How to have a healthy relationship with money

Does thinking about money make you anxious, or is is just a tool that gives you choices?

Business owners often transfer their feelings about their own money to their business and this can cause lots of problems, so we asked Money Coach, Dennis Harhalakis, to answer questions on "How to have a healthy relationship with money"

What is money coaching?

Dennis Harhalakis I spent many years working in the finance industry and I noticed that most of the people I worked with were pretty bad at managing their money.
The whole industry is set up to take your money and do things with it, but there was very little understanding about what enabled some people to have healthy saving and spending habits, whereas others - and there is no relation to income or social standing - struggled with everything money related.
In the late 90's there was a book called the Millionaire Next Door and this analysed the behaviour of people that built wealth over their lifetimes. They identified 4 positive financial behaviours:
1. Frugality - spending less than you earn
2. Confidence - financial literacy and learning about how the system works
3. Responsibility - taking ownership of your financial outcomes
4. Social indifference - not being influenced by what other people are buying and what society tells you should have.
Understanding the emotional aspects of your relationship with money is the key to developing these behaviours.
It's hard to budget if thinking about money causes anxiety.
It's hard to be indifferent to the opinions of others if your self-esteem is low.
So, money coaching helps people to recognise and understand those patterns so you can make the changes you want.

Using money as a measure of success

Q. There are many ways to define and measure success but in business, money is the usual measure, why is this?

Dennis Harhalakis Money is the simplest measure society has for success. As hierarchical mammals our brains are always looking out to see how we compare to others. It's a core survival issue and it's totally subconscious.

Q. Some people are easily able to separate how they deal with business money and how they deal with their own. So its obviously not money per se that's the issue but having a different relationship to ownership. Is that right?

Dennis Harhalakis Yes correct. Our relationship with our own money is entirely emotional. Money is a core survival need and so dealing with it triggers our core survival processes and responses. That's why it's so emotional. For small business owners, the problem is often that there is no neat separation between personal money and business money. So, personal issues with money will leak over into the business side. This goes beyond simple competencies, and extends to issues of self worth which can then limit your ability to drive your business forward.

What we learn from our parents

Q. In your experience, what's the most common thing that gets in the way of having a healthy relationship with money?

Dennis Harhalakis The biggest cause of unhealthy relationships with money is bad messaging during childhood. Depending on how the adults behaved, money becomes associated with anxiety, shame, conflict. In households where money wasn't talked about it's really hard to develop a positive relationship. The sad thing is, children tend to internalise this and we find ourselves ashamed that we cannot manage our finances properly.

Q. I've found it's not too hard to understand where my beliefs about wealth and money come from but it's much harder to change them - what do you advise?

Dennis Harhalakis We often don't understand how and why we feel the way we do, but we blame ourselves. As a society we don't talk about these feelings and we are embarrassed. If I had to give you one message only, it's that we all have money issues and it's perfectly normal. Unless your parents were incredibly enlightened, you will have some negative patterns.

The path to developing positive emotions, patterns and behaviour around money 

1. Understand your money story
2. Moderate extreme behaviour
3. Change negative patterns and scripts.
This is really, really hard to do on your own because you brain will shy away from things/thoughts that make is feel uncomfortable.
Understanding your neurobiology - how the brain works - how the brain handles money - is probably the key to all of this.
The aim is develop greater consciousness in your behaviour around money. What is driving those emotions, what is driving your behaviour.
95% of our behaviour is subconscious and driven by deeply ingrained processes that keep our species alive for millions of years.
The good news is that it's possible to change all these lifelong habits and beliefs and there are incredible benefits to it.

Technology and money

Q. Technology is changing the way we handle money and that this is something that looks set to grow significantly in the future. Do you see technology improving peoples relationship with money?

Dennis Harhalakis Technology will help us to deal with the complexity of managing our finances - I love Monzo and Money Dashboard - but the emotional dynamics of our relationship can't be changed by technology per se. If technology can be used to support financial literacy and budgeting, then yes... it is extremely useful. But there is also a downside. When spending becomes frictionless, we spend more.

Q. Is that because we cannot manage/control our own desires or that we just don't follow the figures?

Dennis Harhalakis We are wired for instant gratification. As we evolved, if we saw something we needed, we just took it (and usually ate it). We don't need to do that now, but the urge is still there. So, when the process of instant gratification becomes frictionless, it becomes really hard to control.

Q. What about pay forward systems where you have a self imposed limit to your spend?

Dennis Harhalakis All friction is good..... and 'control' mechanisms will vary from person to person. It's about choice architecture and designing the process that will achieve the outcome you desire. Neurologically speaking, handing over cash versus waving  a card or phone are completely different processes.

Resources and help

Q. So many books/resources/experts on relationships with money rely on new age ideas like manifesting - can you recommend any that are based on things like psychology and solid financial principles instead?

Dennis Harhalakis The resources page on my website has a good list of useful books and I suggest you have a quick look at those that seem interesting. If I had to pick 1 it would probably be Wired for Wealth and I would also highly recommend Money Magic by Deborah Price. She is the founder of the Money Coaching Institute and has been doing amazing work for over 20 years. I trained with her.
https://cambridgemoneycoaching.uk/resources-2/

Dennis Harhalakis is the founder of Cambridge Money Coaching and a Certified Money Coach (CMC)®.  Money Coaching deals with the unconscious patterns, beliefs and behaviours around money that we all have.  Understanding these behaviours and patterns is the key to achieving true financial independence and success.  This understanding is particularly important when facing the challenges of a sudden change in circumstances.

With over 30 years’ experience in financial services, Dennis offers clear, practical guidance on how to address the common problems associated with money choices, patterns, and the day-to-day management of money issues.  He holds an Investment Advice Diploma from the Chartered Institute of Securities and Investments (CISI).

Dennis believes strongly in supporting financial literacy and helping young people prepare for the challenges of today’s world.  He has been a Business Adviser with Youth Enterprise and worked with Cambridge schools as a mentor and guide to careers in Finance.

by Ann Hawkins

How to close more sales with email marketing

Are you worried that email marketing comes across as automated spam?

Do you know how to manage your mailing list so that your messages arrive almost by magic to solve your customers problems at just the right time?

Helen Lindop helps small businesses set up lists that make your customers feel special, not just an anonymous part of your sales and marketing machine.

This is a transcript of a live Q&A.

Helen Lindop  I'm not going to teach you sales tips because I'm not a sales expert. But one thing I see a lot is people assuming that email marketing is just another marketing channel (and an older, less-sexy-than-the-latest-social-media-platform one) and therefore just one more marketing job they don't have time for.

But I'd like to give you a different perspective. Think of your other marketing channels as ways of reaching out to new people and starting off a relationship with them. Email marketing asks them to go a step further - usually offering a gift of some kind in exchange for an email address - and that means it's about following up, carrying on with the relationship-building, then closing the sale.

If you've ever been frustrated by not selling as much as you'd like on social media, it's very possible that you're missing this piece of your marketing strategy, or at least leaning too far towards reaching out to new people and not putting enough focus on following up and closing. This is also good for people who feel a bit uncomfortable about selling... because an email does that bit for you - if you do it right.

How to avoid looking like spam

Helen Lindop There are lots of ways to avoid the dreaded spam label: First make sure you're following the rules - GDPR fills a lot of people with terror but it's not so daunting for small businesses and a lot of it is just transparency and courtesy anyway.

Then, send info that people actually want to read - help, educate or entertain them. Send something they'll look forward to reading.

Check your stats e.g. if your unsubscribe rate is high, drop the frequency a bit and see if it improves. Test your headlines to see if they have spammy words in them - many email marketing platforms have a headline checker.

How you gather email addresses matters too. If they already know and like you from social media or a presentation you ran then you already have a relationship with them before they subscribe. Then you need to develop that.

Don't let GDPR put you off

Helen Lindop For any micro biz owners nervous about GDPR, this might be reassuring https://ico.org.uk/.../assessment-for-small-business.../

How well do you comply with data protection law: an assessment for small business owners and sole traders

Q. What's the most effective way to get replies? Is it header/content/CTA? or a combo?  I'm sure it depends on what the relationship I've built with them is, and where they're at in terms of sharing info with me and when we can meet. Ideally I want to meet up and chat as that's when my 'sales' get done :)

Helen Lindop If you want to move them towards interacting with you I'd encourage that right from when they subscribe. So in the welcome email, ask them a question like 'What's your top challenge with x? Hit the reply button and tell me, I promise to reply'. That way they know you're a real human being and will respond. Often people assume email marketing is a one way communication so they need a bit of encouraging. Then write your emails as if you're writing to one individual, make it feel really personal. Similar to the way you approach social media, nothing like a dry newsletter.

How to get started building a list

Helen Lindop Start with a goal - what do you want to achieve with it? E.g. more design clients? I know that sounds really obvious but it's surprising how much this varies. E.g. I had one client who was an accountant who didn't have any space for new clients so the only purpose of her list was to stop people forgetting she existed when she did need a new client!

Q. That's pretty much my goal - attract more clients and remind existing ones I'm still here. However, I don't feel comfortable adding existing clients to a mailing list. Obviously I'd ask for their permission, but "can I add you to my newsletter list" just sounds lame.

Helen Lindop I think 'newsletter' is a very boring word with undertones of 'I'm going to try to flog you stuff from time to time'. Can you think of a way of giving it a brand all of its own that it makes it sound like a product in its own right, e.g. The Design Times. You can still be transparent about what's in it on your landing page.

Q. OK, so I've created a landing page and sign up form... how best to get people to actually sign up? (Is it a good idea to have a sample amount of content or similar?) Then publicise the new landing page on social? What's the protocol for inviting existing clients to sign up - send an email inviting them to do so, or be more subtle, just adding a link to it in my email footer etc.

Helen Lindop I think you need to sell it a bit - it's fine to put it in your footer but in itself I'm not sure you'll get many subscriptions from that. With clients you speak to I'd just drop it into conversation. A landing page with good 'what's in it for me' copy is a great idea, I'd just treat it like a product you'd sell...except it's free. In a way it is 'a sale' because they are paying for it with their email address.

There are loads of ways of promoting your list - a really effective one is to do some kind of event that's closely related to The Design Times - online or off - and mention it there (more on that here https://helenlindop.com/.../how-to-build-your-mailing.../ ). You can do a straightforward tweet or social media update with a link telling people why they should sign up, I put mine in related blog posts, too.

How to build your mailing list using online workshops

Using the right platform

Q. Should all bulk emailing be done via a dedicated platform and not from a personal email address and why?

Helen Lindop Yes, definitely do it from an email marketing platform because to bulk mail from your own email address looks spammy. And it's WAY easier to manage it from a platform. Plus there are all kinds of data security issues with bulk email from your own address.

Q. What kind of numbers of people would you consider bulk email Helen?

Helen Lindop You can get email plans that start from free (Mailerlite for example) so if you have any intention of building a list I'd start right now with one subscriber. That's not to say free is best, it depends what your goals are - you might be better with one of the paid platforms. But it's just not worth the risk and hassle of emailing even 10 people with your personal email.

What if no-body buys anything?

Helen Lindop If you find yourself with a list of people who love your content but don't buy, then check things like are you making offers frequently enough? Are they hidden in a load of text that people skim read over? Are they the right offers for that audience? Are they at the right stage of the buying process?

Some people are so scared of being spammy that they never really sell anything in their emails.

Q. Helen Lindop Is this a good subtle way to do business or a fear that needs overcoming??!

Helen Lindop Often it is a fear that needs overcoming and it's hard to get over it unless you do it. Both from a point of view that it gives you confidence that you can do email marketing without people hating you (you totally can), and you've then got some stats to work with.

It's subtle in one way in that you don't need to sell face-to-face, but you still need to be confident in presenting offers in emails.

Q. How does it work to segment a list so that people who are interested in one thing don't get offers for things they're not interested in?

Helen Lindop Most email marketing platforms allow you to tag subscribers, so you could tag someone who subscribed at your event with #event and someone who has shown an interest in online training with #onlinetraining. Or even both, because most allow you to have multiple tags. You can apply tags manually e.g. if you import subscribers who signed up on a sheet at a live event, or you can set it up that subscribers that join your list from a specific landing page are tagged #event, for example. This means that you can send emails about events to those people who are most interested in events. That's a really simple example, you can also tag people based on what they bought in your online store, whether they've clicked a specific link on your site, if they've abandoned your shopping cart and many more.

In terms of platform, Convertkit and Active Campaign are great for doing this, Aweber is a good lower priced solution that's maybe a bit less powerful but still good, Mailerlite is not that strong but does have some features, Mailchimp is infuriatingly clunky. *other opinions are available!

One significant change with GDPR for email marketing is that you can no longer say 'download my freebie' then subscribe them to a mailing list and sell them stuff. You either have to a) be transparent on the landing page that they'll download the freebie and be added your mailing list where they can expect to receive x, y and z or b) let them download the freebie then get their consent to add them to your mailing list after. Many people got so scared by this they either stopped giving away freebies or added a load of confusing tick-boxes to their landing pages. Just wanted to mention this as it is still possible to use lead magnets, and they can still be very effective.

If you are stuck for what to write to your subscribers I have 9 free templates you can copy, paste and fill in the gaps here (yes that's my freebie!)

Newsletter and awesome freebies

If you have any other questions for Helen you can find her at www.helenlindop.com on Twitter @HelenLindop and LinkedIn

by Ann Hawkins

What's the point of networking?

For some people the whole point of networking is to find new customers.

Unfortunately this has given networking a really bad name and many people avoid networking events because they don't want to be sold to.

And that's a shame because building a great network is one of the most useful things that anyone in business can do.

Ann Hawkins, founder of Drive the Network is well known for her views that the point of networking is not about selling but building great relationships, as she explains in this Q&A.

Q. I read so many comments like 'I hate networking' in small business Facebook groups, then when they expand on that it turns out they mean the type where people hand you a business card, bore you senseless with what they do, then move on to the next person. Which isn't networking. Can you explain what GOOD networking is? And that it can actually be fun?

Ann Hawkins Everyone has a different idea of "good" networking. For me it's so much more than finding out what people do in their business. I want to know if I like someone, if I can trust them, and if they'll be useful to other people in my network. The last thing I'm thinking about is if I can sell my services to them.  It's definitely not giving them an elevator pitch (which I don't have) or "binning" them if they have no need of my services! Even for an introvert, finding people you really like and would like to meet again can be HUGE fun!

Find what you enjoy

Q. Can you give us your thoughts on the different styles of networking, from the very structured ones where you have to bring in a number of leads every week to the ones where there's no pressure at all. Is one better than the other or is it more about personality?

Ann Hawkins It's partly about personality: some people like ritual and knowing exactly what to expect from every meeting, and some businesses do very well from the sort of groups where only one of each type of business is allowed and members have to pass sales leads to each other. However, many small B2B businesses struggle to give 'real' leads consistently. The pressure to provide them and the judgement people face in their groups based on the of number and apparent monetary value of leads means people sometimes make them up and that's a waste of everyone's time. I also find the thought of meeting exactly the same people week after week and being forced to pass business to people I don't like or trust, quite bizarre. I believe in recommending someone who is a good fit rather than someone who happens to be “in my group”.

On-line or Face to Face?

Q. Is face-to-face networking more effective than online?

Ann Hawkins I don't believe it is. I have great relationships with people I've never met face to face and there are people I hate being in the same room with and spend all my time avoiding. It's much easier to avoid boring people on-line and also to get a more complete view of someone's character by looking at how they interact with others and what their interests are outside of business.

The other advantage of on-line networking is that while you're talking to one person, several hundred or even thousands can be observing, learning, and finding out who you are, what you're like, and how you behave in all sorts of circumstances. Its the most effective way I know of building a reputation among people you've never met and don't even know exist. I've got lots of work amd referrals from people all over the world who enjoy the content I share on-line and the way I help people to connect

Q. I know lots of people are nervous about showing up to networking events for the first time - do you have any tips?

Don't walk into a room full of strangers!

Ann Hawkins These are all great tips! But there's really no need for anyone to walk into a room full of strangers these days. I'm amazed by people who just pitch up, don't know what sort of event it is or who anybody is, and sometimes don’t even recognise the speaker – there’s really no excuse for that! Going round the room asking everyone what they do is really bad when a few minutes research beforehand will give you enough information to make a real impact. Imagine walking up to a stranger and saying. "I've really been looking forward to meeting you. Your website / Twitter / LinkedIn / Facebook Page looks great!" Or better still, connect with them on-line first so you can have a real conversation when you meet!

Q. The behaviour some people display at a networking meeting feels like they park their normal self in the carpark and think it's OK the be this, in your face, sales obsessed, inhuman idiot for the period of the meeting, than get back in their car and resume a 'normal' life – its weird.

Ann Hawkins I think that's partly because some networking organisations "train" people to deliver a 60 second pitch and "work the room" so they literally do put their normal self aside and go in with no curiosity about people except to find out if they're a prospect, and if they're not to just ignore them and move on.

Q. What's a good way to follow up after, I'm amazed at how few people do this.

Ann Hawkins  Sending a blanket cheesy email that just repeats your elevator pitch or trying to set up a meeting is definitely NOT the way to follow up. That's kind of why I set up Drive as it is. I don't believe its ever necessary to go to an event without knowing who you're going to meet, check them out and have something to say to them when you get there. Same with the follow up. Connecting on line and continuing the conversation like two human beings is easy. I believe every event organiser, especially for paid events, has an obligation to set this up. I've been doing this for people who attend my events since 2009. It's not hard.

Of course it relies on people actually booking and not doing all this last minute "I'll try to get there" or "I might come" stuff. If you want to get the best out of any event, make a commitment and do your homework before you turn up. You and everyone else will enjoy the conversations more and its much easier to follow up.

Q. Networking will very rarely have instant results and I believe that's the major reason a lot of people shy away from it. We live in a world of quick fixes and that doesn't work in networking. It's a long game. How long would you tell a networking newbie to attend a group or meeting before making a judgement call on whether the group is for them?

Ann Hawkins I don't think you need to go to a meeting at all to decide if its the style you like. If you're a ritual person or intent on making sales, there are tried and tested styles for that. If you're open minded, curious and want to learn, you'd choose a different style. If a networking group has an active forum or on-line community it adds so much to the networking experience and removes the barriers of geography, or other other things that stop people joining in. You don't have to be "in the room" to build a great network.

Actually building a trusted network takes a long time. You need to feel comfortable with people, know their values, and how good a fit they’d be with others before recommending them and then get some feedback about their work before you know if they really trustworthy. Building that level of trust takes a long time and consistent action from everybody.

Q. That's my frustration when people say, “I've never got any clients from networking”. It usually means they've showed up to a few events but not done anything beyond that.

Ann Hawkins They've also missed the point that although the people in the room may never hire them, if they put in the work and help other people, every one of those people knows at least 150 other people who may become their clients. (Dunbar's Number)

Networking for Impact

There are two ways to create impact when we're networking:

We want people to remember us for the right reasons, and although its corny and much used, this Maya Angelou saying sums that up beautifully:

The second aspect of creating impact is in the usefulness of your network to others. If you go out just to find people you can sell to, you're missing 99% of the reasons for building a network. The value is in the impact it has on others when you introduce people to each other - people who can help or are just fun, and people who know other people and are happy to keep building that extended network. When you become the "go to person" for others to find who they need, that's the biggest impact of all.

Talking to people with real curiosity about who they are and not just what they do means you can be of most help to both them and the rest of your network.

You can see Ann talking to Martyn Sibley about Networking for Impact on The Martyn Sibley Show.

Read The Art of Subtle Networking 

Find more from Ann at Inspiring Entrepreneurs on Twitter @AnnHawkins on LinkedIn

by Ann Hawkins

Martyn Sibley - How to be a World Changer

Did you start your business to make a difference - to make the world a better place?

Martyn Sibley had a fierce determination to be independent and in the process, became a world changer. In 2009, he started his blog - martynsibley.com to raise awareness of the barriers and also the opportunities open to disabled people.

Martyn has had Spinal Muscular Atrophy since birth.  He has never walked and has always needed care for most activities of daily living.

His accomplishments include a bachelor’s degree in economics and a master’s degree in marketing.  He has always sought new adventures and has travelled the world, with both mobility equipment and his care team. His passion to experience all that life has to offer has included scuba diving and flying a plane.

In 2011, sitting on a beach in Los Angeles, and having just completed an extensive road trip around California, Martyn conceived the idea of an on-line magazine Disability Horizons. This now has c.50,000 unique website visitors every month, c40,000 social media followers on Facebook, Twitter, LinkedIn and Instagram, and 6,000 email subscribers.

Martyn also co-founded Accomable, an accessible travel site which was bought out by Airbnb. He is extremely good at making a case for inclusion without ever preaching or making people feel guilty for not being disabled, has a wicked sense of humour and a thirst for adventure that leaves most people feeling like a couch potato!

This is how Martyn describes himself and what he's good at:

Martyn Sibley Being in a wheelchair has shaped, but not defined, a lot of my life experiences.

My vision is for a fully inclusive world without any barriers.

I've learned a lot about the following:

- blogging and social media

- being a spokesperson in mainstream media (tv, radio and print)

- building a community to make social impact

- consulting for businesses, governments and charities

- speaking on global stages

- coaching and teaching social change professionals

- running Disability Horizons magazine (managing a team, working on the business model, updating everything based on the readers needs)

- selling an accessible travel website (Accomable) to Airbnb

- more recently I'm working on health, personal growth and work/life balance because I want to keep changing the world way into the future :-)

I think some of the thirst for adventure comes from wondering what life as a disabled adult would be like if there were no barriers. In seeing all these opportunities I just want to grab them all! Moreover I want our community to enjoy them too, rather than focusing on what they can't do.
This is a transcript of a live Q&amp
Berenice Smith I run an infertility and loss awareness site which doesn't generate income but really ought to. I've been looking at offering add ons and I wondered how you analysed/planned the monetary side and also how you became a spokesperson.

Martyn Sibley On martynsibley.com I never wanted to directly monetise the site. But by becoming an influencer, I get paid work as a result of my free work. I'll come back to the media question afterwards.

- on disabilityhorizons.com we aimed to grow the audience enough that we'd get advertisers. This was a struggle but its working.

Then we created Accomable (vetting accessible properties for disabled holiday goers) which had its own business model and new life of its own.

After selling to Airbnb, I tried to solve the DH business model by offering information products to the community. We had some backlash about charging for things. Our 4 mission pillars are: content, digital events, social and holiday meet ups, and education programmes. I've been working with Ann and Brian, a professional fundraiser, on approaching corporate partners.

Media spokesperson question. I would say being a blogger taught me and enabled me to reach beyond my community.

In August 2009 when I started my blog I had no idea about writing, vlogging and podcasting but because I had a mission and plenty to say, I just learned as I went along.

In getting better at writing and speaking, plus with a growing following; charities put me forward for media opportunities, then the media found me, and now I even have an agent 😊

Helen Lindop You have bigger barriers than most of us when it comes to achieving what we want in life and business. How do you stay positive in the face of what must be some really frustrating situations?

Martyn Sibley I still get frustrated from time to time. But I've learned to focus on things I can control, and not give energy to things I have no influence on. I'm lucky that I've got a positive and optimistic disposition, but I do believe empowering attitudes can be learned. I can see things are, slowly, getting better amd it helps when we see progress!

Andy Boothman I would like to know more about your business planning and strategy Martin. For example do you work to a 5 year plan or something longer or shorter? Have you used investment or self funded? What are the pro's and con's of both?

Martyn Sibley For strategy and planning:

My initial plan, whilst still in a job before 2011, was - start blogging and see what happens.

Then it was to ensure I had enough freelance work to pay the bills. Which is still a priority.

With the bigger visionary ideas, I do plan for the objective/strategy/tactics, and work on a vision/mission. But particularly the tactics side need updating regularly.

In terms of funding, Accomable had a social grant and angel investors. But my World Changers community and Disability Horizons are totally bootstrapped.

I prefer bootstrapped. However, without investors Accomable could never have scaled enough to pique Airbnb’s attention.

The reason I prefer self funding is that you serve the community, using your vision, and there’s less risk of anything being derailed from investors looking for the financial return.

Obviously there are investors looking for social impact or longer time to see returns. But this is less common.

I just love how we can have an idea today, ask the community what they think, and if its positive we can do it in such a lean way.

As mentioned to Berenice funding a social cause is trickier. But with a mixture of aligned businesses, I'm positive we'll crack that on Disability Horizons this year

Helen Lindop Can you tell us something about your community building strategy please? Eg do you research where your audience hangs out, design content for them, encourage them to join your mailing list, that kind of thing? Also, does blogging still work as well as it did when you got started?

Martyn Sibley A lot of what I do solves a personal need. Of course I'm aware that a blind person has different barriers to me, and not all social change professionals struggle with what I did. But as a disabled person and social change professional I've experienced things very similarly. This is a big factor.

My social media strategy is; tell my story, build my community, give calls to action.

Part one and three are more simple. I blog on my experiences, and invite the community to comment or join an event etc.

To build a community, this took a long time and refers to your point on research. In 2009 I spent an hour or two every night after my day job engaging with relevant people. Its vital to give and serve without expecting something. In the end magic happens, but community building can't be forced or hurried.

Berenice Smith Have you been copied or imitated and if so, how do you handle people who try do that?

Martyn Sibley I know that I'm unique from my genes, my experiences and my way to execute so I don’t spend time worrying about being copied as its not possible. If peopletry to copy you, its confirmation you're doing well and flattering.

This book puts my point into a business perspective https://www.blueoceanstrategy.com/what-is-blue-ocean.../.

Always look for the new ideas, your first mover advantage will always pay off.

Helen Lindop Is your freelance 'pay the bills' work primarily as a marketing consultant? And if so what kind of work do you do/ who do you work with?

Martyn Sibley Its partly my speaking gigs. Otherwise my clients are all generally in the inclusion space too.

I run an online community for people with my disability for the national charity SMA UK. I'm a panel lead for Open Inclusion who do market research for big businesses on inclusive practises. I make podcasts for them and Cambridge based Iansyst (who help businesses employ disabled people).

Supporting these organisations with social media is definitely a potential strategy to help fund Disability Horizons too.

There are lots of opportunities to expand the work I'm doing, to help more people and build a great business, and I'm excited to be working with people in the Drive Tribe to share ideas and expertise.

by Ann Hawkins

Everything you need to know about business and personal finance ...

How do you know what you need to need to know about business and personal finance?

This is one of those topics that many business owners shy away from.

It's not exciting or cool.

It's not clamouring for your attention.

It's easy to ignore.

That is, until you can't ignore it any longer and then you wish you'd paid more attention sooner.

This is why we asked Andrew Hawkins to host an Ask the Expert session on "Everything you've ever wanted to know about business and personal finance but were afraid to ask" 

Following experience in banking and insurance in the City of London, Andrew has spent 25 years as a business consultant, offering practical solutions to business owners as MD of business strategy and funding specialists The Mercantile Group.

This is a compilation of a live Q&A and there is a quick check list of other questions you may need to ask at the end!

Basic requirements for every business 

Q. What are the basics that every business owner needs to consider Andrew?

Andrew Hawkins The minimum requirements for any business are: Insurance of people, things and liabilities; banking; cashflow projection; business plan; good advice and a tax plan which, in simple terms, is a good estimate of likely tax liability.

Insurance needs to cover your office equipment and anything you need to run your business, possibly Public Liability to protect the business from claims of injury, Employers Liability – if you employ anyone this is a legal requirement, and is usually included with a basic policy - and perhaps Professional Indemnity if you are giving advice. Also check your car insurance to make sure you’re covered for business journeys, especially if you’re claiming motor expenses through your business.

Ideally your business needs to be a separate legal entity - so that means either a Limited Liability Partnership or a Limited Company. If you’re a sole trader at the very least you should have a separate bank account for your business.

You should also consider protecting I.P., trademarks and other ways in which your business might be vulnerable.

Insurance

Q. I have professional indemnity, equipment etc. insurance for my business and as a family we have life insurance which covers critical illness and accident. I don't want to duplicate insure myself (especially when various places have loads of small print that means they often don't pay out).

Andrew Hawkins This can be an issue. A detailed review of a family’s insurance requirements in parallel with those of a business is complex - but essential. Probably needs a qualified Financial Planner.

You can get various sorts of Permanent Health and Personal Accident cover which will pay if one has a major accident - e.g. loss of a limb/eye - or suffer a long-term illness. “Normal” health cover provides for private treatment if the NHS cannot treat you quickly.

A lot of trade or membership organisations can provide this sort of cover, often at discounted rates.

Q. Are there financial planners that specialise in self-employment?

Andrew Hawkins  Some will be more au fait with business matters generally but finding a good Financial Planner is a challenge. Personal recommendation can be useful but the circumstances of the person doing the recommending needs to be similar to yours for that to have any value.  If you can’t get a personal recommendation try asking your accountant, bank manager (good luck with getting to speak to one), solicitor or another advisor. It’s important to have a really strong personal relationship with a financial advisor/planner and to ensure that s/he really understands your full personal and business circumstances. The regulations should ensure that a qualified planner will delve into everything but it’s important that s/he understands the relationship between your personal and business finances.

Q. This is a great reminder on the different insurances - thank you. I have PI as required for my Practising Licence, but should think about more (perhaps when I'm making a lot more :-D )

Don't mess up your taxes!

Q. What are the things you see that most business owners trip up on?

Andrew Hawkins The most common thing is not setting aside enough money to cover the tax bill and not being covered for illness or accidents that prevent them from working and therefore, earning.

The things people really need to avoid messing up are VAT and HMRC payments (these officials can close your business at a stroke!) so these should always be set aside every month so that those obligations are met without any problems.

It’s worth mentioning here that if something does go wrong and you can’t meet any obligation, payment or debt, the earlier you talk to the people involved the better. Usually it’s possible to negotiate a payment plan if you are honest with them and don’t try to ignore the problem! If you aren’t happy negotiating with HMRC – ask around to find someone with a good track record of doing so successfully.

Q. I wince when I hear freelance friends who haven't put enough aside for tax (and don't know about the payment on account thing!)

Q.  My accountant tells me how much I need to set aside each month for corporation tax but I always set aside more than this to my tax savings account. I consider this untouchable and it gives me a good buffer in case anything goes wrong.

Andrew Hawkins  The ‘buffer’ arrangement is a great habit to get into.

If you’re self-employed you’ll be asked to complete a tax Self Assessment form each year for the tax year, 6 April – 5 April.

If you file a paper return, it’s due by 31 October. If you make an on-line return, it's due on 31 January the following year. The tax due is also payable by 31 January. This is why it's not a good idea to leave it to the last minute! There are penalties for late returns and late payments starting at £100. Where necessary you’ll be asked to make an ‘on account’ payment in July and this can catch people out if you haven't been setting aside monthly installments in a tax or savings account.

Pension Provisions

Q. What about investing for the future? My company pension plan with Prudential has been dormant for 14 years, since going self-employed. I don't know whether to resurrect that, as it already has a bit of a (small) pot. Or continue to haphazardly put money in ISAs. Or both? What about new things like PensionBee where they'll merge your pensions (I also have a tiny amount in another one!) Investing in a pension is also deductible, isn't it?

Andrew Hawkins Pension management requires specialist advice and yes - contributions can be tax deductible. The regulations change quite often so check that whoever you consult is up to date with the right information.

This is something a lot of people put off but with life expectancy increasing all the time, its a really good idea to get this sorted as soon as possible.  

Mortgage requirements

Q. Something else that worries a lot of self-employed people is that it may be harder to get a mortgage than if you're employed. Any advice?

Andrew Hawkins As an employee of your own limited company it’s fairly simple to prove your income but if self-employed the mortgage providers know it’s a more complicated calculation and often require independent proof over a number of years from an accountant for example.

Q. Personally, I haven't had a problem but I've been self-employed for a while! You generally need to prove your income over 3 years. With one re-mortgage, I did need to get my accounts certified by an accountant who was ACA qualified. It wasn't my accountant I just used them for that purpose. My accounts had been set up by a bookkeeper using QuickBooks, so it was fairly easy for the independent accountant to verify everything.

Q. So someone who wants a re-mortgage but hasn't had an accountant up until now shouldn't be put off?

Andrew Hawkins Each case is different and depends on the mortgage provider, the type of business, length of trading etc. Again if you’re using a qualified financial planner they should help with the documentation.

Bookkeeping and Accountancy

Andrew Hawkins People often confuse bookkeeping and accountancy. Good bookkeeping - whether by the business owner or a contractor - is an essential day-to-day business activity and can help with cash flow, profitability, decision making and many other things, whereas if you just get your accounts made up once a year, this means that your accountant is mainly dealing with history.

Accounting (for Limited Companies) is not rocket science but it is extremely complicated.... It's concerned with Legislation for Companies, Tax Legislation, relevant Accounting Standards, case law, and often "de-coding" the bookkeeping.

Both S(&)ME, accounts *should* be straight forward. However, that needs adequate bookkeeping, and if people favour doing it themselves, rather than paying for the expertise of a qualified bookkeeper then the risk is that the accountant gets unsuitable records, and... well... "crap in = crap out"... A qualified accountant needs to highlight Directors' responsibilities in this respect and the fact that not fulfilling them is technically a criminal offence!

 In the event of illness or death …

Q. What about in the event of my death? (Cheery, I know). But I'm concerned if I go under a bus my poor husband will need to untangle all my business financial affairs. Is there such a thing as a separate will for the business? And what kind of professional should be the one dealing with my business in the event of my death (speaking as just an owner-manager at the moment!)

Andrew Hawkins We should all give thought to this. If clients have paid a deposit and for any reason you can’t complete the work, do they get a refund from your business? Do they own any work / collateral you’ve already completed for them? Issues like this should be covered by your Ts & Cs and any contracts you enter into.

Your will(s) should include any shares and how they will be dealt with - obviously another good reason for NOT being self-employed. The company shareholders agreement should cover what happens and whether the inheritor of the shares will have any executive/management input in the business.

Similarly, if you have a shareholder or investor and they die, leaving their shares or investment to a family member, you may not want that person involved in your business. Similarly, if their role is to contribute to or work in the business and they fall ill so can't fulfill their obligations, this should all be considered and agreed before issuing shares. We always recommend spending some time working on a Partnership Charter and/or a Shareholders Agreement if you are going into business with another person.

Q. What if I don't have a person in mind to be the executive/manager? I can (at the moment) quite easily give the shares to my husband, but he won't want to run the business. How does one go about finding someone who would either sell, run or dissolve the company if I die?

Andrew Hawkins Either you need someone in the business who can take over – usually set out in a continuity plan that some clients require - or you need appropriate legal and accountancy advice to set up how you wish things to work in those circumstances and you may need to consider a number of different scenarios.

Q. For our Practising Licence we have to have a "back-up" Accountant if we have more than 7 clients. It's a pain, and hard to find someone one trusts, but good when it's done.

Ann Hawkins Having seen the chaos caused by an accountant who just went off the radar due to illness, leaving his clients with fines from HMRC (and is now back in practice!) so I strongly recommend that anyone who engages someone in a position of trust like this investigates their continuity plans!

Rainy Day Funds

Q. How many months income do you think people should set aside as a buffer / rainy day fund, both personally and for their business? I realise that there are lots of variables, but is there a general minimum that you suggest to people? For example, I'm a bit concerned about the best way to use resources as I don’t want to stop the business from growing (and me from doing things I want to do personally), but also want to reduce the risk of getting into financial difficulties.

Andrew Hawkins Two different things here Emma. A buffer or ‘rainy day fund’ is always worthwhile to protect against illness, bad debts etc. The amount you need will depend on what insurances you have in place and how quickly you can replace your income. If you have employees and payroll obligations, ideally you’d want to be secure for 6 months, but for a sole trader 2-3 months cushion should give enough room to avoid a disaster.

This also depends on how quickly you could re-establish a business if you had to close down. There are lots of cases of businesses closing one day and re-opening the next with a different name.

Q. I definitely over estimate tax, and I'm always saving for it out of the year it's incurred rather than the year it's due. 6 months buffer isn't a massive stretch from where I am at the minute, but I think I need to strike the right balance between putting the buffer in place and not holding back the business in order to do so.

Q. Definitely strike the balance. 6 months buffer and I'm relaxed but if not spending money is holding back the business I'll happily skim 2 months off.

The questions you may not know to ask

We're aware that some people just don't know what to ask on this topic so here's a quick checklist of things that every business needs to consider:

1. Basic Business Plan
2. Business name registered and protected / trademarked
3. Business bank account
4. Accounting system
5. Payments app/card machine
6. Insurances
7. Pension
8. Enough money or support until profits become regular
9. A rainy day fund or buffer of between 2 - 6 months
10. Incorporate limited company/Limited Liability Partnership at Companies House
11. Register domain name(s)
12. Bookkeeper, accountant, lawyer, other advisors
13. Website, email, internet security, and data protection support.
14. Communications, phone systems, admin support.
15. If employing people (or yourself) apply for an Employer Identification Number/register with PAYE.
16. Register for VAT with HMRC if turnover will exceed £85,000 (currently) in first 12 months – or if you or your advisors feel registration will be advantageous. Investigate ‘cash’, ‘annual’ and ‘flat rate’ payment schemes.
17. Working space
18. Suppliers
19. Networking / support group
20. A mentor/advisor to help you work on your business not just in it.

If you have any specific questions or would like to discuss a growth strategy for you business, you can contact Andrew by email or through the Drive website.  

by Ann Hawkins

How to set up your business to be saleable

Could your business be attractive to a potential buyer?

Whether or not you're thinking of selling your business, these tips are worth following as they'll make your life and your business much easier to run!

How to set up your business to run without you  includes five free templates.

In this session, Ann Hawkins, MD of Drive the Network and Inspiring Entrepreneurs and Andrew Hawkins of The Mercantile Group, share their experience of how to make a business attractive to potential buyers.

This is a transcript of a live Q&A

What puts potential buyers off?

Q. What are the key things people get wrong in terms of not setting up their business to be saleable?

Ann Hawkins I'd say that main thing is in making themselves indispensable. That's why we started with Louise Lee last week with strategies to overcome that problem right from the start.

The other is in taking all the revenue out of the business, not showing a profit or paying tax. A buyer wants to see profit potential and some good accounts that show the business is being run properly and responsibly.

Q. Should we be thinking about this from day 1 (or if we've already started, ASAP)?

Andrew Hawkins 2-5 years before you want to sell is the minimum. It can take a lot longet than most people think!

Ann Hawkins As you all know, my favourite saying is "Start with the end in mind". If you set your business up with an exit plan in mind it can influence the decisions you make about the business is structured and it gives a clear focus right from the start. Even if you decide not to sell, setting your business up to run without you is the best way to grow it and stop you from burning yourself out!

Q. Is there a 'business eBay' where we can see what's selling and how much for?

Andrew Hawkins There are various agencies - but beware they all want to take your money! Hilton Smythe and Knightsbridge are examples - not recommendations.

Ann Hawkins This has always been a good "business marketplace" DALTONSBUSINESS.COM

Q. Are some types of business generally more valuable or easier to sell than others? E.g. products, services, websites, bricks and mortar

Andrew Hawkins Each business will be valued - although the methods of calculation vary - and compared to similar businesses. Generally ‘small businesses’ will be valued between 2 and 10 times annual profit.

Ann Hawkins If its a product, you'd need to show you own the intellectual property, trademarks etc.

Q. If you were starting a business today with the intention of selling it in 5 years time, what type of business would it be (asking for a friend 🤣)?

Andrew Hawkins Little effort, highly profitable, mostly automated. Recent trends suggest tech businesses are the easiest to sell.

Ann Hawkins Just think about some of the buy outs with big $$$$ in recent years. They're nearly all software businesses - and a lot are B2C consumer / services. Some haven't even made a profit but have huge subscriber lists and that's what they've been bought for. The buyer wants to sell more or advertise to those subscribers.

Q. Other than high profitability and low effort, what can help make a business attractive to potential buyers? I assume a coherent set of accounts is a good start?

Andrew Hawkins Coherent accounts - and credible. No surprises or hidden loans to directors etc. The other issue is a good team with complementary skills. The purchaser may not want the founder/MD for very long but a strong team is always attractive.

Ann Hawkins It can be something that's a match with what the buyer is already doing or they see you as a competitor and want your customers. Another reason could be that your business adds something to their current offering - think AirBnB who bought Martyn Sibley's Accommable (accessible accommodation portfolio)

Q. Let's assume it's easy to demonstrate coherent and credible accounts and the buyer sees me as either a competitor or a good fit. How do I demonstrate I have a strong team?

Andrew Hawkins You should be able to show that your team has the skills to cover all the basics: Product/service knowledge, marketing/sales, finance, operations.

A ten point checklist

Ann Hawkins Selling to an outsider is only one option. You might want to allow an employee to "buy in" with a view to taking over when you're ready to retire. If you've got a succession plan in place, that can be attractive to a potential buyer too as it means they've got someone ready in place to run the business if they don't want to do it themselves.

Andrew Hawkins  Often a great way to plan succession. A management buyout. You have some control over who is involved and negotiations should be more amenable. Other options include a management buy-in where a new external team is put together to buy; a straight ‘trade’ sale; a merger with a mother company - or even an arranged takeover by another business. Here’s a check list of things to think about, but most importantly plan early (2-5 years ahead) and consult an independent specialist (not a sales agent) at the earliest opportunity.

1. Plan ahead 2-5 years
2. Minimum 2-3 years profitable accounts
3. Ensure accounts are ‘clean’
4. Don’t try to avoid paying corporation tax
5. Need good level of profit over a number of years to attract buyers
6. Calculation of price is often dependent on level of profit
7. Make business less dependent on founders/MD
8. Most non-retail businesses require preparation of a credible proposal
9. Non-retail agencies can help attract potential buyers
10. A simple up to date business plan

Q. Individually I understand the words in point 8. Collectively I don't. Would you explain please? :-)  Oh and how does one manage to avoid paying Corp Tax? I'm asking for a friend 🤣

Andrew Hawkins A credible proposal is a sales document demonstrating the history, current position and future prospects. Plus a credible reason for the sale.  As for avoiding tax ... well.... that would be ..... Anyway - don’t do it - if you want too sell - pay the tax on your lovely profits. 😁

Q. What would a simple business plan contain?

Andrew Hawkins Very briefly - as each plan is different - a simple business plan needs to be completely up to date and easily understandable by an outsider who may have no knowledge of your trade or sector. It should include all the necessary financials - P&L, Balance sheet and cashflow projections. It needs to tell the reader what the business does, how it started, what exciting prospects it has for expansion and greater profit, the founder and the team together with CVs, description of product/service, competitors, SWOT analysis, marketing/sales plan, risk and reward.

Want to keep your intentions to yourself?

Ann Hawkins We're aware that not everyone wants to broadcast their intentions of thinking about selling their business so if anyone wants a private chat just send us a message!

You can find us on Twitter @AnnHawkins @Andrew_Hawkins  or contact us through the Drive website!

by Ann Hawkins