What is Market Sizing

what is market sizing

Market Sizing

Market sizing refers to the process of estimating a market’s potential. Understanding a market’s potential goes a long way in identifying the potential of a market for a business when unveiling a new product or service. Market sizing is a holistic process that should answer the following questions:

  1. What is the total size of the market?
  2. Who makes up the competition in the market?
  3. Who are the target customers and what is their profile?
  4. What services and products are in the market?
  5. Which trends in the market are the most significant?

Estimating a market’s potential often requires a rigorous approach that ensures all the necessary variables are taken into consideration. The approach commonly adopted is the bottoms-up approach. In this method, the unknown variables are broken down into better-understood assumptions, and then their solutions are evaluated up to the estimate of the total market size. This process requires one to research and also engage in extensive consultations considering that market sizing has a highly distinct nature. Therefore, this process otherwise referred to as a market sizing analysis can only be accurate if the above interventions are executed with a high degree of precision.

What is Market Sizing

A good market sizing approach is often considered so if it produces accurate results that can be relied upon to make significant investment decisions. But, to start there first must be an estimate of the market size. This forecast is essential in establishing precedence for the marketers to pursue or encourage the development of services or products within the market. It is, however, advised to have at least two estimates, created using different approaches before the market sizing is completed. When these two estimates agree, there is an increase in the confidence of the market size range. However, there is always the possibility of the two approaches leading to two different estimates. When this disparity occurs, it is best to conduct a sensitivity analysis to establish the assumptions that are most vital to the process. Furthermore, you are also advised to perform risk reduction or research in the attempt to reduce the range market size estimates.

Market sizing is a highly valuable business tool. An estimate for the market size is a vital ingredient in enhancing a business’s development initiative for any new service or product that it wants to roll out to the public. Therefore, it is essential to reconcile the number of resources directed towards the success of the product or service with the anticipated returns from the market. Doing so will ensure that investments do not end up running a business into unprecedented losses or expenses.

The assumptions used when establishing an estimate of the market size have to be handled with critical analysis. It is beneficial to have the most accurate information on hand when starting a business, or launching a product. You can always consult with a professional that will help identify key indicators, consumer trends and market statistics.

Misconceptions About Outsourced Bookkeeping

misconception about Outsourced bookkeeping

Small and Medium-sized business owners are becoming increasingly wary of the costs of internal bookkeeping. Therefore, some of these businesses have decided to outsource bookkeeping services among other accounting-related services.

However, a sizable number of business owners are still not willing to outsource. It is mainly due to lack of adequate information, or they are victims of false information regarding outsourced bookkeeping.

If you are a business owner, what prevents you from taking the leap and outsourcing your bookkeeping needs? Are you concerned about the security of your finances or you are just a captive false beliefs about the trade?

In this article, we want to explore the common fallacies about outsourced bookkeeping that might be preventing you, as a business owner, from taking that step.

Perhaps the most common myth about ‘outsourcing’ as a word is its synonymy with overseas. Quite many business people hold the belief that to outsource services would mean to contract another business that is not within the country.

This idea makes it extremely difficult to have faith in these foreign companies handling businesses finances.

However, this notion of equating outsourcing with overseas is preposterous and should not hold as it prevents you as a business owner from accessing quality bookkeeping services.

The truth is that outsourcing means merely acquiring services from a source not within your own business. It could be the business in the next building, or right down the block, or on the other side of town or within the country.

Therefore, outsourcing can efficiently be done onshore without having to go overseas.

The next time you are considering to outsource bookkeeping services, bear in mind that there are a lot of accounting firms within your city or in the country that can do an excellent job for you.

Are you a small business owner? Your worst fear is probably the loss of control of your business because you put a lot of financial and time resources in it, right?

I know the notion of outsourcing does very little to quell such fears because it would involve surrendering crucial business information to an outsider. While your concerns are understandable, I assure you that they are entirely baseless.

Contrary to beliefs, outsourcing is an excellent strategy for taking full control of the business. By bringing in the third eye to scrutinize your books, you expose yourself to the precise position of your business.

Therefore, you become better equipped to reconcile the business goals and strategies to improve your operations and financial management for an accelerated growth of your business.

Furthermore, an outsourced professional bookkeeping service provider will always ensure a regular and timely delivery of reports. As such, you will also become timely in making critical business decisions that depend on the bookkeeping records. Doesn’t this scenario place the control of the business firmly in your hands?

Yes, it does.

Another common misconception of outsourcing bookkeeping services is the high costs involved. One thing that most business people seem to forget is that time is of almost equal worth to the money the business makes. As a business person, what would you do with more business time on your hands?

Come up with more and better ideas to improve your operations and generate more profits right? It is precisely what outsourcing bookkeeping services gives the business.

Outsourcing takes from you and the company a lot of pressure regarding time and the energy that might have been spent if done in-house. Therefore, you will have at your disposal more time and energy to carry out other activities involved in the business.

Business data security is a legitimate concern for businesses especially if you are considering outsourcing bookkeeping services. Therefore, given that a business accounts are highly confidential, it is only natural that you as a business owner would cast aspersions to the prospect of sharing this information with a third party entity.

I’ll have you know that, however, no data is ever really wholly safe the world over. From the little notes you scribble down in your notebook, to the hundreds of files you store on your drive or data kept in the large servers of big corporations, susceptibility to a data breach is measurable.

However, the truth of the matter is that professional accounting firms from which you can outsource bookkeeping services employ the latest hi-tech data protection technologies.

It is in tandem with the sensitivity of the information held within the bookkeeping recordings of business. Therefore, statistically and logically, a data breach is likely to occur within your business or home as opposed to the professional accounting firm to which you have outsourced bookkeeping services. Are you still having second thoughts about outsourced bookkeeping?

Many entrepreneurs have fallen to the above misconceptions about outsourced bookkeeping. As a result, they have regarded it with a high degree of skepticism and as such have failed to grasp the extent of benefits that would stand to achieve from it.

These suspicions are unfounded and must be handled with the complete disregard that they deserve. Even though it is natural to have reservations about the prospect of sharing vital bookkeeping records with a third party, the benefits accrued far outweigh the risks involved.

Therefore, in attempting to address the most common misconceptions about outsourced bookkeeping, I hope I have given you reasons to take the risk and drive your business to another level.

The Benefits of Key Performance Indicators (KPI) to Business

Key Performance Indicators

All companies know the importance of customer service, employee satisfaction and office organization. One important aspect of businesses aiming for success is to identify and focus on key performance indicators (KPIs). KPI are used in business to measure, monitor, and manage performance across business areas. They can be used to focus on employers and employees on the details of what action to take to improve their business.

KPIs focus on the aspects of organizational performance that are the most critical for current and future success. KPIs represent an invaluable form of business intelligence and when determined by company, can educate everyone involved on a strong team approach to measurable targets.

The process of monitoring, managing, and analyzing KPIs can be time consuming. For this reason, it is important that selection of metrics address the specific needs of the company. The main characteristics that help create relevant KPI include:  the need for accurate measurability and an understanding of the actions taken to correct, maintain, or otherwise alter the outcomes predicted.

If a company relies on having a strong web presence to generate leads, an example of a relevant KPI would be the “bounce rate.”  A bounce rate represents the percentage of initial visitors to a site who “bounce” away to a different site rather than continuing to other pages within the same site.  The conventional wisdom is that visitors who bounce do so for lack of compelling reasons to explore on.  Typically, the target for bounce rate is 30 percent or lower and it needs to be updated daily.  If the bounce rate is higher than 30 percent, then the web content should be modified to help lower the rate.  This satisfies the characteristics of a KPI and it is apparent how valuable it is to continually monitor the bounce rate.

If a KPI has been correctly assigned to a company, it will have a”flow-on effect” which will in turn benefit the company. The entire office can monitor and fix problems associated with the success rate of the company’s KPIs.

In addition, KPIs can create a type of benchmarking within one’s business.  A person can see the present quality of their business and with the use of KPIs, they can envision the business they want to become; they help companies become what they deem the epitome of success through the process of managing, monitoring and analysis.

Performance dashboards are generally used to facilitate the easy monitoring of an organization’s KPIs.  The dashboard will check the rate at which the chosen KPI is succeeding (or failing).  If the results of the KPI are not improving, the dashboard will visually alert staff that changes must be made.  It will then be possible to analyze what could have caused the shortcoming and allow staff to quickly remedy the situation.

Performance dashboards facilitate getting the most important, actionable information to the needed users appropriately.  As performance dashboards have the data needed to measure a KPI in one place, it is easy to see if the KPIs are succeeding in their purpose or not.  Such dashboards allow employees at any level to monitor information which represents the outcome of a KPI.  Dashboards are a topic onto itself and beyond the scope of this article.

Every business person should strive to create exceptional KPIs, as they show the ways in which troubled companies can fix their problems and successful companies can proactively plan and mange continued success.  Companies will obviously benefit when employees can readily understand what needs to be done through the presentation of easy-to-read dashboards allowing them to make the most effective follow-up decisions.

Let us know how we can help identify and create great KPI reporting and dashboards to help increase your profitability and efficiency!

Cost Benefits of Virtual Bookkeeping

Management Consultant Firm JA Simon

Benefits of Virtual Bookkeeping

The rise of the virtual community has greatly enhanced the way we do business. This is especially true for business owners when it comes to bookkeeping. It has become increasingly practical to outsource these services. The time saved by outsourcing can be better spent focused on growth and management of your company. Finding a great virtual bookkeeping partner can change your business for the better.

virtual bookkeeping image

There are several reasons beyond the overhead reduction that outsourcing can make sense for your business. On site accountant or bookkeepers create a large amount of overhead. From managing software, to training and recruiting employees, the burdens of in house bookkeeping staff consumes valuable resources. There is a growing number of business that have adapted to the virtual, low-cost accounting marketplace. Research from Sage found that almost 75% of accountings predict that online services will become the largest aspect of their working practice sin the next several years. What some business owner’s fail to realize is that there are indirect cost savings that can be attributed to outsourcing your bookkeeping needs.

Using a virtual or outsourced bookkeeping service does not mean buying software and working the system yourself. The human factor and customer service provided is what creates a dynamic working relationship between your business and your bookkeeper. Bridging the gap between people and software is a great business model and something you should consider when selecting an outsourced service.

The largest concern for most business is the security and integrity of their business data. Servers and other areas that financial records are stored should be appropriately secured. When using an outsourced service, there is no concern for employee access to the important data and the information can be stored electronically. For electronic storage and transmission, it is good to know what encryption method is used. You should always ask your prospective virtual bookkeeper if they log into secured servers and there is good monitoring of the dissemination of data. If your bookkeeping service allows client access to data from a cloud storage, then you’ll want to know what security features are in place to protect access by third parties and limit access to yourself or key members of your business. The costs of managing software, server upgrades and maintenance, and important file storage are one of the many reasons that the outsourced bookkeeping service can help save your business money and mitigate areas of concern.

Research has shown, companies that use virtual bookkeepers have been more successful at growing their business, increasing revenue, and generating higher margins. A 2012 article by the ACCA cited the access to a professional increased the efficiency of completion and filing of returns, real-time review of their business, and mobile availability as the top reasons for choosing an outsourced bookkeeper. Outsourcing greatly increases the scalability options of your business. You have the option of expanding or cutting back quickly and effectively. Whether your business is in a growth or cost reduction state, the outsourced team can provide you with different plans and the best options to achieve your goals.

Other Benefits

Compliance and audit preparedness are other areas of potential cost savings directly affected by a capable bookkeeping service. In terms of accounting, this means that someone is making sure a company’s financial matters are handled in accordance with federal laws and regulations. Running a business is tough enough without the burdening aspect of regulations. Ignoring these factors can have huge financial consequences for your business. Whether it is payroll or payment processing, the details of mitigating financial penalties and comprehensive compliance can be daunting.

Outsourcing your bookkeeping duties to a reliable group can make a significant impact on your growth and profitability. From compliance to regulation updates, virtual bookkeepers have the tools and capabilities to better focus on the complexities of everyday financial reporting. Your outsourced bookkeeping team provides all the benefits of a financial controller, software specialist, and full-charge bookkeeper. They are available to explain and help analyze important data in your financial statements to help you make better decisions. Job costing processes improve profitability but are dependent on accurate bookkeeping records and financial statements. Your virtual accounting department allows you to leverage technology to increase mobility and scalability for your business.

benefits of virtual bookkeeping

The oversight of creating high-quality financial statements and accurate reporting are a key aspect of the fundamental management of any business. This allows for the efficient financial planning and strategic growth programs to be based on real-time accurate data from your organization. The partnership created allows for an increase in expertise and experience to help plan and implement the subsequent growth stages for your business. The cost reduction and insightful accessibility of an outsourced bookkeeping service can be instrumental in furthering your businesses growth and profitability. The new age of running your business is founded in virtual cooperation and teamwork. Don’t let the nuances of daily record keeping and financial reporting hold you back. Finding the right bookkeeper can be a game changer for your business.

 

Partner with a virtual bookkeeper today!

To find out how J.A. Simon & Company can assist with your outsourced bookkeeping needs contact us now!