An Inside Look at the GFMEDC

Guest blog by John Machacek, Greater Fargo Moorhead Economic Development Corporation

It’s no secret Fargo-Moorhead appreciates and supports its startups, entrepreneurs and small businesses (think 1 Million Cups, Startup Weekend, CoStarters, Financial Planning Day… we could go on and on.) These people and businesses are helping shape the economic ecosystem, as well providing the area with many new, fun opportunities for shopping, dining and entertainment.

The bottom line: startups, entrepreneurs and small businesses are important to our community. In fact, there are organizations in the community that have resources dedicated to helping businesses grow and thrive. One such organization is the Greater Fargo Moorhead Economic Development Corporation (GFMEDC).

The GFMEDC is a great resource for those who want to live, work and play in the FM area. The Mission and the Vision of the GFMEDC do an excellent job of explaining who we are as an organization and what we aim to do.

Mission: The Greater Fargo Moorhead Economic Development Corporation is a catalyst for economic growth and prosperity. Using a comprehensive approach to economic development, the GFMEDC accelerates job and wealth creation in Cass County, ND and Clay County, MN.

The Vision includes points such as:

  • Lead the development of a robust economy where people and businesses thrive
  • Strategically pursue job creation and business attraction
  • Work with K-12, higher education and industries to ensure a strong talent pipeline
  • Support a vibrant entrepreneurial ecosystem
  • Create collaboration between public and private sectors

In other words, the GFMEDC wants to see the area’s economy and ecosystem thrive, and it understands the importance of small businesses in making this dream a reality.

Innovation and new businesses contribute to a stronger economy and job creation in the area, and the GFMEDC serves as a resource to support this emerging ecosystem.

On a high level, one role of the GFMEDC is to encourage the idea of being an entrepreneur and the importance of them on our economy. The FM area has one of the lowest unemployment rates in the nation, so it isn’t realistic to rely on the attraction of new businesses into the community. That’s where the entrepreneurs and startups come in.

By increasing the awareness and support of entrepreneurial development, the GFMEDC helps connect startups, builds confidence and portrays the community as a great place to build a business (and it truly is). This message is conveyed through a combination of messaging and events, which come from traditional organizations like GFMEDC, as well as help from non-traditional organizations like Emerging Prairie and Folkways which help us reach a wide variety of audiences.

On a more personal level, another purpose of the GFMEDC is getting to know the entrepreneurs on an individual basis and to be there for them throughout the various stages and needs of their business. The GFMEDC aims to engage with startups to listen to their story, learn what they need and be all ears about how they can help down the road. By building these strong, trusting relationships, the GFMEDC helps make entrepreneurial connections and strengthens the network of all those in the entrepreneurial ecosystem.

Although the GFMEDC wants to see all types of businesses succeed, there is a special interest for those in the primary sector. These businesses are those who are adding value to a product/service and a significant portion of their customer base is outside of the region. Think of software and application developers, manufacturers, value-added ag services, etc. These companies could be located in nearly any part of the country and it wouldn’t change their customer base much – yet they’ve chosen to make the FM area the home for their business because they know the benefits of doing business here. These companies bring new wealth to the communities, which then gets passed on to employees who have spending needs which grow other industries in the area. The support of the GFMEDC helps fuel the economy by creating an ecosystem where businesses and industries all benefit from each other.

The GFMEDC also likes to stay on top of what and how these businesses are doing so we can better help them with any needs that may arise. For the more established businesses, routine visits are scheduled with them to check how things are going, but also to stress the importance of remaining in contact, especially if the business is planning an expansion in employment, facilities or financing needs. For startups, the GFMEDC aims to be in contact with them right from the start to better understand their growth stages and to be a better guide for them.

The positive approach from the entrepreneurial ecosystem (GFMEDC, Emerging Prairie, SBDCs, universities, fellow startups, etc.) has increased entrepreneurial confidence, community pride and the innovative image of the metro area around the country. Startups and small businesses are better aware of programs available to them to help them progress faster.

The Fargo-Moorhead community is friendly and caring, and entrepreneurs should know they’re not in this alone. At the GFMEDC, we pride ourselves on knowing people and programs, and we simply cannot expect businesses to know all this on their own. The GFMEDC is here as a resource to listen and learn about the current stage and future plans of each business, and to help them take advantage of what is available in the community in order to help them grow and thrive.

Happy Small Business Week!

Happy Friday! We hope you’ve had a great week – after all, it was National Small Business Week!

What’s Small Business Week you ask? Dating back to 1963, the President has announced National Small Business Week every year. The purpose of this event is to recognize and celebrate the important, inspiring and amazing contributions of entrepreneurs and small business owners (personally, we think small businesses should be celebrated all the time.)

In honor of National Small Business Week, we want to share some of our favorite fun facts about small businesses – after all, we think they’re pretty neat!

  • According to the Small Business Administration, more than half of Americans work for or own a small business, and they create roughly two out of every three jobs in the US.
  • There are somewhere around 30 million small businesses in the US and of those, roughly 22 million consist of one lone employee!
  • One of the fastest growing industries for small businesses is the service industry – think auto repair and hair salons (but likely not in the same place.)
  • In 2015 alone, venture capitalists invested nearly $60 billion in small businesses. People know and understand the importance of these businesses – they show that by supporting ones they believe in.
  • Good news on profits! 2016 was the fourth consecutive year of improved net profits seen in businesses with less than $5 million in revenue.
  • Three of the top five challenges said to be facing small businesses in 2017 are increasing profit, growing revenue, and cash flow – finances really do matter!
  • Some of the biggest names in the business world (think Apple, Starbucks, Coors) all started out as small businesses, thanks to some generous funding.
  • Over half of small businesses have a CFO or controller (either in house or outsourced) managing their finances.

To top it all off, check out this video that shows even more statistics of just how important small businesses are:

http://mediahub.financialpicture.com/view/7823/481

We truly enjoy working with small businesses, and we’re happy to celebrate National Small Business week with you!

Common Troublemakers on the Books

By: Ryan Renner, Eide Bailly LLP

A while back, we discussed some ways to know when things go wrong on your books. When something goes wrong, it’s important to understand the root cause in order to hopefully avoid the problem altogether. While there are many pesky problem causers, the basic concepts of these generally apply to a lot of the most common errors.

Here are a couple of the most common troublemakers we see causing problems on the books.

Lack of Consistency

Often times, errors start in areas of the books that are unfamiliar or new to small business accountants (we can help you get familiar with them – just ask). When these processes aren’t completed consistently and accurately, this can lead to issues over the course of the year that, if not caught right away, can cause even bigger issues down the road.

One common example? Those pesky balance sheets. Balance sheets contain a lot of important information that can tell you where your business stands and where it’s going in the future. If you only reconcile them annually, or convert from a cash to accrual basis at the end of the year, you could end up forgetting what you did previously, and you might even be doing it a little differently. The problem? This can often lead to issues with your prior and current year balances being calculated differently, resulting in balances that don’t make sense.

The best way to correct this common issue and prevent it from taking over is to implement a consistent process over the course of the year. Consider setting up monthly or quarterly updates and reviews. This can help you keep information fresh in your mind (as opposed to trying to figure out how to record something in December that happened back in April), and can also help you remember how a process was completed previously. Although this might add time up front, it can help save time in the long run. Whether you spend your time trying to remember what occurred earlier in the year or trying to find an error caused by a change in your processes, your year-end can become much more efficient when you come up with a consistent process, leading to less errors on the books.

If implementing a consistent monthly process sounds confusing, know that you can always check with your accountant or auditor to make sure you’re doing things correctly from the start. They can help you make sure you’re on the right track, and can help make your process a breeze. 

Letting Issues Grow

Another common issue that leads to major problems on the books is letting issues go and deciding you will take care of them later. Once example is sitting back and ignoring small differences in the details, such as in your bank reconciliations. Generally, we see accountants noticing these small errors, spending a little bit of time of them and then letting them go if they can’t figure out what is going on. They usually push them off and just assume they will figure it out next month.

However, by letting them go and pushing them off until next month, these issues will only continue to grow. If allowed to sit and grow for too long, the issues can build up until you find your business with some serious problems. Although it may seem like a small, pesky task at the time, taking care of issues right away can save you time (and help you keep your calm) later in the future.

It’s also important to note that if these seemingly small issues keep popping up every month, even when you took care of them previously, you may have an even larger underlying problem. Don’t be afraid to seek out assistance when it comes to issues in your business – after all, you’ve invested a lot in it, and you want to make sure everything is in tip-top shape!

Entries from Your Accountants

Your accountants are there to help you and your business grow and be successful, and they really know their stuff. A common (and somewhat perplexing) issue we see is companies and organizations not booking entries from their accountants. Rather than taking the year-end tax or audit work information and putting it in the books, companies often ignore it or post it to the wrong period. Rather than waving this off, schedule time to talk to your accountant to make sure you fully understand what they’re telling you, and ask for help posting them to the books (numbers nerds enjoy helping you understand your finances!).

When it comes to your business, it’s likely you will run into a few speed bumps. When you run into these issues, work to identify what caused the problems in the first place. By identifying these issues and taking care of them right away, you protect your business from falling victim to common mistakes that can seriously impact the success of your business.

Strategies for Success

As you begin your business, or even as you’re running it day-to-day, it’s important to consider strategy. Putting strategies in place can help you stay on track and achieve your goals.

When developing success strategies for your business, there are three common strategies you can focus on to help your business.

1. Profit Strategy. It might seem obvious to focus your attention on profit, but it comes down to how deliberate you are in making plans to reach this goal. Have you thought about how much profit you are aiming for each week, month or year? How about your sales plans to achieve these goals? P.S. For more on all things profit, check out this blog.

2. Resource Management. Resources here refer to human and capital. You know, the people and things the business depends on to make a profit. Some businesses are heavy on human resources, such as service oriented businesses, while others are heavy on natural and capital resources, such as manufacturing or technology companies. Furthermore, some businesses even require a good dose of both. No matter what type of business you’re running, your resources are extremely valuable. If you don’t take care of them, you risk the negative impact it can have on your business’s bottom line.

So what do resource management strategies look like? Human resource management can take on many shapes and forms. Maybe it’s developing an employee wellness program to keep your employees healthy, or offering special perks like free lunches or themed days in the office. There are a lot of options when it comes to keeping one of your most important resources, your people, happy. (If you’re struggling with this part of the strategy, let us know – our outsourced HR practices are pretty great!)

It’s also important to have a strategy in place to manage your capital. Capital, which can be anything from the tangible machinery and buildings a business owns to the financial assets of the company, is essentially the backbone of your business. For your physical capital, it’s good to have strategies in place which determine when to renovate or upgrade items as they get worn down. You should also have a game plan in place for your financial capital. Consider creating a strategy that helps you determine which assets can be used for which projects, and which assets should be left alone to grow and invest.

3. Market Alignment. Having a strategy in place to fit in the market and give people what they want is a major key to having a successful business. You want your product or service to line up with the needs and desires of your potential customers – otherwise, no one will buy.

So how do you put together this type of strategy? First and foremost, it’s important to understand who your target market is. Once you know who you’re trying to reach, you can further develop your strategy of how to reach them.

When developing this strategy, it’s also important to keep in mind the possibility and impact of change. People always want something newer, faster, better, etc. Try to develop a strategy that is flexible and allows for change when it is needed. This can help you stay up to date with the market and ensure your business is always ready for the next big thing.

The moral of the story

Setting strategies early on, and taking the time to think through them, can help you set your business on the right path to grow into the dreams you have for it. Strategies help develop the tactics and plans needed to perform your mission, achieve your vision and reach your goals.

 

Business Myths: Busted!

There are a lot of misconceptions, myths, bad advice and even lies about what it takes to be a successful business. Most of these issues come from people who have never gone into business, or those who have failed and are trying to find somewhere to put the blame.

To help clear the air, we’re here to debunk some common myths about running a business.

  1. To be successful, you have to be a pioneer – It’s often said you have to be the first one to develop and sell a product or service. However, this isn’t always the case. Think of Microsoft or Dell. Dell wasn’t the first computer and Microsoft wasn’t the first word processor. However, looking at the industry now, these two companies dominate! While the leading edge can be fun and exciting, joining an established industry with your own take on a product can also bring success.
  2. To be successful, you have to be cheaper –How you price your product does not always determine your success. Nordstrom and Ferrari don’t use a cheap pricing model, but they’re wildly successful. On the other end, Amazon and Southwest Airlines use cheaper pricing models and are also successful. The moral? Customers will pay what they think is fair for your product, but ultimately you have to decide how to model your product pricing. If you have a luxury item, customers will pay more for it. If you aren’t selling your product on the cheaper end, but are providing excellent service with it, your customers will give you business based on other factors besides price.
  3. The customer is always right – Let us guess, you’ve heard this one a few times before. If this was always true, it would be tricky to find any business being profitable. The truth is customers might be wrong sometimes, but they’re still important for your business. Take time to listen to what customers have to say, and use their valuable input when making business decisions. However, don’t let customer opinions overrule logical thinking or dismantle your business mission. When customers are wrong, they can sometimes cost you more money than they make you.
  4. Bigger teams mean bigger results – While having a bigger team can help get more accomplished, it can also hinder progress. Having too many people can lead to complicated lines of communication. It can also result in productive team members getting slowed down by helping new team members get up to speed. Team work can be great for your business, just make sure the teams are operating smoothly and efficiently.
  5. Failure means you’re doomed – We’ve been told our whole lives that being a failure is bad. In reality, failure is actually a stepping stone towards success. While failing can be a setback, it’s important to remember the lesson that can come from it. Failure is only a problem when you allow it to be the final stage, rather than taking lessons learned and growing from them. Sometimes our businesses must encounter failure in order to move forward.
  6. Knowledge is power – Unless you are actually applying this knowledge to your business or other endeavors, it’s just potential. Take what you know and consider using it to better your business, rather than keeping it to yourself. You never know what kind of growth and ideas you could spark from sharing your knowledge.
  7. Every customer is equal – Truth be told, some customers can actually be more valuable than others, but in their own ways. A customer who pays you more money isn’t necessarily of more value. Sometimes a customer who pays less for a smaller project might prove more value because they can help move your business in the direction you want it to go. A valuable customer will make you money, but will also align with your vision for your business.
  8. The more customers the better – Would you believe that some companies go out of business due to too many customers or unreachable demand for their product? If you have so many customers you cannot reach their demands, your business will struggle. Customers may start cancelling orders and taking their business elsewhere, which can result in word traveling that your business isn’t competent. Although it’s a tough decision to make, sometimes you have to turn away customers to keep up with demand and keep your capacity in check.

While some of these myths have some truth to them, many of them are just that – myths. By understanding what can really help or harm your business, you can put your business in a healthy position for growth and success.

 

 

 

 

The Importance of Understanding Money

Let’s face it: some people just aren’t good with money. Whether it be reading financial statements, balancing a checkbook or managing cash flow, money can be a real struggle. This lack of understanding can also carry over to your business.

Money is the fuel for your business. Just like your car needs fuel otherwise it won’t run, your business works the same. Money is the driving force and energy behind all of your business processes. Whether it be your marketing activities, innovation strategies or even just how you pay wages to your employees, money is pumping life into these important functions. Without these functions, your business would not be able to survive.

If you take an even deeper look into your business, you will realize there is not one part of your business that is not or has not been impacted by money in some way, shape or form. Here are a few other reasons to start getting an understanding of your money.

Less Worry, More Freedom | When you don’t understand your money, you’re faced with a cycle filled with anxiety and panic. You might be constantly worrying about how much money you have to pay the bills, pay your employees, make routine payments or just keep up with the maintenance. And when you find out money is too low, you’re faced with the panic of not knowing where the money will come from.

This could all be avoided by having a better understanding of your financials. When you know what your monetary situation looks like at a point in time, you are able to eliminate some of those hidden surprises. By doing this, you are able to take the time and energy you spent worrying about your money and put it back into other aspects of your business where it can be better used.

No Discrimination | You might be reading this blog and thinking, “this makes sense for numbers people, but this doesn’t really apply to me.” Wrong. The understanding of money does not discriminate based on what type of business you are in or what position you hold. In any industry or role, it’s important to understand what the numbers mean and their impact on you (and you on them). Be it a dog walking business or a tech startup, understanding your money can help you create a top notch business that you know both inside and out.

Educated Decision Making | When you’re making business decisions without understanding your financials, you’re taking a shot in the dark and hoping it works out for the best. Understanding your money gives you more power when it comes to making decisions that will impact your business. There will be less guessing and more knowing, which will ultimately lead your business away from the negative side effects of making blind decisions and hoping you will be able to financially support them.

Money is an integral part of your business, and understanding it can help your business – and you – make smart choices, have less stress and gain more financial freedom. To get started understanding what’s going on with your money, consider visiting with professionals, taking a class or even reaching out to other business people. If money is getting you down, just remember help is available!

It’s Lonely at the Top

You’ve started a business. Things are running smoothly, you’re drawing in customers and your employees are happy. Things are going great! Or are they? While everyone around you may be thriving, you find yourself stuck in a hole. You feel stressed, pressured and alone – even though you have all these great people around you. So, what’s going on?

Sometimes, it can be lonely at the top. You may have never thought being an entrepreneur would lead to these feelings. As an entrepreneur, you had a dream to start a business, and you followed that dream until it became a reality. You believed in and trusted yourself. When there were successes, you had your team there to share in them with you. But when there were failures and setbacks, there weren’t as many people around to take them on.

These feelings of loneliness can come from a variety of sources. Maybe you feel lonely because you sit in your office all day working on the core of the business, while everyone else is interacting and working together. Maybe you know the nitty gritty details of your business, but realize you can’t share these details with your employees because they just won’t understand. In other words, you know your vision and goals for the business, but you just aren’t able to share with everyone.

This loneliness might impact other areas of your life as well. Maybe you’re spending too much time traveling for work, so you’re missing valuable time with your kids or family. Your social life could be suffering, and your friends might think you’ve fallen off the face of the Earth. The loneliness you are feeling can even have a negative impact on your health.

Although this loneliness may seem impossible to deal with, there are some ways to combat and manage these feelings.

  • Collaborate – Finding a way to collaborate with your employees, even if it’s just one day a week, can be extremely beneficial. Find ways to engage your employees in what it is you’re doing, so that they can get a better understanding. Having your employees working with you, rather than just for you, creates a new relationship that doesn’t leave you feeling isolated.
  • Self-Care – At the end of the day, you will always have yourself – so it’s important to remember to take care of yourself. Whether it be allowing yourself to relax in front of the TV at night, hitting the gym or volunteering, finding ways to take care of your mind and body outside of work can help you feel better all-around and push off those negative feelings of loneliness.
  • Consider Co-working – If you live and work in a town that has co-working space available, take advantage of it. Often times, other business owners, entrepreneurs and CEOs will be doing the same thing – and this can provide a place for you to work around like-minded people. You might meet people who are going through the same struggles as you, and you might be able to form a relationship that is beneficial to both of you. Working around others can help you find a support system that can help you through the struggles of loneliness.
  • Find an Advisor – Looking to a trusted business advisor may be one of the best ways to beat the woes of entrepreneurial loneliness. It’s likely that your business advisor has dealt with feelings similar to what you are feeling – so they can really truly understand what you’re dealing with and how to help you. Having a trusted advisor also takes some of the burden of decision making off your shoulders.
  • Peer Groups – You can seek out advice and mentorship from other people besides a business advisor. Consider joining a peer networking group that interests you and matches with your situation. This will give you access to a network of people who can be there for you during life’s struggles, but are also ready to celebrate life’s triumphs. Being a part of a peer group gives you access to people who won’t let you feel alone.

While being lonely at the top might be a struggle, it’s important to remember your business depends on you. With the right amount support and guidance, as well as remembering to take care of yourself, it’s possible to overcome the loneliness of being at the top.