Tag: business planning

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If accounts are the language of business learn to say “hello”

It works both ways. Business owners need to understand the story that their accounts tell about their business and accountants need to be able to translate the accounts story into plain English.

Too many people are terrified of their numbers. All those crosses across school books can be quite intimidating. Start to look for the patterns. We can see at a glance if one playing card is higher than another without needing to count the hearts etc on the face of the card. Concentrate on which numbers are higher than last month, last year, or compared to budget. Know whether they should be higher or lower.

And you don’t need to look at all the numbers. Business owners should agree with their accountant and/or business coach which 2-3 numbers to focus on each time.

I feel so passionately that I even wrote a course to help explain it:
➡ Finance for Business Owners

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My life isn’t as perfect as my timeline

Nobody’s is!

I’m all in favour of authenticity but I also hate oversharing. You’re my wonderful clients and business contacts, not my best friends, and there need to be boundaries in every relationship.

We all draw that line in a slightly different place. Although I will never deny that I have dirty laundry I certainly won’t be airing it in public. In spite of my very public social media profile, I’m actually an introvert and a naturally private person. I’m also a positive person who prefers not to dwell on any negatives in my life.

I love social media, especially Twitter, but there is a strange phenomenon where we all think we know each other perhaps better than we really do. The downside of this is that it is surprisingly easy to be the victim of ‘catfishing’ and all sorts of fraud.

There is also a tendency to believe that what we see is the whole story. Whilst some people overshare, others overedit causing real FOMO and other envy or depression in others who feel that they haven’t achieved as much. I love celebrating your successes, but I also assume that you’ve worked as hard as I have and there is blood, sweat and tears behind the picture of you with your latest award.

So here are a few things that you need to know about me that I don’t explicitly mention:

  • Like you, I often think about jacking in my business and taking a normal job for an easier life. Running a business is never as glamorous as it seems on the outside. I think it is this experience that makes me a good coach, even more than my Coaching/Mentoring qualification.
  • Although I’ve generally worked with wonderful teams, I’ve also had to dismiss people. I try to do this legally and as kindly as I can.
  • My kids have grown up into fabulous people that I enjoy spending time with but some days they’ve exhausted my patience. If you have a small business and you’re short on sleep, I completely understand.
  • I’m in the process of getting divorced. Fortunately, it’s all amicable but sometimes I really have to bite my tongue and remember to act like a grown up (and he’s probably doing the same)
  • Some days I find it hard to get started. Without motivation it’s just hard slog dependent on discipline.

I don’t think it helps anybody to have the details of my rough times but that doesn’t mean that everything is 100% rosy.

Do you think you have the right balance between being genuine and oversharing?

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What sort of business do you want to run?

I recently quoted a prospective accountancy client. Part of the agreement is that she would move her paper records onto the software that I recommended in order to be ready for MTD (Making Tax Digital).

She asked whether it was compulsory to use software and whether other accountants would insist on the same. I held firm and explained that it would be an essential part of working with Minerva Accountants as we want all our clients to get the benefits of using software and to prepare early for MTD while we have the time to help them get used to the software and quarterly deadlines. I was also honest and explained that many accountants haven’t started this move to MTD yet.

Would you rather work with an accountant/expert who is preparing you for the future or somebody who will let you do what you want?

This week’s reading has been ‘Rich Dad Poor Dad’ by Robert T Kiyosaki, I think that is a good book for business owners and also for teenagers.

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How’s your memory?

I have the memory of a flip flop (that’s a thong for my Aussie readers but a thong in British English is an item of underwear so stand by for maximum confusion). I remember preparing for interview questions “What’s your worst point?” “I have a terrible memory … which is why I take excellent notes and ensure that everything is properly documented.”

I talk a lot about having systems in your business to improve efficiency and the simplest system is often a checklist. These were great when I was trying to run my first business around two small children as I was always able to pick up again reasonably quickly after interruptions “Mum, J’s dangling from the blind cord” (fortunately it was by his ankle and not his neck!).

I recently stayed at a Premier Inn. I’m happy to mention them by name as their service is usually excellent. But on this occasion the bin in my room had not been emptied before I arrived. A simple checklist before the cleaners left the room would have avoided this oversight.

Checklists are also good for having a replicable process to save reinventing the wheel each time. Especially for things in your business that don’t happen all the time. We have detailed processes for completing accounts and tax returns, for onboarding clients, and for regular marketing work. In an ideal world we’d have a written process for everything but I run a small business with limited resources. For less frequent work we just rely on a quick checklist

I recommend Michael Gerber’s E-Myth revisited for ideas on how to systemise your business (and of course, our own course and coaching 😉)

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Like wildlife on a safari

I love what I do but I also like to spend quiet time away from my business. This is the life part of my work-life balance. Now that my kids are older it provides time for enjoyment and also for rest so that I am refreshed when I get back into work.

We can all benefit from some quiet time in our lives.

I was fortunate to spend my honeymoon on safari in Kenya. As we waited quietly by a waterhole the wildlife drifted into view and we were lucky to see all of the ‘big five’ animals: lions, leopards, elephants, rhinoceroses, and African buffalo as well as some gentler giraffes and zebra.

At home, when I take time to wait quietly or, more normally for me, to walk or run gently, I am rewarded by ideas.

How often do you get away from your desk to get fresh ideas?

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One does not simply walk into Mordor

This is Gandalf’s response in Tolkien’s ring trilogy when he is asked the way to the evil land of Mordor.

As with any challenge Gandalf has three things

  1. A map
  2. A plan
  3. A fellowship/support team

Do you know where your business is going? How will you get there? What and who will you need to overcome obstacles along the way?

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One touch is enough

No, I’m not talking about sexual harassment but about your admin processes. How often do you open an email or look at a task more than once? How many of those would take less than 2 minutes to complete?

Wherever possible I try to handle small tasks just once.

When I receive an invoice or receipt I scan/forward/upload it to Xero immediately so that my bookkeeping is taken care of with no bother. As we have reasonable cashflow I also make payment immediately so that I don’t need to look at the invoice again, this also ties in with my value of looking after small businesses and their owners by paying promptly.

The same goes for emails. Anything that will take less than 2 minutes is done immediately eg a quick answer or forwarding to the right person to complete the task or creating a task to complete later

How do you minimise your admin?

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Celebrating our successes

If you’ve been reading these tips for any length of time you’ll know that I am a great fan of celebrating our successes so that these positive memories remain with us to get us through some of our tougher days.

Well, this year, ICB (The Institute of Certified Bookkeepers) have been celebrating their 25th birthday.

They kicked off the celebrations at their annual dinner where they made me, and a number of other more famous people, Companions of the ICB to recognise our support of the bookkeeping profession (I’m almost as fond of good bookkeepers as I am of a decent cup of tea).

Bookkeepers are the Cinderellas of the accounting world. They do all the hard work that makes us accountants look good. With good bookkeeping acting as a strong foundation we get to do the fancy bits like fairy godmothers producing useful information to help businesses to grow and their owners to achieve their dreams. So it seems only right that they should go to the ball or, in this case, a reception at the palace.

Last week Garry and June Carter, the Founders of ICB invited me to join them at a special reception held at St James’s Palace by kind permission of Her Majesty The Queen, and in the presence of ICB Royal Patron His Royal Highness Price Michael of Kent.

What a splendid way to celebrate their anniversary and here’s to many more.

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Social media

This week I have been up in Scotland speaking about social media and how small businesses can use it to punch above their weight. It’s also a great way for introverts to network.

Here are some of the actions that I suggested:

  • Update your headshots so that you are recognisable
  • Review your introductory information. I like to add a little personal thing to get conversation started eg I’m a triathlete and a tea addict.
  • Arrange to meet one of your online connections in real life to deepen the relationship
  • Next time you attend a face to face networking event connect with everybody you spoke to online so that you can sustain those initial relationships
  • Ignore ‘the algorithm’ which is just trying to promote good content and genuine relationships. Instead focus on creating good content and genuine relationships
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Money, money, money

Most small businesses fail because they run out of cash. It caught out a lot of people who couldn’t cope while they waited for covid funding came through. Hopefully we’ll never have to manage a global crisis of that magnitude again but there are many things that might go wrong for individuals. I’ll talk about business continuity planning separately as I just want to consider your bank balance today.

I recommend reading the first half of Profit First by Mike Michalowicz and I think I’ve written about it before. There are some good principles and the remaining chapters just go into more detail

I have a Starling account which comes with savings spaces and I do monthly management accounts on Xero so I try to ensure that I have the following saved:

  • VAT per Xero
  • Corporation Tax per Xero management accounts (or you can save 19% of your profit)
  • 3 months of overheads in case of illness or crisis which can also be used to buffer any large or unexpected bills
  • Dividends to pay myself later in the year
  • Spare cash to pay into my pension later in the year to minimise my tax

I usually pay my suppliers immediately because, as a small business, it reduces my admin to only deal with each transaction once. You should ensure that you have enough funds to pay your suppliers on or before the due date. A business is insolvent if it can not pay its debts on time.

I also use a Starling account for my personal finances and I use my savings spaces for:

  • 3 months of household costs in case of illness or crisis which buys me enough time to sort out alternatives
  • Savings to replace my car every three years
  • Savings for holidays each year and fun experiences such as watching musicals with my kids
  • Income tax due on my dividends and other income not on PAYE.

It’s taken a long time to build up this financial security so don’t worry if you’re not there yet but, if you’d like a hand with making your business run more profitably, please give me a shout.

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