When you can’t find a job, self-employment becomes an option. The big question is what kind of a business should you start? There are lots of choices so you need to really do your homework. One of the big factors is to find something that you truly have a passion for rather than chasing money.

Having your own business gives you an opportunity to do what you have always dreamed about.  I have made this journey and it isn’t easy. The first step is to take time and really think about what you would like to do and where you would like to do it. Taking time to do research possibilities and doing the necessary due diligence is critical.

 There are lots of books and internet resources to guide you. One of the first steps is to carefully evaluate and assess your skills and abilities. This will reveal the possible business options that you could follow. When performing this step you should document all your thought processes. Think about what might be possibilities. This is essential because it gives you a good road map of potential opportunities. Let yourself go and explore all the things that enter your mind without limitations. Noodle, take notes, and create a road map.

 The above analysis should include some of the self assessment steps mentioned in my most recent blog post. Take your transferable skills inventory and link them to potential self-employment opportunities.

 After you start to get some ideas about what businesses are possible, list them down on paper. This is when you really need to dig in and do your homework. Some things to consider include:

• Am I qualified to do this work?
• What is the cost to start this business?
• What resources do I have to commit to the business?
• What is the competition?
• How successful is the competition?
• Will I need help to run the business and can I get the help I need?
• Can I run the business from my home?
• Who can I talk to about starting this business?
• Do I need a business coach or advisor?

These questions represent only the surface of things you need to know about your new potential enterprise.

 Before you actually launch your new business, take time to develop a good business plan together with appropriate projections and an estimate of cash flows. Just doing a spread sheet isn’t good enough. The business plan should contain a detail written statement of your vision and business mission. You’ll need to set objectives and craft a strategy to achieve them. In line with all of these plans include the type of structure for your business. Should you incorporate, create a LLC, a partnership, or operate as a sole proprietor? What business systems will you need including accounting systems? Don’t try to do all this stuff yourself. Spend the time and money to get a trusted advisor to assist you. This can save you a lot time in the long run.

 One of the big questions to answer is can I pull this off and do I have enough money, time, and the skills to do it? This is where an advisor to help guide you through the process can really payoff. Objective advice here can save you invaluable time and money.

 Lots of people have done it and done it successfully. This blog post won’t answer all your questions, but will give you things to think about. There are many possibilities and you need to explore to find what can work best for you.

Where do you start the process of figuring out how to start a new business? The best place to start is with you.  A good reference is Richard Bolles’ book What Color is My Parachute. While this is a book on how to find a job, it contains lots of self-assessment tools and resources you can use to evaluate what business might be right for you.

 This is interesting stuff as I am getting ready to start my new e-book series on the self-employed entrepreneur. Haven’t settled on the title yet, but that sounds catchy and provides the gist of the book.

 Aside from taking different tests on your personality and skill preferences, a careful self assessment is essential. Everyone thinks they understand who they are and what they’re best at doing, but it really needs to extend beyond. The Parachute book uses the flower exercise to guide you through the process. It is a great way to examine yourself and learn more about you. Bolles says that “the reason most job-hunters fail to land their dream job isn’t because they don’t understand the job market. It’s because they don’t understand themselves.”

 The flower exercise has seven steps but the middle of the diagram deals with your favorite skills. I’m going to give you enough information to start you thinking about the process and you’ll need to take it from there. You need to determine what you know how to do and what you do best. Are you good at working with people, dealing with information, or working with things?  Start with these three categories and begin drilling down.

 Some additional considerations might include:

• Working with your hands
• Using your body
• Using words
• Using your senses
• Working with numbers
• Utilizing your intuition
• Using logic or analytical thinking
• Maybe it’s using creativity and artistic skills

These ideas will give you some things to think about and consider. I encourage you to take the time to explore these possibilities. It is a good way to unlock your passion and find out what you really would like to do and can be good at.

 Testing is another option. One of the most well known tools is the Myers-Briggs evaluation. There is an online test based on this methodology you can take free of charge. It never hurts to get more insight and knowledge that can take you in the right direction.

While these efforts aren’t going to specifically tell you exactly what business or type of business you should launch, it will give you information that can guide you in the right directions. Later this week I’ll do a post that explores the possibilities on what types of businesses might be possible for unemployed people. For now, I think you’ve got plenty of material and ideas to keep you busy.

I just looked the date of my last blog post and thought I better let everybody know that I am still writing and creating. A lot has happened over the last few months so I’ll quickly get you up to date on what I’m doing and where I’m going.

Creating golf content for Dr. Mo bit into my business writing. Besides its fun and I like it. When you realize that golf is a lot like life then it makes sense. In addition, the Colorado weather wasn’t real conducive to me setting down and grinding out a lot of boring business stuff. The real key here is that I’ve had time to figure out where to take http://www.northrupcpa.com/.

The site started out being focused on client services and my CPA resources and tools. Not that I won’t provide services or help other CPAs, but the real need seems to be entrepreneurs and business people who can benefit from all the knowledge and consulting expertise I’ve amassed over the years. Getting this information on to the web site and into books takes time, so it will be a journey.

I have started a new book for the self-employed entrepreneur together with support material that will be posted on the web site. In addition there is the Building Business Value™ content and approach that can help the new businesses grow and flourish. In addition I plan to turn my MBA course content into a book as well as develop a book on accounting and finance for business owners and entrepreneurs. I have been teaching  courses on these topics for over three years, so this is a no brainer. I’m not sure about the titles, but we’ll come up with something good. I have learned to do the back cover of the book first and then develop the content and title.

In addition to this blog, check the AccountingWeb blog and my latest post at http://tinyurl.com/3yrkwkz . There’s lots material on that site from other contributors in addition to my stuff.

This blog will become more active, I promise. In addition to writing books, I’ll be converting my content into new products and articles for the site. I have started to figure out Twitter and you can find me at @northrupcpa. Also, we’ll begin showing the tweets on the web site. I’m not sure I have enough to do!

It was fun sharing these thoughts as it provided me with a better sense of how to make the blog, the web site, and my content more relevant. Let me know if you have any ideas.

Recently, I have written about defining the future, being unemployed, and underemployed. Having a good insurance policy on avoiding these difficult challenges would be a good idea. However, buying a policy off the shelf from your insurance agent just isn’t an option.

One way to cope with challenging situations emerged from some words of wisdom from Pete Drucker who is known as “the father of modern management.” The best insurance policy is to build and develop a full life complete with diversity, multiple relationships, and interests. It is a process of developing “You Inc.” in ways that allows one to quickly bounce back from adversity and the challenges of life.

In my recent book, Learn to Win – A Major, written in collaboration with Dr. Mo Pickens, we tell golfers they have to invite and embrace challenge. While this book is about golf and providing the insight required by golfers to play better and learning to win, it provides the basic rules for success in any endeavor or line of work.

The first step in challenging uncertainty is to understand your strengths and likewise, identify areas where improvement is necessary. This means that you’ll always be assessing and developing areas of strength. It also means practicing self-development. This requires thinking about your life as it is and how you would like it to be. Golf is a lot like life. You decide what’s working and what’s not working and then implement a plan to fix it.

In the current economic environment, it probably makes sense to make sure you have plenty of options. This could mean creating a second career or a least something that parallels what you are doing now. In fact, this is the path I have taken. I have utilized my knowledge and skill with golf combined with the ability to write to expand from my CPA and consulting career into new areas of endeavor.

I haven’t given up on being a CPA, but I am using my ability to write to create new books, concepts, and other efforts including teaching. This is a great way for me to share my knowledge and expertise in different ways. I have chosen to define the future by creating it.

The future will be a new series of business books which will be based on my teaching and training programs. This information and knowledge will be shared on this web site and with posts to my blogs. Another new book will be developed to help unemployed people discover themselves and ways to earn a new living. We are also going to keep writing golf books with special emphasis on junior golf.

This will keep me energized and focused and provide my readers with an abundance of new ideas and material. It will be an interesting journey that provides a win/win for everyone.

Everyone wants success. The difficulty with achieving success results because it hasn’t been clearly defined. I am going to give you a 5 step approach to achieve success and build the value. The secret to creating value and achieving success starts with a vision for what you want to achieve and how you define success and the steps that are associated with it. The 5 steps necessary to achieve success are:

1. Create a Vision for Success

2. Set Objectives

3. Develop a Strategy for Making it Happen

4. Build Action Plans

5. Evaluate Performance

Following these 5 steps and documenting them are essential to keep your life or your business on track. This doesn’t need to be a complicated process, and in fact, the simpler the better. However, putting these steps into a written document is essential and helps to build the commitment necessary to convert the vision for success into reality.

1. Create a Vision for Success

A mission statement should be brief and focused. It can be nothing more than a few words or phrases that provide a description of how you define success for you and your business. It should become a living document about where you’re headed going down the road. When you define where you are going you have a better chance of getting there.

Your vision statement should spell out where you plan on going and the steps required for getting there. There needs to be a link with the goals and objectives required for achieving the desired level of success. The best vision statements are simple and straight forward. Keep it simple and spell it out in contrast to just thinking about it. Writing the vision versus thinking about it is usually the difference between success and failure.

2. Setting Objectives

After establishing a vision for success, the next step in the process it setting goals and objectives. Setting goals and objectives stems from the vision statement and assessing current performance and the major issues that need to be addressed and how they relate to strategy to accomplish your objectives.

Objectives should specify measureable results that need to be accomplished together with a target date or a time span for completing it. Objectives should be as specific and quantitative (measurable and verifiable) as possible. Development of objectives should specify only what and when it needs to be accomplished and should not venture in to the why and how. Objectives and goals should relate directly to crafting a strategy to achieve your objectives.

3. Develop a Strategy to Make it Happen

Strategy corresponds to the actions and approaches necessary to achieve your objectives and fulfill your vision. The components of strategy include deciding on those attributes which offer the best chance to achieve your objectives or to gain a competitive edge. Strategy is where you focus on the skills, expertise, and competitive capabilities that will set you apart from your rivals.

Strategy is about being different in contrast to something that everyone is or should be doing. It boils down to making the tough choices that create a sustainable competitive advantage. These choices are those that allow you to change the rules in your favor.

4. Build Action Plans

Action plans are when you need to get more specific to clearly identify what has to take place. They represent an opportunity to test and validate your objectives. In addition, they provide a basis for communication for others who need to contribute to or will be affected by what takes place.

The following basic components should be part of the plan development. First, document the specific steps that will be required. Next, it is important to identify the people who will be held accountable making sure that each action step is completed. Developing a timetable getting things done is essential. Make sure to determine what resources will be needed to achieve your objectives. Finally, it is critical to provide feedback mechanisms to monitor progress.

Documentation provides a basis for monitoring the progress of each action step. Incorporate this documentation into a schedule that spells out what needs to get done and when.

5. Evaluate Performance

“If you can’t measure it, you can’t manage it” is a term frequently associated with achieving results. Monitoring and evaluating performance is essential if your vision is to become reality. It might be necessary to reevaluate your strategy depending on how things are working out. Assessing the financial impact is essential in determining if you are achieving the level of expected results. Regularly evaluate your resources. Do you have everything in terms of personnel, materials, information, and other resources to support your vision and strategy? After establishing the vision, the strategy, objectives, and action plans, it is essential to monitor the few vital factors that let you know whether or not you are on track or if modifications are necessary. Continually check your progress and respond appropriately.

Final Thoughts

When creating a vision and converting it into reality is not only critical, it is essential to put it into writing. Written goals and objectives are more likely to be accomplished. Make this a habit and I think you’ll start to see success. Written plans represent a commitment that translates into success.

Gaining an understanding of strategy and its objectives is essential not only for business, but in everyday life. I teach this topic to my accounting and finance students and thought it would make a good blog post.

Competitive strategy is really about being different and selecting a different set of activities capable of delivering a unique mix of value to customers. In the process of selecting a different set of activities it boils down to the choices you make to change the rules in your favor so you create a competitive position that eliminates the competition.

Choices to change the rules should include setting the right goals. A sound strategy might be to achieve superior profitability by not becoming too big or growing too fast. It might involve becoming a technology leader. Strategy needs to have continuity and is something that can’t be constantly reinvented. It boils down the basic value you are trying to deliver to customers. It is important to maintain a strategy that is consistent in the face of a multitude of changes.

A good strategy will ensure that its components will drives competitive advantage and sustainability. There should be a simple consistency between each functional activity and the overall strategy. This will occur when activities are reinforcing and there is an optimization of effort. A good competitive strategy will grow out of the entire system of activities.

Essentially there are five steps in developing strategy which are presented as follows:
1. Formulating a strategic vision of the organization’s future business composition and the direction on where the entity is headed.
2. Setting objectives.
3. Crafting a strategy to achieve the desired outcomes.
4. Implementing and executing the selected strategy efficiently and effectively.
5. Evaluating organizational performance and making appropriate corrective adjustments wherever necessary.
These five primary tasks become a continuous loop whereby you are observing, orienting, deciding, and acting on necessary adjustments as needed. In the current economic environment, organizations need to be agile and quick in making these decisions.

Good strategy can involve a variety of approaches. This might include a variety of cost approaches ranging from low cost/low price, differentiation, to a specific market niche. Other approaches include responses to changing market conditions, moves to secure a competitive advantage, geographic market coverage, and vertical integration. In addition strategic approaches include financial approaches, human resources, R. & D., marketing, manufacturing, and collaborative partnerships and alliances. The development of the strategy will certainly consider some of these options.

In addition to various approaches, there are some fundamental components of strategy. Foremost, it will be essential to decide what product or service attributes offer the best chance to win a competitive edge. The next step is to develop the skills, expertise, and competitive capabilities that will set the business apart from rivals. Your choice of strategic components should insulate the business as much as possible from the effects of competition.

Attempt to evaluate your firm or company as to whether it is either conventional or reactive. Another way of looking at the evaluation is to determine whether your firm is distinctive and far-sighted. One way of assessing this is evaluating which issues absorb management’s time and attention. How does management’s point of view regarding the future measure up against the competition? Are you better at improving operational efficiency or at creating new businesses? Is the company’s agenda determined by actions of competitors or is it set based on your own unique vision of the future? Within the organization, what is the balance between anxiety and hope?

Finally, it is essential to assess the quality of your strategic market leadership in terms of the customers being serviced today in contrast to those you expect to service in the future. This same question can be directed to your current competitors and who you expect to compete against in the future. Where are your profits earned today and versus where they will be earned in the future? Effective strategy is dependent on resolving the key questions of what drives your business today in contrast to what will provide the competitive advantage in the future. In too many instances, organizations fail to address these issues and follow the course of plodding from day to day with not real thought of the future.

How valuable are CPAs to their clients? What do clients want their CPAs to do for them? These questions have puzzled me and frustrated me for some time. After giving this some thought I reached the conclusion that clients don’t receive value and CPAs don’t provide the value they are capable of delivering.Creating value lies in the pursuit and development of value propositions. Value propositions aren’t defined in the tax code or in generally accepted accounting principles, yet it is the secret to greater profitability which is created by providing needed and necessary services. Clients want more than taxes and accounting from CPAs. They want and need help with their businesses, especially when economic conditions are tough. This means defining customer value in terms of what services CPAs provide and how they do business with their clients. Here is where you can link price together with reliability, dependability, and convenience of the service provided.

Far too many CPAs provide a service, but miss out on providing and building client value. This occurs because they haven’t taken the time to develop the knowledge and understanding as to what clients really need. You need to ask the key questions of clients so you know what they expect of you and how they think you could help them address their challenges and opportunities. This most likely means the ability to provide them with management consulting in strategic and operational areas.

Developing a basket of services which provide value will allow you to value bill. This begins with understanding clients needs and translates into increased profitability for you relative to the hours expended. You now have a choice on what you charge because the client is receiving greater value from the services you provide.

You might end up servicing fewer clients and receiving greater revenue. Providing added value services to clients you truly want to work with ends up being a win/win situation. You can develop some ideas relative to the types of services by reviewing the list of services I offer both to clients and as resources to CPAs.

Employing a value proposition strategy to your practice is an effective way to re-engineer what you are doing by giving clients the services they need and want. Providing added value to clients puts you in the driver’s seat and lets you value bill in contrast to just being paid for the hours you charged to an engagement. It also creates a better overall client experience since it enhances the flow of communication and avoids difficulties and problems which can occur.

You can now start charging the maximum amount that a client is willing to pay which results in greater revenue and a more productive work environment. You will have happier clients since they now perceive they are receiving the value they wanted and are willing to pay for it. Your practice should grow because happy clients talk and this should translate into increased work. This is truly a way of working smarter and not harder.

What is a mission or vision statement? In brief terms, a mission statement is a description of how an organization defines success and where it is headed going down the road. In order to be successful, a mission statement needs to be more than just words or phrases. An effective mission statement needs to be a living document that provides the necessary focus for all levels of the organization.Despite the importance of defining a mission, there have been a lot of failures to create any change in organizational performance or in what people are doing to accomplish results. One of the big problems is that mission statements fail to effectively communicate to employees on where the company is headed. Mission statements also fall short on linking strategic direction with specific goals and objectives at all levels of the organization.

It is critical for organizations to define their future business direction so employees clearly understand where they are going and how they will get there. From this platform, organizations need to develop a definition of success and a process for setting goals and objectives. Together with these steps, it is critical for the entire organization to have clarity on its sources of strength and competitive advantage.

Once organizations get these step right, they need to move forward to clarify “the what, where, and how” of competitive success. This message then needs to be effectively communicated to employees and other people who have a stake in its success. A process of setting goals and objectives at all levels of the organization needs to be complete so everyone is on the same page in order to achieve a successful execution of the mission.

In many instances I think the objective setting process can be simplified. It doesn’t need to be complicated, but there needs to be buy in at all levels and everyone needs to know their role and how they fit into the plan. Defining an effective set of objectives might sound easy, but it is a tough job and is critical to achieving success.

The key to a successful mission or vision statement boils down to the following three steps:
1. Where is our business going?
2. What are our objectives?
3. How will we accomplish our objectives?
After these three questions have been answered, the key to success is to effectively convert the answers into performance objectives for employees at all levels of the organization. Organizations that commit to this process with focus and determination will be the winners.

In the current economic environment there are lots of business owners struggling to deal with issues and problems and no idea on where and how to get help. Likewise there are CPAs who are asked by their clients for assistance in areas where they lack the knowledge and experience to provide support. It is a perception that help has to be geographically accessible. The reality in many situations is that there are virtual means of accessing the necessary experience and assistance.Many services, including training, can be provided virtually using the telephone, e-mail, and conferencing tools. I selected the areas of my expertise that could be delivered virtually. It is possible to review strategy and operational situations by using my questionnaires and experience in effective ways. Another situation faced by many companies is that they lack the financial expertise to provide the financial and controllership skills required to survive the current difficult economic environment. Virtual tools are available to share financial information and in many instances an experienced financial manager can provide the needed suggestions that can make the difference between success and failure.

Internal controls represent an area where CPAs need some assistance so they can avoid reinventing the wheel. In many instances I can provide instant answers to questions and provide suggested solutions that could otherwise take hours to solve. Based on working with the COSO internal control framework and assessing audit risk, I can provide direction and advice to practitioners and even help them review their work papers to minimize their risk.

My dealings with family-owned businesses have provided me with firsthand experience in working with succession and planning issues including estate and trust planning tools. It is like having someone working in your CPA practice where you can discuss and review a problem for potential solutions.

Some other areas where virtual assistance is available are cost management, operations and supply chain management. Why struggle with these areas when help is a phone call away. I can also provide assistance with strategic planning and share checklist and questionnaires that will allow you to facilitate development of strategic thinking with your clients. If you are a business looking for assistance, I can provide virtual support and training in these and other specialized areas.

You may not have given thought to using virtual support or training, but it available and utilized all the time. It is a cost effective way to receive the assistance you need. Give me a call to discuss ways that I might be of assistance.

It seems like economic crisis and tough times are all we hear about these days. In a recent publication of Accounting Today an article appeared talking about the need for CPAs to step forth to provide assistance to small businesses. We need to provide guidance but small business people have to make a paradigm shift and realize they need help. They have been used to going without financial assistance for far too long and CPAs have been too focused on tax returns and financial statement preparation. Change needs to happen if businesses are to survive. My web site contains a lot of information both business owners and CPAs can use to survive the recession.CFO and Controllers of larger companies are also in a survival mode. They are laser focused on cash preservation and cost reduction. The key areas of focus include the following:
1. Preserving cash
2. Reducing costs
3. Reducing risk
4. Understanding expenditure patterns
5. Plugging holes in the dike
Over emphasis and indulgence on these factors can lead to overlooking some potential opportunities.

I think small business and larger organizations are missing the boat by placing all the emphasis on cutting back and hunkering down. Risk management should include looking for opportunities in addition to potential risk events that could adversely affect the company. Risk management should include considering opportunities to do a better job of purchasing and improving visibility on spending. Cash conversion efficiency includes managing accounts payable and inventories. These two areas represent a significant source of extra cash. It deserves additional focus and effort that will produce extra cash and liquidity.

Risk management includes effective planning and development of value propositions. Reevaluation of business strategies must be addressed since the old business model has shifted. New product lines and new markets need to be evaluated. More than likely the old rules no longer apply. Survival will depend on creating new visions and new strategies. These strategies then need to be linked to new marketing and sales programs. One of my clients is now spending a significant amount of effort developing new products and markets because the streams of revenue that existed just a few months ago no longer exist.

Operations and strategic planning when combined with sound financial management concepts and methodologies represent exactly how businesses need to deal with the economic crisis. Linked to these concepts are lean accounting and value stream analysis based on the voice of the customer.

I think this back to basics approach is what is required to cope with the challenges we face and represents the road less traveled to build healthy businesses and an economy that will survive the test of time.