Four Secrets to better delegation!

First posted by Sharon Williams on Dynamic Business.

1. SOS: When a ship sends a message to another ship they do so with the use of Morse Code, a series of taps and signals that tap out an entire message. When a ship receives a message it sends the message back in its entirety to the sending ship to ensure the right message has been received. There is simply no place for error. In the same way, when you delegate a task, ask the team member to repeat back to you what the task is. This way you can pick up any miscommunications and ensure that your request has been understood.

2. The “it’s not done till it’s delivered’’ boomerang: When you throw a boomerang it comes back to you and this is what you want with delegated tasks. Ensure your team member understands that the task isn’t complete until a response or feedback is returned to the owner. Often in the office you will hear “yes I did that”, but as I tell my team, ‘’it is not done until it is delivered.”’ Until you, the manager, know that a task is competently done, you have not delegated effectively. Ensure your team knows that a task is not considered done until it is delivered back to you.

3. Beware of black holes: Black holes generate fear. They exist in the universe and swallow up planets, stars etc. Things can be lost in black holes and I tell my team I want no delegation black holes. I want to hear back on progress, all the way back up the management line.

4. Cultivate a culture of care not ‘Who cares?’: Disengaged staff harm business. If staff are not interested in servicing customers beyond expectations and performing duties well, the business will suffer and ultimately so will bottom line. A good starting point is to put the right people in the right jobs, doing what they like. In a competitive marketplace, most people won’t stay if they are not happy. We tend to be good at what we enjoy. Ask how to keep them motivated. Incentives, rewards and a genuine thank you go a long way.
Some common fears when being delegated a task include:

• Criticism or embarrassment if I get some or part of the task wrong, or if I fail to meet expectations
• Exposure of the lack of my skills or current working knowledge
• Being seen as the frequently ‘dumped on’ or most junior employee, and consequently not being taken seriously

Workplace delegation involves three important concepts and practices: responsibility, authority and accountability. Each of these is equally important to both the manager and the relevant team member.
Accountability is the top down as well as bottom up
As manager, when we delegate to our team, we need to be aware that we share our responsibility with them. Individuals and teams should be accountable for their performance, as you are held accountable for yours.
Before you next delegate, prevent an unwanted game of ‘hot potato’ with the following:

• Does this task really need to be delegated?
• Who is the best suited individual or team for the task?
• Does it need a high level of specialisation?
• Explain why the task is being delegated and provide a bigger context?
• Explain why it is important, as understanding and responsibility encourages commitment
• Set expectations for reporting and results
• Agree on and set a deadline.

Once a task has been delegated it is important to maintain contact to:

• Implement controls for reporting and feedback, create a two-way street

• Train your people with the skills necessary to complete the task
• Provide necessary resources for completion of the task.

At the conclusion of a delegated task:

• Feedback on the performance of the team member
• Acknowledge achievement and provide recognition.

The Benefits of Credit Card Funding

By Odysseas Papadimitriou

Reposted from Mashable

Thinking of using your credit card to finance your startup? For some entrepreneurs, it’s the only way to get their new business off the ground. Still, it comes with plenty of risk.

The Benefits of Credit Card Funding

• The ability to retain maximum equity:  People willing to take the risks associated with launching a startup generally believe that they have a potentially very lucrative idea on their hands. The further you can take your company without outside help, the more of your company you can keep for yourself and the less oversight you’ll have to deal with.

• 0% offers:  The ubiquity of low interest rates has made it common practice for banks to offer extremely attractive packages. The ability to escape interest for more than a year on either upcoming purchases or funding expenses already incurred would certainly help your company’s bottom line. The best offer currently available is the No Balance Transfer Fee Slate Card from Chase, which offers 0% on purchases and balance transfers for 15 months and does not charge a balance transfer fee (most cards charge 3%).

• Lack of collateral:  If you go to a bank and ask for a business loan or a business line of credit, they will want collateral.  If you want to bring on investors, they’ll want equity.  Credit cards, on the other hand, are unsecured.

The Cons of Credit Card Funding

• No separation between business and personal:  When you use a credit card to fund a business venture, the distinction between your business and personal finances largely disappears.  This is important for three reasons: 

1. It presents the possibility for personal credit score damage: Startups are inherently risky, and when you use a credit card to fund one, you are gambling with your personal credit score.
2. You are personally at risk for a lawsuit: If credit card debt proves to be the downfall of your company, debt collectors will likely be able to come after both your company and your personal income/assets to recoup what you owe.
3. Credit cards might be unattainable:The fact that business credit card underwriting has more to do with your personal credit standing than that of your business might help you get a better credit card, but it could also have the opposite effect.  Past personal credit problems could keep you from getting a credit card that will truly help you grow your business.

• Potentially low limits: Because credit cards are unsecured, they generally provide lower spending limits than secured alternatives.  Sure, you could get up to tens of thousands of dollars to play with, but there is usually an invisible ceiling around the $50,000 mark.

• Overextension:  The potential to spend more than you can afford to pay back is not a negative unique to credit cards.  Misuse of any small business funding vehicle can put you in the hole, which is why you should handle them with extreme care.

Ultimately, regardless of the funding method you decide upon, simply throwing money at a startup does not guarantee eventual success, Papadimitriou said. “Efficient use of this money as well as a lot of hard work and a little bit of luck are also essential,” he said.

Four tips to keep your team motivated!

   Every small business needs to motivate their employees in order foe the
   team to work more efficiently and produce better results. Using
   monetary and other rewards to improve motivation is a simple idea, but
   doing it fairly and effectively can be challenging.
   Therefore the difficult question is ‘How can you create a compensation
   program that motivates employees, results in a more productive staff
   and is administered fairly and effectively?’ Here are some valuable
   tips.

   







   1. Establish an action plan: Set realistic goals in your action plan.
       You must always reward top performance and must be as clear as
       possible in establishing realistic and fair goals. This is because
       effective communication is the key ingredient for the entire
       program.

    2. Be creative in determining rewards: Before you launch the plan,
       decide the reward. The reward need not always be cash. Recent
       studies have proven that non-cash rewards are more attractive and
       effective than cash rewards. Offering flexible working hours and
       the occasional Friday afternoon off have proven to be great
       rewards. If cash flow is a problem, then why not implement non cash
       rewards to motivate your staff!

    3. Group rewards may be appropriate, but don't undermine individual
       initiative: Most businesses tend to reward the group and limit
       individual rewards as base pay to keep the simplicity of the
       program. However, that may result in lowerindividual initiative and
       innovation. It is important for individual contribution to be
       valued separately to the group when it is outstanding.

    4. Finally, it is important to keep motivation going:Once you have
       achieved success, don't forget to celebrate! Keep thinking of
       creative ways to increase your motivational strategies, including
       making use of retreats, team-building exercises and travel where
       relevant. Always keep in mind that a motivated workforce will be
       happier, more productive and more profitable, and it ensures a fun
       place to work.

Self Managed Superannuation Funds (SMSF) and Lending

Has your SMSF loaned money? If so, make sure the loan terms comply with the law and are in the best interests of your retirement.

The ATO is concerned some trustees are lending money from their fund to people who provide advice or assist in the running of the fund. This may not be in the best interest of your SMSF, and may place your retirement savings at risk.

When a loan agreement is not in the best interest of your SMSF - for example, when you have given discount loan rates or favourable terms - this could have serious consequences. In addition to putting your member's benefits at risk, your SMSF could be found to be non-complying and would, therefore, not qualify for concessional tax rates.

 

Before lending any money, you should consider your fund's investment strategy.

If you still decide to go ahead and lend money from your SMSF, you should:

l  Put in place an appropriate loan agreement and have it signed by all the parties involved

l  Ensure the loan agreement specifies all the terms of the loan, such as

Ø  what the security for the loan is

Ø  the repayment period

Ø  when repayments will be paid

Ø  the amount of the repayments

Ø  the interest rate

l  Ensure the interest and repayments are received by the fund according to the loan agreement

l  Take appropriate action to protect the fund's investment if the loan agreement is not followed

l  Ensure the loan is sensible and does not put the members' benefits at risk

l  Ensure that the conditions of the loan agreement do not provide the borrower with favourable terms.

Remember that you are the one ultimately responsible for running your SMSF, and you must make sure you understand your duties, responsibilities and obligations.

Get ready For the Post-Christmas Cash Flow drought….7 ways to stay ahead!

The global financial crisis is squeezing credit and bank overdrafts and trade payments have been slowing. Therefore, small businesses should support themselves for an economic slowdown in the wake of chaos in international finance markets and a decrease in the value of the Australian dollar. They should be keeping a close watch on cash flow, considering the most appropriate finance options and improving administration processes. Here are some helpful tips to help your business survive and thrive in challenging market conditions!

1.       Get Organised - Keep summaries of all purchase and sales invoices and petty cash dockets. Importantly, keep your bank statements safe as they are a record of your payments and receipts.

2.       Always check the credit status of a new customer - Risks must not be underestimated in the eagerness of taking on new business. Credit checks can be done quickly and are relatively inexpensive.

3.       Chase overdue accounts regularly - take prompt action to follow up overdue accounts by telephone and check customers whether they have received invoices.

4.       Look for more flexible funding options – why not look into Debtor Finance or a line of credit.

5.       Review your suppliers - review the prices of all your suppliers are charging you. Are you too loyal to your suppliers for the wrong reasons? Think of the effect of 10% reduction in cost on your profits!

6.       Dusts off your business plan- try to reconstruct a winning business plan in 2012. Keep an electronic copy to make sure changes are easier to track.

7.       Call in a business consultant – A dedicated financial consultant can help you plan effectively and take advantage of opportunities on the horizon. If you would like more information on Business Consulting contact James Solomons on (02) 98683900 or james@elitefinance.com.au.