused vacation pay.

The moral of the story …

It is important to remember the majority of issues impacting the firing of employees varies by state. Contacting your state’s labor department can help you be sure you have the latest information to keep you out of trouble when firing a bad employee. If all this seems scary and you’re not sure where to look, let us know. We know how important it is to have someone monitoring all these rules, and our HR team is here to help you do just that.