The Kiss Business too (2)

How government's spending cuts could be really easy realised.

It was predicted and it was delivered: the government is cutting its spending. Some departments have to find ways to cut their budget (IMHO quite different than what they actual spend, but that's a different story) as much as 40%

If it all works out, all of us - tax-payers and beneficiaries of those taxes - will have a more sustainable financial future. That's the plan. As business owner and tax-payer (double, on personal and business "profits") I would love to see this happening.

Place to start: accountability

After the emergency budget was announced we received the following online order from a gov.uk email address - very local as well. A Kent council project/centre in nearby Ashford - 6 miles away from our showroom.

1 bottle a £ 10.54 - total price paid: £ 43.17
Let me break this down for you:
bottle £ 10.54
shipping costs £ 17.63 (default setting, can be changed to appropriate costs during check-out)
additional fees £ 15.00 (fixed fee for payment by credit card)

So now lets retrace the steps the gov.uk person took ordering this one bottle:

Product and pricing information

Underneath every single product in our online shop we list the P&P per quantity. In this case: ordering 1 bottle will cost £ 8.50 ex VAT for P&P

Check-out options

First page on our secure check-out:
1) Delivery Method, select delivery method.
2) Default setting is the top one, 99% of our clients change this option when needed to a lower or higher one, depending on the information found on the product page.
3) The option the gov.uk person ordering the bottle should have selected

Payment options

Again, default is the top one: place your order and pick up the phone (9 times out of 10 we're the ones who pick up the phone to call the client and discuss how they would like to pay.)
This time the gov.uk person ordering the one bottle did manage to select the correct one and changed the default method. But don't take me wrong, for an item costing just over £ 10.00 would you personally pay £ 15.00 extra just for the pleasure of using your credit card?

Simple savings could have been made

If this gov.uk person had read the information correctly the first saving would have been £ 6.50 ex VAT (£ 7.63 including VAT). If only this gov.uk person had picked up the phone to discuss the payment method/options another big saving could have been made.
We do charge a fee for payment by credit card, 3% on the amount paid because that's what the credit card companies charge us for the pleasure. Our online shop does not work with percentages so we calculated what the normal amount ordered is and based our fix fee for this payment option on this (and we win some, we lose some).

A simple phone call to the shop - only 6 miles down the road of the gov.uk person - would have told them:
it's only £ 8.50 for the delivery and if you insist on paying by credit card we'll have to add £ 0.61 to the total price = £ 21.13
That's a saving of £22.00 or 51% - more than any department is asked to save.

(And would a short journey from Ashford to Charing really cost that much in time and petrol? If they'd visited the showroom they could have saved another £ 10.00)

The principle of many small ones, pennies and pounds

Now of course does this £22.00 not make a big dent in the deficit. But as bookkeeper (and double Capricorn) I know very well that many small ones make one big one; that to keep an eye on the pennies, the pounds will take care of themselves.

The principle of who's money is it anyway?

Mine, and yours. And if you are only a little bit like me, you care about your money and how it is spent.

But for a gov.uk person in an office ordering one bottle online it seems to be nobodies money. It's on a credit card anyway, who knows who gets to see the monthly statement of all the spending?

Government spending cuts should start with accountability for every penny spent in her name. If there's a waste of yours and mine money the gov.uk person accountable should pay the moneys unnecessarily spent out of their own pocket, definitely making it their money too.

I predict that then a lot of savings will be made straight away, without any hardship to beneficiaries of taxes. (Update 12.07.10: listed this also on George Osborne's website: Spending Challenge)

(And before you berate me of having accepted this order with this tremendous waste of your money, the extra profit on this order has been donated to Room to Read - World Change Starts with Educated Children)

Business plan, annual waste of time or essential for your business

The minute you mention "business plan" to anyone 9 times out of 10 the reply is a loud groan or a shake of the head. Many think it is "only" essential when you are trying to secure external funding, whatever type of external funding that comes to mind (from bank loan to venture capital).

Every business template I've come across (and there are many organisations/institutes that can provide you with a free template) has the same structure you are deemed to follow and the explanation of some parts confirms that a business plan is "only" essential when looking for funding:

1. Summary
(Enter your text here)

The summary is the last part of the plan that you write, but should be included at the beginning of the plan. This allows busy readers to quickly see what the plan is about without reading all the details.

(copied from a standard business plan template offered by one of the large banks).

Specially the part of "busy readers" shows it to be more an external focussed plan than for internal use. The biggest problem or even largest pitfall for this is writing to please/seduce that external source instead of being a honest presentation of past, present and planned future. Don't fool yourself, we've all done it. Even if you write such a plan only for your accountant or bank manager we tend to write it in the most optimistic way we think we can get away with. So who's fooling who?

 No wonder then that so many (annual) business plans end up in the archives once written, stacked on top of the plans from last year, the year before and so on. Where in fact it should be an ongoing (rolling) report/assessment of where your business is now and where you want to take it.

This month's free download at the Director's Centre Business Club is all about "Where do you want to go?".

"If you are able to start to define where you want to be and what you want to be, then you are also starting to define what it is that you do not want to be. This process of defining the direction that you wish to move in makes it easier to decide what the steps on the way will need to be.

The more focus you have, the greater your clarity, then the easier it is for you to define the path. If you do not know where you want to go then any road will do!
While many consultants get very excited about the definitions of purpose, vision, mission, objectives and goals, what really counts is how you can use the process to define and determine the future development of your business."

It contains one of my all time favourite remarks: if you don't know where you want to go, any road will do.

You have to know/find out/discover where you want to take your business. You, not your bank manager, the venture capitalist or anyone else. You are in the driving seat and it all starts with focus. And focus is better "captured" and sustained when you write your goal/aim/plan down - in your own words, comprehensible for you and not just for your external sources - and once it is written down this way it becomes more real and achievable.

You can register for the Director's Centre Business Club still for free, just start here (the first page tells you it is indeed for free and no credit card details will be asked, then on page 2 you are asked to fill in your business details).

Once you've registered find this month special workbook. That's right: a WORKbook, not just something you should only download and read, but work on/with it to grow your business. Does this replace the annual business plan? Perhaps in more ways than one.

Using the workbook you'll have to come clean for yourself, it makes you think hard and long if you are on the "right track" of what you set out to do when you started your business and how you want to proceed. Once you know/realise this, the road is clear to plot/plan your own and your business' future in sustainable steps. (And the same applies for when you are "only" just thinking of setting out to start your own business.)

And believe me, if you know deep down in your heart that the steps of this plan you write down are honest, of your own making and sustainable, it will become so much easier to convince external sources if in the event you are indeed looking for external funding. Now that's what I would call a plan to do/stay-in business, the only business plan worth your time.

(This article/pondering came about after a discussion on a DIY-forum - of all places!)

Off line business activities online, recap of last week

Have you ever realised how many 'standard' business tasks can now be done online?

We have been using Internet banking the moment it came available: constant instant overview of your going in's and out's. On the road? Access your bank's website anywhere you are and take care of your finances.

More and more service providers notify us we can find our latest invoice online. And then I'm not even talking about all the standard essential office products you can buy online nowadays, from stationery to coffee pods, study books etc - all delivered to your front door without you having to go out. Our own business has its own secure webshop and we dispatch products all over the UK (some through drop-shipping, some through our local post-office).

Marketing is more and more done on-line:

using blog platform software for your business website (again, accessible everywhere you are to add, edit and comment/answer questions left by your website visitors).

email-marketing: how often I access AWeber you don't want to know, queueing 'blog-alerts' to subscribers interested in wooden flooring, writing and sending out our monthly newsletter, checking how well all the marketing messages are performing and which headline in which webform works best (split-testing). Instant access to statistics: what you can measure you can improve.

If you need an internet ad campaign: Google Adwords is your tool. Easy to set up and to control your spending. Another great on-line tool.
(Although.... yesterday I received a discount voucher - valid till the end of this month - for Adwords from a friend as thank you for some SEO I'd done for his latest website. When I entered the code into my billing page of my long term Google Adwords account I got the following message: my account was too old to redeem this voucher! As if Google isn't making enough money already!! Too old to be treated as a respected client? End of rant.)

Customer care can be done online too these days with one of my favourite programs: ScreenSteps Desktop and ScreenSteps Live. Publish the answers to your frequently asked questions online (written in Desktop so you can publish and combine in multiple ways) and direct your prospects/clients to the appropriate page in the manual using ScreenSteps latest innovation: Live Support System.

(Blue Mango Learning System announced last week the price for ScreenSteps Desktop Pro is - IMHO finally! - going to be increased with $ 20.00. Since the release of the latest version 2.6 the value of the program is tripled if not quadrupled and rightly so should the price reflect this. If you hurry you can still get this excellent and multifunctional program for the old price of $ 59.95. Offer end Wednesday 17 June)

 Another online software I used this week is perhaps also the latest 'innovation' of off-line business tasks now available online: bookkeeping! Liberty Accounting comes complete with Payroll and is one - if not the - first to include filling your VAT return through their program.
(Side-note: the program was recommended by our business adviser for my neighbour who had asked both him and me for advice on accounting. All three of us can access the program: the owner of the business, the 'bookkeeper' of the business and the accountant of the business - how's that for multi-functionality?)

All the above programs I've used this last week - a short week for us after our well deserved break last weekend - and makes you wonder/ponder if the 'virtual office' or 'virtual business' is about to truly become a fact?

How many online tools are you using for standard 'off line' business activities yourself? And what other tasks can you see being turned online in the near future?

The Quarterly mystery of the 3 pounds

Another 'regular' banking mystery turned up again yesterday: for the third time this year the "Advance Notification of Charges" our bank sends us every quarter shows:
4 credits paid in a £ 0.75 = £ 3.00

It has been over 18 months since I even visited a bank branch, cheques are paid in into another bank (one that doesn't charge for this), any moneys coming in to this 'full of mysteries' bank are either through PDQ machines (off line and online) or BAC's - never ever do we pay in cheques or cash over this bank's counter.

So, on the phone again - as I did twice before, yes I know, I am a penny pincher! - and after waiting for around 3 - 4 minutes the person at the other end of the line first questioned me about paying in cheques or cash etc over the counter, then mentioned something about perhaps it being refunds that were listed in their system as 'Credits Paid In'. I was told - as I've been twice before - the local bank manager would have to look in to it and I would be contacted again.

The first time - 6 months ago - I questioned the mysteries £ 3.00 charge I was never called back, the second time - three months ago - the £ 3.00 were credited to our account without any explanation and now I'm still waiting for a reply.

Think this time I better follow up with a letter, too many mysteries happening. And if anything, the mysteries are very constant! I'm now also wondering if the 'wandering' pound every month has anything to do with it? When it comes back home safely does it have to pay a fee to enter 'home' again? Mysterious!

Anyway, Merry Christmas and a Happy and prosperous New Year!

The monthly mystery of the missing pound

When you are a bookkeeper (and a double Capricorn!) like me you have the habit of checking your online bank accounts daily. I do, business wise as well as personal accounts.
This way I keep a close check on the cash-flow, very important responsibility when being in business.

Now, some time last year I noticed there was a 1 pound difference between the balance and 'currently cleared balance' on one of our business bank accounts. There can be a difference between the two when we have paid something by debit card that normally takes two - three days to appear on the balance, but is deducted from the currently cleared balance - available moneys so to say.

But in this case I knew there wasn't a £ 1.00 due anywhere. So I called my bank and told them one of my pounds had gone 'walk-abouts'. They would look into it. 15 minutes later they informed me there was nothing they could see and that I shouldn't worry: that little pound would surely come back safely home soon.

Which it did; two days later.

Almost every month I notice the same: at one point one of our pounds goes 'walk-about' and returns home safely two - three days later.
Weird! Does that happen only to our account?

Imagine being able to borrow one single pound (who would miss it?) from all your clients - 100.000, 500.000, a million clients? - just for a few days to 'play with'. What could you generate in profit from it?

Borrowed without consent - like my school friend used to do with my push-bike all those years ago. She took mine because hers was at the back of the stack and I 'didn't need it at that time'. I did 15 minutes later and had to walk! Frustrating!

I know it's just 1 pound that always "materialises" again, but still: it irks me. I truly don't like mysteries of the financial kind.

(Or am I just paranoid? - do your pounds/dollars/euros ever go "walk-about"?)

Disability with numbers - for a bookkeeper just plain weird?

Every language has its own particular way or method to pronounce numbers. Some go from left to right (80 + 4 = 84), some from right to left (4 + 80 = 84) and some, well lets not call names but it can be very complicated to count in French (4 x 20 + 4 = 84).

As bookkeeper and lets not forget my other job: sales person, working with numbers is all in a days work. Nothing special you can say.

But.... since I don't know how long I have a problem with numbers. I keep turning them around. Just mention 67 to me and I'll write down 76, 57 becomes 75, 84 turns into 48 etc.

Now, our native language (Dutch) reads numbers from right to left: four and eighty makes 84. Could that be the problem? We Westerns read from left to right, not the other way round.
So when we moved to the UK 8.5 years ago (time flies when you're having fun!) I thought the problem would 'solve itself': eighty four makes 84 - reading numbers from left to right like 'normal' standard reading of words. But alas. 84 still turns into 48.
I always ask callers to spell their phone number digit for digit, I get 'lost' otherwise.

My partner remarked on it again yesterday. Why couldn't I get 'it' right? (He happened to be in our showroom when I mispronounced a price per sq m not once but twice - oh, the troubles I've been in sometimes for doing this!)

I told him I just don't know. I concentrate on getting it right, of course I do, but no matter how hard I think: I have to pronounce this right, I have to pronounce this the right way round... I keep turning it around. I've come up with a trick: imagining the number written down on paper and then almost spelling it out - helps a bit but not always.

Being dyslectic - word blind - is a 'common' and recognised disability. I just wondered if there are more 'disabled' bookkeepers like me around who are "number-deaf"?

I can't be the only one!

How info-marketing keeps us on the right (financial) track

While the financial and economical world seemed pretty much in turmoil last week (and the end isn't nigh according to many) our own quarterly management report (July-Sept) shows a rather different picture. Not that we aren't affected by the turmoil - we are 13% down compared to last year-to-date results - but Q3 counts for almost half of our total turnover of 2008.

Anyone reading this blog for a longer time knows I'm a 'statistic' freak - if that's the correct word - but if you don't measure you don't know what's working and which famous 50% of your marketing budget brings in the best results.

In our management report we have two separate ways of measuring our results: per source and per client type (some types come with a higher margin than others). The source tells us which marketing pilar is working well and which isn't. And like the last 3 years our website - as source of where a client has heard from us first - brings in over 60% of turnover (in Q3 even a massive 83%). Contrary to last year our DIY-floor client type shows a drop of 62%, but our Supply & Install client type increased with 13%. Percentage wise the 'online client' type (who have never set a foot in our showroom) is an absolute winner: 13300% (yes, that's thirteen thousand three hundred) more than last year-to-date.
That made me dive even deeper into the statistics: 62.5% of the number of online-clients had their first contact with us through one of our AWeber email lists. And we shipped these 'online' ordered materials as far as Portsmouth, North Yorkshire, North Wales, Scotland and funnily enough (back) to The Netherlands.

Last year October my good friend (and accountant and business adviser) Richard C suggested I'd look into this AWeber online email marketing software. He was convinced it would suit our type of marketing (right beside our informative website) rather well. And as so often he was quite right! We had to invent a whole new name for this source of turnover: AWeber clients and I reconfigured our reporting system to show this growing number of clients: differentiating between 'normal' website clients and those clients who first of all requested information from us through one of our AWeber lists. In Q3 our AWeber clients contributed 31% of our turnover, total year-to-date 15%

It definitely shows that "The more you tell, the more you sell" (to please Shuaib) - and that telling the whole story might take a while to bring in the results (AWeber is in place now for a whole year and 'only' now in Q3 our AWeber prospects turn into clients). But bringing in the results it definitely does!

Our statistics show more: our paper ads (yes, we have multiple pilars of marketing in place, of course we have) in 5 regional Village Directories are starting to have a possitive effect too. We've launched this ad campaign in Q2 and focussed on headlines - not selling, but informing and no standard company name banner at the top of the ad - and again since Q3 we see an increase in our turnover from this source. This month - October - we had the opportunity to have an editorial placed in it and we kept to the same principle: The more you tell, the more you sell. The editorial covered how and why natural wooden flooring is the only robust floor covering that becomes more beautiful over time; not the standard who we are, where we are and how good we are.
I've lost count of how many visitors our shop has seen lately who come in carrying one of the five magazines in their hand.

So, are we pleased with the results of 2008 so far? I have to be honest, it is a mixed feeling. Yes and no. Compared to all the stories you hear out and about of falling customer confidence, failing large retailers, failing banks, failing other 'trusted' organisations and increasing unemployement figures; we seem to be doing alright as small and specialised retailer. Compared with last year, where we saw a hefty 66% growth, we know there's a big chance the end result this year comes in even or at lower turnover. But then again, we might surprise ourselves.

One thing is for sure though: info-marketing (new word?) is definitely our way. Even if we still write "double Dutch English" some times. Customers are becoming more cautious before making a buying decision. They keep searching for more and better information. Small businesses who are able to build trust by giving more and better (free) information to prospects will eventually win the sale.

(For those looking for more information on how AWeber can help grow your customer base too, click over to my 1 Plus 1 Makes 3 dymamic website - aka blog - which is regularly updated with hints and tips on using AWeber. I'm also about to announce a complete u-turn on the AWeber Guide and if you don't want to miss out on that, subscribe to the Kiss2 of 1 Plus 1 Makes 3 blog-alerts).

Do you love AWeber, too?

Tax (code switch) doesn't have to be taxing

Today, 7 September 2008, 22 million basic rate tax payers in the UK have their Tax-code changed from 543 to 603. The change is due to an extra raise in personal allowance - a government decision to get back in the good books of many since the 10p debacle.

The change in code means payroll systems have to be adjusted too and recalculation of the PAYE (Pay As You Earn) to be deducted from the wages has to be applied. I know a good deal about bookkeeping but tackling the payroll for our two-man-woman-band is completely different matter IMHO.

In 2004 I found this excellent Internet Payroll system and haven't looked back since. Able Internet Payroll Ltd makes calculating PAYE, net-wages, NI etc a doodle. The system is user friendly, accredited by HMRC and has a 100% success score in E-filing (which we've done from the beginning and hence received the total amount of 'discount' from the 'tax-man' for voluntary E-filing, just for clicking some dedicated links in the Able Payroll software!).

And it is also very cost-effective: for 1 - 10 employees the annual costs are £ 50.00 (per company, not per employee).

Ending a tax year and starting a new one every year in April (for someone used to calendar financial and income tax years - Jan to Dec - really odd) in the Able Internet Payroll system is made rather simple, just follow the clear instructions on screen once you click the extra large button Able makes around that time (hard to overlook).

So I was kinda hoping that this extra tax-code change would be made easy too by them - making mistakes in PAYE to be paid to HMCR is not something I was looking forward too.

I shouldn't have worried. When I clicked on the User-Sign-In link I landed on a 'sub-page' which happily told me that I could Globally Update the Tax Code in the system. Able Internet Payroll had created a one-button system to do the work for me. And it really took only one click.

Of course there was an opt-out option too: not every employee of every business has the basic-rate tax code, so in some businesses the person responsible for the payroll will have to update their codes 'manually'.

But for us and with 22 million basic rate codes I think for many small businesses Able Internet Payroll made business life real easy again.

Makes you wonder why other service companies try to make life so difficult - I'm still waiting for 9 months worth of credit notes from one company for a PDQ device we returned with the rep the same day it arrived. They keep sending me an incorrect invoice every month and every month I send it back - the note I write on it shows an increased level of irritation. But that's a whole other story - a whole commedy in fact (that's a pun intended on the company's name:the Italian word for commedy is....?)

Mamut and MYOB - when 1 plus 1 makes 3

As (Dutch) qualified bookkeeper most of you know I'm one of those persons who gets excited over accounting programs - I know, weird to say the least.

When we moved to the UK - today exactly 8 years ago! - I had the 'pleasurable' task to select an accounting program that complied with English accounting rules and regulations but that also would make our 'foreign' business life simple. Well, that took care of SAGE - makes bookkeeping and especially reporting the facts and figures harder, not simpler.

I opted for MYOB and have never regretted it. Great software, great service.

Until our business needed a Customer Relationship Management System and I was introduced to Mamut CRM & Sales. Great software, great service.

It soon became apparent to me that adding the accounting module of Mamut would make my life even easier. My personal Support Manager advised me to opt for the Mamut Enterprise solution to benefit from even more modules and so came the time - January this year - to say a heartfelt farewell to my loyal and trusted MYOB accounting program.

Today I received the news - straight in my inbox from Alan Moody, the Managing Director of Mamut UK  personal! - that Mamut has purchased the UK and Ireland Business Division of MYOB.

The 'marriage' of two of my favourite, loyal and trusted accounting and marketing programs - who can ask for more?

Yes I know, only a weird bookkeeping nerd like me would get excited about this news, but I know what this can mean to many other small and medium businesses in the UK - user friendly and effective software for a very reasonable price with a proven track record of great customer service. Multi functional software that gives every user a big advantage over their competitors who are still 'stuck' on or with SAGE.

Rapid Accounting - as easy as 1, 2, 3, 4

As (Dutch) qualified bookkeeper 'doing-the-books' is almost second nature to me and I really took time to select that accounting package that does everything I want it to do (and preferably more). For that reason I recently switched from my trusted and reliable MYOB software to Mamut Enterprice (which integrates Customer Relationship Management, Accounting, Webshop, Sales & Purchasing and more into one simple system).

But that's me - facts, figures and statistics 'nut' (or 'freak' as my partner regularly compliments me), 99 out of the 100 small business, self-employed traders or service providers will be more than happy with a less complicated, user-friendly simple piece of software that replaces the 'old-fashioned' pencil and paper cash-book, saving time and money.

And time and money are the two main things you as a starting business, a small business owner or self-employed trader can't have enough of for doing the normal day-to-day work, be it on the job or sourcing new clients. But your accountant, the Inland Revenue and for some the 'VAT-man' come knocking at least once a year to see and check the results of your normal day-to-day work.
(Side-note: if you have an accountant that really only comes knocking once a year, find another one immediately - a modern accountant should not only concern him/her self with your financial annual result, he/she should actively be involved as business consultant or advisor to help you grow your business any which way he/she can!)

Our own modern accountant has, on request of many of his clients, designed the Rapid Cash Accounting Package - as simple as 1, 2, 3, 4.

It works like any other ledger-system (cash-book): every line contains the 4 W's of every transaction:

• Money coming in:
• Who's paid you money (clients name)
• When did he/she pay you money (date of payment)
• Where was the money paid into (cash, bank, card)
• Why was it paid (product or service sold)
• Money going out:
• Who did you pay (suppliers name)
• When did you pay
• Where was the money paid from (cash, bank, card)
• Why was it paid (product or service bought)

But with the Rapid Cash Accounting Package that's all you have to do! Fill in the 4 W's per transaction and the program does the rest. It calculates the totals of every column, from bank balance to income or cost category after every transaction.  And at the end of every month it transfers your bank, cash and card balance automagically to the next one - plus at any moment in time you can check your year-to-date results.
Once again: all you have to do is fill in the 4 W's per transaction - as simple as 1, 2, 3, 4.

Watch the video below to see how easy the program is:

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The revised 2008 version is now available for instant download (this RCAP page contains much more information on the program) and as a very special re-launch offer the first 25 purchasers of the revised program only pay £ 17.95

= a whole £ 50.00 discount on the normal price of £ 67.95

My (volunteer) life as treasure of the BNI-Ashford chapter was made very easy with an earlier version of the program, the revised 2008 version is updated with even more benefits for the user.
So hurry before the special re-launch offer runs out - and to be honest even £ 67,95 for a program like this is worth every penny of it.

It deserves a K.I.S.S.-award!