The Importance of Record Retention in Growing Businesses

Document retention is a topic is not always well understood and frequently makes its way to the back burner as growing firms channel their energies into more imminent demands. But keeping easily accessible records can save significant time and expense if and when their need arises.  As business communications continue to trend from paper to electronic documents, it has become both easier to preserve information as well as inadvertently destroy it.  It is therefore essential that small business owners have a good understanding of what information should be maintained and for how long.  Beyond conforming to laws and regulations, there is a sound business upside to retaining records; maintaining an accessible financial history of your company can provide the foundation necessary to make informed prospective decisions.

In the wake of the malicious accounting cases of the last decade, several well-known regulations have been enacted such as the Sarbanes-Oxley Act, which concerns large, publicly held firms.  Several other less-known state and federal rules apply to all companies, regardless of size and complexity.  In many cases a company is never too small to comply, and violations can be disastrous financially and otherwise.  Depending on the nature of your business, certain additional agency regulations may apply beyond those concerning taxes – those governing employment, medical and financial instruments, for example.  Once all applicable rules have been considered and a retention policy has been defined, it’s equally important that it be communicated to and understood by everyone in your firm.

A sound record retention policy also provides for the destruction of information that is no longer useful or required to be kept.  If there is legitimate purpose behind the removal of unnecessary records, it is important that guidelines for doing so be codified as well.

We have attached a Record Retention Guide recently released by the MSCPA and hope it will be of assistance in planning your company’s retention policy.  If ever you are unsure whether information must be retained or have a question about implementing best practices, please reach out to our team at Verge Advisors.

The Idea Factory – Verge Advisors Moves into the Belly of the Entrepreneurial Beast

The year has marked several developments for Verge Advisors as we've refined and expanded our outsourced CFO solutions. To best position the firm for future growth and relocate closer to our clients, we recently moved into new space at the Cambridge Innovation Center in Kendall Square, Cambridge. This exciting facility, nicknamed the "Idea Factory" by the Boston Globe, and surrounding neighborhood are a vibrant hotbed of local entrepreneurial action. A unique fusion of venture capital activity and the proximity world class academic institutions makes this a launch pad for innovative startups, with more than 170 in our building alone - many in clean energy, health sciences, and high tech. Kendall Square is an entrepreneurial powerhouse and our new location is a great cultural fit. We're immersed in an atmosphere of constant growth, cutting edge technologies, and idea investment. The CIC has been a funding sponge since its inception - our neighbors have been entrusted with more than $1B of funding and absorbed more than 5% of the total capital raised by New England tech companies between 2007 and 2008.

Verge Advisors is eager to cultivate new relationships in the Kendall Square area and rise to the challenges they provide.  We look forward to serving our new community.

ClickFuel Raises $2.5M

Congratulations to ClickFuel on their $2.5M Series A round from Baird Venture Partners. Good luck to the entire team as the innovative internet marketing services company welcomes in the next phase of its company growth.  The full press release is available here. 

JLICPA Launches New Website

The JLICPA team is pleased to announce the release of our new web presence.  Along with a fresh look and feel, the site now provides additional resources including CFO case studies that highlight our method and results and white papers on emerging issues that effect our client base.  This blog, Lessons From the Ledger, will update with observations, commentary on trends, and topics of interest.  Please check back frequently in the coming weeks as new content is added.

Cinema MBA - Tucker

Tucker is a great movie for those of you that have big ideas.  The true story centers around Preston Tucker a "dreamer, visionary and inventor" who tried to revolutionize the auto industry in the late 1940's.  It also is a cautionary tale to remind those who evangelize disruptive technologies that they will probably feel the wrath of the powerful companies that they intend to overtake. 

Hold That Tiger!

"Hold That Tiger!" This is the phrase that Preston Tucker exclaims when he has a eureka moment.  You can just see the excitement as his mind siezes on an untapped opportunity.  The beginning of the movie centers around this big idea...the Tucker, a revolutionary car boasting many technological advances.  What is great for the entrepreneur of today is that the formula for a big idea in the 1940s is very much the same as it is today:

Have Big Idea > Try to Raise Funds > Get Rejected > Advertise > Demonstrate Demand > Get Credible Board Signed On > Get Funded > Hit the Ground Running

Early on it is almost all smoke and mirrors and very little reality.  It is basically Tucker's drawing and charisma that gets things going...oh and a well place magazine ad that creates a groundswell of demand for the proposed automobile. 

Preston is the typical entrepreneur...dynamic, hungry, and often frustrated by the inability to realize his ideas immediately.

A Loyal Group

Another thread that flows through the movie is how loyal a group Preston puts around him.  He doesn't discriminate or pass judgment, if you have passion about the Tucker you gain entry into his inner circle.  He also instills an incredible amount of loyalty in his team.  You see them working ridiculously hard to make impossible deadlines with very little to work with.  The plight should be familiar to those of you who have been part of a startup....not enough funding, not enough time, crazy hours but really gratifying.  Whenever they fall short they are met by the frustration of Tucker, but also the knowledge that he is with them working just as hard to realize the dream.

At one point he stops everything and looks at the group and says: "Is there anyone in the room who can look me in the eye and tell me we can't do it?" Later, the man who orchestrated his financial backing, who admittedly began working with Tucker for the money states, I never thought that if I got too close to you that I would catch your dreams.  They all bought into the vision.

Creating Buzz

Another great entrepreneurial trait that Preston Tucker had was the ability to create buzz.  With the car, it started with the magazine advertisement which received 150,000 responses from around the country.  It continues when he chooses the largest building in the country to be his factory for his cars.  Probably the height of the buzz occurs at the unveiling of the Tucker.  Preston kept everyone but his closest confidants in the dark about the car.  The reasons were twofold: 1)  create buzz, 2)  he didn't want anyone to know that the car really was not ready and only resembled the advertised Tucker in appearance.  However, despite the scramble to get everything ready, he went ahead with a huge launch, complete with a band and all sorts of fanfare.  It was a harrowing experience, but in the end it was a huge success.

The Steadfast Belief of the Entrepreneur

The story turns much darker after the initial launch as the big automobile companies use their significant powers to smear and ultimately ruin Tucker's company.  There is a messy trial where Preston Tucker is facing serious charges and possibly looking at significant jail time. 

At the closing arguments of the trial Preston Tucker speaks on his own behalf and has this to say:

"We invented the free enterprise system where anybody, no matter who he was, where he came from, what class he belonged to, if he came up with a better idea about anything, there was no limit to how far he could go. I grew up a generation too late I guess because now the way the system works, the loner, the dreamer, the crackpot who comes up with some crazy idea that everybody laughs at that later turns out to revolutionize the world, he's squashed from above before he even gets his head out of the water because the bureaucrats, they'd rather kill a new idea than let it rock the boat... If big business closes the door on the little guy with the new idea, we're not only closing the door on progress but we're sabotaging everything we fought for, everything the country stands for."

After the trial, as he is outside looking at the 50 beautiful Tuckers fresh off the production line he says, "50 or 50 million, it's the idea that counts, the dream".  An entrepreneur through and through. 

We’re Hiring: CFO Wanted

As we grow the team, we are currently looking to bring on a dynamic CFO.

Since we are in hyper growth ourselves, this is an exciting role with significant growth potential.  The person will be working closely with me and will be learning by real world on the job training.

Some of the things that the person will be doing right away are:

1) Working on financial models for companies seeking funding
2) Strategic planning sessions and identifying opportunities for growth
3) Developing and implementing monthly closing processes for business clients
4) Preparing custom financial management reports for executives
5) Preparing corporate, individual and trust tax returns

To be considered for the position the candidate must have the following attributes:

-Have the highest integrity
-Efficient user and learner of technology
-Strategic thinker
-Work hard to meet deadlines
-Able to work at 20,000 feet and in the weeds
-Not afraid to answer honestly
-Enjoy working as part of a team

Overall they must also have high energy and have a genuine passion for business.

If you or anyone you know are interested in applying for this position, please send the resume with a brief description my way at jiannacone@jlicpa.com .   

Here is the link for the complete Craigslist ad posted:

 http://boston.craigslist.org/gbs/acc/536931183.html

Resolutions 2008

Well it is resolution time.  Here are my New Year's Resolutions for 2008:

1)  Automate in 2008.  There are many tasks that I/we do, that can be automated.  I am going to ruthlessly look for ways to automate our existing tasks to free up more time for a higher level of service.

2)  Email response within 24 hours.  For many years now, I have only responded to urgent or easy to answer emails within 24 hours.  The rest I would batch process at some point in future.  Well I am changing all that and will attempt to answer all emails within 24 hours of receiving them.

3)  2 Week tax turnaround.  For this year's tax season it is the goal to have all returns that are not waiting on additional information turned around from receipt to release within 2 weeks.

4)  More time spent on training.  This past year I did not do enough to make the time to train (myself, my colleagues, my clients).  The result was predictable...frustration for all.  This year I will invest more time in training myself and others.

 5)  No work on Sundays.  A long time ago I made a promise that Sunday would be family day.  For me that means going to church, having a big meal together and then doing some activity with the whole family.  There has been a slow erosion of this rule over the past few years.  In 2008 I vow to get my Sundays with my family back.

6)  Increase my positive energy.  I want to be known as a positive force by those that I come into contact with.   I will try to eliminate or minimize my complaints, conflict, and most of all projection of stress.

For all you who read this and come into contact with me on a regular basis, help me to be accountable to these.  If you have resolutions that you have, please let me know and I will do the same for you. 

Hope everyone that reads this has a happy and healthy New Year!  

Home for the Holidays

Well, there is no place like home for the holidays.  In addition to celebrating Christmas with family and friends and eating more good food than should ever be allowed, for me, this week is also good for doing some really important things related to the business: 

1)  Recharge

In recent years it seems like everyone is going a mile-a-minute all the time.  This week marks one of the last bastions of relaxation.  This week, give yourself permission to relax.  Stop worrying about everything and just do whatever helps you to recharge. 

2)  Reflect

How was this past year for you?  What are you most proud of about the business?  What did you do well?  What do you need to improve?   

3)  Declutter

You may have a messy inbox, a messy work area, or if your like me...a messy mind.  Use this week to clear the mess and "eliminate the noise".  This will help you to focus your mental energy on what needs to be done.

4)  Wish  

Wish lists are not only for kids.  Think about what your wish list for your business is:

-What one thing would you like to buy for the business?

-What do you wish you did not have to do anymore?

-What are the attributes of that next "perfect" hire?

-What aspirational person or business would you like to become a customer?

Recharge, Reflect, Declutter and Wish...and also eat, drink and be merry. 

Happy holidays!

Whatever You Do, DO NOT…

The advice I give to the hard-working and passionate entrepreneurs that I work with is this:

Whatever you do, DO NOT TAKE YOUR FOOT OFF OF THE GAS!

Running a successful startup is about achieving scale.  And without the sale, there is no scale.  There is a tendency among early stage companies to sprint and then relax.  Whether after a big win, achieving a milestone or closing on funding, it is a natural inclination to sit down and take it all in.  Resist this temptation. 

Top line growth is the single greatest insulator against failure in a startup environment.  It lowers burn, increases enterprise value and allows you to add more passionate people to deliver on the promise of the business. 

So as the new year is almost upon us, get your ducks in a row now. Delegate the tasks that are on your plate that bog you down, suck your energy and really do not add all that much value.  You know what they are and do not need me to tell you.  Then before New Year's Day define an aggressive (reach) revenue goal for Q1 and also for the full year.  Now, drive the company towards that goal.

Good things will happen I promise.

Simplify Your Business

One of the habits we have determined is a strong predictor of success is focus.  A compliment to focus is simplicity.  Take an objective look at your business, is it simple or complex?  Are your processes and work-flows bloated with extra steps?  How successful are your training programs and new employee orientations?

Until you simplify your business you will have limited success focusing you and your company on its strengths.

Here is a daily routine of someone that I admire and who I think really has simplicity down to a science.

1. He woke up and read the morning newspaper. Something he does everyday.

2. He got into car and drove himself to work and arrived shortly before 9am.

3. On this day he received only 13 phone calls, including one wrong number.

4. He does not carry a cell phone nor have a computer on his desk.

5. There were no urgent meetings today. Instead he found time in the day to work on new song lyrics for a birthday party for a friend, and to demonstrate a newspaper-throwing technique he learned while delivering papers as a boy.

6. Although he is an accomplished businessman, his company is run very efficiently. The headquarters is staffed by just 17 employees and has no public-relations, human-relations, investor-relations or legal departments. He writes only one letter each year to the managers in his company, giving them goals for the year.

7. He leaves the office between 5 and 6pm.

8. He returns to the same small house that he bought after he got married 50 years ago and says it has everything he needs in that house.

9. He spends his evenings and weekends doing his favorite hobbies: playing bridge and watching his college football team.

Do you know who it is?...

It's Warren Buffett (sources WSJ 11/12/05 article,  CNBC "The Billionaire Next Door).

The 2nd richest man in the U.S. who heads Berkshire Hathaway, a company with the 7th largest market cap, has managed to keep his business (and life) this simple.

If he can do it, can we really have any viable excuses?

Listen to Thoreau, or look at your iPod....Simple is better.