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James Bennett

Creating Innovation 2

Creating Innovation 2 150 150 Cypher

Creating Innovation 2

Mention an innovative business and most people will point to a tech business; a platform, a SAAS product or a hardware producer like Apple or Dell. But for me innovation doesn’t just mean being the next Microsoft, there are a number of ways completely non-technical businesses can innovate.

The word ‘Innovation’ comes from the Latin root word innovare, which means ‘to renew or change’ and not, as is commonly assumed, the introduction of something new.

My innovation story is about buying a new car. I traded mine in during the summer because the price for my second hand car was phenomenal, largely caused by a lack of super conductor chips that were all destroyed in a factory fire in Germany. All the top brands were affected; BMW, Mercedes, Jaguar and Landover and it created a waiting list of around half a year for a new car

Buying an electric car
As any good accountant will tell you – now is the time to buy an electric car, so my wife and I wanted to look at a Polestar, which is a Swedish electric car manufacturer. The sales of electric and hybrid cars have never been greater, but have you ever seen a Polestar dealership? No, because they don’t have them. These guys have come from nowhere, engineered a car from scratch and as well as the innovative technology they use under the bonnet, the way they sell those cars is also completely different.

We arranged to see a vehicle at our local ‘centre’ – not a dealership, more like an art gallery- we booked in and were given a car and a route to follow via GPS and off we went, just the two of us. They made us aware that we wouldn’t be able to buy the car on the day, because they don’t employ sales people at the ‘centre’.

During your tour and test drive Polestar don’t talk price and they don’t talk finance deals; you can ask as many question as you want but there is no haggling. The next day you get a text which basically says if you are interested press 1, and if not thanks all the same.

The cars are a very impressive in their own right, but my point is they’ve innovated the whole sales process; my wife who does not like car dealerships, because she doesn’t like being sold to, could spend the whole morning touching all the fabric, getting in and out of the cars, all with no pressure, it’s a completely different way and that was the perfect buying experience from us.

I think there is a scale that innovation can be measured on from incremental right up to disruptive where a process – or in my example a customer journey has been turned on its head.

They are also innovative in their approach to the competition – I did a blog about Competing v Completing earlier in the year and as far as Polestar are concerned as long as the consumer chooses an electric car versus a petrol and diesel one, whether it is theirs or a Tesla or another brand, they don’t care. They want to grow the electric brand as a whole, they’re conscious that they’re innovating alongside Tesla or more traditional car manufacturers but as long as you’re in one of their ecosystems, long-term, that’s still a result for their business.

Top 10 most innovative companies in the UK
To help my discussion with , I Googled the top 10 most innovative companies in the UK. Some of the results might surprise you.

  1. Dyson – no great surprise with an investment of around $2m a week in R&D activities
  2. Shazam –an app that can identify music, movies, ads and TV shows, based on a short sample heard by your smart device
  3. Mind Candy-created an online game for children called Moshi Monster which is like a virtual Tamagotchi for the digital age. Your kids will be all over it.
  4. Arm Holdings, – who create semiconductors and chips, for smartphones and devices
  5. Spotify- the world’s largest music streaming service provider
  6. Burberry- the retail giant founded in the mid-19th Century has taken onmichannel retail to a new level. In their flagship Regent St store you can have a coat tailored to your fit and in real time see what it would look like if you took the hem up three inches or shortened the sleeves. They have brought the buying experience into the modern age.
  7. Heatherwick studio. Is a collection of designers and architects who in their own words are ‘dedicated to making the physical world around us better for everyone’.
  8. Raspberry PI has created a credit card-sized computer which you buy and then they challenge you to turn it into something else. I have one that is emulating an old Nintendo gaming system. You can turn them into security cameras, servers, phones, whatever. It’s an amazing bit of kit but in addition for every one bought they give one to the schools for kids to learn to code and build computers.
  9. Berg, were a creative design consultancy that wrapped up a few years ago.
  10. Marks and Spencer – who make the list because of their drive to make their stores greener. They’ve reduced CO2 by 23% in the last 15 years; they now operate at zero waste and have embraced eComm which has resulted in web and mobile sales going up 17% on.

Some of the businesses on this list are very new, some like Burberry and Marks and Spencer’s are very old, which proves that innovation is not just a young businesses game. But for me, while market disruption can come from start-ups and new businesses, for an entire industry to shift to something new, it needs one of the big players, the established brands to pivot to show the world what’s possible.

We have seen the way that streaming services like Netflix and Amazon have come along and stolen market share from traditional TV services and cinema to some extent, but now Disney – probably one of the oldest media companies in the world has launched Disney+ into the mix, now everyone is jumping on this streaming bandwagon. HBO are now doing it, Sky has a streaming service too.

If Mark’s and Spencer’s get their e-commerce site absolutely nailed and working, there’s no excuse for the other established high street retailers not to be able to move along with those times. Like Polestar, M&S has re-engineered the customer experience.

The remarkable tablet
I wanted to finish this blog talking about one of the best named products on the market. It has no internet, doesn’t send or receive text messages; it is basically a tool to write notes on. For me it’s replaced a thousand Xero branded notebooks and has reinvented writing on paper- which, incidentally is one of their core marketing messages. It allows me to complete a simple process of writing notes and then, once I have finished, by pushing a button it turns my notes into text and emails them to our systems so that everyone in the team has got a record of my notes.

It means that  whenever I meet a client or pick up the phone to someone, I push a button and I’ve got their notes in front of me; I don’t have to go hunting through the last book to find the last time I spoke to them and that is a complete game changer in my world.

By the time I’d had it six months –despite feeling it was a finished product- it had moved on three or four times. Now whatever you write can appear on a second unit in real time, which is mind-boggling. The point is though, they could have waited to release it when it was perfect, which might have delayed its launch but instead they put it out there and continued to innovate.

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New editions of the Mind Your Business Podcast appear every Friday. Subscribe on Apple Podcasts, Spotify, Google Podcasts or your choice of Pod provider to have it delivered straight to your device.

Business Strategy

Business Strategy 150 150 Cypher

Business Strategy

As we approach the end of 2021 – yes it has, hasn’t it – lots of business owners will be thinking about their plans for 2022.

I did a blog on business planning previously and for me, you can’t really write a business plan unless you’ve got some kind of strategy that underpins it. If a business strategy isn’t written down and no-one knows about it, is it really a strategy?

A definition of strategy
The term strategy throws up different connotations. Google says strategy is ‘a plan of action, designed to achieve a long term or overall aim,’ or the ‘art of planning and directing overall military operations’, so strategy in a specific context. Both definitions have a long-term feel about them and I think that’s where some of the tension comes, as more and more businesses look to become more agile, reactive and focus more on the short-term.

Mind you, if someone asked me about the Cypher strategy, I am not sure I have a coherent answer. We knew what we wanted the firm to be; we knew we wanted to be different because we saw an opportunity to do so and now a lot of the industry is moving into the space that we’re in and we are working hard to keep that first mover advantage.

In his capacity as a business coach Alan suggested that our vision is to stay two steps ahead of the mainstream in our industry; that is our strategic intent and the set of actions that underpin this will become our strategy.

If the first definitions of a strategy lend themselves to a big old plan that achieves something spectacular in the long run, then perhaps a more useful way for businesses today to consider a strategy is to think about, for example, how to create the best customer care on the high street, or how to gain 200 clients within six months and to then create a set of actions to achieve these goals. This feels like more nimble, agile and quite frankly more doable. Being achievable is surely a key element of any strategy after all!

Another definition of a strategy then is ‘a set of actions that win’. So think of two or three spaces you want to win in and create a set of actions to get there. In this regard, I am comfortable considering a strategy as the culmination of four 90-day plans.

90 – Day planning
Looking too far ahead loses helpfulness. The reason we are all told to create 90-day plans is that the human brain is simply not wired to fixate on a goal five years out. You need to be succinct in your strategy so that it’s easier for you as the business owner or the senior managers or whomever to digest and action it.

When a strategy is broken down into smaller chunks, it also offers you more opportunities to see wins, to see progress towards bigger goals. You tick a box; get a pat on the back and then move on to the next  90-day chunk.

If you are ready to take control of 2022, come to a Growth Club event on Wednesday 12th January. In conjunction with action Coach Newbury, we will look at alignment for the whole year and you will leave with clear goals and a 90 day plan in place.

Apple’s Agenda for 2011
Earlier this year Apple were engaged in a major legal battle with Epic Games, about the distribution of funds from games sold through the app store. During the trial, internal emails from Apple’s late CEO, Steve Jobs were released including an agenda for a 2010 meeting of the 100 most influential Apple employees. At the time Apple were in the middle of a massive pivot; the I-phone and I-pad were in their infancy, Apple was engaged in another war with Google and preparing the ground work for their new headquarters in California. There were six points on this agenda.

The first two points were internal facing questions; who are we and what do we do? His point was that the business then was not what it was about to be and that in five years’ time it would become something else again.

Next was a point about the products and positioning and moving into the post PC era, stealing a great chunk of market share from laptops by encouraging consumers to do IT things in the palm of their hands. The fourth bullet was about competitors called ‘the holy war with Google’, who themselves were growing an empire away from the search engine into hardware and had started to overlap with Apple products.

The fifth point was around the wider tech landscape, suggesting that 2011 would be the year of the cloud as businesses and individuals learned to operate within the cloud environment that is now standard. The sixth and final point was to focus on Apple’s subsequent move to a $5bn, 176 acre site as its new headquarters.

In the five years after this agenda, Apple was probably the most successful business on the planet, but you could take this agenda and apply it almost any business and it would create a very decent strategic set of action points.

Multiple strategies
Let’s be honest, how many businesses or business owners create a marketing strategy and a recruitment strategy and a procurement strategy and a technology strategy? How many can compartmentalise these distinct functions and how many of us let them merge into one? Given the impact optimising any one of these functions can have on a business overall, there’s definitely value in picking them apart and then bringing them back together under one overarching strategy.

Getting clarity and identifying spaces you want your business to win in – and what winning looks like – whether that be attracting the best people or offering the client experience, creating a healthier cash flow; the big rocks that Stephen Covey would say make the biggest positive impact on your company- identify those and create the set of actions that will drive those outcomes.

What do you want to achieve
Lastly, as a business owner, before you build your strategy, it’s important that you ask yourself what you want to achieve. If you build a strategy around confusion, you’re going to create more confusion, if you build a strategy around clarity, you’re going to get clarity. And achievement – or winning – isn’t the same for everyone.

Strategy is about setting objectives to be achieved over a set of 90-day periods that lead to wider goals. Strategies can only help you win if you know what winning looks like to you.

New Year, new idea
There is never a bad time, but the next few weeks might provide the time and space for business owners to become galvanized and enthused about the word strategy again. Space to think about will lead to strategic intent; your vision or mission, which gives you a purpose. Clarity of purpose, using Steve Jobs’ six agenda items, answers the big questions –the big rocks – which will create a strategic set of actions.

Identifying who you are and what you do, who the big competitor is – as well as recognising that it may not be the obvious choice, but someone that offers your customer the same result but with a completely different product or service- is another big piece of the puzzle along with the landscape of your industry and big plans you may have on the horizon.

Find out more

New editions of the Mind Your Business Podcast appear every Friday. Subscribe on Apple Podcasts, Spotify, Google Podcasts or your choice of Pod provider to have it delivered straight to your device.

Technology in Business

Technology in Business 150 150 Cypher

Technology in Business

I was listening to Jack FM – a number of our clients advertise with the station – and an advert came on for the Oxford Institute for Ethical AI. Firstly, I’m really pleased that there is an Institute for ethical AI, because that feels like it’s going to keep the terminators at bay, but secondly, why are they advertising? Is there so much AI around now that people need to know there is a body like this to keep the ethics of the industry in check?

As usual, it got Alan and I talking!

Covid-19 has become the accelerator for one of the greatest workplace transformations in generations. How we work, exercise, shop, learn and communicate has changed, possibly forever.  But one of the constants of the last two years is the role that digital technology- and the wider tech sector-has played for businesses. From enabling the transition to remote working, to helping small businesses pivot and reach new customers, technology has become integral to almost every business on the planet. It certainly is for mine.

The acceleration over the last two years have been massive but go back even just 10 years and pick any business in any industry and look at what software, systems and technology they were using and see just how much it has changed. It’s mad to think that we now have more power in our pocket on an iPhone than they had when they put men on the moon in the sixties.

Technology as a disrupter
We support a number of Estate Agents and the disruption in the property market caused by the launch of on-line estate agencies like Purple Bricks or Sarah Beeny’s Tepilo has been massive. They have completely flattened the market. From traditional questions about how a property would be marketed; would there be a leaflet drop, would there be a photo in the centre of the shop window; where was the shop window and did it have high footfall? Nowadays it’s far more straightforward; everyone uses Right Move or Zoopla and – as long as they are prepared to pay the prices -90% of Estate Agents use these same tech platforms and even post almost exactly the same listing details. It means it’s much harder to stand out.

What’s interesting though is that the on-line agency hasn’t completely removed the need for humans – far from it. People want to see the listing on Right Move, for sure, but, for what is usually the largest purchase in someone’s life, they want the comfort blanket of dealing with a person.

Integrated Systems
When we set up Cypher, we knew that we wanted to base the business around Xero so we tested different software systems that support the product that we deliver; the accounts, the tax, the VAT returns and this is now all driven by Xero directly or via systems that integrate to Xero.

Our mantra is that we never enter data more than once and having chosen Xero we then spent time understanding what we could do to speed up the non-product side of our business.  We now have four distinct platforms; a CRM system, a bookkeeping system, a proposal system and a direct debit system that all talk to each other, which means that when a new client signs a proposal it creates jobs in our CRM system, which creates tasks in our diaries, clients are invited into our portal with a nice email that also requests anti money laundering information and then triggers the direct debit mandate.

The key to all of this is integration. Systems working in isolation will – at some point- hold you back.

The Rise of Big Data
In a world of big data it’s quite scary how much information is available on every individual and business in the public domain if you know where to look. We work with a company that scrapes about 300 bits of data from prospects, while they are filling in a contact form, to determine whether they are a good match for their product or not. They only want to work with businesses of a certain size, with a certain amount of web traffic, that have a top brand position and operate in certain countries. If a prospect answers yes to these criteria they throw the kitchen sink at you – if you’re a no for whatever reason they put you down a different path.

Businesses that can leverage data about their customers or potential clients will be part of the next big advance.

Instant reporting
We work with a chain of cafes and via an I-phone the business owner has instant access to up-to-the-minute daily sales information. They know who’s in their shop and what the spend is across sites. They can be anywhere in the world and as long as they’ve got internet connection they’ve got that visibility. Technology has flattened the playing surface to some extent and now a small independent can compete with a global retailer.

Risk v Reward
Of course, a reliance on tech can cause greater risks – ones we didn’t see 10 years ago. If say Boots had an issue with a server, it could potentially knock out a number of connected sites in a way that years ago wouldn’t have been possible. When I was at Halfords in my youth, if the card machines went down, no one batted an eye lid because customers carried cash and kept on spending. Nowadays, I don’t even take my wallet out; generally I take my phone and use Apple pay; that is how much the world has fundamentally shifted. But it means if your till system, or your card machines go down, you are in trouble.

Tech as a threat or opportunity
As business owners or entrepreneurs there is no doubt we need to get more tech savvy. Do we see advances in technology as a threat or an opportunity? What elements of any business could be improved significantly by technology? Technology has been a great leveller for business; anyone with a laptop and a Wi-Fi connection can now compete with huge multi-national businesses. Platforms like Amazon, E-bay, Etsy and Not on the High Street have offered every type of business, from garden fencing to a side hustle an opportunity to go global. Technology is growing – humans need to understand it and take advantage of it.

The Human Element
The genie is definitely out of the bottle; technology gives new businesses with new offerings a  fresh opportunity to consider which technology platform and what technology advantages they want to bring in with their new ideas.

Tech has enabled a shift; it’s enabled wider choice, it’s opened the curtains on the windows to many business models, but so much is still driven by the human element and it will continue to be driven by the human element because so many consumers are not ready for that next step.

Advances in technology have meant that every business in every industry is fundamentally different to what it was 15 years ago. However, if I ran a business 15 years ago, I would say nine out of 10 of the conversations that I still have with clients today would be the same.

Whatever the business, the issues business owners face; not having enough time, not having enough cash flow, stress with people, none of that has changed.  Businesses maybe more complex but every business owner is still wants more time back, still wants to make more money. So the human element in business is still as important as it ever was.

Find out more

If your business could use the Cypher touch, please contact us and we will be happy to discuss your options.

An Employee vs An Entrepreneur Mindset

An Employee vs An Entrepreneur Mindset 150 150 Cypher

An Employee vs An Entrepreneur Mindset

At the start of the year, on the Mind Your Business Podcast we said that 2021 was the year of the entrepreneur; the ‘Entrepren-Year’ and we have seen that prediction play out over the last 10 months or so.

So many people have used furlough as the catalyst to start their business, but others, who might aspire to be business owners, are still held back, sometimes by circumstance, but often by their own limiting beliefs.

It begs the question as to whether there is such a thing as an entrepreneur mindset, or indeed an employee mindset and actually whether a barrier to prospective business owners is that they still think like an employee and what they really need is a switch.

My default position is there is absolutely a difference in mindset between an entrepreneur and an employee. It hit me, when in Cypher’s early days; I played golf on a Friday afternoon with a friend who’s an employee. While I love a game of golf as much as the next person, while he enjoying his freedom on the course that afternoon, all I was thinking was how much work I was going to have to do at the weekend because I’d chosen to be out of the office on Friday. Having time off is very different if it’s your business compared to when you were an employee.

Working for an unlimited company
One of the main differences between an entrepreneur and employee mindset is the concept of barriers. As an employee we are conditioned to respect certain defaults; for example, the role we do, the business we work in, the hours, the pay -effectively the overarching parameters within which a business generally works. There is usually a certain rhythm and routine and a monthly predictability to it. Subconsciously while you operate in a safe space, there is also an inherent creative limitation in the role.

As an entrepreneur, you can enjoy unlimited thinking, even unlimited possibility. Entrepreneurs by nature allow themselves to believe what is truly possible and then go all out to achieve it. An entrepreneur’s mindset allows for an extra bit of performance, an extra bit of drive and an extra bit of enthusiasm for what the possibilities are.

Dealing with payment pressure
Usually, employees get paid weekly or monthly. Generally, other than seasonal or performance related bonuses, they know what will be in the pay packet each month and have a regularity to their lifestyles that is supported by this sum. For entrepreneurs, it doesn’t need to be that way. As an entrepreneur, you could make £200,000 in a month and then nothing for a full year. And actually, if they did that, entrepreneurs would focus on the freedom and opportunities this model presented to create more in the time they have freed up.

That’s not to say entrepreneurs don’t suffer financial stress. The financial reality is that life is structured around monthly payments; your mortgage, your bills and as an employee-you would hope- your monthly wage covers this. But for new business owners, especially those that were recent employees, one of the biggest stresses is wondering whether the business can provide them with an income in three months’ time. The trick is to look past that because it will. The challenge is actually whether you can spend enough time building your brand and your culture and understand what you want to do to make it more successful.

More money, more problems
One of the big freedoms of being an entrepreneur is to be able to access more funds from your business. But once entrepreneurs get up and running they have a habit of just taking money as, and when they need it. Sometimes though, they don’t realize how much they’re taking or alternatively, they don’t take enough because they’re scared that the business will run out of cash. Our job as accountants is to do some basic tax and business protection planning to make sure they’re taking the right amount out of the business so they’re not leaving themselves or the business short or paying too much tax.

Some entrepreneurs need time to break down the monthly rhythm, while some need to build it back up.

The danger of not pivoting quickly from the employee to entrepreneur mindset is that you make very short term decisions. If you retain the employee mindset, which is largely dictated by your monthly pay, you base your business decisions on short-termism. Am I going to make the £3,000 I need this month? You take on bad clients, do the wrong type of work, and neglect the pipeline at the top of your funnel because you are focused on whoever can pay you today. It stops you making space for the real entrepreneurial thinking that you need for months 12 18 or 24.

Learn Unlearn Relearn
We did a whole podcast on having to learn, unlearn and relearn how to do business in 2021. Shifting from an employee to entrepreneur mindset is a perfect example of this because there’s a lot about being an employee you need to unlearn and then relearn in order really become a phenomenal entrepreneur. One of the important learnings for any would-be entrepreneur is that everything you do needs to have some profit in it, and if it doesn’t, you need to stop doing it. Whether that’s working with specific clients, offering certain services or selling certain products, if it doesn’t generate a bottom line you’re better off doing something different with your time. As an employee you probably don’t have to make these decisions.

Business owner v owning a business
It can become apparent that the wrong mindset can actually provide solid blockages to business growth. Without an entrepreneurial mindset, you may end up with a new business that’s worse job than you had before. It will have all the hallmarks of a job; you are a slave to the nine to five, it doesn’t earn any money if you’re not there, but because you’ve lost the benefits of being an employee you might actually get paid a lot less, for a lot more stress and a lot more hours.

To be able to create something that can grow, you need to be able to think past yourself as the only employee or as the only mechanism for making money. It’s important to make the step from employment to business ownership to make it something bigger than just you, the individual.

Shifting from Employee to Entrepreneur mindset
There is a fundamental shift available for all business owners to move from an employee to entrepreneur mindset. This distinction is often really helpful for people to see where they are in their journey. For example, I don’t consider myself an accountant anymore, I own an accountancy business. It might sound twee but it is fundamental to my mindset of what I do as my day job. I think what you tell people you do clarifies where you are on the spectrum between employee and entrepreneur; are you a plumber or do you run a plumbing business?

The more we realize is possible with entrepreneurship, the more we can harness the full power of this state of mind and realise all the opportunities it brings. A more entrepreneurial mindset, will enable you to think more long-term, make better decisions and be more at peace with yourself and where your businesses is.  But it’s not a failure if you don’t have a 100% entrepreneur mindset, even if you’re 10 years into your business, because it’s a skill you learn, it’s not a switch you can flick.

Find out more

New editions of the Mind Your Business Podcast appear every Friday. Subscribe on Apple Podcasts, Spotify, Google Podcasts or your choice of Pod provider to have it delivered straight to your device.

Business Plan Gold

Business Plan Gold 150 150 Cypher

Business Plan Gold

No matter how old your business is, it’s important to have a business plan. Lots of business owners have one; it gets done once, with just enough information to convince you there is a business opportunity there, but then it’s not looked at again. Some people have never done one; some business owners monitor and tweak it all the time.

There’s an old adage that no plan survives first contact with the enemy, which is why a business plan shouldn’t be seen as restrictive, fixed and inflexible. It should be an opportunity to get real clarity on what you want from your business, who you want to serve in terms of your customer base, along with some realistic numbers.

The most important part of a business plan
I love a good business plan! At the start of Cypher’s journey we needed some finance so I wrote my first business plan with two aims; one to convince my wife that it would work and secondly to convince the bank so they would give us the funds we needed. I included all the traditional bits; the unique opportunity we’d got, what our strengths were going to be, some SWOT analysis, our typical customer, who our competition was and how we would be different, then I did a three-year financial forecast. It became an 81-page PDF.

I would argue that the final document, all 81 pages of it, is not particularly useful anymore, but the time we spent thinking about each section was really powerful.

The most important element of business planning is the time and the headspace business owners give themselves to actually think about their business. Business owners need to understand who their competition are, understand their ideal client, understand the importance of cash flow for their business and how everything fits together.

When I showed a business coach the financial forecast, he immediately recognised that it was for my wife’s benefit.  Cypher was operating just above breakeven.  At the time I was acting out my business horror story and I needed help to see a brighter future. But that is another story.

The 1 page business plan
One of the best things we did with our 81 page business plan was to distil it into a one-pager; a pitch-deck of the key headlines. It has a summary of each section, plus some of the key numbers in the forecast. Now, whenever we log in to our client management system, the first thing everyone sees is our core values; what we stand for and why we’re trying to do things differently. All the stuff that came out of that business planning process is front and centre in our daily routine.

The importance of Cash Flow in Business planning.
The amount of business plans I see that have no mention of cash flow is phenomenal. A lot of new business owners are able to create a solid profit and loss account; they project the amount of sales they will make and estimate how much it will cost them to make those sales. Based on that, they break even in month six and are profitable by month eight. Well done them.

What they miss is the disconnect between profit and loss and cash flow. The amount of times I’ve had to sit with someone and say, this P and L is great, you’re making profit in month eight, but to get to that point, you’ve first had to buy £100k of assets, you’ve had to pay for everything up front because you’re brand new  but your customers have 90-day payment terms, so actually if you don’t make profit by month four, you’re going to run out of cash before month seven, so being profitable in month eight is a waste of time.

Forecasting is tough, but if you forecast profit and loss, you’re only doing half the job and you’re forgetting the most important part. A business can trundle along for a few months, breaking even if cash flow is ok, but no business can survive with no cash.

For example, its vital to understand the impact of payment terms; are customers paying 50% upfront and the balance on completion, or 100% on point of delivery or is payment due 30, 60 or 90 days after delivery. With this information, we can build the rules around when the business is receiving funds for work done.  By understanding the impact of each transaction a simple decision to shorten payment terms from 30 to 14 days for example, might give you another three or four months of trading at a very low income rate.

We then look at fixed costs, for example; is the rent paid quarterly in advance, or is it paid monthly?  What payment terms does a business have with its suppliers? We know things like if you’ve got staff that they get paid at the end of the month but that national insurance and PAYE is paid on the 19th of the next month to spread the risk.

Beware the cash black hole
Our aim, using all of this knowledge is to find the month, in the first 12 months where there is a potential cash pinch. Based on funds coming in and money going out we can see if there is a cash black hole somewhere down the line.

Business planning for established businesses
If you have a more established business then the business planning process either allows you to reconnect with your plans at the start, or if you are doing it for the first time, it re-engages you with your purpose.  Businesses and business owners shift overtime and a business plan reconnects you with what you are actually trying to do. Once you have done that and you have your longer term vision, the next step, is to plot what you are doing in the next 90 days to achieve part of that plan.

The Power of Review your Business Plan
Whether you make a business plan or not, the important thing is to understand that businesses change, owners change, markets, customers, competition all change and reviewing your situation at regular intervals provides great insights into a business and an opportunity to re-evaluate, or learn, unlearn and re-learn what a new framework for the business might be.

The best time to make a business plan
The good news is that typically new businesses outperform their initial forecast, but our job is to look at cash run rate based on a worst case scenario. The best time to do this is before a business model becomes a business. No cash has changed hand and the impact of decisions won’t be as critical. But however old a business is a business plan with SWOT, competitor analysis, customer research, P&L and cashflow forecasting brings huge amounts of clarity.

For me the best outcome for a good business plan is that it gives the business owners the comfort or belief that there is a business there; that they know it isn’t going to run out of cash in six months, they have thought about who their customers are and know there’s a market for their product or service, that their pricing is correct and their idea has legs.  Then distil it all down to one page and you have a plan.

Find out more

New editions of the Mind Your Business Podcast appear every Friday. Subscribe on Apple Podcasts, Spotify, Google Podcasts or your choice of Pod provider to have it delivered straight to your device.

The destructive power of Apathy

The destructive power of Apathy 150 150 Cypher

The destructive power of Apathy

Apathy is something that can haunt all entrepreneurs and business owners at various stages of their journey-sometimes quite drastically- such is its destructive power.

Now, everyone has ups and downs in their business, but have you considered that perhaps apathy plays a massive part?

Apathy is an emotion that by definition means you lack interest, enthusiasm, or concern; in other words you don’t feel anything, you don’t really care one way or another and that is the problem.

On the Mind Your Business Podcast, we have talked about the power of belief and the affect an entrepreneurial mindset can have and how motivation, inspiration and enthusiasm all provide really powerful energy that help entrepreneurs to act no matter what. It keeps them going forward when the path is blocked or times are hard and brings light and colour to their world. Apathy on the other hand is dullness and emptiness; I can’t be botheredness; a listlessness that can be really destructive when you are running a business.

Check your revs.
One way to view your levels of apathy at any given time is as the speedometer or rev counter in a car. On one end, let’s say near five, maybe six thousand revs, you get action and at the other end- under one thousand revs- you have apathy.

It’s a situational thing for sure; people aren’t generally apathetic about every aspect of their business- if they are then there’s a bigger problem- it’s usually only in certain circumstances that apathy causes our revs to drop. The problem here is that if we let our levels drop – even for one day –maybe as a culmination of events, it has the power to undo lots of good our work. Losing your mojo for a day, without realising that you are having that sort of a day can also have a very negative effect on your team.

Beware Dementors
Apathy is nothingness. It’s like the Dementors from Harry Potter that literally suck the life out of everything. Now that’s an extreme example, but  I think it describes the link between anxiety, which is a burner of energy, and apathy, which is the feeling of emptiness you are left with after you have completely burnt out quite well.

Apathy can also be common in people that have a very negative view of themselves. All of us have heard of impostor syndrome, but negative thoughts and self-doubt view both play into apathy.

Are Entrepreneurs at greater risk of apathy?
There are very few entrepreneurs that haven’t suffered from a healthy- or unhealthy- dose of anxiety. They deal with pressure situations all the time and not everything comes off. So there are bound to be times of doubt. I would say that this leaves them more at risk of this condition called apathy.

Apathy is self-sabotage
Business owners that are apathetic about their business have the potential to do a great deal of self-sabotage. Business owners get in a mindset of ‘what’s the point?’, ‘it’s not going to work’ and the situation becomes a self-fulfilling prophecy. As an example, a client pitched for a massive bit of business, but was sure they weren’t going to win it. Normally they would have followed up two or three times, this time they didn’t bother. Now, they may not have lost the business because they didn’t follow up after the meeting, but they definitely wouldn’t have won it that way either.

When team members are apathetic
There are, of course, super motivated business owners, who are always 100% motivated and driven but they have team members that fall into apathy. Everyone has seen the ability of one person to drag down the whole room. It’s not necessarily their default position but they are having a day where they just don’t care. As leaders we have to recognise apathy for what it is and maybe give that person the benefit of the doubt for one or two days; lots can be going on in the background. But if the apathy spreads it’s time to have a conversation. Be heavy on empathy, let the individual open up but also recognise the effect that apathy can have on your business – and them as individuals.  Remind them of the valuable contribution they make, how their actions can help everyone grow.

But remember, it isn’t their business. It’s not their fourth child, their baby. Yes they will enjoy working with you, enjoy the rewards it brings but it isn’t what keeps them up at night. Now that doesn’t mean business owners can’t have powerful conversations with workers, give more responsibility that can make them feel it is their business. You do have the power to inspire people to go well above and beyond what is in their contract.

Toxic workplaces
In a room of 10 people, you would hope seven or eight are flying and maybe one or two are feeling a little apathetic, that’s just life. In any culture or workplace you cant expect everyone to be on it all the time. If the majority of workers are having off days though then business owners have to dig deeper because there could be a million reasons for it as we talked about in our Toxic Workplace pod

Get moving
There is a clear link in many articles between apathy and a lack of exercise. So doing something that gets the heart rate up, the blood pumping is a great way to stop the funk. If you’re having a rubbish day, go for a walk, go for a run, do something.  The link between exercise and mood is massive!

Avoiding apathy
Apathy can manifest itself in the minds of business owners and their teams. It can be driven by anxiety and can lead to a lack of positivity but also a lack of productivity, which is key. We have talked a lot about the mindset that successful business owners have; they are positive, enthusiastic and driven. If you’re apathetic about your business then 100% it won’t do as well. No successful business owners are apathetic about their business. That’s not how you create a £1m organisation.

The first thing to do to avoid apathy taking hold is to be able to self-diagnose; to understand that it’s natural to have days when you just aren’t on it as much as other days, but once you have recognised that you’re feeling apathetic about your business, get some easy wins. Find some tasks which are ten, fifteen minute jobs that can just be done.  Post on LinkedIn, ring a customer or reply to an email; do something that can be ticked off of a list.

Secondly get active. Stop staring aimlessly at a screen and physically make yourself get up out of your seat.

Thirdly have someone, a coach, a business partner, a trusted advisor, someone that you can talk to who recognises that you’re self-sabotaging and is able to bring you back on track.

Times can be hard, clients leave, pitches are lost but there is never a good time to take your hands off the wheel.

As business owners we have spoken a lot about a positive, healthy mindset; how clarity can prevent a horror story being scripted that doesn’t need to play out. If we recognise our revs are low meaning our apathy levels are high, then we can shift the needle through to action and the power this can generate for a business is huge.

Find out more

New editions of the Mind Your Business Podcast appear every Friday. Subscribe on Apple Podcasts, Spotify, Google Podcasts or your choice of Pod provider to have it delivered straight to your device.

Autumn Budget De-Cyphered

Autumn Budget De-Cyphered 150 150 Cypher

Autumn Budget De-Cyphered

‘Jobs up, growth up, debt down’, Chancellor Rishi Sunak delivered his long-awaited autumn budget speech today.

While there were few surprises, – the Chancellor got himself into hot water by trailing most of his announcements in the press last week- his mantra for economic and jobs growth reflects the experiences of the majority of our clients.

I would say 90% of our clients are growing, if not quicker than they were pre COVID, then certainly at that level, many have also either recently recruited or are in the process of recruiting. In terms of debt, however, a number of small business are still sat on bounce back loans, some have spent a little, some a lot, some have repaid them in full but the picture is slightly different to the overall headline.

While there was little in the budget for an accountant to get our teeth into tax-wise but there were a few things that caught my eye.

Annual Investment Allowance
This was set at £1m and due to be reduced in April 2022, but it has now been extended until March 2023 meaning that the first £1m you spend on things such as commercial vehicles, tooling and computers you still receive 100% tax relief on, or actually slightly more based on the Super Deductions announced in the March budget. This £1m applies to all businesses whether they are a corner shop or Sainsbury’s who can burn through this quite quickly but for farmers who invest annually in big plant material this is big news.

£22bn R&D investment targeted
We work with an excellent business that has sourced and secured great sums of money for clients in terms of R&D tax credits. In his speech today Chancellor Rishi Sunak set out a target of increasing spending on research and development (R&D) in the UK to more than £20bn by end of the current parliament and £22bn by 2026/27.This was said to represent a cash increase of 50% in addition to R&D tax reliefs.

He also pledged to ‘modernise’ the R&D tax credit system to ensure more money is spent in the UK, which might mean, if you’re a UK subsidiary of an overseas business, potentially you will see restrictions from 2023 on how you get R&D tax relief but hopefully this represents the first step in applying the necessary rigor to the sector to ensure spurious claims are wedeled out the R&D claims made are funding the appropriate programmes.

Business rates
Typically, business rates isn’t something we speak to clients about because we can’t affect them in any way.  You can’t, for example, reduce the cost of them by adding money to a pension scheme. The good news though is that the multiplier is not increasing next year like it was expected to and interestingly, in a move to help regenerate run down high streets, businesses that improve dilapidated old premises will not incur increased rates based on the value added by the improvements.

In addition – as a number of our clients are in the retail, leisure and hospitality sectors- they will welcome the 50% discount applied to rates next year.

Cut in beer and sparkling wine duty
Landlords and pub goers might feel like raising a glass this evening after the Chancellor announced a major cut in taxes on prosecco, rose, draught beer and cider. He also said that the 28% premium on sparkling wine will be shelved, while duty on sparkling products will be levelled at the same rate as still wine, knocking as much as 83p off each bottle of bubbly.

A planned increase in duty on spirits, whisky, wine, cider and beer will be scrapped from midnight tonight, basically making it cheaper to have a drink in a pub.

The Chancellor said he will also slash the so-called “keg tax” on barrels of beer delivered to pubs and clubs so less costs are passed on to the consumers.

In other good news for accountants of licenced premises, the chancellor announced a simplification of alcohol duties. Sadly this came a day too late for me as I spent a day filling out an alcohol duty registration form for a new microbrewery. It was the most complex tax form I have ever filled out.

National Minimum Wage
In good news for those earning the minimum wage, the chancellor has announced an increase to £9.50, but of course if you are a business owner that pays this level then you might see an impact on profits.

In good news for the building industry, the chancellor outlined plans to build 160,000 greener homes on derelict or unused land in England with almost £2bn set to be invested, with a further £9m also pledged towards 100 urban pocket parks across the UK.

National Insurance and dividend tax hikes from April
In terms of how the Government will pay for its new spending plans, the greatest tax increases were announced last month as the Prime Minister announced a rise in both National Insurance contributions and dividend tax rates across the UK from April 2022.

Following a rise of 1.25 percentage points basic-rate payers will pay 8.75% tax on dividends, up from 7.5%, higher-rate payers will pay 33.75%, up from 32.5%, while top-rate payers will pay 39.35% up from 38.1% on dividend earnings of above £2,000 per year.

There is still time before these changes come into effect, so if you have excess reserves in your company it may be worthwhile voting additional dividends in this current year to ‘bank’ the lower tax rates.

Find out more

Get in touch if you you have any questions or Read our blog on how to take money out of your business.

The Power of Brands

The Power of Brands 150 150 Cypher

The Power of Brands

The whole concept of brand and reputation is massively powerful and something that is easily translatable between the biggest and the smallest organisations.

While an accountant will take an inventory of all your company’s assets, creditors and debtors to ascertain the ‘paper’ value of your business, the true worth of a company includes its brand value in the market place. You have a logo, a web site, a presence, tangible things people can touch but a good brand also has an intangible element; you can’t pick it up and touch it, but it does have weight and it does have value.

What’s in a brand?
As an example of the power or value of a brand, at this summer’s UEFA European Championships, Christiano Ronaldo –heard of him lately- managed to knock around $4bn off Coke’s share price by moving some bottles of their product out of shot during a post-match press conference in favour of a bottle of unbranded water.

In the same week, France midfielder Paul Pogba, a practising Muslim, removed a bottle of non-alcoholic Heineken beer after he was named ‘Star of the Match’ in France’s 1-0 Group win over Germany.

As one of the official sponsors of Euro 2020, in their response, Coca-Cola said that “everyone is entitled to their drink preferences”. What’s interesting is that since the incident, Coca-Cola’s stock value has since risen, so the cynic in me wonders whether it was all just a ploy to create some headlines.

As a company, Coca-Cola has a value of around $284 billion, more than many small countries, but if all it takes is one person moving two bottles of their product to wipe off 2% of that value it goes to show the added value of a brand. Yes Coca-Cola, along with Amazon and Apple make a substantial amount of money from sales of product but there’s a big chunk of their share price, which is made up purely of this intangible goodwill towards the brand.

Remember how Gerald Ratner undid all of his life’s work – and destroyed a very well patronised high street jewellery brand by stating the products were all ‘crap’. The company’s shares dropped £500 million in a matter of days.

Ronaldo and Pogba are recent examples but, but athletes refusing to endorse a team or competition sponsor isn’t new. Back in 1992 at the height of their battle with Nike, Reebok paid millions to sponsor the warm up gear of the USA’s basketball Dream Team at the Barcelona Olympics. Predictably, which Reebok was counting on, the Dream Team won gold, but atop the medal podium, Michael Jordan and Charles Barkley – both Nike sponsored athletes- draped US flags over their shoulders to hide the Reebok badges of their warm up apparel. Both knew the value of their association with Nike and weren’t prepared to jeopardise it – especially at one of the most watched events in history.

Brands and football
When you look at the brands that sponsor an average football game, in my opinion, it is 100% sport washing. McDonald’s, Coca Cola, various alcohol and sports-betting brands, Tik- Tok, Gazprom; they are they’re there because everyone loves football and it has such an unrivalled, world-wide audience. It’s why we’ve got world cups in Qatar and boxing matches in Dubai. They try and push their human rights record, the obesity epidemic and the gambling and alcohol addictions to one side and get cosy with brand football.

FIFA or UEFA seem to sell to the highest bidder, which ethically is probably a conversation in its own right, but to make it relatable for small business owners, the message is to be careful who you partner up with.

The power of a brand for small businesses
The power of a brand is greater than your balance sheet, and has far more value than I think a lot of people realise. I like to think that we have managed to build a brand at Cypher. If you’d have asked me three years ago, do I think small businesses can build brand, I would say no, at the time, I thought it was all about the business owner’s personality or the credibility of a product, but it’s not, and I think now small businesses definitely have an opportunity to brand themselves and if they do it well, then it’s a massive tool in their arsenal to differentiate themselves from the competition.

Brand v branding
It’s important to remember that branding isn’t just about your logo, or the colours you use on your web site. It is much bigger than that; it’s about how you act, how you are perceived, what clients think of you, your touchpoints and how you ‘show up’. You know when you’ve got your branding right when your customers are proud to share your logo, your work, content and comments too.

Going back to football and its dealings with sponsors, Norwich City, recently promoted back into the Premier League had to do a complete U-turn on a shirt sponsorship deal with Asian betting company BK8 worth millions when fans complained about the adult content being shared on the sponsor’s social media pages.

The club’s fans are very protective of its brand and its legacy but while, hopefully this is an opportunity for Norwich to take a step back and consider all of its future commercial decisions, I am not sure whether smaller businesses have the luxury of making such wrong choices. You don’t generally ditch your football club and go and support someone else over a sponsor, but you would ditch your local restaurant if that restaurant got called out for unhygienic or inhumane working conditions.

Customers vote with their feet and so small businesses need to be more conscious than ever, of not just the quality of their logo and visual branding, but also the values behind them and the perception this can give prospects and customers. Understand that your reputation as a business owner is what people say about you when you’re not there. How you do anything in businesses, is how you’re perceived to do everything.

Perception is Brand
When we take on any client that has a history of trading, we ask them what has brought them to us, essentially why they want to change accountants. A number cite receiving unexpected or big bills. As an example, one recent client was hit with a bill for £16,000, payable in 14 days. The outstanding amount was for work done on their behalf, which only came to light when their accountants were audited. After the shock of the size of the bill, their immediate thoughts were how can we trust anything these guys do for us if it takes six years and a third party auditor to spot that they haven’t billed us properly? Basically, if they don’t look after their numbers, how do we know they look after ours?

This type of scenario absolutely undermines any statements on a web site about being proactive, helping clients with cash flow and supporting business owners because there’s no authenticity to it.

Instagram life
How many of us only share the good bits of our life on social media. LinkedIn is full of stories and posts from business owners winning. The thing is we want to be associated with winners. We queue overnight for the latest Apple product, not because we understand the P and L’s and the balance sheets and the cashflow of the business, but we understand the brand and its association to winning.

The rise of influencer marketing
The power of a brand is massive but these stories demonstrate how tenuous it can be. What would happen if every Premier League or international footballer followed Ronaldo and Pogba and boycotted Coca-Cola, how much would that knock off the share price? And imagine if the water bottle what Ronaldo picked up was an Evian bottle?

Find out more

New editions of the Mind Your Business Podcast appear every Friday. Subscribe on Apple Podcasts, Spotify, Google Podcasts or your choice of Pod provider to have it delivered straight to your device.

How to Avoid Toxic Work cultures

How to Avoid Toxic Work cultures 150 150 Cypher

How to Avoid Toxic Work cultures

In the war on talent, one of the overriding messages was that strong company cultures would always attract better talent.

The topic of this blog and podcast came about following the publication of an open letter to the co-founder of BrewDog James Watt from ex-employees, accusing him of creating a culture of fear in the workplace.

In the letter, circulated on Twitter, former workers alleged that the Scottish brewer’s rapid growth had involved cutting corners on health and safety, espousing values it did not live by, and creating a “toxic” culture that left staff suffering from mental illness.

The language used is particularly emotive and claims that further 45 ex-employees supported the message but refused to share their names for fear of repercussions.

There’s a particular section worth highlighting that for me sums the whole letter up in one go. It starts “So many of us started our jobs at BrewDog  eagerly, already bought into the BrewDog ethos only to very quickly discover that ‘fast-paced’ meant unmanageable and ‘challenging’ meant damaging’.

Fast-paced dynamic workplace or somewhere you’re lucky to survive?
This is an example of management failing at every turn. Now I was always a fan of James Watt. He is famous for putting himself out there and being a bit edgy. His book even has a chapter on how to make people hate you.  He believes that there is no such thing as a job for life, if you do that you might as well be a zombie. His views are that you go in, do your work and if you move on, you move on. This story however, completely changes my perspective on BrewDog from being a fast-paced dynamic, modern workplace to somewhere that you’re lucky to survive two or three years before you’re being binned off.

Sadly, toxic workplaces, aren’t the preserve of the large corporations, you can have really dysfunctional, toxic work environments in small businesses too. I learnt it the hard way. I was part of a leadership team in a business that had lost a number of really good people in a short space of time. But I didn’t realise how toxic the culture was until I sat in a meeting for over an hour and a half to hear the senior partners conclude that the problem was the staff and not them!

Theory X and Theory Y
In the 1960s, an academic called Douglas McGregor suggested two contrasting management theories, Theory X and Theory Y. Theory X was a traditional view of direction and control that suggested workers required close, firm supervision with clearly specified tasks and that the threat of punishment or the promise of greater pay were the driving motivating factors. The classic stick and carrot technique if you like.

Theory Y, however, suggested that human beings are motivated by engagement, empowerment and will exercise self-direction and self-control in the service of objectives to which they are committed. In short, work can be inherently motivating and people will seek responsibility and see it as reward in itself.  McGregor created Theory Y, not as a panacea for all the ills created by Theory X, but he hoped that by highlighting Theory Y, as an alternative it would persuade managers to abandon the limiting assumptions of Theory X and consider using some more of the techniques suggested by Theory Y. I think we still need to be somewhere on the spectrum between these two extremes.

A fish rots from the head down.
A business coach once told me, that a fish rots from the head down. You will not find a dysfunctional workplace culture where there is a high-level functioning leader. If the people at the top understand their vision and have clarity on what they’re trying to achieve, then they can build a culture in service of that mission and bring the team along with them. Whereas, bad decisions and poor people management completely takes the legs out from any culture below them.

As a leader, displaying the behaviour that gets the best out of the people is surely the best possible start for creating a culture conducive to human and business growth. If you have a structure that is big enough to contain a tier of middle managers, then it is their job to filter the message from the leadership down through their direct reports. Make sure that those guys are a hundred percent on board and are aligned to your values too, because that’s where the message can get muddled. And how can you expect a manager to build a team if the directors above them can’t stay on message.

Focus on people and the results will follow
It’s easy to imagine that in many bottom-line driven organisations, a focus on profit will outweigh a focus on culture. Going back to BrewDog this was allegedly a case of a hierarchy so focused on growth that it would sweep some people issues under the carpet, as long as the numbers stacked up. But surely, if you help your people be the best they can possible be, the performance will follow.

Both Alan and I recounted stories on the Podcast of our first experiences of management. I was working as a bike mechanic at a national chain, Alan was working at a national DIY store. His store manager demonstrated a thuggery and use of language that many would be appalled at, while I encountered a regional manager that spent his time belittling the store manage, whom everyone liked. In both cases management meant bullying, swearing and keeping people down. Not a great advert for leadership.

It also demonstrated that in any workplace, you don’t necessarily need four or five people of sufficient seniority to create a bad culture, one is all it takes. It may be more detrimental the higher up they are but the power of one individual to undermine an entire business culture is phenomenal.

Listening to staff feedback
Going back to BrewDog employees, it feels that a toxic work environment is just so unnecessary. Very few people leave without giving you a reason, so like your inner critic sift through the gripes and identify some real nuggets. If 30% of your workforce is leaving in a 12 to 18 month period, there’s an issue whether you like it or not, whether it’s too much for your ego or not, there’s an issue. And you need to find out what the problem is and you need to fix it.

One of the best examples of creating a strong company culture was led by Nicole Reid, chief people officer at Xero. Xero refer to their staff as ‘zeros’ which could literally mean nothing, but they have got to the point where people are happy to be classed as a zero because they focus so much on employee engagement. Every day, before they leave their employees do a ten second survey. Have you had a good day, thumbs up or thumbs down? Have any of your colleagues been a star today, write their name and say why? It gives the company a daily pulse check that can measure the health of an organisation. Is there an overriding positive or a negative? Three thumbs down in a week from a colleague is a clear indication that you need to put your arms around them.

Treat people well, and they reward you with better performance
For me there is a clear correlation between culture and performance. If you want growth, improvement, more revenue, then you need a culture that breeds performance. A toxic culture might lead to a short term bump, but overall usually the wheels come off sooner or later. There is no good business reason to allow a toxic culture to invade your organisation. You may not know that you have a toxic culture, but your staff do. So the underlying key message is to talk to your staff.

Find out more

New editions of the Mind Your Business Podcast appear every Friday. Subscribe on Apple Podcasts, Spotify, Google Podcasts or your choice of Pod provider to have it delivered straight to your device.

NI and Dividend tax increase – how much extra will you pay?

NI and Dividend tax increase – how much extra will you pay? 150 150 Cypher

NI and Dividend tax increase – how much extra will you pay?

Earlier this month, the Prime Minister announced that National Insurance contributions and dividend tax rates will increase by 1.25 percentage points across the UK from April 2022. Basic-rate payers will now pay 8.75% tax on dividends, up from 7.5%, higher-rate payers will pay 33.75%, up from 32.5%, while top-rate payers will pay 39.35% up from 38.1%.

There is a dividend tax-free allowance on top of the £12,570 personal allowance, so the first £2,000 of dividend income you receive is tax-free.

The Government said the move would raise £600m in extra revenue, to contribute to funding social care in the UK, the financing of which will change from October 2023.

These changes affect 3 groups of tax-payers.

Employees will likely see their monthly take-home pay reduced by the 1.25% increase in employee’s NIC.

Employers will  pay an additional 1.25% of employer’s NIC for employees earning above the class 1 secondary threshold (currently £8,840 in 2021/22).

Business Owners running Limited Companies will pay an additional 1.25% of tax on any dividends they take over and above the £2,000 tax free amount.

There is still time before these changes come into effect, so if you have excess reserves in your company it may be worthwhile voting additional dividends in this current year to ‘bank’ the lower tax rates.

Find out more

Get in touch if you you have any questions or Read our blog on how to take money out of your business.