Your people are a vital asset, so when you hire a new starter it’s critical that this new employee fits perfectly into your operations, your culture and your values as a company.

But how do you know if a potential hire is a ‘good fit’? Will they drive your business to bigger and better success, or could this new employee become a potential spanner in the works?

Be transparent about your company values

Your company values are central to your mission as a business. So making sure those values are clearly outlined and shared is essential for hiring the right talent. By clearly defining and sharing these fundamental values, you’ll attract candidates who share your ethics, values and core motivations – making them a great potential fit for your company culture.

To do this:

• • Identify your core values and what’s important to you as a business and an owner.
  • Communicate your core values to your employees and all new starters
  • Live your values. Reflect them in the way you do business and how you treat people

Communicate your values, mission and culture in your job advert

When you’re hiring, this process isn’t just about you choosing an employee – it’s also about a worker choosing your company and understanding what you stand for. Make sure your job advert gives the best possible indication of what the job entails, but also what you’re like as a workplace. This is a great way to appeal to like-minded people with the best skills.

When advertising and interviewing:

• • Describe your mission and ask candidates if they are on board with these goals
  • Talk about your culture and ask candidates why this might appeal to them
  • Paint the most honest and appealing picture of your workplace

Ask interview questions that reveal the real candidate

You obviously want to know that a prospective hire has the right mix of experience, knowledge and professional skills. That’s a given. But it’s also sensible to ask questions that reveal more about their underlying values, morality, work ethic and interpersonal skills. This will help you to assess whether the candidate is a good fit for your company culture.

Here are some examples of interview questions that did a little deeper:

• • What do you look for in an ideal employer? And how important are their core values?
  • Tell us about a time your faced conflict in the workplace, and how you resolved it
  • Our culture is front and centre. How do you see yourself fitting into our culture?
  • How do you see your career evolving as a valued team member in our business?

Ask your team for feedback on candidates

You may think a candidate is the bee’s knees, but what do the rest of your team think? Gauging the opinions of your management team and other team members is vitally important. These people will be working directly with this new hire, so they have to get a good vibe from them.

To encourage objective feedback, give your team members a chance to meet the candidate and take their feedback into account when making a hiring decision.

Monitor your new hire and have regular, ongoing performance reviews

Once you’ve made a hiring decision and have a new employee on the team, it’s vital to have regular and ongoing informal catch-ups and more formalised performance reviews. This helps you to measure how your new employee is settling in. It’s also an opportunity to gauge whether there are areas where they may need support from you and the wider team.

Don’t hold back. Be as open and transparent as possible:

• • Ask them how they’re feeling about their role, workload and their performance so far
  • Check their progress against set targets and objectives for their first three months.
  • Find out if they need help, support, further information or more onboarding support.
  • Check if they feel they are fitting into the team, and if they are feeling happy
  • Look out for potential issues that may be causing conflict in the team.

Having the very best talent in your team is central to achieving your goals for the business. So, making sure you hire the right people is actually a business-critical decision to make.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Data analytics is rapidly changing the way businesses are operated.

By making use of your financial and non-financial data, you can quickly start to gain a deeper insight into your operations, performance and financial management.

Data-driven decisions are quickly becoming the norm, for even the smallest business. Data analytics allows helps you spot the patterns. Understand the data trends. And preview the upcoming threats and opportunities for improvement.

Taking a deep dive into your data

Data analytics has become a crucial tool for small business owners that want to stay competitive and grow their operations in the most informed way possible.

By collecting, analyzing and making sense of data, you can gain valuable insights into your performance. This means you can quickly identify the areas that need improvement and the opportunities in the market – while making data-driven decisions about your future.

To deliver the best insights from your data:

• • Calculate which data and metrics are most important to the business – what are the key numbers and drivers of success for your particular business? By analyzing your data, you can determine which data and metrics are most important to your business and track these numbers in your cloud accounting platform or forecasting app.
  • Track KPIs in your software stack – your cloud-accounting platform can provide a dashboard that shows all your performance indicators (KPIs) key in one place. To add to this, you can also integrate with industry specific or tailored reporting apps to create detailed management information and reports. Tracking and reporting on these key numbers helps you analyze your data, create detailed breakdowns of your business information and monitor your sales, business and financial performance in real-time.
  • Look for the patterns and opportunities in the data – what you’re looking for in your data is the trends, patterns and insights that will help you become a better business. Pull out the trends in your customers’ behavior, spot opportunities for growth and optimize your operations, to help push the company towards success. Non-financial data about customer behavior and experiences can also be invaluable. When you know your customers expectations and spending habits, that gives you the foundations to tailor your products and services to their needs. It also helps drive sales, revenues and get a better return on investment (ROI) from your operations.
  • Use AI to analyze your data – with the help of artificial intelligence (AI) and machine-learning applications, you add the ability to sift, filter and compare your data in superhuman ways. AI can process and analyze data at a speed and volume that would be impossible for a human being. Software can measure progress towards goals or detect variances in budget numbers, flagging up these insights as notifications in your dashboards and management information.
  • Keep yourself ahead of the competition – With the right smart data-analysis tools at your fingertips, you’ll make informed decisions that help you stay ahead of your competitors and new entrants. These tools help you identify new market segments, spot opportunities for growth and optimize your operations to stay competitive in the market. In the fast-moving digital age, keeping on top of your data is the fastest way to give your business a much-needed edge.

Talk to us about employing data analytics

Data analytics is an essential tool if you want to stay competitive and grow your operations.

We’ll help you track the right data, produce the most insightful management information and deliver the insights you need. Whether your goal is improved business outcomes, cost savings, increased revenue or improved customer satisfaction, we’ll help you delve through the data and make informed decisions that will drive the future of your business.

The following content was originally published by BOMA. We have updated some of this article for our readers.

To fund the growth of your business, you’ll almost certainly need to take out a business loan at some point.

But many lenders will ask you to provide a personal guarantee against this business loan – and there’s a risk element to consider when taking out finance.

So, what does offering a personal guarantee on a secured loan actually entail? And what are the principal risks of becoming a guarantor?

Understanding the key risks of a personal guarantee

When you agree to offer a personal guarantee, you’re essentially promising to repay the loan if the business can’t make the payments – and to do this out of your own money or assets. This might seem like a small step to take, but giving a personal guarantee can have serious consequences if your business is unable to repay the loan.

Here are some of the risks of giving a personal guarantee:

• • Personal liability – by signing a personal guarantee for the loan, you’re putting your own personal assets on the line. If your business defaults on the loan, the lender can come after your personal assets to collect the debt. This means your home, car, savings, and other personal assets are all fair game and could be at risk.
  • Negative impact on credit score – if the lender comes after your personal assets, this can have a negative impact on your personal credit score. As a result, it could become more difficult for you to obtain credit in the future. Lenders will see you as a higher risk, which could affect your ability to borrow, take out a mortgage or find personal finance.
  • Strained relationships – when you’re asked to give a personal guarantee by a business partner or family member, this can put a strain on your business and personal relationships. Having to repay the loan from your own assets can cause resentment, mistrust and ongoing problems between you and your partner, or family member.
  • Difficulty obtaining credit for your business – giving a personal guarantee for a loan may get the business out of a short-term financial hole. But when the business relies on personal loans from directors, this can impact your ability to obtain credit for your business in the future. Lenders see this as a risk and may be less likely to extend credit.
  • Risk of bankruptcy – if the business can’t repay the loan and the lender comes after your personal assets, this has the potential to push you into personal bankruptcy. Becoming bankrupt can have serious long-term consequences, including difficulty obtaining credit, loss of assets and damage to your credit score.

Talk to us about your business finance plans 

If you’re planning on taking out a business loan, it’s important to consider the possible risks. Make sure you understand the risks involved and have a plan in place for repaying the loan if the worst happens and the business can’t meet the repayments.

We can help you work out a strategy for your business finance plans. We can also connect you with a suitable independent financial adviser or legal expert to explore the risk threats.

The following content was originally published by BOMA. We have updated some of this article for our readers.

When you’re a small business owner, sole trader or freelancer, asking for payment on overdue invoices can be a delicate matter.

Without an accounts person or department, sometimes you’re trying to secure new work and chase invoices from the same person. That can be an awkward tightrope to walk.

Here are five tips for chasing payments while maintaining customer loyalty:

1. Automate reminders – Set friendly payment reminders that go out automatically – they tell clients they’re missed a payment without making it personal. It’s like your invoicing platform is giving them a nudge, rather than you doing it yourself. You can sign it off with just your business name, rather than your own.
2. Find out who’s behind the payments – Is there another person at the business who’s in charge of accounts or payments? Ideally, you want to be selling your services to your usual contact and chasing someone else to pay your invoices.
3. Enlist help from a friend – If you have a friend who also has a small business, become each other’s accounts support. Set your friend up with an ‘accounts@yourwebsite.com’ address and they can send out email reminders and follow-ups to your clients, or call them about the invoice. Maybe you can do the same for them.
4. Set expectations when you negotiate the job – Firm and clear payment terms make it easier to get paid faster and keep that cash flowing. Set out your terms up front – it’s much easier to talk about your payment expectations when you organize the job, rather than once the invoice has been sent. For persistently slow payers, consider offering an early payment discount or ask for more money upfront for the next job.
5. Be nice, but firm – There’s no need to be rude or aggressive to your clients when chasing payment; you want to maintain a positive relationship. However, at some point you need to cut off their credit. Often saying ‘I’m very happy to do that for you, just waiting on payment of that last invoice’ will give them the impetus they need to pay you. But if they persistently don’t pay, no matter how much you like the client, you’re not providing a free service! Stop working for the client and chase those outstanding invoices more assertively.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Cashflow and profit are two of the most important financial metrics for any business.

But while they’re both related to the financial performance of a company, they measure different things.

Knowing the difference – and how cash and profit contribute to your success story – is a vital skill if you want your business to have the best possible financial health.

The difference between cashflow and profit

Understanding the technicalities of financial reporting can be daunting as a new entrepreneur. And even seasoned business owners can find it hard work resonating with the various financial reports that today’s cloud accounting software can produce.

But getting your head around the differences between cashflow and profit can be a gamechanger – especially when it comes to managing your working capital.

So, let’s look at the differences:

• • Profit refers to the amount of money your business has left after subtracting all expenses from your revenue. It’s a measure of your company’s financial success over a given period, whether that’s a month, quarter or a full 12-months.
  • Cashflow is a process that measures the inflow and outflow of cash in your business. This includes both your operating and investment activities. Maintaining a ‘positive cashflow position’ is vital for meeting your financial obligations.

Why is it important to make a profit?

Profit is a measure of the financial success of your business. It’s also a key factor in your growth as an organization. Healthy profits mean you have the surplus cash needed to reinvest in the business, and to pay yourself and your fellow shareholders healthy dividends.

However, you can only make a profit if you have enough liquid cash to keep operating – and this is where the importance of cashflow becomes paramount.

Why is positive cashflow so essential?

Poor cashflow is one of the biggest factors in most business failures. As the lifeblood of the company, cash is an essential ingredient in the financial mix. To operate effectively, you need more cash inflows than cash outflows. If not, you don’t have the cash to purchase raw materials, pay your workforce or buy the services that keep you operating.

Positive cashflow is all about ensuring that there’s more cash coming in than expenses going out. In this harmonious place of being in a ‘positive cashflow position’ you have liquid cash available exactly when you need it – and that’s vital for keeping the lights on in the business.

Talk to us about getting in control of your cashflow

Profit is an excellent measure of your financial success. But positive cashflow is the electricity that powers your business and keeps the wheels turning day in, day out.

Positive cashflow helps you:

• • Stay operational, with enough cash in the kitty
  • Meet your financial obligations as a company
  • Invest in your expansion, growth and scale-up strategy
  • Sustain your long-term success as an ambitious business.

Even a profitable business can face liquidity issues, so getting in control of your cashflow really should be top of your financial to-do list this year.

Get in touch to talk about your cashflow position.

The following content was originally published by BOMA. We have updated some of this article for our readers.