How to Take on Risk the Right Way

There is an element of risk in every decision we make. We are evaluating risks with the decisions we make every day. What is the best way to get to the office? Should I rent or purchase a house? Which restaurant should I choose to dine at? Every decision has a different result; every result has its own distinctive upshot or risks.

The case is similar in business. Normally, business leaders are naturally entrepreneurial. It is instinct for them to evaluate the potential and risk of every strategy or decision. Taking risks is par for the course.

Make the most out of every opportunity to prevent needless damage to your business and ensure that you make informed and structured decisions to help you reach your strategic targets. It is essential to factor in the risks accompanying the decision, not only the cost and opportunity.

Effective risk management involves distinguishing and countering the risk before a negative event happens. This safeguards the survival of your business and its success even in difficult economic times.

Step 1: Distinguish the risks.

It is important to inform yourself about the risk your particular business faces. Though it is a time investment, recognise the damage it could suffer over weeks, months and even years, if you fail to distinguish or minimise the risk.

The risk management practiced by most business owners covers tangible things, such as infrastructure and assets. The right insurance is arranged and physical security measures, such as CCTV and gates, are put in place. However, security and asset insurance are just a minor aspect of any risk management strategy by any quality business.

Think about the effect of your key management staff leaving the company. Would anybody step in to oversee the management or provide that order? What do you do in case of a data and intellectual property leak? What happens if your company reputation is trashed beyond repair?

It is in the operations and processes of a business, not in its tangible assets, where major risks are found in many small to medium enterprise. Here are some typical business risks:

  • businesses disruption (e.g. technology failure or fire)
  • injury to employee/s
  • loss of important business knowledge
  • unidentified and threatening changes in your industry
  • product recalls
  • harm to reputation or brand
  • loss of important staff
  • fraud
  • supply chain delays or disruption

Step 2: Gauge the level of your risks.

Risks are categorised by a business that implements sound risk management based on the following:

  1. The possibility of a risk incident happening (infrequent to nearly certain)
  2. The outcome of a risk incident happening (trivial to serious).

These items, known as risk criteria, have to be established by the company’s governance function, which is the audit committee or Board for most companies. For small enterprises, it is likely the business owner himself.

You derive a context for the risks when you set risk criteria. What is considered an acceptable risk? What risks do you consider unacceptable for your company? Using the risk criteria, you can create a combined risk rating. The rating is established according to a company’s evaluation of probability and outcome and can be graded from low to extreme. With the rating, you can find out what area you need to direct the company’s limited resources and time.

For instance, a typical risk that occurs in a company is an unexpected disruption like an earthquake. This type of risk is unlikely to happen. However, if it happens and the company has no plan of action, operations could stop due to that one event. The lack of plan to minimise the risk could have a major impact on the business.

Step 3: Handle the Risk.

When you have determined and rated the risks to your company, you can set up risk management measures to minimise the effect of the risks linked to your business decisions.

Here are some important risk management measures:

1. Elude risk

It’s impossible to escape all risks, but you can elude needless risk and its effects by keeping in mind that “prevention is better than the cure.”

2. Shift the risk

Allow another person to handle the risk. Mechanisms such as product warranties or insurance are the most common means of transferring risk.

3. Minimise risk event or its impact

You can minimise risk in many ways. In general, risk reduction is confined to an already known risk. For instance, all staff are required, as a condition of their employment, to undergo regular training on how to handle goods safely in order to minimise health and safety risk in the workplace.

4. Acknowledge the risk

There are times when the risk reduction strategy is very costly to carry out that it is best not to implement it at all. If this is the case, you have to accept in full or in part that probability and outcome of the risk of a negative event. For instance, the premium for full crop insurance may be steep and will compromise the farm’s return on investment. But insuring a portion of the farm (for example, 50%) lets you reduce some of the risk and accept part of the risk.

Don’t think that risk is all negative. Some business success has been due to risk taking. Certainly, failure can be the outcome too. However, none of the world’s most successful people achieved what they have achieved by not taking risks.

Risk management will help you get from failure to success. So, it is fine to take a risk. Just always remember to do it the right way.

PJS Accountants offers expertise in helping business owners minimise risk to their business. Based on the assessment of your business, we can design a plan to help you implement strategies to boost the potential of your business. If you need help, guidance or advice in this area, contact PJS Accountants.

3 Effective Ways to Improve your Cash Flow

Business owners cannot overemphasise the value of the cash flow metric in their companies. Certified Public Accountants (CPA) notice that many employers take pride in their company’s profits. However, this is not evident in the state of their cash flow.

Cash flow and profits vary significantly. While the two metrics are important to the well-being of a company, cash flow is what allows a business to pay for bills and the salaries of its employees, ensuring the continued operation of the business.

It takes time to explain and analyse cash flow problems. One of the responsibilities of an accountant is to advise employers on ways they can strengthen cash flow, including cutting costs in the right departments and bargaining for more decent terms on their procurement. But the first thing that accountants tell their clients (one that is frequently ignored) concerns timely invoicing.

Invoice without Delay

Waiting to do the invoice after a sale will almost surely stall cash collection. Regrettably, the consequences are more than that:

  • If you delay, the company you’re dealing with may not be able to include it in their budget to make the payment to you. You may have to wait longer to collect the money owed to you.
  • The business you’re transacting with may be near bankruptcy (and you don’t know it). When you delay, you may not be paid for your invoice at all.
  • Your customers could forget certain information about the job and may ask about it. This results in plenty of exchanges, which brings even more delays.
  • Employers can become busy in their personal lives. If the invoice is not done and sent immediately, the customer may not be invoiced at all.
  • Make sure to make invoicing your customers a routine. If they signed a work contract with you, they are presuming that they would pay for the work.
  • If the invoices are recurring every month, we recommend auto-generating them by using cloud-based accounting software. The system generates the invoices automatically as scheduled and allows for quicker payments.

Improve Cash Flow thru Faster Payment

Issuing an invoice and waiting for the check to arrive by mail can mess up your cash flow. You are trying to make payments directly to your vendors but you are waiting weeks for payments from your customers to arrive. A business goes into a cash-crunch due to this common scenario.

There are a lot of web-based payment services out there that it is easy to receive payments via online bank transfers or credit card.

PayPal and Stripe are two very popular payment services used at present. You follow a simple set-up process and you are ready to charge your customers’ credit cards as soon as you give them an invoice. In addition, you can deliver invoices with a direct payment link using cloud-based accounting software.

You guarantee that you have available cash for your business when you accept payments without delay.

Customer Follow-up

Be persistent in following up after you send the customer an invoice and the payment has been delayed.

It is the task of your accounting services provider to check your accounts receivable listing as often as possible. Checking your outstanding invoices and following up on overdue invoices should be made a weekly habit. Remember to mark down when your customer consents to pay and make a follow up immediately if you still have not receive any payment.

The use of cloud-based accounting software allows you to look at your accounts receivable listing wherever you are. With a click a button you can re-send the invoice to several customers or transmit statements to clients with several overdue invoices.

Final Note

Be diligent and improve your invoicing system to see a dramatic improvement in your cash flow. This results in greater flexibility in your ability to pay bills, or better yet, inject money into your business again in advance, resulting in more growth.

It is imperative for every business to have access to cash anytime. The way to ensure this is an efficient invoicing process. Either create a top-notch accounting team within your company or hire professionals to do the job for you, especially if your business is just starting out or you are a small business. PJS Accounts offers accounting and other booking services individuals and companies, big and small. Allow our team to get your accounts in order, prepare financial reports, give business advice based on those reports, and train your accounting staff. Contact PJS Accountants for enquiries.

Having a Vision for your Business

It is essential to have a vision for your business. Your team can use this as a guide so they know what they are a part of and what direction they are going. The team’s goals and duties/ responsibilities will align to this so that all members are going in the same direction with a well-defined, cohesive objective. Business culture can also be shaped over time to make sure it is helping you achieve the vision.

Based on our experience, business owners from small to big may or may not have a vision. Those with vision, range from expressing it in a babble of sentences, to a few expressing something that is clear and intelligible.

If a clear vision is present, those businesses that can also draft a written document that is updated, easily available and supported within the organisation are certainly few.

Don’t worry if the vision for your business is not clear; you are one in many businesses out there. However, there is no better time to start than now. But remember that you may not be able to sit down for an hour and come with a perfectly polished vision. The process will take time and several versions before you can come up with something that you can take pride in.

What’s the starting point? You have to get into a mindset of thinking strategically to establish a business vision. Pick a time frame to work with, maybe 5 or 10 years from now, or maybe a time period that corresponds with a scheduled event, and consider how you want your business to be described when that time comes.

Here a few perspectives you can use to describe your future business:

  • Yours as the owner
  • Your customers
  • Your team members

It will benefit you to ask questions frequently during this process. Why? It’s because it helps you reach the heart of what your purpose really is and see beneath the window dressing of what sounds pleasant.

PJS Accountants offers expertise in supporting business owners in attaining clarity for their vision and in creating a plan to shift to it. If you need help in obtaining clarity of your business’ future, contact PJS Accountants.

SME’s: Business Can Avoid Unnecessary Risks

Small businesses are in for some great incentives under the 2015 Federal Budget presented by Treasurer Joe Hockey in May.

Businesses having a yearly turnover of below $2 million are now eligible for tax deductions on purchases below $20,000. This is a great confidence boost for small businesses and the retail sectors.

Business owners can add assets worth more than $20,000 into a depreciation pool and immediately claim the deduction if the value drops to $20,000 or below prior to 30 June 2017 when this program terminates.

It’s an incentive that can be enjoyed long term by some, but those thinking of capitalising on the new budget policy should be cautious.

Organisations must be calculated and deliberate when deciding whether their business would benefit from going after it.

Mulling over Purchases

First, determine whether you are in a stable financial position before making additional expenditures.

Australian small enterprises are still experiencing difficulty and many of them are concerned about cash flows. The new incentives are tempting, but businesses should exercise prudence in their purchases and take into account the effect it may have on their business as a whole.

If your primary reason for making purchases under the new measure is because of the tax deduction, you could be opening yourself up to needless risks.

Making new purchases means you are taking money out of the business, even though you can claim the amount back. The business should be able to pay for the new expense. If it affects its capacity to meet other monetary obligations, the tax deduction may not be worth it.

Ensure that you know and have a good working capital cycle, including the ways you can turn debtors and stock into cash and the terms of your creditor agreements. This will allow you to know the amount of money you have at all times.

If companies are considering taking out a loan to make more investment, it is essential to use appropriate debt facilities. Don’t use high interest credit cards and overdraft facilities. Instead, use longer term fixed loans instead. Also make sure you are able to meet all existing interest charges and principal repayments.

Make sure to find out whether you are eligible for the $20,000 asset write-off because the immediate tax deduction is only open to small businesses. More specifically, you will be able to keep the annual turnover below the $2 million threshold.

You may need a more in depth examination of your business’ turnover during the course of the year, in particular when the purchase intended to be written off will be made, since you may be clueless about whether you will surpass or fall below the $2 million turnover threshold at year-end.

Seek the Appropriate Advice

On the whole, don’t forget that while you have to take into account various things before making any new purchase, support networks are available to help you choose the right path.

It’s very important to consult with a bank and other financial experts so you are sure that any new investment or purchase – whether it is tax deductible or not – you make will not impact the most critical aspect of your business – your bottom line.

According to financial professionals, there has been an increased demand from businesses searching for the expertise of advisers when they fall into financial difficulty, in the hopes of stabilising its financial status.

Any company that is targeting to implement the right structure and strategy to flourish as an organisation, instead of fighting help, is setting themselves up for the best chances of continued development.

As advisors, we are aware of the amount of hard work, passion and sacrifice needed to build a business, and it can be disheartening when they fail.

However, what we often find out is that many company owners are so attached to the business they have founded that they find it difficult seeing a different manner of doing things, which is sometimes a necessary evil they have to deal with.

This situation is where an independent, expert point of view can be the difference between returning to the right path and closing shop permanently.

Don’t expose your thriving business to taxation pitfalls by not employing financial professionals to advise and guide you. PJS Accountants offers a full complement of compliance, corporate and individual tax services. For enquiries on how we can help you manage your tax affairs, contact PJS Accountants.

Leadership: How to Get the Best out of your People – Part 3

In the second part of this three-part series we tackled three important leadership behaviours of “Setting the Tone”, “Walking the Talk” and “Fairness.” Aspiring leaders often make the mistake of trying very hard to be popular or to be liked, rather than aspiring to be effective. Concentrating on being nice can turn you into a weak leader, when strong leadership is what employees need, as well as assertive leadership in some cases. It is natural to want to be liked, but let it be the outcome or side benefit, not a leadership objective. If you strive to consistently exhibit the 12 primary leadership behaviours then you will be popular and be liked.

7. Competence

Have you encountered a boss or a manager that you think is less competent than you? If yes, you were probably less motivated to take their lead. For leaders, this is a likely scenario if you are perceived to be incompetent by your people.

Being competent doesn’t require you to know how to do everything, but it does require you to know what to do and the ways to accomplish it. An inept leader has several occasions to be ineffective. Competency is not an ability that is achieved quickly. It entails a mix of experience and knowledge seeking and retention. There are three important areas of knowledge:

  • Operational knowledge – the way every business function works – areas where the business is weak and how to resolve them
  • Strategic knowledge – what course to lead the business, why and how
  • Compliance and risk knowledge – what government policies that need to be adhered to, like the Fair Work Australia, and the kind of business risk to deal with and how, like Workplace Health & Safety risks

Good leadership does not require you do it all alone. It involves knowing specifically where you are competent, strong and weak, as well as recognising what expertise you need and what knowledge to acquire. Competent leaders gain confidence, trust and loyalty, so if you are lacking in any strategic, operational, compliance or risk knowledge, then endeavour to expand your knowledge in your weak areas.

It is vital because it is the foundation of making good decisions and choices. It also allows leaders to see through the haze and determine real from fake. To quote the philosopher Socrates, ‘the person who clearly knows and articulates best what ought to be done is the person who will most easily gain the following of others’.

Finally, avoid upstaging or embarrassing another person when you show competence. At the end of the day, leadership concerns the success of your employees, not you.

8. Emotional Maturity

Also known as emotional intelligence, this is a leader’s knack for understanding and managing their emotions, and those of his employees. A highly emotionally intelligent leader recognises what they are feeling and the reason for it, and how to control those feelings so they don’t have a negative impact on others. You may also call this “self-awareness” and “self-management.” Specifically, this involves feeling calm under pressure.

Once again being consistent is essential in this case. Workers don’t like to have a boss who is Dr. Jekyll one day and a Mr. Hyde the next. They want to know what your expectations are for them, so communicate predictably. Using a communication style that is objective, pleasant, calm, collaborative, positive and respectful will let you get the best out of your people because they need to feel important. Negativity, yelling, criticisms, cynicism, interrupting, impatience and self-righteousness are examples of emotional immaturity. These behaviours undermine leadership.

Aspiring leaders usually have emotional maturity “blind spots”, meaning they’re not aware of how they are acting or communicating and how it is impacting their team members. Or worse, they know the harmful effect of their communication style and elect not to change. It’s weakens leadership either way.

So how do you change it? First, understanding the four major personality types, and how to recognise them, is vital. Second, you can improve your emotional intelligence through training workshops and online assessment tools. This is a life skill that offers relationship building benefits far outside mere good leadership.

9. Change Agent

“If you always do what you’ve always done, you’ll always get what you’ve always got,” Henry Ford once said. You need to lead change to survive and flourish in an ever increasing competitive business environment. Lead change until it is manifested in your business culture. Raise the bar and expand your business by encouraging a culture of constant improvement and initiative.

Change success is not limited to just setting a new path or creating a new strategy. For instance, you can outline the best development approach to implement. However, it usually fails due to poor implementation. This happens when leaders fail to involve the hearts and minds of the people tasked with carrying out the change.

Resistance is normally an employee’s first reaction to change. The reason is they become comfortable doing assignments they know, the way they execute it. Being comfortable makes them feel secures as they are bosses of their environment. Often they fear change because they think it will harm them or upset their comfort zone. They could also be feeling like they don’t have what it takes to adapt, their work may become more difficult, or they might fail to remain in control of their environment. The last one is significant.

Leaders must eliminate their people’s fears so they can advance from an attitude of change evasion to change acceptance. How can this be accomplished?

First, persuade them that change is needed by conveying to them what is not working and what effect it is spreading and will be spreading across business performance and the business’ competitive position.

Second, make them realise the benefits from the change. These may include acquiring new skills, the reassurance of being a member of a more competitive organisation, or less issues they need to resolve every day.

Third, make them feel confident by showing that support will be available to them throughout the process, that a good change process will be implemented, and that their ideas and effort will have a massive role in the change success.

Once again, encourage a culture of change and constant improvement. Instil in your team to take initiative and think of better ways of executing tasks, daily.

Continue reading the part 4 of this article.

If you are considering outsourcing your bookkeeping, accounting and other business-related processes, but still allow you to make the big decisions and remain in control, contact PJS Accountants. We have has over 30 years experience with local Redlands and Brisbane businesses. Our team is at your disposal, always ready to for your call, to help you to stay in charge of all aspects of your business. Call us for enquiries on how PJS Accountants can partner with you to improve your business.

Leadership: How to Get the Best out of your People – Part 2

Here is the second part of a three-part series on 12 important behaviours to develop to become a better leader. Ineffective leadership is among the top five reasons that hinder business development, because it’s tough to keep good employees when they work under a weak leader. Good employees want to work in an environment with good leadership. Conversely, mediocre employees are content with weak leaders because it is an environment where they can continue to under perform, and display their often stubborn and discouraging attitude across the entire organisation.

4. Setting the Tone

Tone is appropriately defined as the “feel” of the place. It is the first impressions that a customer, supplier or new employee gets upon first entering your place of business. For example, if you want employees that are motivated, energised and passionate, then those are the traits you should present. If you are negative, cranky, sullen, easily stressed or unresponsive, then it is most likely that those traits are displayed elsewhere in the organisation. Employees will get their behavioural cues from the person leading them. When there is a lack of a solid tone-setting leader, other voices become powerful. The underminers, the pot-stirrers and whiners have the chance to spread their message.

Culture is not taught, it is caught, which means your communication style and behaviour will be shown through your business culture. The buzz is created, or not, by the leaders. When it is finally time to again evaluate your business core values, you should clearly determine the expected tone. In one review of a client’s business core values, they identified the following tonal features: respectful, cheerful, constructive, energetic, positive and professional. Business owners want these tonal features implemented throughout their business. It has to start from the leader to be successful.

Tone also significantly affects customer service levels. The top service providers are those companies where tone setting is always implemented by the leader, and this is no fluke. This in turn is shown in how employees treat clients. Employees cannot be expected to present a positive, upbeat client experience, if they are undergoing the reverse in the workplace. Tone also has an effect on employee stress levels. Employee will also be stressed if a leader’s mood is tense, stressed or cranky. In turn, productivity will likely suffer and longevity will diminish.

So, “how is tone implemented?” First, determine the expected tone that all team members will share and embrace. Second, keep the tonal features a top priority to the point that you stop and think before responding to any communication or situation. It will be difficult at the beginning, but will come naturally over time. Third, set the tone daily. It should be done at the beginning of the day by performing a walk-around and devoting a minute to greet your team and being upbeat and optimistic about the coming day. Quality workers want to be headed by a person who radiate upbeat energy, positivity and optimism and shows that there is a solution to every challenge. Consistency is important. Don’t be negative, even if you feel it.

5. Walking the Talk

Quality leaders motivate their members because they involve their emotions. Trust is one of these emotions. It can take a long time to build trust and quick to destroy. Once it is broken it will not be easy to rebuild it. Trust is quickly broken when leaders fail to “practice what they preach.”

Think about a line manager or supervisor who requests team members to be productive and work hard, but takes a long break a couple of time weekly. Or a boss who says that all ideas and opinions are vital, but rejects them immediately. There’s also the General Manager who preaches about spending wisely, but buys pricey office equipment for his use. These may appear insignificant to the would-be leader, but leading by example is equally critical as leading with words, if not more crucial.

This is what makes a footy captain. Their actions on the field inspire their team members. They lead by taking the initiative to do things, especially the hard ones, which allows their business to come out on top. This is the same value parents implement daily to observe effective parenting. Parents rear their children by example because they are aware of their children watching them and listening to them.

Effective leaders use inspiration, trust, vision and excitement to push their team members forward. If your people don’t trust you, then interest will fade and productivity will decline. It will be hard for you to make your vision come true, all because your people don’t trust what you say. It is important for you as a leader to lead by example and walk the talk.

6. Fairness

Let’s be honest, we like to interact with some people more than others because we are more comfortable with them. We often naturally want to make friends with people who have same personality trait as us.

Being a leader in business or in other areas, you must be cautious with this element because since people value fairness, that is, no favouritism towards team members you “like.” Wanting to be treated fairly is a basic need in people. Be respectful and friendly to all your people but be wary of starting friendships with people who report to you. As an example, a National Sales Manager declined a dinner invitation from employees because he wanted to avoid appearing “unfair” in future employee promotion.

Fairness is not the same as, or should not be mistaken with, treating each person fairly. Treating people differently based on, for instance, their performance is acceptable. Think about the gun worker who works harder and longer than other workers and steadily contributes excellent results for the company. That worker will likely get disinterested if the “slacker” is treated the same.

Consistently communicating what success looks like, and conveying the complete background of decisions on such matters as employee promotion, task allocation and reward structures is the key again. It is essential that employees understand the basis of decisions so they feel that they are being treated equally. You can’t go wrong for being completely transparent.

Fairness is a major building block for respect, to the extent where good workers will resign if they feel they are not being treated fairly. The key here again is consistent performance feedback. Regular communication with your people assures them they have a voice and the freedom to talk about any issue relating to fairness within your organisation. At the very least, enforce your business policies equally to all employees.

The third part of this series will tackle “Competence”, “Maturity” and “Change Agent.”

‘Til then, rate yourself using the three leadership behaviours listed above and determine an improvement action for all that you can act on immediately to improve your leadership skill.

If you are considering outsourcing your bookkeeping, accounting and other business-related processes, but still allow you to make the big decisions and remain in control, contact PJS Accountants. We have has over 30 years experience with local Redlands businesses. Our team will be at your disposal, always ready to receive your calls and provide services, to help you to stay in charge of all aspects of your business. Call us for enquiries on how PJS Accountants can partner with you to improve your business.

Leadership: How to Get the Best out of your People – Part 1

You will find literature on leadership in hundreds of books and thousands of articles online, but you have to dissect all the information to enable you to become a good leader and to get the best out of your people.

Leadership is said to be the Achilles heel of many business owners. They don’t fully understand it, they dislike doing it or they are incompetent at it. Therefore, it makes it virtually impossible to create a productive, collaborative work environment, or in truth expand their business. If you are a small business owner, getting leadership training and working hard to improve your leadership skills will enhance your business growth.

There are 12 main leadership criteria that you should always keep in mind and continue to work on, these are necessary, everyday behaviours, not personality characteristics. Every person’s leadership style will be slightly different, influenced by their personality type, and the behaviours enumerated here are independent of your personality type. In general, a good leader is confident, believe that they can be an effective leader and like everything in life, practice and dedication are what it takes to be successful at it.

Leadership Defined.

Firstly, what is leadership? It is defined as the ability to persuade a person to do what you ask, not out of fear but respect for you. It’s establishing a direction, and forming the behaviours of a person or team to achieve desired results or goals. Leaders get results because people admire, believe and are motivated by them.

Releasing the potential in your people that allows them to take ownership and responsibility is one of the main results of effective leadership. This is different from “management” because management entails directing things, not individuals. Managers mainly realise outcomes due to their position of power or authority, but this does not automatically mean managers are effective leaders.

1. Be Accessible or Approachable

What employees desire from their leader is to be valued, connected and respected. Those team members will surely make more effort and remain with their leader longer.

Depending on their degree of talent, employees must be empowered to allow them to work at their best. If you’ve hired people with the right skill sets to carry out a task, micromanaging is not an effective leadership style. They dislike it because it doesn’t permit them to completely utilise their talents and initiative, and it stifles accountability and ownership. Being approachable, supportive and giving people sufficient space but specific guidelines is the key. When approached, give them your complete attention and don’t ignore them. Listen attentively and utilise strong motivational words or succinct phrases of inspiration such as “good job”, “get to it, I believe you”, and “I love your work”.

You have to be careful in managing your responses so you’re not resolving things or seeking solutions for your people. The chances are, if you do this, they will be constantly relying on you instead of working on their own to find solutions, and you will experience an never-ending stream of interruptions. Your ability to listen is vital. Listen and focus on understanding, not responding. Make sure that you don’t sound rushed or annoyed, or reject their concern or idea because that is not being approachable.

Be visible, always be approachable and consistent by learning how to manage your environment. Use strategies such as allocating certain time of the day to perform a walk around to various parts of the business, or setting aside an “open hour” for, say a couple of hours daily. Implement whatever is effective for you and the people who work for you.

2. Communicate Clear Expectations

There are three main reasons why people get upset. These are:

  1. Undelivered communication – there is something important that you want to say but were not able to, or you were howled down;
  2. Thwarted intention – you have set your mind to say something or do something in a particular manner, but were not permitted to;
  3. Unfulfilled expectation – you expect that someone is going to do a task to fulfil the outcome you want, but they fail to do it or do it badly.

The last one is significant because it aims at the core of performance management.

Effective leaders are always firm and calm when conveying clear expectations and limits for their team members to work within. These expectations are mainly centred on duties and tasks to be carried out, quality of goods or services, and culture.

Some team members “get lost” if leaders don’t communicate daily or weekly with them. Don’t expect your people to carry out a task if you don’t communicate your expectations clearly and consistently. You will be less upset or cranky if you are consistent in communicating your expectations.

Using the good old position description as your guide can help you in this situation. However, by modifying the structure to a table system so that every task on the position description has a parallel segment titled “what success looks like.” You can measure this as either qualitative like “all stock lines and patterns easily located within their place” or quantifiable like “20 new business appointments monthly.”

3. Hold Team Members Accountable

Some people can experience difficulty with this area, because of their personality type. For example, a business owner with a “South” personality is people centred, non-assertive, sympathetic and draws back from possible disagreement. This is their normal state. It is neither right nor wrong, it’s just who they are. “Southies” can have a hard time leading their people who have a “North” personality, who are fast-paced, assertive, confident, decisive, impatient and controlling.

If you find yourself in the “South” personality, you probably have to put more effort with this behaviour as it’s not likely to come instinctively to you. But it is essential. Never forget that people are hired to carry out certain responsibilities and be an asset to the business, not just to pick up a salary. It’s your duty as the leader to hold your people responsible for the briefs they are expected to carry out, and for the tasks they’ve been asked to do. If you fail to do so, you are fundamentally conveying that they can do whatever they like, which can result in long term frustration and stress to employers.

Hold your people accountable firmly, calmly and privately. Provide them with regular performance feedback. Utilise the new position description system you have devised to check the outcomes or desired behaviour (what success looks like). Criticising them should also be avoided, but convey your expectations again if necessary, the effects of persistent under performance.

In closing, rate yourself using the three leadership behaviours listed above and determine an improvement action for all that you can act on immediately to improve your leadership skill.

For Part 2, stay tuned for a discussion on the concepts of “setting the tone”, “walking the talk’ and “fairness”.

If you are considering outsourcing your bookkeeping, accounting and other business-related processes, but still allow you to make the big decisions and remain in control, contact PJS Accountants. We have has over 30 years experience with local Redlands businesses. Our team will be at your disposal, always ready to receive your calls and provide services, to help you to stay in charge of all aspects of your business. Call us for enquiries on how PJS Accountants can help you improve your business.

In’s and Out’s of Employee Shared Schemes

Employers dream of high employee productivity and retention, and many employers consider gifting employees a stake in the business to motivate them. But there is more to it than that. Our PJS Accountants Newsletter for April 2015 discusses the new Employee Share Schemes (ESS) reforms that Parliament had recently enacted and how these affect shares or options issued from 1 July 2015.

Some highlights:

  • The purpose of ESS
  • How the new rules apply
  • When a company should consider an ESS
  • How a company can create an ESS

Download the April Newsletter here

There are many things to consider before implementing an employee share scheme. Contact PSJ Accountants to discuss whether an ESS is right for your company and how it should be set up to bring positive results. Dial (07) 3245 5726 or click here.

Should Your Business Bring in Investors?

Many business owners want their vision realised sooner rather than later, and one of the ways they see this happening is raising new capital by taking in new investors. It seems the trendy thing to do. However, the question is: should you or shouldn’t you? Our PJS Accountants Newsletter for March 2015 tries to answer this question to guide you in your business decision.

Here are a few highlights:

  • Investment types
  • Investor types
  • Things to look out for when considering investors to bring in

Also, read up on how the Government’s newly introduced 2% “debt tax” on high income earners could impact you and what both employers and employees should do to deflect the potential drawbacks of this new tax reform.

Download our March Newsletter here:

If you want to talk business strategies with an expert, or simply have a question or need more information, please call PJS Accountants on (07) 3390 3177 or contact us here.

Free Trade with Korea and Japan – What’s next?

There are three issues to address for any business regardless of whether you plan on exporting or not: Is there an opportunity to develop your product overseas? Do the FTAs represent a competitive threat to the industry you are in? And, is there an investment opportunity?

FTAs are generally implemented over time and with that, you can expect opportunistic businesses to focus their products and services in areas where the greatest gains can be made. The benefits will not be immediate for most as Australia is not first on the list of FTAs with Japan and Korea. Also, as you would have seen, the list of ‘winners’ is selected and different terms of trade apply to different sectors and different products. With some, tariffs are removed immediately, others over 15 years.

The first step is to understand that an opportunity exists and what the parameters are. And for some, what the competitive pressures will be. For those interested in expanding overseas, Austrade has a lot of resources about international markets. And of course, we can help you with your strategy, approach and local professional contacts.

Don’t forget that small and medium businesses in Australia have access to an Export Market Development Scheme that reimburses up to 50% of your eligible export promotion expenses above $5,000 as long as you are spending at least $15,000 – and you can receive up to 8 grants.

If you feel like you need support in making your way through the uncertainties and tough times ahead, or simply have a question or want more information, please contact PJS Accountants on (07) 33903177 or click here to contact us.