Romy Taormina Carla FalconePsi Bands make mine a million $ business powered by: count me in

My Daily Blog

1. CPA vs Bookkeeper

   August 25, 2009

   Romy Taormina Carla Falcone

   At Psi Bands, we recently had a coaching session on financials. In that conversation, we learned something that was surprising to us…that CPAs look in the past and book keepers look towards the future with an eye on the past. The light bulb went off for us. We have been using a CPA. We thought they were more equipped to help us review our numbers, but what we really need is a book keeper with a great deal of experience in helping to review our numbers, project for the future, and do some serious projections and analyzing. We need to be looking forward and the best way for us to accomplish this is to make a switch. So, we are. Our book keeper’s responsibilities include the following tasks: • Create and mail/email invoices • Monitor outstanding invoices • Post payments • Apply early pay discounts • Post and manage deposits • On a regular basis prepare and send an A/R report • Twice a month prepare and send an A/P report • Pay vendor invoices – cut checks (signing authority to remain with biz owners) • Review the numbers and make recommendations around categories with regards to tracking projects, ad revenues generated by marketing efforts, shipping etc. • Prepare monthly financials • Create reports as needed • Create proformas • Prepare payroll • Provide tax suggestions throughout the year Our CPA will be used to help with filing taxes and misc. questions that arise during the year. In addition to the benefits that the book keeper will afford us in planning for the future, we will also be saving money in monthly fees because book keepers charge less than CPAs. I will be meeting with our book keeper weekly in person in addition to email/phone. It is critical that are intimate with our numbers. They become our friend. Suggestion: hire a book keeper that is bonded so that you are insured fraudulent acts.

2. Ready to super size it with the “Big Box” stores?

   March 25, 2009

   Romy Taormina Carla Falcone

   Going “big” is not for the weak at heart. And I don’t mean supersizing it at McDs. When I say “big”, I mean landing that big dream account of yours – maybe its Nordstrom or Babies R Us or CVS. Whoever it is, are you ready to do business with the big retailers? Large retailers are demanding. Here’s some food for thought (one might think I am hungry with all these food analogies).They want large amounts of inventory. Are you prepared to deliver it? Can you handle the cash flow between the time you manufacture and ship product to payment receipt?Speaking of inventory, are you prepared to handle fulfillment?If you deliver late or mislabel a box, ding. They will impose fees that will make your stomach turn.Can you handle the follow up inventory when they place the re-order (you want the re-order!)? What if they don’t pay Net 30 but rather pay you “on scan” (meaning you don’t get paid until the item gets purchased)…can you handle the cash flow?Some retailers impose “holds” on the initial order to account for possible returns. Cash flow issue again.Do you have EDI? Electronic Data Interchange might be a requirement. http://en.wikipedia.org/wiki/Electronic_Data_InterchangeThey might require a large promotional funding agreement of let’s say $10K for all first time vendors. They want you to support sales.No final sales here. It’s a guaranteed sale (i.e. they can ship it back if they so choose).Do you have product liability insurance? Depending on product category, you may need a $2M policy (or more). More cash outlay.Do you have a solid advertising or PR plan in place? You not only have to get on the shelf, but you have to stay there. How will you drive sales?Be prepared. Know what is expected of you. Ask lots of questions. It's a huge learning curve so go it slowly, one retailer at a time. The pie is yours for the taking, but take one bite, one piece at a time.Note: online retailers are much easier to deal with – less overall demands. So, if your dream account is Nordstrom, for example, consider Nordstorm.com at first and see how it goes.

3. Partnering or going solo?

   March 18, 2009

   Romy Taormina Carla Falcone

   Have you considered a business partner? I thought I would flesh out some of the pros/cons to having a partner(s). Some of you may have been on the fence about this choice, or maybe never considered it. Maybe it’s for you, maybe it’s not. But worth pondering, I think.  As some of you know, I have a business partner. What most of you probably don’t know is that I have two business partners, Carla and Pieter.   When we started Psi Bands, there was so much to do. The idea behind Psi Bands was literally the “mother of invention”. Carla and I suffered from terrible morning sickness during our pregnancies and we found nausea relief from wrist acupressure – but we were dissatisfied with existing products on the market. We set out to create something both functional and fashionable for others who suffer from nausea. The idea for Psi Bands was born. But, where to start? We found the answer in each other – and in Pieter, a product designer/developer. We created a team where the sum of the parts was greater than the whole. We combined our strengths and core competencies to set out on our entrepreneurial journey.  Pros to a partnership You can leverage off each others’ strengths and talents. You can benefit from differing opinions – arriving at decisions that are well thought out. You can spread out your financial investment. Especially during the current economy, this could be a major consideration. You have an instant support system. This is important for morale, especially when there are bumps, and there will be bumps.  We know we are in this together.  Cons to a partnershipYou are not the sole decision maker. Your business partnership is like a marriage where you must listen, be respectful and compromise. You will be faced with disagreements. But, at the end of the day, assuming you are in a good partnership, these disagreements are highly beneficial – leading to more effective decisions. You have to coordinate schedules to make decisions. It ads a layer of complexity. You need to have systems in place to effectively execute. In our case, we all work remotely, all from home-based offices so we don’t pass each other in the hall or lunch room. We have regularly scheduled weekly meetings on Skype and communicate as needed via phone and email. It’s not always easy, but it meets our individual needs/schedules. All 3 of us are parents with young children spanning in age from 2-9.  OtherYou should have a well defined and legally documented partnership agreement in place. What happens if someone dies, becomes disabled, goes through a divorce, wants “out” of the business, etc. These are all realities. No one goes into a partnership thinking that these things will happen to them, so it should all be clearly defined from the get go where all partners and spouses have signed the dotted line.  Whether you partner or lead solo, savor your journey.

4. Balancing Motherhood with Work-Related Travel

   March 13, 2009

   Romy Taormina Carla Falcone

   As you might imagine, traveling for business does not come easy when you are also the main caregiver in your family. That is the case for me. I have two boys, ages 9 and 6 ½. They are school aged, which helps, but what about those in between times when the kids get out of school and before dad gets home? Or, those times when travel conflicts with minimum school days or school vacation days like 4 days off during the week because it’s President’s Day? The short answer: it’s mind boggling. All those “things” you do as a mom that come naturally that you don’t normally download to anyone else. Oh, like packing school lunches, making sure the library books are in the kids’ backpacks when it’s library day, giving the cat her medicine on specific days during the week…you get the picture. Now you have to write is all down for your spouse to handle. And, you have to coordinate childcare between the time the kids get out of school and the time your husband arrives home from work. This means many phone calls/emails to/from friends and relatives asking for help (the kids like their play dates). It also means notifying the teachers where the kids are supposed to be in the event of a snafu, and it all needs to be clearly outlined so your husband knows where to pick up the kids when he gets off of work. Are you tired yet? I create an Excel Spreadsheet broken out by day. Everything from what day the garbage cans need to go to the curb to ensuring that the Valentine’s Day cards (that I worked on with my children ahead of time) get put in their backpacks so they can exchange them during their parties.  In prep for these trips, I make dinners ahead of time (and freeze them) and/or we plan for simple meals.  I do all the laundry before I leave. Of course, the responsibility of my travel does not fall entirely on me by any means. While I am away, my husband steps up to the plate – using that Excel Spreadsheet as a guide to accomplishing those day to day “things”. (He probably appreciates me more when I return, an added benefit, and I am appreciative for his support.) When I am not traveling, I offer to take my friends’ children for play dates, especially when they have work or an appointment. I am fortunate to have a supportive group of friends and nearby relatives.  Do I feel guilty about traveling? No. My husband supports me in this effort. And, I know that I’ve worked my darndest to ensure a smooth transition during my travels by planning ahead of time. I feel my business gives back in so many ways – from our product that relieves nausea, a very common and debilitating problem; to our charitable donations to Fertile Hope; to providing income to our employees/consultants and doing our part to stimulate our economy; to serving as a role model for my boys (working mindfully towards a goal); to providing income for my family to help us meet our personal, financial and philanthropic goals.  Business travel as a mom may not be easy, but it’s worth it to me. And, frankly, those things in life that do come easy are usually not the ones that we savor. It’s those that we work hard at that we typically find the most memorable and the most rewarding.