What the world of entertainment can teach you about your business….

I picked up a very interesting time management tool this week from SUCCESS magazine’s interview with Dan Sullivan.  Dan is one of the world’s most revered business coaches and has been in the game for over 30 years.

He talked about his experience of advertising and entertainment and how he used a similar way of working in business.

Performers have 3 types of day.   There is the performing day, the day that they are on stage.  The back stage day, which would be the day they rehearse and sort out any other backstage issues.  Then there is the free day, which is their day off.

Nothing unusual so far.

But Dan goes on to explain that we as entrepreneurs can use this principle in our own business days.  Rather than having every day the same with the same level of intensity, he suggested splitting your days into 3 types of day.

The performing day would be the day that the key results (money) is produced.  So for most business owners, this could be the day that you are selling to customers or prospects or it could be the day that you produce the most work.  Either way, it is the day that results (money) happens.

The second type of day is the buffer day that sits around the performing days.  This is where you would be sorting out everything that supports the performing days.  So it could be financial, administration, internal meetings, training – anything that ensures that the performance on the performing day is optimal.

Then you have the free day, which is the day where you don’t do anything on the business.  This is the day where you are able to relax, let your mind wander and rest. 

The overall idea is that you are able to really focus your energy into these different types of day rather than doing everything at the same time.

Let me know on russell@rsaccountancy.co.uk if you try something similar.

The biggest problem with your year end accounts…

If you are a business, you have to do year-end accounts for the tax office.  If you are a limited company, you also have to do them for Companies House.  You don’t get a choice in this, they have to be done.  But even though it is compulsory, year-end accounts can still tell you lots about your business.

But there is one big problem about year-end accounts……

To use financial statements that you see once a year to run your business is the equivalent of timing your toast with a smoke alarm.

i.e. by the time you actually get to look at the accounts, your business could have already been burnt. 

I was having a conversation with my dad today (just before checking out ‘the cabin in the woods’ at the cinema) about the speed of change in the economy.  Fifteen years ago, could we really have predicted the demise of book and CD shops?  Will Facebook really be around for another 5 years or will it be replaced by something else?

If you are looking at growing your business, you have to have up to date numbers.  Even the fastest turn around on year-end accounts that we can do, which would be 30-45 days after the year-end, is too late if you are running your business from your accounts (which I argue, is essential). 

I get most of my numbers a day after the month end and we look over them to see the trend and see what we can learn.  If I’m looking at my numbers even 30 days after, this could easily be too late.  By the time, you’ve figured out there’s a problem it’s often too late to change it, or if it isn’t, it’s too late to make an immediate impact. 

The key is to get regular reporting in the business so that you are always ahead of the curve.

 

What Ben & Jerry can teach you about pricing….

Pricing is a massive area in business that is often ignored by many business owners.  This can be a huge mistake since it can be the difference between making a profit or making a loss.

When they started, Ben and Jerry were making their ice cream for three years before they got any better than break even.  They would have continued to just break even if Ben’s dad hadn’t stepped in.

Ben’s dad was an accountant (hurrah!) who challenged them on their pricing of their ice cream.  Ben’s dad could see that they were trying to sell a quality product which wasn’t reflected in the price.  He challenged them to raise their prices.

Ben and Jerry were reluctant as they saw the reason for them not making a profit was because of overscooping, waste, expensive labour costs, bad employee scheduling – in short, inefficiency.  Ben’s dad responded by arguing that they couldn’t turn all these inefficiencies around, they were only human, but they could increase their prices.

Ben and Jerry followed the advice and the rest is history.  What we can learn from this? 

Ben and Jerry ice cream didn’t become profitable because they raised their prices.  Anybody can raise their prices.  What Ben & Jerry did was to have a price that matched their value proposition to the customer.  The customer was happy to pay the price for such quality ice cream.  You can’t price for 100 percent efficiency but it doesn’t matter that you can’t.  Your price should reflect what the value is in the eye of the customer.

As the great business thinker, Peter Drucker, says - the point of a business is to create wealth for its customers not to operate efficiently.  Many businesses have gone out of business despite being efficient but if you have something that people want, your chances of great success is more likely.

4 Amazon Kindles, 1 Apple ipad and your tax return…..

Every year I rack my brains to come up with a way to entice my clients to send their tax return information to us as early as possible.

There are lots of great reasons to get your tax return to your accountant quickly. Firstly, you can get access to your numbers quicker.  Secondly, the quicker you know your tax bill, the longer you have to plan how you will pay it.  Thirdly, it can affect the payment on account in July and in some cases decrease the tax bill OR get a tax refund.  Fourthly, if you are due a tax refund, you’ll get your hands on the money quicker if you get your tax return submitted

Anyway, lots of great reasons.  Some clients usually respond but not as many I hope.  So this year…..

If you are a client of our firm and you get your tax return information to us by 31 May 2012, you will be entered into a prize draw of 4 Amazon Kindles and 1 Apple ipad. 

I’ve already announced this through emails BUT even with the volume of people who have responded, this will be the best chance statistically to win an ipad or a Kindle that you will ever get. 

If you are not tempted by this, can I just say that the Amazon Kindle is simply the best thing I own, better than my cool car, better than my phone, better than my house (although I need my house to read my Kindle).  I usually read a book a week, the Kindle has enabled me to double that.  If you do have one, any book recommendations are welcome.

So if you don’t have one, make sure you enter the draw.  I can’t comment on the ipad, I don’t have one but everybody who does have one raves about them.

Hopefully, this will be enough to get your tax return in soon!

How not to have a double dip in your own business…

Yesterday the statistics were released on the UK economy for the first quarter this year and the news wasn’t great.

The economy had decreased by 0.2% in the first quarter.  Since there was a decrease in the last quarter of 2011, this meant that there were two consecutive quarters of negative growth which means that the economy is in recession.  Since we had a recession in 2008, this is now officially a double dip recession i.e. we haven’t recovered from the first recession and are now decreasing again.

In all likelihood, it looks like the negative 0.2% will be upgraded when more data is confirmed so it may not be as bad it looks but either way it isn’t great for the UK economy right now. 

I could happily blog about the politics of austerity and whether or not George Osborne will save the day in the end, but you are probably not reading this for my political opinion.  My accountant opinion is this:

The UK economy is the total of all the economies of all the different sectors.  Some of these sectors are doing great and some are doing not so well.  Within these sectors, there will be types of companies that are doing well, some not so well.  Within these companies there will be people who are doing really well and some not so well.

You can’t control the UK economy but you can control your reaction to it and actions day-to-day.  If you believe that the economy is the main reason why your business will be or not be a success, that’s one way to look at it.  If you believe that your business success is down to you and only you, nobody else, then that’s another way to look at it.

The business leaders who I know who are doing really well, without exception believe in the latter.  They are in control of what they can control and don’t care about what they cannot.

The tax that nobody wants to think about and why you should

If you hadn’t noticed, there are many ways that you can be taxed (did you know that almost 80% of the cost of petrol is actually tax?).

 The majority of tax questions I get asked concern income tax, corporation tax, VAT and capital gains tax.  But there is one tax few think about and only when it is too late….

Inheritance tax

This is the tax that you get hit with when you die on everything you own (your estate). 

It is probably the ‘die’ bit that puts this tax saving opportunity off of the urgent list.  Nobody want’s to think about their own death.  Also, many people are under the impression that if all the money is left to their kids, everything will be fine.

Not so.

It is this sort of thinking that will get you heavily taxed and why you personally may not be around to feel this pinch, your children certainly will.  The potential tax on death is eye watering and can take a big chunk from your children’s inheritance.

So if you are worried about this tax, here are some things you can do….

1. Get a will.  Wills can cost between £20 and £2,000.  There’s a reason for the price disparity.  Some wills are tax efficient and some aren’t.  Get one that is.

2. Look into trust planning, this is  great way of tax planning for your children’s inheritance

3. Regularly value your wealth so that you know your numbers and potential tax bills, keep your eye on it.

4. If you have started to plan for inheritance tax, its well worth looking at other protection such as keyman insurance and shareholder protection.  It is well worth planning for any future problems since it could save you a great deal of money.

If you need any help planning for the tax that nobody wants to think about, feel free to email me on russell@rsaccountancy.co.uk

 

 

3 yipping marvellous tips from a networking dog

An interesting thing happened this morning.  I have been part of a BNI networking group for 3 and a half years and the thing that happened this morning was definitely a first for me and for most of the group.

During Andy Simpson’s 10 minute presentation (from Fast signs http://www.fastsigns.co.uk/857) on his business, a dog appeared in the room.  It was a small dog and seemingly friendly.  He (or she) appeared from nowhere and began to sniff feet and make himself known to the rest of the group.

Andy then said to the group that he was handing over his presentation to his assistant (the dog).  Of course, he was joking.  The dog was NOT Andy’s assistant.  However, I did catch up with the dog after and asked him what made him come along to the group.  He began to give me 3 top tips on networking which I found very interesting so I decided to blog them.

1. Always sniff out the referral opportunities.  There are always chances to refer people to your contacts but they can easily be missed.  Keep your nose out for these opportunities.

2. Your network could be several hundred but you really have to focus in on the people that are going to be pedigree contacts for you.  They may be similar sectors or just get along with you, but there’s no point being chums with everybody, pick the people that you think could be a referral partner.

3. Always refer in confidence.  It is barking mad to refer on to people that either you haven’t tried yourself or don’t have confidence that they are going to do a great job.  Make sure you really do know the person you are referring, iff the referral doesn’t work out, you’ll be the one that will be hounded by your contacts.

Thanks Dog for those great tips (I didn’t catch his name – if anybody knows, please email me)

 

 

5 more effective ways to communicate…..

One of the things about being an accountant is that I work with numbers.  I love numbers.  But  not everybody does and it is great fun helping clients understand the numbers in the business, what they mean and what they need to change them for the better. 

Because numbers is a turn-off for many people, the pressure is always on for us to be excellent at communication since we are driven to be able to explain numbers to our clients (without them having to become accountants).

Whilst I think we do a pretty decent job at doing this with our clients, I am always striving to be better.  Which is why I was slightly bewildered this morning when I managed to mis-communicate to about 3 of my team inside an hour.  It could have just been a Monday morning but it really made me think, despite all the reading I have done on communication, how much SHEER EFFORT it is to communicate effectively. 

With that in mind, here is my top 5 on more effective ways to communicate, and this is for me as much as it is for you.

1. If the person you are speaking to speaks at a slow pace, speak slowly.  If they are speak at a fast pace, speak fast.

2. Don’t interrupt.  Ever.

3. Always use the classic line ‘What I am hearing you say’ rather than the common ‘What you are saying is…’ much more polite, and accurate.

4. Listen, actively listen (you can use this tip for your spouse if you like)

5. Check that they have understood what you have said with the rather time-consuming but mostly effective – tell them what you are going to tell them, tell them, tell them you have told them

6. Don’t get angry.  Or irritated.  Or bored.

7. Remember, if you can crack communication, you can conquer the world.  Probably.

 

What I used to think about brand and what I think now….

When I started my business I was a real novice in the concept of branding.

I never really understood why people would spend so much time and money focussing on their logo, name and stationery.  To me, that’s what branding was, just some graphics.

That was a long time ago because I was soooo wrong.  Having a number of clients who are brand specialists opened my eyes to what branding was all about (clue: more than the logo), but also, one of my clients has had a major re-branding exercise which really encapsulates my current thinking on brand.

I’m no expert on brand (I know many who are) but I am currently reading a fantastic book called ‘The Brand Promise’. 

The book talks about not what you do for your customers but how you make them feel.  This is such a great question to ask, ‘how do you make your customers feel?’  There’s only one way of finding this out of course, by asking them (go on, I dare you), it should be enlightening.  The Brand promise is setting up what you will do for the customer and what they will come to expect.

There’s many great brands out there who do this, one of my favourite’s is Starbucks.  Starbucks is not a coffee shop it is ‘the third place’ between work and home.  The place where you can enjoy a really nice cup of coffee in relaxing surroundings and unwind, do some work, chat with friends, read the paper or a book.

This is Starbucks promise and as far I can see it is a promise kept.  Think about your own business in these terms, what is the promise that you give to your customers, do you keep it?  Does your team know it?  What are your brand values? 

Many of your competitors won’t come close to asking these questions so it is well worth exploring this with your team and getting clarity on what your promise is to your customers.

The top 5 things to do on a Friday…..

The old gag goes, “I give 110% to my job, 10% on Monday, 30% on Tuesday, 30% on Wednesday, 30% on Thursday, 10% on Friday”.

So if you were feeling a bit 10% today, here are some things to do on Fridays:

1. Friday morning is the best time for sales, your more likely to get through to people you want to speak to, people are generally friendlier and less time pressured – so get on that phone!

2. Most people are winding down for the weekend, therefore if you start to maintain a consistent level of productivity, tackle a few tough tasks and you will feel amazing on Monday

3. The phones will be ringing less so catch up with your team.  Do some informal 121s, grab people for some internal meetings, people will be more focussed since there will be less customer queries.

4. There is a rule that says ‘don’t do meetings on Friday afternoons’ – but there’s nothing wrong with them, so do them!  There’s no point blanking out part of the week.

5. Have a quiz.  In our office it would be a tax quiz or a VAT quiz, in your place of work it could be something less fun or interesting but give it a go.

6. Catch up with those emails that contain information, grab a cup of coffee, put your feet up and digest all the info

7. Same as 6. but any magazines, subscriptions that you have

8. Dress down (not for me, but many like to)

9. Buy loads of chocolate for your whole team, you’ll have many takers

10. Clear your emails, its fun going to the weekend with a clear in-box and the emails will slow down on Friday afternoon

11. If you want to take a day off, Friday is the best since many people are doing the same thing

12. Spend some time planning next week

13. Review your numbers for the week (my favourite)

Have a great weekend!