EMyth Mastery - Improving Business
by Matt Berkley
When it comes to business accounting software, there’s certainly no lack of options. The two programs at the head of the pack are, without a doubt, Peachtree and Quickbooks, the latter holding on to an approximate 85% market stranglehold.
What makes Quickbooks such a popular option? Primarily because the software is backed by Intuit, a large company that commits hefty sums on R&D and user support. Shawn Dolan, partner with Voellinger, Simpson, Dolan & Associates, PC, has been working with Quickbooks since 1998. And from what he’s seen, the software continues to get better. “It’s very user-friendly. Clients like it and the accounting professionals like it. The tutorials are very good as well as the customer service and technical support. And since most people in the accounting profession support Quickbooks, clients find that they can get any queries answered from a number of sources, either from Intuit or different accountants.”
“One of the biggest differences between Peachtree and Quickbooks is marketing,” states Phil Brumbaugh of Philip Brumbaugh CPA, CVA. “Peachtree is a little more accountant-oriented and less user-friendly than Quickbooks, which is more of a simple, open database. Quickbooks has done a tremendous job of marketing, and it has been designed over the years for non-accountants. It stays away from technical terms like ‘debit’ and ‘credit’ and the screens are built so that it’s relatively easy to find your way around.”
Again, other choices are there: Netsuite, Microsoft Solomon, Simply Accounting, Accpac, and AccountEdge are but a few. How can business owners sift through the pile and find a program that’s right for them? First, realize that there isn’t a one-size-fits-all program available. “The software really depends on your business. It should be based on that,” says Gavin Poppen, manager/CPA with Poppen & Associates, CPA’s, P.C. Other than the basic accounting system characteristics, anything specific-based on your business really depends on what you need.”
Jeff Gusdorf with Brown Smith Wallace agrees. When his firm sits down with a client, the goal is to identify all the critical business processes that differentiate how the company does business compared to its peers. Matching the software to those processes is the key. Gusdorf says you can cut to the chase—in terms of decision making—by focusing on four main features: functionality, vendor reputation, quality of the technology and price. These factors are weighed differently and tweaked depending on a client’s needs. “If you miss out on any of these,” he says, “you may not make the right decision for your business.”
When you’re talking about small business, the individual in charge of the books, in most cases, will be someone without accounting sophistication. Accordingly, says Kraig Spisak, CPA with Schmersahl, Treloar & Co., you should focus on software with high ease of use, ease of navigation, and ease of data entry. “Software should limit the mistakes. People need to be able to use and navigate the system easily and figure out where the various entries and invoices need to go.”
Poppen admits that Quickbooks is a good, functional program. But that’s not to say that the software doesn’t have its share of limitations. “It’s not as powerful as higher end programs. The accounting controls are weak. For your 5-10 person business it usually does quite well; but once you get to a level where you need more controllership, it’s time to get something else.”
When entrepreneurs first start out, programs like Peachtree, Quickbooks, Simply Accounting, etc., are attractively functional and cheap. These are people who can’t afford implementation services or consulting services, says Gusdorf. “Once you get beyond five users it’s a whole different ballgame. These programs are only designed to handle a moderate number of users and their performance just degrades as you add more.”
“Once you get beyond the do-it-yourself marketplace, it becomes a more complex decision and you have to be a little bit more sophisticated in your approach with buying software.” At this point, you have to consider who’s going to help you implement, configure and train your users on the software.
Gusdorf reiterates the importance of writing down your business processes in order to best match them with the proper software. If a person can’t make one for himself or herself, he advises enlisting the help of a qualified consultant. “The important thing with consultants is to find someone who is not selling software. That way, the consultant is not trying to steer you to a particular solution.”
by Matt Berkley
“Work on your business, not just in your business.” That one sentence, taken from Michael Gerber’s 1986 book, “The E-Myth,” turned Bill Collier’s company around.
According to Collier, if all you’re doing is the work of a technician, then you’re going to be stuck on a treadmill forever and you’re eventually going to implode. Collier said, “The things we need to be doing include: delegating, putting systems together, and making yourself less indispensable to the business.”
Collier made his comments during a recent presentation for the St. Louis Chapter of The Institute of Management Consultants. He discussed the key strategies and insights from “The E-Myth.” The book has been a tremendous influence on Collier, who has adopted many of its principles into his businesses along with his current consulting practice.
Collier, a professional business advisor, forged years of experience working in a corporate position and later founding his own businesses. After selling his company, BC Group International, Inc, in 2005, he formed Collier Business Advisors, LLC. Collier is also the co-owner of a small manufacturing company in Kirkwood. His book, “How To Succeed as a Business Owner… and Still Have a Life,” is currently being published.
As Collier explained, “The E-Myth,” is a common misconception held regarding entrepreneurs. Essentially, the classic American vision of an entrepreneur is the strong, windblown, heroic figure that rises from the ashes, pulls himself or herself up by the bootstraps, and succeeds amidst the cheering lookers-on. Gerber contends that this is absolutely not the case.
“Most people who we think of as entrepreneurs really aren’t,” Collier said. “Entrepreneurs are people who work somewhere else in an industry and get good at something and one day have what Gerber call’s an ‘Entrepreneurial Seizure.’ They see that the ‘man’ is making all the money for their hard work and they’re too little appreciated and too little paid.”
The problem, said Collier, is that once business owners decide to start their own companies, they’re far too focused on the work itself and, consequently, ill equipped when it comes to actually running a business. “Knowing how to do the work in a business is different than knowing how to run the business that does the work.”
A common business problem occurs, according to Gerber, amidst what he calls the business owners’ three contending alter egos: the entrepreneur, the manager and the technician. Collier explains, “There’s a personality clash going on between these three because all of their different needs have to be fed and all their jobs need to be done. The chaos ensues when we can’t do it all.”
As Collier puts it, Gerber believes the deciding moment arrives when a company moves from its infancy period into adolescence, which is essentially the breaking point when a business owner needs to reach out for help to eliminate the chaos. “Most businesses struggle and get stuck in infancy and adolescence and don’t make it,” Collier pointed out.
He went on to discuss the “Franchise Prototype,” Gerber’s concept of creating systems and standardizations that can be used to improve even the smallest business. “You need to quit making it up as you go along,” said Collier. “Even if you don’t want to franchise your business, pretend that you do. Pretend that you want to make 5,000 more businesses just like it.”
Gerber stresses that every business process should be documented. No knowledge should simply be kept in an employees mind. “It’s never too early to delegate and never too early to put systems in place for your business,” Collier said. “By writing down procedures and policies when you figure out how to handle a payable, how to handle an inventory purchase, and how to handle stocking the front showroom, you’re delegating to future employees.”
As Collier explained, your biggest asset as a business owner is your information. “The information and the process and the systems and all the other things that make your company what it is may well be the most valuable thing your company owns.”
Collier also discussed Gerber’s ideas on the challenges of selling to small-business owners, advising that salespeople should realize how keenly aware entrepreneurs are about spending business money that’s essentially their own. As a small-business owner, Collier said, I’m going to ask what can I take away and directly put to work and help my business today?
“If you just have a vague notion of what might come from this and you think it might help someone, you’re going to have a tough time selling to small businesses.”
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