[ 1 comment ] ( 3 views ) | permalink
A key part of running your business effectively is to know where you make your money and which areas of the business just aren’t pulling their weight. Then you can put into place strategies to improve your bottom line.
It can be hard to look at your business objectively, which is why seeking the advice of experienced professionals can add real value to the process. Some straightforward steps you can take include:
- Look at how your business’s profitability compares with the industry average. If you’re falling behind, you need to find out where you are going wrong.
- Review your fixed and variable expenses. Cut back on things you can do without, such as new office furniture, but think very carefully about losing personnel – redundancy is not a cheap option and in a year or so, you may need the skills and experience of people who are no longer with you. Recruiting staff to replace them will then be another substantial cost.
- Target a ten per cent saving through “bottom up” budgeting, involving everyone with financial control over an area of the business.
- Get your employees involved in expense and cost-cutting efforts. Asking for their suggestions will help them to feel more involved in the business while offering incentives for helping you to reach profitability goals will help to build morale.
- Review your list of products and services and eliminate those that are unprofitable or not central to your business.
- Consider adding extra products or services that complement your current portfolio without adding to marketing or advertising costs.
- Think carefully about accepting every contract and consider how it will generate cash and add to your profits. Be wary of taking on non-profitable work that simply increases turnover.
- Get rid of “can’t pay, won’t pay” clients if necessary and build on relationships with your better customers
- Review your main business processes (such as sales processing or shipping) to see you can make them more efficient or can outsource some activities.
[ 2 comments ] ( 375 views ) | permalink
The legislation governing how businesses deal with disputes with their employees has changed. The new simpler and more flexible system is intended to save you time and money.
Acas, the employment relations service, has issued a new Code of Practice, which lays out the principles and provides practical guidance on procedures for handling disciplinary and grievance matters in the workplace.
This:
- Repeals the mandatory three-step process for discipline/grievance issues.
- Allows employment tribunals to adjust awards by up to 25 percent if an employee or employer has acted unreasonably in not following the principles in the new code.
For further guidance and advice, you can contact the enhanced Acas helpline on 08457 474747, open 8am-8pm Monday-Friday and 9am-1pm on Saturdays. You can also access the new early conciliation service through the helpline, to help resolve seemingly impossible workplace problems.
The Government is providing additional help for all employers to get the maximum benefit out of this new system by working with Acas.
So as an employer, what changes should you be considering?
- Review your disciplinary and grievance procedures so they are compatible with the new law.
- Identify where a more relaxed and informal approach to dealing with problems at work may be appropriate.
- Include a mediation stage in your internal processes.
Train your managers in how to deal with problems at an early stage to stop them from escalating.
[ add comment ] ( 13 views ) | permalink
It is usually advantageous to pay a wage just above, rather than just below, the Lower Earnings Limit:
There is a band of earnings which are subject to ‘nil rate National Insurance contributions’ – this apparent contradiction in terms means that no contributions are payable, by employee or employer, but the employee’s contribution record is still franked for pension and benefit purposes. For 2009/10, the ‘nil rate band’ runs from the ‘Lower Earnings Limit’ of £95 a week (£412 a month) to the ‘Earnings Threshold’ of £110 a week (£476 a month).
Where family members work part-time in a family business, it is important to remember that worthwhile pension rights can be accrued, at no cost, by paying them a salary just over, rather than just under, the Lower Earnings Limit. If you are already doing this, watch that the Lower Earnings Limit rises slightly each April – this year from £90 to £95 a week – so you must remember to increase wages accordingly.
[ add comment ] ( 42 views ) | permalink
Running a business doesn’t leave you with much time to spare, so setting and measuring targets might seem like just another piece of paperwork that you could do without.
The reality is that every organisation needs to know how certain financial and non-financial drivers that determine your overall business success are performing.
It can be a difficult to decide which measures to use, which is why seeking the advice of professionals in this field is a worthwhile investment.
Once you have identified a realistic and manageable number of factors – also known as key performance indicators (KPIs) – to measure, you will benefit from valuable information that puts you in a better position to manage your business effectively.
KPIs give a focus to activity within your business, to improve performance, and make it easier to draw up and develop business strategies. They also allow you to spot potential problems or opportunities. If the trends move in the wrong direction, you are likely to have a problem. If they move consistently in your favour, you may have greater scope for growth than you expected.
KPIs vary from sector to sector and from business to business so you need to choose the factors most relevant to your particular circumstances and objectives and the best way to measure them.
For example, you may decide that customer service is a priority but you could choose to measure this in a number of ways, such as the number of customer complaints, the time it takes to fulfil an order or the percentage of incoming calls answered within a certain time.
Once your KPIs are in place, they also allow you to set targets for departments and employees throughout your business that will deliver your strategic goals.
[ add comment ] ( 11 views ) | permalink
Calendar
