5 tips to save time (Not reading this blog isn't one of them)

You can't buy time.

Mega rich Warren Buffet knows this and he protects his time fiercely. There's a YouTube video of him chatting with Bill Gates about this. Bill is amazed that Warren's 'old school' paper calendar is practically empty. He needs his time for thinking and making decisions. Lots of meetings and appointments won't help with this so he avoids them. You can't argue that it hasn't worked for him.

I've been busier than usual lately and it forced me to think carefully about how I manage my time. I re-read Tim Ferris's, '4 hour work week' for inspiration and changed some of my working habits. I'm a long way from a 4 hour week but I have become a bit more productive

Here are some of the things which have worked for me:

1. Chunk your week

Break your week up into time slots where you do specific things. For example - client work in the mornings, sales calls in the afternoons, admin and queries on Mondays etc

2. Shut out all distractions

If you have time blocked out for a purpose, do that and don't get distracted by email, social media, phone calls etc. Let your phone go to voicemail and check email at set times during the day rather than being, ' Always on'. Tim Ferris takes not checking his emails to further extremes - checking only weekly or even monthly if he is travelling. Only one or two time slots a day is a good starting point.

3. Say no

We all want to please. Say yes to that lunch with the nice chap trying to sell you a photocopier, say yes to being on that new committee, yes to that meeting that someone else thinks you really should attend. No wonder our calendars get full. Before saying yes to an appointment a good test is, 'if this were tomorrow or the day after and not in two weeks time, would I still want to do it?'. If you find yourself hesitating you should probably (politely but firmly) say no.

4. Don't be too ambitious

We all have long lists. For business owners, the list is endless. There is always something you can do to make the business better. So we have a tendency to be ambitious with our lists. 'I'm going to get these 10 things done before lunch, then grab a sandwich, prep for that meeting, do the meeting and then finish off some other stuff'. We end up doing only half of it (often not very well) and leaving the office frazzled and exhausted. If you have just 2 or 3 'must do' things rather than a massive list you are less likely to be disappointed and can feel satisfied with a day well spent.

5. Have some chill out time

It's good to make some time during the working day to chill out a little. Whether that's a morning run, a lunchtime walk or a short break in between tasks, it's important to manage our own stress. Like Warren Buffet, have those little gaps (in his case big gaps) where there is nothing scheduled and you can think or take some time out.

I hope these tips help a little if you are feeling super busy and overwhelmed. A final thought is when you have finished your important but not too ambitious activity list, if you're the boss, why not call it a day? You don't need to stay every day until you have done your allotted hours.

Tim Ferris managed to get down to 4 hours a week. Most of us might not get there but a 40 hour week would be nice, right?

Let's finish with a quote from the great man, Warren Buffet, 'I really like my life. I’ve arranged my life so that I can do what I want'.

Now that's time management. 


www.base52.co.uk

Sell and deliver

We start off as technicians.

But pretty soon most business owners need to become good at selling. Being good at making your product or delivering your service isn't enough. You need to attract new customers and sell to them.

It's sometimes difficult to separate the selling from the doing. Whilst closing the deal a business owner might also be worrying about how they are going to deliver it. That's not a good thing if your anxiety is visible to the potential customer. They want total confidence that you have the capability to deliver. They are not too bothered about the 'How?'

There is a quote from Richard Branson which always sticks with me, 'If somebody offers you an amazing opportunity but you are not sure you can do it, say yes – then learn how to do it later'.

That's fine and is good sense if you have resources at your disposal to deliver on your promises after making the sale. For a smaller business, that can be a challenge. The smarter business owners will have some back up. Some additional resources they can call on at peak times to get a job done. They can also get stuck in themselves.

But every now and then, despite their best efforts they may not quite have the capacity to take on a new sale and meet the customer's expectations. However painful, the best policy then may be to say, 'No'.

That's incredibly difficult. To turn away business and an opportunity that may not come around again quickly.

I've seen the consequences of overtrading several times - where businesses take on more than they can manage. It can be catastrophic and even terminal.

So I think Richard's adage of 'Go for it' is right but tread carefully and make sure you can deliver on your promises.

www.base52.co.uk

What's the point in a 'Break-even' point.

Accountants learn about the  'Break-even' point whilst studying for their professional exams. 

Many though will rarely, if ever use it during their working life.

I think it's a useful and under-utilised tool however, particularly for start ups and early-stage businesses but also to established businesses who struggle with achieving consistent profitability

So what is it?

Well, essentially it is the level of sales or sales units needed in a period to cover fixed overheads and break even.

It is traditionally used in a manufacturing environment where the number of units which need to be sold to reach break-even is a critical measure.

It can be applied however to any environment where the cost components of gross margin are relatively uniform and directly related to sales volumes.

Let's look at a restaurant business as an example:

• The  main 'direct' costs are drink and food ingredients (wet and dry stock) and the labour needed to prepare the food, greet customers, serve the food and drink etc
• Let's say the labour costs are 30% of sales value and stock is 20% of sales value. So the gross margin is 50%.
• Fixed overheads rent & rates, insurance, premises costs, directors' and admin wages etc are £20,000 per month.
• So in this example 'break-even' sales are £40,000 per month. They generate a gross margin at 50% giving £20,000 'quantum' margin which covers the overhead.

So what?

Well getting to break-even should be be the driving force for the business. Every fibre of management's focus and effort should be to getting there and then forging above it.

The main levers are price - is there scope to increase these and still deliver good value and maintain ( or only slightly reduce) volumes, and cost control - ensuring buying stock is effective and payroll and staffing schedules are well managed.

If £40,000 sales per month are needed management should be asking, how are we doing on a weekly basis, or every day? What do we need to change?

The break-even point can be a powerful motivator for change. Once reached, the sales above this threshold are all profit. In our example, every £1,000 sales above the break even puts £500 on the bottom line. That's the happy place where  all businesses should aim to be. The business then has surplus profit for investment or additional return to the shareholders.

So some of the things we accountants learned in school - like discounted cashflow, internal rates of return and correlation coefficients may not see the light of day that much after our studies.

Break-even analysis though is something that I believe should get regular use in every business accountant's tool box.

www.base52.co.uk

What kind of small business is yours?

Every small business is different.

It's shaped by the founder or founders' values and the experiences and learning picked up on its journey. So putting small businesses into categories is not easy. It can be helpful though in gaining an understanding of the owner's motives and goals. For professionals like accountants, that helps us to give the right advice and support.

My consultancy colleague, Stewart Peart and I have recognised three main types of small business. All mainly shaped by the owners and what drives them.

The three types of business are Lifestyle, Owner-Managed and Entrepreneurial.

A Lifestyle business does what it says on the tin. It is built around the owner's lifestyle. There is no great ambition of being the biggest or best. It's primarily about working sensible hours fitting around family and leisure, the owner delivering the service and probably no other employees in the business. Examples might be a self employed plumber, hairdresser, accountant working from home etc. The typical business structure might be a sole trader. The owner effectively 'is' the business.

An Owner-Managed business is perhaps a bit bigger in scale. The owner will still be closely involved and 'hands on' with running the business but their role will involve managing as well as doing. Typically there will be employees and the business structure might be a limited company. Examples might be a small retail outlet, a small manufacturing unit or a high street accountancy practice with a single branch

An Entrepreneurial business is something else. This is where the founder or founders are obsessive about growth and scaling up. They are prepared to take significant risks to reach their goals and put the business above everything else. It is not for the faint-hearted or risk-averse. Typical Entrepreneurial businesses will be multi-outlet or nationwide in coverage or international. The structure might be a limited company but probably with a more complex share structure to accommodate investors. Raising capital may be critical to achieving scale in a short timescale

Where does your business fit within these categories?

We've put together a short series of videos which expand on these business types and how to make them work

I hope you find them useful

Watch 'business types' video

https://www.base52.co.uk/services/consultancy

Back on the tools again

The aim of every business owner is to make themselves redundant.

Or it should be.

Over time the lucky ones, or perhaps the more organised and determined ones manage to delegate much of their activity to a capable and loyal team. Their role becomes more of being a guardian of the business. Making sure it still runs smoothly, managing growth and fixing problems.

Problems. Yes, inevitably they crop up. Stuff happens. Again, the savvy entrepreneur is selective about problems they get involved in. The tendency may be to roll up their sleeves and get stuck in if something is not working well. That may not always be the best thing. Giving the team the knowledge and the scope to fix things is a better and more sustainable long term solution.

Occasionally though something comes along which can't be left alone. Maybe a big systems failure or key staff leaving and client service beginning to suffer. In these most extreme cases the only solution might be for the business owner to get stuck in. Effectively to 'get back on the tools' again. The tools might be a paintbrush and roller, an Excel spreadsheet, an HGV or hairdressers' scissors. Whatever you need to deliver your product or service to your customers

At first it feels odd. You are a little rusty. Things have moved on a bit and you need to get used to some new technology or a new way of working. Then it starts to flow. You've still got it. This is fun! This is what I used to do. It's why I started this business. It's what I'm good at.

This is the time that the sensible business owner will pause and think about the longer term. Staying on the tools may be comfortable, familiar and rewarding. But it will take your energy and focus away from where it should be - developing and sustaining the business. So it needs to be a short term thing.

The day you start back on the tools is the day you should start planning to get back off them. Otherwise you might get stuck. Your business will stay small or you will start to burn out - doing too much of everything

For a short time it can be fun while it lasts and reassuring to know that you still have what it takes. But don't let it trap you....

https://www.base52.co.uk/services/consultancy

What's the point in business growth?

We seem to be slightly obsessive about growth in business. 

It's a measure of success. Sales growth, profit growth, share price growth, market share growth. It's all about growth.

Or is it? Well it depends on the business and more specifically the business owners. What is important to them?

Many 'lifestyle' businesses are happy to reach a certain scale and then stop growing when they reach the optimum size to support their lifestyle. They might tweak aspects of the business and replace lost customers but growth in itself is not an objective.

I've always liked the 'buzz' around growth. Many moons ago, in my role as a management accountant for for a large food retailer I was responsible for a while for reporting weekly sales. It was exciting and immediate to analyse and present the sales figures for the previous week. Management were passionate about looking for trends in regions, departments, 'like for like' sales,  new stores etc. It helped that this was a period of high growth and dominance for the company but the culture was very much about having aggressive growth targets and tracking and measuring against these.

Since moving onto my own business I've kept that excitement about growth. I've always set targets and worked hard to achieve these. There's something rewarding and motivating about beating last week's or last month's or last year's results.

It works for me anyway

Leaving the score-keeping aside, there are serious reasons why growth is a good thing.

Some which spring to mind are:

• It keeps the business fresh and interesting for employees
• It creates new opportunities for the team and allows them to develop
• Employee retention is probably better (provided people don't feel overloaded or unsupported)
• If well managed it can lead to more profits
• More satisfying and rewarding for the owner. The potential to create a business of scale which may endure after they move on

So growth still motivates me and keeps me excited about being in business. It's not an end in itself but in my view it makes the journey much more interesting and satisfying

A test of whether you have a growth mindset is if you know your sales target for this month and how close you are to achieving it.

Do you?

If you don't know either your target or how close you are to achieving it, I would argue that there is a gap in your reporting systems.

It's a bit like the John Lennon quote, 'If you don't know where you're going, any road will take you there'.

Setting sales and profit targets and tracking against them is not a terribly radical or difficult thing to do.

In my view it is essential however if you are serious about growing your business over the longer term.

www.base52.co.uk

How busy is too busy?

We are all busy it seems. 

It's a bit like a badge of honour where we try to outdo each other with how hectic and out of control our lives are. 'It's been mental. I'm so busy. There's work, the kids, the elderly parents, we're having the kitchen done, Christmas is coming etc.' The busier we are, the greater the kudos.

Does it have to be this way? I'm reading, 'Tribe of mentors' by Timothy Ferriss. It's basically a book of life and business tips from a 100 or so successful people - 'Short life advice, from the best in the world', as the strapline goes. One of the contributors, designer Debbie Milan, comes out with a great quote, 'Busy is a decision'. She argues that broadly we do the things we want to do. If being busy is an excuse for not doing something, what we are really saying is it's not important enough.

I struggle a bit with how busy to be in my own small business. My ideal is that I'm the sales, client care and business development guy and everything else gets covered by the team. At times (not often) I have short windows of feeling on top of things and going into the office in the morning without a long to do list. It feels good while it lasts (which is usually not long) but it is always  accompanied by a slight feeling of guilt that I'm not busy enough.

I used to work with a business coach who was obsessive about helping his clients grow their businesses. One of his sayings was, 'Business owners don't realise how hard they need to work to be successful'. He felt it was human nature for an entrepreneur to take their foot off the gas and coast for a while when they reached a milestone and things became a little more comfortable. He believed it was his job to stop that happening and keep the owner's nose to the grindstone.

It's tax season so I'm in a busy phase now until February. No coasting or taking my foot off the pedal. That's fine and I have my browny points in the 'How busy are you?' chat with people I bump into in Sainsbury's.

But getting back to the phrase, 'Busy is a decision', I really need to sort this out. It's up to me what I do and how busy I choose to be. I will be putting my mind to that...as soon as I get the time

www.base52.co.uk