Kenneth Boyd's Blog, page 43
January 21, 2020
Expand Your Brand’s Reach in the Area Beyond Your Physical Store
If you’ve ever felt that the static location and four walls of your store or office have limited your ability to spread brand awareness physically, then don’t be afraid to branch out. Your physical marketing and branding efforts don’t have to start and end in the physical space that your store occupies, after all.
Hire the talents of a good graphic designer and outdoor sign maker and start putting your brand name out there!
Statistics Back Your Use of Outdoor Signage to Drive Foot Traffic
Ads have a bad rep for being ineffective because consumers have become “sign-blind.” But the phenomenon seems mostly to affect its digital iterations. Meanwhile, outdoor signage, those located on the storefront or the premises, especially, have been proven to drive foot traffic by up to 50% for the shop or business.
The percentages vary for each industry, but physical outdoor signs encourage consumers to shop on impulse. Service stations, fast-food restaurants, and convenience markets, as well as smaller-scale shopping centers, have benefited most from this situation (45%, 40%, and 35%, respectively). Sit-down restaurants, warehouse stores, and supermarkets also get an uptick in outdoor sign-related foot traffic.
Ad Quality Equates to Business Quality
Our brains are hardwired to make snap judgments and draw split-second associations. Thus, first-impressions are more important than you probably already think. If you display well-made and designed signage, your potential clients are more likely to draw parallels between their quality with the products or services you deliver. An impressive two-thirds (68%) of respondents of the FedEx Office Survey said that they believed this.
Meanwhile, around half (52%) of those surveyed said that the opposite-poorly made or misspelled signs-discouraged them from entering a store.
Brand Visibility to New Markets
Almost 20% of the US population relocates every year, according to date from the Census Bureau. This means that you’ll need to draw in more customers to replace them. Fortunately, 85% of your business should live within a five-mile radius of your physical store. Post some quality outdoor signage in the area to let them know about and familiarize themselves with your brand.
If they already have you at the back of their minds from frequent exposure, it will be a no-brainer to get them to come to you once they need a product or service you offer.
Now that you know they work, how do you make outdoor signs that draw consumers?
Outdoor Signage that Get Your Brand Noticed
Like all manner of signs, you’ll have to design your outdoor signage carefully to maximize its exposure to potential customers. Aim to be concise. Only include your core message in the text; overloading your design with long-winded explanations and block texts only serve to deter the customer from reading. Your sign might even drive them away!
Next, make sure that your signage displays high-contrast elements. This enables the eye to make out what your text says on a stark background. Forego the addition of finicky images, too. They’re distracting. Your customers will reward you for making their part easier by being more open to your message.
Another thing to think about: People draw in people. Have an employee accompany your outdoor signage, if you can. More than good graphics and excellent quality signage materials, your customers are drawn to other people.
It might be true that we’ve gone through a digital revolution, but that doesn’t mean good old physical signage has become obsolete. With a well-designed, manufactured, and positioned samples, you can still drive foot traffic to your physical store.
My next book, 50 Stories That Explain Accounting, will be out in 2020. More info to follow.
For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.
Get your questions answered to pass the CPA exam, and to learn accounting concepts.
Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:
Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post Expand Your Brand’s Reach in the Area Beyond Your Physical Store appeared first on Accounting Accidentally.
January 16, 2020
Helping Out Employees in Times of Need
Although you might not see your employees much outside of work, there’s no denying that they also have personal lives.
In fact, things that are happening in their personal lives can often affect their performance at work. While the simplest thing to do might be to tell your employees to leave their personal issues at home, it’s not necessarily the most effective thing to do. Separating work and home life isn’t so simple, especially when someone is dealing with a big issue that may be difficult to ignore during the day.
Another option is to provide support for your employees to help them deal with their problems and cope while at work.
Provide Financial Assistance
One of the possibilities available is to provide financial assistance to your employees when it might be useful to them.
This could include extending a number of offers to help, including allowing employees to take an advance on their wages or to access a loan or even a hardship grant from the company. You can also provide outside resources for them to access, or consider offering access to financial advice services. This type of help could make it easier for your employees to deal with money worries that could affect their work.
Give Them Emotional Support
You don’t have to be a personal shoulder to cry on if you want to support your employees emotionally. If you want to give them the resources to deal with personal issues and mental health problems, there are several ways to do it.
One option is to offer counseling services to those who may need them, or similar services to help your employees work through personal issues. Again, you can also provide them with relevant information to access outside sources. You can also ensure they have good health coverage so they can afford therapy and other mental health treatments when necessary.
Offer Legal Advice and Support
An employee who is experiencing legal issues is not necessarily something you want to deal with.
However, when you have a valued employee who is facing legal trouble, you might want to do what you can to help them solve it so that you can keep them on at the company.
You could help by providing legal representation, using a firm such as KMH&L Lawyers for criminal cases or even finding lawyers to help with civil cases. You could help employees access legal advice, legal aid and other resources. Their legal issue doesn’t have to relate to their job for you to offer help.
Be Flexible with Working Hours
Another way to support employees in crisis is to be understanding when it comes to working hours.
Allowing someone to come into work a little late or leave early, being understanding about doctor’s appointments, or being flexible with time off to deal with bereavement or any other issue are all options. You can show that you are a caring employer, and your employees will be able to concentrate on what they’re doing when they are at work.
Discuss each of these options with an attorney, to make sure that you understand your legal risks and obligations.
Provide support to your employees in their times of need, and they will appreciate you and work hard when you need them to.
My next book, 50 Stories That Explain Accounting will be out in 2020. More information to follow.
For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.
Get your questions answered to pass the CPA exam, and to learn accounting concepts.
Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:
Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post Helping Out Employees in Times of Need appeared first on Accounting Accidentally.
January 14, 2020
Here’s Some Good News: Poverty Is Falling In The US
The official statistics you see on the state of the economy can make for depressing reading. The media likes to zero in on the one negative economic factor, ignoring all of the positive progress the country has made over the last fifty years or so. While the previous decade didn’t meet the financial expectations of many, the overall trend is clear: we’re reducing poverty like never before.
The official poverty rate is currently 21.1 percent, but the way that the government calculates these figures is a little misleading. As a piece of pure accounting work, it’s accurate. It’s true that poverty rates, when measured by household income, stand at around a fifth of all US households. But when you dig a little deeper into the statistics, you soon see that things aren’t as simple as that. While original incomes are low, benefits-in-kind, such as food stamps, lift a large number of people out of the poverty bracket, improving the numbers.
In the 1950s, the number of people living in poverty was 27.3 percent. Today it’s 21.1 percent, after hitting a low in the 1970s of just 15.1 percent. The reduction in poverty rates appears to coincide with the introduction of government welfare programs, but whether action at the state level was the real driving force is unclear. Poverty rates had been declining for some time before the 1950s, too, thanks to regular economic progress.
If you’re interested in the government’s role in poverty reduction, take a look at the following insightful infographic.
Click here to learn more
My next book, 50 Stories That Explain Accounting, will be out in 2020. More info to follow.
For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.
Get your questions answered to pass the CPA exam, and to learn accounting concepts.
Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:
Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post Here’s Some Good News: Poverty Is Falling In The US appeared first on Accounting Accidentally.
January 13, 2020
Planning A Successful Corporate Event
If you are planning on hosting an important business event in 2020, this blog post has you covered. We’re are going to take a look at two of the main areas of consideration when it comes to planning an important corporate event: the venue and the entertainment.
Finding The Best Event Venues
No matter what event you are hosting, one of the key ingredients of success is the venue in which you host it in. In order to ensure that you find the best event venues, you need to consider some key points. This blog post will give you a helping hand by revealing what these crucial points are…
The key points mentioned include the following; price, size, facilities and location. With regards to the price, you obviously need to find somewhere that fits into your budget. In addition to this, the size of your venue is crucial; make sure you hire one which caters specifically to the number of people you expect to attend.
Furthermore, you need to ensure that the venue offers any facilities you may need. You also need to make sure the venue is right for your brand. Working with a company that understands your business like Elite Lawyer Management can make all of the difference here. And finally, make sure it is in a location which is easy for all guests to access.
Exciting Entertainment – Magicians
Magicians have various degrees of skill and reputation when it comes to handling corporate presentations. Do you need a different voice for your live event? Perhaps a new and exciting format for your award presentations? Hiring a magician for these events could be just the solution you are looking for.
Magicians tend to be very enthusiastic with a real flair for performance and public speaking, being able to extend that sense of fun and positivity into a presentation format. Sometimes a magician will choose to incorporate magic tricks into the presentation in order to add enjoyment for the audience and make them something different from the norm. Other magicians will simply offer their services as a presenter or give voice-overs during certain audio-visual segments of the presentation.
Whatever it is make sure you do your research and find a magician who has the right degree of professionalism and charisma to be taken seriously at a corporate live event. Magicians can also be good candidates for appearing in advertisements or infomercials for your products. Their sleek professional manner and their ability to converse with lots of different people gives them a unique ability to present products in a compelling way and create a sense of appeal.
These are all valuable qualities to look for in a presenter as an audience will not be as likely to pay attention to a presentation that has no originality or creative spark in it. Play your cards right and your next presentation could be a real winner!
My next book, 50 Stories That Explain Accounting will be out in 2020. More information to follow.
For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.
Get your questions answered to pass the CPA exam, and to learn accounting concepts.
Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:
Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post Planning A Successful Corporate Event appeared first on Accounting Accidentally.
January 10, 2020
Why Cramming is Not a Good Idea
The school is supposed to be a child’s second home.
It is where they learn about various subjects that can be useful in their everyday lives. It is also where students meet life-long friends and teachers who can make a difference in their lives. Their respective parents have the primary responsibility of choosing a senior secondary school that will help mold their young children into well-educated and socially responsible adults.
Like working adults, students have to deal with balancing their academic and personal lives. More often than not, a lot of students resort to cramming for the next day’s major exam. For one thing, students need to have a good studying habit. However, it doesn’t always happen, which often results in cramming.
Can Cramming Do Any Good?
Cramming happens both in working adults and students but is often associated with the latter. It occurs when people delay doing specific tasks until the given deadline arrives.
In such cases, students tend to do other things and then pay attention to studying their lessons a few hours before an important exam.
This habit has become a common thing among many students. You might even have resorted to cramming back in your student days. It might work for some people as they claim that it makes their lessons easier to memorize. Students feel they have to study well and hard when they cram.
But does it work?
Studies have shown that students are not able to recall what they have studied after cramming. This is because cramming trains individuals only to memorize, not to understand concepts.
Cramming can also add to a student’s stress levels. It makes them feel pressured to cram for the sake of good grades. It also lessens the quality of their sleep, which can affect their academic performance. They do get good grades out of cramming, but they might not get the essence of what they are studying in the first place.
It Doesn’t Work For Adults, Either
As I discuss in my book, The CPA Exam For Dummies, studying for the exam requires 400+ hours of study. It’s impossible to cram for this exam, because no one can memorize the huge amount of material. You need study time to digest the material, so you can recall it for the exam.
How to avoid cramming
While some claim cramming works for them, it can only assure good grades but not life-long knowledge and a deep understanding of a specific topic. Rather, students should learn how to develop good study habits. Here are some ways to ditch cramming:
Learn the concept of spaced learning.
It refers to studying a specific topic in a more extended period. It allows students to grasp the concepts and ideas surrounding that particular topic and make it easier to recall and learn later on.
Take notes.
It is also a good idea to take down notes while studying for an exam. It helps students understand the topic more using keywords and formulas.
Learn to organize your schedule.
Students should also learn excellent organizational skills – from listing upcoming tests, project deadlines, and so on. This is considered a life skill that can help a lot when they enter the workforce.
Get enough sleep.
Sleep is vital to keeping their minds sharp and healthy. Experts recommend about eight hours of sleep every night so that students will wake up with well-rested minds.
Plan Ahead
Going to school is not only about getting good grades and being one of the most popular students around. Rather, it is also more on understanding the lessons and applying them to be better persons in society.
My next book, 50 Stories That Explain Accounting, will be out in 2020. More info to follow.
For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.
Get your questions answered to pass the CPA exam, and to learn accounting concepts.
Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:
Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post Why Cramming is Not a Good Idea appeared first on Accounting Accidentally.
What BuzzFeed’s New Business Lines Teach Us About Cost Allocation
Creating new revenue streams is a smart business decision, but how to you assign company costs to each source of revenue?
The process can be difficult, and if you don’t allocate costs in a way that makes sense, your financial results will be distorted. You won’t understand how profitable a particular business line is, and that’s a big problem.
To illustrate this challenge, consider the changes happening at BuzzFeed.
What Happened
This Wall Street Journal article explains how BuzzFeed is adding revenue streams:
“Now, the onetime digital-media darling is edging closer to profitability thanks to staff cuts and efforts in recent years to generate new revenue streams, such as launching its own line of kitchenware and investing in a chain of stores selling quirky toys.”
Here are some of BuzzFeed’s revenue streams:
Tasty Foods: Cookbooks, frying pans and hot plates
Partnership with Scotts Miracle-Gro to ship house plants to homeowners
Camp Toy Stores
By diversifying its product line, BuzzFeed is less reliant on any one source of income, which can smooth out big variations in profitability.
But revenue growth adds more costs. How do costs get properly allocated to each business line?
One important cost concept is support costs.
Support Costs
Here’s a quote from my Cost Accounting For Dummies book:
“Support costs are incurred to provide a product or service to a company operating department. An operating department is one that makes a product or service for customers.”
The point here is the not all departments in a particular company make a product or service for customers. Some areas, such as accounting and legal, support other departments that make a product or service.
Another quote:
“A support department exits to help operating departments. Support departments can also provide services to each other. That makes the cost allocation to the product or service that goes out the door a little more complicated.”
An IT department is a good support cost example.
Fixed costs: The computer department pays salary and benefits for employees, and the cost of equipment (hardware and software) that they use each day.
Variable costs: Variable expenses are incurred when the IT department spends time working on a tech issue. The variable expense can include hardware and software costs, as well as the expense of outside tech experts.
So how to you allocate these costs to the operating departments?
The goal is to connect costs to a level of activity. Fixed costs might be allocated based on the number of employees (who all use technology) in each operating department, or an allocation based on the number of computers supported.
If the Tasty Food division has 5% of the total employees, the division is allocated 5% of the IT Department’s fixed costs.
Variable cost might be based on the percentage of tech issues that each department submits in a year. If the Tasty Food division has 11% of tech issues (based on repair tickets submitted), the division is allocated 11% of the IT Department’s variable costs.
The Lesson
Every dollar your company spends must be traced or allocated to a product you sell. If apply this rule to your business, you’ll know your total costs, and you’ll be able to price your product more accurately.
My next book, 50 Stories That Explain Accounting, will be out in 2020. More info to follow.
For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.
Get your questions answered to pass the CPA exam, and to learn accounting concepts.
Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:
Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post What BuzzFeed’s New Business Lines Teach Us About Cost Allocation appeared first on Accounting Accidentally.
January 7, 2020
How An Accountant Can Help
The decision to hire an accountant isn’t always an easy one. Sometimes it can feel obvious that you need to hire someone to help with your finances, but there are other occasions when you tell yourself you can do it on your own. However, an accountant can help you with a number of different things.
Filing Your Taxes
Filing your taxes is something you can do on your own, especially if it’s your personal taxes and not for a business. However, even though you can do it alone, having the help of an accountant can make it a lot easier. They can save you time and they can prevent you from making costly mistakes.
Setting Up a Business
Thinking of starting a business? An accountant can help you with a number of different things, including deciding which structure could be best for your business from a financial point of view.
Making the Most of Your Money
You don’t want to lose more money than necessary. In fact, you want to make and keep as much as you can. If you need help with both of these things, you should be sure to contact an accountant. They can assist you with making the most of your money.
Keep You Updated on Important Issues
When you hire an accountant, they can help you to stay up to date with the latest financial issues. If a financial issue is going to affect your finances or the finances of your business, they will keep you updated.
Visit Northeastern University to learn more
My next book, 50 Stories That Explain Accounting will be out in 2020. More information to follow.
For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.
Get your questions answered to pass the CPA exam, and to learn accounting concepts.
Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:
Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post How An Accountant Can Help appeared first on Accounting Accidentally.
January 3, 2020
What DoorDash Teaches Us About Profit Margin And Sales Mix
There’s nothing wrong with promoting a loss leader product to get customers in the door.
Your grocery store does it all the time.
Around July 4th, the store advertises rock-bottom prices for charcoal, hot dogs, buns, and other items for your holiday picnic. They also bundle these products into a nice display area in the store.
And that works.
“Oh, that’s right!” you think to yourself. “I need to get stuff for the picnic- and I might as well take my grocery list with me.”
The store makes a profit on the other items on your grocery list.
But if too many products or services are loss leaders, you’ll never make any money.
Investors are starting to notice.
What Happened
In this article, the Wall Street Journal explains how investors are pushing startup firms to move away from loss leader/ discounts, and toward profitability.
“The proliferation of subsidized products and services from venture-capital-backed startups over the past decade reflected a rush by investors to fund the next behemoth consumer-tech company. The thesis: Create a market leader with loyal customers hooked by attractive deals delivered at the touch of a smartphone app. Once the company got big enough, profits would flow and the subsidies could end.
Startup investors are re-evaluating that approach. Following a year of dismal performances from companies that were heavily subsidized by venture capital, investors and board members are pressuring companies to figure out a more profitable business model, tech deal makers and startup founders say.”
DoorDash, the meal delivery service, is a good example. The company operates in 4,000 markets, and current has a 37% market share, according to Second Measure.
Another quote from the article:
“DoorDash provides free delivery to a low- single-digit percentage of its orders, the person said, and its restaurant partners cover part or most of the losses from other freebies.
The growth in markets came despite encouragement from some board members to focus on turning a profit from each customer, according to another person familiar with the matter. DoorDash is projected to lose about $450 million this year, before factoring in certain expenses, that person said. ”
So, what’s the solution? Well, it has a lot to do with managing profit margins and sales mix.
Managing Profitability
I defined profit margin in this QuickBooks article:
“Profit margin is defined as (net income / sales), and this ratio explains the profit earned on each dollar of sales. This metric is a great tool to compare the profitability of products with different sales prices, and you should start your pricing analysis with this metric.”
I explain sales mix in this article:
“Each product may have a different profit margin, and a business can change the sales mix of products to generate a higher overall profit. Many firms don’t analyze sales mix, and these companies are missing the opportunity to increase profits.
Assume that the hardware store earns $4 on a garden hose priced at $20, and $45 on a $300 lawn mower. The profit margin on the garden hose is ($4 / $20), or 20 percent, while the lawn mower profit margin is only 15 percent ($45 / $300). The lawn mower generates far more revenue, but less profit per dollar of sales. The hardware store can increase the company-wide profit margin by selling more garden hoses and fewer lawn mowers.”
DoorDash can certainly promote using some free deliveries. They can take a loss on some restaurant agreements, if adding a particular restaurant will increase total sales. If DoorDash starts to offer pizza from your favorite restaurant, you may decide to start using the food delivery service.
The total profit on all of your sales, however, must generate a company-wide profit.
The Lesson
Use profit margin and sales mix to balance sales promotions and profitability.
My next book, 50 Stories That Explain Accounting, will be out in 2020. More info to follow.
For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.
Get your questions answered to pass the CPA exam, and to learn accounting concepts.
Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:
Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post What DoorDash Teaches Us About Profit Margin And Sales Mix appeared first on Accounting Accidentally.
January 2, 2020
The Importance Of Small Businesses
You may feel that your newly launched small business is not hitting the goals you had initially set when you first began your business, but you may be forgetting the importance of your brand.
The prevalence of small independent business has soared over the past decade and as we enter a brand new decade, these figures are set to skyrocket. There is more demand for people to start their own business; we are shaping a new future in terms of careers and more than ever, people want to have sole control of their career and finances. There are more resources and opportunities than ever before and there is a major reason for this.
If you’ve had a financial setback, this article can help.
Demand Is Growing
Small businesses provide many things that larger businesses do not and this is incredibly beneficial and profitable for your in the long run.
So what is that makes small businesses so valuable and why exactly should you begin to restore your faith in your own business? As previously mentioned, the demand for small businesses is rising. Smaller businesses are often cheaper than larger, more commercial businesses. They offer local solutions to public issues, which may be as simple as providing a certain service or product that can be found on their doorstep.
The finances behind smaller business are of course much lower and they will often have just the one brand rather than a chain or franchise which incur further costs. It may well be also that smaller businesses are able to gain access to better loans and startup assistance rather than having to rely on investors and incurring many overhead costs.
When smaller businesses look at their finances, it is important to ensure that they are hitting their monthly financial goals to ensure their staff can be paid month to month. You may want to look at payroll outsourcing in provo ut and be completely on top of your finances. Smaller businesses may not have the luxury of having hundreds of thousands of
If you work as a freelancer, this article can help.
Keeping on top of business and staff is simpler when your business is small, it means that you most likely know your staff on a first name basis, and keeping your staff happy will also keep them working for you for longer without a huge turnover of staff which some larger companies often have to deal with.
This can prove incredibly beneficial to your business and growing your custom, because the fact that your business is small, manageable means that you can put a bigger effort into your customers and keep them coming back time after time, building up a brilliant database.
Your location is your bread and butter….
Location Is Critical
It’s a fact that your business location is so vital to your success.
Small businesses, as previously mentioned, have such a demand in the local area and your location can prove to be important dependent upon the place in which you are based. For example a small town business is likely to pay less rent for any office space because it is not part of a huge bustling city.
You are also massively contributing to your own town’s profit, by encouraging local business you are paying into the town. A great contribution and way to pay back, building up the interest of the local city, local business will help the economy grow and bring further jobs, better profits and general success of the local area.
You may even be able to start offering further jobs for people who are searching in the community or allowing types of work experience from local schools which will allow students to gain the necessary skills to take them onto the next steps in life. It instills inspiration into students that they too, can do the same and
People love to buy into locally sourced products and services.
It brings a sense of community and people often believe it will be cheaper…which usually, it is. In addition to this, these unique brands that are offered can also assist in bringing tourism closer to home. Locally made goods are brilliant to also care for the planet.
If buyers wish to reduce their carbon footprint, then using local businesses are brilliant in order to do this, it cuts down costs of production and shipping. It will also keep shipping costs non-existent. So as we approach the new decade, remember that the small business is set to steal the limelight as we see a rise in savvy buyers and that all important demand for things on the doorstep.
My next book, 50 Stories That Explain Accounting will be out in 2020. More information to follow.
For live CPA exam prep and accounting classes, join Conference Room for free. Members will be notified of course dates, times, costs, and how to attend these courses.
Get your questions answered to pass the CPA exam, and to learn accounting concepts.
Go to Accounting Accidentally for 300+ blog posts and 450+ You Tube videos on accounting and finance:
Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post The Importance Of Small Businesses appeared first on Accounting Accidentally.
December 23, 2019
How Grounded Boeing 737 Max Planes Impact The Inventory Turnover Ratio
How expensive is it to carry inventory?
It may be your firm’s biggest use of cash- money that you can’t use for some other purpose.
One of the biggest inventory issues is the Boeing 737 Max planes, which are currently grounded.
What Happened
The Wall Street Journal explains that the FAA has grounded Boeing 737 Max planes, due to problems with adding new engines and software issues. After several recent crashes, the 737 MAX was grounded. The firm also fired their CEO.
Cowen & Co. reports that, as of January 2020, 447 Boeing 737 Max planes will be undelivered, meaning that clients are not putting the planes in use. Boeing planes may cost over $400 million each.
Using round numbers, 400 undelivered planes at a $400 million totals $160 billion in revenue. Boeing’s 2018 total revenue was about $100 billion.
Now, Boeing manufactured the 400-plus planes over a period of years, and they have contracts that require the buyer to make partial payments as each aircraft is built.
But that’s still a huge amount of inventory that’s not being shipped to clients.
When you think of inventory sitting in a warehouse or on a retailer’s shelf, think of the cash required to buy that inventory.
The inventory turnover ratio is a great tool to assess both your inventory levels and cash.
Inventory turnover ratio
The ratio is defined as (cost of goods sold) / (average inventory).
Average inventory is the (beginning balance plus ending balance)/ 2.
This ratio tells you how many times you’re selling all of your inventory in one year. The idea is to sell a large amount of product (cost of sales), while minimizing the inventory you have to carry (average inventory).
A big ratio is much better than a smaller ratio. Here’s what I mean:
Let’s say that a hardware store has $600,000 in cost of sales, and that average inventory is $100,000. The inventory turnover ratio is:
($600,000 cost of goods sold) / ($100,000 average inventory), or 6.
The hardware store is selling all of its inventory six times a year. What if they could generate the same cost of sales and carry half the amount of inventory?
The updated inventory turnover ratio is:
($600,000 cost of goods sold) / ($50,000 average inventory), or 12.
The benefit?
The store spends half as much on inventory, and generates the same level of sales. The owner saves $50,000 in inventory costs, and can use those dollars for some other purpose.
The Lesson
Use the inventory turnover ratio to maximize sales and to spend less on inventory.
My next book, 50 Stories That Explain Accounting, will be out in 2020. More info to follow.
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Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
The post How Grounded Boeing 737 Max Planes Impact The Inventory Turnover Ratio appeared first on Accounting Accidentally.
