Tag: businessgrowth

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Process thinking

As you know I really believe in the power of systems for running a an efficient and rewarding business. But what does that mean?

I’m visiting clients at the moment so I had a hotel breakfast buffet. For some reason they had decided to put the plates in the middle of the two hotplates of food. This meant that

  1. They weren’t where everybody expected them at the end
  2. People had to join the queue in the middle
  3. People had to cross over to get from the food on one side of the central queue to the food on the other side
  4. It was all slightly chaotic and much slower than it needed to be

Another common example is the chaos at the tea/coffee table at events. The first thing somebody needs is a cup so these should be at the end. Tea drinkers need somewhere to put their teabag before they add milk (for the non-tea drinkers, tea is a chemical reaction and adding milk too soon cools the drink and quenches the reaction ? ) so they need a spare bowl/bin for the teabag packet near the milk. Getting everything laid out in the right order helps to avoid bottle necks. Moving the table away from the wall can allow people to get their drinks from both sides of the table.

When we first started using Receipt Bank (now Dext) software for processing invoices back in 2013 there was a delay between scanning invoices and the OCR process of around an hour. Our bookkeepers were used to working on one client at a time and complained that they had to wait for the software. So we changed the process to scanning all the invoices for all the clients first to allow time for the first client’s invoices to be ready.

This is the sort of thing that a business coach can often see straight away when observing your business from the outside. Quite often there are quick fixes that can make a huge difference for little effort. Generally the big wins require longer projects and a little more planning

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Managing your interruptions

Interruptions can be a real problem as, in addition to the time they take, they also disturb your train of thought. Here are a few tips for managing some of your interruptions.

Consider whether you need to answer your phone straight away. It may be possible to use your voicemail or even better, an answering service, for a few hours per day. This will allow you to focus on work for a while and then to block all your calls together to get back to people later in the day. As long as you return the calls and don’t forget about them!

If you work alone then you may not wish everybody to have your mobile number. Consider getting a virtual landline that is answered by an answering service. I have used Answer It for this purpose but also for answering calls when all our business lines were in use.

Emails can all be batched together and answered once or twice a day. Batching similar tasks is much more efficient. Many accountants have a shared inbox linked to a practice management system which allows them to delegate emails/tasks. Technology can be your friend.

Remember that people usually send emails when it is convenient for them, they may be working flexibly or they may be in a different timezone. Big corporations often use an autoresponder to say that your query will be answered in say, 5 or even 15 days.

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A mindset for distinction

Today I learned that I had earned a distinction in a singing exam that I took earlier this month. But it almost never happened.

Mindset fail: I spent too long believing that I couldn’t sing.

After failing to get into my school choir I spent most of my life believing that I couldn’t sing. A few years ago I took a few vocal coaching lessons with my daughter’s singing teacher to help strengthen my voice as I was doing more professional speaking.

I was pleasantly surprised to find that I could sing better than I thought and I went on to get a merit for my grade 3 Musical Theatre just before lockdown.

With lessons and exams cancelled through lockdowns etc it has taken a while to get around to my grade 4. My exam was in the morning (I’m not a morning person) but I didn’t want to postpone any longer. My daughter also needed to get her grade 7 out of the way so that she can squeeze in her grade 8 and diploma before she heads off to university.

The first two songs sent okay although I could hear that my voice was a bit husky due to hay fever but I carried on as best I could.

Mindset fail: I let one small problem take over my mind

Then we came to the third and final song which I usually sang a whole tone lower than the official score. It’s easy to turn a knob to transpose on an electronic piano but this was a new venue and there was only a grand piano! I had a panicked talk with my accompanist and asked what key I should sing in. There was no choice but to go for the original key. I knew I could only just make the top notes which is why we’d chosen to sing it lower so that I could belt them out with confidence.

I was so fearful that, part way in, I had a complete mind blank and forgot the words! It’s not like when I speak on stage where nobody knows if I’ve diverged from my script; the examiner had the lyrics and score in front of him. I carried on singing some made up words and may have got away with it but then I couldn’t even do that so I had to stop to ask my accompanist for a prompt. I knew I’d blown it and I wanted to leave the room so I could have a comforting cry.

I was cross with myself for letting my terrified thoughts force me into such a simple mistake. But at least I had nothing to lose so I carried on.

Mindset success: I stopped being scared

Just before the belt with the terrifying high notes I remembered my teacher’s instruction to ‘relax’ and her tips on using less breath.

I didn’t just hit the notes, dear reader, I hit them well!

Overall I lost a few marks for the memory lapse but I handled it professionally and didn’t allow it to affect the rest of the performance.

But how many times do we fail just because we’re too scared to try?

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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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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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I’m worried about increasing my prices in case I lose clients

It’s a common fear but your existing clients will be less price sensitive if you are doing a good job.

Have a look at this example (numbers rounded for simplicity) of how many clients you can afford to lose without impacting your profit:

Before
• You have 100 clients paying £1,000 each so turnover of £100,000
• You make 50% margin so profit of £50,000

After
• Della comes along and tells you to increase your prices (see the last two weeks for how and why you should do this) by 10%
• You now have 100 clients paying £1,100 each so turnover of £110,000
• Your margin is now 54.5% so profit of £60,000 ie a gain of £10,000 because all your pricing increase is profit

But
• Some of your clients aren’t happy and 10% decide to leave
• You now have 90 clients paying £1,100 each so turnover has fallen slightly to £99,000
• But your 54.5% margin means that you are still making profit of around £54,000 so you are earning £4,000 more for only 90% of the work. Possible even less work because the price sensitive clients are usually those who are most demanding and often a pain to deal with.

In fact
• In this example you can afford to lose up to 16% of your clients and still make slightly more profit
• 84 clients paying £1,100 gives turnover of £92,400 and profit of £50,400 ie £400 more than at the start but for 84% of the work

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Why you need to increase your prices

A lot of business owners avoid increasing their prices, either because they’re worried about losing clients or because they don’t know how to go about it. Even when they know that they need to increase their prices it is too easy to procrastinate (I’m the queen of procrastination, I have all the excuses)

I’ll cover the ‘how’ in separate tips but today I want to talk about why.

We all started our business for a reason which broadly come into one of three areas:
• Profitability
• Build something valuable to sell at retirement
• Better work – life balance

All of these will benefit from having better prices allowing you to earn more money, increase the value of your business, or to earn more in limited time.

But the real benefit to our clients is that we will have time to provide a quality service. To do things properly and not cut corners. And to run a business that will still be around to help them in future years.

When we provide a quality service our clients benefit, they stay with us, and they refer other people to us. It’s a virtuous circle because everybody wins.

To create the business you want you need to charge the right prices.