It pays to be brave!

You may have picked up, if we are connected on LinkedIn, that I ran a successful Webinar for CIMA in October.

I have never done a webinar before and so I was quite nervous about the whole thing. Not only because the participants could see me but I could not see them, but also because I was not sure I would get the timings right.

An hour is a long time to be talking for but time can soon run away with you if you don’t time things right – so preparation is key.

Fortunately I did not have to worry about the material as I have written, talked and run courses about how accountants in practice can move their businesses more towards the work they love – and clients really value.

I also did not have to worry about the techie side as Emma Bailey from CIMA was my partner in crime and dealt with that side of things.

On the day itself, however, I was surprised to learn from Emma that 350 people had registered to take part! I knew not everyone would be listening live, but had registered to get the recording of the webinar to watch later – but I still found it a little intimidating to have so many listening (either live or later)!

In the end I could see the counter of participants gradually increase until it stopped at 180 people This was far more than I had bargained for.

Once the webinar had started I did find I got into the swing of it pretty quickly and the hour sped by – and I did not run out of time or material!

The feedback has been great and I came away from the experience with a spring in my step and a desire to do more webinars – and to restart my workshop programme for accountants.

What this whole experience re-enforced for me is that it pays to be brave and try new things. Our comfort zone is stretched when we do (something I wrote about last month), and we are more likely to continue trying even more new things.

Incidentally, I was also asked in October whether I wanted to do a wing walk – but I am not feeling quite that brave yet (or ever!!).

How to collect the cash!

Piggy Bank

In these turbulent times it is more important than ever to be on top of cash collection. However, many small business owners find it a real challenge to chase customers who are late paying.

A phrase we hear often is, “They’re a really good customer, so I don’t want to annoy them by chasing for payment”. Let’s just analyse that sentence for a minute. Why are these customers good for your business? Because they allow you to do lots of work for free? Surely, a good customer is one who appreciates your efforts and is happy to pay because they value you. If you have done the work you agreed with your customer, to the level they expected, why should they not pay the agreed price in the agreed time period?

So don’t be shy about collecting YOUR money.

Other problems we see regularly are:

Not setting payment terms up front

If you have not agreed when the customer should pay BEFORE the work is done, you will struggle to collect the money in a reasonable time frame. Make sure your terms of engagement/purchase confirmation clearly state when you expect to be paid.

Setting unnecessarily long payment terms

Don’t assume that you have to offer customers 30 or 60 day payment terms. Start from a position of offering zero payment terms and only offer extended terms if there is a commercial advantage in doing so. Bear in mind that even if you offer 30 day terms you will most probably be paid later than that. As you don’t know the financial position of all your customers the only safe money is the money in your bank account.

Not sending invoices out promptly

If you do not send out your invoices as soon as the work is complete, you automatically build a lag before you receive payment. Invoicing is a chore, but regular invoicing is vital to achieving financial stability.

The most common reason small businesses fail is because they run out of cash.

The most common reason they run out of cash is because they do not collect the money they are owed quickly enough, or allow debts to go bad.

Make sure you business succeeds by being cash collection savvy.

🙂 Fiona

What have you learnt lately?

If, like me, you are a professional who is required to do a certain amount of continuing personal development (CPD) you will be used to going along to regular training sessions.

Sometimes they can be a bit of a drudge because they are generally all about updating our knowledge rather than gaining new skills.

As time goes on we can get increasingly stuck in the rut of doing the same things for the same people day in and day out. But the work pays the bills and we don’t believe we have a lot of work time to do much else in any case.

However, this type of thinking is a mistake in my opinion. After all, our working lives take up the majority of our actual lives so why settle for drudge?

One way to mix things up is to take bits of time out to do training to learn brand new things – maybe directly related to the work you are doing now, or completely different but complimentary to it.

Over the last year I have done 5 day workshops aimed at helping CIMA accountants understand the world of charities and not for profit enterprises. It was not a world I had particular experience of before but the workshops were fascinating.

My main reason for going was to help with my role as director of Wessex Community Assets but I would have gone along anyway because of my growing interest in community benefit models. 

I will be following up this training with 4 Community Shares Practitioner Training workshops run by COOPS UK with the eventual aim of becoming a registered practitioner. 

I am exited by the prospect of helping local community benefit societies raise money through community share issues to enable them to finance the setting up of shops, pubs and other community focused enterprises.

Slight re-training is enabling me to confidently move more into a world of opportunities I would not have envisaged a couple of years ago.

So my advice if you are stuck in a rut is to look around you and see what training is going on that tweaks your interest and take a punt.

Remember the days 2

This time last year I was inspired by the youngsters who were just getting their GCSE and A’ level results. This year I am taking you back to when you got your first job.

The reason for this direction of reflection is that my eldest son has finally become a fully, tax-paying, contributing part of society after 5 years of university life. He is all set to start as a maths teacher in Cambridge.

This got me remembering when I started my first job at Siemens 30 years ago. I was so naive about the world of work – even though I had had the usual part-time jobs and had done a year’s placement.

When we start out, over-confident in our abilities and sure that the world of work will deliver job satisfaction and plenty of money, we have very little incling of how our careers will develop.

Even 30 years ago there was the expectation that we would stay in the same job, and certainly the same career, our whole working lives. There was a comfort in this, but also a certain lack of imagination.

I certainly never expected that I would start my own accountancy business and have to spend so much time on the edges of my comfort zone – in fact as a youngster my comfort zone was so much wider than it is now as a more cautious adult.

We gradually lose the ability to stretcour comfort zone as we get older and more secure. We are more likely to take the easier path rather than the type of brave new steps we were often taking in our youth.

As business owners we are probably better than most at accepting change and happier to work at the edges of our comfort zone, but I think, even for us, this zone is contracting over time.

But to be successful we do need to push against this trend and ensure that we are as open to new opportunities as possible – even if it means stepping out of the familiar and exposing ourselves to being challenged. 

So take the plunge on a regular basis by finding new things to challenge yourself with so that you exercise the elasticity of your comfort zone!

Talking of taking the plunge, below is a piccie from the Moat Race at Wells last Monday – some teams ended up taking an unexpected plunge!

Metwalking comes to Somerset

I have written on a number of occasions about a new type of networking that imbraces the great outdoors whilst building relationships with a great group of people – Metwalking.

So far the walks have generally concentrated around the Bristol area – such as the one below around Porteshead harbour – and Metwalking has confined itself to just the walks.

However, world domination is afoot! There is now a Metwalking website membership scheme, which means members can take part in sounding boards, to promote their businesses and take advantage of special offers.

Members can also run walks themselves under the Metwalking banner so they are publicised by the Metwalking team. Louise Mcmilan and I are exited to announce a new Somerset based group. The first walk is on 25th September at Cheddar.

So if you want to see what it is all about why not join us?

https://www.metwalking.co.uk/upcoming-events/cheddar-reservoir

Professional goal setting

I have written about goal setting on a number of occasions because it definitely makes my life easier, when I am doing business planning with a client, if they are very clear what their personal goals are.

As a business owner any funds needed to achieve personal goals will often need to be generated from the business. So understanding how much is needed, and when, can make it much easier to set the business goals that will deliver against these personal goals.

Someone who has certainly helped me to dig deep and properly think through my personal goals is Andrew Stinchcomb – my partner of the month.

Andrew has a great tool – the financial road map – for helping clients to understand what is important to them in life. This leads to a greater understanding of their goals and subsequently to what funds are needed to meet those goals.

For my husband and I, once we have helped finance our two sons through university, a key goal is to be able to take a year out and go camper vanning around Europe for a year.

The roadmap process highlighted quite quickly that Jeff’s idea of the camper van we were talking about, and my idea were quite different, which was quite amusing. But naturally we settled on what we needed to budget for as somewhere between the two.

Once we had a clear idea of what money we needed to have to make all our plans a reality, it was much easier for me to focus my business so I contributed my part.

We meet up with Andrew on an annual basis to check that everything is on track and he has some wonderful graphs that show how we are progressing.

I must say it is very reasurring to see that our retirement is sorted and we will have enough for our camper van, and other, goals.

The more I work with businesses of all sizes the more convinced I am that good planning is the key to success – and goals are a key driver of good planning.

And the more I work with owner managed businesses the more convinced I am that having clear personal goals is vital to drawing up meaningful business goals.

So, if you are not sure what your personal goals are I recommend that you spend some time with a goal based financial planner.

Here comes the summer

On holiday in Rhodes earlier this month

As I am writing this the sun is shining and a heat wave is anticipated for the weekend – even though it is Glastonbury festival time!

Whilst we all love the summer it can bring with it extra managerial problems for business owners who are trying to balance employees motivation, with getting the job done.

It can be difficult to concentrate on doing your job when the sun is shining outside – particularly if it’s very hot. This means business owners need to spend more time than usual focusing their team to their usual level of effectiveness.

Then there is the issue of holidays. If you have staff who have school age children there can be the battle to book time off during the school holidays – and you have to make sure you still have cover for all the roles in your business!

I think that, if you are able to, it can be very helpful to offer a degree of flexibility in working hours to staff who either suffer with the heat or generally want to make the best of the good weather.

Could employees start earlier in the day and finish earlier, for example? Could they work part of the day from home where it might well be more comfortable than in a hot, stuffy office?

In my experience a little bit of flexibility can go a long way to motivating employees to work harder when they are at work.

Then there is the issue of your own holidays. I have seen several LinkedIn posts where business owners seem to be proud that they are still answering emails and responding to business issues whilst on holiday.

To me this is not taking a holiday. 

If you have staff you should ensure that they are empowered (through training and instruction) to act appropriately to problems whilst you are away. 

If you don’t have staff you still need to find a way to balance business needs against your needs for a proper break by: informing clients in good time that you will be out of contact for the duration of your holiday; completing client work before you go; ensuring sales leads are not lost by using a call answering service…

Everyone needs proper holidays to enable them to recharge their batteries and be at their best – and you are no different. I certainly find I return from holiday more effective, focussed and full of ideas just because my brain has had a rest!

Plan for the worst…

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Flooding has become an real risk in many areas across the country, as has coastal erosion, and other natural disaster events, which seem to be more prevalent than in previous decades. As the consequences of global warning are starting to increasingly impact on people’s lives it is important to consider how your business might be affected by future events.

It is a sad fact that at least half of of businesses devastated by flooding (or other natural disasters) will never recover, and those that do, may take a long time to get back on track.

Before they can repair and rebuild there is often the initial wrangling with the insurance company about how much they should pay out, but there are far wider implications to a business than just putting right the premises.

The problem is not just the event itself but the downtime the business experiences whilst the damage is repaired, and the consequences of that downtime.

Do you continue to pay your staff even when they are not able to work and if you do so, how do you afford a wages bill when you have no income coming in? Once even loyal customers have gone elsewhere, how do you persuade them back when you are up and running again?

These are the type of issues many businesses do not consider until forced to do so.

Natural disaster events are just one type of business catastrophe but there are many others all businesses should consider and plan for. The scale of the catastrophe will be linked to the importance of the occurrence to the business.

For example, if your business server fails how big an impact would that have on your business? If all your staff need to access information on that server 24/7 it could cost you dearly and clearly in that situation it is vital that you have a backup plan to cover just that type of emergency.

Alternatively, if you are heavily reliant on one employee what would you do if that employee goes off sick for an extended period of time?

Every business has its own ‘flood’ scenario and it is hugely important that you have a disaster recovery plan to mitigate against the worst effects of a catastrophic event. You need to build your ‘flood’ defenses – first identify the scenarios which could do the worst damage, plan for how you would deal with those scenarios in the most effective way, and ensure you have the ‘backups’ in place.

Of course we hope never to use our backup plans, but at least if we have one in place, we are as prepared as we can be if the worst happens.

Fiona 🙂

Why you should be forecasting

Following on from my previous post I thought I would concentrate on cash flow as a particular area you need to focus attention on.

Many business owners don’t know how much money is in their bank account on a day to day basis and look at their accounts only once a year, so the idea of forecasting for the future leaves them cold.

Many businesses of all sizes fail because they do not have the foresight to ensure that they avoid making poor decisions, or react too late to changing circumstances. In particular, in not doing cash flow forecasting (at the very least) these business owners are putting their businesses at real risk.

Forecasting forward can help ensure you don’t suddenly run out of money. If things are going badly you at least have forewarning of when you MUST get some money in and have time to do something about it. You can then use your forecast to help the bank – or any other parties you are hoping to secure funding from – understand your business and who investing in your business is a good bet for them.

I have written a free guide to help you with forecasting for your business which you can download from my website http://www.fionabevanfinancialmanagement.co.uk/guides.php

Fiona 🙂

Look after your pennies…

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Many owners/managers of small businesses (and larger ones for that matter) struggle to understand their business finances. This lack of understanding can make it very difficult for them to make the right decisions for their business.

Now, I am sure my accounting colleagues would not mind me saying that, most accountants make lousy entrepreneurs. We just lack the creativity and drive which makes entrepreneurs so effective at getting new business ideas off the ground.

So why should entrepreneurs/business owners be great accountants?

Each role requires an entirely different skill set and way of working and, indeed, a different personality type (if you are familiar with DISC profiling). So don’t be shy about admitting that you are stuggeling with the money side of your business.

Many business owners do not seek the proper help and guidance, or have the right level of financial information, to help them make decision.  To me this is a huge mistake which can lead directly to business failure. As a responsible business owner/entrepreneur you do not need to be a trained accountant but you do need to have enough knowledge of financial issues to run your business effectively.

So what do you need to do to get this knowledge? Well, for starters:

  1. Ask lots of questions of your accountant about why the figures are as they are.
  2. If you only receive figures from your accountant once a year, several months after the year has finished, this is not enough! You need to have regularly updated financial information to make decisions on a timely manner.
  3. Have a properly thought through profit and loss and cash flow forecast so you can manage your cash – and make sure it is regularly updated for what has actually happened.
  4. Don’t just be happy with knowing how much you have sold in total and the margin on this total figure. Ask how you can get information on individual customers, products and projects so you are clear which activities are profitable – and which not.

It is not good enough these days to just shrug and say “Well, I am just not good with figures”. You started your business to make a living for yourself, and any staff you have, and you owe it to yourself, and them, to have a good handle on the money in your business.

To help I have written “your guide to understanding business finances” which can be downloaded for free from my website www.fionabevanfinancialmanagment.co.uk

Good Luck

Fiona 🙂