We see it all too frequently, businesses of all sizes getting into financial trouble and struggling to pay their suppliers, the taxman and their own staff. This can happen because the people running the business are so focused on their product or service or customers that they forget to take care of cashflow management, which is key to sustainable growth. Cash is the lifeblood of every enterprise, but although entrepreneurs want to make money, ironically, they sometimes forget about cash.
Recently we saw a marketing services business that made lots of sales and had great service delivery, but could not deliver its services at a profit and made so many mistakes with its invoices that it struggled to get paid, even when the customer was happy with the service. They were growing too quickly and could not manage the business they had become.
We live in strange economic times. Banks are not supporting businesses to anything like the degree the economy needs, while at the same time, too many businesses operate a culture of slow payment to their suppliers. This is a top-down problem. Too many of the largest UK companies pay slowly and this trickles down through the rest of the economy.
This means that you must take care of yourself and implement strong cashflow management in your business. Manage your outgoing payments, while getting everyone who owes you money to pay you as soon as possible.
Dealing with payables:
And reflect your cashflow management in a cashflow model, so you know where you stand all the time and can predict and negotiate bumps in the road ahead.
© Michael Austin, founder and managing director of Blue Dot Consulting, a firm of chartered accountants focused on small and new businesses in southwest London.
Governments and blue chips think they're talking and marketing to smaller or owner-managed businesses, but they're not. They don't know how to talk to owner-managed businesses. They don't even realise that small businesses have a separate language and way of being.
There are more than four million small businesses in the UK and they employ 12 million people. All of my qualitative research shows that owners of the so-called 'small and medium-sized' businesses feel ignored and sold to in an insulting manner.
Small businesses are not the same as big businesses and they do not make purchasing decisions in the same way. Small businesses are small by choice.
Meanwhile, corporates assume that a small business is just a little big business. Wrong. Frogs are not the same as small crocodiles. They do not have the same mindset.
Most advertisements focusing on the small business market, from banks, IT, software, HR service providers, etc do not communicate with small businesses - they are not creating (or even attempting to create) a relationship or demonstrating values important to their target customers. Most ads aimed at the small business are relatively ineffective because the ad agency fails to understand the needs and wants of their target.
|Bruce, our very own Atom office dog|
The national campaign, Bring your Dog to Work Day, launched on 27 June. It raises proceeds for three major animal welfarecharities and encourages businesses to allow dogs in the work place.
The number of UK businesses with office dogs is increasing. A canine mascot is a common addition to the open plan workspace of many a trendy start-up. But, more than just a fashion accessory, the presence of a dog in the office may have a real impact on employee efficiency and wellbeing. Here’s the evidence:
Countless studies suggest that people who are content in their job are more productive and animal/human interaction has been shown to dramatically lower stress and anxiety.
The National Canine Research Council describes how people who take their dogs to work experience lower stress and increased work satisfaction than employees who don’t take pets to work. The use of dogs in care homes, rehabilitation centres and court rooms in the USA is increasing because it has been proven they contribute to lower blood pressure, faster recovery from surgery and increased oxytocin levels, as well as reducing depression, while increasing self-esteem.
Across the board, dogs in the office can keep the team fitter with a mix of fresh air, exercise and stronger immunity.
Many companies now run dog-walking schemes, where employees sign up to a dog-walking rota. Plus, dogs bring a taste of the wild into a clinical office environment in the form of bacteria we would not otherwise have contact with. Scientists at Your Wild Life carried out studies that found that doggy germs (which, contrary to expectations were not from ‘doggy doings’) help to improve immunity and can reduce allergies and wheezing.
Dogs can help us make friends with each other. Researchers at Central Michigan University found that dogs in the workplace may act as social catalysts and encourage collaboration and bonding. In experiments, people were asked to complete a group task: those groups with a dog in their midst scored higher than teammates in terms of trust, team cohesion, and intimacy.
The workplace can be a dispassionate landscape, where people use language that is corporate and alienating. Throw a dog into the mix and the ice is immediately broken, with a disarming canine cocktail of crotch sniffing, face licking and lashings of affection, regardless of the recipient’s status!
Leaving a dog alone at home can cause it undue stress and anxiety, and the more businesses allow dog-owning employees to bring their dogs to work, the less dogs will suffer or be taken to rescue homes.
Research suggests that going on holiday not only makes you feel good while you’re away, but also helps you feel better for weeks, sometimes even months afterwards.
But how many business owners have taken heed of the advice provided by the Holiday Health Experiment, as reported in 2013 by tour operator Kuoni and Nuffield Health, which urged us to make sure we get away? Huge numbers of us appear not to be resting sufficiently and we know that start-ups and sole traders are among the worst at letting go, fearing leaving their business unmanned.
As much as we know we need it, we can all come up with reasons not to take a holiday (‘I’m too busy’, ‘no-one can look after my business like I do’, ‘I can’t afford to take my foot off the gas’, etc). But whatever reasoning is holding us back, think again, because jetting off has been clinically shown to reduce blood pressure, help us sleep better and bounce back from stress, benefits that shouldn’t be ignored.
But it’s not just about getting away; it’s about completely switching off. Years ago it was technologically impossible to keep in touch on a beach, but now it’s the norm, with emails, text messages and social media with us wherever we go – but only if we choose to have it that way.
As tempting as it is to always have one eye on business, we are risking our health and wellbeing and thereby our ability to perform well at work if we don’t take a proper break. So, the benefits of a complete break are clear, but we are still surrounded by evidence of business owners struggling to switch off.
Earlier this year, Alexander Ehmann, deputy director of policy at the Institute of Directors, said: “You won’t be able to stop people checking their BlackBerry from the beach, and it may be necessary to be contactable in emergencies, but we’d call on businesses to use their common sense and relax when on leave.”
Part of being able to switch off is ensuring your business is covered while you’re away. Holidays are always a challenge, whether for start-ups and smaller businesses anxious about staying in control or for larger businesses juggling staffing levels. In a fast-moving, 24/7 world it can be difficult to let go, but with the technologies and services available today there’s no reason why business owners should not be able to relax and enjoy their holidays.
Returning from a holiday feeling happy and healthier makes for greater productivity and creativity, so don’t be afraid to relax. After all, regular, restful breaks are the best tonic for you and your business.
Smart businesses and entrepreneurs are increasingly getting more hands on deck by using freelancers online. Gone is the need for an endless list of “stuff I need to do” (aka everything). Whittling down your to-do list to the stuff you want to do (and are best at) and getting someone else to do the rest frees up your valuable time.
Across Elance and oDesk there are over 8m freelancers covering over 2,500 skills – that’s a big pool of talent you can tap into. But it’s not just a question of posting a job and then forgetting all about it. Online hiring can make a huge difference to your business but only if you approach it in the right way. Avoid these schoolboy errors and you’ll be laughing.
If you don’t know what you want, you’ll never get what you want. Whether you need a mobile app created or a piece of content written, clarity and details are all important.
The very first question you need to ask yourself is quite simply, what exactly do I need them to do? The more clearly you can define this the easier the process will be. Let’s say your website needs an overhaul. Perhaps you’ve gone as far as you can with free website templates and now need more functionality. Or perhaps it’s time to integrate a customised ecommerce engine that connects your market with your products. Take the time to work out exactly what you need. If you have an existing site, note where you are having issues currently (eg technical problems that come up on a regular basis). Prioritise your wish list into “must-haves” and “nice-to haves”.
If you don’t have the technical know-how to write a really great brief, your first job should be to find someone who can help you craft the brief before it even gets to the freelancer who will actually do the work. Trying to write a brief for something you don’t understand yourself is schoolboy error #1.
In the same way that you don’t buy a car without taking it for a test drive and you wouldn’t buy a year’s supply of wine you haven’t tasted, don’t launch into an enormous project with a freelancer you haven’t worked with before.
Start with something small to test the waters. Bite-size chunks are what you’re after. You could even try giving the same small job to a couple of different freelancers (paying them both of course – nobody should have to work for free). That way you get to see firsthand whom you like working with best. When you’ve selected your freelancer, again make sure the project is split into clear milestones and deliverables – and don’t forget to check in regularly.
You can find talent very quickly online. Often within minutes of posting a job you’ll receive proposals from relevant freelancers and it can be tempting to choose quickly and let them get on with it. Don’t. If you were hiring a full-time employee, you wouldn’t take the first CV that lands in your inbox, you’d wait until you’d had a few applicants, conducted interviews and checked references. All this can happen much more quickly online, of course, where you can see a person’s portfolio and read feedback from previous clients.
The bigger the job however, the more time you should take selecting the right person for it. On Elance, for example, you can conduct a video interview with your shortlisted freelancers to get a better feel for whether they are right. Also bear in mind that often the best freelancers are busy people and they may not have chance to see your proposal right away. For bigger design or development jobs you may be better off posting the job and then inviting selected freelancers to apply. Be sure to tell them why you’ve selected them specifically – flattery gets you everywhere!
• Blog supplied by Hayley Conick, Country Manager for Elance UK & Ireland.
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Telecoms are an essential part of any new business – so you need to get them right from day one. Here are nine of the most common (but easily avoidable) mistakes new business owners make with their telecoms…
Research shows more than 30% of people do not trust and therefore will not contact mobile numbers. Plus, you’ll only have a single voicemail for personal and business calls.
How will you know if it’s a friend or customer calling? Also, you can’t turn off your business in the evening and at weekends, while there is limited functionality for handling a second call and personalising voicemails.
It’s tempting to accept offers of free installation if you sign a long-term contract, but if you expand and/or move you could face penalties for cancelling the contract. Plus, you are locking yourself into prices in an environment where prices are generally going down.
Using inbound numbers such as 0800, 0844 or 0845 creates two problems. Firstly, using 0845 for post-sales service is now illegal. Secondly, if most of your customers call you from their mobile, they’ll get a warning telling them it will cost a lot of money, at which point 40% hang up.
Check contract lengths, notice periods and penalty clauses, and make sure your supplier is signed up to the Telecoms Ombudsman (here’s a list of participating companies).
Are the telecoms flexible and scalable should you expand? If you are working from home, is the number portable should you move into premises?
This can be very expensive compared to organising your own telecoms and they may not release the number should you move out. Some business centres offer to forward calls but this can be costly. Always ask if you can bring your own and if not are the numbers portable if you leave.
Not everyone in business uses Skype, particularly larger businesses. Also, Skype phone numbers are not portable, so when you have outgrown Skype you’ll lose the use of that number.
What do you want them to do? If it is just to take a message you need to ask yourself what value is that adding. However, if they can handle certain queries, that can enhance your offering.
So what are the options? For micro businesses, a simple inbound geographic number can be set up for about £7 a month. For a little extra it can have a voicemail and a whisper facility to tell you that it is a business call.
For larger start-ups, the choice is VOIP or traditional telecoms solutions. The more sites and the greater the likelihood of growth, the more likely it is that VOIP is the best solution. If you’re looking for more sophisticated features then a PBX may be better. This guide and this one will tell you more.
In conclusion, think about your business, not just now, but in the future. Ask the relevant questions of your potential providers and ensure your telecoms align with your plans for the business. If in doubt, an independent telecoms broker can help.