The FreeAgent Blog

4 business lessons to learn from Queen

Posted on 8 November 2018 by Adrian Mather - Jump to comments

A hand holds a crown in the air

With the recent release of the new biopic movie Bohemian Rhapsody, the flamboyant world of Freddie Mercury and Queen is now firmly back in the spotlight.

So with the likes of We Are the Champions and Fat Bottomed Girls blaring out on our Spotify playlist, we wondered whether there were any lessons that businesses could learn from the legendary rock group. Here are our top four:

Work with the right people

Individually, every member of Queen was responsible for writing some of the band’s bona fide classic songs, whether it was Freddie Mercury (Bohemian Rhapsody), Brian May (We Will Rock You), John Deacon (Another One Bites the Dust) or Roger Taylor (Radio Ga Ga). But without their combined creative, collaborative skills, the band may never have had the success that it did.

In business it’s equally important to build a good team around you. By choosing talented, skilled people who you can trust to take responsibility for their specialist roles, your business should run more harmoniously and efficiently. Remember that your team doesn’t need to be made up of people within your business. Even if you’re a one-person operation, you’ll still need to work with the right suppliers, collaborators or third-party specialists at times, so make sure that you choose wisely when it comes to these “band members” too.

Challenge yourself (and your team)

There are plenty of legendary stories about Queen falling out with each other in the studio amid blazing rows. But more often than not, these disputes were down to the pursuit of artistic and musical perfection among people who were passionate about their craft, rather than personal gripes.

Of course, hurling chairs at each other during a full-on screaming match is unlikely do you or your business any favours, but don’t be afraid to respectfully challenge yourself and your colleagues. Healthy discussion and teamwork is far better than simply having your staff implementing your ideas without question, and it may uncover new avenues of business growth that you hadn’t considered before.

Always make the most of your opportunities

In 1985, Queen were 15-year rock veterans with a string of memorable chart-topping hits in the bag, but they never rested on their laurels and were always looking for new ways to promote the band.

The chance to play Live Aid at Wembley Stadium in front of a global TV audience of 2 billion represented a huge chance for the band to put themselves further into the limelight. With a blistering 20-minute primetime set, Freddie & co wrung as much as possible out of this opportunity, putting in a performance that’s still regarded as one of the finest of all time.

The lesson? Even if your business is well established, it’s similarly important to take advantage of new opportunities when they arise. Whether you’re pitching to a new client, attending a networking event or presenting at a conference, give it your full focus and put on your very best performance.

Be creative and take risks

A key factor in Queen’s success was their willingness to take risks for their art. Just look at the song Bohemian Rhapsody:, an operatic, six-minute opus that record execs thought was too long and complex to be a hit, but ended up selling a million copies and spending nine weeks at the top of the charts.

Sometimes you have to be willing to get creative if you want your business to grow and flourish. Don’t be afraid to take risks that your competitors may not have thought about so, like Mercury and his bandmates, you can stand out from the crowd.

Zombie companies: how to know if your business is walking dead

Posted on 31 October 2018 by FreeAgent - Jump to comments

A green, deteriorated, Zombie-like arm raises from the ground in a graveyard.

They limp along lifelessly, feasting on the resources of business owners and their employees, groaning and wandering aimlessly. This is the dawn of the dead business model: zombie businesses.

One of the key signs you’re operating a zombie company is that it’s only making enough money to pay off the interest on your loans to the bank. Without any cash, there’s no money for investment to fuel growth. But things aren’t dire either! You can still pay off your suppliers, make payroll every month, pay the rent and keep the lights on.

What separates zombie businesses from thriving ones is a lack of means to grow. Like their flesh-eating counterparts, they’re not fully dead, but they’re not fully alive either.

The looming threat of zombie businesses

There’s only so long that zombie businesses can survive without growing. Eventually, something will kill them off. Whether it’s a change in the market or a lack of funding, these businesses simply aren’t sustainable.

Ultimately, it’s the business owners and employees who stand to suffer. With recent research suggesting that there are 49,000 of these businesses operating in the UK today, the zombie company is a monster you can truly be scared of this Halloween.

Signs you might be running a zombie company

Do you suspect your venture might have joined the realms of the undead? Put your objective hat on and have a cold, hard look at your business.

  • Are you losing customers at a faster rate than you’re gaining them?
  • Are your competitors dominating your market?
  • Do you have a great offering but people just aren’t interested in it?
  • Are you making plenty of sales but just can’t turn a profit?

If the answer to any of these is yes, there’s a good chance your business is suffering from the zombie plague.

Time to pull the plug?

Deciding to let go of a business is not an easy decision. You’ve worked on it day in, day out and have invested a huge amount of emotional energy in it. However, if you go on you’ll be doing yourself a disservice. Your energy, creativity and expertise should be put to use in a business which stands a chance of survival. Maybe it’s time you brought death to your undead business?

Closing down your business may feel like a dark cloud, but research suggests there’s a silver lining for those who are able to view the failure as a positive development experience. A 2014 study by Stanford University economics Professor Kathryn Shaw found that entrepreneurs who had previous ventures — even those that had failed — increased their chances of success as a result of the lessons they learned from the previous businesses.

Your decision to move on may be your opportunity to move up.

Thinking about your next venture? Here are four ways to finance your business without a bank loan.

Autumn Budget 2018: what's in store for small businesses?

Posted on 30 October 2018 by Emily Coltman - Jump to comments

budget briefcase illustration

The government may have opted for a Monday afternoon Budget over the usual Wednesday to avoid Halloween jokes, but what ghoulies and ghosties lurked in the Autumn 2018 Budget for small business owners?

IR35 changes in the private sector

At the moment, if you’re a contractor and your clients are in the private sector, it’s up to you to determine whether you are an employee in all but name and should follow the IR35 rules.

From April 2020, if your clients are “medium or large” businesses, it will be up to them to assess whether or not you are caught under IR35 – meaning you should be taxed as an employee rather than as a contractor without receiving the benefits of employment such as holiday pay.

This rollout to the private sector follows controversial changes made to IR35 rules in the public sector in April last year.

The Budget report did not define a “medium or large” business, but my suggestion would be that this will follow the Companies House thresholds, where a small business is one that has at least two of:

  • annual turnover (sales) not more than £10.2 million
  • the balance sheet total not more than £5.1 million
  • the average number of employees no more than 50

A medium-sized business is one that has at least two of:

  • annual turnover (sales) not more than £36 million
  • the balance sheet total not more than £18 million
  • the average number of employees no more than 250

And a large business is one that does not meet the criteria of either of the above.

Whether the “number of employees” will also include affected contractors has yet to be determined.

Employment Allowance restricted to small businesses

The Employment Allowance, which gives many businesses a £3,000 reduction in their employer’s National Insurance (NI) bill, will be available to fewer employers from April 2020.

From that time, it will be limited to employers whose annual employer’s NI bill was under £100,000 in the previous tax year.

Annual Investment Allowance (AIA) increased

At the moment, businesses can claim tax relief on the cost of qualifying capital assets up to a limit of £200,000 a year.

From 1st January 2019 to 31st December 2020 that allowance will be increased to £1 million a year.

Digital services tax for large businesses only

From April 2020, a new 2% digital service tax will be introduced on sales made by large, established digital services businesses.

There was speculation before the Budget that this new tax could directly impact small digital services businesses; however, it only applies to groups generating over £500 million a year globally from these services.

VAT threshold remains at £85,000

The UK’s VAT threshold (the level of annual VATable sales at which a business must register for VAT) will remain at £85,000 until April 2022.

In some ways this is good news, as it could have been reduced; however, in real terms it is a reduction in the threshold as inflation is rising.

No mention of Making Tax Digital (MTD)

There was no mention of MTD in either the speech or the full report, so we have to assume that the current plans are going ahead, with MTD for VAT due to be introduced in April 2019.

Business rates to be cut for small retail businesses

Business rate bills will be cut by one-third for retail properties with a rateable value below £51,000, for two years from April 2019. The government says this will benefit 90% of retail properties.

Not much good news for small businesses!

Although there are promises of more support available to small businesses, such as a new Small Business Leadership Programme and a pilot in Greater Manchester to test what government training could help the self-employed, sadly this Budget does not contain a lot of good news for the smallest businesses.

The IR35 changes could introduce additional complications in building relationships with clients, while the Annual Investment Allowance increase is unlikely to be very helpful and the Employment Allowance continues for the smallest businesses as it has been.

Find out more about how small businesses will be affected by this year’s Budget in the FreeAgent podcast →

5 simple mind tricks to help get your invoices paid on time

Posted on 25 October 2018 by FreeAgent - Jump to comments

Looking for an alternative way to get your invoices paid? Here are five simple psychological tricks that might just give you the power to summon invoice payments from the most stubborn late payers.

1. Ask for a favour

This trick is also known as the Benjamin Franklin effect. The story goes that Franklin once asked to borrow a book from a man who didn’t like him and, as a result, the man soon became good friends with him. Of the incident, Franklin said: “He that has once done you a kindness will be more ready to do you another than he whom you yourself have obliged.”

Early on in the relationship with a new customer, ask them to do a favour for you. This could be something small, but it will encourage the client to view you as a friend. By asking a favour of someone they can’t help but rationalise that you trust them and that, as you must have been worth doing the favour for, they can trust you in return. When you’re trying to figure out how to convince a customer to make a payment this might just help get the ball rolling.

2. Use the client’s name

Dale Carnegie, author of the multi-million selling book “How to Win Friends and Influence People” strongly advocates for using people’s names to win them over and said “A person's name is to him or her the sweetest and most important sound in any language”.

Find out who is responsible for paying your invoice and call them by their name. Using a customer’s name on an invoice is probably more likely to get positive results than “dear sir/madam” or “to whom it may concern”.

3. Appeal to the late payer’s good nature

People hate feeling guilty, but if they haven’t paid your invoice, maybe they should be feeling guilty. You can prompt them by starting invoice reminder emails with a phrase like, “I need your help.”

How far you go with this depends on your situation. One FreeAgent customer even attached a picture of his hungry child to his payment reminders. The child wasn’t actually starving, but the image seemed to do the trick!

4. Prime the client for paying from the get-go

Invoices often come as a rude interruption for both parties and conversations about payment can be awkward if the invoice comes out of the blue. You can stop this from happening by setting up a funnel that reminds clients of the payment deadline throughout your correspondence.

In your first email after winning a contract with a new client, clearly set out your payment terms and note any interest you’ll charge or legal ramifications for non-payment. When the invoice is nearly due you should give the client a friendly heads-up that it’s on its way.

When you send the invoice, give another friendly reminder of the penalties for late payment and legal ramifications. Your first chasing email, if you have to send one, should be equally friendly and hint at charges. Your second reminder should ramp it up a bit with a warning about legal action.

5. Harness the power of nouns

Studies have found that using nouns that reinforce people’s sense of membership to a group can have a powerful effect. In one experiment a group was asked “how important is it to vote in tomorrow’s election” and another was asked “how important i is it to be a voter in tomorrow’s election?” Subjects who were given the “voters” question were found to be more inclined to vote the following day. The study concluded that this was likely to be because the noun “voter” reinforced their membership of a particular group and encouraged them to get involved.

When it comes to encouraging clients to pay your invoices, you could harness the power of nouns in your reminder emails. Instead of talking about “late payment”, refer to these customers as “late payers”. Their desire to not be part of this group might get them to send that invoice after all.

Hopefully these tips will help you understand more about how to get a customer to pay an invoice on time and get those late payers reaching for their wallets. Don’t forget that you can set up automated invoice reminders in FreeAgent so you don’t have to spend time chasing up clients.

Find out more about invoicing in FreeAgent →

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