Firm Journal

25 February 2021

What to do before you buy a business

Buying an existing business can be a great entryway into being a business owner – but it does come with challenges. Following these steps might make it easier for you to make sure that the business you buy is right for you.

1. Understanding if you are ready for business: This doesn’t just involve the financial aspect of things, but also management more generally. Even though there are procedures in place, you still need to develop management skills to oversee those processes. You will need to be disciplined when it comes to day-to-day operations, especially at the start before you become more familiar with everything. Reflect on your current situation and ensure that you can handle the responsibilities that come with owning a business.
2. Decide whether you want to buy an independently owned business or a franchise: You will be able to make a lot more decisions and changes if you buy an independent business – but you will also need to come up with a lot more ideas, and conduct marketing and safety strategies by yourself. Franchises on the other hand provide a lot of support when it comes to routine business processes, but there is a lot more rigidity when it comes to handling the business.
3. Research the business: Look into all the costs involved in buying the business and potential ongoing expenses that you will incur. Make sure you get an insight into the business’ strengths and weaknesses and how it is likely to perform against competitors. 
4. Carry out due diligence: Examine a business in detail before you sign a legally binding document. This includes various financial aspects such as income statements, tax returns, etc. You should also review the legal aspect of the business such as intellectual property, registered patents, etc.
5. Value the business: Calculate the net worth of your business by taking the assets and liabilities into consideration. Also calculate the value of the business based on future earnings – what you can gain from the business. 

18 February 2021

Business management styles you should avoid

The business management style you adopt will depend on the needs of your business, what motivates your employees, and your style of work. Therefore, you do have some flexibility when it comes to the choices you make and how you manage your business. However, there are some which you should always avoid due to the relationship they foster between employers and employees. 

Autocratic

This style of top-down management leaves all decision-making to managers and expects full cooperation from employees. Any sort of criticism from employees will be received with public disapproval. This management style relies on fear and guilt and seeks to micromanage employees rather than allowing flexibility. 

This sort of strategy limits innovation and inhibits employees’ loyalty and personal motivation to progress as employees do not share the company vision. 

Servant

This type of management values people first and tasks second. Overvaluing emotions and wanting to avoid conflict at all costs is detrimental to effectively completing work. 

This sort of strategy places no focus on success and goal completion. It can damage the business if performance is not to par and employees are not encouraged to do their best at the tasks assigned to them. 

These two management strategies sit on opposite ends of the spectrum when it comes to valuing employees. You should regularly make an effort to interact with employees and ask them for suggestions to improve company performance as collaboration can be extremely valuable. However, don’t get carried away in developing personal relationships with employees that can be detrimental to business success. 

15 February 2021

The types of benefits businesses should consider for their employees

n Australia-wide survey asked employees what benefits they would most want from their employers. 

The following are the top 10 benefits:

• Flexible working
• Discounts on electricity, gas and water
• Continued education options
• Petrol discounts
• Free meals
• Supermarket discounts
• Mental wellness initiatives
• Subsidised massages, yoga, and gym memberships
• Special company deals on loans, mortgages, health insurance
• Discounts on mobile phones and data services

Many of these benefits are difficult to arrange and may be costly. However, the top benefit desired by employees is flexible working, which small businesses can also adopt easily. 

Further, due to COVID-19, there are many more resources available to facilitate flexible working and it has become more normalised than ever. 

Offering flexible working will make your workplace more attractive to potential employees and increase the loyalty of current employees as they can work according to times that suit them.

Employers should also consider providing other benefits that are accessible to them – this will improve employee satisfaction and inevitably contribute to productivity in the workplace.

4 February 2021

Types of partnerships

There are three types of partnerships. The partnership type you choose will depend on what best suits the partners involved. 

General Partnership (GP)

All partners involved will be equally responsible for the management of the business. Each member has unlimited liability (personally liable) for the debts and obligations that the business incurs. 

Limited Partnership (LP)

Liability of partners is limited to the amount of money they contributed to the partnership. Limited partners tend to be ‘passive’ investors who don’t play a role in the day to day management of the business. 

Incorporated Limited Partnership (ILP) 

ILP partners have limited liability for the debts of the business. However, there must be at least one partner with unlimited liability. If the business is failing to meet its obligations, then the general partner (or partners) will become personally liable. 

Choose a business by discussing what and how each partner can contribute. Based on this, choose a structure which accommodates these differences. 

28 January 2021

Preserving your customer’s confidentiality

Customers trust businesses with a lot of personal information and it is the business’ responsibility to maintain confidentiality. Businesses should take relevant precautions to ensure that the privacy and personal information of their customers is not compromised. 

• Encrypting the information you receive from customers: There are programs available which encrypt information that customers send to you over the internet. These scramble the data so that it is indecipherable to anyone trying to read the information.
• Create employee log-ins: Create log-ins for each employee for company computers. Screening each employee before they are given access to a log-in for any of the databases is necessary. Creating passwords for protected files that only the relevant employees have access to will add another layer of security.
• Keep your sensitive files in a different location: Avoid keeping particularly sensitive files on the same network as all other files. These files should instead be kept on a separate computer and limited employees should have access to it, if not any.
• Separate groups of customers: Separating databases will prevent loss of all customer data if there is a breach of security. 
• Confidentiality agreements for employees: If the information you store is particularly sensitive or high profile, ask employees to sign confidentiality agreements. This increases their accountability as they run the risk of a lawsuit if they give out confidential information.

21 January 2021

How you can improve your company’s shipping department

Effective shipping is essential in a world where online shopping is so popular. Businesses can suffer if their orders are not being shipped on time or if they are not regularly updating their customers. The following are some ways you can improve shipping.

• Improve your communication with your shipping facility: Communicating with your warehouse and shipping team or company regularly will mean that they are updated with orders and avoid delays. 
• Offer order tracking and estimated delivery times: Letting customers track the progress of their orders and track shipping reassures customers that their package is on the way. Estimate delivery times are particularly useful so that customers can plan ahead for delivery if possible.
• Shipping costs should be built into the budget: Shipping rates will change regularly, but this should not change what your customers have to pay. When creating your budget, allocate more money to shipping than you have calculated to account for potential rate changes.
• Streamline your packaging process and do standard quality checks: Invest time into creating a process which works efficiently for your business. For example, you could find software which communicates with the warehouse and creates documents which make collecting and shipping the packages easier for staff. Quality checks should also be conducted regularly to guarantee that the product the customer will receive is what they were looking at online. 
• Declare items for customs ahead of time: This is especially important if you offer and regularly conduct international shipping. Declaring your package online when the order is placed will help it get through customs faster, and to your customers earlier. 

14 January 2021

Responding to negative feedback

The internet and social media have made it all too easy for customers to relay their feedback to businesses. This can be a great thing because it shows other customers or potential customers why they should choose your business. 

However, this also means that if a customer has a negative experience, then their public feedback has the scope of preventing future customers. Hearing what these reviews have to say to implement change can benefit your business and responding sensitively to the reviews will help with damage control. 

Follow these steps to construct an appropriate response:

• Address the customer by name: Rather than using Sir/Madam, refer to the client by name so that they know their feedback is valued and not simply a scripted and automatic response.
• Sympathise with the customer’s problem: Try to understand what happened from the perspective of the customer to find out why they might have had a bad experience. Apologising will also let the customer know that regardless of whether you agree with their review, you sympathise with their negative experience.
• Let them know you are solving the problem: Acknowledge their problem and let them know that you will be addressing it. This will let future customers know that the negative review may no longer apply so that they are not immediately driven away.

Make sure you do not ignore negative reviews and feedback. Either the review is specific to the customer or they are making a valuable contribution towards how the business can be improved. In order to identify which it is, you should listen to what the customer has to say.

7 January 2021

Collaboration to grow business

Businesses can gain a lot from collaboration, regardless of the industry they are in. The following are some reasons why businesses should care about collaboration.

Get inspired

As a business, it is important to build a routine and figure out day-to-day operations. However, this might mean that you stop trying different techniques which could be more efficient. Collaboration could give you a fresh perspective and encourage new ideas and methods you could apply at the workplace. 

Grow your network

Initiating collaboration will help you meet people who share common interests and goals. Building connections will benefit your business and could result in partnerships down the line. 

Educate yourself

Collaboration opens up opportunities to learn from those outside your immediate circle. This can provide you with valuable information that may be helpful for your business which is not otherwise accessible to you. 

Solve problems

Two heads are better than one. Therefore, with collaboration, you may be able to solve problems that were otherwise difficult to solve. This is because collaboration allows people with different expertise and backgrounds to contribute ideas. 

17 December 2020

The skills necessary to be a business owner

As a business owner, you need to continually update various different skills. Improving these skills will enable you to improve all aspects of business operations. 

Financial skills

Being an owner means being able to manage finances. You should be able to effectively forecast your cash flow, monitor profit and loss, create budgets and make financial decisions which reflect all of these factors. 

Marketing and Sales

You should understand how the promotion of your products and services will take place. Marketing strategies are always changing and updating with technology, so make sure you keep up with these changes to ensure you are increasing your chances of sales.

Communication and negotiation

Building relationships with your suppliers, potential investors, customers and employees is essential. Effective communication and negotiation skills are the cornerstones of success in this area – so make sure you cultivate these skills. 

Leadership, project management and planning

Having an understanding of each aspect of your business will allow you to plan your projects and lead your team members. Keep yourself updated with different management styles, develop policies and procedures that will help your team members and manage resources to achieve your business goals. 

While you may be able to hire advisors, marketing directors, and managers, this does not absolve you from the responsibility of overseeing your business. This is why it is integral to continually update your skills and knowledge so you can understand the decisions being made about your business. 

10 December 2020

Sustainable practices for your business

Adopting sustainable practices for your business is a great way to contribute positively to the environment. These changes won’t significantly impact business operations, but will effectively reduce the carbon footprint of your business.

• Office location: This is relevant if you are moving to a new location or are newly starting your business. Choose a location which is convenient via public transport or accessible to bike lanes. This will help employees avoid driving to work which contributes significantly more to the carbon footprint than public transport.
• Reduce the use of single-use products: There are lots of disposable products such as cups, spoons, and coffee pods regularly used in the office which cause excess waste that can be easily avoided. Instead, opt for reusable items and also put in recycling bins around the office so that if single-use products are used, they can be disposed of appropriately. 
• Reduce water usage: Conserving water usage can be very simple. Install a dishwasher to efficiently wash the reusable utensils you have bought for the office. Ensuring that there are no leaking taps and the office uses low-flow toilets and faucets will also contribute to reducing waste. 
• Recycle electronics: Whenever you are replacing your electronics (such as monitors, smartphones, printers, etc.) to update your technology and find that they are still working well, consider donating them to charities or schools who will be more than willing to put them to good use. If the electronics are not working, then there are technology recycling programs that you can use.
• Sustainable partnerships: Building sustainable partnerships with like-minded businesses benefits the environment and makes it easier for businesses to make more environmentally conscious decisions. 

Making these changes isn’t particularly difficult for businesses but will significantly impact the carbon footprint businesses leave.