The Ledger: January 2020
Marcus Wolfgram • February 22, 2020
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Hello and welcome to all clients and others to the last edition of The Ledger for 2019. As a Beancounter it is my job to help nurture businesses, as well as ensure they are compliant with the Taxman. I have created The Ledger to provide bite-sized snippets and concepts you can apply immediately if you so choose. So let's get started.
Black Ink 1 : Getting back into work after a break can be hard.
“In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” - Mark Zuckerberg
This concept applies to your entire team. Motivate them to work in their Performance Zone instead of their Comfort Zone but have processes in place to prevent their burn out. If you notice someone coming in early, staying late and visibly stressed, find out why. Speak to them about the Performance Zone and offer support to help them manage their workload, prioritise work and reduce their stress levels.
The aim is to set goals and implement changes to move beyond your Comfort Zone into your Performance Zone. If you do find yourself hitting the Danger Zone, it’s ok. Retreat back into your Performance Zone… not back to your Comfort Zone. You’re here to improve your business performance, that won’t happen from your Comfort Zone.
Be wary of putting the full throttle down though. If you stretch too far out of your Comfort Zone, past the Performance Zone, you may find yourself in the Danger Zone. Committing to a massive amount of change all at once can lead to volatility, burnout, mistakes resulting re-work, the loss of a key team member, and cause you to work even longer hours for no gain (apart from stress gain).
Working in The Performance Zone enables you to break bad habits and form good ones, achieve your goals, and improve the value of your business. When working in your Performance Zone, you’ll be engaged in your work and adopt new learnings, processes and technology to streamline your business and make it more efficient.
It’s easy to hang out in your Comfort Zone. We just keep doing what we’ve always done because so far it’s worked… and there’s no motivation to change. However, sitting comfortable in times of such rapid change can leave you exposed. Your competitors, those working in the Performance Zone, setting goals and making incremental changes and improvements, could squeeze you out.
The ‘Performance Zone’ sits between the ‘Comfort Zone’ and the ‘Danger Zone’.
You might be struggling to get back into your routine and engage your brain in work. Or, perhaps you spent time setting your goals and planning your year and you’re full speed raring to go. There is, however, an optimum approach somewhere between these two scenarios - we call this hitting ‘The Performance Zone’.
Black Ink 2: Your small business has a great story to tell
Your small business has a great story to tell. If you are looking to employ a PR consultant to help drive media coverage, make sure you have done your ground work for your best chance of success.
Here are the four questions to ask internally:
1. Have you nailed your value proposition and business objectives?
Your announcement must be newsworthy not just news. When you are competing with hundreds of other press releases on a journo’s desk, you need to be saying something new and interesting. It might be a new product or service or the unique culture in your business.
2. Are you ready to respond? Ensure your online and operational systems are running smoothly. If your public relations firm gets press coverage for your business make sure you are ready and able to respond to questions, interviews and (ideally) demand. If you are driving sales, are you prepared with appropriate online functionality (or sales team) and sufficient inventory before going live with a campaign?
3. What’s your goal for your return on investment? If you are bringing in an external agency, make sure you have defined what you want to achieve and how you will measure success. Discuss your outcome expectations.
4. How much can you do yourself? The right agency will bring you access to key journalists and media in your sector. They will be honest with you about the best approach and help find a way to communicate your brand to the media in the most effective way. But there are no guarantees and if a dramatic event happens on the same day as you release, it can be hard to get traction.
However, there is a lot you can do yourself to tell your own story. Put your great news on your website’s blog and share it on your social media channels. Add social sharing buttons to your blog pages so it’s easy for people to share your news with their network. Does your website have details on the team, information about your business and easy ways to get in touch? If your press release stimulates interest in your company, make sure your house is in order when they go online to find out more.
Black Ink 3: Want more money, more time or less stress?
We believe our clients all deserve the three freedoms: Financial Freedom; Time Freedom; and Mind Freedom. In other words, more money and time to spend on important things outside of their business, along with less stress. Is your business stifling your freedom?
Being in business is tough. At times, you might be worried about whether you’ll have enough cash in the bank to pay your team and suppliers. Perhaps you’re working 80-hours a week just to stay on top of things. Or, maybe the stress of daily business life is impacting how you turn up at home.
What would Financial Freedom look like for you?
This is about having enough cash in the bank - both in your business’s bank account and in your personal bank account - to do the things that will enrich your life. That could be buying new assets for the business or your family, having an amazing team Christmas party, or taking your family on a much-needed holiday.
We can help you achieve the cash levels you need for your desired lifestyle.
How would having Time Freedom impact your life?
As a business owner, do you feel like you need to be the first to arrive, the last to leave and even take work home with you? You could be too busy working in the business to spend time working on your business strategy. It’s also highly likely that there’s little time left for friends and family, let alone yourself.
We can help you achieve balance so that you are not only less stressed in your home life, but more effective when you’re working in your business.
What is Mind Freedom?
Mind freedom is being able to sleep soundly at night. It’s not burning yourself out before taking that much needed holiday, and it’s not getting sick the moment your holiday starts. Attaining financial and time freedom can be the first step to achieving mind freedom. More money in the bank and more time outside your business generally leads to better perspective and less stress. We believe it’s not only our duty to help our clients meet their taxation obligations, it’s our duty to help them achieve Financial, Time and Mind Freedom. Contact us for more information on how we can help you grow your freedom. “Your business should deliver you the cashflow you need and the discr
There are three fundamentals to successfully scale up your business: having a clear organisation structure, having comprehensive systems, and developing great leadership.
Heard the quote, “What got you here won’t get you there”? These are wise words (and the title of a book you should read!) are from Marshall Goldsmith. Choosing to scale your business does not come without risk!
Many leaders focus on their systems and teams when looking to scale, which is important, but they must also focus on scaling themselves.
Fundamental three: developing great leadership
Most reasons why businesses fail, directly and indirectly, point to leadership failure.
From poor planning to poor hiring, poor communication to poor process, poor capacity to poor execution - most things can be fixed with great leadership.
Scaling the business will make new demands on a leader’s time and attention and it’s critical that these are both focused on the right things:
1. Planning:
Setting a clear vision and relevant business goals, regularly reviewing progress, and resetting goals to drive performance improvement.
2. Inspiring:
Motivating others to achieve more than before; showing them their potential to make an impact.
3. Empowering:
Enabling your team to find their own solutions by guiding them with your support, trust and encouragement
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4. Culture:
Demonstrating allegiance to the team and standing for the business’s core values.
5. Innovating:
Continuous improvement in people, product, and process.
6. Personal growth:
Developing and supporting your future leaders with mentoring and guidance
Black Ink 4: Collect your debtors faster
Great leadership is about influencing others in the direction of a common goal.
While there can only be one leader of a business, there are seven operational departments that need individual leaders. People can lead multiple departments initially but, as the business grows, should look to empower others and delegate the leadership of some departments to ‘leaders in training’.
On a scale from 1 to 10, how well do you rate your performance on the above six categories? Where can you scale your leadership? Need help? Get in touch.
Did you know that you still have to pay tax on your debtors, even if you haven’t yet collected them?
This is because you pay tax on your sales figures, whether you’ve collected the cash or not.
So, how do you collect your debtors faster?
Agree your payment terms at the time of sale.
Ensure your customer signs your Terms of Trade before you start the job.
Include a guarantee in your payment terms.
Invoice as quickly as you can.
Ask for a deposit prior to starting the job.
Change your payment terms to within 7 days of invoice or on delivery.
Send statements with only two columns - current and OVERDUE.
Follow up the day after the due date.
Have someone other than the owner be responsible for collection of debtors (owners are usually too soft!).
Document any changes to your standard payment terms in writing.
Use a debt collector sooner rather than later - the longer you leave it, the harder it is to collect.
Don’t provide credit to customers who’ve been late payers in the past, and don’t offer more credit to customers with outstanding payments.
Don’t procrastinate on your debtors. Establish clear payment terms and ensure you stick to them.
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