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Does Your Business Have an Ego?

Businesses are like people. In fact, businesses are people. And as such, businesses tend to take on characteristics like people. These collective characteristics can enrich or diminish how a business performs.

It is interesting to note that a business, like a person, has an ego. The word ego may carry with it some negative connotations in today’s world, but actually there are healthy business egos and there are dysfunctional business egos.

Having a healthy ego is a good thing. The earliest concepts of the ego positioned it as a psychological construct contained within the mind that referred to the active, controlling, perceiving, learning functions of personality. The healthy ego scans external reality and inner experience, choosing and directing a person’s behavior so that personal needs are met without danger to the self or without violating social taboos. The healthy ego creates a proper sense of self-image.

Similarly, a healthy business ego would be one that collectively monitors the business environment, collecting data that can be used to further its cause in a proper way. Internally, like the cells of the brain, each employee is free to share information that may help the business grow or avoid pitfalls. Each employee has some contribution to make toward generating sales, servicing customers, and creating new products and services. Employees are empowered to use their personal talents, skills and abilities in a manner that furthers the values of the business as a whole.

But somewhere along the way the collective egos of the owners and employees (which form the business ego) gradually are led astray by the pressures of economy, market demands, panic, or visions of grandeur. What is left in the dust are the reasons why the business became a business in the first place; the visions of the founders, the understanding of how the business is highly interconnected with other businesses, with customers and employees, and with the earth itself. Thus we see the rise of the dysfunctional business ego.

Although those trapped in a dysfunctional business ego can’t usually tell they’re infected by one, it is painfully obvious to others. Customers usually know, employees usually know, suppliers usually know, and lenders to the business usually know. As business performance slowly “heads south,” owners and managers overlook root causes, grasping instead at short-term fixes.

What are some of the symptoms of a dysfunctional business ego? What do people see in the business that tells them something is wrong? Here are a few of the more obvious key symptoms:
o Frequent miscommunications within the business.
o Higher than normal turnover or absenteeism.
o Talents, skills, interests and abilities of employees are unknown and underutilized.
o Cash flow, the life blood of a business, is ignored, often concealed in accruals or otherwise intentionally overlooked.
o Repeat customers disappear and new customers are hard to find.
o Internal thefts and misappropriations.
o Morale drops; building and grounds appearance disintegrates.
o Management directives focus on the “bottom line” to the exclusion of company values.
o Business owners no longer rely on outside help to advise their business; they claim they can do it themselves without outside help.

A business with management capability, product uniqueness, cash reserves, efficient distribution and delivery operations, and a strong customer base can still be brought to its knees if a dysfunctional business ego emerges.

What is the cure? A business ego, as with a personal ego, can be dissolved in the face of awareness and truth. Here are a few guidelines to explore with professional assistance:
o Become aware that your business has an ego problem. This is a huge first step toward regaining its health.
o Reestablish and promote the values upon which the company was formed. Use the company’s mission and vision as a decision-making guideline.
o Empower employees to discover and improve their skills and interests. These are huge resources often overlooked.
o Act on fact, not fear. A dysfunctional ego can’t tell the difference between opinion and fact. It assumes viewpoints are reality. They’re not.
o Focus on the good that the business does for others; use the bottom line as a measure as to how well you’re doing, not as a goal in itself.
o Learn to become aware of your business environment, moment by moment. Slow up and watch the little things around you – they tell you volumes.
o Monitor your actual cash flow – dig into your processes when something is not working right, keeping in mind the above guidelines.

Take time to care for your dysfunctional business ego and it will eventually regain its health. Having a healthy business ego may be the key to your business success!

How to Set Up Business Banking Requirements For Your Beauty Salon Or Day Spa

Banking is a significant component within the varied mix of business-related topics you’ll need to address in your beauty salon or day spa business. If you’ve decided to operate under your own name as a sole trader, you can use your regular savings account to run your business. However, you’ll require a number of banking products to help you do so in the most practical and efficient manner.

Salon banking is relatively an easy component of your business responsibilities within your salon systems and thanks to online banking these days, you don’t even need a salon software to manage the task.

So, what other kinds of accounts might you need? I advise anyone intending to go into the salon or spa business to consider setting up the following, which are examined in more detail below.

o A personal account.
o A business account.
o Personal and business credit cards.
o A taxation account.
o A merchant facility, (credit card processing).
o A superannuation account.

1. Business account

Unless you’ve chosen to trade under a name other than your own, this will be opened using your business name. You will need your Business Registration details from the Department of Fair Trade to open the account, along with other proof of identification. Request monthly bank statements so you can track your business success and manage your money on a regular basis. You should also have a chequebook, an internet banking facility, a merchant facility (more on this later) and direct debit capability.

NB: if you are not the most disciplined person DO NOT have a key card attached to this account. Pay yourself a weekly salary from it and don’t touch it for any purpose other than paying business-related expenses. That way, you’ll always know where you stand financially.

2. Personal account (savings)

This can be an account you already have, and will be used for all non-business-related bills and purchases.

3. Personal and business credit cards

You may want to take advantage of Frequent Flyer miles and other loyalty bonuses by using a credit card for all your business purchases. If you do, you may not require a traditional business bank account. Watch out, though, that the flexibility of the credit card doesn’t encourage you to spend on things that won’t help your business! If you do choose to use a credit card only, do as you would with the traditional accounts and have two: one for your personal and one for your business expenses.

4. Taxation account

Hopefully, your taxation bank account will be the most rewarding. Sadly, we all have to pay tax, and if you’ve got a tax bill you’ve made money. If you don’t have the money saved to pay the Tax Department, then the lifestyle you have is outside the financial parameters of your business. To ensure you always have the readies for your tax, open a bank account especially for that. Set it up so that 15 to 18 per cent of you total turnover is withdrawn direct from your business account and transferred into your tax account WEEKLY. If you’re registered for GST, add another 10%. This will prepare you for your taxation commitments and enable you to concentrate solely on making money, rather than worrying about not having enough at the end of the year. Most banks have special accounts for precisely this purpose.

If you’re a lousy saver or don’t trust yourself with money in the bank, set your tax account up in the following way.

o As a fixed-term account that must contain a designated amount before withdrawals can be made.
o Have a co-signatory on the account – your partner, a parent, a best friend or someone you trust implicitly.
o No key card.
o Not linked to any other account.
o Not linked to the internet.

You can set up the direct debiting facility from your online banking facility. That way, you can have a set amount credited to your tax account or pay precisely the right percentage each week by making a ritual payment at the end of the week as part of your business housekeeping.

Tip bit:
o Keep your business and personal expenses separate, using clear and defined account and record-keeping procedures. It’s a must for a business of any size, from micro to macho. It’s the simplest way to see how your business is travelling (at a glance). If you have any questions about separating your business and personal finances, consult your accountant/ CPA or business coach.

o If you can get to the money in the account for any purpose other than paying tax you’ll rip yourself off. Don’t go into business if you want to spend your life avoiding tax. You’ll fail, if not sooner then later! Be consumed with making money, not hiding it! You won’t enjoy being self-employed if you don’t have enough funds to cover your income and GST tax obligations as they arise. Save for your tax!

o Bank as and when you collect the money, especially cheques. Make going to the bank a daily discipline.

o Whatever bank and accounts you decide to use, consult your accountant/ CPA to ensure this aspect of your business is set up correctly right from day 1.

o Have two separate filing boxes and get into the habit of sorting all your receipts in the appropriate files during and at the end of each week. Don’t get to the end of the financial year and start then – if you haven’t made good notes on each receipt you may find it too hard to remember where it should go.

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