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Posts Tagged ‘risk’

A guest post from Rosie Slosek at onemanbandaccounting.co.uk

You started your business – so exciting – you’ve done the graft, the emotional roller coaster, the have-I-done-the-right-thing worries, the achievement of your first client and your second, third and tenth.

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You’re more established now, you don’t feel quite a newbie any more. You know what you’re doing and you know where you’re going. You’ve built a consistent income and you have money left over at the end of the month after essential bills.

You know now’s your time to take your business to the next level.

But how?

You started as a sole trader because the tax return was easy, or easier than a limited company, and you could do it yourself. If you’re honest, you don’t really understand limited companies and when you’ve asked questions or searched Google, you’ve left more confused than you started.

Is a limited company the next step?

You need to ask yourself 4 questions so you know if you’re ready to take your business to the next level and if a company is right for you now.

Who are your clients?

Do your plans for business growth include bigger clients who will require you to be a company? Corporates for example. Even something simple like diversifying into app building (for example) can mean needing to be a company as businesses like Apple won’t work with sole traders.

What is the risk?

When you grow your business, sometimes the risk you take grows too, and only some of that can be covered by insurance. Working with corporates, organisations or executives can be higher risk as there is less you personally control. You need to look at the risk and decide what’s appropriate.

Your personal circumstances

When you have a mortgage and dependents, you have ‘more to lose’ than if you rent and it’s only you. We don’t need any ‘you’ll lose your house if you’re a sole trader’ scaremongering but you do need to consider how comfortable you are with your clients, risk and your circumstances.

Tax

This is the last factor to consider in my opinion, not the first. Although having a limited company can save you money on tax, tax laws can change which the Chancellor has done very recently.

You need to uplevel because it’s the right decision for you and the future of your business.

Taking time to explore whether a limited company is right for you is a great way of bedding down your strategic planning for how you’re going to take your business to the next level.

You’re even paid differently as a limited company, so you need to get sorted on your business and personal finances too.

It forces you to seriously think who your clients are going to be, how you’re going to expand, your financial responsibilities and goals and how your want the future of your business to look like in the next 5 years.

I know you can do it and it’s always such an exciting time growing your business. Take a moment to celebrate this step!

rosie-slosek-1353-lres-300x240Rosie Slosek helps cake-loving UK freelancers to become unstuck about accounts & tax so they can feel free to grow their business.

Join her on 14 April on a gorgeous day retreat to demystify limited companies and learn everything you need to know about company accounts & tax in 1 day.

Learn more: http://bit.ly/ltdretreat  | 07989 945918 | http://onemanbandaccounting.co.uk/blog

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If you read my recent blog about trying to be a little more personal in my business blogging then you’ll know that this touches a bit of a nerve with me. But having decided to share a little more about the person behind the Success Network brand, here’s a small glimpse of what I’m all about:

  1. I love starting my day in a slow and gentle way with a mug of Earl Grey. That first cup in the morning rarely gets cold unlike the endless supply of black coffee I drink whilst working. Switching to decaf in the afternoon helps me to feel I’m not addicted to caffeine, but maybe I’m just kidding myself.Mummy rules
  2. I am just as productive in a buzzing coffee shop as I’m working in my home office. I have even written course plans and blogs on my iPhone in airport lounges! So why don’t I like working to background music at home? Odd!
  3. I also use my iPhone to write down some of my dreams! I have promised myself to join them all up one day and write a script for a science fiction movie.
  4. I have three cats, one of whom must think he is a dog. He follows me around, sleeps near me when I work and waits by the front door in the hope I’ll take him walkies.IMG_0771
  5. I hail from a tiny village in middle Germany where everyone knows everyone else. My street in England reminds me a little of that. But what I like best is that my lovely neighbours know the perfect balance between privacy and being there for each other.
  6. I found networking and promoting myself quite challenging at first. Feeling a little shy didn’t help and neither did having to adjust to cultural differences. But in time, I learned to love it. Perhaps I’m a poster girl for the theory that you can learn anything you put your mind to?
  7. That said, humour is a language I may never learn. This pains me greatly as I love a good joke, but the hidden subtext in British humour can be a tough nut to crack for an outsider. Tell me a joke and if you’re lucky, I’ll start laughing five agonising minutes later.
  8. The first time I took a risk as an inexperienced entrepreneur felt like standing right on the edge of a cliff. But I jumped — metaphorically speaking of course — and took on my biggest-ever client well before I felt ‘ready’. Knowing that I had everything to gain and little to lose helped. Little did I know then how positively this ‘jump’ would influence my business career!
  9. I thought I knew what happiness is but nothing prepared me for the moment when my first grand-baby started to greet me with a huge smile. Now, whenever I feel stressed or sad, all I need to do is remember his happy little face.
  10. My camera aka iphone is always ready to capture a moment that means something to me. I have to thank my daughters for introducing me to Instagram which is fast becoming my ‘visual voice’. If you love images too, please visit me there and say hello!

 Ute2013-150x150About the author: Ute Wieczorek-King is a UK-based German mentor who inspires passionate midlife women to achieve business success by simplifying and staying focused on what really matters. If you’d like to take your small venture from good to great, why not download Ute’s free “Passion to Profit ebook or read her motivational business tips on Facebook.

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A guest post from Fiona McKenzie at Blue Note Solutions Ltd:  

When you love the service you’re providing and want to deliver the best it may seem crass to say it’s all about the ‘numbers’. But ultimately you will have no business if the numbers generated do not add up to a profit. If you find your numbers do not help you assess and manage your business that is probably because you are not receiving accurate or sufficient information!

An analogy suggested to me recently is weight control. Effective weight control would be difficult without the right numbers or rather measurements.

However if I tell you someone is 10st, that is a number, but what does it mean? Over or underweight?  Well you don’t know, you need additional information such as height and if you also know sex and age you can make an even better judgement.

To begin weight control you need some idea of your weight; where you are now. So you probably need scales. Not only would you need scales but you’d need to ensure that the measurement is accurate i.e. scales are correctly calibrated. Inaccurate measurement may mean dieting unnecessarily or ineffectively – disaster!

You may have accurate scales but they may not be providing you with the most useful measure. So your weight may be generally OK but you’re accumulating a little fat around the middle. In this case the best measure may be waist size. So a tape measure and inches rather than scales and pounds.

Knowing your weight/waist size is of course only the beginning. If you feel unhappy about your weight then you will want to reduce or increase that weight. Knowing the measure you can then formulate a plan – a diet or exercise regime. Here you will need more measures such as numbers of calories, portion sizes or exercises. And then you’ll measure (weigh) again to check and adjust your progress.

So it is for your business as for weight control:

·         Get accurate, appropriate and meaningful measures (numbers)

·         Based on initial measures formulate an action plan (business strategy)

·         Measure your actions/outputs/inputs

·         Measure the result (progress)

·         Adjust your plan as required to reach your target

As Brad Sugars, founder of ActionCOACH, says, “One of my main business mantras is ‘Know your Numbers’ and because numbers are the language of business, it is numbers that will ultimately determine your success!”

About the author: Fiona McKenzie is the Director of Blue Note Solutions Ltd based in Oxford. Fiona helps SMEs gain clarity and control of their financial performance. She offers a complimentary Profit Improvement Review to SMEs based around Oxford and the Thames Valley.

Website:  www.bluenotesolutions.co.uk  Email: fiona@bluenotesolutions.co.uk

 

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Blue Sky by Ute Wieczorek-KingA guest post from Fiona McKenzie at Blue Note Solutions Ltd:  

A while ago I was at a business networking meeting when one of the business owners said: “I’ve been trading for two years but I don’t know if I’ve made a profit. I’d rather not know.”

Well after I’d got back on my chair (eek – the tax authorities?) I realised that this statement was perhaps an extreme example of a phenomenon I’ve often experienced in business. This woman’s business was her passion, her baby, and she didn’t want to be told it was not a success. She wanted to keep on going regardless.

This attitude is not confined to small start-up businesses. Anyone who has worked at a senior level in finance will recognise that sometimes business decisions are based on criteria other than cold, hard business analysis and logic. Basically a decision is reached and then the search is on for facts to support that decision.

However, especially for smaller organisations profits are essential to enable business survival. If, over the longer term, your revenues do not exceed costs i.e. you have a profit, then you are paying your customers. That is not a business but a hobby. This is not to say that if a business does not immediately make a profit it should cease.

Most new businesses take time to develop. Amazon famously did not make a profit for seven years. Some investors criticised it for that ‘failure’. But it was part of the business plan to expand and expect the profits to accrue later.

There is a place for hunches or feelings about future trends. Twenty years ago if I had been asked to model the mobile phone market I would have considered the demand limited and any business analysis would have been pessimistic. Often the best ideas are so simple the impulse would be to assume they can’t be viable.

Remember Friends Reunited?  Launched in 2000 by a husband and wife team it was sold five years later for £120 million. Analysis would not have predicted these successes. However lack of information and planning, for example about costs of working capital, could have sunk these business successes before they got started.

All business carries risk.

However plunging in blind or with false assumptions can only waste precious time and resources. Business needs to have the facts and figures in order to make informed choices. Those choices will always be a matter of judgement but ‘what is measured can be managed’. It is a better policy to measure what is actually happening and then to model possible future scenarios.

The future is uncertain but informed risk is better than ignorance or basing decisions on biased analyses.
About the author: Fiona McKenzie is the Director of Blue Note Solutions Ltd based in Oxford. Fiona helps SMEs gain clarity and control of their financial performance. She offers a complimentary Profit Improvement Review to SMEs based around Oxford and the Thames Valley.

Website:  www.bluenotesolutions.co.uk  Email: fiona@bluenotesolutions.co.uk

 

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A few days ago, a colleague and I were discussing what holds women back in business.

We talked about how, when you assemble a group of men and women and give them a completely new project, the men are often quicker to raise their hand and volunteer whilst women may be grappling with an internal question such as ‘Can I’?

And even when they are almost sure they can do it, the answer is often ‘I can’t!’

By the time they’ve decided that it may not be too risky to step out of their comfort zone and worth putting themselves forward, the opportunity may well have passed them by.

Many men on the other hand are known to take something on first and then think through their competencies and the practicalities later.

As we were discussing this, I suddenly had to laugh! We were sitting in a hotel lounge at the time and about 20 feet away from us a man, deep in conversation with his colleagues was actually raising his hand, as if to illustrate my point!

When thinking about your own willingness to raise your hand and step out of your comfort zone – do you find it easy or difficult?

To be fair, in a mixed work environment we may have to work a little harder to raise our head above the parapet, but we can waste a lot of time waiting to be invited to do so, which may essentially keep us invisible.

Although playing safe can keep you ticking over, by waiting for the right time – for the moment when you think everything is in place – you may be playing small when you could be playing big, and opportunities for personal development and business progress may pass you by.

When I launched my training company in the 90s, it didn’t really get going until I stepped up to take on a project for a company that wasn’t happy with one of my biggest competitors at the time.

I can remember thinking that whilst I was up to the job, I wasn’t quite ‘ready’ in other ways, for example,  I didn’t have the same resources as my much larger competitor.

But I said yes anyway, devised a quick plan, renegotiated the terms (which was quite easy as I was much cheaper) and started recruiting trainers (putting the resources in place) before I had the security of knowing exactly how many courses I would be running.

This first experience of putting myself forward was brave of me at the time, and could be considered as risky by some. But knowing that in reality I had little to lose and lots to gain, I set the wheels in motion for a very successful business which made me raise my hand more than once (practice makes perfect!) and helped to turn me into the ‘enterprising’ entrepreneur I am today.

“If you don’t go after what you want you’ll never have it. If you don’t ask, the answer is always no. If you don’t step forward you are always in the same place.”

Such a great quote by a woman called Nora Roberts.

So if you want to stand out from the crowd in business and grow personally and professionally then just consider this: If there is one thing you need to do, to raise your hand and step out of your comfort zone, what is it?

Ute Wieczorek-King is a Success Coach, Trainer, Mentor, Founder of the Inner Circle Business Clubs & Owner of Success Network

You can connect with Ute via Twitter, the Success Network Community on Linkedin, or Success Network Recipes on Facebook. Or sign up to her monthly newsletter on the Success Network website.

Copyright 2012, Ute Wieczorek-King

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