Lynn Northrup

Health care costs are outrageous and continue to climb. A Business Week article reported that over 700 hundred billion dollars is wasted on countless wasted procedures, fraud, and unnecessary treatments. After thinking about the current state of the economy, this revelation struck home. With all the effort being placed on health care reform, it is shocking that this legislation will have no impact on the rising level of health care costs.

Because the health care system operates on a fee-for-service basis, there is no incentive for doctors and medical care facilities to eliminate waste and do a better job of cost control. While there is no incentive for doctors there seems to be plenty for those who are interested in using the system to fraudulently rip off the system for an estimated $150 billion dollars or more.

In thinking about this mess, I tried to consider some potential solutions. CPAs have lots of tools to assist in fraud investigation. The talent is there to get the job done. Why not engage some of the best resources available to stem the tide of leakage from fraud?

The health care system is a process, just like internal control and business processes. Again, wouldn’t it make sense to tap into the lean experts that are streamlining our supply chain and provide focus on the health care system?

When considering cost containment and control, health care represents one of our biggest challenges. I realize the political sensitivity and polarization that surrounds these issues, but government could wake up and pay attention to the talent pool available and make some real progress in contrast to pushing legislation that isn’t going to get the job done. The answer doesn’t lie with Congress; it requires executive action to take the steps that could really make a difference.

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.

Running a business in a saturated market if no easy feat – in fact, it’s downright tough. With more and more businesses popping up daily, entrepreneurs are facing the challenge of not only making their product or service available, but rather, making them more valuable than anyone else’s.

With this in mind, small business owners have taken to the web to build the value of their business.

Here’s what they’re doing to effectively build the value of their small business – consider doing the same for your own business!

1. Branding

Creating a recognizable profile for your company and yourself is important when building value online. Whether you run a website, a blog, a collection of social profiles, or all of the above, it’s important to create an image for your business so people will recognize it across the web.

Branding your business online is about consistency. Help your visitors recognize your profiles, blogs, and website visually by adding a simple picture of yourself – not your business logo. The first step in tapping the social sphere as a business entity is creating transparency – in other words, you need to introduce yourself and let your visitors know who you are. By spending time branding yourself first as an authoritative person in your niche, visitors are more likely to stick around and trust you.

Once you’ve successfully branded yourself online as an authoritative source, you can then proceed to brand your product or service.

This step is all about consistency and persistence. To brand your product of service, create an image and let people know it exists – in other words, remind your visitors it’s available where ever possible without spamming them.

One of the best ways to remind your visitors that you have something to sell is to post a banner in your own sidebar, header, and in the footer of your blog posts. Remember, this game is all about reminding your visitor – the more you remind them, the more likely they’re going to buy.

Why?

Because they trust you … don’t they? Wait, how do you build trust online so that you can brand yourself as an authoritative voice?

2. Building Trust

The practice of building trust with your visitors is similar to building credit – it takes time and it requires a record of good history.

To start building trust with your visitors, you need brand yourself as a transparent source of information – that is, someone interested in providing information … for free. Even if you’re helming a business and need to focus on making money to stay alive, you need to position yourself as a source of information and help that visitors can depend on. If you don’t then visitors will happily click away from your site and visit someone else’s – and there are plenty to choose from.

Becoming transparent is simple – just be you. Avoid hiding behind company logos, mystery profile pictures, and other tactics designed to shield your identity from your customers – you don’t want people to think you’re shady. Reveal yourself and give people a reason why they should trust you – it should be clear, to the point, and fast.

Giving your visitors a reason to trust you can happen in as little to one to three steps – if you’re new, chances are it will take a bit longer.

First, create something of value your visitors can use. For example, if you have a blog, create a post that your targeted visitors will find helpful. The goal at this point is to attract your future customers, hook them with helpful content, and lead them to one of two places … which leads us to the second step:

Second, provide your visitor with an impressive “about” page. Whether you’re working from a blog, a social profile, or traditional website, you need to create that “about page” so that your visitors can read more about you once you’ve impressed them with your post (the about page is one of the most popular pages visited on a site). Tell the visitor who you are, what your experience is, and what you’re doing.

It’s completely up to you whether to take the modest approach – some find it effective, others find it effective to blatantly spell out why they’re at the top of their game. Perhaps a balance of both would serve your goals best. Visitors want to be in the hands of a pro, yet too much arrogance or confidence could result in a backfire and you’ll lose the customer.

Usually at this point you will have either gained or lost a new reader, but sometimes readers will stick around undecided, which brings us to the third step … which is more of an ongoing step:

Third, continue to help your visitors with helpful information (such as blog posts, guest posts, eBooks, reports, and more). This step depends entirely on your performance either as a social media personality, blogger, or other web publisher. Your activity and production will determine whether or not your readership grows, shrinks, or flatlines, so it’s crucial to stay on top of it at all times.

Blogging and social activity can be very rewarding, but it requires dedication of time and effort. This brings us to the final method I’d like to explore …

3. Building Useful Content

With the boom of social activity online, including networking, bookmarking, commerce, and more, there’s no question that every business owner online is a hyphenate – that is, you’re a business owner – web publisher.

By publishing blog posts, submitting to article directories, updating your status, and uploading photos or videos, you’re a web publisher. How much you do is entirely up to you – there is no secrete formula or mixture that leads to success … it’s all about experimenting what works and what doesn’t. If you’re selling cameras of developing photographs, you might find more results joining photo sharing sites than video sharing sites. Likewise, you might find that your crowd prefers to follow you short updates than your drawn out blog posts.

Regardless of platform, the point is that business owners should to take advantage of the web by providing useful content for their visitors, followers, and customers.

What type of content?

Helpful, of course! Write an article that solves someone’s problem, provides a possible solution, or other helpful resource. The idea behind producing content is to feed the conversation online and help visitors in the process – those visitors will turn into your customers depending on how well you present yourself as an authoritative voice in your niche.

If you position yourself and your business as a helpful resource, you increase the chance of turning your visitors into customers – especially when you reach out and provide help with your social profiles.

Building value for your business online isn’t all that complex; it just takes time and effort, which for most business owners, isn’t an option. If you have the time and ability to create content, it’s highly recommended. Every piece of content you publish is like an active banner – the more you publish, the more likely you’ll be able to attract some visitors. That said, creating content is also an exceptional way to connect with your customer – it enables you to open a discussion with them, hear their feedback, and even track them as customers. It also happens to be one of the ways small businesses can win customers from the conglomerate giants … connection. For more on this, check out The Power of the Business Owner’s Connection with the Customer.

Brand yourself and your business, build trust with your readers through transparent presentation, and provide helpful content – just a few ways to build value for your business online.

Christopher writes about building more value, finding more customers, and making more money online at the Dapeem blog.

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.

Why not virtual consulting and business support? Since I have always performed consulting services at client’s sites, this represents an interesting question. In the current economic environment when every dollar counts it occurred to me that I could provide companies with excellent support and advice they might not be able to access in their geographic region. I teach on-line courses for Villanova University in conjunction with Bisk Education where I facilitate live discussion session with students every week. If I could teach on line then why not consult on line?After pondering the topic and the question, the answer seems pretty straight forward. Clients could really benefit from such an approach. In one of my recent live discussion sessions we had an extensive dialogue on the transformation of communication. Virtual communication is what has evolved in today’s world. Since we communicate virtually, then consulting and business advisory support represents a logical approach.

Telephone and e-mail are logical tools that most clients understand. The part which is a mystery to them is realizing that we can conduct an on-line dialog over the internet utilizing voice in addition to sharing of presentations and other analytical tools. It isn’t quite the same as face to face communication, but it works pretty well and is a lot cheaper and more time effective. It is an approach that works well enough to help a large number of clients. Virtual consulting can save time and reduce costs so traveling to client sites is limited only to the bare essentials.

In addition to reducing costs and improving efficiency, this approach saves a lot of wear and tear and allows me to reach out to a greater audience and expand my market reach. I can now help more people access my knowledge and expertise. I think this is a good way to work especially in a tough economic environment.

COSO issued new information and direction on monitoring internal control during January 2009 in a three volume publication titled Guidance on Monitoring Internal Control. Monitoring of internal control is performed through application of ongoing evaluations and separate evaluations to ascertain whether other components of internal control continue to function as designed and intended. These evaluations facilitate identification of internal control deficiencies. The deficiencies then need to be communicated to appropriate officials responsible for taking corrective action and where appropriate to higher levels of management and the board of directors.It is important to realize that business risks change over time. The internal control system must be capable of determining that the internal control system continues to be relevant and able to address any new risks. Monitoring should address requirements for revisions in the design of controls as risks change. It also provides assurance regarding the ability of the internal control system to contain risks at an acceptable level in order to provide for effective and efficient operations.

Monitoring follows a risk based approach in evaluating risks linked to achieving operational objectives. It is important to establish a monitoring foundation that includes procedures for evaluating risks, assessing controls, and reporting the results together with any required corrective action steps.

One of the primary elements of the monitoring includes establishing an effective tone at the top of the organization giving a high priority to an effective internal control system. Effective “tone at the top” ensures that the management team and the board of directors are supportive of the evaluation process. Successful monitoring of internal control requires the selection and utilization of evaluators who have a baseline understanding of internal control. They also will have the suitable capabilities, resources, and authority to conduct a meaningful assessment of the internal control system.

Since the enactment of the Sarbanes-Oxley Legislation I have developed multiple training programs dealing with assessment of internal control in addition to my book, Profitable Sarbanes-Oxley Compliance. Please feel free to contact me with your internal control questions and to discuss how to create and implement an internal control monitoring program.

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.