How much should I save?

How much cash should you leave in your business and how much should you take out?

The generally accepted wisdom is three month’s worth of costs. I don’t know the source of this figure, but this seems about right. If all your income stopped overnight, you would have three months to make plans.

In reality, unless there is a global pandemic, it’s unlikely that your income would all stop at the same time, so you’d probably have longer to find funding, start a new income source, or to ride out a temporary blip. Most income protection insurances take 3-6 months to kick in.

We should also have a similar amount easily accessible to cover our household bills.

The last eighteen months have been tough, but we need to rebuild our reserves ready for the future.

How long would your reserves last you?

What’s the worst that can happen?

I did it! I completed my first triathlon in over four years!

Not only did I complete it but I managed to do it in similar times to fours years ago when I was much fitter.

It wasn’t fast and it certainly wasn’t pretty (everybody’s bum looks big in a wetsuit!) but a large proportion of the entrants were DNF (did not finish) and others were DNS (did not start).

And it’s the same in business. Too many people miss opportunities because they never get started.

I’m a great supporter of Bryony Thomas’ principle of overcoming perfectionism by releasing things which are “functional but not too embarrassing” then coming back and improving them at a later date. I write my books quickly to capture my thoughts, and then edit slowly to make sure that my readers will be able to follow those thoughts.

I also use a business coach (as well as being a coach myself) because, although we often know what to do, we never get around to it without somebody to hold us accountable.

So this week why don’t you JFDI (Just F Do It) and perhaps even join one of our September cohorts to help you to do it faster?

Myth busting: build it and they will come?

I’ve seen lots of startups think that, just by buying stock or building a website, they will automatically generate business but, as you experienced people know, it’s a lot harder than that.

How many things do we think will happen automatically?

I buy more books than I have time to read so I’ve had to replace my bedside table with a book shelf, not to mention my Kindle.

I buy new sports kit in the hope that it will get me one step closer to the gym. And don’t get me started on all those people who crowd into the gym in January but are nowhere to be seen by February/March.

I read business books or listen to talks and don’t implement the actions. These days I do make sure that they at least get written onto a to do list on Trello. I get some lovely comments about my books but I wonder if my readers are as bad about implementing as I am?

In an attempt to provide better value for money I set up online coaching programmes to work through the books and more. Each webinar is accompanied by an action list and we have three cohorts a year to work through these together. It may cost more than £14.99 for the book but, if you’re anything like me, it provides much better value because things actually get done.

What do you have to do to improve your business and make it work for you?

Efficiency: conserve your strength for the long haul

Lots of triathlon and sports metaphors to come. Triathlons, like running a business, are an endurance event. We’ve seen the Brownlee brothers and others helped across the finish line (there’s another message there about needing support, even in individual sports). Speed alone is no good if you can’t make it to the final goal.

Working long hours just won’t crack it as many folk are finding out after working through stressful lockdowns without a break.

Personally I like my 25 hours working week spread over 5 days. I can feel my brain slowing down throughout the day so better to go and do something nice with family or friends, or a bit of alone time rather than push on through (unless there’s an exceptional deadline).

Whatever hours you choose to work you want every one of them to count and that’s why we focus so much on efficiency on the online courses and couching sessions.

Look for one thing you can do more efficiently this week; perhaps by automating or delegating it or just improving the system.

What’s so special about 30 days?

What are your payment terms? Do you even have stated payment terms?

Most businesses seem to opt for 30 days from the end of the month of invoice which means that the wait an average of 45 days to be paid.

But accounting systems are far faster now than when I joined the workplace 30 years ago so surely it’s easier to register, approve and pay invoices much faster now than all that time ago? Personally, as a small business, I find it easier to pay invoices as they arrive to minimise admin time. But not everybody is in such a strong cash position.

My standard payment terms are 7 days from invoice so an average of, well, 7 days. And most of my clients pay me by direct debit which costs a few pennies but the integration between Gocardless and Xero means that it does all the bookkeeping entries to so saving me precious time.

When speaking at conferences I’m always paid the full amount before I travel to the event as organisers like to take a few days off afterwards rather than fuss over invoices.

Is it time to review your payment terms to improve your cash position and, in turn, to pay your suppliers faster?

How do you want to spend your day?

When I first set up my business I had a vision of how I wanted to spend my days and you probably did too.

I wrote mine down but you may have a vision board or another means of capturing what you, personally, wanted out of your business. (If not then you should consider doing this now)

How does your typical day compare to this ideal?

Over the last 16 months many of us have drifted away from this but we now have time to catch our breath and make improvements. I could tell of the benefits of a decent business coach to make things happen in your business but you can still do things for yourself.

What ONE thing can you do today to move your business closer to the business you originally dreamt of? Now do it. TODAY.

Periods and menopause – for the men

These are often seen as women’s issues but, as about half the workforce are female, they’re things that employers need to know, whether they are male or female.

By the time women are old enough to hit the workforce they should be able to cope with their periods but some women may suffer quite debilitating pain or heavy flow that will affect their work for a few days each month.

Employers can help by:
• Being aware
• Allowing flexible working
• Allowing home working
• Running meetings to time. How many women have been sat waiting to dash to the bathroom when a meeting is dragging on?
• Being a little more sympathetic on the bad days and save the horrid jobs for another day unless it really is urgent (we’ll still get it done as we are professionals, after all)

Menopause is something else that hits women differently around ages 45-55. There is a period of peri-menopause prior to periods actually stopping when the body does strange things and sleep can often be disrupted.

Employers can help by:
• Being aware
• Allowing for different ventilation in different areas for those hot flushes and for variations in uniform if necessary
• Allowing flexible working
• Allowing home working
• Being a little more sympathetic on the bad days and save the horrid jobs for another day unless it really is urgent

For more information then Lauren Chiren over on Linked in does some great training for men as well as women. She’s a professional whose life was set back because she didn’t recognise the symptoms of her early menopause and now she is raising the profile of the topic so that others avoid the same problems.

Hurdling through Covid

I’m an athletics coach as well as a business coach. This means that I often get called in to make up the numbers for track and field events. I’m not very good at them but it’s easy to collect a lot of points by coming third of three in the less popular events. One of the events that I discovered in middle age was the 400m hurdles.

And, you guessed it, I have an analogy with business life.

400m hurdles may be a longer distance than 100m hurdles but there are the same number of barriers to cross. At the 100m start I can just see a row of obstacles and it is quite intimidating to stare at them while waiting for the gun. The 400m hurdles are spaced out so that I can only see one at a time and there is time between them to recover my stride before focussing on the next challenge.

For me, and for most of the accountants and business owners that I coach, the last 15 months have felt like a very long 100m hurdle event. Obstacles coming straight after each other with no opportunity to recover in between.

Now we’re heading back to a new normal which is more like the 400m event with time for recovery between each hurdle. It is up to us to make the most of the flat bits to recover and prepare as well as to move forwards, ever forwards.

Have you booked yourself a holiday yet?

Have you got your self a post-Covid plan? Can we help?

Will you return to the office?

There’s still a big debate over returning to the office. Personally I was remote before Covid and I intend to remain so as I coach accountants and business owners around the world.

In favour of the office:

  • Casual conversations and useful remarks
  • Easier to focus
  • Social
  • Dedicated space and resources to work better
  • Easier to supervise and train staff

In favour of home working:

  • Easier to focus
  • No commute
  • Saves some childcare
  • No micromanaging
  • Better Covid risk management

In practice most organisations will probably opt for a hybrid approach but do watch out for

  • Creating an ‘us and them’ division of those mainly in the office vs those mainly at home
  • Mixing online and offline meetings. Will somebody go into the office just to sit on a Zoom call with clients and colleagues working from home?

Whatever you decide to do needs a thorough risk assessment and discussion with your team about their own concerns and preferences.

AC12 efficiency

I’m a Line of Duty fan and one of the things that really impresses me is their evidence packs. It’s like an enhanced audit file where everything they say has supporting documentation.

I only wish that my own business documented everything as well. I’m pretty good at making notes and writing processes but often create a second document rather than updating .

Do you document all your processes for yourself, for new starters, and for possible automation? Do you download all email attachments to a separate document management system? I’d love to get some idea of how everybody keeps their client/customer information and their standard operating procedures.

As a chartered accountant I have to make sure that, if anything happened to me, another qualified accountant could step in and keep Minerva Accountants ticking over using my procedures and notes.

Is your paperwork good enough? Would your business survive without you?