Monday, January 31, 2011

Don't make these HR mistakes!

The following HR practices in a small business should be guarded against. Never forget that all people want to feel valued, and part of achieving this, is sharing information. Company values, vision, mission statement, worker performance, company performance. All of this information is of interest to employees. You don't have to give detail, but rather share information that is pertinent to the worker and his level of involvement with the information being presented. It's important that this information is regularly updated.

Lack of policies and procedures.
need to feel they are being treated fairly and
consistently.
Employees
Misunderstanding probationary
periods.
fail it should not be a surprise.
If an employee is going to
No job description.
expectation of what they should be doing.
People need a clear
No contracts.
receive written terms and conditions of
employment.
Legally, all employees must
No performance feedback.
employees need to know the goals of
the business, your expectations for their
performance, and if they are meeting them.
Motivated
Avoiding conflict.
become a major issue later.
A small problem could
Using contract workers to circumvent
legislation.
employee has a reasonable expectation that
his/her contract will be renewed.
This may result in problems if an
Management attitude.
same team, working for the good of the
business.
You are all on the
Lack of communication.
your employees and build trust.
Share ideas, inform
High expectations.
doing things perfectly the first time.
People don’t learn by
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Thursday, January 20, 2011

Do we have opportunity - food for thought.

Every Friday I'll be adding a little inspirational article, Feel free to print them out, or even copy any excerpts that you find motivational. This week it's about oppertunities and what we do with them.
No man is kept poor because opportunity has been taken away
from him; because other people have monopolized the wealth,
and have put a fence around it. You may be shut off from
engaging in business in certain lines, but there are other
channels open to you. Probably it would be hard for you to
get control of any of the great railroad systems; that field
is pretty well monopolized. But the electric railway
business is still in its infancy, and offers plenty of scope
for enterprise; and it will be but a very few years until
traffic and transportation through the air will become a
great industry, and in all its branches will give employment
to hundreds of thousands, and perhaps to millions, of
people. Why not turn your attention to the development of
aerial transportation, instead of competing with J.J. Hill
and others for a chance in the steam railway world?
It is quite true that if you are a workman in the employ of
the steel trust you have very little chance of becoming the
owner of the plant in which you work; but it is also true
that if you will commence to act in a Certain Way, you can
soon leave the employ of the steel trust; you can buy a farm
of from ten to forty acres, and engage in business as a
producer of foodstuffs. There is great opportunity at this
time for men who will live upon small tracts of land and
cultivate the same intensively; such men will certainly get
rich. You may say that it is impossible for you to get the
land, but I am going to prove to you that it is not
impossible, and that you can certainly get a farm if you
will go to work in a Certain Way.
At different periods the tide of opportunity sets in
different directions, according to the needs of the whole,
and the particular stage of social evolution which has been
reached. At present, in America, it is setting toward
agriculture and the allied industries and professions. To-
day, opportunity is open before the farmer in his line more
than before the factory worker in his line. It is open
before the business man who supplies the farmer more than
before the one who supplies the factory worker; and before
the professional man who waits upon the farmer more than
before the one who serves the working class.
There is abundance of opportunity for the man who will go
with the tide, instead of trying to swim against it.
So the factory workers, either as individuals or as a class,
are not deprived of opportunity. The workers are not being
"kept down" by their masters; they are not being "ground" by
the trusts and combinations of capital. As a class, they are
where they are because they do not do things in a Certain
Way. If the workers of America chose to do so, they could
follow the example of their brothers in Belgium and other
countries, and establish great department stores and co-
operative industries; they could elect men of their own
class to office, and pass laws favoring the development of
such co-operative industries; and in a few years they could
take peaceable possession of the industrial field.
The working class may become the master class whenever they
will begin to do things in a Certain Way; the law of wealth
is the same for them as it is for all others. This they must
learn; and they will remain where they are as long as they
continue to do as they do. The individual worker, however,
is not held down by the ignorance or the mental slothfulness
of his class; he can follow the tide of opportunity to
riches, and this book will tell him how.
No one is kept in poverty by a shortness in the supply of
riches; there is more than enough for all. A palace as large
as the capitol at Washington might be built for every family
on earth from the building material in the United States
alone; and under intensive cultivation, this country would
produce wool, cotton, linen, and silk enough to clothe each
person in the world finer than Solomon was arrayed in all
his glory; together with food enough to feed them all
luxuriously.
The visible supply is practically inexhaustible; and the
invisible supply really IS inexhaustible.
Everything you see on earth is made from one original
substance, out of which all things proceed.
New Forms are constantly being made, and older ones are
dissolving; but all are shapes assumed by One Thing. There
is no limit to the supply of Formless Stuff, or Original
Substance. The universe is made out of it; but it was not
all used in making the universe. The spaces in, through, and
between the forms of the visible universe are permeated and
filled with the Original Substance; with the Formless Stuff;
with the raw material of all things. Ten thousand times as
much as has been made might still be made, and even then we
should not have exhausted the supply of universal raw
material.
No man, therefore, is poor because nature is poor, or
because there is not enough to go around.
Nature is an inexhaustible storehouse of riches; the supply
will never run short. Original Substance is alive with
creative energy, and is constantly producing more forms.
When the supply of building material is exhausted, more will
be produced; when the soil is exhausted so that foodstuffs
and materials for clothing will no longer grow upon it, it
will be renewed or more soil will be made. When all the gold
and silver has been dug from the earth, if man is still in
such a stage of social development that he needs gold and
silver, more will produced from the Formless. The Formless
Stuff responds to the needs of man; it will not let him be
without any good thing.
This is true of man collectively; the race as a whole is
always abundantly rich, and if individuals are poor, it is
because they do not follow the Certain Way of doing things
which makes the individual man rich.
The Formless Stuff is intelligent; it is stuff which thinks.
It is alive, and is always impelled toward more life.
It is the natural and inherent impulse of life to seek to
live more; it is the nature of intelligence to enlarge
itself, and of consciousness to seek to extend its
boundaries and find fuller expression. The universe of forms
has been made by Formless Living Substance, throwing itself
into form in order to express itself more fully.
The universe is a great Living Presence, always moving
inherently toward more life and fuller functioning.
Nature is formed for the advancement of life; its impelling
motive is the increase of life. For this cause, everything
which can possibly minister to life is bountifully provided;
there can be no lack unless God is to contradict himself and
nullify his own works.
You are not kept poor by lack in the supply of riches; it is
a fact which I shall demonstrate a little farther on that
even the resources of the Formless Supply are at the command
of the man or woman will act and think in a Certain Way.
This is an article by Wallace D. Wattles
This is so true in life or business. It's about your mindset. Keep positive thoughts, mix with positive people, never think you know it all. Listen more than you tal .. and you will grow. Your business will grow.
Till next time .. The business coach
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Tuesday, January 18, 2011

Buying an operational small business

At some stage in any business' life finance will be required. Whether it's for start-up, bridging, asset aquisition or expansion. But Qualifying for a small business acquisition loan  is ussually even more nerve wracking.

If the business being sold is very profitable, the selling price will likely reflect a significant amount of goodwill which is ussually difficult to finance.

If the business being sold is not making money, lenders can be difficult to find, even if the underlying assets being acquired are worth substantially more than the purchase price.

Although specifics vary  here are some of the major challenges you'll typically have to overcome to secure a small business acquisition loan.

Financing Goodwill

The definition of goodwill is the sale price minus the resale or liquidation value of business assets after any debts owing on the assets are paid off. It represents the future profit the business is expected to generate beyond the current value of the assets.

Most lenders have no interest in financing goodwill.

This effectively increases the amount of the down payment required to complete the sale and/or the acquisition of some financing from the vendor in the form of a vendor loan.

Vendor support and Vendor loans are a very common elements in the sale of a small business.

If they are not initially present in the conditions of sale, you may want to ask the vendor if they would consider providing support and financing.

There are some excellent reasons why asking the question could be well worth your time.

In order to receive the maximum possible sale price, which likely involves some amount of goodwill, the vendor will agree to finance part of the sale by allowing the buyer to pay a portion of the sale price over a defined period of time within a structured payment schedule.

The vendor may also offer transition assistance for a period of time to make sure the transition period is seamless.

The combination of support and financing by the vendor creates a positive vested interest whereby it is in the vendor's best interest to help the buyer successfully transition all aspects of ownership and operations. 

Failure to do so could result in the vendor not getting all the proceeds of sale in the future in the event the business were to suffer or fail under new ownership.

This is usually a very appealing aspect to potential lenders as the risk of loss due to transition is greatly reduced.

This speaks directly to the next financing challenge.

Business Transition Risk

Will the new owner be able to run the business as well as the previous owner?  Will the customers still do business with the new owner? Did the previous owner possess a specific skill set that will be difficult to replicate or replace? Will the key employees remain with the company after the sale?

A lender must be confident that the business can successfully continue at no worse than the current level of performance. There usually needs to be a buffer built into the financial projections for changeover lags that can occur.

At the same time, many buyers will purchase a business because they believe there is substantial growth available which they think they can take advantage of.

The key is convincing the lender of the growth potential and your ability to achieve superior results.

Market Risk

Is the business in a growing, mature, or declining market segment?  How does the business fit into the competitive dynamics of the market and will a change in control strengthen or weaken its competitive position?

A lender needs to be confident that the business can be successful for at least the period the business acquisition loan will be outstanding.

This is important for two reasons.  First, a sustained cash flow will obviously allow a smoother process of repayment.  Second, a strong going concern business has a higher probability of resale.

If an unforeseen event causes the owner to no longer be able to carry on the business, the lender will have confidence that the business can still generate enough profit from resale to retire the outstanding debt.

Localized markets are much easier for a lender or investor to assess than a business selling to a broader geographic reach.  Area based lenders may also have some working knowledge of the particular business and how prominent it is in the local market.

Personal Net Worth

Most business acquisition loans require the buyer to be able to invest at least a third of the total purchase price in cash with a remaining tangible net worth at least equal to the remaining value of the loan.

Statistics show that over leveraged companies are more prone to suffer financial duress and default on their business acquisition loan commitments.

The larger the amount of the business acquisition loan required, the more likely the probability of default.

Remember anyone investing in your business will want to feel sure of the viability of the business, to ensure your ability to repay the loan.

Crucial to the viability of the business is the ability of the owner to manage all the resources to achieve success. It's highly unlikely that any individual has all the skills.
That's where the business coach can help! With a tried and tested base of skills and resources I can work with you in your business or present you with a workshop to hone your skills.

Till the next time .....
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Sunday, January 16, 2011

The business coach works with you from planning to growing your business

Welcome to the first post of the business coach's site
I offer business courses that cover; identifying personal requirements, business plans, where to find funding as well as daily running of your business. I also assist in facilitating specialised services - HR/IR practioners; Legal services; Quality systems and problem resolution; accounting. These service providers specialise in SMME's and their requirements, and offer customised solutions.

My mission is to work with you in your business - so you can choose the level of involvement you require as well as the amount you can afford. My services range from full training workshops, to subscription online advice, onsite consultation and problem resolution. I can also take your business online and optimise marketing in this medium.
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