Article by www.businesstech.co.za

The collision between “business as usual” and technology is imminent, and the fallout will be nasty, especially for millennials, says recruitment specialist, Adzuna.

According to the online job aggregator, automation and Artificial Intelligence is one of the most disruptive forces the ‘modern’ workplace has encountered thus far, and if the predictions from across the world are correct, up to 37% of millennials are at risk of losing their jobs to automation.

Since the baby boomer generation is now generally employed in leadership or managerial roles, and jobs that require more complex problem solving, they’re not in such grave danger as their younger counterparts. This is according to Scott Dobroski from Glassdoor.

The millennials are the ones that will be replaced sooner since they don’t have as many job skills and generally, they hold positions that are simple enough for AI to take over.

“The jobs that AI and automation will take over aren’t just the ones that come to mind first, like drivers. They’re across all sectors because every company in the world relies on some sort of tech at the moment,” said Jesse Green, country manager for Adzuna South Africa.

“Every company on earth has an online presence or an app, and that puts everyone at risk.”

Jobs that require critical thinking, strategy, and data science are less likely to be replaced than repetitive, white-collar jobs like accounting roles. This means that professionals like software engineers, data scientists, doctors, nurses, and financial planners are relatively safe, for now.

Although automation might not take over those roles, they will most definitely affect them, said Green.

The role of AI and automation on the jobs that are “safe” will be to make them more effective and efficient. “We’re still a couple of decades away from seeing robots analyse someone’s back injury and fixing it on the spot.”

Citing an article from the Harvard Business Review, Green said that AI will reshape the organisational structures we are used to today. Ravin Jesuthasan and John Boudreau, the authors of the article, said that the human aspect present in the workforce after the Fourth Industrial Revolution hits us won’t be sourced through employment.

Jobs within organisations will become a thing of the past and will instead be outsourced by measure of units.

Kai Fu Lee, an AI expert and venture capitalist recently spoke to CBS News in an interview, revealing that it’s possible for up to 40% of all jobs across the globe being replaced by robots or computers. Big names, like Elon Musk, have been warning about the power of AI for quite some time, hammering on how it has the ability to disproportionately affect low-income workers.

But the sad reality is that AI is on the rise, and there is no stopping it or the impact it is bound to have on society. Artificial intelligence can be seen in the same light as the steam engine and electricity. Before those systems worked, people laughed at the struggling inventors, but only until their dreams became a reality across the world.

Humans will always be affected by change, but somehow, we always get over it. The only problem with AI is that it will hit us much sooner (and harder) than those innovations did.

Article by www.businesstech.co.za

Article by www.succeedasyourownboss.com

Every company, big or small, is always concerned about one thing – managing money. Proper financial management is crucial to surviving a volatile economy and the industry competition. Small businesses, especially, need to exercise caution with their financial decisions from the very beginning. It takes more than just a good idea to run a business. Every business needs a financial structure that generates a profit to stay credible.  Entrepreneurs need is to be equipped with good money management abilities to turn their venture into a success story.

Not all business owners, however, are adept at handling finances. But that doesn’t mean all hope is lost.

Here are 6 tips for managing small business finances.

1. Educate Yourself

One of the first things that you should do is educate yourself about the various aspects of finance. For starters, learn how to read financial statements (if you don’t already know how). This is one important statement that tells you all about your money – where it originated from, how many hands it changed, and where it is.

Financial statements contain 4 essential details – cash flow statement, income statement, balance sheet, and statement of shareholders’ equity. The cash flow statement analyzes operating activities, investments, and financial in/outflow. The balance sheet provides information related to the company’s assets, liabilities and shareholder’s equity. The income statement reflects the revenue earned within a specific period of time. Shareholder’s equity represents the amount by which the company is financed through common and preferred shares.

2. Separate Personal and Business Finances

Always keep your personal and business finances separate. This entails getting a business credit card and putting all related expenses on it. This should help you track your outlays and keep you in control.

You will also do well in opening a savings account dedicated to your business, wherein you can transfer a certain amount of money from each payment that you receive and gradually build a considerable corpus. You can use this money to pay taxes.

3. Cut Costs

It is important that entrepreneurs stay tight-fisted to keep their expenses in check without hampering customer satisfaction. This, especially, holds true for small businesses.

Every business endures 2 types of costs – fixed and variable. While fixed costs have to be borne irrespective of whether your business is making money or not, there is scope for savings in variable costs.

For example, instead of buying costly branded software, you could work with free, cloud-based, open-source software, which is equally good. Conduct free online calls, video conferences instead of travelling lost distances. You could also try bartering your services with other professionals and cut costs.

4. Invest in Cloud-based Accounting Software

While you can definitely download regular accounting software to manage your finances, it will never give you the kind of convenience cloud-based accounting software can.

Web-based software provides you with real-time insights as most allow you to store, update, track, and access data from anywhere at any time. Whether you’re at home, office or are travelling, you can conveniently work with your data from anywhere you like. It is error-free, hassle-free and dependable.

5. Monitor and Measure Performance

It is crucial that you, as a business owner, keep tabs on the movement of your money, especially when large amounts are involved. Keep looking at your company’s financial performance in comparison to the past financial statements to project your future revenue, expenses and cash flow.

Being aware of these aspects will help you make informed decisions for your business.

6. Hire Professional Help

Everyone needs help, especially a budding entrepreneur interested in making a huge success of his venture. Sometimes, it pays off to engage the services of an expert, even if it is on a part-time basis. They can help you determine where your business is, where it is heading by using and analyzing your data. Make sure you hire someone you trust, though.

Whether it is tax planning for the next financial year, or payment for the current year, their expertise can go a long way in guiding you and bringing you peace of mind.

Conclusion

While owning and running your own business can be exciting, it can also be nerve-wracking, especially when it comes to handling finances in a lucrative manner. Don’t let your business suffer due to poor money management. Keep the above tips in mind and give your venture a bright future.

Article by www.succeedasyourownboss.com

Article by entrepreneurmag.co.za

For any successful business, safeguarding its future through careful succession planning should be an important focus. This applies whether you’re running a large listed business, a family owned business, or a small to medium sized unlisted business. There are interesting parallels to heading a successful family and preserving long term family wealth.

This was borne out in our latest survey of over 150 ultra-high net worth individuals, many of whom run or have run successful businesses, often across jurisdictions and generations. Over two thirds of the respondents identified succession planning as their current primary concern in preparing financially for the future. This represents a shift from our 2017 report which identified capital preservation as the primary concern.

What is driving this change? According to our findings, the answer is the rapidly changing and uncertain socio-political and economic environments. Against this background, our respondents said they see a certain urgency in preparing the next generation of leaders to respond to future challenges and opportunities. This means a more sophisticated, better structured and increasingly democratic approach to leadership, greater emphasis on training and development of young people, and better communication and renewed emphasis on long-term planning. The risk of failing to prepare the next generation is now seen as the highest priority for long-term sustainability.

In the family business scenario, and given the rate of technological, social and political change, intergenerational relationships are also transforming. Nearly all respondents agree that the impact of societal change on a family business must be reflected in the way they prepare for the future. Traditional, informal approaches are thus being challenged as families look to more sophisticated governance and communication.

For many of our clients, a successful business is the principal source of wealth and frequently represents a substantial proportion of their assets. Below are some practical, actionable insights from the report that came out of the survey, Four Pillars of Capital: Practical Wisdom and Leadership for Changing Times.

Concern #1: Succession Planning

As mentioned, the survey showed a shift in the primary concern by respondents from capital preservation to succession planning. We found that 69% of respondents identified succession planning as one of their top three concerns for future financial planning, followed by capital preservation (62%) and tax planning (48%).

Our Recommendation: Planning for the long-term is crucial in any business. Discuss strategic planning for future ownership with your Board, your mentor, your family and or key business stakeholders, which could include raising external finance or planning for an exit. Develop a purpose or planned vision for your business.

Partner with an independent professional to help advise and implement suitable and practical strategies to support governance and succession.

Concern #2: Leadership Selection

We asked families how they selected their leaders and how this should change in the future. One of the most interesting results of the survey is that 28% of families interviewed still currently operate on the basis of primogeniture (the right of succession belonging to the first-born child). When asked about their intentions for the future, however, the figure is now around a third of that at 10%. There is a growing preference for wider consultation for the selection of new leaders, possibly including a formal process. Currently only 13% use a committee to select the leader, however at least a third (33%) expect leadership to be selected this way in future.

Our Recommendation: Our experience tells us that having a clear leadership structure and process will provide the best chance of managing unforeseen risks – both internal and external – pursuing opportunities and ensuring that the business prospers. Most business owners need to employ leaders who can keep pace with the modern world and are able to adapt to a fast-changing environment. This means more broadly-based preparation than in the past.

The counterweight is that there is greater need for leadership responsibilities to be shared with others who have both the knowledge and stature to debate the key areas of risk and ensure the interests of all stakeholders are properly protected. Having an experienced mentor to help think through ideas and handle challenging relationships is invaluable.

Concern #3: Failure to prepare the Next Generation

Respondents identified that the top risks to long-term family wealth relate to family disputes (68%) and lack of planning (67%) as well as the failure to appropriately engage or train the next generation. This happens in businesses too, whether or not they are family businesses. Partners in a business can fall out, leaving the business and its employees to an uncertain future and often resulting in detrimental impact to the value of the business.

Our Recommendation: Increasingly, we suggest that families and business owners should engage in ongoing, regular and transparent communication with all company stakeholders, regardless of their responsibility or position within the firm. Employees should be given an opportunity to contribute towards defining the company’s core values and owners should invest in continuous development training programmes for their younger, more inexperienced employees.

Article by entrepreneurmag.co.za

Article by entrepreneurmag.co..za

Many startup founders and small businesses dream of receiving an offer to becoming the next billion dollar business. Whether its because they are ready to move onto another project, or they are ready to expand and are looking to leverage the financial power of a bigger partner, selling a business is a big move for any business. For many business owners, getting an offer from a buyer is certainly exciting, but before you jump into anything, remember that there are important steps to take before you sign the paperwork that will move a successful transaction forward.

Some entrepreneurs are ‘starters’, they like to start a business, get it off the ground and then flog it. Others are ‘growers’, they look for existing businesses and have the ability to grow them beyond their original value. Both will probably get to the same end point: Selling the business.

But entrepreneurs are often misled when it comes to the sale. They have put everything into the business and it is worth a huge amount to them because of it. But buyers are seldom willing to match the price, because what is being sold, and what is being bought, are not the same thing. Sellers see the emotional and financial investments they’ve put in; the buyer mostly looks at one thing: Profit.

Prepare for the challenges of selling

Once you get to market you will soon realise that there are, unfortunately, fewer buyers than you’d like. Unlike listed companies, you can’t sell shares easily and quickly on a public platform. Instead, you need to find an interested individual or business, many of whom just aren’t buying what you’re selling.

Some of them are, but that doesn’t guarantee a sale. Most SMEs must put their faith in a cash deal, since banks will never finance anyone wanting to buy them. In reality, this means that you may have a genuinely interested buyer for your business, who won’t be able to get finance for it from the bank. So, after a few months, you’re back to square one. After a few rounds of this cycle many entrepreneurs will just sell out of desperation, forgetting what the business could actually be worth.

Selling a business can be very emotionally draining and this will be compounded by many people who will waste your time and mess you around. You spent a large portion of your life building this, but others will not see it the same way you do. Ensure that you prepare and mitigate against all of those issues, and have the stomach for the fight.

Always keep the end in mind

If you are looking at exiting your business, it is crucial to allow enough time to prepare yourself for it. Maybe you’re simply tired of your business and you just want to get out, but, because the business is not in a great state at the moment, you’re too fed up to care, and you simply don’t have the energy to fix the issues.

You’re at risk of letting your business go for next to nothing. All the hard work for hardly any reward.

If you have the end in mind, and prepare for it, it can be a very different, more lucrative story. A successful transaction will mostly boil down to having a solid business with great systems in place that is making decent money and the starting point for these transactions will be financial information. You need to have proper financial records for your business and you need to be able to show the potential buyer how much the business is making and how it is making it. It sounds so elementary, yet most entrepreneurs don’t have financial information when they want to sell their businesses. If you think you may want to sell in the future, make sure you’re keeping solid records now.

If your business’s financials are messy, start cleaning them up at least twelve months before trying to sell your business. Remove all your personal expenses from the business and ensure that all transactions are properly recorded, and that your taxes are up to date and accurate. Work with your accountant to prepare a sales pack with all your financial information, including details of your clients, employees, suppliers, what your strong and weak points are and how the business could grow in the future. It’s at this stage that you can pick up on issues and resolve them before taking your business to the market, making it a much more attractive product.

With some (more) hard work, you will be in a great position to sell your business, you will have serious buyers and the valuation that you deserve for all your hard work.

That being said, here are 4 essential steps that will help you avoid potential setbacks and increase the chances of a fair and satisfying transaction while you are selling your business.

1. Preparation is everything

Since you’re already a business owner, you most likely already know the importance of preparation. When it comes to selling your business it’s always wise to conjure up all that you have learned along the way and apply that to the process of making a sale.

Some of the key documents that buyers expect to see are:

• Corporate records
• Records of any important contracts
• Information concerning stocks and investments that would affect the relationship with the buyer.

Preparation also entails that you are forward about any setbacks or issues you had in the past that currently affect company operations. Being open about what failed in your business model will help buyers feel confident in their decision working with you, in addition to understanding what to potentially avoid in the future.

2. Setting up the right environment for buyers

Your business may have received endless praise from the press and has made the “most up and coming list” time and time again that doesn’t mean you are ready to sell. Good press will very likely attract buyers, but if you haven’t created the right environment to continue along with a merger and acquisition, those investors and businesses that were one so eager to scoop you up may not stick around that long. To ensure a productive environment for selling your business  it pays to be open to new ideas, while also maintaining a professional setting from which trust can build.

3. Make sure your finances are in order

Financial records are vital when making a sale. Not only to they provide a clear outline of your businesses progress in numbers, they are also key to making sure you get what you want out of the final sale in the end; investments and any and all financial commitments. Ensuring that both parties are satisfied.

4. Hire a merger and acquisitions advisor

Even the most experienced business owners can benefit from the expertise of a mergers and acquisitions advisor. Trained specifically to help owners assess their the value of the business by reviewing it’s strengths and weaknesses on both a macro and micro economic level.

Some of the key ways that an M&A consultant can help you streamline the selling process are as follows:

• Professional who specialise in mergers and acquisitions are highly skilled at preparing for due diligence, helping you to navigate and organise the necessary documents and information that is needed by all prospective buyers
• If you are in the unique situation that you have more than one buyer interested in acquiring your business, an M&A consultant can help you assess which one will be the right relationship for you, especially if you will still be activity participating in daily business operations.

Again, experienced business owners may know everything there is to know about running a company, but that doesn’t mean they know how to appeal to buyers. Not only do you have to be in tune with your own company’s needs, but it’s essential that you understand what buyers and investors expect from a sale.

At the end of the day, even if you think you’ve found the perfect buyer, taking a few extra steps to ensure that a potential buyout will meet both parties needs and is overall good for the business can be done by being fully prepared and and working alongside an expert that will help to point you in the right direction. Successfully taking your business won’t happen overnight, in fact most transactions take about six to twelve months to complete, so it pays to be prepared every step of the way.

Article by entrepreneurmag.co..za

The year is nearly done and we hope that it has been a successful one for your company and that you are excited about 2019. To prepare for the new year ahead, there are a few must-dos you need to look at that will ensure you don’t overlook anything and keep you and your company on track in the upcoming year.

Take Account of Your Accounts

Make sure to follow up on all outstanding accounts. If you have many accounts payable that are overdue by 90 days or more, consider hiring a collection agency to help. Write off bad debt and then close your books for the year.

Make sure that all expenses are entered into your accounting system and that things are recorded and classified properly to avoid any possible upsets in the next financial year.

Stay Up to Date on Your Tax Records

For sole proprietors and simple partnership businesses, the biggest benefit of staying up to date on tax records is that you know where you stand financially. You can make the maximum contributions to ensure you qualify for the maximum allowable tax deductions in areas such as retirement funds and charities. Accurate financial statements guarantee preparedness when compiling your tax returns for the next tax season.

Performance Reviews

There are four areas of review you should look at within your company at the end of every year.

Firstly, you would need to review your company’s performance. This means assessing how your company did with regards to revenue, gross margin and profit, maintenance of expenses as well as the strategies your company has used internally over the course of this past year. It is important to review such strategies as it equips you for the upcoming year and its challenges.

Make sure to focus on what goals you had that went further than just financial performance. Did you achieve everything on your company goal list? Did the company expand? Did you launch a new product? If not, what can you change to make sure 2019 is more successful?

Second, you would need to review the company’s external relationships. Often, your company will establish relationships with vendors, partners and/or customers, the end of the year is ideal to review these relationships that are vital to your success. But don’t forget that your vendors, partners and/or customers may be doing the same and you need to establish if the relationship you have with them is beneficial, not only to you, but to them as well. Business is only continuous if the relationship is mutually beneficial.

Thirdly, the end of the year is often used to review employee performance. Yes, we know, how can you only assess performance once a year?! Well, we feel strongly that employee performance reviews should be done more frequently, however, it is appropriate to assess performance at the end of the year, rather than at the beginning. You should measure their accomplishments against their goals to accurately review their performance.

Finally, you’ll want to take a step back and review your own performance. How did you do with regards to your personal and business goals this year? How will you take your personal performance to the next level in the new year? Should you hire a business coach? Have you completed the training you signed up for at the beginning of the year? This review will help you better yourself for your company in the new year and help you establish a plan for success in 2019.

With all of this in mind, remember you can contact The Finance Team which will provide you with a part time or interim Financial Manager that can assist you with the year end rush to keep your house in order. We hope our tips and tricks will benefit you, your employees, your clients and your company in 2019!