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Performance Reviews

Conducting successful performance reviews

Your staff are the backbone of your business, and their success is going to help your business succeed. An important, but often-overlooked part of this is holding regular performance reviews.

Rather than being an administrative drag, or something that you or your staff members dread, performance reviews can be a really valuable and constructive process. They can enhance your relationships with employees and the performance of your organisation. Here’s what you need to know:

They need to happen on a schedule

Whether they are every year, every six months or even every three months, it’s important to set a schedule and stick to it. If it comes to the day and your employee finds that their meeting with you has been bumped due to a ‘more important’ commitment, this can send a very clear message to them about how much you value their contribution. Instead, make sure you both know when these meetings are happening. This will also give both parties time to really consider what you want to discuss. Turn up prepared and ready for a two-way conversation.

Prepare for the meeting

Whether you’re having a tough conversation or giving praise, go in with specific examples, and chat with other senior team members to get their supporting feedback. It’s important that you pay special attention to anything that isn’t borne out by the experience of other staff members. This is a valuable opportunity to examine any biases that you might be holding. A tough process, but a necessary one for any manager.

Create the right environment

Put some thought into the environment you want to create. If you have a strong relationship with your employee and you’re looking forward to another constructive conversation, perhaps this is a chat that can happen over an off-site coffee. If this is a more serious check-in chat, make sure you’ve got a private meeting room where you can both talk candidly without worrying about anyone listening in.

Keep a record

Working with an employee over time can be a wonderful thing for your business. It’s really important that you have records which reflects the progress that they have made and the ways in which you have been able to support them. It’s essential to take notes during each meeting and record these notes in a way that you’ll easily be able to access later. This also gives you a reference for what you need to follow up, such as whether you’ve discussed a schedule for a pay increase, professional development opportunities or additions to the employee’s role.

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What you need to consider before you take your business overseas

A globalised and digitally connected world means that your business isn’t restricted to one country. Expanding your business overseas gives you access to new audiences and a little protection should anything happen to destabilise your home market.

But, as with all things in business, proceed with caution. While the saying ‘no risk, no reward’ holds true, it’s important to fully understand what’s at stake before making the decision.

What you need to consider:

Tax implications

It’s essential that you understand the tax implications of this new market before you invest any money or time into your business development. Make sure that this is your first step, and talk to us, we can help.

The local market

Don’t assume that what’s working for you locally will necessarily transfer to a new market. It’s important to research trends, and set objectives specific to the new market. Your product or service might enjoy a lack of competition at home, but that doesn’t mean you won’t find an equal overseas.

As well as market trends, pay attention to the political and economic climate. Make sure that you’re engaged with what’s happening in the area, and understand anything that could be poised to disrupt your business success.

Increased costs

Whether you’ll be shipping from your home country or looking to despatch locally, it’s likely that this could cost you more than it does at home. Don’t forget that if you are using local services for either shipping or production you will probably need to make at least one trip to meet the team who will be supporting your business.

Your website

There are a number of changes that you may need to make to your website. Customers may prefer to shop in their own currency rather than relying on a conversion at check out. You may decide to include some local imagery or add other touches to demonstrate that your new potential customers aren’t just an afterthought.

If your new market speaks a different primary language, you will have to decide whether you will translate your site or let Google Translate do the job for you. Also, find a local language speaker who can check that your product names or company name don’t mean anything that could offend once translated.

Finally, if your new customers are in the EU, you will need to make sure that your business and the way you plan to manage customer data is GDPR compliant (a regulation that protects the data and privacy of EU citizens).

Customer support

Dealing with customers in a different time zone may mean hiring additional customer support staff so that any queries can be dealt with quickly. Companies like CloudPeeps can be good places to find support and marketing team members in different parts of the world.

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6 ways to measure the health of your business

6 ways to measure the health of your business

When you’re running a business, it’s easy to get caught up in the day-to-day activity and lose sight of the big picture. Taking stock of the health of your business is important. Knowing where you’re allows for more effective planning, early warning about any issues, and the chance to better chart a course for success.

There are some quick ratios that will help you in order to gauge the health of your business. We can help you to assess your business health and show you how to calculate these vital checks.

Liquidity Ratios

Liquidity ratios are about how quickly you can turn your business assets into cash – which helps you assess whether you’ll be able to pay the bills.

High ratios are better, as this means you’ve got more assets than liabilities.

Current ratio

Current ratio = Total current assets / Total current liabilities

As a general guideline, 2:1 is a good current ratio, but this does depend on the kind of industry you’re in, and the nature of the assets and liabilities.

Quick ratio

Quick ratio = (Current assets – stock on hand) / Current liabilities

This measure excludes your existing stock, which you may not be able to quickly turn into cash, and is seen as a more realistic quick snapshot of your position.

Solvency ratios

Solvency ratios look at sources other than cash flow to see whether your business will be able to settle debts.

Leverage ratio

Leverage ratio = Total liabilities / Equity

This is a measure of whether your business is reliant on debt financing or equity to fund your assets. A higher ratio can make it harder to borrow money.

Debt to assets

Debt to assets = Total liabilities / Total assets

This tells you what percentage of assets is being financed by liabilities.

Profitability ratios

Profitability ratios will let you know how efficient your business operations are. Where possible, it’s good to measure your business against others in your industry.

Gross margin ratio

Gross margin ratio = Gross profit / Total sales

This ratio tells you whether you can cover the necessary business overheads from your sales.

Net margin ratio

Net margin ratio = Net profit / Total sales

This measure tells you the percentage of sales dollars left after you’ve settled your expenses, except for your income taxes.

Checking in on your business health is a great habit to get into. Using these ratios helps you to understand your current business health and allows you to plan. Talk to us about how to calculate the factors in these ratios in order to keep your business on the right track.

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The Weakest Link: Security

The weakest link: Why security is everyone’s responsibility

For many of us, the internet is not just an intrinsic part of our lives, it’s integral to how we do business. It enables businesses to connect to global markets and complete transactions in minutes.

As we take advantage of the opportunities the internet has to offer, online security becomes a priority. This means being vigilant about keeping sensitive data and information secure from hackers and cybercriminals – just as you’d keep your home or your car safe by locking it.

Statistics from online security software vendor Norton show that 978 million people in 20 countries were affected by cybercrime in 2017. It’s an unfortunate fact that the impact of cybercrime is a reality for all businesses.

However, a system is only as good as the weakest link in the chain. Security needs to be strong on all fronts and it’s important that businesses are committed to protecting themselves and their customers from attacks. As a business, it’s your responsibility to safeguard not only your own information but, more importantly, the sensitive data that your customers and employees have entrusted you with.

Here are some simple, easy-to-implement steps that will help you better protect your information and that of your customers online.

Have strong, unique passwords

Over 80% of breaches occur due to stolen or weak passwords. Always use a strong, unique password for each site you log in to. While this may seem extreme, particularly in an age of multiple logins, different passwords will help prevent a compromise of one login becoming a compromise of many. You can use password manager software to help you use your multiple logins and to generate strong passwords for you. Password manager software securely stores all of your usernames and passwords, on your desktop or in the cloud, so you just need to remember the password for your password manager.

Use two-step authentication

2SA or two-step authentication equates to having that extra deadbolt on the door. 2SA works by having

two layers of security: first you enter your existing password, then another verification code is generated by an app on your smart device.

Update your software

Security threats are changing all the time and new software vulnerabilities are identified every day. Keeping your operating system and applications up to date is your first line of defence. Many attacks exploit a known software vulnerability that could have been patched. Set your system preferences to update automatically and delete applications you don’t use.

Having up-to-date anti-malware (anti-virus software) is another simple but effective way to protect yourself. Anti-malware will scan your attachments and downloads as you use them and alert you to any malicious software detected. Make sure your anti-malware is updated regularly so it’s able to detect new viruses, trojans, ransomware, and the like.

Backup your local data

While computer hardware is pretty reliable these days, failures still happen. Then there are malicious acts such as theft and ransomware, and accidents and disasters that can prevent access to your data. You need to store copies of your backups at a different site from the source systems so a local disaster doesn’t destroy the backups along with the original data. Cloud backup services can address this need and make your data available from anywhere with an internet connection.

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Understand Your Risk Profile

Here’s how to better understand your risk profile

Whether you’re getting into investing for the first time, or looking at how you might expand your existing investment portfolio, it’s important to understand your risk profile. Once you have this key insight, discovering the kinds of investment that will help you meet your goals will be more straightforward.

What is investment risk?

The risk when you make any investment is that you won’t get the return you’re hoping for, or worse, that you might lose your investment completely. You’ve heard the saying, ‘no risk, no reward,’ and this is exactly where that comes from.

High risk versus low risk

When you’re making a higher-risk investment, you’re looking for a higher return or more growth. But, there’s more chance of losing your money, or of seeing short-term fluctuations through market changes. A lower-risk investment generally avoids a ‘negative return’ or a loss of your investment, but will usually deliver lower returns.

Of course, you could opt for a shoebox of money under the bed for a zero risk situation. But even holding on to cash has dangers too, namely that inflation will increase and your stash will decrease in value.

Your investment goals

Before making any investment, it’s essential to set your goals. To do this, you’ll need to understand the following factors:

  • How long are you looking to invest for?
  • What is your overall financial position
  • The type of returns are you hoping for?
  • Do you need access to your money during the investment period?
  • What is your level of investment experience and insight?

Building a diverse portfolio

When you begin to create a portfolio of investments, it’s a good idea to combine different kinds of investments with different degrees of risk. This will help to balance the risk you’re assuming, but this can be a technical process, and it’s best to talk to a professional in the planning stages.

Talk to us to better understand your risk profile.

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Have you got your super sorted?

Have you got your super sorted?

When you’re employed, your employer makes compulsory contributions to your superannuation. When you work for yourself as a sole trader, or you’re in a partnership, making super payments isn’t mandatory. But, it’s still an important thing to consider.

Retirement savings contributions are there to set you up in retirement. Generally, investing money into super will give you better investment returns than just putting it into a bank account. Plus, because the money is effectively locked away until retirement, there’s no temptation to dig into it in the meantime.

Chances are you’ve worked for an employer at some point, and have an existing super fund to add to. If you’ve never worked for anyone, it’s probably time to set up a fund. You can make regular contributions or make lump sums less frequently, to suit your cash flow. Contributions that you make will still benefit from tax savings, and these can mount up.

Another thing that’s very handy for the self-employed and generally offered through your retirement fund is insurance. Your fund may offer you life insurance and income protection insurance. Make sure that you take the time to really understand these policies, as the payout amounts may not offer enough money to replace the income you earn through your business. You may want to source an additional policy as a top up.

If your business is a company and you employ staff, you are responsible for making super payments for eligible employees. There can be serious penalties for failing to do this, so take the time to fully understand your responsibilities.

Stirling Proactive Accountants can help you and provide advice including contributing to your super, starting a pension or creating a SMSF.  Contact us for more information and to get started.

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How to Plan For a Holiday From Your Small Business

How to Plan For a Holiday From Your Small Business

Whether you’re heading into a holiday period, or just planning to take a break (and congratulations, because a healthy business means work-life balance), it’s important to keep your cashflow under control. This means pre-planning and being proactive.

When you’re not in the office, there are still overheads and salaries that need to be sorted. If taking time off means that less cash will be coming in, it’s essential to plan for this period to make sure that these costs can be comfortably covered. Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for.

If there’s even a possibility that there could be a shortfall, it’s essential to meet this head-on. Whether this means talking to your supplier or creditors to figure out an arrangement, or compromising on other business outgoings, you must make a plan to ensure that the business, or your staff, won’t suffer.

Tips to minimise the stress of cash-flow over the holiday period

Invoice early – Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal to if they book services or make a purchase from you in advance.

Chase payment – use this opportunity to chase up any outstanding payments. Strong communication and relationships matter – talk to clients and chase invoices.

Talk to suppliers – a little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.

Review your costs – it’s also a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make a time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions or purchases which you can decide on an alternative approach to.

Talk to the bank or inland revenue – if cashflow is tight, make sure you have conversations early so you have everything in place to see you through.

When you’re planning for a break, book an appointment with us. We can help you navigate the holiday period and help you alleviate cashflow worries. So you get a well deserved break.

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The Top 10 Time Wasters In Your Working Week

The Top 10 Time Wasters In Your Working Week

There are 1,440 minutes in a day and each of us have the same allocated amount. Some people manage to achieve much more than others. So, how can we free up time to help lead a better business and ultimately a happier life?

The top 10 time wasters:

1. Lack of clear goals. Planning and setting SMART goals provides clarity. SMART = Specific, Measurable, Attainable or Achievable, and most importantly Time-bound. Have your goals documented and visible.

2. A messy desk. Desk clutter equals mind clutter. Tidy your workspace each day before you leave. Also consider how paperless you are; paper is part of the problem.

3. Procrastination and shifting priorities. Avoid unnecessary pick up and put down. Multitasking is a productivity myth. Plan your day carefully and stay focused; don’t deviate unless it’s really necessary.

4. Interruptions (from humans and technology). Establish ground rules for others, and set yourself clear parameters regarding your technology distractions, e.g. turn off your email notifications and only check emails between tasks. If it’s urgent, they’ll call or tap your shoulder.

5. Ineffective delegation (and abdication). Responsibility and doing are not the same. Invest time in creating clear processes and empower others to do more for you. When delegating a task, responsibility still falls on you… and without a clear process, you are setting someone up to fail which will ultimately reflect poorly on you.

6. Ineffective systems. Mistakes can usually be attributed to ineffective systems. Involve your team to get buy in and LEAN up processes where possible. Eliminate systems that don’t add value; always go back to your purpose.

7. Inability to say ‘no’. We are defined not just by what we say yes to, but what we say no to. Planning helps us to say no to things that don’t align with our purpose and goals.

8. Ineffective meetings. Every meeting needs a purpose, an agenda and clear objectives. Stick to the agenda, document outcomes and consider which meetings could be replaced with reporting or an online planning tool (such as Trello).

9. Ineffective email use.Think twice before playing email tennis. Ask yourself: 1.) Is the directive clear? 2.) Is the tone correct? 3.) Is it better to walk five steps to have a conversation?

10. Poor planning. Effective planning has three key components: a one page plan (with goals, KPIs and required actions), regular reporting to ensure continuous improvement, and accountability.

What are your biggest time wasters? Identify your top 3 and take ownership and responsibility to minimise them today!

‘Regretting wasted time is wasting more time.’ – Anon

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Are you a Slave to Your Business?

Are you a Slave to Your Business?

Your business is there to serve you; not the other way around. In other words; you should never be a slave to your business.

Being a slave implies a victim mentality – that the world has simply dealt you a bad hand, that you have no say in the matter. Perhaps you hear yourself thinking you’re a slave to your business because your clients need you, or your team can’t cope without you, or maybe the economy is busting, or booming… basically, insert any excuse here as to why you can’t change. But it is exactly that, an excuse.

The OARBED behaviour model tells us we must act above the line; that we must stay out of BED, and take Ownership, Accountability and Responsibility for our actions – and choices. So, what’s stopping you from taking control of your business? What must you do to be a victor?

  • Do you need to start going home on time every night?
  • Do you need to stop accepting work from people who don’t respect your payment terms?
  • Do you need to block out calendar time to respect your health and wellbeing?
  • Do you need to implement 10 strategies to grow your cashflow?
  • Do you need to train and empower your team to do more?
  • Do you need more time to plan?

No more excuses – it’s your business, you make the rules, choose not to be a slave!

Need accountability coaching? We can help you be the master of your business.

‘Success isn’t a result of spontaneous combustion. You must set yourself on fire.’ – Arnold Glasgow

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