Tuesday, 14 February 2017

Solving Problems Not Just Symptons

Regardless of the type of business that you manage, problem solving is undoubtedly part of your day job. However are you solving problems or just the symptoms of problems?

No matter how good a manager you are, nor how hard you work, you’ll end up in trouble if you spend your time solving symptoms rather than actual problems. It is often not easy to determine when an issue is in fact a problem that needs to be solved and when it is a symptom of deeper trouble in the business.

What’s the real problem?

A problem is a holistic failure of something you are trying to accomplish. Treating symptoms wastes time, money and resources. In the business world of problems and symptoms, often what you first think is a problem, is really only the symptom – it’s not the real issue. If you focus on that symptom without uncovering the real problem you are wasting your time. You need to discover what’s causing the issue.

To find this out you might need to discuss the issue with different people across your business. Keep in mind the focus of the conversation is to find the root cause of the issue, rather than find “someone to blame”. The goal must be to strengthen the business by eliminating a problem or making a system or process better.

How long has the problem existed?

Problems usually occur in one of three ways; the same old problem, something brand new or the old problem but manifested in a different way. If the problem’s been around for a long time, perhaps there’s a deeper issue embedded within your business. If this is the case you need to deal with the underlying issue.

Does the problem serve a function?

Is the problem worth fixing or is it just a mild annoyance that doesn’t really impact the way the business functions? If it is worth fixing then you should do that as soon as you can realistically do so.

Once you understand the real, underlying, root cause of the issue, you can begin to design a solution. That solution may require rethinking the processes and procedures in your business. It might even entail a reorganisation of aspects of the firm. Whatever the solution you develop, you will need to think through the steps required to successfully implement and evaluate it in order to eliminate the problem.

Contact us if you have any questions or need business help:
PJ | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Saturday, 11 February 2017

Blurring The Line Between Work And Life!

Technology is a double-edged sword which is blurring the line between home and the office. In some ways, this adds more flexibility in terms of how we can all manage our time but it also means more calls, more email and more meetings.

Work-Life Balance

 Technology also means that we frequently have to switch between work and life. It’s no longer the case that we switch off from work when we leave the office. Rather, we go home and are constantly switching back and forth between family and work roles, dipping into work-related social media even as we are cooking dinner or having a drink with friends.

Smartphones have really impacted our ability to manage our time. As such, it can be helpful to switch your phone off from time to time. You need to allow yourself some time away from the chaos: the calls, texts, emails and social media alerts. Whether you're spending a night out with your partner or grabbing lunch with a friend, you don't need to obsess over work at every moment. If you turn off your device on weekends or the odd evening, you won't feel the constant need to check on business matters.

Working hard is tiring. The demands of the modern working environment can often make you feel that you need to be “always on”.

Time is a limited resource and in order to make the most of your time it is important to manage your energy levels in order to allow your mind and body to perform. No matter how accessible we are to our clients and our work responsibilities, we can't make more time. As such it is necessary to make the most of our time by being more effective when we are in “working mode” but it is essential that we allow time to replenish our energy. Sleep, exercise, eating properly and having a good social life are essential to success in business. Giving yourself time to recharge ensures that you will be more alert and more effective when you are working.

In order to be more efficient and effective in how you use your time, it is imperative that you create a realistic schedule. You can only do one thing at a time. As such, you should create your to do list in your calendar (Outlook, Google, IOS etc.), allowing enough time to get things done.

It’s also important to build in some flexibility so that you can respond to unexpected demands as and when they arise. Your approach to scheduling should also prioritise and allow time for your health, family and hobbies. After all – we work to live, we don’t live to work!

Friday, 10 February 2017

Stop Selling, Start Helping Your Clients to Buy!

Increasing your sales isn’t all about selling. Instead you should focus your energy on helping your customers to make a buying decision. Customers are more in control of their buying decisions than ever before. They have a wealth of alternatives and information available online, and interactive access to sources they trust via social media. They don’t want to be pushed into a sale, but they are happy to be pulled in by what is important to them.

If you want to help your customers to buy, you need to spend more time understanding what motivates their buying decisions. This means understanding the buying process.

The buying process begins with customers understanding that they have a need for a product or service. The stimulation for that need may have come from the obsolescence of an existing product or service or perhaps a desire to acquire a significant one off, high value, purchase.

At this stage, two groups are responsible for attracting these potential customers - the marketers (who raise awareness of your products / services) and the people involved in the previous sale (who generate recommendations from existing customers).

The next phase of the buying process involves your sales team directly. Customers seek people they can trust. Trust is enabled by the provision of a referral from an existing customer who has had a good experience; the presence of a strong, reputable brand; or the level of service received from a business.

In terms of your sales team, having conversations with customers helps to develop rapport. Asking open questions which cannot be answered with a yes or no engenders trust. The opposite, closed questions, when strangers first meet, sound like and feel like an interrogation and should be avoided. Good sales people know how to start a conversation and build rapport with clients. If your sales team can’t seem to do this, perhaps they need some training.

The final phase is where the traditional sales approach kicks in. At this stage, the buyer is looking to determine the value of your product or service offering. Your sales process needs to demonstrate this value to the potential customer.

Customers who have developed trust in your firm and / or your sales people will place an unconscious premium on the relationship when it comes to considering perceived price versus perceived value. Once you can demonstrate value to your customer you should be able to help them to close a deal.

Wednesday, 8 February 2017

Developing A Culture Of Accountability

One of the toughest balances to achieve within any business is between building a culture that gives people the autonomy to get on with their job while maintaining an environment of accountability.

There is a fine line between managing and micromanaging  and it tends to be quite subjective. Some team members will welcome day to day management and guidance while others might rather be left alone to get on with their job. As such, it is necessary to create systems and processes which allow the management team to maintain awareness of what is going on across the business without people feeling like someone is constantly checking on them.

Everyone in the firm should have annual goals which align with the overall objectives of the firm and are communicated to everyone across the business at the start of the year. Each individual should then be tasked with agreeing what their personal goals should be with their manager. These should cascade down from the overall objectives of the business. Ideally you should aim to agree between five and eight goals for each team member.

Once everyone’s objectives have been set, you and your management team should set up quarterly meetings with each of your staff to discuss progress towards achieving each objective. You should let your team member lead the meeting, explaining the progress they have made towards each goal and what they intend to do in the next quarter in order to keep moving forward. As a manager you should ask open questions such as “What went well? Which areas could be improved upon?” or “Do you need any additional resources in order to achieve your goals?” This will provide the opportunity to assist the individual towards successfully achieving their goals but in a way that doesn’t feel like they are being micro managed.

Finally, each team in your business should have a weekly meeting with an agenda designed to allow everyone to update what happened last week and what is planned for the next week. This provides an opportunity for managers / team leaders to drive objectives forward. In order to encourage accountability, at each weekly meeting, every team member should be required to give a 3-minute update on where they are against their objectives.

In order to make this approach work, the managers in your firm should be accountable for the objectives and their teams should be responsible for delivering them. In order to communicate progress across the business and increase transparency, each manager should produce a quarterly update, which can be shared across the firm. This could take the form of a simple email to all staff. This type of communication also allows the managers to outline what is coming up in the next quarter and solicit help / resources if required.

Monday, 6 February 2017

Facebook Live

With latest figures showing 1.79 billion monthly active users, Facebook is a social media platform that has immense potential for business users. However, as with any large target audience, getting your message right is key.

Facebook Live is a new video streaming service which enables users to livestream video broadcasts from their mobile phone or other device. While this idea in itself isn’t new, Facebook’s huge audience means many more people can potentially tap in to the videos that you post. In addition, Facebook Live offers features such as the ability to watch again (unlike platforms such as SnapChat).

Facebook Live is designed to be interactive and allows users to comment on videos and share them. For business users, there is great potential here - customers can ask direct questions about the products or services that you feature in your live video, and this allows you to resolve queries. It may also provide valuable insights into what your customers actually want.

The key benefit of Facebook Live is that it offers your business the chance to engage directly with users and offer interesting live footage. The live element means that you can now draw people in as your news is happening. For example, you could stream the live launch of a new product or service to your customers and potential customers around the world.

Using the service is very straightforward. Users go to their Facebook page and when they are ready to start filming simply tap on the live stream icon. As soon as this is done, followers will get a notification, which will immediately request them to engage with the content. You can also write a description of what you’re filming. An important point to remember is that all live videos are archived. This means that if a user misses the video, they can go back, view comments and watch it after you’ve stopped recording. This offers a further extension of the platform for users to share their experiences of your product / service and gives you additional (free) marketing opportunities.

Thursday, 2 February 2017

Tax News UK - February 2017!

Making Tax Digital To Be Delayed?

The Treasury Select Committee has reviewed the proposals for the introduction of “Making tax digital” (MTD) and have agreed with the various professional bodies that if the new systems are introduced too quickly there could be a disaster. It would significantly increase burdens on small businesses. In their report they comment that the overall benefits of  mandating the digitising of record keeping and quarterly reporting, as is currently envisaged, have yet to be proven.

The Select Committee further note that the cost to business of introducing MTD, as well as the continuing costs of maintaining digital records and submitting quarterly updates are of further concern to the Committee, as is the availability and functionality of the free software that has been promised.

At the time of writing we are awaiting the Government response to  the November 2016 consultation and we will keep you updated about the implications for your business. Remembers that the proposals as they are currently drafted will apply to property rental businesses as well as trading businesses.

Do You Have Enough Shares To Qualify For CGT Entrepreneurs’ Relief?

Entrepreneurs' Relief reduces the rate of CGT to 10% on the first £10 million of gains on the disposal of qualifying business assets. This would include sole traders disposing of their business and partners disposing of their interest in a partnership carrying on a business. With many businesses operating as limited companies these days it is important to appreciate that not all shareholdings qualify for this generous relief.

Shareholdings qualify for Entrepreneurs' Relief provided the company is a trading company or the holding company of a trading group. There are additional conditions that the shareholder is an officer or employee of the company and holds 5% or more of the company's ordinary share capital and votes. All of these conditions must be satisfied throughout the twelve months up to the date of disposal.

A couple of recent tax tribunal cases have considered the 5% test and the HMRC view is that most shares except for certain preference shares need to be considered. Always contact us first if you are considering issuing additional shares in your company as it may have a detrimental effect on other shareholders' entitlement to CGT Entrepreneurs' Relief.

Shareholders Must Also Be Officers Or Employees

In order to qualify for CGT entrepreneurs' relief on the disposal of shares, the shareholder must have been an officer or employee of the trading company or group throughout the twelve months up to the date of disposal. Although there is no minimum  number of hours, it is important that there Is evidence that this condition is satisfied, so for example the employee/ director should not resign before the disposal of shares takes place.

HMRC are known to request such evidence and recent tax tribunal cases have resulted in Entrepreneurs' Relief being denied .

New Government Savings Scheme Starts In April 2017

From April 2017,adults under the age of 40 will be able to open a Lifetime ISA (LISA) and pay in up to £4,000 each tax year. They will be able to continue making contributions up to the age of 50. The government will add a 25% bonus to these contributions. This means that individuals who save the maximum will receive a £1,000 bonus each year from the Government.

The tax-free funds, including the Government bonus, can be used to help buy a first home worth up to £450,000 at any time from 12 months after first saving into the account. The funds, including the Government bonus, can be withdrawn from the LISA from age 60 tax-free for any purpose. LISA holders will also be able to access their savings if they become terminally ill.

If savers make withdrawals before age 60 for other purposes a 25% charge will apply  to the amount of withdrawal. This returns the bonus element of the fund (including any interest or growth on that bonus) to the Government.

“Help to Save”, aimed at supporting people on low incomes to build up their savings will follow in 2018. That scheme will add a 50% Government bonus on savings up to £50 a month for up to four years. Help to Save will be available through NS&I to any adult who is receiving working tax credit or universal credit with minimum household earnings equivalent to 16 hours a week at the National Living Wage.

Don’t Forget Your 2016/17 ISA Allowance

The current ISA allowance is £15,240, rising to £20,000 for 2017/18. Remember that there is no longer a 50% restriction on the amount that you can invest in a cash ISA; the £15,240 annual limit covers all ISA investments which could be in shares, bonds, cash or certain other investments.

And Make Pension Payments Before 6 April

The current annual pension limit remains at £40,000. In addition, unused relief from the previous three tax years may be utilised once the current £40,000 limit has been used. However, the relief from 2013/14 will lapse on 6 April 2017.

If, for example, you have £10,000 unused allowance from 2013/14 you would need to make pension contributions of at least £50,000 by 5 April 2017 to avoid losing your 2013/14 relief. Remember also that pension savings continue to qualify for higher rate tax relief and may help to reduce your payments on account.

Property Sales – Trading Or Capital Gain?

In the December edition of this newsletter we flagged up that new anti-avoidance legislation in Finance Act 2016 will tax certain transactions in UK land as trading transactions instead of capital gains.

Just before Christmas, HMRC issued guidance to clarify the scope of the new rules. The legislation as enacted in Finance Act 2016 was drafted in such a way that it could be interpreted as catching certain disposals by buy to let landlords. The HMRC guidance states that the new rules do not apply to businesses which acquire and repair properties in order to generate rental income, even if those businesses also enjoy capital appreciation from those properties. So the average buy-to-let landlord should not be subject to income tax on the gains he makes when he sells properties which were acquired for letting.

The HMRC guidance also makes it clear that the new transactions in UK land rules are directed at businesses which conduct a trade consisting of property development or property dealing.

This is a complex area and you should contact us so that we can help you ensure that the sale is treated correctly for tax purposes.

Scottish Income Tax Rates And Thresholds

The Scottish Government has the devolved power to set certain tax rates, principally income tax and land transaction tax (equivalent to SDLT in England and Wales). Although it proposes to freeze the basic, higher and additional rates at 20%, 40% and 45% respectively, the thresholds will not be the same as the rest of the UK.

The higher rate income tax threshold will increase by inflation to £43,430 in 2017/18. Whereas the higher rate threshold for the rest of the UK will be £45,000.

Scottish income tax applies to Scottish taxpayers who are UK resident but who live for most of the year in Scotland. Where they work is irrelevant but workers who live in Scotland are liable to Scottish income tax on their non-savings income. If you employ staff who live in Scotland they should have a special PAYE code so that the correct tax is deducted. This will be particularly important when there is a lower, higher rate threshold in Scotland.

On the land and buildings transaction tax (LBTT), the equivalent of stamp duty land tax in the rest of the UK, rates have been kept on hold for 2017/18 at their current 2016/17 levels.

Contact us if you have any questions or need business help:
PJ | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Wednesday, 1 February 2017

What to consider while scaling up your small business?

Increasing the scale of a business is easier said than done. If your business objective is to scale up, you need to consider the people aspects, strategy and financials.

People make the firm

People determine a company’s success, and hiring the right people is critical. Hiring a team of great people will help to solve most of the problems the business encounters as it increases in scale. As such, you should invest time and money into the hiring process to find the best professionals to take the company to the next level. Screen candidates not only for their skills and knowledge, but also for their personality and how well they fit the mission, values and culture of the firm.

Once you have hired the best team, you need to make sure that you keep them. You and your management team should communicate openly, recognise and reward their achievements, and give them the tools and training they need to succeed.

Follow a simple strategy

In the words of Albert Einstein, “Everything should be made as simple as possible - but not simpler.” Businesses need a strategy to succeed, but it shouldn’t be complicated. The very best strategic plans are 1 page of A4.

The strategy should include the strengths, weaknesses, opportunities and threats of the business, the company’s core values and mission. As the focus is to scale up and grown the firm, the strategy should include high-level goals for each quarter, and year. Once you have finalised the strategy, ensure that you communicate it effectively so that everyone in the firm understands what the objectives of the firm are and what they need to do to achieve the overall goal of growing the business.

Manage risk (and cashflow)

Like anything in life, businesses encounter unexpected storms from time to time. As such, the management team should manage risk effectively in order to ensure that the firm’s growth strategy isn’t derailed by unforeseen market forces.

Cashflow is very important when trying to increase the scale of a business. As such, unnecessary outlay should be avoided. Instead, the firm should focus on building up cash reserves which can be used from time to time to assist the business in achieving its growth strategy.

Contact us if you have any questions or need business help:
PJ | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com