Why the *#?! Didn't I Join AIESEC?

Originally posted at Cirillo Hooper & Company

AIESEC is the world's largest youth-run organization, whose focus is primarily on providing a platform for youth leadership development. I had heard about AIESEC in my undergrad years once in conversation back in 2007. I didn't think anything of it, because I was working full time in the profession, and studying externally for the most part.

I was introduced to them again early 2012 when Mike from Our World Today introduced me to Jemma Schilling (who now incidentally now works at the firm, but that's a different story). She invited me to talk at their state conference, and I was happy to oblige. 

At the conference, it turned out I already knew Trent Blucher from Fresheyedeas aswell as Chris and Mike from Our World Today. I met the other speakers and forged powerful new business relationships with Martin & Miriam Castilla from Smartline and Jo Schneider from DVE Business Solutions. I also was introduced to the Dean of Flinders Business School, and as a result got a job teaching there. Also at the conference I met some awesome university students, all of which were totally switched on and motivated.

Since then, I went on to hire Jemma in Cirillo Hooper & Company, had Waleed complete his internship with the firm, had four other AIESEC students register interest in the program next year, have had clients take on AIESEC members as staff members, three of them are volunteering to assist me with my charity One Day MBA and I've been invited to speak at more of their events.

These days not a day goes by when I don't talk about AIESEC, and how important it is in preparing university students for the business world. As Jemma put it, "It's like you're an AIESEC Alumni that never actually had anything to do with them at uni." Fortunately at 25, I'm still (kinda) young enough to fit in.

If you are a university student, and you're not working in your discipline, join AIESEC and they will help you bridge the gap between academia and 'The Real World.'

Jemma Schilling & Chris Hooper of Cirillo Hooper & Company with Jo Schneider & Rebecca Ham of DVE Business Solutions at the AIESEC Gala Night

Fixing Cars and Businesses

Originally published at Cirillo Hooper & Company

n following from Jemma's last blog, I went out and bought Simon Sinek's book Start with Why on audible.com. In listening to it, it made me reflect on "The Why."

Our firm has had a very clear "Why" since we changed the purpose statement in February of 2012, this resulted total buy-in for the firm's mission. We now use the lean enterprise methodology of "5 Whys" to ensure internal projects we engage in are congruent with our firm's mission. I have no issue with the firm's mission, it's clear, we all know what we're doing and why we're doing it. The "Why" I'm looking for is, "Why did I become accountant?"

I once had the pleasure of meeting with an ambitious young high school student called Natasha. She was 17 and she knew she wanted to be an accountant and why she wanted to do it. I am certain she will be extremely successful in her career.

So why did I become an accountant? Initially as a young entrepreneur, I enrolled into my accounting degree, so I could run (or at least understand) the accounting in my own businesses. That was enough to get me through university, but I needed a more compelling "Why" if I was going to choose a business in accounting rather than another business. In his book, aptly called Accountants, Colin Dunn reveals that the third most popular reason for becoming an accountant was, "I am genuinely curious about business." It hit me, that was my why! I love business, just like an mechanic loves tinkering with cars, as an accountant I love tinkering with businesses. So in choosing to start an accounting firm rather than some other business was simple, if I chose another business I would only have one business to tinker with, through an accounting firm I get to tinker with heaps of businesses.

Having built on this idea some more, it dawned on me that working on a business is no different from working on a car. With that believe, I realise that any business can be fixed if you have the right parts and the right tools. The trick is knowing which parts to get and what tools to use.

Business Owners are Gladiators

Many of your friends may have this misconception that being in business is easy because:

• You don’t have a boss 
• You get to wake up whenever you feel like it 
• You get to do whatever you want 
• You only work four hours a week 

While being a business owner is pretty awesome in the sense that:

• Some get a bit of flexibility in terms of when and where they work
• You get some pretty cool tax concessions 
• The harder [smarter] you work, the more you earn 

That being said, most of our clients will attest to: being in business is still really, really, really hard work. I heard a good analogy last week, that said, "Business owners are gladiators." Too right they are, this vocation is not for the feint hearted and here’s some myths that I’d like to bust:

• Most business owners I know work at least 50 hours a week and often more 
• When you’re not actually working, you’re thinking about the business 
• While you may not have a boss, your customer is the boss which means you have lots of people to keep happy 
• Most business owners I know particularly in the first five years are earning somewhere between $1 to $20 per hour after wages, overheads and taxes
• Business owners seldom take sick days (unless it's really serious), most don’t take holidays 

Just some food for thought if you’re ever thinking about quitting your day job. It's not all sunshine and daisies; it's really, really hard work. Make sure you know what kind of commitment you’re going to make. This is Sparta!

Innovation Accounting

Originally published at Cirillo Hooper & Company

While there has been very little discussion of it in the Australian accounting profession, I thought it was high time I discussed 'innovation accounting' as coined in Eric Ries' bestseller The Lean Startup.  

In its simplest form, innovation accounting Ries describes as "An Accountability Framework That Works Across Industries." 

The notion behind innovation accounting is that while traditional accounting, although an integral part of any business, does not adequately satisfy the unique timeliness and relevance needs of the modern startup. The fact is that traditional accounting principles are used measure established business ventures as well as startups as if they were playing on the same field. The fact is the modern startup is on a whole different wave length from established traditional business, and thus the need for a new take on accounting is required.

The whole notion of Lean Startup is about the startup cycle of Build - Measure - Learn cycle, within that cycle innovation accounting plays different roles. I have elaborated on these roles as I see them within each area of the cycle.

Build

-Set a business hypotheses: This is typically the entrepreneur's business idea, but established in a scientific manner to test against. 

"There is a market for widgets."

-Establish a minimum viable product (MVP) to establish real data: An MVP is the quickest way to obtain market feedback and test the business hypotheses without waste. 

An MVP for widgets may be a basic website with to collect preorders or potential customers to register interest to buy widgets that don't even exist yet.  

-Identify quantifiable metrics to monitor progress: The entrepreneur must identify what metrics are of relevance to validate the business hypotheses. 

The metric for validating demand for widgets may include things like traffic, conversion rates and other leading web metrics.

Measure

-Establish the baseline: Once the metrics have been identified, the entrepreneur must use the MVP to establish a starting point to measure progress. 

In our widget example we would set the baseline around the real data obtained from our basic website around the metrics that we set earlier.

-Monitor progress: The entrepreneur must now monitor the performance of the MVP under the original hypothesis. 

For our widget site we would sit patiently and watch the data tick over until we are satisfied we have sufficient data to make modifications.

-Tune the engine: From here the entrepreneur can make changes or split test to drive performance from the baseline to the ideal, all while still monitoring the progress of our key metrics. 

On our widget website we can make any number of changes namely the sales copy and the site design.

Learn

-Pivot or persevere: Having made adjustments to move from the baseline to the ideal, the entrepreneur can either decide to either pivot (change ideas or direction) or persevere with the current business model. 

In our widget example we will either pivot to test the market for doodads rather than widgets, or we can perserve and proceed with our widgets business.

You can see from this example we have gone through a whole business cycle before your tradition profit and loss accounting has even come into play (Hence my previous article: Why your profit and loss statements don't tell you a thing). Even after a business is established, it should still never stop using innovation accounting to run the business.

Stop Trying to Invent the Next Big Thing

Originally published at Cirillo Hooper & Company

This Thursday I will be speaking at Collaborate to Innovate (#C2IADL) on "The Next Big Thing" or more specifically, not waiting to discover 'The Next Big Thing.'

When I was involved with The Startup Club I used to rack my brains with fellow members trying to create the next Microsoft, Google or Facebook. Suffice to say many of my ideas did not make it past validation, and I was getting frustrated. So much so, that I was almost willing to give up on entrepreneurship as a career path and settle into a 9 to 5 in the accounting profession.

By the time I had finished my degree I had noticed several opportunities for massive innovation in my very own profession. I started putting ideas to paper and the rest as they say is history. I am now in the traditional business of accounting, doing some very untraditional things to gain market share and drive efficiency. Moreover, I now have an opportunity to go into other traditional businesses as a business advisor and introduce innovative new concepts.

The point I am trying to make is this: You do not need to be doing something new to be innovating. So if you're stuck trying to invent 'the next big thing', try starting with something you're already good at and innovating from there. It works for us, it works for our clients and it just might work for you.

Who knows?

While you're doing that, you may just discover 'the next big thing' along the way, except now you'll have the resources and experience to make the most of it.

Entrepreneurial ADD

Originally published at Cirillo Hooper & Company

Can’t sleep at night? Can’t focus on one project for more than a day before jumping onto the next big idea? Getting bored of the business you’re in and ready to start a new one?

You probably have Entrepreneurial ADD (Attention Deficit Disorder). My brother David and myself suffer this affliction. I believe it’s from the buzz that comes with the challenge of building a startup from scratch. As soon as it becomes cashflow neutral the challenge is nowhere near as exciting and you start daydreaming about other business ideas.

The important thing to remember at this juncture, is that at cashflow neutral, no-one is really interested in buying your business yet. Further, if your business is at breakeven, then you have a validated business idea that works! The same cannot be said about any of your new ideas.
You need to discipline to persevere because the business, your customers and staff still need you.

Don’t go riding off into the sunset with another business idea just yet, finish (or bury) the one you started first.

Originally posted at Cirillo Hooper & Company

As a small business owner you have to wear many hats. The operations hat, the marketing hat, the HR hat, the accounting hat, the IT hat, the legal hat and many more. This is done out of necessity rather than enjoyment or strategy.

You only have a limited amount of capital and you didn’t want to spend it on web developers, bookkeepers and lawyers, so you bootstrapped and did it yourself. You built your own website, you kept your books on a spreadsheet and you downloaded template contracts and changed a few words. This was done out of necessity, not enjoyment and probably saved thousands. My concern is you also might have a website that scares away customers, a spreadsheet that makes your accountant cringe and contracts as water tight as a sieve.

So when is a good time to stop wearing all the hats? It comes down to cash and opportunity cost. If you believe it is reasonable that you will get more business by having a professional website, then the investment was worth it. If you are spending all weekend doing your books, when you could pay someone a couple hundred to make the problem disappear, then it’s worth it. If the cost of getting a lawyer to review your contracts is cheaper than the potential lawsuit, then it’s worth it.

Sometimes an entrepreneurs biggest enemy can be themself. Know when to take a hat off and start focussing more energy on growing your business.

Photo: http://www.flickr.com/photos/staipale/3963327366/