Wyospace.com

Emotional Intelligence: rapidly becoming today’s most sought after business skill.

By Diane Wolverton, State Director, WyomingEntrepreneur.biz

Emotions are a very normal part of business. Emotions are also a little-understood aspect of business management. Your emotions impact how well you do in all areas of life—personal and professional.

The skill of being the master of your own emotions is called emotional intelligence and it is rapidly becoming one of the most sought after skills in the business world. Why? Because business is done through relationships and relationships are made strongest between people who have done their inner work and have become adept at managing their emotions and their reactions.

Much is known about the power of emotions and much has been written about emotional intelligence. Daniel Goleman popularized the term in his bestselling book, Emotional Intelligence: Why it Can Matter More than IQ. Goleman describes four aspects of emotional intelligence:
1. Self-awareness - the ability to read one's emotions and recognize their impact while using gut feelings to guide decisions.
2. Self-management - controlling one's emotions and impulses and adapting to changing circumstances.
3. Social awareness - the ability to sense, understand, and react to other's emotions while comprehending social networks.
4. Relationship management - the ability to inspire, influence, and develop others while managing conflict.

Each aspect of emotional intelligence has important business implications, impacting you in your decision-making, relationship building, conflict management and leadership. The more emotionally intelligent you are, the more competent you become in business.

Developing your EI skills can be done in several ways. You may want to start by doing some research. There are several books on the market including Goleman’s book mentioned above. Another very accessible book is The Emotional Intelligence Quick Book: Everything You Need to Know to Put Your EQ to Work by Travis Bradberry and Jean Greaves, which includes an EI appraisal you can take online. Other resources for building your emotional intelligence include business coaches, personal development retreats and counseling.

Some people think the concept of emotional intelligence is too “soft” to be part of serious business conversation, but the paradigm is rapidly changing. Consider the words of Jack Welch, former Chairman of GE:
"A leader's intelligence has to have a strong emotional component. He has to have high levels of self-awareness, maturity and self-control. She must be able to withstand the heat, handle setbacks and when those lucky moments arise, enjoy success with equal parts of joy and humility. No doubt emotional intelligence is more rare than book smarts, but my experience says it is actually more important in the making of a leader. You just can't ignore it.”

Second Annual Business-to-Business Idea Expo - OCT. 9 & 10, Cheyenne

Though the bums have removed our name from the Idea Expo for 2008, we're still happy to let you all know that the Second Annual Business-to-Business Idea Expo will be held this October 9th and 10th at the Little America Hotel in Cheyenne, WY.  This year's keynote speaker is Doug Hall of the Eureka! Ranch.  More information and registration can be found on the conference website, www.wyomingideaexpo.com.

Accounting records wobbly? You need a balance sheet!

By Margie Rowell, WSBDC Region 6 Director

A balance sheet is a listing of assets (items of value the business owns) along with a listing of liabilities (what the business owes to others) as of a particular date. The difference of the two is your ownership interest (equity) in the business. The purpose of a balance sheet is to communicate the financial position of a business in order to help make good management decisions; it is essential in forecasting your financial health (so you can make sure your business remains healthy, i.e. it is adequately funded). A balance sheet is also useful to a banker or investor for assessing risk and collateral issues.
While most small businesses can produce profit and loss statements it’s a different story when it comes to creating a balance sheet. A balance sheet (also known as a statement of financial position) is a formal document following a standard accounting format showing the same categories of assets and liabilities regardless of the size or nature of the business.
Accounting is considered the language of business because its concepts are time-tested and standardized. Even if you do not utilize the services of a certified public accountant, you or your bookkeeper can adopt certain generally accepted accounting principles (GAAP) to develop financial statements.

When setting up your accounting records, either manually or with the aid of accounting software, keep in mind the items needed to have a reliable balance sheet. Most sole proprietors focus on income and expenses and never think about how to record fixed assets, inventory, bank loans and draws from the company. I cannot emphasize enough the importance of setting up software correctly for proper accounting. Most software companies advertise how easy it is to set up these accounting systems…they are; however, most small businesses don’t find out until they seek a bank loan or want to sell the business there were problems with the initial set up. It is very time consuming and expensive to go back and correct errors after the fact. The business usually must call in a specialist to “untangle” the “easy set-up” errors made months before. Had they sought professional help when setting up their records; they could have actually saved money. When accounting records are set up correctly from the start, businesses can rely on the balance sheet and income statements for management review and decisions for the business.

If you would like more information about recording keeping for your small business, contact mrowell@uwyo.edu.

Are you a good record keeper?

By Margie Rowell, WSBDC Region 6 Director

I’m not a professional bookkeeper and I don't like to spend my time keeping records!

Keeping good records is essential for any business owner. New businesses must decide whether to do their own recordkeeping or hire someone for the processes. Often there is not enough cash flow in the business to hire someone, leaving the business owner to do the recordkeeping. Keep in mind even if you hire someone, you, the business owner, are responsible for correctness.

You may choose any recordkeeping system for your business as long as it clearly shows your income and expenses. Except in a few cases, the IRS does not require any special kind of records. It is essential for you to know if you are making or loosing money; good recordkeeping will help you stay on top of cash flow and allow you the opportunity to know if you need to adjust your expenditures. Without good records it is impossible to create financial statements should you need to apply for a commercial bank loan. Records must support the income, expenses and credits you report on your business tax returns. If the IRS examines any of your tax returns, you may be asked to explain the items reported.

You may choose to maintain a manual record-keeping system using ledger paper (available in office supply stores). While these systems do not automatically produce financial statements, they will satisfy the IRS by showing recorded transactions, dates and methods of payment. Keep each month separate. At the end of the year add monthly sheets together to total your annual expenses.
Using an accounting software package allows you to create financial statements from the information you input. A simple-to-use software program eliminates the need for a handwritten set of books. It works particularly well for any business providing a service. Software programs often look like a checkbook register, but are, in reality, the backbone of the records for the business. Each transaction—an item of expense or income—is input as either going out of, or into your checking account. Each item is categorized as to type of expense or income, using either a number or name, such as "210" or “office supplies". You may also enter "cash" and "credit card" payments the same way. The best time-saving feature is the ability to print a set of records in a few minutes, any time of year. Additionally, those easy to make, hard to find, math errors will no longer be a worry.
Whether you go computer or do it by hand, you will still need to keep what accountants call "source" documents—receipts, bank statements, purchase invoices—to back up the numbers used in your record-keeping system.
Contact your Wyoming Small Business Development Center for additional insight into recordkeeping processes.

Your business is in crisis if sales are not covering expenses.

By Anya Petersen-Frey, SBDC Region IV Director

If you’re dipping into savings at a rate rapidly depleting your reserves, your business is facing potential problems.  It’s time to step back and evaluate; careful of ‘throwing good money after bad’. Investing more money to retrieve losses is a gamble. If you choose to put money into the business, first understand how the business is doing and what the future of the business might be. Consider the following:

• Is your business expanding so the future looks brighter? If your business is new, evaluate the time needed for a chance to succeed. If your business is mature and not growing, it’s a different case.

• Can changes be made to improve sales?  Remember, if your business is not doing well and you don’t change your technique, you’ll keep getting the same results.

• Can you cut costs?

If expenses have been cut to the bone, the business continues to lose money each month, and you don’t see a way to change the situation, you have a tough decision to make. Sometimes closing the business is the best choice. The experience gained will be invaluable in evaluating and operating another business.

Many business owners think financial crisis happens suddenly. Most of the time financial concerns burdening a business are a management issue and accumulate over a period of time. Below is a checklist to help you organize your financial management. Accounting needs vary, so this list is not comprehensive; it provides a guide to help a manager understand the most common tasks to maintain accurate accounting records.

Daily:
   • Total cash on hand.
   • Record income. Enter sales and cash receipts daily using software or a handwritten ledger.
   • Note payments made by cash or check.
   • Record inventory; add new items.

Weekly:
   • Review accounts receivable. Decide what action to take with slow pays; follow through.
   • Examine accounts payable; take advantage of discounts.
   • Prepare payroll – this may be bi-weekly.
   • Revise inventory to deduct items sold.

Monthly:
   • Balance the checkbook. It’s worth the time to reconcile your checking account to your bank statements.
   • Compute monthly totals for sales, expenses and payroll, including payroll liabilities.
   • Handle tax deposits; file federal or state taxes due.
   • Determine the status of accounts receivable. List unpaid accounts and the length of time outstanding – 30, 60 or 90 days. Use this list to decide which accounts need more aggressive collection tactics.
   • Check inventory levels; note items not selling so they can be replaced with new products.
   • If using petty cash, reconcile; replenish as needed.

Quarterly:
   • File estimated tax returns.
   • Send in sales tax – monthly in some communities.
   • Create an income statement and balance sheet – did you meet financial goals? If not, how can you improve in the upcoming quarter?

Yearly:
   • Figure total sales, expenses and payroll.
   • Prepare an income statement and cash flow. The income statement will show sales, expenses and profit for the year. The cash flow statement shows the cash position of your business.
   • Create a balance sheet for the year. This will show the value of your business and owner equity.
   • Send 1099 and W-2 forms to contractors and/or employees who worked for you during the year.
   • Gather paperwork needed for tax preparation.
   • If utilizing an accountant, turn over copies of tax documentation; discuss the financial condition and tax strategy of your business.
   • Set up books for the upcoming year.

The items on this list are not new. Many small business owners simply fail to put these basic accounting principles in place or don’t understand how to do so. Nearly 99% of small business failure is due to poor management.

If you need help, contact an accountant, another business professional or an organization, such as the Small Business Development Center.

How the Wyoming Partnership Challenge Loan Program can assist agricultural businesses

By Mike Martin, WBC Loan Program Mgr.

The Wyoming Partnership Challenge Loan Program is not designed only to help main street businesses.  There are a variety of agricultural businesses who have worked with their local lender to take advantage of the program. 

The loan program is designed to help growing Wyoming businesses by offering a lower, fixed interest rate on a portion of their bank loan purchased by the Wyoming Business Council (WBC).  Typically, the Council can purchase up to 35% of project cost to a maximum of $250,000 for growing businesses.

How can this help you?  Let’s see how it is helping 3 growing agricultural businesses across Wyoming: 

• Gluten Free Oats in Powell, a growing internet retailer of oats for people who have celiac disease, has been approved to have the WBC purchase $174,000 of their loan from First National Bank & Trust at a fixed rate of 5% for the first 5 years of the loan.  Receiving a lower interest rate will help the business lower operating costs and increase profitability.

• Brown Co. in Wheatland, an implement dealer, has been approved to have the WBC purchase $250,000 of their loan from First State Bank at a fixed rate of 5% for the first 5 years of the loan.  The lower interest rate will allow the business to grow their new location more rapidly.

• Rocky Mountain Agronomy in Riverton, a liquid fertilizer distributor, had $94,000 of their loan purchased from Wyoming National Bank in Riverton at a fixed rate of 5% for the first 5 years.  Receiving the lower rate has allowed the business to expand their product mix into the dry and liquid fertilizer business and accessory products.

To see how the Wyoming Partnership Challenge Loan Program can help you with your growing business, contact your local lender or contact Mike Martin at (307) 777-2845 or mike.martin@wybusiness.org.