Mistake #1: Completely task or project-based outsourcing.

In other words, hiring someone to complete a specific task or project when the need arises. Instead, they should be focusing on gathering long-term valuable members of their team.

I’m thinking that this goes to the question before, I see people who are constantly going to the freelance sites, and trying to find a new person, or trying to find the cheapest person, even though they are looking for quality, they’re still looking for the cheapest person.

Each time they need it, they are looking for someone new, and it’s so much easier if you find someone good and keep them busy. And, it’s not just that you keep that new person.

It means that your business can continue to run smoothly, because the people who work for me… I don’t have to talk with them all the time.

Mistake #2: Looking for the cheapest price.

You might find a great deal, but as a general rule, you often do get what you pay for.

Plus, it goes back to that you are task-oriented, because you are constantly looking for new people, and trying to find the best deal. It’s too much work to do it that way.

Mistake #3: Not giving clear instructions.

The more information you can give your contractor about a task, the better. Every time you give instructions, keep a copy for your files, so that you can use it over and over again.

I know people don’t want to give those instructions, because they think it takes a lot of time, but if you keep it, then you can use it again when you need it, and then you already have it on hand, and it’s amazing how people will say, “I hired someone, and they did a terrible job.”

And, a lot of the time, it’s the way they gave the instructions. If you don’t give enough information, either that person has to interpret what needs to be done, or they may misunderstand, and it’s just your own fault.

Mistake #4: Not checking work.

I talked about overseeing everything. Outsourcing doesn’t relieve you of all your obligations.

You need to check work to make sure that your business is being presented properly, and so that you can give constructive feedback to your contractors, because that’s how you grow, and things get better.

They’re not going to be perfect, right out of the gate, so they need that feedback.

Mistake #5: Not evaluating their actual delegation.

Sometimes, checking the work is checking the quality of their work, but also sometimes people outsource for months and months without truly evaluating — even if people are doing a great job — what they are actually doing, is it actually effective?

You can’t get away from customer service.  That has to be done.  So, you outsource that, and it goes.

But, if you’re outsourcing things like specific marketing tasks, say its article marketing or something like that, you need to regularly evaluate if your plan is working. If it’s not, you might need to change your strategy or just scrap that part altogether.

Now, let’s look at the income and cash flow statements.

Income Statements

An income or profit loss statement is a report that shows how much you’ve earned over a specific time period. An income statement shows the costs and expenses associated with earning that money. The literal “bottom line” of the statement usually shows the company’s net earnings or losses.

Income statements also report earnings per share (or “EPS”) which calculates how much money shareholders would receive if you distributed all of the net earnings for the period.

At the top of the income statement is the total amount of revenue from sales of products or services. This top line is often referred to as gross revenues or sales, because expenses have not yet been deducted.

The next line is money the company doesn’t expect to collect on certain sales such as discounts or merchandise returns.

When you subtract the returns and allowances from the gross revenues, you get your net revenues.

Next there are several lines that represent various kinds of operating expenses. Although these lines can be reported in various orders, the next line after net revenues typically shows the costs of the sales, or cost of goods sold. This is the amount of money you spent to produce the goods or services sold during the accounting period.

The next line subtracts the costs of sales from the net revenues to arrive at a subtotal called “gross profit” or sometimes “gross margin.”

The next section is operating expenses. These are expenses that go toward supporting a company’s operations for a given period. Marketing expenses are another example. Operating expenses are different from “costs of sales,” which were deducted above because operating expenses cannot be linked directly to the production of the products or services being sold.

Depreciation is also deducted from gross profit. Depreciation takes into account the wear and tear on some assets, such as machinery, tools and furniture, which are used over the long term. Accounting spreads the cost of these assets over the periods they are used. This process of spreading these costs is called depreciation or amortization. The cost for using these assets during a certain period is a fraction of the original cost of the assets.

Next you arrive at a total called income from operations. Operating expenses are deducted from gross profit to arrive at operating profit before interest and income tax expenses.

You must also account for interest income and interest expense. Interest income is the money you make from any investments.

Finally, income tax is deducted and you arrive at the bottom line: net profit or net losses. Now you know how much the company actually earned or lost during the period.

Cash Flow Statements

Cash flow statements report your company’s inflows and outflows of cash. While an income statement can tell you whether your company made a profit, a cash flow statement can tell you whether your company generated cash.

A cash flow statement shows changes over time rather than absolute dollar amounts at a point in time.

The bottom line of the cash flow statement shows the net increase or decrease in cash for the period. Generally, cash flow statements are divided into three main parts. Each part reviews the cash flow from one of three types of activities:

1. Operating activities
2. Investing activities
3. Financing activities

1. Operating Activities

The first part of a cash flow statement analyzes your company’s cash flow from net income or losses. This section of the cash flow statement usually reconciles the net income (as shown on the income statement) to the actual cash your company received from or spent in operating activities.

Net income is adjusted for any non-cash items (such as adding back depreciation expenses) and any cash that was used or provided by other operating assets and liabilities. When a cash flow statement is accurate, it can be a helpful tool in determining the value of your business.

2. Investing Activities

This is the cash flow from all investing activities, which generally include purchases or sales of long-term assets, such as property, plant and equipment. When you buy equipment, the cash flow statement would reflect this as a cash outflow from investing activities. If you sell an investment, the proceeds from the sales would show up as a cash inflow.

3. Financing Activities

The third part of a cash flow statement shows the cash flow from all financing activities.

As a business owner, it is imperative to keep a close eye on your financial position. It may not be as sexy as developing new products or marketing campaigns but it is necessary to your business’s survival.

The good news is you do not need to be an accountant to read financial statements. The basics of accounting are simple. If you can follow a story, you can learn basic accounting. So, anyone can learn to read basic financial statements.

There are three main financial statements:

1. Balance sheets: Shows what your company owns at a fixed point in time.
2. Income statements: Show how much money your company made and spent over a period of time.
3. Cash flow statements: Show the exchange of money between your company and the outside world over a period of time.

Balance Sheets

A balance sheet provides detailed information about a company’s assets, liabilities and shareholders’ equity.

Assets are what your business owns that has value. This typically means they can either be sold or used by the company to make products or provide services that can be sold. Assets include physical property, such as plants, trucks, equipment and inventory.

There are also intangible assets that can’t be touched but nevertheless exist and have value, such as websites, trademarks, and patents. Cash and property are also assets. So are the savings and investments your business accumulates.

Liabilities are the debts that your business owes. This can include long term and short term obligations. Liabilities are money owed to suppliers for materials, the payroll you owe employees, environmental cleanup costs, or taxes owed to the government. Liabilities also include obligations to provide products or services to customers in the future. Long term debts are notes or mortgages paid usually over years.

Shareholders’ equity is sometimes called capital or net worth. This is the money that would be left if you sold all of your business assets and paid off all of your business liabilities. This leftover money, or owner’s equity, belongs to you, the shareholder or owner.

The accounting formula for a balance sheet is:

Assets = Liabilities + Owner’s Equity

Your company’s balance sheet is set up like the basic accounting equation shown above. On the left side of the balance sheet, you list assets. On the right side, you list liabilities and shareholders’ equity.

Assets are generally listed based on how soon they will be converted into cash. Current assets are things a company expects to convert to cash within one year. A good example is inventory. Most companies expect to sell their inventory for cash within one year.

Noncurrent assets are things you do not expect to convert to cash within one year. They include fixed assets. Fixed assets are assets used to operate the business but that are not available for sale, such as vehicles, computers, furniture and other property.

Liabilities are generally listed in the order they are due. Liabilities are also labeled as either current or long-term. Current liabilities are obligations a company expects to pay off within the year. Long-term liabilities are obligations due in more than one year.

Shareholders’ equity is the amount owners invested in the company’s stock plus or minus the company’s earnings or losses since inception. When a company distributes earnings, instead of retaining them, they are called dividends.

A balance sheet shows your assets, liabilities, and shareholders’ equity at the end of the reporting period. It does not show the flows into and out of the accounts during the period.

For more information on income and cash flow statements, click here to read Introduction To Financial Statements (Part 2).

Life consists of seven areas:

1. Health
2. Family
3. Financial
4. Intellectual
5. Social
6. Professional
7. Spiritual

Although you will not spend equal amounts of time on each of these areas, neglecting any of them will jeopardize your success in all of them.

1. First, write things down – whether in a Day Planner or a Palm Pilot. The actual process of writing down a task helps you remember to complete it. You are also able to see the big picture and evaluate where the new task fits in with other tasks you have already been assigned.

2. Plan each day’s work and then stick to your plan. If you do not have a plan, you will be easily distracted and therefore, less productive. You will spend your work day responding to others, their requests and crisis situations, rather than completing your own tasks.

3. When you are planning a day’s work, prioritize. Your list of things to be accomplished will include those that are crucial and those that can wait. Make sure you do not spend all your time working on tasks that really aren’t as important just because they are smaller and easier to complete. Work your list in order of importance. Do no procrastinate. If you are tempted to put an item off, break down the task into smaller manageable pieces.

According to surveys, the average person gets 50 interruptions a day that take about five minutes a piece. This means that we spend over four hours each day dealing with unplanned events. Sorting through the deluge of paper that crosses your desk in a single day can be exhausting.

Between email printouts, telephone messages, mail, memos, advertisements and faxes, your work area can quickly become overwhelming. Try to stick to the rule of handling each item only once. If you don’t need it, get rid of it. If you can’t handle it in a few minutes, consider delegating it. If it is your responsibility and will take time to address, schedule it on your calendar and put it away.

4. Get into a routine. Good routines can increase energy and save time while mindless routines can curb creativity. Make sure any routines you use are serving a purpose other than just to fill up time. Plan times to accomplish certain tasks every day.

Repetitive tasks, such as answering email or completing paper work, can be scheduled to be completed during a certain time period each day. This will allow you to devote your full attention to these tasks once a day, instead of partially addressing them several times a day. Set start and stop times for all major tasks during your day.

5. Make sure you do not take on more than you can handle. You may want to impress your clients but it can be a mistake to say yes to too many things. You can only accomplish a finite amount of work during the day and taking on more than this will result in the parts of your life becoming imbalanced. Every time you take something home from work that you said you would do but just didn’t quite finish, some area of your personal life is suffering.

6. Do not put extra effort into tasks that are not worth it. Some tasks will require your full attention and should be completed to the best of your ability. However, there are other tasks that just have to get done. Don’t let perfectionism get in the way of completing less important tasks quickly so that you have more time to devote to those projects that really deserve it.

The simplest definition is it’s the amount of money you need to keep your business afloat. It’s like the blood in your body. If you run out of blood, you die. So, if you run out of cash, you’re out of business.

An easy way to master this concept is to picture your business checkbook. Will the balance be enough to pay the bills? As it is fairly easy to determine your expenses for at least a few months, will the revenue you expect to receive during that time allow you to continue meeting your obligations?

It will take a lot of discipline to consistently look at your cash flow on a daily basis when there are so many more interesting business issues vying for your attention.

You might even consider developing a spreadsheet customized for your particular business that requires you to make entries on a daily basis and thus keeps your financial situation at the forefront of your mind.

Cash flow can be seen from two different perspectives:

1. Prevention: Which focuses on managing the business in such a way that you are able to see problems that might arise before they become too large to manage.

2. Cure: Deals with problems once they have already reared their ugly heads.

Prevention, as is true in other aspects of life, is the best option in business management. The farther you can look ahead and search for any potential problems that may arise, the more likely you are to be able to head them off or at least lessen the toll they have on your bottom line.

If you do come upon an unexpected cash flow problem, you will have several options from which to choose.

• You can borrow from your own personal account.
• You can delay paying suppliers.
• You can put off payroll for another week.
• You can try to collect on past due balances.

However, the best option is probably to have a line of credit that you can draw from at your local bank. You can think of this as overdraft protection for your business checking account.

In order to obtain and maintain credit with your local financial institution, develop a relationship with your banker. Send him frequent financial reports in order to make him feel that they are seen as a part of your organization, not as an outsider.

The more he is kept informed about the financial status of your business, the more he will trust you and be willing to help you out of any unforeseen financial crises that do arise.

You should only have eight to nine things on your work surface at any one time. Items used on a daily basis should be kept within reach but those that are used every other day or less frequently can be relegated to nearby drawers. Items that you may only need weekly or monthly can be stored in a supply closet.

Filing must be done on a regular basis. It is okay to keep a file out that you need to use within the next two days but anything else should be returned as soon as possible. You are wasting time looking for files when you allow them to stack up in your work area and, in turn, other people are unable to access them at all.

Set discard dates for all your paper and computer files. These dates may be regulated by law depending what type of industry you are working in so make sure you check if there are any laws governing file retention.

Make a spot on your desk just for incoming items. Label it and make others aware of it. You might even wish to put an inbox on the wall outside your door. This will further reduce interruptions to your busy day.

Keep a master calendar which lists deadlines for all the projects you are currently working on. You don’t have to remember everything. Writing down deadlines and appointments not only frees your mind to deal with other problems, it gives you a visual image of what your days and weeks look like. Keeping everything in one place allows you to refer to it easily.

Finally, improving your telephone skills can improve your productivity. When you have to leave a message, make sure to speak slowly and clearly. Give your number at the beginning and the end of the message. Even when you are leaving a message for a repeat customer, do not assume that they already have your number. If you have an unusual name, spell it.

Following these tips will greatly increase your chances of getting a response to your message. Since you make business phone calls to procure some sort of information that is necessary for the completion of a task, it is vital that your calls be returned.

I’m sure you’ve heard people say, “I wish I had more time.” They jump from task to task and event to event at light speed, trying to find ways to accomplish more.

Some people seem to accomplish far more than others in their day, week, and lifetime. For instance, Benjamin Franklin was a successful author, politician, scientist, philosopher, printer, inventor, activist, and diplomat. His accomplishments are astounding. Benjamin Franklin is also credited for the statement; ‘Time is money.’

So, how did he find the time to accomplish so many things? The answer is effective time management.

And here’s the good news: Time is limited.

How is that good news? It’s good because it means that the playing field is level.

• Everyone gets the same twenty-four hours in a day.
• Your competition has no more hours in a day than you.
• The richest man cannot buy even one more minute of time in a day.
• Only you can manage yourself and activities more effectively.

In a typical forty-hour workweek, it’s estimated that the average person spends:

1.7 hours looking for things
1.0 hour rescheduling appointments and tasks
1.4 hours wasted because of rescheduled appointments and tasks
2.2 hours wasted because of disorganization and lack of priority

That is a total of over 6 hours wasted due to poor planning and a lack of organization.

When people are asked why they are disorganized, the number one reason given is: ‘I just don’t have the time.’

The fact is people choose to be disorganized. Most people could avoid wasting time by spending just two hours a week organizing and planning. In just two hours of planning, you could free an additional three to four hours every week.

Effective time management is about behavioral change. It’s about learning how to spend more time acting instead of reacting. The skills described herein will help you become better organized and manage time more effectively, which will increase productivity but only if you adapt the behavioral changes as outlined throughout this report.

The fact that most organizations do not have a time management program in place suggests that they do not feel that this is an issue that needs to be addressed. However, nothing affects the ability of a company to function and be productive more than the ability of its employees to use organizational skills to save time during a typical business day.

Companies must take action in order to encourage their employees to become more skilled in organization and time management. Even if you are an extremely organized person, all of your efforts will be wasted if your colleagues are not picking up where you leave off. There are several things you can do as a manager to encourage your staff to become more efficient managers of time.

Managing Your Employee’s Time

First, think of your employees’ time as an asset. It is a tangible asset that is worth a great deal of money and must be dealt with accordingly. Your job is to manage this incredibly valuable asset. You cannot assume that your employees know how to regulate their use of time on their own.

As a manager, it is your job to use the 40 hours per week an employee gives you in the most efficient manner possible.

Next, when you are hiring new employees, make sure to evaluate their time management skills. This is particularly important when the job position being filled will require self-regulation. You want to hire self-starters with good self-discipline.

Ask appropriate questions such as “How good are you at setting deadlines and meeting them?” Do ask previous employers about the candidate’s time management skills.

All of your employees should be working at their fullest capability. Down-sizing over the previous years has lead to the elimination of many assistant positions. Managers and executives are now forced to do their own clerical tasks. If they are performing these tasks on a regular basis, it would be more cost-effective to hire an hourly employee.

When an employee demonstrates above average time management skills, reinforce their actions. In other words, reward them for good behavior. Behavior that is noticed and pleasantly remembered is much more likely to be repeated. In addition, other employees will follow their example.

If you are a good time manager and have good organizational skills, share them with those around you. Teach them how to manage their time. You might begin by asking all employees to bring paper and a pen to meetings in order to take notes. This way they can transfer the items from your assignment list to their to-do list. Arrange meetings in which you refer back to the tasks that were given to them.

Meetings must be conducted in a time-conscious manner. An unorganized meeting can be one of the biggest drains a company has on productivity. If you have trouble believing this, calculate the wages you are paying all the people who are sitting in your next meeting. Meetings should begin on time. Otherwise, people will get into the habit of being late.

You should have an agenda. However, be flexible enough so that intellectual breakthroughs can occur. End the meeting after all of your goals have been addressed. Do not let it drag on any further than necessary. Let attendees begin work on the items discussed in the meeting instead of continuing to just talk about them.

Lastly, emphasize how important good time management is to the success of your organization. You could include time management tips in your newsletter. If your company does not have a newsletter, present these tips at staff meetings.

• Provide time management training opportunities for your employees.
• Purchase books and CD’s on the subject and make them available for use.
• Conduct on-site organization seminars.
• Provide employees with personal organizers, whether manual or electronic.

Making organization and time management visible at the work place will remind employees of the importance of these skills.

Time is a constant. When poor organizational skills lead to wasted time, this time cannot be retrieved. Each person in an organization needs to evaluate where their time is going on any given day and then implement a few time saving methods to overcome their biggest time wasters.

Implementation of too many techniques at one time can result in an employee spending more time organizing than working or becoming overwhelmed and just returning to their old ways out of frustration.

There are numerous time wasters in the work place. Indecision and procrastination are perhaps the two biggest offenders. However, they are closely followed by inefficiency, interruptions, unnecessary errors, crisis management, poor organization, ineffective meetings, micro-managing, failure to delegate and lack of policies, procedures or standards to be followed.