Rewarding employees for a great performance is one of the best ways to ensure the business is able to attract and retain the right staff. While financial incentives are of course important, they are not the only way to show staff you appreciate their work.
So here are five great ideas to motivate your team without breaking the bank.
Stacey Price from Healthy Business Finances says this is the first step when it comes to rewarding great employees.
“I also pay for them to do training and I know my business has benefited from my employees’ extra skills. Staff also love the challenge of undertaking training they would otherwise not have done,” she says.
Great communication techniques are a critical business management tool – especially when a quick fix can address an employee’s concern. For instance, one of Price’s employees told her they didn't like the timer function in the program the business uses to track time for client jobs.
“So I bought a $4 miniature electronic timer which I gave to her and she was over the moon. Listen to what your staff need to make their job easier,” says Price.
Don't expect because one person loves wine all staff are happy to receive a nice bottle for a job well done.
“Some people might want to finish 30 minutes earlier on a Friday to get home to see their family. This costs the same as a bottle of wine and I know my employees love getting an early mark once a month,” she adds.
Giving employees Christmas puddings every year is boring and predictable. Plus, if staff don't want the incentive you are trying to give them then it really is not an incentive. Price suggests researching alternatives and giving staff personalised gifts. “Last year at Christmas I gave staff themed wine charms. People loved them and they cost less than $10 each.”
Above all, never forget to say thank you to your staff. It’s easy to forget to praise staff when they do a good job and we’re often very quick to criticise if things don't go to plan. Instead, make sure you acknowledge staff every time they turn in a top performance.
At Banjo, we appreciate that the right business coach can add real value to your business, acting as a mentor and helping to develop new revenue lines, drive profitability and introduce better business processes. But it’s important to work with a coach who has demonstrable ability assisting previous clients to grow their business to ensure you get the biggest benefit possible.
Peter Horsfield, a financial planner with SMART Advice is one business owner who has used a coach as a business consultant to help improve his enterprise.
“During my youth I had a swimming coach and through commitment, following instructions and building momentum I improved. Over time I rose above my competitors and in doing so felt more empowered and successful, evidenced by my results,” says Horsfield.
“Every great athlete has a coach and if you want to be the best in your field you need a business coach. In my youth, I liked to swim. In my career, I like to help people reach their goals and coaching helps me achieve that,” he adds.
Horsfield says having a business coach ensures his clients get the highest return possible from his advice. “Clients and my business coach hold me accountable to delivering value.”
When it comes to choosing the right coach he says the first step is to find the best coach relevant to your needs and budget. “Then, do some research into their style. Find out about fees, results, testimonials, their processes and the support they will provide. Many will offer a free first meeting. Take this opportunity to find out more and see if there is a personal fit between you and the coach,” he says.
Then, identify and document what’s important to you, your business’s current position, your personal goals and the milestones you wish to achieve. The coach will help you tailor activities you can control and be held accountable for to help build your business.
“I flew to the US quarterly for two years for intense five-day coaching events with other advisers. I was held accountable with calls every two weeks reviewing activities and my benchmarks,” Horsfield explains.
In terms of results, he says he now has more meaningful relationships, not just with his clients but with everyone who is important to him. “I have learnt to focus on what I can control and let go of what I can’t.”
In addition, his bottom line has increased by more than 200 per cent since he started coaching, while working fewer hours and achieving greater flexibility thanks to embracing technology.
“I have been able to better focus my time and energy to do more of the things I receive a direct benefit from, including more time to exercise and more time spent on my relationships. This is one of the biggest benefits in having a business coach because I have learnt how to delegate, which has freed up my time. Every great athlete has a coach and if you want to be the best in your field hiring a business coach makes perfect sense,” he adds.
If you were a top athlete you’d work with a coach and if you want to be a top business owner it’s worth seeking advice from a mentor.
Blood, Sweat and Tears
You are no longer the start-up business owner with a dream and passion. After 3 or more years of hard work, persistence and some anxious nights - your business is established and you may even be drawing wages.
Remember when you approached the bank for financing at the start and the answer was: ‘too early for us’ or the Bank Manager asked you to provide your home as security or possibly suggested you fund your business with an expensive business credit card?
It is just so perplexing when today an enthusiastic Business Development Manager of the same bank has become aware of your business success and wishes to proactively market their services to you.
He says “If you could provide me with a business plan telling me your story; how your business works; and bring a 12 month cash flow forecast and copies of the last 3 years historical financial statements….we could have a really good conversation.”
And you are thinking that you funded the business from savings and family loans, toiled into the wee hours and weekends, sacrificed family holidays to build the business. It has been substantially de risked. And your bank is now stating they would consider a square shaped loan if you have some square shaped box full of the required information. Well, whilst you could do with a cash injection to kick-start a new campaign, you just do not have the time to compile the information required and quite frankly you have more pressing priorities; like generating income today.
Here are two real life examples that establish the needs of small business when it comes to growth: convenience, speed and access to finance.
Grace runs an established gift and home wares retailer with sales approaching $1m per annum. Lately, her revenues have been growing due to the ever expanding suburban population and increased foot traffic in the main street shopping strip. And online sales have steadily grown over the last 3 years without any advertising. Grace and 3 full time staff are very busy, and her mother works two days a week part time to help as well. After she closes the shop and completes some daily administrative tasks, she gets home well after 6pm to take care of her two children. She gets some breathing space after 9pm when the kids are in bed. Grace knows that hiring a book keeper 1 day a month will help – a small marketing budget could increase online sales – and the shop next door is available for lease which would give her more space to meet customer demand especially as Christmas approaches.
All of this will require a $65,000 investment, and she will need to finance it. The Bank across the road closes at 4.30pm, and she finds it difficult leaving the shop during the day to visit a banker. One night she goes online to search for options and finds the website of a marketplace lender called Banjo. The online application takes less than 10 minutes and it is easy to complete due to drivers license identification and the download of financial records from her cloud based accounting software (MYOB). She is asked a time when the lender can call, and a time is arranged for 8.30am as she is driving to open the shop. After some general discussion about the business, the loan is approved and the funds are deposited into the nominated business cheque account the next day. No documents required, no paperwork: all completed online with a brief telephone conversation. Grace’s priority was funding the expansion to make the most of the Christmas retail season and she was able to achieve this with fast funding. Banjo served her needs at rates equivalent to a traditional financier and the Bank didn’t even get a look in.
Eddie runs a commercial property firm with a large customer base for both small businesses and mid-sized corporates for a region of Victoria. The firm is well known and valued for their ‘straight up’ approach. Lately he has been so busy that he has 4-5 day pre-set schedules with no room for ad hoc meetings.
Despite a strong and regular rent roll, commercial real estate sales can fluctuate, and Eddie knows he has a looming cash flow shortage with GST and Superannuation payments due at the end of the quarter. He knows these will easily be covered in March with some excellent property sale listings.
Eddie approaches a local bank but the analyst viewed the funding of statutory payments as a sign of a distressed business. Eddie was not willing to pledge his family home as collateral, and decided not to proceed with the loan application. Five pages of application forms and a 3-week waiting period were just not worth his time.
On a Sunday watching his son play football from the comfort of his car, he went online searching for small business loans and found Banjo. The application was completed in 10 minutes, he downloaded his Xero accounting information and he received an approval Monday morning. The funds were deposited to the business cheque account that day.
The Bank believed Eddy was a less credit worthy customer. Banjo reviewed all available data in real time to obtain a holistic view of the business and made a different decision.
--------------------------------
There are many such case studies: busy business owners that are passionate about their trade and customers; there are many service businesses owned by young people that may not have purchased a home; there are opportunity hunters that know you must act quickly to capitalise on a growth option.
Banjo uses a myriad of available financial data to obtain a holistic view of the business in real time. We provide a unique user-friendly online customer experience: not a bricks and mortar destination separated from reality by a moat of rigid rules.
Sounds just brilliant to me.
* These case studies are taken from real Banjo customer experiences
One of the most important truisms in business is that if you can’t measure it, you can’t manage it. And if you can’t manage it, you can’t improve it. This is one of the reasons why it’s essential to regularly review your enterprise’s hard data. So here are some of the most popular benchmarks great companies use to take their organisation’s temperature and build better balance sheets.
Retrospective figures provide hard facts and established patterns for your business, and provide insights into what you could be doing more of and areas you could change.
Above all, remember cash is king, and the cheapest form is cash generated by the business. You need to understand what drives sales, margins and cash flow to get the most from running your business.
Unless it’s increasing sales a business can stagnate and fail. So the very first measure an organisation needs to focus on is the sales pipeline. It’s essential to record sales that have been made, which products have been sold and to have a way of assessing upcoming sales opportunities.
Some of the key figures businesses should be measuring when it comes to sales include call effectiveness, traction, velocity, quality and change in win rate.
The gross profit margin represents the average gross profit on each dollar of sales before operating expenses (defined as gross profit divided by sales). This is an excellent way of analysing the profit of each product or service type.
The net profit margin tells you whether you’re making a profit after covering all your costs (defined as net income divided by sales).
The four main profit benchmarks every business should be measuring include gross, operating, pre-tax and net.
Running your business to optimise the production of cash brings an holistic approach to business management as it forces a business owner to focus on a number of cash drivers such as inventory management, accounts receivable and accounts payable.
When it comes to collecting data around these three points, a cloud based accounting software package delivers a real time review of your business performance anytime, anywhere and on any device. The data should ideally be reviewed weekly (sometimes daily), and tracked monthly against your forecast budget.
It’s beneficial to compare your performance metrics with industry peers. This information is usually sourced from the Australian Taxation Office’s web site. You should also talk through your performance with your accountant, who should also be able to help you with benchmarks.
Some of the important cash flow measures businesses need to monitor include forecast, actual, free cash and break even point.
Of course, financial benchmarks are just some of the measures great businesses should be assessing: non-financial benchmarks are equally as important, especially lead and lag indicators.
The number of leads, or quotes given or enquiries are used to provide early warning of any peaks or troughs in your sales. Such lead indicators usually provide feedback on the success of marketing campaigns and sales conversion rates.
This measure can provide a good snapshot of your levels of customer advocacy and satisfaction with the service or product you are providing. For instance Facebook, twitter and LinkedIn follower growth rates coupled with external customer satisfaction surveys can provide excellent data to the business owner.
Most business owners are passionate about fulfilling their dreams and making their business grow and it can be tricky to take a step back and review what’s actually happening in operations.
Working 'on', rather than 'in' your business is what sets apart good business owners from great ones. Simply set aside a little time each day to assess how things are going. Devoting time to instilling basic business disciplines will ensure you're in control and the business is not running you.
Banjo's top three vital cash flow measures:
Cash is king, which means it’s the one variable every business owner needs to be across. Here are three measures to help you understand what your existing and future cash flow position is.
At Banjo, we understand that having an accurate forecast of your enterprise’s future cash position by having a robust cash flow statement is essential for every business owner. It’s the only way of knowing whether incomings will be enough to meet outgoings. Here, we explore how to develop great cash flow forecasting disciplines, as well as common forecasting mistakes and how to avoid them.
As Banjo’s founder Andrew Colliver explains, the business monitors its cash flow position in real time, on a daily basis, constantly reviewing data such as the number of new clients the business has, repeat business and loan volumes.
“This helps us understand what’s driving our business model and contributing to loan volumes and margin,” he explains, adding that other key data points include the net cash flow position and cash on hand at the start and end of each month.
According to Colliver, the best businesses are always monitoring the actual versus budgeted cash position. But on a weekly basis, they are also monitoring cash on hand and payment obligations in the coming month.
In terms of the starting point when it comes to forecasting cash flow, Bradley Callaughan, founder of Callaughan Partners Financial, says forecasts must be driven by assumptions and you will need to arrive at these before you can start.
Banjo advises using a cloud-based accounting software package such as MYOB or Xero to record accurate financial data on which to base assumptions for cash flow statements and forecasts.
“For forecasts to be useful assumptions must be appropriate to the specific industry or business. The second year will be much easier as you will have past performance to rely on. In the first year you will have to turn to industry statistics, benchmarking, dealings with customers and suppliers and any knowledge that you may have on the industry,” Callaughan notes.
He says some of the main things to focus on will include:
“Listing your assumptions within the forecast to show how you derived your figures will serve you well when assessing actual performance against the forecast,” advises Callaughan.
When it comes to collecting information, in your first year you will need to rely on realistic estimates based on industry benchmarks. In your second year the best place to start is to look at sales in previous years to identify trends.
“You can also look to identify external and internal items that may affect prices within the first year and adjust accordingly,” he adds.
When you have arrived at your forecast sales figure you will need to review how that money will be received.
“Assume 70 per cent of debts will be received within trading terms and 25 per cent will be received outside terms. The remaining four per cent will come thereafter and leave a one per cent provision for bad debts,” Callaughan notes.
To complete your cash flow forecast, you will need to prepare a list of other incomings and outgoings. Some examples of these include:
Incomings
Outgoings (direct and indirect)
It’s important to be realistic to ensure your forecasting is as accurate as possible.
Don’t inflate income figures, but always over estimate the running costs and expenses.
“You can forecast for as long as you like but normally we look at a 12 month period. So when doing the next year we can use the last year to provide information to fill in the upcoming 12 months,” he notes.
When it comes to the major challenges Banjo has faced and overcome in terms of its cash flow, Colliver says one of the main ones is deciding when to hire new staff.
“Eighty per cent of our expenditure is on staff and there’s always a temptation to hire more staff as the business becomes busier. But it’s important to review the 12-month run rate for the staff member on your books – rather than just taking a six-month view. The risk is that if you take a short-term approach, you could overrun your expense budget,” he explains.
The other challenge, says Colliver, is the timing of lumpy payments and cash receipts.
“You might be due to pay a large insurance premium, accounting bill or software licensing fee and it comes at an unexpected time. This can cause cash flow issues,” he notes.
To avoid this, talk to suppliers and clients about when large invoices are due, or when to expect payment for a large invoice, to give you better oversight of your future cash position.
His other advice is to ensure the enterprise has sufficient cash on hand so that if a business opportunity emerges, it can take advantage of it.
Above all, make sure cash flow forecasting becomes a regular business practice. Reviewing your cash flow statement weekly will allow you to make changes based on the information at hand, making your forecast more accurate. It will also ensure your profit and loss statement and balance sheet are as accurate as possible.
Finally, cash flow is often determined by the industry in which the business operates. For instance, in some sectors high volume, low margin trading is expected, whereas in other sectors high margin low volume trading is more the norm. It’s an idea to talk to the Australian Taxation Office or your accountant to ensure your approach
The Dream?
Sometimes my dreams are vivid and other times I barely remember them. One night, I dreamt I was part of some weird new reality television show, a cross between ‘My Kitchen Rules’ and the ‘The Block’. There were 4 teams: Banjo, 2 major trading banks and 1 regional bank. We were all called into a warehouse and given the brief of building ‘a new financial services operating platform to fund the growth financing needs of small business in Australia’.
Each team would compete over an 18-month ‘design build and test’ period with a hand-selected team of 10 experts from the banking, technology, digital marketing, legal and payment systems industries. And each team would provide their time on the basis of love, passion and self-belief.
I thought at the time “good luck getting that show to work”.
I cannot really remember whether it was Scott Cam or Pete Evans providing the brief (I guess that depends on whether your focus is building it right or having it look good) but the instructions were clear. ‘The operating platform must be available anytime, anywhere on mobile, tablet or PC’.
Scott said “Over 60% of mobile banking users rate speed, time saving and ‘I can do it anywhere’ as the 3 most important factors. Your customers are busy business owners that do not have the time to visit a branch, complete paperwork and they make money by being responsive in the market place: so they need you to understand their business and be responsive.”
And then the competition became a little harder.
The platform must represent a convergence of digital data technology and the customer experience. That means, it is built in the context of the business owner’s life; an offering that makes life easier, without friction and easily amalgamated into the business day.
My dream conveniently skipped the ensuing 18 months of sacrifice, hard work, innovation, creativity and anxiety and fast-forwarded to the results. I remember the other competitors dropping out of the competition or being voted off after some token efforts and bursts of activity.
At Banjo, it didn’t matter that the competition had dropped away. We had a brief and we were on a mission! Pete and Scott sat back and watched, scratching their heads and wondering if it really could be done. I overheard them talking:
Pete: ”These guys are so determined! It’s watching like a dog with a bone. Mmmm, bone broth….”
Cam replied: “ Build it once, build it right mate!”
During that show:
Then I woke up. There was no reality television show, and Scott Cam and Pete Evans had disappeared. But there was a real business with a focus and passion for small business at its core.
Banjo introduces a new online marketplace lending platform built by Australian banking experts who simply thought there must be a better way to provide unsecured loans to SMEs. We want to make it easy so business owners can get on with what they do best!
Imagine being able to just get on with the business of running your business.
Well that’s the new reality.
Sounds just brilliant to me.
Thanks for dropping in to Banjo: We are thrilled to finally be here! This Australian built and owned business really understands the challenges facing SME's today. No-one more so that our CEO Andrew Colliver, he's spent years in institutional business banking and really understands the gaps in servicing the needs of busy business people. For more about Banjo, check out this article by Yolanda Redrup at the Australian Financial Review.
Andrew Colliver is looking to disrupt the banking sector with new online lending company Banjo.(image: Pat Scala)
Original article: https://www.afr.com/technology/former-nab-execs-raise-millions-to-take-on-big-four-in-small-business-loans-with-banjo-20150916-gjo0bc
