Finance Coach - Vol. 25

Finance tip: Household

Spread out your washing. Whenever you are doing laundry, or if you use a dishwasher, rather wait to have a full load before turning on the machine (not that you need an excuse to put your chores off!). Using the washing machine or dishwasher uses up quite a fair amount of water and electricity, so having less than a full load at a time is a waste of both. Using your dishwasher to do a lot of dishes, though, is actually a smarter choice than washing them by hand. Hand-washing is inefficient for anything more than a small amount of dishes, as there is a lot of water wasted in the process - so unless it’s only a couple of bits and pieces, rather wait till you can load it up into the dishwasher. Another way of saving energy on these machines is to refrain from using the hottest setting. Other than in exceptional cases, using a lower setting will give you the same result, and use a lot less electricity…

Business tip: Finance

Look to your friends and family first for financing. Small businesses generally need to raise less money than larger ones for start-up or bridging purposes. So if you’re looking at raising finance for your small business, and you’ve exhausted your personal resources, consider approaching your friends and family first for the extra that you need. But don’t go cap in hand; make it a business proposition for them, and treat them in substantially the same way as you would a bank or financing institution. (1) Show them your business plan: It may not be as professionally presented as if you were approaching a bank, but it shows them that you’ve done your research. (2) Show them your passion: Tell them from the heart why it is that you want do what you want to do, and how passionate you are about the idea – this is a lot easier with people you know and love than it is with a bunch of suits from your bank. (3) Make it worth their while: There is generally a broad band of interest rates between what they could make on their savings and what you could get finance at (lending institutions see small businesses as risky, and aren’t afraid to charge the earth on the money they lend you). Offer to pay them at a rate somewhere in the middle – this way, they have the chance to make an increased return on their money, and you pay a lower rate of interest than you otherwise would. (4) Respect their investment: Realise that they have gone out on a limb for you, so make sure that you put every last ounce of energy into the business to make sure it works. And don’t even think about skipping payments – you wouldn’t dream of doing that to the bank, would you?

Finance Coach - Vol. 24

Finance tip: Income

Show-house sitting. There’s a great opportunity to make some extra money by offering your services as a show-house sitter. These are basically people who sit in a show-house on show days, and hand out information flyers to the potential buyers that come to have a look. You don’t have to be an estate agent, and you get paid for doing extremely little! With agents and realtors battling to sell houses at the moment, they’ve got too much stock on their hands – this means that they generally don’t have enough in-house staff to sit at each and every house in their portfolio on show days. Approach a few agencies in your area, and ask if they’re looking for standby sitters. It works out to be only a few hours at a time, generally over the weekend (when you can spare it), and if you do it reasonably regularly, you can pocket some nice extra cash!

Business tip: Marketing

Always remember the spouse/partner. When you’re looking at selling your product or service to a potential customer, and it involves a little more thought or decision-making, always remember to include their partner or spouse in your approach. For many purchases, people would generally discuss it with their other half before committing to buying, so find a way to get to them as well. If, for example, your target customer is a man, and he needs to think about it, pitch it in a way that would appeal to a woman as well. He can then take this message back home, and bring it into the discussion he’d have with his wife or partner. Include an incentive or gift to win over the other half, get them on your side, and you could find it a lot easier to close the sale…

Day jobs are risky...

Many people I've met come up to me and ask: "Don't you worry where your next paycheque is coming from?" or "Why don't you get a stable day job? It's less risky..." While I understand where they're coming from, and my income does fluctuate from time to time, I'm of the opinion that relying on a day job is just about the riskiest thing you can do.

Most people have one job - they have a position where they work for one company, go to their office every day of the week, do their work, and get a paycheque once a month. And they probably feel quite safe and secure, looking at an entrepreneur like myself with a querying glance, maybe even a hint of fear. "You could lose it all", they say. "What if it all fell apart?", they ask. "Working for yourself is far too risky!", they cry. Au contraire, I reply...

You see, here's the thing. Working for myself, I decide how much I'm going to get paid. I pay myself when I want to. I don't have to go begging someone else if I need an advance, or if I need some time off - I just take it. Yes, I might make more in some months than in others, but the way I've structured my income, I get it from three or four different sources. You, miss scaredy-pants, only have one source of income. One. Think about that. If your boss suddenly decides "You know what, I don't think we actually need Sarah in accounts anymore, we need to cut back" BOOM!! SLASH!! You're gone. All of a sudden, you've got no income. Zero. And it happens all the time. Just ask around - I guarantee you know, or someone you know knows, someone who's lost their job in the last 12 months. Now that's risky...

Now, in my case, if I were to lose a client or, God forbid, some disaster were to happen to one of my companies, I'd be bleak, yes. But I'd still be in control of it - it wouldn't be the whim of some nameless suit in corporate cutting costs across the board. If one of my businesses failed, it would be because I'd let it happen (or some freak Act of God occured, but let's not go there!). And even if one of my businesses did go under, I'd still have another two or three sources of income. So I wouldn't go from working to destitute overnight (and I know that I'd claw my way back!). I'd be relatively covered and still working - I'd still be able to pay the bills and live my life.

The second scenario above seems a lot less risky now, doesn't it? I guess I'll just never understand how people could put their entire lives in the hands of one company or one boss. It just boggles the mind. But hey, if they think it's the safe option, then who am I to judge?

Finance Coach - Vol. 23

Finance tip: Food

Meal-sharing at the office. With most people eating lunch at work,there's a great opportunity to save some serious money by organising to split the cost of your meals between you and your colleagues. You could either pool your money and buy your meals in bulk, or alternate days on which one of you cooks for the group. You never know, if you really enjoy cooking, it could even turn into a chance to cook for your colleagues on a regular basis, and make some extra money on the side!

Business tip: Sales

Incentivise your staff to increase sales and profit. While this may seem obvious to those who have sales staff working on commission, there are other ways to implement this across all staff. One way could be to offer commission to non-sales staff if they bring in business (you'd be surprised how many contacts your other staff will suddenly have when they know there's money in it for them!). Another plan could be to set aside a percentage of profit, to be distributed amongst the staff on a monthy or quarterly basis. This will not only serve as an incentive for everyone to pull together to drive sales and revenue, but could also result in some innovative cost-saving ideas which, until now, your staff had never thought of mentioning...

Finance Coach - Vol. 22

Finance tip: Debt

Consider consolidating your debt. If you have various small debts which you are trying to pay off (such as credit cards, store accounts, etc) as well as a mortgage or bond on your property, consider consolidating your debts into one payment. Essentially, what happens is that you would extend the amount you borrow against your property, and use that money to pay off all of your other smaller debts in one fell swoop. The rationale behind it is that the interest rate on large debts (like a mortgage bond) is significantly lower than that charged on smaller consumer debts (like your credit cards). It also becomes easier to manage, as you only have to focus on making one payment every month, instead of a handful. If you choose to go this route, though, you must be disciplined and still pay off the same amount every month that you would have been paying on all your smaller debts. If you aren’t disciplined like this, all that you are doing is stretching the short-term debt over a longer period of time – in which case you’ll end up paying much more in interest over the long-term.

Business tip: Networking

Join your local trade association or organization. Nearly every industry has its own trade association, made up of all relevant role-players and stakeholders. Find out about your local chapter, join it (or if there isn’t an existing one, start one), and actively take part in it. Not only will it present you with growth opportunities – like forming joint ventures with other companies in your area to grow your market, or finding out that one of your competitors has excess demand that it can’t fill – but it can also act as a great source of troubleshooting advice. Speaking to others will give you a fresh perspective on any problems you may be having, and it’s also almost guaranteed that someone there has been in exactly your position, and can advise you on how they got through it.