Category Archives: Business advice

EXEMPTION FOR TRIVIAL BENEFITS IN KIND

The Office of Tax Simplification has made a number of recommendations to the government to simplify the tax rules for reporting benefits in kind and expenses paid on behalf of directors and employees.

One recommendation was to replace a number of extra statutory concessions and legislate that trivial benefits in kind, where the cost to the employer is no more than £50, will not need to be reported in future and will be exempt from tax. HM Revenue and Customs raised concerns that some directors of family companies might abuse the new rules and have insisted that the exemption should be limited to £300 per annum in the case of directors and family members of such companies and this has now been included in the draft Finance Bill to be introduced from 6 April 2016.

The exemption is expected to cover the provision of small gifts to employees and former employees such as flowers on the occasion of a wedding or funeral and should not be in recognition of particular services performed by the employee in the course of their employment.

Please get in touch with us for further guidance on which benefits will qualify for this new exemption.

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Training your Team to be More Resilient

Why do some people bounce back from difficult situations more easily than others? How is it that they are more resilient? Training can help. Managers can help their teams to become more resilient and confident. Training your people to handle difficult situations helps them to respond appropriately.

 

Letting people fail – Allowing people to fail builds resiliency. People need to try, to risk, and then try some more. This comes from failing a few times along the way. Resilient people are not people who have never failed. They are people who have learned from trying, failing, and trying again. Richard Branson for example, has failed several times along the way to becoming a billionaire business leader. Steve Jobs failed – he was pushed out of Apple in 1985 even though he was one of the founders of the company. He returned to the firm in 1997 and it is now the worlds largest company by revenue. One of the issues today is that people are afraid to allow for mistakes, and they want to protect others from failure. However, every good manager knows that if we never fall over, we won’t learn how to get back up again.

 

Teaching your team to solve problems – Solving problems doesn’t mean solving them all yourself. The most difficult task a manager has is to resist doing something themselves even though they may be able to solve the problem more quickly. Instead, managers need to step back and ask their people: “What is the next step?” or “What do you think you should do?” It is really hard watching people make mistakes without stepping in, but your team will never learn if someone else is doing their job for them. It will pay off in the long term as your team becomes more capable and confident.

 

Focus on the big picture – It is easy for your team to get discouraged if they only see the failures. Teach them to consider the big picture. They should be encouraged to see every step of the learning process as being a step towards success, even if that attempt doesn’t result in a solution to whatever problem they are facing. Getting it wrong along the way should be ok in the grand scheme of things. Equally when they get it right, encourage them to see how this has contributed to the overall success of the business.

 

Accountability – Making allowances for people to fail does not mean that people shouldn’t be held accountable. Failure without a lesson is failure in its worst form. By contrast, failure with a lesson is a learning process. Encourage your teams to consider what went right and what went wrong, and to note what lessons have been learned from the process. Your team should take note of the failures and figure out a way to avoid failing in the future. They should be encouraged to accept responsibility for the problem and move to create a better outcome.

 

A problem versus an inconvenience – Problems are serious issues that are a real threat to the business. Inconveniences are when you get stuck in traffic on the way to the office, for example. You and your team should focus on letting the inconveniences go and focus on solving the real problems.

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Marketing Messages – Getting to the Point

Regardless of the type of business that you run, your customers will have one thing in common. As a result of technology, they are bombarded by marketing messages. Customers are more time-poor than ever before so if you want your marketing communications to stand out, you should consider cutting down the length of your messages and getting to the point.

 

Identify the message that matters most and make sure it’s memorable. Marketers have known for decades that there’s value in identifying and driving home the most important point or benefit. It goes all the way back to when the best businesses began to identify their unique selling proposition (USP) for every client.

 

The difference today is the way that viewers and readers consume media. Today’s reader or viewer is overwhelmed with an astounding number of media choices and channels. In fact, consumers are exposed to so many messages that they notice fewer of them. Here are a few tips to help you get your point across.

 

Focus on what is most relevant to your customers – Focus on what your target audience see first and outline what is most important and relevant to them. Avoid the temptation to use that first impression to deliver what you or the management team finds most interesting, unless you’re also the target audience.

 

Write active rather than passive sentences – Active sentences are more vigorous and put more life into the message. Here’s an example: “We deliver shipping services to clients nationally.” This is much punchier than saying “Shipping services are delivered by us to clients nationally.”

 

Avoid jargon – Try to avoid formal, overly corporate language. Where possible avoid using big words with several syllables. The business world is now very much a global market and English may not be your customer’s first language.

 

Make it about them – Use the words “you” and “your” much more than “I” and “we.” If you catch yourself saying “I” and “we” a lot, then you’re talking about yourself too much. Get back to being focused on your reader and their needs and concerns.

 

Be concise – If you can say something in 10 words don’t use 120 words instead. Cut out the fluff and keep your message concise. Remember, your potential customer is time-poor so you need to keep the message relevant.

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PROPOSAL TO RESTRICT TAX RELIEF FOR TRAVEL EXPENSES FOR IR35 WORKERS

One of the controversial measures included in the draft Finance Bill 2016 was the proposed restriction of the deduction for travel and subsistence expenses incurred by certain workers caught by the IR35 rules. This proposed change was consulted on during summer 2015 and, if enacted, will significantly restrict the tax relief available for those affected.

The original proposals have been toned down to a certain extent and will only apply if the IR35 rules apply to the engagement and there is supervision, direction and control (SDC) over the worker. This now seems to be the key test to determine whether the new rules will apply and ignores the other employment status factors. The examples in the consultation document seem to suggest that if there is no expertise within the end user organisation then there is likely to be limited SDC and the worker will be entitled to relief for travelling to the client’s premises.

Any tax debt arising from the deliberate misapplication of the rules is to be transferred ‘jointly and severally’ from the ‘intermediary company’ to its director(s). It would appear that the ‘engager’ will not now be liable, which was one of the proposals in the consultation. It is intended that these rules will be implemented where it can be shown that the ‘intermediary’ had knowingly failed to apply the rules correctly.

Please get in touch with us if these new rules are likely to have an impact on your business.

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BUSINESS DEVELOPMENT – DOING IT PROPERLY

One of the main reasons businesses fail to meet their sales targets is their lack of attention to business development. Done properly, business development will help you to raise the profile of your firm in the market. If more people know who you are and what your business does, the more likely you are to receive new sales opportunities.

What is business development?

Business development is about developing new business with both potential and existing clients. A sale rarely happens on the first meeting. It requires multiple and varying touch points such as the phone, social media and email over a period of time. Business development needs to be consistent in order to position the firm to maximise new sales opportunities and to create sales growth.

Creating new opportunities
The less you know about a potential client, the more difficult it is to succeed in getting a meeting. Strategies to connect with potential clients could include networking, email marketing, social media campaigns or seminars. Consider who in your firm knows people who work in target firms and use these networks to open doors.

Make it about the client
If you can relate your product or service to solving a problem for a client, you have a proposition that will appeal. Consider your target market. What keeps them awake at night? How can your product or service help to “alleviate the pain”? For example, if your client doesn’t like doing payroll and you can offer to provide outsourced payroll services, you will have a value proposition.

Consistency
Successful business development requires persistence and consistency using a variety of touch points whilst focusing on stating value from the client’s perspective. You must ensure that your firm is visible to the client so that when they require your product or service, they call you rather than your competitor. You can do this by meeting them regularly, inviting them to seminars, sending monthly email updates, etc. This will provide you with the greatest opportunity to secure an initial meaningful conversation and a meeting which could ultimately result in a sale.

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RECRUITING IS NEVER EASY

A business is only as good as the people who work in it. When you are making a recruitment decision you are taking on responsibility for the cohesiveness of the staff and diversity in your workplace in addition to cherry-picking the kind of talent that can help to drive your business forward.

Rushing the Process
Making good choices about the people who will represent the company and drive it’s future should not be rushed. Taking the time to contemplate the fit of a new hire can spare you a great deal of heartache and having to redo the whole process six months down the line road because of incompatibility. Having adequate software such as an applicant tracking system can help save you time by narrowing down individuals who meet the needs of the company. Your discerning eye can do the rest.

Choosing Talent Over Personality
It can be a big mistake to hire on the basis of talent alone. Some large global businesses like Google don’t pay too much attention to hiring graduates with MBAs or other heavyweight qualifications. They have come to realise that people that make it without college or University qualifications are often the most exceptional. Of course, it’s important to choose applicants that can meet the professional or creative requirements of the job, but their skill-set shouldn’t be the only characteristic you vet them for.

An applicant’s personality also determines how well they’ll work with others, how they problem-solve, and their likelihood to abandon the company should they be offered a bigger salary by a competitor. Aim for applicants that meet the talent quota but also deliver a personality that will work well with others.

Failing to Forecast
This hiring mistake can piggyback off the previously mentioned pitfall of rushing in: not anticipating company needs may cause you to make impulsive and hasty recruiting decisions. Understanding where the organisation currently is and where it’s headed can add value to your recruitment selections. Before recruiting new members to your team, consider how applicants may meet existing needs but also their potential for fulfilling future needs. Otherwise, you could end up having to recruit double the staff over the long term.

Gut Feeling
Finally, learn to trust your gut feeling. If you have been in business for a long time, you will have a good idea of what your business needs in terms of its people. Let your instincts guide you – if a candidate feels right, then they probably are right.

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GET MORE OUT OF YOUR NETWORKING

While satisfied customers may be your best sales force, they are not the only sales force. There are lots of other people out there who can send business your way if you make the effort to network with them and make it worth their while.

The concept of networking and word-of-mouth marketing is a very hot topic in business today for one simple reason: lots of people are starting small businesses that need to find other businesses they can work with for mutual benefit.

Your networking time needs to be marketing time. This means putting yourself in front of customers or people who will send customers your way. With that in mind, here are a few tips to help you to get more out of your networking:

Competitors can be a networking opportunity
Just because you go head to head with other businesses does not mean that you can’t work together sometimes (for mutual gain). Airlines have an agreement whereby they book business for each other in return for a fee. You may find it useful to work out such an agreement with some of your competitors. On the other hand, you may have an informal agreement whereby you refer one of your competitors to customers for no fee in the hope that they might reciprocate.

Businesses that complement yours
If you put an accountant, a surveyor and a lawyer in the same room – you may have people who can refer clients to each other. When a customer buys from you, what other products and services is he/she likely to want or need? These businesses are the ones that you should consider networking with in order to build reciprocal referral links.

Prepare in advance
Before going to any networking function, make sure that you are prepared. Have business cards, prepare your elevator pitch and read through the attendee list before you go. Try to identify at least 3 people on the list that you want to network with. After the event, make sure to follow up with your new contacts.

Ask for referrals
That is why you are there. After describing your business to someone, ask, “who do you know who might need my services?” Take the time to describe your typical customer. Follow-up on leads as quickly as you can. Where possible, send business to your referrers. Reciprocity is the basis for all good relationships and it is especially true in business. When someone sends a customer to you, acknowledge it with at least a thank you. Keep in touch with your contacts and where possible, send them a referral.

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