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5 Ways to Keep Your Business Finances Healthy

Article by www.entrepreneur.com

A report from the U.S. Bureau of Labor Statistics cites two primary reasons why businesses fail — lack of proper planning and poor leadership. In a way, both these factors are tied to the decisions made by the business owner. Poor decisions, like too much debt or unviable investments, can dramatically alter your company’s fortunes. In this article, we’ll take a look at some ways business owners can keep their financial books in the black through smart planning and earnest leadership.

1. Equity vs. debt.

One of the perennial dilemmas that business owners face while raising funds for their business is the choice between equity and debt. Raising funds by giving up equity might seem attractive to a risk-averse startup businessman. However, giving up too much equity dilutes your own stake in the company and can be a bad choice over the long term. Debt, on the other hand, can be repaid and lets you retain your control over the business. In other words, although raising debt can be painful in the short term, it protects your stake in the long term and can thus reap larger dividends.

2. When to choose debt over equity.

A number of startups in the web and tech space today do not have a clear monetization policy during the launch phase. Companies like Twitter went through several rounds of fundraising before they started making money. It is a good idea to give up equity in such instances since these businesses do not have a clear revenue stream in place to start repaying their debt. However, if you are a startup or a small business with an established revenue stream and a steady cash flow, there is no reason why you should choose equity over debt.

3. How much debt is too much?

There is a limit to how much debt a business can take. It is worthwhile to note that business income is not always going to be consistent. Market forces outside your control can grow or dent the demand in your product or service. It is hence a good idea to only take debt that can be paid back even if you stop making money for a month or two. A good business owner knows to maintain a fair balance between money raised through debt and cash infused through the sale of equity.

4. Keep low working capital.

Working capital is the cash necessary to simply keep the business operating. It is essentially the value of your current assets minus your current liabilities. Building your product requires capital infusion and without a paying customer, your product is a liability waiting to be liquidated. Businesses that offer lengthy credit periods to their customers require high working capital. On the other hand, if you demand upfront payment for your product or service, then the liquid assets in your system are higher than liabilities. You would hence require low working capital. Tweak your business processes, including credit periods, to bring down the working capital required to run your business.

5. Insist on recurring invoices.

Modern invoicing software applications let customers set up automatic invoicing on their purchases. There are two big pros with using recurring invoices for your clients. Firstly, it brings down the accounts receivables of your organization. Although it is customary to mark accounts receivables as an asset in your accounting books, it can be a liability for small businesses that do not have the resources and the means to get paid on time for their rendered services. Secondly, automated payments establish a level of consistency in your income statements. This helps your business plan with better demand planning and logistics management.

The tips provided above can help your organization bring down the owed debt without compromising too much on your business ownership. Also, by tweaking your credit practices, it is possible to set up a healthy business process that is better suited to take on the vagaries and fickleness in the market and ensure survival for the long term.

Article by www.entrepreneur.com

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April 17, 2021 / No Comments /  

Avoiding Bad-Debt Clients

Article by www.entrepreneurmag.co.za

How do you ensure new clients can pay for the services and products you offer?

Borrowing and paying debts or using credit is standard practice for any business. Some businesses have good payment records, whilst others don’t, so it’s important to always check the credit rating of any business before lending them funds or dealing with them.

Similar to an individual, a company can have its own credit rating. A credit rating is a number generated by a mathematical algorithm based on statistical analysis of information researched for a credit report. Here’s how to go about building a credit report that will save you from collection problems in the future.

What to include in the credit check

If the report is for the purpose of extending credit then the following items would be important to include. However, the extent of your exposure would dictate the amount of information required and some credit bureaus allow their clients to choose the information they wish to include.

  • Comprehensive company details are important to understand the type of entity you are dealing with. This could affect how you deal with the company and its information, especially considering sole proprietors and small companies fall under the protection of the National Credit Act. It can also affect litigation in the future.
  • Comprehensive details of owners/directors/members to obtain details of current and previous business interests and any judgments.  If a person has been involved in a number of failed companies or has personal judgments you may wish to be more careful in your business dealings with them.
  • Bank code. This verifies that the company’s banking details are legitimate and gives a ‘snapshot’ of the company’s cash flow situation.
  • A few trade references will give you an idea of how quickly the customer is paying its other vendors and whether they are handling credit accounts matching what they are hoping to obtain from you.
  • Details of preferred creditors. If your exposure is high ie. bank overdrafts, mortgage bonds, cession of debtors, and if you are looking for some form of security from the client, this will establish how many suppliers are already ahead of you and also the number of preferred creditors there are in the case of liquidation.
  • If your exposure is high, include further detailed financial information including turnover figures, value of debtors and creditors and audited financial statements.

Should the report be required because you are considering a supply agreement whereby the subject of the report is to become a supplier, the focus of the report would be somewhat different and should include the following in addition to most of the above, as it would be necessary to establish both financial stability and capacity.

  • Operational details, which would include major customers, contracts and agencies.
  •  Details relating to capacity would be important in order to ensure the company was capable of fulfilling your requirements. This would come from type of premises, number of permanent staff, vehicles etc.
  • Financial information, including audited financial statements to ensure stability. This may be hard to come by and depends on the disclosure. It may be easier to use an independent company to request it.
  • Customer references to establish the reliability and operating style of the company.

How to read and interpret a report

Researching a company’s judgments, bank code, financial information and what suppliers have to say in the trade references may seem to be the most important aspects of a credit report.  However, checking on previous or current business interests of the principals, the type of entity or whether the directors have been involved in a previously failed business can often be very telling and a better indicator.

It’s not sufficient to just obtain a credit rating, and by using a professional credit check you will ensure that reports include more information which improves the report’s accuracy in terms of creditworthiness and risk. Using a bureau that is registered with the National Credit Regulator will ensure that the research generated is above board and may well prevent bad business dealings from occurring down the line.

Dealing with cash emergencies

The unexpected can happen to even the busiest businesses. A big customer can be late on payments, or a normally busy season is not so busy. Colleen DeBaise, the author of The Wall Street Journal Complete Small Business Guidebook, shares three ways you can deal with a cash emergency.

Get out there and sell

Jump start your sales efforts to find new customers and work the ones you have. Now’s the time to make sales calls – if you don’t, your competitors will, especially if they learn you’re in trouble.

Review your line of credit

See if there’s any room to borrow. If there’s not, talk to your banker and see if you can increase your ceiling. They might give you the money you need to cover the deficit.

Ask your suppliers for a favour

Remember, you’re a customer too. Talk to the people who provide your supplies and your equipment. See if they can extend your terms or give you a line of credit. After all, they don’t want to lose your business. Now is the time to work those relationships.

Article by www.entrepreneurmag.co.za

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September 12, 2020 / No Comments /  

Tops Corporate Challenge – TFT Come’s out 6th!

Article by www.wildfly.co.za – Previous winners, The Finance Team, come 6th in the 2018 edition of South Africa’s premier fly fishing competition

Mist and drizzle greeted the finalists of the TOPS Corporate Challenge Final this last weekend, which not surprisingly didn’t put even a slight damper on the atmosphere of the opening evening at the legendary Notties. But, with over half a Million Rands worth of holidays up for grabs and every person guaranteed to win one of them, you can understand why.

Tiger fishing Trips to Matoya, Ichingo, Royal Zambezi, Redcliffs and Shayamoya coupled with yellow fish expeditions led by Kalahari Outventures as well as Trout adventures to Semonkong and Highland Lodge had all our anglers champing at the bit to get onto the water.

With every fly fisher kitted out in their new complimentary fishing gear, the onslaught on the poor Trout was relentless. By 6am lines were sailing and flies were being stripped with intent. The resting of the waters for a full month in between qualifying legs played a role in the fish being so obliging, with an impressive 263 being caught and released in the first day alone.

There was no room for stockie bashing, the size of each catch being key and with only a total of 7 fish per angler to count in the first two sessions, the focus was on fooling fish of stature. The bonus of every amateur team able to bequeath fish to their more unfortunate team mates also had a major impact on the leader board as the sun set on Friday. Fortunately for the anglers and guests, Glenmorangie had set up a first class whisky tasting to refresh them, showcasing their range of exquisite Highland Scotch.

Friday nights at Notties have a reputation for subduing a man’s enthusiasm to brave the Midlands Winter morning, but most were up to chasing the proverbial worm, but the teams were soon battling against 35km driving winds, making any float tubing one way traffic.

Despite the challenging winds, lunch time saw another 100 Trout that had made it to the net with an impressive 61cm from Chris Wentzel and a lovely 62cm Rainbow from Simon Giles. Three other Brown Trout made an appearance and just too many fish over 50cm to mention… Despite the abominable weather, the fisherfolk were just not taking no for an answer.

We had four ladies who had made the final in 3 separate teams this year and they were showing a lot of the lads how it was done. In particular Louise Steenekamp who in the last sessions led her team’s charge with four fish and a great winning 4th session 51cm Rainbow to finish it all off.

As one would expect after all the rod pressure only 77 fish were recorded on Saturday Afternoon, but totalling 442 Trout in a final broke previous year’s records and brought the tally to an incredible 1343 fish for the 2018 TOPS Corporate Challenge.

Grant Giles from team TDI, travelling all the way from Zimbabwe took top honours, catching in every session, with 15 Trout at an average of 47cm.

The Biggest fish was a count out, forcing me to adjudicate on actual size and in the end definitively it was Rob Rein, with his 62cm Rainbow cock fish from Dwaleni that topped Simon’s Hen from SpringGrove, making him the first person in the event’s history to catch the biggest fish twice in a row. He walked away with another Quintrex boat, compliments of Yamaha.

Every angler walked away with a fishing holiday for the entire team that evening, with the Trout destinations of Cathedral Peak, InverMooi, Fordoun, Nooitgedacht, Verloonkloof, Rivendell and Sandstone making up this wonderful ensemble of fly fishing trips. This complemented the hoard of prizes that every angler won compliments of Greys, Hodgeman, Xplorer and Craghoppers.

Like any great Open Championship, It all came down to the final session and the below table will give you an indication of how closely contested it was, with 9 teams in contention to win the title:

Placing After 1st Session After 2nd session After 3rd session After Final Session
1st Growler Wildguys Growler Wildguys Growler Wildguys Growler Wildguys
2nd Afriguide Logistics Guns ‘n Roses Fly Fishing Consultants Notties Football Club
3rd Notties Football Club Fly Fishing Consultants ST Ferguson Fly Fishing Consultants
4th Joint Venture Afriguide Logistics Joint Venture Joint Venture
5th Guns ‘n Roses The Finance Team Guns ‘n Roses Guns ‘n Roses
6th ST Ferguson ST Ferguson Notties Football Club The Finance Team
7th TDI Notties Football Club Afriguide Logistics ST Ferguson
8th Fly Fishing Consultants TDI The Finance Team TDI
9th Wildlife Assignemnts Wildlife Assignemnts TDI Afriguide Logistics
10th Sasfin Securities Joint Venture The Split Cane Brand Co The Split Cane Brand Co
11th The Finance Team The Split Cane Brand Co Novus Print KZN Wildlife Assignemnts
12th IDM Build It Sasfin Securities Wildlife Assignemnts Sasfin Securities
13th The Split Cane Brand Co Novus Print KZN Sasfin Securities Novus Print KZN
14th The Fingerlings IDM Build It IDM Build It The Fingerlings
15th Novus Print KZN The Fingerlings The Fingerlings IDM Build It

But it’s a hearty congratulations to the Growler WildGuys with Andrew Strachan, Edwin Bean, Martin and Louise Steenekamp who pipped their competition to take home the prestigious title as the 2018 TOPS Corporate Challenge winners!

It’s testament to the quality of this event that plans are already being made about next year, marking the 18th anniversary of the TCC.

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September 7, 2020 / No Comments /  

Passion x Challenges = Opportunities + Movement

Last year I shared a couple of tweets from this passage by Louis Groenewald and received more re-tweets than ever before: “Passion is a powerful language. Passion for a cause crosses cultural and language barriers. It is felt, rather than mentally understood. Passion feels authentic. It sends out honest vibes. It can be quiet and vibrant and at other times it can be overwhelming and dominant. Passion can also be the most destructive force on earth driving evil motives. Passion is a catching thing! It can be seen in our eyes and body language. Our passion for excellence as leaders has the tendency to cross almost impossible boundaries of cultures and philosophies. Passion is a universal language. The greatest passion is that of unconditional love, often manifested by mothers and leaders committed to universal values.”

Unfortunately I find leaders are less passionate about what they do than in the distant or even recent past. And the same can be said of employees in general, fortunately with exceptions here and there. Simple passion for one’s job seems to be disappearing quickly in the modern workplace, and as this happens the passion for excellence is also severely impacted in a negative way.

And of course there is a strong correlation between a leaders’ passion for the job and that of the employee.

There may be many reasons for this decline in passion. Clem Sunter recently touched on this when he wrote: “Where people are employed, many of them are working much longer hours than their parents did last century. It has been known, particularly in the investment banking industry, for companies to set the norm of 70 to 80 hour weeks which is 10 hours or more a day with no day at the weekend off.”  He continues: “Stress-related illnesses are multiplying and the work/life balance has gone straight out of the window. Even Australia, which is not known for having a cruel work ethic, has introduced migrant labour into its mining industry with its “fly in-fly out” system, putting pressure on the marriages and quality of life of those who spend two to three weeks a month away from their families.”

Against this backdrop, in today’s fast paced, ever moving environment which never comes to a standstill, and where pressure on leaders increases daily, they have to be on top of their game like never before – and I would hasten to add that they had better possess bundles of passion if they are going to succeed. But it is difficult to be on top of their game when the facts about the situation they lead seem to fluctuate and change at the blink of an eye – because in today’s world everything affects everything. The socio-political, economic and technological environment is so integrated that one thing changes and affects another, which affects yet something else – the well-known domino effect. Many leaders struggle to have sufficient insight into their environment to see how dynamic changes around them impact the facts of their own situation.

The environment in which leaders lead seems to be bombarded by all sorts of obstacles, challenges and negative perceptions of their followers. These too seem to change on a consistent basis, and while this was always present, the pace and severity seems to continually increase. This clearly has an impact on people’s attitudes, which has a direct correlation with performance – once again because of the dynamic composition of our modern, connected society.

On the positive side, as challenges and obstacles arise, so do innumerable opportunities, options and possibilities. This is the nature of life and amidst the persistent change of facts and constant wave of obstacles a leader needs to be fully aware of this. If he is not and allows himself to be consumed only by challenges he is on a losing streak.

Because of all this and more, these distractions make it very difficult for most leaders and their team members to keep a focused eye on the strategy and vision.  As a result they easily divert from what they agreed on, in order to get a handle on the changing facts and deal with the never ending challenges. As this happens and performance is negatively affected, they panic and seek answers or even quick fixes by unnecessarily changing direction and relevant structures, implementing new systems and procedures in a desperate attempt to impact performance indicators and accommodate or correct the course. And then their organisation moves towards becoming a compliance institution rather than a value adding institution. This is a dangerous place to be.

Under this mounting pressure leaders neglect to calmly, consistently and systematically follow up, evaluate and measure the right priorities pertaining to the plan and vision. Or, they do far too much of this because of a compliance culture. The emphasis becomes one of measuring or evaluating for the sake of doing it or to simply enforce compliance, rather than doing it in areas that add most value or that are core to the business. They lose confidence to adjust when needed and more often than in the past act tough inappropriately, out of context and due to frustration and lack of confidence. They stop trusting and listening, and instruct instead, sending a message of panic and spreading the feeling of distrust and even fear across the organisation. And so the spiral continues.

To make matters even worse, the environment does not slow down to give them a chance to breathe. In fact it just continues to pick up pace and thrust new and different challenges at them, or the same one’s in different guises, but faster and more regularly than in the past.

What to do about this? As is always the case the answer is simple but difficult, yet it remains the answer nevertheless.  A leader must implement a process, system or way of always remaining in tune to the following:

  1. The changing facts of their relevant responsibility – not only as they see it but as their team sees it. They have to keep listening.
  2. The constraints, obstacles, challenges of their relevant responsibility, together with the negative perceptions their people may have at any given moment. Why? Because these impact directly on their attitude, which has a direct correlation with their performance. Again, this must be viewed not only from the leaders’ angle but his team must always be part of identifying and addressing these.
  3. The positive opportunities, options, strengths at their disposal, together with the positive perceptions that exist. Also for reasons of attitude, to remain sane and positively focused on solutions and even ways to miraculously leapfrog their pressured environment into proactive space where they achieve profitable movement.
  4. Exactly where they are leading their people to – the destiny. This must be on every agenda and always top of mind.
  5. The clear and relevant plan or strategy that will take them there and continually raise the believability levels of followers that they can get there.
  6. The relevant resources, structures needed to follow the plan towards the destiny. If this is not done structures will get out of hand, irrelevant, expensive and consume unnecessary energy that should be expended in other areas.
  7. The above six points need to be evaluated together with the leaders team, on a regular basis and in accordance with the pace of change of their environment
  8. Only when the leader feels on top of the seven points above may he adjust where relevant and even act tough appropriately where the situation requires it or people require it.
  9. Finally, he needs to continually focus and re-focus his team and organisation on the vision, the destiny of where they are moving to.

As we have assisted leaders to “culturise”,  “habitualise” or institutionalise this crucial nine step process on all levels of their organisation, we have seen how the timing of when to refresh, revisit or tap back into it changed. A team may for example feel to do it every year or six months, but soon realise that the pace of their changing environment requires a more regular approach. They are forced to stay on top of every point every month, week or even day.

This is the reality under which leaders operate today. There is no way of escaping it. If leaders do not master these nine steps they will become crises managers that mostly feel out of control and they will lose their passion, resulting in their people losing their passion, which can only move one way fast and that is nowhere – failure.

This article was featured in the

Business Report

 

 

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September 4, 2020 / No Comments /  

Avoid Burnout With These Small Changes To The Way You Work

Workplace burnout is real. I know, because I’ve been there, and I know most others have as well at some point or another. Thrive Global’s Arianna Huffington is no different. She’s on a mission to fix what she deems a “culture of burnout,” after her own collapse from exhaustion in 2007.

Huffington rightly says: “When we take care of ourselves, we are more effective, we are more creative and we are more successful in a broad definition of the word.”

Medical News Bulletin recently published “Can Positive Psychology Traits Prevent Burnout?,” referencing a study where participants completed a survey about the balance of the effort versus reward from a job. This particular research was focused on the manufacturing industry in China, given the “monotonous and repetitive nature of their work,” but this can be said for many professions and sectors. It was found that hope, self-efficacy, resilience and optimism can help to manage work stress, and people with these qualities are less likely to become burnt out.

There have been many studies published over the years that working less results in higher productivity (hint: the optimal number is less than 40 hours per week). Perhaps even more important is that it’s nearly impossible to stay focused for long stretches at a time. Some research suggests that you should be breaking as frequently as every hour.

Work smarter not harder

In line with that, I believe in working smarter, not harder. While there are 24 hours in a day, they weren’t all made for work. I’m in the camp that working eight hours nonstop is actually more unproductive than it is beneficial. Your brain has peak operating times, and what works for one may not work for another.

Some people are at their best in the mornings, while others are most efficient late at night. I firmly believe that dictating what hours you should work and when is not the best method to yield quality work.

I often get asked how I can get things done. I work from home, and some have the perspective that I have no one to hold me accountable throughout the day. Inquiring minds wonder everything from what my daily schedule looks like, to how I motivate myself to finish up a project or prospect for my next client.

tim-ferrissLet me start by saying that I strongly value flexibility. It’s the reason why working for myself is the best fit for me. But I hold myself accountable, and there’s a certain amount of self-discipline involved in doing that. Everything I do is because I’ve set goals for myself.

I have a duty to uphold to my clients and my partners, and a commitment to myself about the success of my business. I also pride myself in the underrated aspect of efficiency. It’s not how long you do something for, but how well you do it.

Several books I’ve read over the years on this topic have stuck with me. Getting Things Done, by David Allen, addresses the two-minute rule. If you can do something in two minutes or less, do it now. Don’t make a note and come back to it later. The time you spend thinking about it, planning it and recording it is more than the time it actually takes to complete the task.

Tim Ferriss’s 4-Hour Work Week covers the topic of efficiency as well. He’s a prime example of taking the phrase “Work smarter, not harder” to a whole new level. To be successful, it doesn’t necessarily mean you need to work more, only that you need to work more efficiently.

Based on experience, I’ve adopted these top five tips to do just that:

Free up your mind

There is no need to remember everything. You read that right. Why are you keeping everything in your mind, which only serves to bog you down and make you feel overwhelmed? Find a record-keeping system that works for you.

Some people prefer old-fashioned paper notes. I prefer electronic. With a Mac laptop and an iPhone, I use Notes and Reminders apps to store everything I need to do or think about. I schedule reminder times to make sure I’ve checked something off my list. No matter what device I’m on, I know it’s available to me.

Schedule

Plus, I schedule everything on my calendar – my morning activities to start my day, hours allocated for every client and even things like time to take a walk. But again, I’m flexible. I move things around as needed, but I know I have set time to focus on a task at hand.

Plan and bucket

Some projects seem daunting from the start, but they need to be done whether you want to or not. Oftentimes the hardest part of a project is starting it.

Create a plan and break it down into manageable chunks. If you can complete a portion each day, not only will your mind stay sharp, but that focus will also help to make the task more bearable. As the saying goes, Rome wasn’t built in a day.

Follow the 80/20 rule

I’m a longtime follower of the 80/20 rule, also known as the Pareto Principle: 80 percent of results come from 20 percent of the work.

Why are you spending time on things that take 80 percent of your resources but deliver 20 percent of the value?

Stop doing meaningless tasks, or outsource them if they must be done. Prioritisation is one of the most important keys to efficiency.

Take breaks

It might seem counter intuitive that you can get more done by working less, but the human mind was not created to work non-stop. As research suggests, breaks are beneficial. Go for a walk, have lunch away from your desk, read a book, catch up with a friend or colleague – I promise you’ll feel refreshed and ready to reengage.

The 40-hour workweek is so synonymous with the American culture that it’s unlikely to change in the corporate world anytime soon. Most of us know that 40 hours isn’t really 40 hours anyway, it’s “whatever it takes.” That being said, with influencers like Huffington working to educate companies on the detriments of overwork, there’s hope.

There’s nothing wrong with working hard – it’s to be admired and valued. But don’t work long hours only for the sake of it. The companies that are getting it right realise that face time isn’t everything.

The results you deliver, the reputation you hold and the relationships you build should always outweigh the hours of your workweek. As an entrepreneur, you can take advantage of this and you can evangelise this approach to others. Work smarter, not harder, and you’ll be better for it.

This article was originally posted here on Entrepreneur.com.

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August 13, 2020 / No Comments /  

These 5 Mindful Habits Will Keep You From Burning Out

Humans are easily distracted. Smartphones, gossip, social media, substance abuse, endless emails, mindless web browsing, too much TV, video games, unnecessary meetings, bargain hunting. When done in excess, these activities zap you of energy, productivity, a willingness to serve and ultimately, fulfillment.

It doesn’t have to be that way. Here are five ways to rig your environment for greater success and happiness:

1. Avoid passive screen time

Many, if not most, of us use computer screens to get work done. I’d call those active screens, in which we’re contributing, rather than taking from, the world. On the other hand, passive screen time reinforces the idea of “letting things and life happen to me,” as opposed to actively seeking out an doing things that that are important to you and your family. For maximum success and fulfillment, avoid passive screen time unless it’s something that truly excites you – like a blockbuster movie, high-stakes competition or niche medium that gets your heart racing.

 

personal-journal2. Keep a journal

Research shows that doing so increases gratitude, and that alone can make you happier. But keeping a journal also lets you know yourself better, which in turn will help you make better choices in the future. Since keeping a journal several times a month, I’ve been able to turbocharge my decision-making and learn from mistakes faster than I used to.

 

3. Say “no” to invites that don’t resonate with you

More specifically, that could be declining things that don’t interest, excite or speak to you individually. Obviously this could be a bad thing for people with fear and confidence issues or those who don’t already volunteer their time to help those in need. That group should probably say yes more to opportunities. But for everyone else, saying no more usually means saying yes to yourself more, which results in greater success and more oxygen to improve and maintain your own health so you can better help others. Moral of the story: be strategic with your availability.

4. Declutter your mindshare.

I am a devoted minimalist for several reasons – thrift, better speed and less Murphy’s Law chief among them. On top of that, however, being a minimalist creates an environment were you literally have less to think and worry about – fewer thoughts to distract you. That’s a powerful thing to both our productivity and mental well-being. This isn’t to say you shouldn’t reward yourself or splurge on things you love. You totally should. But only do so when you truly love something, as opposed to merely liking it or feeling peer pressure to love or like something that society suggests you should.

5. Play more

Unstructured play time is as healthy for adults as it is children. The act of play lets our mind wander, which activates it in new and sometimes innovative ways. Of course, more play doesn’t always lead to greater inspiration, but more work certainly doesn’t either. In fact, too much work has been linked to burnout and stale thinking, both of which can frustrate our productivity, efficacy and contributions to the world. Although it sounds counter-intuitive, more play results in greater success and fulfillment.

If you’ve read this far, chances are you’re already hoping to change, improve or inspire your current trajectory for the better. For that, I commend you. But I also leave you with one of my favourite quotes on finding the courage to change. It’s been attributed to a variety of modern leaders and is a superb mechanism to instill self-mastery. “If you always do what you’ve always done, you will always get what you’ve always got.”

This article was originally posted here on Entrepreneur.com.

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August 10, 2020 / No Comments /  

Tax Refunds – What You Need To Know

Article by www.entrepreneurmag.co.za

Most taxpayers are not aware of the requirements for a tax refund to be facilitated and SARS very often will delay paying out the refund. In this article, we will look at the requirements taxpayers need to be aware of and the Tax Ombud’s report on the investigation into alleged delayed payment of refunds as a systemic and emerging issue in terms of section 16 (1) (b) of The Tax Administration Act No. 28 of 2011 (TAA).

What you need to know as a taxpayer:

  • The tax refund must be claimed within 5 years from date of submission of the return.
  • SARS has the right to withhold the refund as per section 190 (2) of TAA: “SARS need not authorise a refund as referred to in subsection (1) until such time that a verification, inspection or audit of the refund in accordance with Chapter 5 has been finalised.”
  • Authorisation of payment of refund done once SARS is satisfied with the acceptable security provided by the taxpayer in terms of section 190 (3) of TAA: “SARS must authorise the payment of a refund before the finalisation of the verification, inspection or audit if security in a form acceptable to a senior SARS official is provided by the taxpayer.”
  • As a taxpayer, you need to ensure that you verify your banking details with SARS and that there are no outstanding returns in order for your refund not to be delayed.
  • Any decision not to refund by SARS is subject to an objection and appeal by the taxpayer in terms of section 190 (6) of TAA.
  • Refunds less than R100 are not refunded but carried forward to the next tax period.
  • To view the status of your refund you can use the Refund Dashboard on efiling under the ‘Returns History’ tab for the tax period in question or contact the SARS call centre.
  • Interest starts accruing from 21 business days from the date on which the refund became due, i.e. verification/audit outcome finalised.

Tax Ombud’s Report

The Tax Ombud’s report identified various mechanisms used by SARS to defer or delay the payment of refunds due:

  • SARS failing to link submitted supporting documents at a SARS branch to the main file.
  • The use of special stoppers on taxpayers’ accounts and the delay in lifting the stoppers, e.g. being required to verify banking details in person at a SARS branch. Even after the verification is done, there is still a lengthy delay in paying the refund.
  • Using the filing of new returns as an excuse to block refunds. The system blocks already verified refunds the moment a subsequent return is submitted by the taxpayer.
  • Withholding of refunds for one period while an audit/verification is in progress on another period. This is contrary to section 190 of the TAA.
  • The use of historic returns suddenly reflecting as outstanding but these have never been shown as outstanding on the Tax Clearance Certificate or the Statement of Account.
  • The raising of assessments and passing of journals to absorb credits on taxpayers’ accounts, i.e. overpayments. In doing so, SARS creates fictious tax liabilities instead of making a decision on the refund.
  • Requesting further information during the audit to delay finalisation, thus delaying the time frame from when the interest accrues.
  • No turnaround time for assessments successfully disputed.
  • Obstacles regarding diesel refunds.
  • Raising of assessments prematurely before the 21 days to submit the supporting documents
  • Refunds for periods that have been verified automatically set-off against bad debts on other periods not withstanding a request for suspension or where there is the suspension of payment. SARS may not instate any collection steps from date of submission of request for suspension of payment until 10 days after decision to not grant the request has been communicated to the taxpayer in terms of section 164 (6).

You are able to object/dispute any SARS decision not to release the refund on efiling or through your tax practitioner.

Article by www.entrepreneurmag.co.za

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July 25, 2018 / No Comments /  

8 Negotiating Tactics Every Successful Entrepreneur Has Mastered

Article by www.entrepreneurmag.co.za

Deep down, we’re all a little greedy. We all want the best outcome for ourselves. We can’t help but consider what’s in our own self-interest any time we negotiate a deal.

But to become a truly successful negotiator, you have to learn to put aside pure self-centeredness. Because if all you care about is serving yourself, you’ll blow the deal before you even start.

Negotiations are a delicate balance of give and take. Learning to strike this balance is necessary for any entrepreneur hoping to build a prosperous business. It takes time and practice and whole lot of patience to hone a winning strategy. And yet each deal is unique and needs to be approached correctly, which is why a one-size-fits-all approach will never work for long.

Here are eight of the most important skills every entrepreneur should learn to become a master at negotiations.

1. Do your prep work

Successful negotiations are built on solid prep work. This means you know something about the parties involved, you’ve done a little background checking, you know about their business and maybe you’ve even talked to others they’ve worked with to get an idea of their strengths and weaknesses.

The same is true if you are on the other side of the table and are looking to invest in a product or service. You should have a solid understanding of the pros and cons of the commodity they are selling. The bottom line is, you need to have a good idea of who you are dealing with and what they can offer.

You should always go into negotiations with your best foot forward. You should be well rested. You should have eaten something (being “hangry” can swiftly detonate any negotiation). You should show up on time – maybe even early, so you aren’t walking in feeling rushed.

If you’ve done the above, you should be feeling positive and are going in clear-headed and confident. You will have the stamina and energy to get this deal done.

2. Consider all the details of the opening offer

The opening offer usually acts as an anchor for negotiations. It’s also where the details get hammered out, so it’s important that it’s done carefully and thoughtfully.

The basic elements of an offer include the offer price, the work being proposed, what goods or services are included, when it will all be delivered and if there are any performance incentives, warranties or terms and conditions. Obviously, price is a key component to any deal, but keep in mind the other details. They can matter nearly as much in the long run.

If you are the one initiating the opening offer, this is your chance to set the stage for the negotiations ahead and start with the upper hand. You won’t get what you don’t ask for, so be bold! If you’re on the other side of the table, the offer is key to seeing how close together you are.

Know your bottom line – what are you willing to accept? And remember to take a close look at the details. What else are you getting for your money and what else are you potentially signing up for?

3. Check your ego and emotions at the door

While you should have confidence and assurance because you’ve done your prep work, you also have to check your ego at the door.

Letting your emotions run the show will never serve you well. In fact, you should be going in feeling as neutral as you can about the situation. Leaving your ego behind will free you to think objectively during intense bargaining. You can then negotiate from a standpoint of flexibility. 

To be successful you have to be able to think clearly in stressful situations and be willing to work to find common ground. If you walk in with a middle-of-the-road attitude, you’re more likely to strike a balance between getting what you want and not giving away too much.

On the other hand, you don’t want to give something away without getting something in return. Losing your ego and putting your emotions aside will help you find right path forward.

4. Play the game rather than letting the game play you

If you’re entering into high-stakes negotiations, it may be helpful to run through possible scenarios with a friend or colleague.

This will help you feel less nervous, and it may also show you objections to the offer that you hadn’t thought of, or help you see a side of the deal that you hadn’t considered.

Playing through the scenarios, even if it’s just in your own mind, may help you feel less attached to the outcome. In order to treat the whole thing as a game, you should care…but not too much!

Having a little apathy will help you stay neutral and keep your feelings in check. And remember, negotiations are like anything else: the more you practice, the better you’ll be.

5. See your strengths and weaknesses clearly

Self-awareness is key when you begin negotiations. You are essentially looking for the other side’s strengths and weaknesses. Not in a cruel way, but to help you determine your next play.

At the same time, you must also be aware of your own strengths and weaknesses, so you don’t allow yourself to be exploited. Try to take an honest inventory of your strong points and vulnerabilities.

If your company is small, what is its growth potential? Are you able to be more responsive to the market than a larger company? In short, what can you offer that the other side can’t, and what can the other side offer that you can’t compete with? Knowing where you stand on the negotiation chessboard will help you determine how to land the best deal.

6. Know when to walk away

When you enter into a negotiation with the knowledge that you are willing to walk away if things don’t go as planned, you come from a position of strength. That’s why staying neutral is key to a successful negotiation.

You can’t be bullied into a deal if you just leave. But often we tell ourselves that this deal means everything to us. Our ego is involved, and that weakens our position.

It’s about mindset. You have to believe that if this deal falls through, you aren’t losing an opportunity. You are keeping that space open so when a better opportunity comes along you can snag it. If you force a bad deal to happen, you are stuck.

You are no longer able to grab hold of something better. And there is no shortage of business out there. So if you are pinning all your hopes on one deal, you may be killing future business.

7. Negotiate in good faith

Whether you’re negotiating a long-term business deal or setting up a quick sale, it’s natural to feel on the defensive when you begin negotiations. We are all protective of our interests and we want to cut the best deal in our favor.

But if you are hoping to walk away with your reputation intact, you need to practice negotiating with compassion and good faith. Engage in active listening and really hear what the other side is saying and asking for. What are the issues that are making them hesitant? Then make sure that you relay your own priorities.

This is the basis of a “win-win” solution, when both sides explore each other’s positions and walk away feeling heard and comfortable with the deal that was struck. Even if it appears that you are on opposite sides, there’s usually common ground to be had. Maybe the other side has a different goal or an opposing position. But if you look for it, you can usually find mutual gains both sides will accept.

8. Know how to close

Negotiations may feel like a game of chance, but they’re more like a game of chess. A successful negotiation requires a good sense of timing and the ability to sense the other side’s next move.

If you’ve done your prep work and are bargaining in good faith, you should have a solid idea of what they’re looking to get out of the deal. And of course, you should have a clear idea of your own bottom line. So you’re either working to bring the sides progressively closer, or the deal is going nowhere.

Ask yourself what the endgame is. Can the difference between both parties be split? If both sides are close but a few numbers are hanging up the process, what will it take to shake things loose?

If you can strike a bargain that makes sense, it doesn’t need to be perfect. It just needs to work for both parties involved. If you can get to that point, you have set the stage for the final handshake. If not, you have to be willing to walk away knowing it just wasn’t the right time.

This article was originally posted here on Entrepreneur.com.

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July 11, 2018 / No Comments /  

Keep Your Business Finances in Order With These 6 Tips

Article by www.entrepreneur.com

Do you find managing your business finances to be a pain? Although it may appear to be, and often is, tedious, keeping your finances in order is extremely important.

It helps you to project where your business is headed, and when you know exactly how your revenue and expenses are stacking up, you can begin to make more informed decisions for your business. Maintaining your financial records also makes tax reporting and payments a lot more manageable.

Don’t try to do it all alone. Leverage the talent and the tools that are available to you. Here are six tips to help you keep your business finances in order:

 

1. Keep your personal and business finances separate.

Mixing your personal and business finances will inevitably result in confusion. It might seem convenient to charge everything to a single card, but ultimately this will make tracking your spending far more complicated than it needs to be.

Begin by opening separate bank and credit card accounts for your business. For the ongoing tracking and measuring of your finances, and for tax purposes, this practice will take a major headache out of sorting your transactions every quarter, or every year as the case may be.

This will also take the guesswork out of the equation. If you want to be successful in business, you need to be able to monitor and track your key performance indicators. You need to know the score, and some of the most important elements include cash flow, expenses, revenue, profit and so on.

2. Choose accounting software that makes sense for your business.

When it comes to accounting software, there are a variety of different solutions. Think of Xero, QuickBooks and Freshbooks. The best online accounting software depends on your business, and it’s worth considering several options before making a decision.

If you haven’t moved your financial data from desktop software to the cloud yet, that should be your first order of business. Cloud-based tools allow you to view real-time insights, and they can be accessed from anywhere at any time. The ability to keep an eye on your finances on the fly gives you a great deal of flexibility as a business owner.

If you’ve already picked out an online solution, ensure that it’s the right one for you and your business. Today more than ever, there are a myriad of options to choose from, and if you aren’t satisfied with your current service, you can always make the switch to another platform that better matches your needs.

3. Consider hiring a professional bookkeeper.

Most people aren’t numbers people, and will never be excited about them as much as accountants or bookkeepers are. If managing your own finances is starting to get on your nerves, it’s time to look into hiring a qualified bookkeeper.

Many entrepreneurs have a tendency to try to handle everything themselves. But as with legal matters, the granular elements of small-business accounting aren’t usually within a business owner’s wheelhouse.

Although it’s easy to balk at the expense of working with a bookkeeper, they will be able to help you save money over the long haul. You’ll be freed up to work on high value tasks that keep the business moving forward, while your bookkeeper handles the tedium of number crunching.

4. Stay organized and plan ahead.

The aforementioned tips should help with keeping your finances organized. Moreover, monitoring your finances and projecting future revenue and expenses will enable you to make better long-term decisions for your business.

Without this information, planning ahead can prove challenging. If you aren’t looking at the future of your business, you could be taken by surprise. If you want to get ahead and stay ahead of the competition, you should plan as much as 10 years in advance.

You’ll be able to mitigate unwanted surprises if you stay ahead of the ball. Even if unexpected expenses do rise, if you’ve been practicing conservatism in your spending, you shouldn’t run into any major problems.

5. Make a budget.

Part of staying organized and planning ahead should include creating a budget. Many business owners view this step as dull and unnecessary, but the importance of a budget could be equated with the value of a well-formed business plan.

A budget is not a tool for planning out how every penny should be spent. Rather, it’s a framework that you can use to help you make clear-headed decisions, whether it’s increasing your marketing spend, or cutting expansion costs to keep your profits on track.

Make a budget and use it as your guide. Don’t allow it to force you into decisions you don’t want to make, but use it to make adjustments when and where necessary.

6. Find a trusted credit union in your locality.

Credit unions are invaluable to small-business owners, especially since they are often willing to provide loans at competitive rates. Make it a point to seek out the best one in your locality, and make sure they understand your business needs. The partnership could prove immensely beneficial.

Some of the other advantages of credit unions include fewer transaction fees and account service charges, as well as flexible, customized services.

Since credit unions are not answerable to shareholders, they are empowered to put your interests at the forefront. Credit unions also keep profits within the community, and help budding entrepreneurs get their dream businesses off the ground.

Final thoughts

The reality is that many business owners do not keep track of their finances. Whether you know it or not, this could mean missing out on opportunities to minimize your expenses and maximize your profits.

Preparing online business accounts can take time, but the end result is worth the effort. Even if you don’t consider finances to be the most important part of your business, streamlining your process will allow you to develop a straightforward step-by-step process as opposed to a search-and-find initiative.

Make the effort to simplify the organization of your business finances moving forward. This will allow for long-term stability and sustainability.

Article by www.entrepreneur.com

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June 28, 2018 / No Comments /  

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