Business Management | BizSieve.com

Common Mistakes In Business Practices That You Will Need To Avoid

Many new business owners consider that the financial management of their enterprise is an over complicated task that is best left in the hands of their accountant. However, nothing could be further from the truth, because the task of the accountant resides exclusively in recording the cash flow from and to your enterprise, not interpreting it. He is not qualified to keep track of your company’s profit loss ratio and take business decisions according to it. You are!

While I’m not saying that financial management is a walk in the park, you can definitely make things easier if you steer clear of the mistakes that I’m going to present in the following article.

Failing to establish business strategies that are easy to follow

You should start your enterprise by organizing a list of tasks that are mandatory for its well being and profitability, such as:

Constant verifications of the company’s revenues
Checking out the value of the expenses on a regular basis
Examining the cash flow
Requesting a forecast of the company’s budget in the long and short term

Photo credits: stefan.erschwendner

There are of course other tasks, related to your particular business niche that you need to account for. However, the point is that you need to plan these actions on a regular basis and always make time for them, irrespective of how busy your schedule is. Without them, financial chaos are bound to unleash and that’s never good for business.

Combining personal income with the company’s income

Right off the bat, that is probably the worst thing you could possibly do because it’s a surefire way of embezzlement. Disconnect the two accounts – business and personal – is the first action you should engage providing you recognize yourself in this situation. At the same time, it is critical to refrain from paying your company’s expenses from your own pocket or vice versa, purchasing personal use goods/services from your business account. It is also necessary to point out that these erroneous approaches will make it difficult to keep track of profit and loss statements, income statements and cash flow statements.

Avoid paying your taxes as much as possible

Many financial experts state that the taxes themselves are not the actual reason why businesses become crippled. To put it simply, the taxes that you have neglected to acquit will start piling up to the point when you will not be able to get out of debt. Other common errors you can make is to utilize the money that should be dedicated for taxes in order to account for other operating purposes or to forget about setting aside the cash that goes on taxes for each of your employees. In order to avoid these costly mistakes, my suggestion is to open a dedicated tax bank account which will be utilized for no other purpose and that will also help you provide the quarterly estimates requested by the IRS authority.

Improvising instead of planning

Remember how I mentioned the fact that you need to have the financial statements on your desk to analyze at least on a monthly basis? Well, that will not serve any purpose if you have not set an actual goal for your business. In other words, you have the data at your disposal but you have no idea what it signifies. Is it good? Is it bad? In the absence of a pre-established financial goal – for example a certain monthly/yearly net profit – you have no clue regarding whether or not your current business strategy needs tweaking. On the other hand, by creating at least a basic estimate of your expectations will permit you to find out how close you are to the goal and adapt accordingly.

Forgetting to put a part of the revenues aside for a rainy day

The volatility of the financial environment nowadays makes creating a revenue savings fund more necessary than ever. Almost every field of business can experience sudden shifts in supply and demand, so without a lifeline your company may be assuming more risks than it can handle. However, there is an alternative reason why a certain percentage of your revenues should go into a savings account: unexpected opportunities. What I mean here is that there is no way to predict when you could be granted to possibility to make an investment that would allow your business to expand or reinvent itself. Therefore, if you want to be certain that you are not the one left on the shore while that ship sails, be sure to take this advice into consideration.

Not outsourcing some of your workload

As a rule of thumb, in the business world you cannot make money without spending some cash first. Here I’m not referring to the budget for marketing and advertisement, but rather to that associated with distribution and fulfillment services.

If you have been in business for a while now, then it is likely you already have these details sorted out. However, if you do the math, you will soon realize just how much this actually costs. All I’m saying is that fulfillment centers have managed to help some industry veterans reduce company expenses. Isn’t it worth checking out if this is applicable for you as well?

New companies that consider they can’t possible afford such an investment, should think of their competition. Can you say that you can live up to the standards in your niche operating from an adjacent area or a stock room? Think about it, folks!

About the Author: Chad is a writer for fulfilmentcenters.com, a leading fulfillment service in the US.

Delivering more with less – How to (successfully) run a lean project

If there’s one thing the recession has taught us it’s that every business must run as ‘lean’ as possible.

In these cash-struck times, the basic premise of lean – creating more value in delivering client projects using fewer resources – has never been a more attractive prospect.

In project-oriented organisations where people-related costs are far and away the biggest outgoing, it is difficult to cut out the fat without leaving the business exposed. The well-established just-in-time strategies of the manufacturer have to be translated into a ‘just-enough’ strategy for resourcing, so that projects are delivered on time and to budget.

Successfully implemented, the lean approach leads to a winning combination of outcomes: better managed projects, greater client satisfaction, reduced cost to the business and importantly, greater long-term business viability.

Here, we look at the key pointers that are fundamental to developing a leaner business without putting projects and client relationships at risk…

Don’t keep recreating the wheel – build on previous experience to save time, reduce administration, and improve the accuracy of your quotations. When setting up new projects, use previously entered information and apply previously established rules, processes and templates.
Have clearly defined project plans – assign key responsibilities so everyone knows what they’re doing. Ensure any actions discussed as a team have a named ‘owner’, responsible for carrying them out.
Measure and review throughout the project cycle – but do this in a way that does not in itself consume time and hinder progress, for example by automating the flow of information from remote teams back into the business.
Eliminate bottlenecks – use the technology available to streamline essential processes such as workflow management, timesheet recording, expense claims, time and expense approvals, and billing.
Trust and empower your team – an open book approach increases accountability and helps win their support in the drive to increase efficiency and identify where time could be better spent.
Gain a ‘helicopter’ view of your whole project portfolio – being able to view the big picture but also zoom in on the underlying detail leads to better management and strengthens your ability to avert risk.

This article is taken from the IRIS ProjectMinder whitepaper: ‘Running lean: How project-oriented organisations are creating more value with fewer resources‘. The guide is free and available to download in full here.

About the author: Paul Sparkes is Product Director at IRIS ProjectMinder, the ideal web-based project management solution for architects, engineers, surveyors, IT & management consultants, marketing agencies, and other time-based project centric organisations

The Importance of Data Confidentiality for Small Businesses

The second a business obtains a piece of confidential information is the moment security measures must be put into place to protect the business and the people the information pertains to. A business doesn’t have to be a government contractor to think about ensuring the privacy of documents and personally identifying information.

Ideally, every piece of information about a customer, client, business partner or employee should be kept confidential, but this is not always possible to do. Some examples of information that should be secured are:

Names
Telephone numbers
Email addresses
Physical addresses
Blueprints
Patent designs
Research
Financial details

While it is often overlooked in this digital age, physical data needs to be secured too. For instance, if running an architecture business and a project is to be kept under wraps for whichever reason the client has, especially in the case of government and military facility plans, blueprints and design plans should be kept under lock and key with limited access.

data-privacy — *Image by Salvatore Vuono*

The secretary and the cleaning staff shouldn’t need to be privy to the details of where escape routes in the latest military research facility are located. File folders, contact information, billing information and everything else that isn’t public information should be kept in lockable cabinets or rooms.

Though it is harped upon, not everyone practices the safest digital security. Antivirus programs and software firewalls are, of course, helpful. However, they are not the only security points that need to be addressed. For example, a company that engages in researching highly-infectious viruses should keep data pertaining to the research on a company intranet that doesn’t have outside access to the Internet to protect it from potentially harmful leaks. Furthermore, not everyone needs access to certain files and computer networks.

Some small businesses may feel that it’s far too much work to be bothered with physically and digitally securing information. They may feel that they’re too small for anyone to notice or bother with. As far as the Information Commissioner’s Office (ICO) is concerned, a company could have one client and still be under breach of the Data Protection Act (DPA).

If a small business is caught with a breach concerning confidential information, the ICO has potentially unlimited fining power. The highest fine they’ve ever issued came in June 2012. It was issued to the NHS in the amount of £325,000 GBP. Fines are calculated based on whether a breach is the first one, how big an impact it may have or has already had and a number of other factors. Because the fines, except in special instances, do not have caps, a small business would benefit from ensuring the security of customer data.

About the Author: Andrew Morrell has been involved in the confidential paper shredding services for several years and believes in the importance of business security and managing data. He currently works for Russell Richardson.

The Many Hats of Small Business Ownership

Small Business Owners Wear Many Hats… One at a Time.

As you launch your own business, you inevitably will “wear many hats.” Of course, day-to-day operations will require frequent changes of hat and headgear, but you always must remember, when you don more than one hat at a time, you just look and act silly. More importantly, you absolutely cannot change your mind each time you change your hat. Change-up the millinery as circumstances demand, but make sure each new brim contributes to building the business by commanding customers’ loyalty.

Pat on his Mac (next to another Mac)
Image by Kevin Galens / Flickr

Maintain Your Priorities and Solve Urgent Problems

Before you celebrate your grand opening, take time to examine your entire hat collection, assessing the relative importance of each. The collection surely will include marketing, public relations, advertising, accounting, finance, IT, forecasting and planning; as the business grows, you will add personnel management and training. Day by day, your profit-and-loss, your market share and the quality of your competition may influence your hat selection, but do not allow exigency or expedience to prevail over your genuine priorities. Baseball caps and hard-hats come and go, but your dedication to building the business persists. Therefore, go to the hat tree with a realistic sense of what to wear in the moment and throughout the day.

Customer service always comes first

Inventory management and marketing always seem urgent, but they never become so urgent you cannot set them aside and devote your undivided attention to a customer’s needs. You always have known this cardinal principle of good business, but the pace, distraction and stress of running a one-man-show may cause temporary lapses of memory. A well-chosen customer service cap will keep you safe.

Become exceptionally skilled at problem-solving

Skilled problem-solvers develop their powers of discernment, and they use those powers to determine which problems they can solve with their own resources and which require professional intervention. In order to remain focused on building your business, call-in qualified people to fix urgent problems outside your areas of expertise. If you cannot fix a toilet, call a plumber. If you cannot do taxes, call a CPA. In general, if you cannot see cause and solution in a problem’s symptoms, call an expert.

Dedicate your best efforts to building your business

Choose your hat with consummate respect for your own time, talent and temperament. If you have exceptional marketing and public relations skills, devote lots of time and energy to using them in service of boosting revenues. Conversely, if you have little accounting skill, devote even more effort to marketing so that you generate enough revenue to hire a bookkeeper. Even as you wear your PR hat, though, keep scanning the horizon for customers in need of your special attention.

Take time for reflection

No need to hire a small business consultant. Your conscience and intuition will tell you exactly where you went wrong, and they will outline the best ways to fix your mistakes. Take time each day for serious reflection, asking three essential questions: First, find courage to ask, “Where did I go wrong?” Then summon insight and imagination as you ask, “What can I do better?” Third, reward yourself as you consider, “What did I do well, and how can I do more of it?” Record your thoughts in a journal. Make journal-writing the last item on each day’s to-do list, using it to complete the day’s business and anticipate what comes next.

Add a mortarboard to your hat collection

When your journal routinely calls your attention to a big vacancy in your hat collection, fill the empty spot by going back to school. Several reputable online universities offer advanced business degrees in entrepreneurship. Because you take just one class at a time and you complete the work online, you can focus and study according to your schedule. Andrew Shigeru, an MBA student at Ashford University, exults, “I immediately can apply the benefits of each class session and every discussion in the next day’s work. I feel myself becoming more skilled and professional literally every day.” (interview. 2012. July 7)

Recruit dedicated staff

As your business grows, promote staffing to second place on your list of priorities. When you recruit devoted employees to wear hats that do not fit you well or complement your complexion, you relieve much of your stress and gain time for wearing your own favorite hat, the one that always has held a little magic and inspired your best work.

About the Author: Kelly Smith is a full-time writer for higher ed blogs and journals nationwide with a focus on online education opportunities. Several schools offer online degrees in strategic management, including New England College and Quinnipiac University.

Dealing with Bullying in the Workplace: Advice for employers

For a small business, bullying in the workplace can have a deep impact. It can lead to decreased productivity, lowered morale, increased absences and potentially to expensive and lengthy employment tribunals. Added to that the emotional effects of bulling on the victim, and the fact that one office bully can affect the working environment even for those he or she does not target, and it makes for a very unpleasant situation.

workplace bully — *Image by imagerymajestic*

As a small business owner, and employer, you are responsible for the welfare of your employees under the Health and Safety Act 1974, so you need to know the signs of bullying in the workplace and put a stop to it before it escalates.

What is bullying?

In its guide for employers on dealing with workplace bullying, ACAS, the UK’s employment relations service, defines bullying as

“offensive, intimidating, malicious or insulting behaviour, an abuse or misuse of power through means that undermine, humiliate, denigrate or injure the recipient.”

Workplace bullying may not be the name-calling and taunts of the schoolyard, but it can have just as much impact on the victim, often more, as it is much more subtle. Workplace bullying can be:

humiliation
exclusion
intimidation
harassment
sabotage of work or promotion prospects
constantly singling someone out for blame or criticism

In the workplace that can translate to some of the following signs, which as an employer, you should look out for:

withholding information or giving incorrect information
undermining a co-worker
refusing to delegate tasks
spreading malicious rumours

The problem with workplace bullying is that what may be considered bullying by one employee might be considered office banter or just firm management by another. Then there is the fact that the victim may not be willing to speak up, for fear of being thought of as weak, or a “snitch”. And added to that, other employees may not be willing to speak out for fear of calling the bully’s attention to themselves.

This is why it is important to make clear to your employees the behaviours which will not be tolerated.

What can employers do?

As an employer, you need to have a clear policy in place that makes it clear that bullying should not be tolerated, with a set of rules and consequences, and a formal complaints procedure. It is in your best interests to have a supportive environment within your company, not one where the victim feels that they have nobody to turn to. And they may in turn lose respect for you for not addressing the problem.

You should also encourage your employees to look out for any signs of bullying. And make sure you yourself set a good example in your behaviour towards others

If a complaint of bullying is made, it should be investigated and followed up promptly. Gather the evidence and review it thoroughly before deciding how to proceed. An informal talk may be all that is needed, but in some cases, disciplinary action will need to be taken.

Start by calling the employee into your office, and talk through your concerns, outlining each reported incident. Give the employee a chance to tell his or her side of the story, but make it clear that his or her behaviour will not be tolerated. It may be that this is the end of the issue.

However, if attempting to resolve the situation informally does not work, then you may have no choice but to start disciplinary action against the bullying employee. You should make sure you follow procedures carefully and ensure that both victim and accused are treated fairly. Possible punishments for bulling may be a written warning, suspension or even dismissal, but before deciding on your course of action, review the facts again. For example, if the bully has accepted his or her actions were wrong, then a written warning may be enough.

For more information, contact ACAS on 08457 47 47 47

Author Bio: Altmore Business Law are a commercial law firm in the East Midlands, providing solicitors in Nottingham, Leicester, Grantham and across the region. They work with both SMEs and large companies, and provide advice and guidance on a broad range of matters.