A False Economy

The Alternative Board—Manchester Wes

How many of us business owners see the insurance premium for our buildings and contents cover as another cost that should be managed tightly? I hear often phrases like, “Do we really need such high cover?” or “If we reduced the level of cover we could save on the premiums.”

One TAB member recently shared with his Board that his outlook completely changed following a fire which started in the neighboring premises, then led to his own property being destroyed.

Since one of the benefits of the TAB Board is learning from each other’s experiences, he now considers it prudent and essential to “over-insure.” He explained that the process of settling a claim results in what might have looked like ample cover possibly being insufficient due to the usual raft of small print and techniques used by insurance companies to mitigate their exposure. But for the financial resources of the company, that reduced level of cover could have been catastrophic for the business. You would likely be surprised to learn that increasing cover on all aspects of insurance is far less expensive than you think.

The internet has a plethora of statistics claiming that upwards of 50% of businesses which experience a fire fail within 18 months to five years. Whatever the reality, there is no doubt that inadequate insurance cover will be a major contributory factor when a business fails to recover from such an incident.

The next time your insurance premium comes due for renewal, really challenge yourself as to whether the level of coverage is high enough, not whether you can save money on the renewal premium by minimizing the level of cover.


Are you overworking your staff?

Overworking-EmployeesWhen you last strolled around your workplace, did you notice any difference in the environment? Did you get a sense that your employees felt stressed-out (or more so than usual)? Were people less friendly than in the past? Was some sort of “siege mentality vibe” present in the air?

Having an overworked or burned-out workforce comes with risks no business owner can afford to ignore. Above and beyond the problems this can cause a business internally, there’s also the possibility that overworked employees can lead to poor quality products and services, as well as growing customer dissatisfaction with your business.

That’s why it’s so important to notice “red flags” suggesting overworked employees and take action before any serious damage occurs.

Here are warning signs to watch for:

1. A change in attitude and engagement. You know who your most upbeat and positive employees are. If these hard-working individuals exhibit signs of burnout, don’t pretend that all is OK. Look for employees who eagerly participate in meetings, but now sit back, arms crossed and remain silent throughout the discussion.

In the same respect, pay attention when employees who are known for never complaining about work conditions begin to grumble about “always feeling behind” or “never having enough time” to get their work done. Of course, some of these individuals may never speak up, but if you get the feeling they’re avoiding you (because they don’t want to get stuck with more work assignments), that’s another clear warning sign of trouble ahead.

2. Employees are working longer hours. Let’s assume for the moment that business owners are generally the first ones in the office each day and the last to leave. Have you noticed that some employees are already at their desk when you walk in the door or that some are still at their desk when you’re getting ready to leave? This is a clear indicator people are putting in hours well above a “normal” 40-hour workweek—yet another indication of looming employee burnout.

3. Absenteeism rates increase. Sometimes employees send the message they’re feeling overworked by simply taking more days off than usual. Often, there’s a good reason they’ve decided to stay home; workplace stress is causing them to lose sleep, eat poorly and experience more anxiety than they can handle.

4. Employees are leaving your business. High turnover may be the most clear-cut sign of employee burnout. If you feel you have good managers in place, then it’s time to look at burnout as a key reason for a mass employee exodus. After many years of very low staff turnover due to the lack of alternatives staff turnover is on the increase. Those left behind are trying to manage increased volumes. As the pressure on managers increases they will tend to pass it down the line. A vicious circle starts causing more staff to leave. According to Gallup, 50% of staff leave because of their boss, not because of the greater opportunity elsewhere.

What can you do to combat these alarming trends?

5. Find out what’s going on. Invite employees to talk to you about their working conditions. If they’re reluctant to discuss the situation, “ask questions that allow him or her to bring up the possibility of burnout,”  “Try: ‘What do you have on your plate right now—and if you had the choice, how would you change it?’” Let them know you want an honest appraisal of their workload, so you can work together to address the problem. Many of our TAB members have  used our surveys to measure net promotor score among their staff to assess the mood and stress levels in the business.

6. Assist with prioritising job duties. Employees who feel overwhelmed may need assistance in prioritising all the assignments they face. As part of your discussion, encourage them to openly discuss everything on their plate and then collaborate on creating a reasonable schedule for achieving the most important tasks first, and everything else later. Make clear that, as far as you’re concerned, doing the best job they can is more important than trying to do everything and having little to show for it.

7. Encourage (and model) a healthy balance of work and life. An effective leader always advocates for a healthy work-life balance for their employees. “As long as they are getting results, don’t balk if they leave early to hit the gym,” says workplace expert Alexandra Levit.

Also, remember that employees look to you as a model of proper workplace conduct. There’s no question that entrepreneurs and CEOs are challenged to find the right balance between their businesses and their health and personal lives. But making this a top priority in your own life sends the message that you want employees to do the same themselves—thus, promoting better health and reducing stress and burnout on the job.

Do you believe employees are among your company’s most important resources? If so, do everything in your power to keep them from succumbing to burnout. If you feel the pressure is coming on due to reducing unemployment levels in the eoncomy, you are not alone. There are many techniques to appreciate what is going on and what better way can you learn it, than from other business owners who are facing the same issue on  your peer board. Talk to us your expert Strategic Business Coach about joining a Peer Board in your area. 


Business Owners – Trapped by our taxation system

Tax Breaks required for SME Businesses to repair their Balance Sheets:

Our Governments have had a long and successful history of enabling Ireland to become a modern industrial economy through the advent of foreign direct investment. Start-ups and exporters are revered and supported well through Enterprise Ireland and other support structures like taxation and Enterprise Boards.

However the majority of businesses who employ and create the majority of employment and wealth of the nation get little or no help. They exist and are trapped predominantly in the domestic economy and often struggle to be viable. The tax system often makes them distribute their earnings as they are regarded as close companies and thus the real rate of tax on enterprise is the combination of corporation tax and personal tax on dividends.

A modern economy is a service economy, but yet the Irish taxation system applies a surcharge of 15% on half of undistributed earnings of service companies. Surely companies should be encouraged to build the strength of their balance sheets so that they have war-chests to take on foreign markets, equity to survive future recessions and not least reserves to pay redundancies which are the unaccounted for liability on their balance sheets.

The taxation provisions are also anti small and medium size businesses. A close company is deemed as any business that is under the control of five or fewer. Why does it make sense that if I am sufficiently big I can bring in investors while keeping control of the company while carefully avoiding control from a taxation perspective or I can adopt a strategy of merely spreading my risk over a number of non close companies. However the smaller business who is not in a position to do this is destined to remain small as they have to distribute their earnings.

Take company A – a true case. Sole trader A incorporated his business to manage risk in the recession. However he was left with a tax bill without the resources to pay for it from his sole trading business. He had to pay himself an enormous salary which was then taxed, merely to cover the tax bill of the sole trade. However he was putting everything in jeopardy as the company could not afford the salary levels. This is a nonsense. Most businesses start off as sole traders in order to keep costs down. Then if they are successful and seek to incorporate face this big tax liability either through capital gains taxes on the sale of their business or are strangled through cash flow of having to pay taxes twice.

If we want to build seriously successful businesses who can grow and become international service businesses we must encourage development of the Irish SME Balance Sheets. Let our Department of Enterprise trade and Employment establish what is the median size of equity in Irish SME Balance Sheets employing less than 20 people. Let them set a target for where they wish it to be in five years time. We have put a great effort in to repairing the balance sheets of our banks, how about focusing on our businesses ? ©