BETTER BUSINESS
Issue Eleven, August 2006

In this months issue:

Market Research
What do employees want from their boss?
Factoring

MARKET RESEARCH

Market research is the gathering and analysis of information about a market and its preferences, opinions, trends, and plans. Why should I bother with this extra cost? Well quite simply, it is essential for the long-term survival and growth of your business as it enables you to reduce risks and become more competitive. With market research you may be able to identify opportunities for new products, customers or services, anticipate changing market trends and determine customer satisfaction.

Market research can be conducted in several different ways: by talking to customers (current or potential), talking to competitors, reviewing research conducted by other parties (e.g. Government Departments, the internet), or designing your own research to answer specific problems/questions. General market intelligence is also gained from newspapers, television and friends/colleagues. Finally it is important to have robust internal information systems in place which can capture and retrieve market data as required, e.g. creation of a customer database which contains such things as interests, ages, localities, sales order volumes etc.

WHAT DO EMPLOYEE WANT FROM THEIR BOSS?

Being a business owner/manager involves wearing many different hats, one of them is staff management. HWI has five tips to help you understand the psyche of an employee: -

· Employees want to trust you and you to trust them. Begin by being trustworthy and extending trust as time and the working relationship develops.

· Employees want good two-way communication. You can begin this process by being a good listener and encouraging an “open-door” policy, making it easy for staff to be able to talk to you at anytime.

· Employees want to be challenged. Set forth your business vision and goals clearly and then let your workers exercise their creativity and authority in meeting your goals.

· Employees want accountability. Not only should you hold them accountable for their own performance but you should measure your own performance as well – practice what you preach!

· Employees want recognition. Offer praise and express appreciation at every opportunity but make sure you mean it otherwise this process will quickly devalue.

FACTORING

Factoring, another form of business finance, is the process of turning accounts receivable into cash by selling them to a finance company.  This process can be expensive as you pay for the cost of funds and collections (comparable to costs involved in running a business overdraft), however, it can be beneficial by improving your cash flow and allowing you to take advantage of supplier discounts.  Factoring also gives you the opportunity to outsource your sales ledger operations and to use more sophisticated credit rating systems.  Once you have set up a factoring arrangement with a factor, it works this way:

Once you make a sale, you invoice your customer and send a copy of the invoice to the factor - most factoring arrangements will require you to factor all your sales.  The factor then pays you a set proportion of the invoice value within a pre-arranged time - typically, most factors offer you 80-85% of an invoice's value within 24 hours.  Note that customers who do not pay the factor within pre agreed timeframe results in these debts being deducted off new invoices sold to the factor.

There are other issues to consider so please call HWI if you wish to know more.

What's new at HWI...

Free seminar: Take property off your worry list, Wednesday 23rd August 2006, 9am.  Email Mark at maldridge@hwi.co.nz for details.

 

Disclaimer: Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or rely on it without first seeking professional advice.