Tag: business planning

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Why it may be best to stay small

Small is beautiful. It’s also less hassle and much more agile.

As the sole director of my business I can hold my board meetings in the shower and, if I come up with a bright idea, I can often have it implemented by evening.

The downside of a small business is reduced cover for holidays and sickness. Especially if your business is just you. On the other hand even the best team will take up your time in managing their time and workload.

Before growing your business beyond you it is worth considering whether this will best suit your personal goals. Instead of taking on more clients and higher overheads you could look at taking on better clients and providing them with more profitable services. Before recruiting staff you could investigate software and other automation.

Bigger isn’t always best.

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More than one tool in your toolbox

When it comes to improving your business you need to have more than one tool in your toolbox.

Although we often start with getting the pricing right we also like to look at other things. My books give you some examples of these but they are broadly:

Efficiencies – implement systems, checklists, automation and delegation

People – get the right people in the right place, suitably trained and equipped, and all pulling in the right direction

Marketing – a baseline level of marketing going on at all times so that you have clients/work already lined up for quieter periods

What else do you do to improve your business?

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Do you know your break even point?

Do you know how many units (and the mix of units) that you need to sell in order to cover your costs and break even?

This is an important figure for every business.

Now you can work out how many units you need to sell to make a particular level of profit.

And finally, you can work out your marketing and sales plan to actually sell that number of units. (Okay, there’s a bit more to it than just working out the numbers but at least you know what you’re aiming for)

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How to work like an athlete

As an athletics coach for endurance events, I’m used to planning training loads that include elements of fast work, long slogs, technique work and recovery.

In your business life this would equate to sprinting for deadlines, putting in sustained effort for maintenance, improving your skills and automation, and resting.

Business owners always seem to forget the resting bit but, if it’s good enough for top athletes, it’s good enough for you too.

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How to get the most out of your team 

Personality profiling is often criticised as it is not an exact science. However, as long as you understand the limitations, it can be very helpful. 

We use DiSC profiling but there are other systems based around colours or you could use Myers-Briggs.  

This helps us to understand our preferred communication style and also how our colleagues and clients like to communicate. For instance, my brief bullet points are probably great for somebody who likes to get straight to the point but there are other personality types that would prefer something longer with more descriptions and examples. 

So here’s an example of how we use it in practice: 

In my previous practice we had an art gallery as a client. The owner was a business person who liked direct communication (like me). However many of their artists joined us and preferred a gentler style. I had to adapt my communications and use a more verbose style to get my message across. It is up to us to speak to clients in plain English and also in a way that they can understand. 

On the other hand we had another wonderful client who was even more direct than me which intimidated one of our junior staff. Fortunately I was able to explain that this was just the client’s usual style and not a criticism of the work and their professional relationship flourished from there. 

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Paying your spouse

Paying your spouse a salary can be a good way to save tax if they are not using all of their personal allowance.

BUT you need a credible job description and they must be paid at least minimum wage. We’re happy to make suggestions of how they can assist you in your business.

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New corporation tax rates

As from 1 April corporation tax rates increased for companies with taxable profits above £50,000. The new rate is 25% for companies with taxable profits above £250,000 with a hybrid rate of 26.5% for profits between the two limits.

If your profits are close to the £50,000 you may wish to consider:
1. Are all your costs allowable for tax?
2. Paying into a company pension for yourself or your employees
3. Paying interest on any directors’ loan accounts that are in credit.

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Are you multitasking or attention switching?

We used to be proud to multi-task.
And then we were told it was wrong as we were attention switching which was less efficient rather than more.
But sometimes it is possible to multi-task efficiently.

This is when we’re doing simple tasks that require little thought. For instance, this tip is a result of me cracking an egg for my breakfast while pouring water into the teapot. Both simple tasks that I was able to do using muscle memory and minimal brain input. I also do those all essential pelvic floor exercises while cleaning my teeth so that I can laugh as much as I like when I’m in that retirement home.

Many people listen to a podcast or radio show while doing doing physical exercise. (I’m unable to do this as my focus super-power means that I automatically block out all sound to focus on the other task)

What little tasks can you combine without losing quality?

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Would you buy a discounted parachute?

It’s a question that Brad Burton asked which got me thinking. (So I hope it will get you thinking too)

Why do we assume that we need to be cheap to be attractive?

Quality is often more important than price. Yes, at Minerva we can use software to churn out accounts fairly cheaply but business advice is much more valuable and that takes time to understand the client’s business. It’s hard to be reactive, let alone proactive, on a tiny budget.

What could you do better in your business if you had a little more time or money to put in? And how much more valuable would that appear to your ideal customers?

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Your business, your goals

When I talk to accountants about how to have a ‘better’ tax return season my assumption is that they want to avoid having to do all the work in a short period but I am aware that some accountants choose to work this way. They deliberately set aside December/January to do nothing but work, and then take most of February as holiday, and work part time the rest of the year.

And you will all have different goals for your businesses.

Most goals are a mixture of profitability, work-life balance, and final valuation on exit. But you might have a specific aspiration to drive a particular car whereas I’m happy with my battered old Skoda when it’s too far to walk/cycle or public transport isn’t suitable.

When we take on new clients the first thing we discuss is what motivated them to set up their business. We do this for coaching clients as well as for Minerva Accountants clients so that we can give the best advice. Not everybody wants to grow an empire. Other people are happy to put in longer hours short term in order to accelerate their new startup.

We run Vision and Values sessions for business owners and/or their teams. But you can read ‘Start with Why’ by Simon Sinek to ensure that you are clear about where you and your business are heading.

You can order ‘Start with Why’ here.

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