… with the help of a shareholders’ agreement.
A shareholders’ agreement is a bit like a pre-nuptial contract. I always encourage businesses with more than one director/shareholder to get one drawn up and, if they can’t afford the legal fees initially, to at least discuss and document the important parts.
It’s all very well going into business with a friend but I really want them to remain friends when the business has ended.
The agreement includes details of how the company should be run and how each director shareholder will be remunerated.
• What if one wants to work part time while the other is full time?
• What if one is out meeting and greeting and bringing in new clients while the other is in the back office fulfilling all the ‘work’ or operations of the business?
• What if one invests cash instead of labour?
• What if one has a long term illness and has to be carried in the business for a year?
It should also contain details of how the relationship should end.
• Can a minority shareholder be forced to sell out because the majority has found a buyer?
• Can a minority shareholder be tagged onto a sell out by the majority rather than be left with a partner they didn’t choose?
• Can shares be part of a divorce settlement so that a divorced spouse becomes involved in running the business?
• Can shares be inherited if one shareholder dies or will the company buy them back?
• How will the business be valued if one or more directors decide to go their separate ways?
• Can shares be sold to third parties or must they be offered to existing shareholders first?
If you don’t already have a shareholders’ agreement in place consider getting one drawn up now.
… One bite at a time. Or so the saying goes.
How do you complete a big project? One step at a time.
Whether completing a tax return, growing your business or constructing your dream house the steps are pretty much the same.
- Decide what the finished thing will look like and when.
- Work out the steps that are needed to get there
- Put the steps in order of what has to be done first and what can be done in parallel. Some steps will be dependent on others. Eg You can’t put windows into your house until you’ve built the walls.
- This is you project plan and can be mapped on software or just a simple checklist.
- Break each step down into bite sized pieces. I like to tie this into the Pomodoro 25minute cycles* but this isn’t always appropriate. Eg writing my books I can do about 2 hours at a time straight off (if I’ve already done the research) so it’s better without interruptions.
- Work out what resources you need for each step. eg You need all the paperwork etc before starting a tax return and you may want a coach or mentor to help grow your business.
- Now that you have the steps and resources add some timings; working back from the final deadline.
- Start. Don’t just dream but take action.
*For more on Pomodoro technique see Pomodoro Technique – Hudson Business Advice
I started, grew and finally sold my first business all while working just an average of 25 hours a week. Some weeks were more but others were less. Here’s what I focused on to do it:
1. Make it a priority otherwise you’ll drift into overwork habits.
2. Focus on the non-work option. Mine was 2 small kids – see my Balanced 10 Talk.
3. Focus while in work – see my articles on Pomodoro Technique etc.
4. Say no to the wrong type of work – learn about marketing avatars in my books and courses.
5. Set your prices to ensure that you cover your business and living costs – see my pricing articles and webinars.
6. Systemise for maximum efficiency – see Scale Up Blueprint talk and course.
7. Automate where possible.
8. Delegate to free up your time.
“If you’re ever lucky enough to be successful in what you choose to do, don’t ever believe your own hype, and remember it could all stop tomorrow.
Do whatever you can do to the best of your ability. Take the job seriously, but not yourself. And most of all, be nice to work with.”
Last month was awards season (congratulations to all the winners and finalists) and, as I often get asked to judge accountancy awards, I thought I’d share some hints for those thinking of entering next year.
- Just like in exams you need to RTQ, read the question, and answer what is actually being asked.
- Evidence your claims. If you say something you should have evidence to support it.
- Do not just cut and paste your marketing blurb or let the marketing department fill in the application. Judges need facts not spin.
- If you have the money it is worth using an experienced copywriter who will be able to use appealing words. But do make sure they follow points 2 and 3.
- If you don’t enter you’ll never know if you might have won.
A bit of discussion on social media this week on whether we will go back to handshakes.
I’ve been informed that handshakes spread more germs than a simple kiss so what do you think we’ll do?
- Elbow touches
- A bow of some sort
- Something else
It’s less important what we do than that everybody knows what is the norm. The rules of etiquette were originally set down to avoid social awkwardness (those making people feel outsiders for not knowing the rules have completely missed the point).
Can we start deciding on the new business greeting?
As you may know I do a lot on social media. Whilst I may not follow the advice of experts I do get business this way, and last year I was ranked 4th in ICAEW’s “social media influencer” table.
Here’s my talk on how to use social media to punch above your weight
But the thing that you must do is BE THERE. People often ask for referrals online and I love to be able to recommend experts that I have worked with. It is very frustrating as it creates a negative impression when that expert does not pick up the referral for a week or more. If you can’t be online every day then do set up notifications.
If you’re fortunate to have a brilliant team it can be quite hard when a member of staff leaves.
Assuming that they’re leaving for the right reasons and that you’ve already wished them well, what can you do for your own business?
Treat this as an opportunity to reorganise your own business.
- Don’t just recycle the original job ad but draw up the organisation chart that you need for the next three years based on necessary skills/tasks, not people.
- Add in the names of your existing team and note any additional training needs they may have for additional skills etc. in their new/enhanced roles.
- Draw up job descriptions for any gaps that can’t be filled by your existing team. This may mean that you now have two part time roles requiring completely different skillsets.
Recruiting isn’t always straightforward.
I’ve had a scenario when I was wasn’t able to recruit exactly the right replacement so what did we do?
We took on somebody with less experience who would grow into the role and dropped all of our D clients immediately to reduce the workload. (see ‘D is for Dross’ on how to do this D is for dross – Hudson Business Advice)
The new recruit flourished and far exceeded expectations. The salary saving almost offset the lost profit on clients who weren’t well suited to our practice. As our newbie gained experience we ended up with a streamlined business even better than before.
This week’s tip is stolen from Andrew and Pete of Atomic. (Sorry guys but I can return it any time you like).
They are amongst my favourite marketing people and almost bounce out of the screen on their videos. But, like all of us, they have their bad days and shared how they coped with a particularly stressful period.
They each wrote down every single stressor that they could think of; even the little things. They then worked out one way of improving each of the items on their list. They didn’t try to make everything go away with a magic wand, but just went with one small improvement for each problem.
For more information on Atomic Marketing have a look at their new website
Some businesses were founded during a recession:
Disney, Microsoft, Google, Facebook and Hudson Business Accountants and Advisers.
No matter how bad things are, we all have to do the right things in order to produce the best possible results:
- Build robust internal systems for maximum efficiency
- Recruit a service focused team to be the friendly human interface between these systems and clients
- Be clear on who our ideal customers are and focus our marketing accordingly
- Have consistent marketing and sales systems rather than relying on good luck
- Nurture our clients through the early days and reward loyalty
- Look after ourselves in order to look after everyone and everything else in the business (it’s why I write so much about self care)
- Look after our team (whether employees, subcontractors or outsourced) so that they will look after our business
- Get your pricing right
If you can manage through the tough times you will be a roaring success in the good times.