Stop losing money! The job order costing hack every business needs to know

Posted on by Margaret Gimpel

Ever wondered how companies price custom projects accurately? The secret can be found in a method called job order costing. For small business owners and entrepreneurs, understanding this process could be the key to increasing your profitability and ensuring that every job is priced just right. Welcome to a world where every material, man-hour, and overhead cost is meticulously tracked to unveil the true cost of doing business. Let’s explore what job order costing is, how it works, and how you can leverage it to enhance your profitability.

Understanding Job Order Costing

Definition

Job order costing is a way to assign costs to specific jobs or projects. Unlike methods that spread costs evenly, this approach focuses on the details—tracking materials, manpower, and overhead for each individual job. This makes it especially useful for businesses handling custom projects, such as manufacturing or bespoke services.

Key Concepts

The key elements of job order costing are direct materials, direct work, and overhead. Direct materials are raw materials used in a project, while direct work involves the wages of workers directly tied to the project. Overhead encompasses indirect costs like rent and utilities. Understanding these terms helps you track and allocate costs accurately.

How job order costing works

The process begins by defining the job and assigning it a unique identifier. This helps in tracking all related costs. Next, businesses document materials used, calculate manpower costs, and apply overhead based on a predetermined rate. Finally, all these costs are summed to determine the total job cost.

Imagine a custom furniture maker tasked with creating a bespoke dining table. The direct materials are wood and varnish, while direct work (manpower) includes the carpenter’s hours. Overhead might include electricity used during production. By calculating each element, the business can accurately price the table, ensuring profitability.

Benefits of job order costing

Accuracy

Job order costing is all about precision. It helps you avoid guessing and gives you confidence that your prices cover your expenses and help you stay profitable. This accuracy enables you to set competitive prices and maintain a healthy bottom line.

Bespoke design

For businesses dealing with bespoke orders, job order costing is a game-changer. It allows for detailed cost breakdowns, ensuring each price reflects the actual cost of the custom work. This tailored approach keeps businesses competitive and fair.

Decision making

Understanding the true cost of each job means making smarter decisions. It helps in budgeting, forecasting expenses, and identifying which projects bring the most profit. This insight leads to better project selection and pricing strategies. With job order costing, businesses can confidently make informed decisions that positively impact their bottom line.

Challenges and solutions

Common challenges

Implementing job order costing comes with challenges, such as accurate tracking, complex record-keeping, and time consumption. Overhead allocation poses another difficulty, requiring careful consideration to ensure fairness.

To deal with these challenges, businesses can use strong tracking systems and conduct regular checks. Teaching employees how to manage job order costing well and using software to automate tasks are also helpful.

Case studies

Real-world examples

Consider a construction company using job order costing to build custom homes. By tracking each material and each man hour, they ensure prices reflect actual costs, enhancing profitability. Similarly, a law firm uses this method to allocate costs to individual client projects, ensuring precise billing.

Lessons learned

These examples show the importance of detailed cost tracking. Accurate records enable businesses to set appropriate prices and understand profitability. By reviewing these insights, businesses can make informed decisions that boost their bottom line.

Implementing job order costing in your business

Getting started

To start using job order costing, define your jobs clearly and use unique identifiers for tracking. Document all materials and man hours involved, calculating total costs accurately. Begin with small projects to refine your process.

Best practices

Best practices include regular audits to ensure accuracy, using technology to streamline processes, and training staff thoroughly.

Conclusion

In business, understanding costs is paramount. Job order costing is a methodical way to price custom projects, ensuring profitability and competitiveness. While challenges exist, they are surmountable with the right strategies and tools. Job order costing could be the key to unlocking hidden profits in your business.

Should you need guidance, feel free to reach out. We’ll be happy to assist you.

Tired of chasing payments? Handy tips for managing your receivables

Posted on by Margaret Gimpel

Running a small business is a constant juggle, and one of the more frustrating tasks is managing your receivables. How often have you found yourself waiting on overdue invoices, wondering if you’ll have enough cash flow to cover next month’s expenses? If this sounds familiar, you’re not alone. Many small business owners struggle with keeping their accounts receivable in check, which can ultimately impact their business’s health and sustainability.

In this guide, we’ll walk you through practical steps to streamline your invoicing process, approach past-due invoices with confidence, and ensure your cash flow remains steady.

Understanding the importance of timely invoicing

Timely invoicing is more than just good business practice; it’s a critical component of maintaining a healthy cash flow. When invoices go unpaid, your cash flow takes a hit, potentially affecting your ability to pay suppliers, cover payroll, or invest in growth opportunities. By sending invoices promptly, you lay the foundation for timely payments.

Studies show that businesses who practise timely invoicing and set clear payment terms see fewer delays and disputes.

Setting clear payment terms and policies

To avoid confusion and ensure your clients understand their obligations, you need crystal-clear payment terms and policies. These should be outlined in every contract and reiterated on every invoice. Here are some essential components to consider:

  • Due dates: Clearly state when payment is due, whether it’s upon receipt, net 30, or another timeframe.
  • Late fees: Specify any penalties for late payments, such as interest or a flat fee. This encourages prompt payment and offsets the cost of delays.
  • Payment methods: Offer several options, like bank transfers, credit cards, and digital wallets, to make it convenient for clients to pay.

By having these terms laid out upfront, you’ll reduce misunderstandings and set expectations from the get-go.

Leveraging invoicing tools and templates

Gone are the days of manual invoicing and keeping track on spreadsheets. Today, there are numerous invoicing software options that can automate and streamline your billing process. These tools offer templates that ensure consistency and professionalism.

Tools like QuickBooks, FreshBooks, and Xero allow you to automate invoice generation, send reminders, and they integrate with your accounting systems. The result? Less time spent on paperwork and more time focusing on your business.

Strategies for collecting past-due invoices

Let’s face it, chasing after overdue invoices is a task that few enjoy. However, it’s essential for your cash flow. Here’s how to approach it:

  • Polite reminders: Start with a friendly reminder email shortly after the due date. Acknowledge that oversights happen and provide an easy way for them to pay.
  • Follow-up calls: If emails go unanswered, don’t hesitate to pick up the phone. Sometimes a personal touch is all it takes to resolve the issue.
  • Overdue statements: Send a statement outlining all overdue invoices and any applicable late fees. This formal documentation can prompt action.

Remember, consistency is key. Establish a routine for following up on overdue invoices, and stick to it.

Offering incentives and payment options

Offering incentives can encourage timely payments. Consider providing a small discount for early payment, which can be an attractive option for clients looking to save a little cash. Additionally, the flexibility of multiple payment methods can remove barriers to prompt payment.

For instance, offering an early bird discount of 2% for payments made within 10 days can motivate clients to pay sooner rather than later.

Understanding outstanding vs. past due invoices

It’s crucial to distinguish between invoices that are outstanding (not yet due) and those that are past due. Outstanding invoices are simply payments expected at a future date and don’t require immediate action. Past due invoices, on the other hand, have missed the agreed payment date and need your attention.

Managing these categories effectively ensures you’re not wasting resources on invoices that don’t yet need follow-up.

Final thoughts

Managing receivables efficiently is vital for small business success. By implementing the strategies  above, you can reduce time spent chasing payments and improve your cash flow. Remember, the goal is to create a seamless process that encourages timely payments and reduces disputes.

Ready to take control of your receivables? Start streamlining your invoicing process today. Reach out to us for additional tips and support.

The more proactive you are, the healthier your business will be in the long run.

 

Understanding NZ’s new Payee Check service

Posted on by Margaret Gimpel

The New Zealand banking industry is working together to launch a new Confirmation of Payee service. The new service enables you to check if account names and account numbers match before making a payment.

What is the Confirmation of Payee service?

The Confirmation of Payee service acts as a safeguard, ensuring that the payee’s name matches the account name before processing payments. This will greatly reduce the risk of accidentally sending money to the wrong person and will help curb scams that prey on these errors. Essentially, it acts as an additional layer of verification, making digital payments safer and more reliable for Kiwis.

By verifying account names against account numbers, the service promises to improve financial security for both individuals and businesses.

Who does it affect?

The rollout of the Confirmation of Payee service impacts everyone who uses online or mobile banking in New Zealand, from personal account holders to businesses and sole traders. If you’re someone who frequently sets up new payments or makes one-off transactions, this service will become a part of your routine financial activities.

For businesses, especially those with different trading and account names, it’s essential to be transparent with customers about the correct account details to ensure smooth transactions. Sole traders and companies must communicate these details clearly, as any mismatch could result in failed payments.

What types of payments are affected?

From the end of November 2024, the Confirmation of Payee checks will apply to payments conducted through personal online and mobile banking apps for NZ-based accounts. This includes setting up new payees, making one-off payments, and editing existing payee details.

While the service will initially roll out for personal accounts, plans are in place to expand to business accounts over time. It’s a phased process, so stay tuned for updates from your bank on when these changes will apply to your specific accounts.

How does the Confirmation of Payee work?

The Confirmation of Payee service employs secure software that cross-references the account name and number entered by the payer against the records held by the recipient’s bank. This verification process ensures that the details match before any money is transferred. All information used in this process is fully encrypted, complying with the Privacy Act 2020, and is not stored post-verification.

TIP: To receive payments smoothly, ensure that customers have your correct account name and number. This simple step can prevent transaction hiccups, especially for businesses that might use a trading name different from their registered account name.

How and when will it roll out?

Beginning in late November 2024, New Zealand banks will introduce the Confirmation of Payee service in phases. Each bank will have its timeline and stages for implementing the service, so you might notice it on your online banking platform before it appears on your mobile app—or vice versa.

Banks will communicate with customers as the new functionality becomes available, so keep an eye on your bank’s updates to stay informed. Eventually, the service will be available across all personal and business banking platforms nationwide.

Why the shift to Confirmation of Payee?

The introduction of Confirmation of Payee comes in response to growing concerns over payment errors and digital scams. With online transactions becoming the norm, ensuring the accuracy of payments is more important than ever. This service aims to provide reassurance and protection for all bank customers by verifying that payments are heading to their intended recipients.

Scammers often exploit discrepancies in payment details, so this new verification process will act as a deterrent. By reducing the risk of mistakes and fraudulent activities, CoP enhances the overall trust in financial transactions.

Ensuring smooth transactions

Businesses should take proactive steps to ensure a seamless transition to the Confirmation of Payee system. Start by reviewing your payment processes and verifying that your account names and numbers are correctly listed on invoices and payment portals. For companies with differing trading and account names, clear communication with customers is vital to prevent payment errors.

Additionally, consider offering multiple payment methods to accommodate customers’ preferences and make transactions as easy as possible, whether through credit/debit cards, direct debit, or buy now, pay later options.

Potential challenges for businesses

Despite its benefits, the Confirmation of Payee service may present challenges, particularly for businesses. If a customer’s bank details don’t match exactly, payments could be delayed, affecting cash flow. To mitigate this, consider becoming a registered bill payee, allowing customers to search for and verify your details easily. Talk to your bank about setting this up.

Business owners should also educate themselves and their teams about this to ensure everyone understands the changes and can assist customers effectively.

The importance of staying alert

During the Confirmation of Payee rollout, customers should remain vigilant against potential scams. Fraudsters may attempt to exploit the transition period by posing as bank representatives. Always verify the source of any communication claiming to be from your bank, and never share personal information unless you’re certain of the recipient’s authenticity.

Banks will communicate legitimate updates through official channels, so stay informed and trust your instincts when dealing with unfamiliar requests.

Conclusion

The Confirmation of Payee service is set to transform the way New Zealanders conduct financial transactions, adding an essential layer of security and accuracy. By understanding how it works and preparing for its rollout, you can ensure a smooth transition and continued financial safety.

To stay informed keep an eye on updates from your bank, and don’t hesitate to reach out for assistance if needed.

 

The real cost of bad customer service

Posted on by Margaret Gimpel

Have you ever paused to think about the real impact of the customer experience your business is offering? Is it lifting your brand up or dragging it down, along with the morale of your team? The consumers of today expect nothing short of excellence, so understanding the consequences of poor customer service is vital. So, what does poor customer service actually cost you? Let’s delve into the details—it might just change your perspective.

The ripple effect of dissatisfied customers

Every business faces it sooner or later—a customer who leaves less than satisfied. But don’t be fooled into thinking that the story ends there. Unhappy customers rarely stay silent. In fact, they’re more likely to share their experiences with friends, family, and the vast world of social media. What’s worse, a scathing online review can echo for years, impacting your brand’s reputation far beyond the initial complaint. The National Customer Rage Survey highlights a worrying trend: a significant number of consumers are airing their grievances publicly, and the numbers are rising. This digital age makes it far too easy for a single bad experience to snowball into a PR nightmare, causing potential sales to slip through your fingers.

Damaged reputation: more than just a bad review

When your reputation takes a hit, it’s not just about losing one customer. It’s about a domino effect that can push potential clients away before they even give you a chance. With social proof playing such a crucial role in purchase decisions, even a handful of negative reviews can deter future business. In a competitive market, a damaged reputation can be a slow poison, eroding consumer trust and loyalty over time.

Decreased customer lifetime value

The lifetime value of a customer is a metric that businesses often strive to augment. However, poor customer service can drastically reduce this value. When customers feel undervalued or mistreated, they are less likely to return, cutting short the potential revenue they could have generated. This not only impacts immediate sales but also affects the long-term relationship that could have been nurtured through consistent, positive interactions.

The cost of increased churn

High customer churn is a silent killer for any business. When customers don’t feel heard or appreciated, they’re more likely to jump ship to a competitor who promises better service. This constant turnover is not just costly in terms of lost revenue but also in the effort and expense required to attract new customers to replace those who have left. A revolving door of clientele can undermine your business and drain resources that could be better spent on growth and improvement.

Employee morale and productivity take a hit

Believe it or not, poor customer service doesn’t just affect your customers—it takes a toll on your employees too. Handling disgruntled customers is draining, and over time, it can significantly impact employee morale and productivity. When your team is constantly dealing with unhappy clients, it can lead to burnout and decreased performance, affecting the overall efficiency of your business. Investing in proper training and support for your team not only helps improve customer interactions but also boosts worker satisfaction and output.

Missed opportunities for growth

Every negative customer interaction is a missed opportunity for improvement and growth. Poor service can blind you to valuable feedback that could lead you toward better practices and innovation. By focusing on delivering exceptional service, you open the door to learning from each customer interaction, paving the way for a more robust and dynamic business model.

Three steps to mitigate the costs of poor customer service

Understanding the costs of poor customer service is the first step, but addressing them requires actionable strategies. Here are three practical steps you can take right now to turn things around:

  1. Enhance employee training and support
    Equip your team with the skills and resources they need to deliver exceptional service. Regular training sessions and workshops can help employees stay sharp and motivated. Consider role-playing customer scenarios to prepare them for real-life interactions. By fostering a supportive environment where employees feel valued and empowered, you not only improve service quality but also boost morale and productivity.
  2. Leverage Customer Feedback
    Don’t shy away from feedback—it’s a goldmine for improvement. Implement systems to gather customer opinions through surveys, reviews, and direct communications. Use this feedback to identify pain points and areas for enhancement. Actively listening to customers and responding to their needs can transform negative experiences into opportunities for growth, demonstrating your commitment to their satisfaction.
  3. Improve Communication Channels
    Make it easy for customers to reach you. Efficient communication platforms, such as live chat, social media, and customer portals, can enhance the customer experience by providing quick and effective support. Ensure that your team is responsive and transparent in their communications, keeping customers informed and engaged. A streamlined communication process not only resolves issues faster but also builds trust and loyalty.

By implementing these steps, you can significantly reduce the negative impacts of poor customer service, leading to happier customers, more engaged employees, and a stronger brand reputation. 

Finally, remember, a proactive approach to customer service can be the key to unlocking long-term success.

 

Setting and tracking financial goals for small business success

Posted on by Margaret Gimpel

Setting financial goals for your business may be one of your most important responsibilities as a leader and business owner. Your financial goals serve as far more than wishful projections, they form the backbone of your road map for success, internal and external. Financial goals are something that every single business should possess regardless of its market, model or size. Let’s explore how you can set and track financial goals that empower your business to thrive.

Why financial goals matter for your business

Financial goals are more than just numbers on a spreadsheet. They are the roadmap that helps you plan and make strategic decisions. Without clear goals, it’s like driving without a destination in mind. Think about it—how do you know if you’ve arrived if you never set out where you wanted to go?

First, financial goals offer clarity. They transform your vision into actionable targets. When you know exactly what you want to achieve, it becomes easier to lay out the steps necessary to get there. It’s akin to plotting the course on a GPS; you need a specific endpoint to calculate the best route.

Second, having financial goals motivates you and your team. A shared goal brings people together, fostering collaboration and boosting morale. Your business benefits from the focus and drive that comes with working towards a common objective.

Lastly, financial goals prepare you for the unexpected. By regularly tracking your finances, you can identify trends and anticipate potential pitfalls before they become crises.

The benefits of financial goal setting

Setting financial goals is a powerful tool for business owners, offering a host of benefits. Not only do they provide direction, but they also enable you to measure success and maintain focus.

Clarity and focus

Financial goals bring clarity and focus to your business operations. With well-defined objectives, you can concentrate your efforts on activities that align with your overarching strategy. This clarity makes decision-making easier and more efficient, reducing the clutter of distractions.

Motivation and accountability

Goals serve as a source of motivation and accountability. Having clear targets keeps you and your team motivated to achieve them. It also creates a sense of accountability, as everyone understands their role in reaching the collective goals. 

Risk Management

Financial goals help in identifying and managing risks. By setting tangible targets, you are better prepared to anticipate potential challenges. This foresight allows you to develop contingency plans and make informed decisions, reducing the impact of unforeseen events. It’s the business equivalent of having a backup generator ready to kick in during a power outage.

Getting started with financial goals

Setting financial goals may seem daunting, but it’s easier than you think. Start by assessing your current financial situation. Understanding where your business stands financially is the first step to setting realistic and achievable goals.

Assess your current financial situation

Before setting goals, take a deep dive into your financial records. Look at your income, expenses, cash flow, and debts. This comprehensive overview will give you a clear picture of your financial health and highlight areas that need improvement.

Define clear and specific objectives

Once you have a grasp of your current situation, it’s time to define your financial goals. Ensure they are specific, measurable, achievable, relevant, and time-bound (SMART). Instead of setting a vague goal like “increase profits,” aim for something concrete such as “grow net profit by 20% over the next 12 months.”

Align goals with your business strategy

Your financial goals should align with your overall business strategy. Consider your company’s mission, values, and long-term vision. Ensure that your financial objectives support and contribute to these larger goals. For instance, if expanding into new markets is part of your strategy, set financial targets that reflect this growth ambition.

Breaking down goals into achievable milestones

Large financial goals can feel overwhelming, but breaking them down into smaller, manageable milestones makes them more attainable.

Create incremental milestones

Divide your larger financial goals into incremental milestones. For example, if you aim to increase annual revenue by $100,000, set quarterly targets of $25,000. These milestones act as stepping stones, providing a clear path toward achieving your ultimate goal.

Assign responsibilities and set deadlines

Assign specific responsibilities to team members or departments and establish deadlines for each milestone. This delegation ensures accountability and encourages collaboration. When everyone knows their role and timeline, the team can work cohesively toward the shared objective.

Celebrate small wins

Celebrate the achievement of each milestone. Acknowledging small wins boosts morale and motivation, reinforcing the progress made. It’s like celebrating each mile during a marathon—it keeps spirits high and momentum going strong.

Tracking and measuring progress

Setting financial goals is only half the equation; tracking and measuring progress is equally crucial.

Implement a tracking system

Establish a system to regularly track and measure your progress. This could be through financial software, spreadsheets, or other tools that provide real-time data. Regular monitoring allows you to identify trends, make adjustments, and stay on track.

Review and adjust goals periodically

Financial goals are not static; they should be reviewed and adjusted periodically. Changes in the market, industry, or internal factors may necessitate modifications to your goals. Conduct regular reviews to ensure your goals remain relevant and aligned with your business strategy.

Use Key Performance Indicators (KPIs)

Incorporate key performance indicators (KPIs) to measure your progress. KPIs are quantifiable metrics that reflect your success in achieving specific objectives. They provide valuable insights into the effectiveness of your strategies and guide decision-making.

Use technology to help you reach your goals

Technology can play a pivotal role in managing financial goals effectively.

Explore financial management software

Consider using financial management software to streamline goal setting, tracking, and analysis. These tools offer features such as budgeting, forecasting, and reporting, enabling you to make data-driven decisions.

Automate processes for efficiency

Leverage automation to enhance efficiency in financial goal management. Automation can handle tasks like invoicing, expense tracking, and financial reporting, freeing up time for strategic planning and decision-making.

Gain insights through data analytics

Use data analytics to gain valuable insights into your financial performance. Check trends, identify opportunities, and uncover potential risks. Data-driven insights empower you to make informed decisions and fine-tune your financial strategies.

Final thoughts

Setting and tracking financial goals is essential for small business success. They provide clarity, motivation, and risk management, guiding your business toward growth and sustainability. By assessing your current financial situation, defining clear objectives, and breaking them down into achievable milestones, you can pave the way to success.

Remember to track and measure progress regularly, leveraging technology for efficiency and insights. With well-defined financial goals and a strategic approach, your small business can thrive in today’s competitive landscape. Start setting your financial goals today and watch your business flourish!

For further resources and guidance, reach out to us. Your business’s financial success begins with proactive planning and strategic execution.

Master the Art and Science of Delegation

Posted on by Margaret Gimpel

Delegation is a skill often discussed but rarely mastered, especially by small business owners who are wearing multiple hats. The balancing act of managing daily operations while pushing for growth can be overwhelming. Imagine if you could free up hours in your day to focus on strategic decisions rather than getting bogged down in every minute detail. This is where the art and science of delegation come into play. By understanding and implementing effective delegation strategies, you can enhance productivity, foster team growth, and drive your business forward.

What is delegation?

In essence, delegation is the process of assigning responsibility and authority to others to complete tasks. It involves more than just delegating tasks; it’s about empowering your team with the right resources and support to achieve goals efficiently. But why is it seen as both an art and a science? The art comes from understanding your team’s strengths and how to motivate them, while the science involves the systematic approach to distributing tasks effectively.

Why Does Delegation Matter?

Delegation is crucial for business owners seeking efficiency and growth. Here are some compelling reasons why it should be a part of your management toolkit:

  • Increased productivity: By delegating tasks, you can concentrate on high-impact activities that need your expertise and oversight.
  • Skill development: When you entrust tasks to your team, you allow them to learn, grow, and become more skilled.
  • Enhances trust and collaboration: Delegating tasks builds mutual trust between you and your team, boosting morale and collaboration.
  • Promotes innovation: With more autonomy, team members are encouraged to think creatively and propose innovative solutions.

Types of delegation

Understanding the different types of delegation can help you apply the right one to a given situation:

  • Task delegation: Assign specific tasks that require completion within a set timeframe.
  • Responsibility delegation: Hand over entire processes or projects, giving your team ownership and accountability.
  • Authority delegation: Allow team members to make decisions that affect their tasks, boosting engagement and empowerment.

Pitfalls of Delegation

Like any other management skill, delegation comes with its set of challenges. Knowing what these common pitfalls are can help you avoid them:

  • Micromanagement: Overseeing every aspect of delegated tasks can undermine your team’s confidence and independence.
  • Lack of clarity: Vague instructions can lead to confusion and errors in task completion.
  • Fear of losing control: Worrying about the outcome might prevent you from effectively delegating important tasks.
  • Time constraints: Feeling rushed can lead to improper delegation, affecting both quality and team morale.

How to delegate effectively

Effective delegation isn’t a one-size-fits-all solution. Here are steps to help you delegate successfully:

1. Identify tasks to delegate

Start by listing all the tasks you currently handle. Identify which tasks can be transferred to others based on their complexity and your team’s capabilities. Routine and time-consuming tasks are prime candidates for delegation.

2. Choose the right person

Match tasks with the right person by evaluating their skills, experience, and current workload. Consider their interests as well to ensure they are motivated and engaged.

3. Set clear expectations

Communicate your expectations clearly. Outline the task’s purpose, desired outcome, and deadlines. Ensure that your team members understand the level of quality and any constraints they might face.

4. Provide resources and support

Equip your team with the necessary tools and training to complete their tasks. Offer your support and be available for guidance to ensure they feel confident in their roles.

5. Monitor progress without micromanaging

Check in regularly to offer feedback and ensure tasks are on track, but avoid micromanaging. Trust your team to complete their assignments and encourage open communication for any issues or questions.

6. Celebrate successes

Recognize and celebrate achievements. Acknowledge the hard work and contributions of your team to foster loyalty and motivation.

Overcoming delegation challenges

Even with the best intentions, challenges can arise when delegating. Here’s how to tackle them:

  • Building trust: Invest time in getting to know your team. Be transparent, show appreciation, and provide opportunities for growth to strengthen trust.
  • Effective communication: Develop a culture of open dialogue by encouraging questions and clarifying expectations regularly.
  • Managing fear of failure: Start by delegating smaller tasks to build confidence and gradually increase complexity as your team grows more comfortable.

Summing up

Mastering delegation is a process that blends art and science. It’s about striking a balance between control and trust, strategy and intuition. By implementing these strategies, you can transform use delegation as a powerful tool that not only lightens your load but also empowers your team and propels your business forward.

Ready to make delegation work for you? Start by identifying one task you can delegate this week and watch how the ripple effect of trust and efficiency begins to transform your workflow.

 

Takeaways from The Autumn Budget 2024

Posted on by Margaret Gimpel

The Autumn Budget 2024, delivered by Chancellor Rachel Reeves, is stirring conversations across the UK. With a focus on tax increases and economic reforms, it’s crucial for small business owners to grasp the implications of these changes. In this article, we break down some of the significant aspects of the budget and what they mean for you.

£40 billion tax increase

This year’s budget introduces a significant £40 billion tax hike, primarily affecting businesses and high-income taxpayers. The increase aims to cover rising public spending and investments. For small businesses, this means tighter budgets and a need for strategic planning to mitigate financial impacts.

A major part of this increase comes from sectors such as financial services and tech, which are hit with new levies. 

Changes in National Insurance, Corporate Taxes, and Capital Gains

Small businesses must pay close attention to the shifts in National Insurance, corporate taxes, and capital gains tax rates, which are set to affect both business operations and individual earnings.

  • National Insurance sees a heavier burden on employers, yet the increase in the Employment Allowance (from £5k to £10.5k from April 2025) provides some relief. National Insurance Contributions (NIC) for employers will rise from 13.8% to 15%, starting April 2025 and the threshold at which the NIC becomes payable drops to £5000.
  • Corporate Tax Rates remain capped at 25%, but changes like the inclusion of the undertaxed profits rule (UTPR) will affect multinational corporations with income over €750 million.
  • Capital Gains Tax will now have higher rates, moving from 10% and 20% to 18% and 24%, impacting business asset disposals.

Other key measures

  • Living/Minimum Wage both increased, National Living Wage to £12.21 an hour with minimum wage for those aged 18-20 to also increase to £10 an hour. So, if anyone on your team is on the lowest hourly wage for their age, this needs to increase from April 2025.
  • Reform of Carried Interest affects investment fund managers, altering how their earnings are taxed. Carried Interest rate is due to increase to 32% in 2025.
  • Changes for Non-UK Domiciled Individuals may influence business decisions for international stakeholders operating in the UK.
  • Annual Investment Allowance stays at £1m a year, meaning you can continue to buy a significant amount of capital equipment each year and get tax relief in the year of purchase.
  • Taxation of Company Cars – the Government has set company car tax rates for 2028/29 and 2029/30, increasing electric vehicle benefit charges by 2% per year to support EV adoption, closing ECOS tax loopholes by 2026, and applying a car benefit charge to double cab pick-ups starting April 2025.
  • Inheritance Tax – Inheritance tax thresholds are frozen until 2030, pension death benefits will face inclusion in IHT from 2027, and tax relief on AIM shares is reduced to 20%.

HMRC compliance

The budget’s emphasis on HMRC compliance highlights a need for businesses to closely examine their financial practices. With increased funding for compliance staff, HMRC aims to enhance tax collection efforts, potentially increasing audits and scrutiny. Small businesses should ensure their financial records are precise and up to date to avoid penalties.

Retained fuel duty rates

For businesses reliant on logistics, the retention of current fuel duty rates comes as a relief. By keeping these rates steady, the budget offers a buffer against rising operational costs, benefiting industries with significant transportation needs. This stability helps in cost forecasting and maintaining price competitiveness.

Planning ahead

The Autumn Budget 2024 represents a critical moment for small businesses and individuals to reassess their financial strategies.

Talk to us to ensure you are well-prepared for the changes outlined in the Autumn Budget 2024.

 

Creating a culture of accountability: How to be a High Performance Leader

Posted on by Margaret Gimpel

In any successful operation, accountability is the bedrock upon which trust and performance are built. At the heart of this dynamic are leaders who not only demand accountability from their teams but also embody it in their leadership style. Here’s how they maintain a culture of accountability:

1. Communicate and uphold high expectations

Accountability is a framework that helps individuals understand what is expected of them, ensuring they meet expectations effectively. High Performance Leaders consistently articulate their high standards, often offering insights into how tasks can be enhanced to better serve customers. They lead by example, continuously striving for self-improvement, sometimes with the guidance of a coach or mentor to maintain their progress. The dominant concern for those working in the team is the possibility of disappointing their leaders by not delivering exceptional work.

2. Communicate work clearly

Clarity is key. These leaders make sure that everyone knows exactly what is expected of them. When tasks and responsibilities are clearly defined, team members feel secure and more focused on achieving the common goal. This transparency ensures no one is left guessing about their role or the standards they need to meet.

3. Regular one-on-ones

Frequent one-on-one meetings are a staple. These sessions are not just about performance reviews; they’re opportunities for leaders to listen, support, and align employees with broader business goals. This ongoing dialogue helps team members feel valued and connected, ensuring they have the resources and guidance needed to succeed.

4. Create a safe space

A culture of accountability also means creating a safe space for growth. The best leaders encourage their teams to take risks and learn from mistakes without fear of retribution. By fostering honest conversations and rewarding direct communication, they build an environment where creativity and resilience can thrive.

5. Visibility

Approachability and presence are crucial. Even amidst a busy schedule, leaders make themselves available to their teams. Their visibility assures team members that support is always within reach, whether it’s during a crisis or a regular check-in.

6. Leader accountability

Accountability is a two-way street. High Performance Leaders hold themselves to the same high standards they expect from their team. By consistently delivering on their commitments and owning their mistakes, they earn the respect and trust that empowers them to demand accountability from others.

7. Focus on a meaningful future

When the going gets tough, it’s vision that keeps teams motivated. High Performance Leaders paint a compelling picture of the future, helping employees see the bigger picture and understand why their hard work matters. This sense of purpose ignites passion and persistence, driving the team forward.

8. Low tolerance for poor performance

Maintaining high standards sometimes means making tough decisions. High Performance leaders provide support and opportunities for improvement, but they’re also clear about the consequences of underperformance. By addressing issues head-on, they ensure that the team remains strong and focused.

In conclusion, the interplay of these practices creates a high-trust, accountable workplace where individuals are empowered to excel. It’s a culture where expectations are clear, support is abundant, and everyone, from the top down, is committed to continual growth and success.

 

The heart of the matter – succession planning for the family business

Posted on by Margaret Gimpel

Succession planning in a family business is a complex and often emotional process that involves more than just passing on company control to the next generation. It requires careful preparation, open communication, and a deep understanding of the emotional dynamics at play. Effectively managing these emotional dynamics is crucial to ensure both family harmony and business continuity.

Understanding emotional dynamics

Family businesses are a unique blend of personal and professional relationships, which can sometimes make decision-making emotionally charged. It’s important to understand how each family member feels about the business and their perceived roles within it. By acknowledging these feelings, you create an environment of openness and trust.

Take the time to engage in honest discussions with family stakeholders, offering them the opportunity to express their thoughts and aspirations. Listening empathetically can help diffuse tensions and align goals. Remember that emotions are valid, and addressing them directly can prevent conflicts later on.

Establishing clear communication

Effective communication is essential in reducing misunderstandings and setting realistic expectations. Identify clear roles and responsibilities for each family member involved in the business. Discuss future visions from both a personal and business perspective, acknowledging that these may sometimes diverge.

A structured approach, such as regular family meetings or employing a professional mediator, can help streamline discussions. The aim is to establish a shared vision that reflects both the legacy of the business and the future aspirations of family stakeholders.

Practical steps for smooth succession

  1. Create a formal plan: Draft a succession plan that outlines the transition timeline, roles, and business objectives. This document should be reviewed regularly to adapt to any changes within the family or business dynamics.
  2. Professional advice: Engage with financial advisors, legal experts, and business consultants who work with family businesses. Their objective viewpoint can provide clarity and legal insight, helping to navigate technical aspects of the transition.
  3. Training and development: Invest in training programs for the next generation to prepare them for future leadership roles. Encourage them to gain external experience and learn new skills that can benefit the business.
  4. Mentorship and support: Provide ongoing mentorship and support for successors. This helps build confidence and ensures a gradual knowledge transfer, reducing the risk of disruption in business operations.

Balancing emotions and strategy

Balancing emotional considerations with strategic thinking is key to successful succession planning. “You can’t make a Tomelette without breaking some Greggs,” as Logan Roy quips in the series ‘Succession’. It reminds us that navigating through the tough, often messy aspects of succession will inevitably involve some challenges, but it’s all part of achieving a cohesive outcome in the end.

Ultimately, succession planning for family businesses is about preserving the legacy while paving the way for future success. By approaching the process with empathy, clarity, and proactive planning, families can transition smoothly while maintaining both emotional and business stability.

Contact us for expert guidance

If you’re navigating the intricacies of succession planning within your family business and need a neutral third party, we are here to help. With extensive experience in the field, our team can offer the empathetic and practical support needed to facilitate a smooth and successful transition. We can help you preserve your business legacy. Contact us today to learn how we can help you with a succession plan tailored to your unique needs.

 

Unlock Sales Success

Posted on by Margaret Gimpel

A solid sales strategy will help you consistently grow your business. It will give you a framework for generating more leads, closing more deals, and ultimately increasing your revenue. From nurturing existing accounts to thought leadership and effective pricing discussions, here are some actionable steps for a winning sales strategy.

Nurture existing accounts: 

  • Schedule regular check-ins with current customers to maintain relationships. 
  • Use social media to engage with customers through personal messages and content. 
  • Identify opportunities for upselling and cross-selling based on customers’ past purchases.

Pro Tip: Leverage customer relationship management (CRM) software to automate reminders for check-ins and track engagement history, ensuring that no account is overlooked.

Establish thought leadership: 

  • Create and share valuable content, such as blog posts and webinars, demonstrating your expertise. 
  • Participate in industry events and forums to showcase your knowledge. 
  • Collaborate with other thought leaders to broaden your reach and credibility.

Pro Tip: Repurpose your valuable content into different formats, such as infographics or podcasts, to reach a wider audience and cater to various preferences for consuming information.

Handle pricing discussions transparently: 

  • Research and understand your audience’s preferences on when to discuss pricing. 
  • Prepare clear, value-focused pricing proposals that highlight your product’s benefits. 
  • Keep communication open and be willing to answer any price-related concerns.

Pro Tip: Use storytelling to illustrate the value of your product in real-world scenarios, helping customers imagine the positive impact of their investment and facilitating a smoother discussion about pricing.

Craft custom pitches: 

  • Conduct thorough research to understand the unique challenges and pain points of your prospects. 
  • Tailor your sales messaging to address these specific needs and solutions. 
  • Follow up with prospects to gather feedback and adjust your pitch as necessary.

Pro Tip: Incorporate a discovery phase in your sales process where you actively listen to your prospects’ concerns and needs, enabling you to tailor your pitch with relevant examples that resonate with them.

Remain adaptable: 

  • Stay informed about market trends and changes that could impact your business. 
  • Regularly review and assess the effectiveness of your sales strategies and be willing to pivot as needed. 
  • Encourage team input on potential improvements and innovations in your sales approach.

Pro Tip: Regularly seek feedback not only from your sales team but also from your customers about their experiences and what they feel could be improved, ensuring that your approach remains customer-centric and responsive to their needs

Remember

Following these steps will give you a robust sales strategy, underpinned by a focus on building lasting relationships with your customers.