minimize

Crunchers Accountants

Crunchers Accountants

5 Tips for Recruitment

Archive for June, 2014

5 Tips for Recruitment

In April and May Crunchers was recruiting.  We share 5 tips we learnt in our recruitment process:

1. Short phone interviews.  After receiving over 200 applications we narrowed the field to a shortlist of 16 and set up calls lasting 10 – 15 mins with each one to see which ones we wanted to meet for a full interview.

As we all know CVs can be misleading and it can be clear very early in an interview that a candidate is not the right person.

These 10 minute calls were incredibly useful and a huge amount of time was saved on both sides.

2. Test days.  We got this idea from a client, who gets all candidates to come in and work for day, paying them a modest amount for the days work.

Statistically reseach shows that interviews are a very ineffective way to assess whether someone is good at doing the job (though very good at telling you whether you will get on with someone).

We found the test days excellent at finding out who had the skills and attitudes required to do the job.

3.  The future is more important than the past.   Many job interviews are about what someone has done, but we felt that finding out what our candidates wanted in life and where they were headed led to conversations that provided much better clarity on who the best candidates were.

It also made the process much more enjoyable, transforming it from a game of cat and mouse, where each side tries to find each other out, into an open conversation of whether marriage of job and person would work for both sides.

4.  Offer up your glass chin.  This phrase may be familiar to those who came to Marcus Cauchi’s seminar on sales.  For those who aren’t, the idea is to offer up all the possible reasons why a transaction should not go ahead right at the start, essentially to save time.

Far better that the potential candidate finds out all the bad bits of the job now, rather than a month into the job and exits as fast as they can.

5.  Set aside time.  We learnt that the process takes longer than you think…especially if you are doing it for the first time.  Apart from the obvious elements like having CVs to read, there are employment documents to prepare, systems to upgrade, references to follow up, policies to establish.

Finally we would like to thank Susie Becker of HR Lunar Consulting who was a fantastic sounding board and consultant through the process.

Introducing Joanna Kaminska

I spent my childhood  in Kielce,  a small town in Poland before I moved to Cracow and started my studies in University of Economics.  During my GAP year I came to London for few months and that was it for me, I fell in love with its variety and speed of life.  I was straight back after my graduation in 2007, when I started working in an Education Centre.  After few years of working in administration I decided to do a bookkeeping course and started to work in this field.

I do love travelling and exploring new places. I am particularly fascinated with Asia and try to visit an Asian country every year.  I had two-month internship in Beijing in China, where I got a chance to travel across China and learnt a bit of Chinese. I also lived and worked in Kuala Lumpur in Malaysia for 5 months, where I got married to my husband Daniel.  We have a two year old son, Oliver, who is very active and we will definitely take him for an Asian trip one day.

I am very excited about coming back to work after my maternity, particularly working for Crunchers, as it stands opposite to traditional accounting, which can seem grey and boring.  I really like the fact that we work with local businesses, communities and can be part of their success.  I am excited about learning lots of new systems and software, which make bookkeeping process much more efficient and effective and I am really looking forward getting to know our clients.

Joanna Kaminska

(In May Crunchers recruited Joanna as Administrator for the practice).

Business Culture

Our last seminar at Crunchers was on the topic of Business Culture and its importance to small business (this is an area where small business has a big advantage over big business).

In the course of researching the seminar we came across the following presentation from Hub Spot an online CRM system.

We could spend time explaining why creating and maintaining an exciting business culture is important to all business but we think this says it all:

 

Budget Report

This month’s budget did not include hugely significant changes for business tax, but the tectonic plates shifted with regards savings.  We provide the highlights:

Pensions
The Chancellor has promised that by April 2015 legislation will be introduced to allow savers to withdraw 100% of their pensions over the age of 55.  The first 25% of the  pension pot will can now be taken out tax free.  The amount that may be withdrawn before 55 has been increased from £18k to £30k.

Pensions have long been an excellent way to save on tax.  However annuities (the system of annual payments that pensions have been locked into) often provided disappointing returns and locked up most of the cash, drip feeding pensioners the return on their pension pot.

To the entrepreneur mindset, this locking away of cash is unattractive because cash can be invested.  Given that 55 years old is ten to fifteen years off retirement age (if business owners choose to retire at all), pension savings can now be reinvested in business within the working life of an entrepreneur.

ISAs and Premium Bonds
Greater flexibilty and a increase in the annual limit to £15,000 have been introduced for ISAs from 1st July 2014.

The allowance for Premium Bond investment is also being increased from £30k to £50k over the next two years.

Incentives to investment
The Chancellor has tried to encourage investment.

Annual Investment Allowance was slated to return to £25k from 1st Jan 2015 but has been increased to £500k.

The Seed Enterprise Investment Scheme designed to encourage equity investment in start-ups has been made permanent.

Reasrch and Development tax credits for loss making companies have been increased to 14.5%.

Personal Tax
From 2015 the Personal Tax Allowance will increase to £10,500.  From 2015 Self Employed Class 2 National Insurance will be collected via Self Assessment which should be simpler for most people.

Growth
The economy is growing.  In fact we are in the fastest growing economy in the Western World with forecasts for 2014 revised upwards to 2.7%.

Stepping back to step forward

How often have you heard someone given you a really good piece of advice about marketing and thought ‘That sounds great but I’ll never get around to doing it.’

If you have, you are not alone.

Speaking to business owners it is becoming clear that what stops us from growing our businesses through marketing is mostly not a lack of marketing ideas, or having access to the right systems, or even marketing skills.  What stops us most of the time, is that we are too busy to do any more marketing, and sometimes too busy to do any marketing at all.

And mostly the thing we are busy with that takes them away from marketing is delivering our product or service.

It is easy to get stuck in this place for a long time, too busy to invest in marketing, too busy to bring someone on free your time up, like a climber on a rock-face unable to go up, unwilling to go down.  In our opinion the only way to get out of this situation is to take a step back in order to take a step forward.

Clearly in this situation we need to increase capacity in the production department, but even before you can do this we need to create new systems and maybe bring new people in to the production department.  Of course all of this takes time, so ultimately the first step is a period away from doing projects or delivering your service or whatever our business does in order to be able to invest in building the business.

One of the results is that in the short term our profitability will fall.  As with all investment we accept this in the hope that in the longer term it rises to new heights.

In fact the profitability in business rarely increases in a straight line for businesses.  Rather it goes up in a series of steps with regression in periods of investment. (see diagram below).

 

 

 

 

At Crunchers we see this interaction between Production and Marketing as a dance at the heart of every business, as each department only able to swing forward as the other swings forward.

Understanding your Accounts – the Basics. Seminar Report

Another good seminar in Crunchers series last night, with feedback averaging 9/10 for overall value.

We were looking at Understanding our Accounts and started by having a look at the history of accounts which highlighted four purposes:
  • to allow business owners to manage their businesses effectively
  • to provide a basis for taxation
  • to give investors information on the return the businesses they were invested in
  • to provide evidence of meeting regulations concerning Limited Companies
 

We then looked through the elements of accounts – Profit and Loss, Balance Sheet, the Notes and Reports, providing the basics in terms of what each figure meant.  This lead to a discussion of Company Directors responsibilities which can be summarised by a duty to present a ‘true and fair’ picture of their business.

Finally we set aside the reporting and taxation functions of accounts to look at what they told us about the performance of the business including:
  • Profitability
  • Liquidity
  • Return on Investment
 

It’s About Time – Seminar Report

We believe that time, rather than money is the most precious resource available to business owners.

Knowing where you will get the best Return on Investment from your time, is one of the least understood and most important lessons the aspiring entrepreneur can learn.  The seminar explored the various departments of our businesses that we might invest our time in – production, marketing, management, admin, executive (strategic planning).

Looking where an investment of time can deliver the greatest yields in a business can be a eurika moment for a business owner, because it sets out in black and white why delivering your product or service is almost never as profitable as marketing it, managing others to deliver it or designing systems that get the job done.  It forces you to confront that marketing is more profitable than production, that delegation is a key business skill and that admin is almost never worth doing yourself.

Feedback was excellent scoring 9/10 for overall value of attending.  For the first time we started to get feedback on how people felt the seminars were impacting their business.  We are particularly delighted with this result – almost 10/10 for positive impact.

Comments included:

‘The seminar was a useful reminder (and eye-opener)about the cost that some of the routine business tasks can carry in terms of opportunity lost – I feel motivated to review my overall strategy for developing my business.’

‘Very enjoyable and good for the mind.  Active brain space.’

‘Clear, concise and as always described in plain English, making it easy to follow and informative.’

 

Welcome Books

Recently at Crunchers we have been developing a Welcome Book for prospective clients and we like the idea of the Welcome Book so much we thought we would share our thoughts here.

The idea came from Australian dentist Paddi Lund who completely redesigned his dental practice to give him a life he loved.

One of the things that he did was create a Welcome Book letting prospective customers know all about what his practice was and crucially what it was not, the kind of person he was, what they could expect from working with him and what he expected of them.

For example he told them not to expect him to be cheap and that if they were a client he needed them to refer him on to friends and family.  Of course it also told them the high standards they were entitled to expect from him.

Before he even met anyone to talk about them going on his roster, they had to read the Welcome Book.

Paddi did not set out to be have a more financially successful practice from redesigning his business, he had come close to a nervous breakdown and decided he could not continue with the way things were.

However as it turned out, the Welcome Book and other changes turned it into a highly successful lucrative practice.  He now has a waiting list of potential clients.

What we particularly like about using a Welcome Book as part of the sales and marketing process is that it gets the relationship with your potential client straight off on the right foot.

The tendency in sales and marketing is for the seller to feel the need to convince the buyer.  The seller thinks ‘This buyer could go elsewhere, I need to give them a reason to buy from me’.  Anyone who came to our seminar on Sandler Sales Training will remember that this is not an effective place to start from in sales.  The starting place must be as equals.

The Welcome Book then gets out in the open all the reasons why the potential transaction may not work.  It tells the prospective customer, this is the kind of people we are, these are our values, this is the way we work, these are our expectations of you.  Because nothing is hidden, it filters out all the people who won’t like your product or service.

That might sound like a bad idea but in truth nothing stays hidden forever and a huge amount of time can be saved by not trying to set up business relationships which are doomed to failure.

It also saves time in not having to give information face to face to every client.  By the time you are face to face with your potential client, many questions are answered and you can move the conversation forward.

If you would like to know more about Welcome Books, Paddi Lund has written a ‘Welcome Book Construction Kit’.  Or if you would like to take a look at ours, send an email and we will send you a copy

 

 

Pricing for Profit – Seminar Report

Most people do not realize the dramatic effect that price has on profit.  A typical British business (based on results consolidated across the business sector by KPMG) has a 25% gross profit (before overheads) and a 5% net profit (after deducting overheads).  One of the first things we distinguished is that for a typical British business a price decrease of 10% will produce cause a such a company to go from a 5% net profit to a 5% net loss.  Conversely a 10% increase in price sees profit rise by 200%.

The common concern for increasing price is that you lose customers, but our model business showed that for a 10% increase in price you could afford to lose up to 28% of your customers and still maintain the same profit.  We saw that even if you lost 20% of your customers in this model, you increase your profit by 60% with the 10% increase in price.

Given that most people are prepared to pay a little bit more if you give them a good reason, the name of the game becomes establishing that value that you can provide above others, carefully choosing how you position your product or service and taking control of the price.

We looked at a variety of tactics in finding ways to increase prices, including relaunching your product or service with new guarantees or service standards; charging different customers different prices with integrity through having quality and economy versions of your product; bundling products; trade ins; charging different prices depending on the timing of sale or delivery of the product; concessions; top down pricing and decoy pricing.  We looked at the cost of discounting your price.

Finally we spent time in workshop session coming up with actions to take on in our businesses.

As ever feedback was highly positive: 8/10 for overall value.

Comments included:

“I find these seminars are becoming an important part of my working month, helping me to take the time to focus on my business.”
“Not to be missed if you are starting in business.”
“Ideal for any business owner looking to grow and develop their business”
“An informative and interesting seminar.  I got some good ideas for my business.  Well worth attending.”
 

 

Soul Traders – a new era in business?

Why are we in business?  On New Year’s Eve it seems a pertinent question to ask.

Recently we were introduced to this video on YouTube about the founding of Welsh denim company Huit Denim.  For us it delivers a very powerful message:

Watch the video.
Of course, some say money is the great motivator.  Boris Johnson recently hit the headlines saying ‘Greed is Good’.  Setting aside the truth or otherwise of this statement, what strikes us most is how out dated this rallying cry now sounds.

The saying is in fact a version of a line delivered by Michael Douglas playing Gordon Gekko in the 1987 film Wall Street.  It epitomised something about the 1980s and 90s.

In our opinion, in the post-banking crisis era, the new zeitgeist is for business that works for everyone – for business with integrity and openess.  Selfishness will never go away, but we assert the mood is for business with soul.

As we are fond of saying at Crunchers, ‘A business starts in the mind of its customers’, without satisfying what customers want, you have no business.

It seems to us that customers now want more than just the product, they want to feel their purchase makes a difference.  They are also more canny now.  They are better at working out when a business doesn’t really care about its customers or the wider world.

Like the founders of Huit Denim, there is also a growing band of business leaders who understand that the profit motive cannot drive a business.

Yvon Chouinard of Patagonia inc (featured here in Book of the Month) is one.  Antony Jenkins CEO of Barclays plc was on BBC Radio 4 today talking about the same thing.  A business needs a non-financial purpose to give it life.

Simon Sinek’s book ‘Start with Why’ explains the idea perfectly.

So if we haven’t already, perhaps today is the day to work out why we are in business.