Louis Sullivan was a gifted architect living in the USA near the end of the 1800s. Before Sullivan’s time, multi-storey buildings in the US had relied on weight-bearing walls to carry the loads of the additional storeys.
This meant huge strain on the lower levels of the buildings, the need for very thick lower walls, and limits on how high the buildings could be built. Around this time, America was seeing major urban expansion and a society that needed newer, larger, higher buildings.
Related: Value Based Pricing
The evolution of steel into a cheap and multi-functionary commodity proved part of the answer. Sullivan used steel to create frames on which the rest of the building could lean. These steel frames meant that buildings could be higher, windows could be larger, and interior walls could be thinner, allowing for more floor space.
Sullivan had a vision: A building should be solid, useful, and beautiful. Using the maxim that “form follows function” he brought his vision to life by creating some of the most acclaimed buildings in Chicago, many of which can still be seen today.
Sullivan’s work attests to his foresight, his understanding of the tools and technologies of the day, and most of all, his vision. These combined factors produced beautiful, iconic buildings that we continue to enjoy. But if you were to ask Sullivan where the starting point of each of these masterpieces was, he would tell you that in every case, it all began with a plan.
Just as Sullivan used blueprints to create beautiful buildings, so business owners need a sound financial strategy to help their businesses achieve their vision.
The financial strategy becomes the blueprint of the business’s financial success. And just as the utmost care and energy went into creating the blueprints for these iconic buildings, so the greatest care needs to be taken when devising your company’s financial strategy.
1. Know your industry
When compiling your company’s financial strategy, you not only need to know your company, you need to know the greater environment in which it operates.
For example, is your competition likely to undercut your price? When in the year is business most brisk? Are your competitors sourcing their products at a cheaper price than you are, so are their margins higher or lower than yours? The better you know the business that surrounds your business, the more easily you can identify a financial “edge” for your strategy.
2. Make sure it’s doable
The financial strategy of the company is generally derived with the input of top management. It’s important that strategic insight is leveraged for the plan, but it’s just as important that there’s not a disconnect between strategy and implementation.
Invite the input of middle management as you strategise. When contemplating an action item for your strategy, ask yourself: How will this be translated into something that people in the business can do on a daily basis? Ensure that your financial strategy has the backing of those who will implement it, from the moment it is formulated.
3. Focus on a live document
Too often, the financial strategy is the result of a high-level pow-wow that happens once every three or five years. It is typed up into Word and Powerpoint, emailed out, discussed at a few meetings, and then all but forgotten. In contrast, a truly effective financial strategy is an evolving, reactive document.
It recognises environmental opportunities and changes to include them. It reviews and updates targets regularly. It acts as a means by which departments can constantly evaluate their decisions and behaviour.
4. Look forwards and backwards
An effective financial strategy not only looks at where the company wants to go, but where it’s been and how it’s arrived there. It’s permeated with lessons learned and its direction is one that has been weighed up, considered and attested to by someone with experience in the field.
If your company needs help compiling a financial strategy that will truly help your company to realise its vision, The Finance Team can assist. Our associates are experienced, highly qualified finance professionals whose services can be drawn on for the time you need them.
Fintech And Small Business Success: 5 Tips For SA’s Fintech Start-ups
Let’s look at what the future holds and how small businesses can benefit.
Around the world, the fintech revolution is disrupting our relationship with money, both in our personal and business lives. This global market is expected to be worth $10,499m by the end of 2018 – and digital payments account for much of this growth. This means it’s an exciting time for small businesses looking to get ahead. Whether they’re fintech developers, users or both, these businesses are putting new technologies to work and benefitting hugely.
South Africa’s small business community, like elsewhere, is embracing fintech with enthusiasm. To make the most of this energy, new incubators and accelerators are setting up shop across the country. Cape Town, for example, hosted its first ‘Startupbootcamp’ which focused on creating scalable technology solutions for financial services and related industries. At Xero, we recently launched a virtual hackathon to enable South Africa’s technology entrepreneurs to compete with other forward-thinking developers on a global scale.
Against an energetic business landscape, fintech presents an attractive market for SA’s budding entrepreneurs. In today’s competitive business environment, new technologies are key to meeting your target audience’s needs and expectations.
So, how can entrepreneurs take advantage of what fintech promises? Let’s look at what the future holds and how small businesses can benefit.
Think smart, grow fast
The range of available fintech solutions and tools is vast. However, new technologies alone are not enough to get your business off the ground – and keep it there. Here are five tried and tested tips for small business owners to keep in mind at all times.
1. Have an idea
Entrepreneurs first need an idea, then a plan supported by realistic goals. Your idea has to be good: ask yourself what you’re going to sell, and why. Once inspiration has struck, subject your idea to some hard scrutiny. Chances are someone else is already doing something similar – which is fine if you can do it better.
2. Build a plan
Your business plan is your map. It will help you launch your idea with structure and thought, and guide your company’s progression. You don’t need to stick to your plan like glue: Flexibility is certainly a virtue. A new twist or turn – as long as it’s on the right track – could take the business forward faster.
3. Be flexible
Of course, if something isn’t working then don’t be afraid to abandon it and move on. Fear of failure often results in entrepreneurs throwing good money after bad. Know when to scrap an idea, take what you’ve learnt and focus on something new. Remember, there’s no point crying over sunk costs.
4. Stay alert
When it comes to new ideas, look at what’s old and needs refreshing. Keep a constant eye out for ways to disrupt the status quo and offer people a better way of getting what they need. Even if your business is running smoothly and doing well, if you don’t stay alert, you could lose out on some low-hanging fruit to a competitor.
5. Use technology
Startups are typically constrained by limited resources – namely time, money and labour. A solid plan will help allocate your resources effectively. Fintech solutions can provide a strong backbone that helps you enhance your capacity, manage your cash flow better and improve productivity.
The future of fintech in SA
South Africa is fertile ground for fintech. A lack of legacy infrastructure – particularly in outer lying areas – has created a large underbanked rural population hungry for financial services. What’s more, a growing urban middle class is demanding more sophisticated solutions to outdated forms of payment processing.
Fortunately, these demands are not falling on deaf ears. The local tech community is part of a dynamic development ecosystem that is working hard to innovate tools that provide greater financial access. With a clear gap in the market and an eager target audience, the future for fintech developers and users in SA is looking stronger than ever before.
Regardless of what your business offers, where it is based, it’s size or age, it’s time to join the fintech revolution. By embracing relevant solutions, your business will become more agile, efficient, responsive and ultimately, more successful.
Loan Scams: How To Protect Yourself From Loan Scams
My thoughts are that only if there is a grassroots movement by people affected by these scams to get rid of these unscrupulous marketers, will there be any chance of change.
The current economic situation we’re experiencing in South Africa has created a strong appetite for credit. Often consumers need to borrow money out of desperation just to help them survive. It is here where scam artists and unscrupulous marketers prey on the public, signing them up for services they do not need, with monthly debit orders adding to their woes.
It’s a tactic that we’re seeing more of these days: A company advertises that they can help you secure a loan, even if you’re blacklisted. They charge you for this ‘service’ and at the same time sign you up for a bundle of monthly paid-for add-ons, hidden away in the Terms and Conditions (T&Cs).
They are doing this despite the fact that it is illegal to advertise loans to those who are blacklisted (according to the National Credit Act), and that a company cannot charge to facilitate a loan (according to National Credit Regulator [NCR]). To make matters worse, in 99% of cases, the applicant is turned down, and now has to continue paying for services that they were unaware of signing up for in the first place.
This is criminal behaviour, but for some reason it does not get acted on by relevant authorities (such as the NCR) which should be protecting consumers. With an estimated one million South Africans being preyed upon like this annually, those who are tasked with watching over the consumer should not shake this responsibility. That’s not to say the marketing industry is blameless – far from it, but without a regulatory body, there’s very little to be done to act on these rogue companies. Even Google benefits from these loan scammers – just type in “bad credit loans” and see how many ads pop into the paid search results.
My advice would be for consumers to be vigilant in managing their financial affairs, especially when it comes to “too good to be believed” offers. Here are some pointers to help consumers protect themselves:
- Never give your bank details to an unknown brand or marketing company that is not your own bank or insurance company.
- ALWAYS read the Terms and Conditions before signing up for anything. Most of these scams work because the extras you sign up for are buried in the T&Cs, making them part of the contract.
- Never agree to pay someone to find you a loan. The service provider is conducting an illegal act, since they cannot charge consumers for loan finding services according to the NCR.
- As difficult as it can be, do not apply for loans if you are blacklisted as there is little chance you will qualify. These scams are run by people who feed off/take advantage of people’s desperation, so rather speak to your bank to get advice about your situation.
- Sites such as Hellopeter are a great resource to check if companies are offering fraudulent services. It will only take a few minutes, but could save you years of problems.
As for what to do if you have fallen victim to these scams, complain in writing to the Credit Ombudsman (email@example.com) as soon as possible. At this stage, we’ve lost faith in the NCR or the Consumer Protection Act stopping these types of scams. Rather get in touch with Carte Blanche, your local or national newspaper, and note it on Twitter and Facebook. My thoughts are that only if there is a grassroots movement by people affected by these scams to get rid of these unscrupulous marketers, will there be any chance of change.
6 Hacks For Getting Clients To Pay You Faster
Almost everybody pays eventually but almost nobody pays sooner than they have to. That’s a problem.
Getting your clients to pay you on time is a real hassle. After a sale, it is easy to think you did your job and just relax. Nothing is set in stone until the payment is final.
Not getting your payment on time can be detrimental to your company. This is especially so if you need or were expecting that money to come within a certain timeframe. It is frustrating, and there is a fine line because often you are working with people who could be recurring, valuable customers.
Therefore, it is critical to you find ways to get paid on time. Here are seven hacks to avoid the hassle and get paid faster:
1. Set payment expectations early and give gentle reminders
From the onset, ensure that your clients know what their cost and payment schedule look like. You do not want to give them any reason for confusion or an excuse not to pay on time. Make it crystal clear when they need to pay by and how much they will need to pay. It will properly set their expectations to avoid surprises.
Offering gentle reminders about an upcoming payment can continue to keep their expectations in check. They might not be prepared to pay if they signed their contract three months ago and forgot that their payment date was tomorrow. Instead, put the pieces in place to ensure, with total certainty, that they know how much they will owe and when they will owe it.
Poor communication also sets a poor standard with your clients. It will give them the message that they can receive your services without having to pay on time. It is hard to change this precedent. Therefore, being consistent and straightforward from the very beginning will help you keep these payments coming.
2. Follow up
Do not hesitate to follow up after sending the invoice. Your clients are busy. They likely overlooked a payment if they did not make it. You can send friendly reminders to pay after a few days have gone by. No one minds a gentle follow-up as it demonstrates your ability to act professionally. I built my calendar app for this very reason. Follow up frequently till they pay.
Streamline the payment process as much as possible. There are some awesome tools to help collect payments today. The less time it takes your customers to make the payment, the faster you will get paid and the less hassle you will deal with. It is worth the upfront investment to set up the right systems in order to get faster results.
When possible, take the payment upfront, too. This way there will not even be an issue of getting them to pay. Today, people are more comfortable paying for a service before they see its full value in. Take advantage of that.
3. Offer small incentives for quick payment
Offering incentives for quick payments will speed up the process and build customer loyalty. Customers know they are going to have to pay at some point. If they know that making the payment immediately will give them an additional benefit, then they will often do so.
You can even form these incentives around your product or services. It could be sending company stickers, access to an additional feature, or a free week of service. This will reward them for paying on time and give them further reason to continue coming back.
4. Send the invoice to the right person
At larger companies, it is crucial that you send the invoice to the right person. When your clients are originally agreeing to pay, make sure they know how that payment will take place. It takes two minutes to discuss who will be making the payment, and it will save you significant stress on the back end.
5. Establish personal connections with clients
You might not always have the bandwidth to do this, but getting to know your clients will give you a much easier route to payment collection. In the case that someone has not paid, you will feel more comfortable asking them. It is easier to send a quick reminder to someone that you know than it is when you feel like you have to be more formal. Personal connections with your clients will ensure you get your money faster.
6. Think about the little things
There are a variety of small factors that add up to improve the speed in which you receive payments. Think about the time of day that you are sending the invoices out, the styling of the invoices and the actual content within them.
You can streamline the process with a clean and concise invoice. Make it visually appealing and include descriptions of what they are paying for. The process will slow down if you make mistakes. Instead, take the extra time to make sure that everything looks as it should.
This article was originally posted here on Entrepreneur.com.
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