This was this was transcribed and edited from a talk by Daniel Priestley. It has been posted with permission from Daniel Priestley (@DanielPriestley) and the team at www.keypersonofinfluence.com.au

How Your Industry Rewards High Performance

The power of influence doesn’t come from running around in an attempt to find an easy industry. It actually comes from being visible, credible and connected within the industry that you really love, and making it into the inner-circle.

Being an entrepreneur who has built successful businesses in three countries, I’ve made some really interesting observations along the way, and my findings seem to be becoming more and more prevalent as new technology prevails. It’s all about becoming highly valued and highly paid, and how industry rewards high performance.

Typically, the income distribution of most industries sees the top 10% earn 80% of the lion’s share. So if you consider the medical industry, for example, the top 10% of doctors are gleaning 80% of income within that profession. They usually earn exponentially more because they do things very differently, and their 10% is often represented by a huge spike at one end of the spectrum.

Now I want you to imagine that it’s not a spike at the end of the spectrum, but at its centre. Imagine that every industry has an inner circle populated by ‘Key People of Influence’ who earn most of the money.

Let’s take a closer look at the way in which most industries work.

On the outer circle, we generally have ‘newbies’ who are new to an industry as the name clearly suggests! They’re usually uber-excited and enthusiastic, albeit not all that functional. They may have entered their chosen field because they focussed upon people within the big spike, but failed to take into account the next category, whom I call the ‘worker-bees’. These folk are extremely functional but may have lost their spark, leaving them feeling slightly dejected. It’s as though they work hard work for little reward. They’re not highly valued, nor highly paid. In fact, they’ve become replaceable, and often feel run down after many years of service.

Conversely, the inner circle is populated by Key People of Influence who actually run industries, make most of the money and have lots of fun. They’re the ones whose names come up in conversation and who take fun trips away. They possess the type of influence that makes an actual difference to an industry. What typically happens is that newbies enter what I call ‘the merry-go-round of opportunity’ where they search for opportunities and become stuck in one territory. Or, instead of pushing through and doing things differently, they go looking at various industries. So they’re running around in circles thinking, ‘Which industry is the best money-spinner for me?’ They might conclude that it’s the stock market, or the property industry or that they’ve got to enter multi-level marketing. They keep searching for the elusive ‘easy’ industry, not realising that each has three areas, as mentioned above.

But I’m here to tell you that the power of influence doesn’t come from running around in search of an easy industry. It actually comes from being visible, credible and connected to the industry that you’re genuinely passionate about, and making it to the inner-circle, also known as the ‘Key Person of Influence Zone’.

Why would you want to do that?

Well, the reasons are many and varied. When you get to the point where you’re highly functional at what you do, you’re usually in an industry that you know a lot about. The further you inch towards your industry’s centre, the more radically your income takes a leap. When you’re not yet there, your income might jump incrementally from, say, $45,000 to $50,000, but you’re not quite a Key Person of Influence.

By tipping into the actual Key Person of Influence Zone, you’ll find that you’re on a whole new trajectory where you’re actually moving up in the income stakes, big time. When you reach the inner circle of your industry – you’re great at what you do, highly functional and an excellent performer – you don’t just earn extra income, but incredible rewards. You’ve got more influence over what’s going on around you and you now get to see the myriad benefits at your disposal.

So the difference between people on the outer circle and those in the inner is the difference between functionality and vitality. The people on the outside are extremely functional but replaceable. The people on the inside are not only great, but in a position where they’re vital to their industry. In fact, it’s very difficult to shake them out of the business! They are industry leaders who are doing things differently.

Here are five things you can do to transition from functional to vital.

1.  Learn to Pitch Yourself

If you describe yourself as being functional and replaceable, then you wind up being functional and replaceable. Key People of Influence don’t describe themselves in boring ways. They don’t say, ‘I’m a personal trainer.’ They say, ‘I’m a fitness trainer who specialises in working with people who want to rapidly lose weight and become marathon-ready.’ They usually have a special niche, or a passion that is evident in their pitch. They have the ability to talk about what they do and make it sound incredibly unique, as opposed to functional and ‘beige’.

2. Put Your Pitch in Writing

This could mean authoring a book, which is a great way of separating yourself from the pack and heralding yourself as an authority. You may also write articles and blogs, or provide really great updates or newsletters, the point being that you need to be able to put your ideas down in print. We live in a world where most people are searching for text and tags. Your way of relating to that world must therefore be translated into text.

3. Understand Product Strategies

High performing people completely understand their product. Further, Key People of Influence have a helicopter view of their product strategy and understand why they give certain things away for free or cheaply, and where their core business lies. They know their product mix, or the ecosystem within their industry. So you must know your product. Today we have some really easy ways of understanding such things, the likes of which most small businesses have never seen before.

4. Raise Your Profile

You’ve got to actually be seen to be a Key Person of Influence. When somebody Googles your name, that first page needs to come up with all the things that you want them to see, i.e. your brand values, thoughts, opinions, and what makes you special. Who Google says you are is your personal brand, so it’s worth Googling yourself and doing an image, video and text search to discern what it’s saying. You must raise your profile and be deliberate about how you do so.

5. Take the Money Step

Step five is all about entering joint ventures and partnerships. Key People of Influence are brilliant when it comes to forging strategic alliances, as I’m sure you are too.

You maybe haven’t thought too much about this, but you are already standing on a mountain of value. In Australia, there is a mountain range known as the Glass House Mountains. If you reach the summit of Mount Tibrogargan, the largest of the group, you could be guilty of looking around at all the other mountains and thinking, ‘I’d love to climb those bad boys’ without taking the time to acknowledge your current achievements.

Most people are already standing on a huge mountain, but haven’t learned the art of pitching, writing, forging joint ventures, raising their profile or understanding their product.

Perhaps it’s time for you to acknowledge your mountain of value!

Daniel Priestley is a successful entrepreneur, event producer and author of ‘Become a Key Person of Influence’ –www.keypersonofinfluence.com.au

Want to learn more?

KPI are running their accredited 8-hour Brand Accelerator event in February 2014 with some of Australia’s most well respected entrepreneurs and industry leaders.

Melbourne | 7^th February

Sydney | 13^th February

Brisbane | 28^th February

As one of their event partners, KPI has offered our readers a 40% discount on the retail ticket price, with sale ticket prices starting from $39 for general admission.  If you’d like to join our group on the day, we’re going to be seated in the Gold front seating section.

Book your ticket for the KPI 8 hour Brand Accelerator | Business Strategy Day.

5 Things For Business owners to Implement Now for a Successful Year Ahead

 

With the first quarter of the calendar year well underway, it’s time to look at setting up the year for success.

One of the biggest challenges we see in business is the lack of planning. In a lot of cases it’s because business owners don’t know how to plan or where to start with their planning.

This article will give you a crystal clear To Do list so you’ll know where to start, and then where to go from there.

Based on our experience in advising many businesses over the years, here’s a list of the 5 most important things to have in place for a successful year…

1. Accounting software that supports real-time reporting

To make key management decisions in your business, you need up-to-date financial information.And in modern business ‘up-to-date’ means ‘now’, not last month’s figures. Today’s figures.

One of the downfalls of traditional accounting software is how inefficient it is at maintaining the data. Bookkeepers have to share a single data file. They have to wait for bank statements, and then enter the information manually. And advisers need to ensure they have the correct software version to interpret the numbers.

And that means way too much lead time to produce even a standard report.

If you haven’t worked it out already, we love Xero. It solves many of these  inefficiencies, and automates too many tasks to mention here. Once it’s set up and being used effectively, Xero can shorten the lead time on key management reports (and therefore decisions) to days.

If you choose only one suggestion from this list, we recommend this one hands down. It’s the perfect place to start.

2. Identifying Key Lead Indicators

One part of the planning process where many business owners come unstuck is working out what to aim for. In the book, “The 4 Disciplines of Execution”, co-author Sean Covey clearly explains the difference between lag and lead indicators. And business owners often get hung up on lag indicators such as revenue, profit and net cash. And that’s understandable, because it’s where the rubber hits the road, so to speak.

Unfortunately, they often forget to plan for how to get there–i.e. identifying the lead indicators that produce the lag indicators. For instance, revenue comes from converting leads, getting these new clients on board, and helping them with relevant products.

If you focus on moving your lead indicators, the lag indicators look after themselves. And that starts with knowing what your most important lead indicators are.

3. Revenue and Profit Potential

One process we take our clients through is identifying key indicators that make up their revenue, and how changes to those indicators will affect their overall profit.

Don’t just pull a figure out of the air. You need to work forwards from what lead indicators are achievable, and determine how it will affect your revenue and profit potential.

It’s a valuable process, because we can calculate ‘What if?’ scenarios for clients on the fly, and build realistic revenue and profit potential targets.

4. Budgets and Cash Flow Forecasts

Once you’ve determined your revenue and profit potential, it’s time to go into the numbers a little deeper.

Budgets are great for accountability and ensuring the business sticks to its goal, but the hidden gems are the cash flow forecasts. You can budget for a large profit for your business and still face considerable fluctuations in available cash from loan repayments, late payments from debtors, GST, superannuation, and so on. And they won’t necessarily align with the profit and loss budget.

Profit is theory. Cash is fact.

5. One Page Plan

Finally there’s the One Page Plan, which we not only recommend but use ourselves. Developed by Verne Harnish, this organisational tool helps you put all of your planning, key numbers, business roadmap and accountabilities on a single page. It gets everyone in the organisation on the same page as well (if you’ll pardon the pun).

The One Page Plan clarifies your:
– core values
– key objectives (both short- and long-term)
– management KPIs
– niche/target markets
– SWOT analysis
– key numbers (from three years down to 90 days).

In short, it’s a single resource that keeps everyone in the organisation super-focused and driving towards a clear and common goal.

So, it’s almost the end of January. How do you stack up against these 5 key areas? If you’re only a 1 or 2 out of 5, or even a zero, don’t fret. As they say, the first step in solving a problem is recognising and defining it.

And then… taking action.

Implement each of these in your business and you will add considerable value to your business. And we’d love to help you follow them. That’s what lights our fire. Leading and inspiring business owners to produce better results. Tax and accounting is important, sure. We’re great at that, but what will put you, your business and your family in a dramatically better financial position in a year’s time, will be implementing management systems and practices such as those I’ve listed above.

So… go for it. The year won’t wait for you. It’s time to swing into action.

We’ll explore these topics in more depth in the coming weeks so you can develop your business to its next level of performance.

Trade Marks: What are they worth?

Guest article written by Nathan Donovan, Principal of Brisbane commercial law firm, Donovan Legal.

When I talk to business owners about trade marks, they usually come back at me with the same old reactions.

1. I didn’t realise I could register a trade mark.
2. I assumed trade mark registration was really expensive and just for big business.
3. I didn’t think I needed to register a trade mark. I’ve already registered my business/company name and/or domain name.

My response?

1. Trade marks can (and should) be registered whenever possible.
2. Trade mark registration is not as expensive as you would think (excluding any professional advisor costs, filing and registration fees cost as little as $420 and initial protection lasts for 10 years).
3. Registration of business names, company names and domain names will give you a measure of administrative protection but not the level of protection enjoyed by the owner of a registered trade mark.

If you’re a business owner ask yourself this question; “What is my brand and what is it worth to my business?”  For many businesses their success will be tied to both the strength of their unique selling proposition and its ties to their brand.  What you don’t want is to put all your energy into creating a great product or service only to see a competitor imitate your brand.  Trade mark registration is designed to protect your intellectual property rights to your own brand. That being said, the only way to utilise the benefits of trade mark registration is to first understand how they work.

What is a trade mark?

A trade mark extends beyond just the name of your business and its logo. It includes almost anything which distinguishes your goods and services from those of a competitor.   Some of these distinguishing features can include letters, shapes, colours, sounds and even scents.

It is crucial that that your trade mark is unique and distinctive rather than just descriptive. If your mark simply describes where you are (e.g. Brisbane Dentists), what you sell or do (e.g. Burger Joint), or the kind or quality of your goods and services (e.g. Best Cold Beer), chances are, your trade mark would not be capable of registration.

What are some of the benefits of trade mark registration?

A registered trade mark is recognised as a type of personal property that can be sold or commercialised (e.g. franchising and third party licensing).  Once your trade mark is registered you have the exclusive right to you use your trade mark throughout Australia in relation to the goods and services specified on your trade mark certificate.  In fact, at the same time you register your trade mark in Australia, you can also register your trade mark in other countries, provided they are signatories to what is known as the Madrid Protocol (which most major economies are).

How does a trade mark differ from a business name, company name or domain name?

It is important to understand that business and company name registrations are not designed to give business owners proprietary rights in the name. In reality they serve to enable the public to find out which individuals or legal entities stand behind the business name or company.

The ASIC, which manages business and company name registration, has some administrative processes designed to restrict registration of the same or similar business names. Strictly speaking, business name registration does not prevent someone from registering a business name that is:

• similar to your business name; or
• the same as your business name if they already own the registered trade mark.

Similarly, registration of a business name will not prevent a competitor (or even a cyber-squatter) from registering the same or a similar domain name to your business name.  When it comes to .com.au domain names (a second level domain or 2LDs), it is good to keep a few things in mind.

1. There are no proprietary rights to a domain name.
2. If domain registrations are not renewed every two years the domain licence lapses and can be registered by someone else.
3. Whilst there are policies requiring an appropriate commercial justification when registering a .com.au domain, the policies are quite broad it is usually not hard for a competitor to register similar domains to your brand.
4. Before you adopt a brand, make sure the domain name is available AND register!

What should you do if you want to register a trade mark?

Trade marks can be registered online at www.ipaustralia.gov.au. This website offers a wealth of information to guide you through registering your own trade mark. Of course the safest thing to do would be to seek out a lawyer or trade mark attorney to register your trade mark for you.  Doing your own trade mark registration can be risky and it is far better to talk to an experienced lawyer who can ensure your trade mark is properly registered with the broadest protection possible.

Your business, government grants and tax incentives. Are you cashing in?

Thomas Edison once said that “Genius is one percent inspiration and 99 percent perspiration”.

Unfortunately, going from that inspirational idea to the finished product takes a lot more than hard work. (Here’s a quick article we wrote on getting started quickly…)

Just like Edison, you also need to invest in a lot of research and development, blood, sweat and tears.

And R&D as many experience, doesn’t come cheap.

Fortunately the Federal Government provides assistance to businesses in two ways: Grants and Tax Incentives

What Government Grants are available to you?

Surprisingly, there are many different government grants and assistance programs on offer. The Federal Government’s GrantsLINK website helps you work out the grants your business may be eligible for. Click Business and Industry on the left of the screen and you’ll see pages of grants listed. Depending on your type of business, different grants might be applicable.

The Grants & Assistance Finder on business.gov.au has a more detailed listing of grants and assistance programs. You can filter on State or Territory and Type of Grant or Assistance.

Get in touch with us if you’d like us to shortcut the process for you, and we’ll let you know which grants are worth applying for in your situation.

Keep in mind there’s no guarantee a grant application will be successful. That’s one reason the next type of assistance is so appealing…

Are you eligible for the R&D Tax Incentive?

Innovate, and you reduce your tax. That’s the idea behind the Research and Development (R&D) Tax Incentive. It provides R&D tax offsets to encourage Australian businesses to innovate and engage in R&D.

Businesses conducting R&D may be eligible for:

• a 45% refundable tax offset (equivalent to a 150% deduction) for eligible entities with an aggregated turnover of less than $20 million per annum; or
• a 40% non-refundable tax offset (equivalent to 133% deduction) for all other eligible entities (entities may be able to carry forward unused offset amounts to future income years).

The program is jointly administered by AusIndustry and the Australian Tax Office (ATO).

To register for the tax incentive you must lodge your application within 10 months of the end of your company’s income year.

Each year you must elect to partake in the R&D Tax Incentive. AusIndustry offers a self-assessment process for companies using the R&D Tax Incentive Online Eligibility Tool. This will give your company an indication of its eligibility.

It’s important that your company keeps adequate records throughout the year to show it carried out eligible activities in incurring the claimed expenditure.

If you’re eligible for the R&D Tax Incentive but not applying for it, you’re leaving cash on the table. We can help you make sure you tick all the relevant boxes so you don’t miss out.

If the government is offering your business financial assistance through tax breaks, take them!

A little perspiration will be worth it

Remember Edison’s words. The ‘perspiration factor’ can’t be avoided. You need to apply for the grants and tax incentives, but the effort can be well worth it. And we’ll share the load with you.

Drop us a line and we’ll make a time to catch up and have a chat about your eligibility and the next steps required.

3 Reasons Reducing Your Tax Refund Makes Weird Sense

 

Every year Australian Taxpayers lodge their income tax returns and celebrate the refund cheques the Australian Taxation Office is kind enough to provide. A tax refund is viewed as the mid-year government bonus taxpayers have been waiting for. It’s almost like finding money in the street!

But is it really?

In reality those tax refund cheques represent money that belonged to the taxpayers all along. This is because taxpayers actually pay a larger provision than was actually needed. The ATO has been holding the funds all year, interest free. Ask yourself, in what other scenarios would you allow anyone to use hundreds or thousands of dollars of your hard earned money for an extended period of time, interest free – then celebrate when they give it back to you as if it were never yours to begin with?

Large tax refunds can occur for a number of reasons, including:

• significant work related deductions;
• negatively geared investments;
• incorrect PAYG withholding from income or investments;
• overestimated provisional tax instalments.

You should also note that a large refund does not relate to having a ‘good accountant’ as many conditions may effect the outcome. The service offer by an accountant is identifying the above and structuring the tax liability in an appropriate manner.

Why Reducing Your Refund Makes Sense

Taxpayers who choose to take steps to closely match their withholding tax with their actual income tax liability for a financial year reduce the need for a refund cheque and are able enjoy some unexpected benefits.

1. Increased investment income: By reducing the amount of your money the ATO is holding, you (rather than the ATO) can invest this amount and receive the investment income.
2. Debt Reduction: If you currently have interest bearing debt such as a credit card you can reduce this balance faster by removing any excess withholding tax on your next paycheque. Given that some Australian credit cards charge in excess of 20% interest annually this can result in a significant interest saving.
3. Improved Lifestyle: Currently saving for that dream family holiday? Reducing unnecessary withholding tax could mean the different between taking the trip this year and waiting until next year.

As a taxpayer, if you or your employer are looking to take more control over withholding taxes, keep an eye out for our articles on salary packaging and Fringe Benefits Tax.

Doing the Numbers

After our Christmas Party and Inspire Cafe Launch Party in December 2013, it was time to take a hard-earned break from the first of many big years at Inspire CA.  I’d like to take a moment to reflect on some key numbers and share the most significant business and life-changing moments of 2013.

7,470: the number of emails that I sent during 2013 (That’s about 33 each business day!…);
From 15 to 67: client groups that we now serve;
894: Inspire CA YouTube views, over 19 videos;
From 18 sq. mt to 273 sq. mt.: in office space, with a cafe as the centrepiece;
From 1 to 6: team members between Inspire CA and Inspire Cafe; and most phenomenally ………

62,415: Lives were changed through micro-giving via B1G1: Business for Good.

 

The most Profound Moment of 2013

I was first introduced to B1G1: Business for Good when I met Paul Dunn via a webinar in May 2013.  Paul is a builder of phenomenal businesses, globally, and is now the Chairman of what I see as the best business giving initiative in the world.  After Paul explained to me the concept of B1G1, it was a no-brainer for Inspire CA.

The idea is simple. Paul explains:

– What if every time you dined at a restaurant, a child receives a nourishing meal

– What if you drink a coffee, someone gets access to life saving pure water

– What if you buy a book, a tree is planted

– What if a TV is purchased, someone receives the gift of sight

 

 

B1G1 provides a platform that enables businesses to give efficiently (and effortlessly) to over 600 projects in over 30 countries. What’s more, 100% of the donations go to the projects! The businesses who are part of B1G1 find ways of giving transactionally throughout their business.

For instance, here at Inspire CA for every email we send, we give a child access to life saving water. For every Strategic Planning Session we provide to a client, we educate 75 women in India on how to run their own business and provide for their family.  In the Inspire Cafe, for every coffee that is purchased and meal that is consumed, a child receives access to life saving water and a nourishing meal. The whole idea is to make a difference every day – just by doing what you normally do.

Not only that, B1G1 has recently provided a way in which you can easily see the impact you’re having on the world – via the Business for Good map. Here is our impact to date:

I can’t be more excited to be a part of B1G1 and just recently I shared with Paul our Giving BHAG for 2014: To take the Inspire CA & Inspire Cafe total micro-giving impacts to 1,000,000!

The ATO, the Christmas Grinch, and your office party

The festive season is upon us once again, which means it’s time for our business clients’ questions and concerns about the costs associated with their staff Christmas parties.

“Is the Christmas party tax deductible?”

“Can I claim the GST on the expenses?”

”Will I need to pay Fringe Benefits Tax?”

Do any of these questions sound familiar? If they do, then let us give you the lowdown on the ATO Christmas Grinch.

But first things first: There are no special tax rules for staff Christmas parties. The costs relating to the party fall under the same rules that apply to any other meal and/or entertainment a business provides to employees (past, present and future) and their associates.

Here’s a table from the ATO that outlines how each situation is treated in terms of Income Tax and Fringe Benefits Tax:

Situation	Income tax	FBT
Employee takes two clients to lunch at a restaurant – cost $150	Employee’s portion: $50 tax deductibleClient’s portion: $100 non-deductible	Employee’s portion: $50 fringe benefitClient’s portion: No FBT
Employee has meal in restaurant while travelling on business trip	Tax deductible	No FBT (‘otherwise deductible’ rule)
Employee has meal in an ‘in-house canteen’	Tax deductible	Exempt from FBT
Employer provides sandwiches and juice for working lunch in office (not entertainment)	Tax deductible	Exempt from FBT
Employer provides substantial lunch with wine for employees and clients in office	Non-deductible	Exempt from FBT
Employer provides social function for employees /clients in office	Non-deductible	Exempt from FBT
Employer provides social function for employees and associates in office	Cost per employee: Non-deductibleCost per associate: Tax deductible	Cost per employee: Exempt benefitCost per associate: Taxable fringe benefit
Employer reimburses employee for cost of private party	Amount reimbursed is tax deductible	Taxable fringe benefit
Employer provides employee and associates with theatre tickets	Tax deductible	Taxable fringe benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By looking at the table we can take away a very simple rule of thumb: You can’t claim a tax deduction or an input tax credit in relation to a benefit provided to employees or their associates unless the amount is subject to Fringe Benefits Tax.

Fringe Benefits: Minor Benefits Exemption

To be eligible for this exemption, the taxable value of the fringe benefit must be:

• under $300 per employee
• ‘infrequent’ and ‘irregular’.

The ATO has provided very little guidance on what they believe to be ‘infrequent’ and ‘irregular’, which is frustrating for tax accountants and employers alike. However, the ATO has stipulated the more often and regularly benefits are provided, the less likely an employer will satisfy this criterion.

The ATO touches on how the minor and infrequent exemption should be applied to staff Christmas parties in Taxation Ruling TR 2007/12. This ruling states an employer who provides a Christmas party for its staff isn’t exempt because the benefit is not infrequent. (Christmas parties are arranged annually for staff and, therefore, occur on a regular basis.)

Conclusion

We take the approach outlined in Taxation Ruling TR 2007/12. If a benefit is provided regularly (e.g. every week, month, quarter or year), then it doesn’t qualify for the minor and infrequent exemption and fringe benefits tax applies according to the table. If the benefit occurs ad-hoc or for one time only, then it will qualify as a minor benefit providing the taxable value is less than $300.

How does this apply to your upcoming Christmas party?

We believe employers who hold annual Christmas parties don’t satisfy the minor and infrequent exemption criterion, and will be liable for FBT on the costs associated with the party.

However, employers who don’t necessarily hold Christmas parties every year, or start-up businesses planning their first Christmas party, can satisfy the infrequent criteria, and the minor and infrequent exemption can be applied to the benefit if the cost is less than $300 per person.

Pushing the Envelope (with coffee??) – B1G1: Business for Good

 

The original article was published by B1G1: Business for Good on 14 October 2013. Written by Paul Dunn.

 

Ben Walker’s one of those guys you love to meet. Looks sharp, is sharp and clearly on the pace. And Ben’s a Chartered Accountant.

But the thing I like most about Ben is his intuitive understanding of this, ‘the power of any idea is only ever in its implementation.’

Ben implements like mad. Mention to him, for example, that timesheets have no place in any Professional Knowledge Firm, and he gets rid of them. Totally.

Or mention to Ben that we should do an event together and you don’t get ‘Oh …. What a good idea.” What you get back is “Great … let’s do it!” (http://inspireca.eventbrite.com)

Or this one, “Ben, in all these years I’ve been consulting to and mentoring Accountants, I’ve always felt that the basic office layout was in need of work. I’ve always thought we should not have reception desks and the like. What we should have is someone game enough to make the very core of their office as a café.”

Ben’s response: “I’ve been wanting to move offices to deal with our growth any way, so let’s do it.”

And the result …… the soon to be launched Inspire Café (a name completely consistent with Ben’s firm: INSPIREca.)

But even more than that. Ben’s well aware of this dictum too: ‘WORDS MATTER’. He’s seen what happens when we no longer have tabs on websites that say ‘Our Team’ but rather ‘Meet our Exceptional Team’. That one word ‘exceptional’ changes everything.

So when Ben advertised for a Barista, he got an exceptional one. How? Like this:

 One word makes all the difference doesn’t it?

And Ben Walker’s pushing the envelope by making a difference in so many other areas too because of his Partnership in B1G1: Business for Good.

Oh ….. you’ll want to keep track of the progress of the Inspire Café too. Just click on this link and Ben will keep you right up to date. SO …. Go ahead and implement .. make sure you click that link now: http://inspirecafe.com/

Are You Using The 80/20 Rule? Or Is It Using You? 2 Simple Profit Improvement Business Ideas

In 1906, Italian economist Vilfredo Pareto observed that 80% of the land in Italy was owned by 20% of the population. He also observed that 80% of the peas in his garden stemmed from 20% of the pods.

And so began what’s known as the 80/20 rule or the Pareto Principle—the idea that 80% of your results come from 20% of your efforts.

This principle tends to show up more often then we realise. And our success lies in how we interpret it and react to it.

One aspect of business where we see this all the time is 80% of a business’ profit coming from 20% of their clients. It usually happens when a business moulds its methods around a client’s demands, rather than fitting the client into their business processes while still achieving its objectives—pricing, scope of work, payment terms, etc.

It’s important not let other people govern your business. Here are a couple of ways you can limit your efforts for the 80% of clients who bring you little benefit.

1. Apply Client Selection Criteria

In most cases, 20% of your clients will keep the business afloat, while the other 80% ‘pay the rent’ or smooth things over in the quiet times. Unfortunately, we often get hung up on those 80% despite the fact they’re unprofitable, high-maintenance, and difficult to deal with.

You can avoid this by having clear selection criteria for your clients.

Here’s a strategy you can try:

1. Work out your ideal client (look at your current “best clients” list), and list their attributes. These are your “green” clients. You like working with them, you give them great value, they pay their bills on time, and you wouldn’t hesitate to take on more work from them.
2. Now do the same for the clients you should never have agreed to work with in the first place. You’ll find they have common attributes—they may never see your value proposition, or they may finance their business on yours by holding off payment. These are your “red” clients.  We recommend you stop taking on work from these clients, regardless of how much your revenue drops temporarily. Yes, turning down work can be hard, but once you replace them with more “green” clients you’ll be thanking yourself.
3. Any clients left over are “amber” clients, and you should consider them on a case-by-case basis. While they’re willing to listen to your advice, pay for the value you provide, and are good to work with, feel free to take them on as clients. Just make sure they don’t become “reds”.

Ultimately you want clients who are great to do business with. So save your sanity and let go of those clients who do nothing but test patience.

We understand that saying goodbye to most of your clients is a scary thought. But we have an idea that will make it seem far less dangerous.

Your “green” clients won’t necessarily be aware of every service you can provide for them. And many studies have found that, on average, it is 6 times more cost effective to sell to an existing client, than to invest in attracting a new client.

2. Stick to what you know, with who you know

One of the simplest and least stressful ways to increase revenue is to provide existing services to the clients you already have. Look at the table below. Which quadrant do you think would be the easiest to sell to?

Of course, the answer is the bottom left—selling services you already have to clients you already know. But businesses often focus on selling to the bottom right quadrant instead. Take our advice, and stick with what you know and who you know.

Create a culture in your business of providing existing services to your current clients (identifying, suggesting, delivering, etc.)  It can develop through regular nurturing meetings, identifying opportunities while working on existing projects, running events and webinars, and so on.

And don’t forget tell your clients about your complete ‘menu of services’. It helps them identify help they may need, and who they can call on to get in.

A great way to identify who is missing out on what services is to create a client matrix. Create an Excel spreadsheet with your services across the top (columns) and your clients down the side (rows). Then simply place a ‘tick’ in the services you provide for each client. A blank space means either the service isn’t appropriate for that client or you need to start offering it pronto.

The key is to take action and implement. We’ve had great results using this process, and so have many of our clients.

Cashflow By Design: 3 Ways WorkflowMAX Creates ‘Cashflow MAX’ For Design And Creative Agencies

Many design agencies and creatives use a business model where getting paid is one of the last steps in the job cycle.

While we’re fans of both the ‘price upfront’ and ‘get paid upfront’ pricing models, without efficient workflows and turnaround times you’ll either have poor cash flow or unhappy clients. Or both.

1. Implement a job monitoring system

A job monitoring system gives you a number of benefits, the key one being able to track the work coming through the door. And once that’s happening, you can start reporting on job turnaround (“Work In Progress Days”). By having access to the jobs on hand, your team will be on the same page. And you’ll be able to manage your agency’s capacity more effectively.   Your system can be:

Electronic

Part of our “Optimise” strategy is to make sure you use your time efficiently. It’s the reason we implemented an electronic job monitoring system.   While you can find plenty of workflow management tools online, we’re a big fan of WorkflowMAX. (It’s what we use for our business.)

It’s tailor-made for design agencies, and integrates with Xero so we can optimise our administration process even more. The easy and efficient flow-through from quoting, to invoicing, to data in the accounting system saves a lot of administration time and ensures your business and accounting data is up-to-date and accurate.

Visual

While using only one method to track your workflow saves time, having a whiteboard system as well gives you team buy-in and a subconscious motivation to turn around jobs quickly.   Let’s say you have a service standard of ten days from job in to job out. On your whiteboard, draw up 11 columns and a row for each team member.

For each team member write their assigned job name in column one, and the date it starts in column two.   The idea is to write a date in the next column each day (say, during your workflow meetings) until the job is finished and out the door. It acts as a visual progress bar and motivates everyone to get the job done before day ten. (But no more than two or three jobs per team member, okay?)

2. Get the information you need before you start

Every time you put down a job and pick it up again, you lose efficiency. And that’s not good for you or your client. So don’t start the job until you’ve got everything you need.

Make sure you have a process in place (such as a questionnaire for the client to fill out) so you have all the information and files you need before you begin the work.

And make sure they’re available in case you need more information or feedback down the track. They’ll appreciate it when your turnaround time is half that of your competitors.

3. Set some efficiency standards

How about setting some standards for turnaround times? You could even set a “Ten day turnaround” brand promise so clients know when their job will be finished.

It’s a great way to keep the cash flowing. Just make sure you’ve got the processes in place, because chances are your prospects and clients will put it to the test.

Think of it as self-imposed accountability. When you accept a job, let the client know when it will be ready. It not only adds to their expectation, but also gives you and your team an extra incentive to meet the deadline. It also readies the client for any further information you’d need.

We do this ourselves, and it works. We even set a delivery meeting when we receive the project.

 

We use these tips in our own firm, and they work a treat. So why not try them yourself and see how you go? And feel free to let us know how it goes.   If you need any help, or have further questions, give us a call. Oh, and if you have any questions about WorkflowMAX we’d be happy to help you out.   Your cashflow stems in large part from your workflow, so it pays to get it right. Literally.