Category: Business
UPDATED: Are You Maximising Micro-Moments?

SUMMARY. How many of you are reading this article on your smartphone right now? Dependence on mobile devices has changed the traditional user journey and split it into thousands of micro-moments, each of which is pertinent to someone, somewhere, at some point in time. Users’ perception and consequent trust of a company can hinge on a single micro-moment sliver. So, if you can optimise your content for these moments, you’re going to be noticed, leading to more leads and increased sales.

How do you truly capture your audiences’ attention with valuable content at the right time? As marketers, it’s a daily grapple fuelled by understanding consumer behaviour trends and relentless monitoring of analytics. What if I told you the broad scope of user targeting might be distilled down into a series of moments, micro-moments, to be exact?

 

What are micro-moments?

Micro-moments are those split seconds where time stands; still, your brain’s synapses are firing, causing an intent-rich, instinctive action to occur. An article published by Mention makes the following comment about micro-moments ‘[It’s] when people reflexively turn to a device – increasingly a smartphone – to act on a need to learn something, do something, discover something, watch something, or buy something.’

In a previous article, we discussed Identifying and Adapting to New Consumer Behaviour Trends. In a nutshell, it explains that the evolution of technology continually influences (and increases) users’ expectations when searching for information online; this behaviour has been compounded further with the advancements in mobile usage and an on-the-go lifestyle. Suppose you want your brand to dominate Google SERPs; in that case, you have to anticipate micro-moments and seize them so that you can deliver precisely what potential customers want before your competitors. Recognising and capitalising on micro-moments is being touted as a game-changer for lead generation and conversion opportunities.

 

How you can apply micro-moment marketing

Capture every marketing qualified lead and conversion to establish user interaction. When working with micro-moments, it’s unlikely that the journey will be linear; therefore, accurate analysis and interpretation of the collected data must streamline somewhat erratic patterns. It’s definitely not an easy task; it will challenge seasoned SEOs and search marketing specialists, but the payoff is that you’ll be able to identify subtle connections which you may not have seen otherwise, on which you can capitalise. The ability to be the brand that’s there, with the right message when your customers need you, will tick every box required to ensure a lucrative return on investment.

A guide published by Google states, “Thanks to mobile, micro-moments can happen anytime, anywhere. In those moments, consumers expect brands to address their needs with real-time relevance.”

In the guide, Google summarises three essential stages that can help you win micro-moments – we’ll take a more in-depth look at these methods in an upcoming article [Watch this space].

  • Be There

You’ve got to anticipate the micro-moments for users in your industry and then commit

to be there to help when those moments occur.

  • Be Useful

You’ve got to be relevant to consumers’ needs in the moment and connect people

to the answers they’re looking for.

  • Be Quick

They’re called micro-moments for a reason. Mobile users want to know, go, and buy swiftly. Your mobile experience has to be fast and frictionless.

 

Google also identifies four key moments that need to be captured in each of the three stages. “A good guiding principle is this: be there across all stages (moments) of the consumer journey, not just when someone is ready to buy. To accomplish this, consider four key moment types that represent the full range of user needs.”

 

The four key moments

  • Moment one: The ‘I-want-to-know’ moment

These are instances where a user searches for specific information.

  • Moment two: The ‘I-want-to-go’ moment

These are situations where the user searches for local businesses within a specific industry because they want to go there now. They would type in a question such as ‘Chinese restaurants near me. If your company is currently signed up for Google My Business, do yourself a favour and get registered right away. Your business will be more visible on Google SERPs.

  • Moment three: ‘I-want-to-do’ moment

This situation occurs when a prospective customer is searching for instructions to solve a problem. E.g. How do I manage my personal finances during a crisis?

  • Moment four: ‘I-want-to-buy’ moment

These are moments during which users are looking to make a purchase. Many people aren’t committed to a brand but will generally purchase from the one which supplies the required information upfront.

micro-moments

© Google

Key takeaways

  • Micro-moments are occurrences when people reflexively turn to a device such as a smartphone – to act on a need to learn something, do something, discover something, watch something, or buy something.’
  • You have to anticipate micro-moments and seize them so that you can deliver precisely what potential customers want before your competitors.

There are four types of micro-moments

  • Moment one: The ‘I-want-to-know’ moment
  • Moment two: The ‘I-want-to-go’ moment
  • Moment three: ‘I-want-to-do’ moment
  • Moment four: ‘I-want-to-buy’ moment

When working with micro-moments, it’s unlikely that the journey will be linear; therefore, accurate analysis and interpretation of the collected data is key.

 

So, are ‘traditional’ marketing and strategy planning conventions going to become obsolete?

The efficacy of micro-moment marketing begs the question, are ‘traditional’ marketing and strategy planning conventions becoming obsolete? No, on the contrary, micro-moments can only be leveraged to their full potential if you:

  • Understand your target audience

Implement platforms and methods that entice engagement with your existing and/or prospective customers. Also, keep your ears to the ground about the latest happenings in your industry’s space. If you complement these tactics with continual research, you’ll gain a far more in-depth knowledge of your audiences’ I-want-to-buy-that’ moments and overall purchase decisions.

  • Deliver relevant, valuable content

Once you have a good grasp of who you’re targeting, how your message is delivered is the next hurdle. An omnichannel marketing strategy is an effective way to achieve a holistic view of which channels will convey the moment effectively. Remember, not every medium may be suitable for a particular message, so focus on one or two platforms to bring maximum exposure. For example, if you’re communicating through images and/or video, consider using social media platforms such as Facebook and Instagram.

Interestingly, the concept of micro-moments has been around since 2015, yet it can be argued it generally hasn’t been used to its full potential. It challenges the status quo, which is vital if you want to break audience complacency barriers and oust the competition.

Suppose you’d like help from a professional marketing consultancy to help you integrate this seamlessly into your business strategy. In that case, we have a highly experienced dedicated marketing team ready to assist in maximising micro-moments.


UPDATED: Insights From Our CEO: The Importance Of Budgeting

Welcome to our exclusive series of personal – and business – wealth management insights from Ajay Wasserman, Founder and CEO of the Fio Group. In this article, he explains why you should have an informed budget planning strategy in place to pre-empt a lack of cash flow.

SUMMARY. The pandemic has taken an emotional and financial toll on the majority of South Africans personally and professionally. It’s now more important than ever to compile feasible personal and business budgeting strategies that are agile enough to be adjusted quickly and effectively. Here’s what you need to know.

Updated 26 July 2021

The pandemic has taken an emotional and financial toll on the majority of South Africans personally and professionally. Recently, the promising uptick in the vaccine rollout has been marred by civil unrest and looting of businesses, adding another dimension of financial uncertainty. However, it’s vital that the fundamental principle of budgeting needs to remain consistent.

A budgeting strategy, now, more than ever, needs to be agile, meaning adaptable to situational changes and challenges. This should be applied to personal, and business expenses (if you’re a business owner.)

Below, I discuss budgeting strategies for personal financial wellbeing, but the principles for business are similar.

 

Steps to build an effective business budget strategy

  • Analyse fixed and variable expenditure
  • Define/revise short, medium and long-term business goals.
  • Adjust financial forecasts and target profit margins if necessary.
  • Review your budget with a financial professional such as an independent financial adviser.

Key takeaways

A budgeting strategy needs to be agile, meaning adaptable to situational changes and challenges.

Follow the steps to build an effective business budget strategy:

  • Analyse fixed and variable expenditure
  • Define/revise short, medium and long-term business goals.
  • Adjust financial forecasts and target profit margins if necessary.
  • Review your budget with a financial professional such as an independent financial adviser.
 

How to build a successful personal agile financial strategy

Do you usually feel financial pressure by the 20th of the month? It’s a gut-wrenching feeling, isn’t it? It’s a worldwide reality, unfortunately. People often run out of money in the middle of the month, and they cannot afford to buy essentials due to income being unnecessarily spent shortly after payday. This is why it’s important to build a comprehensive budget plan that accounts for your fixed and variable expenditure as well as your short, medium and long-term financial goals.

Having a proper budget set up is one of the most important financial steps for anyone who needs to manage their finances, thereby improving their cash flow from money coming in from your salary. By implementing this method, you can see exactly what expenses still have to go off your account so that you don’t run out of money by the end of the month.

If you’ve never compiled a budget before and are unsure where to start, it’s best to speak to an independent financial adviser (IFA). They will assist you in firstly, understanding your financial situation, and secondly, mapping out your income and expenditure.

The process will

  • Show you how much money you’re earning, and how much you’re spending.
  • Examine what you’re actually spending your money on
  • Determine how much money is required to cover your fixed expenses and how much can be used for variable expenses.

Fixed expenses

These are expenses that you can’t do much about and, therefore, they need to be the first ones you add to your budget. They include bond and vehicle repayments, rent, medical aid scheme insurance and life insurance.

Variable expenses

These are the things on which you choose to spend money. They include entertainment, groceries, eating at restaurants and travel. This is where an IFA can help you decide where you can make cuts to free up money that can be contributed to your cash flow.

Without a custom, structured budget in place, you are likely to find that most of the time you have to use credit cards, overdraft or another type of credit facility towards the end of the month. This is a dangerous strategy and creates a slippery slope leading you into a black hole of debt that you can’t pay back; you’ll also bear the brunt of compound interest, which can make your situation even more dire.

I think the most important thing for you should be to have an Excel spreadsheet or another type of software that you can use to run your budget. The reality is that payments aren’t always made on the same day every month unless you have debit orders. You may have some payments coming off your account on the first of the month, while others may be debited later in the month. By knowing and accommodating these expenses, you should always have cash in your bank to be able to sustain the budget, the expenses and make sure that you manage your money correctly. Alternatively, you could outsource your accounting and tax to a professional business consultancy if that will make things easier for you.

An independent financial advisor (IFA) has the necessary experience, and perhaps most notably, the ability to provide objective advice about your current financial situation. The problem that many people face when reviewing their finances is that it can evoke emotions, overriding logical thinking which is vital if you want to get a grip on your finances.

Once you have finished your first session with an IFA, you should have a broad understanding of your current financial circumstances and what you can do to achieve your short, medium and long-term goals. At Fio, we have a cherry-picked team of independent financial advisers who can assist you in creating a sound budget so that you’ll always know where your money is going. We can also recommend different savings products tailored to maximise your wealth.

Key takeaways

By knowing and accommodating these expenses, you should always have cash in your bank to be able to sustain the budget, the expenses and make sure that you manage your money correctly.

An independent financial advisor (IFA) has the necessary experience, and perhaps most notably, the ability to provide objective advice about your current financial situation. They will help you map out your income and expenditure.

 The process will

  • Show you how much money you’re earning, and how much you’re spending.
  • Examine what you’re actually spending your money on
  • Determine how much money is required to cover your fixed expenses and how much can be used for variable expenses.

Connect with Ajay

I don’t want you to miss anything, so please subscribe to my YouTube channel, visit, and like,  my Facebook page, connect with me on LinkedIn and follow me on Instagram and SoundCloud.


UPDATED: Insights from our CEO: When Is the Right Time to Get a Loan?

Welcome to our exclusive series of personal – and business – wealth management insights from Ajay Wasserman, Founder and CEO of the Fio Group. In this article, he explains the ins and outs of business loans so that you can decide whether you’re at the right stage in your entrepreneurial career to make use of this particular borrowing facility.

SUMMARY. Businesses require funding to function, period. Whether you’re a start-up or established corporation, there will more than likely be times when you need a loan to get you over a rough patch.. However, you must make sure that you have a reorganised financial plan in place, and a solid loan repayment structure. Your business will suffer serious consequences if you default on the terms and conditions associated with the loan.

If the global pandemic as well as the recent riots and looting in South Africa have taught us anything, it’s that you need to have a sound worst-case scenario financial contingency plan in place to buffer unforeseen events. If your business doesn’t have an emergency fund in place, you may have to consider getting a business loan.

 

“I can’t afford to get a loan.”

This is a valid declaration, but ask yourself, “can I afford NOT to get a loan?” It’s vital to employ a borrow-to-build mindset. If your business is struggling and there’s no other source of capital on the horizon, the repayment of a loan outweighs the risk of having to shut your doors permanently.

Take a step back and look at the long-term benefits of a capital injection.

  • You’ll have the means to build up the resources required to ensure your business operates properly. This includes everything from purchasing equipment to hiring employees.
  • You can enlist the services of wealth management professionals such as independent financial advisers who can assist you in drawing up a viable financial business plan tailored to suit your business’s circumstances.
  • Hire an HR company to perform an audit, and based on the results, they can recommend the policies and procedures necessary to ensure your business operates optimally.
  • You can consult with marketing experts who will help you map out a compelling short, medium and long-term strategy which may include
  • Creating/refining your corporate identity.
  • Promoting brand awareness.
  • Defining and optimising the marketing channels that are best suited to your product and/or service.

There’s nothing wrong with being risk-averse, but it’s more logical to take informed risks instead of flying blind and hoping for the best.

 

The different types of business loans available

Short-term and long-term business loans

Major South African banks such as ABSA, Standard Bank and FNB offer short, and long-term loans. They typically require documents including but not limited to business plans, financial statements, tax records, and even financial forecasts.

Now you’ll have to wait approximately two months to find out if your application has been approved, so send yours in sooner than later.  

Business lines of credit

Many start-ups and SMEs can’t wait for business loan approval; the next option is considering a line of credit. This is a type of small-business loan that is more flexible than a traditional business loan. It’s crucial to understand that.

There is a limit to how much money you can borrow.

Interest is paid on the amount that you borrow.

You have the leeway to withdraw and pay back funds as you wish, as long as you don’t exceed your credit limit.

Invoice discounting or debtor factoring

A financial institution, e.g. a bank, purchases your company’s debtor book or can lend money against the book. Do you know what a debtor book is? It’s a collection of all your receivable invoices.

The primary benefit of debtors factoring is that businesses can use it to supplement cash flow issues if they’re struggling to survive. It acts as a financial buffer while they wait for their customers to make payment(s).

 

Consequences of defaulting on a loan

Remember, these are funds you have borrowed to stay afloat; it can’t be seen as ‘extra money’. There are numerous consequences for your business if you don’t use the funds strategically.

In an article published by Moneyshop, Gary Kayle, founder of the Money School and a facilitator of 1Life’s Truth About Money initiative explains the process:

  • “Once you default on your monthly repayments, the lender then proceeds to flag you on their system and will contact you either via SMS, email, or telephonically to recover the outstanding monies.”
  • If you don’t remedy the problem after the first step, the lender will hand your details over to either their collections department, or a call centre that will act on their behalf.
  • If this still doesn’t resolve the problem, the lender will contact the credit bureaus and they will alter your credit record.
  • Assuming you’re unaffected by a degraded credit record, lenders will move on to the next step. Here they will involve lawyers and force you to pay for their expenses.
  • If the above methods remain unsuccessful, lenders will escalate the matter and take it to court – at your expense.
  • As a last resort, assuming none of the above has worked, lenders will apply for a garnishee order against your salary, under instruction of the court. This means they send a sheriff to your employer and demand they attach all outstanding amounts to your salary which will go to the lawyers at the end of each month.”

Key takeaways

There are three different types of vehicles through which your business can get a loan. They include:

  • Short-term and long-term business loans
  • A business line of credit
  • Invoice discounting or debtor factoring

The main question you need to answer satisfactorily before taking out a loan: Can you keep up with the payment terms?

You must have a restructured short, medium and long-term financial strategy to ensure loan repayments are your priority? If not, speak with a business consultancy that has access to credible independent financial advisers who will help you build a solid plan.

If you default on loan repayments, the lending entity has the right to take the following steps:

  • Flag you on their system and will contact you to recover the outstanding monies.
  • Hand your details over to either their collections department.
  • Contact the credit bureaus and they will alter your credit record.
  • Involve lawyers and force you to pay for their expenses.
  • Escalate the matter and take it to court – at your expense.
  • Apply for a garnishee order against your salary, under instruction of the court.

Seek advice

Did you know that Elon Musk needed to borrow vast amounts of money from investors to fund his SpaceX project just to survive a period before they launched? It’s best to speak with an independent financial adviser about loan options. Make use of these borrowing facilities if it becomes necessary; don’t feel that you’ve failed because you need help with your cash flow.

I would suggest to any entrepreneur that if you are really passionate about navigating your business through rough patches that you are likely to experience, consider borrowing money and make sure you have a sound financial – and marketing strategy to increase sales and overall business growth. This will ensure that you always meet the loan repayments.

 

Connect with Ajay

Thank you for reading this article. I don’t want you to miss any new content, so please subscribe to my YouTube channel, visit and like my Facebook page, connect with me on LinkedIn and follow me on Instagram and SoundCloud.


UPDATED: What Makes a Great Entrepreneur?

SUMMARY. Starting a business, especially today requires resilience as you traverse through competitive markets, often needing to make quick decisions based on situational cues. In short, being an entrepreneur requires specific personality traits as well as having exceptional emotional intelligence. Are you a natural-born entrepreneur?

Starting a business, especially today, requires resilience; navigating your way through competitive markets can seem like an insurmountable task – but it’s not impossible. Successful entrepreneurs possess traits that fuel a never-say-die mindset and work ethic. In this article, we’ll discuss what it takes to be a prosperous entrepreneur.

 

Personal qualities an entrepreneur should possess

Anand Kapoor, the founder of Midcom Group, says that ‘Entrepreneurship is a true vocation; it’s not for the faint of heart, or the easily intimidated. You could say it’s almost a calling– you’re prepared to dedicate your life to an idea, or you’re not.’

There is no linear path to success; it’s convoluted, and your resolve will be tested continually. It’s recommended that you avidly read the opinions and experiences of established entrepreneurs and apply the knowledge to achieve your business goals.

  • Curiosity

An entrepreneur has an innate fascination with questioning the status quo and knowing that they can set a better benchmark. No matter how the industry you choose to operate, the challenge is the same: you’ve identified a problem and have found a novel way to solve it – this is how you grab a gap in the market.

  • Confidence

Self-assurance throughout your journey serves as the backbone to your success in building a profitable business. The trick is to check your ego at the door; there is a fine line between confidence and arrogance – the latter will eventually prove pivotal, a potential fall from grace. 

  • Pragmatism

You can digest as much knowledge as you want, but it must be put into action to make a difference. Entrepreneurs can see the big picture: not only ‘what the business currently is’, but ‘what the business can be’; in other words, they have a natural holistic perception of their journey.

As the contributing editor of Inc.com says, ‘Edison wasn’t the first person to invent the light bulb, but he was the first person to show how it could be used. He had a gift for pragmatism, and it’s something you can emulate.’

  • Empathy

Empathy can be seen as an extension of seeing a societal problem and finding a solution. An entrepreneur has an intrinsic nature of putting themselves into their audience’s shoes, ‘experiencing’ the issue with all their senses and realising how to build a business that will attract customers.

  • Self-discipline

Elon Musk says that entrepreneurship is like ‘eating glass and staring into the abyss.’ You need to have a high pain threshold which can manifest in many ways, particularly financially and personally. It can be a lonely road.

You’re going to need to be a jack of all trades, juggling your overall vision; the necessity for capital acquisition as well as ensuring your business is legally compliant are just two elements on your shoulders. It’s an advanced-level balancing act. The key is to have self-discipline to put in the hours and compartmentalise each task. By doing this, you’ll eventually reach a stage when you can hire employees to take on the various job requirements. The six abovementioned personal characteristics, combined with a relentless drive to succeed, are vital to steer you through obstacles that will occur along the way.

Key takeaways

There are six qualities that an entrepreneur requires to successfully start, sustain and make a business profitable. They include:

  • Curiosity: An entrepreneur has an innate fascination with questioning the status quo and knowing that they can provide a better product and/or service than their competitors.
  • Confidence: An entrepreneur needs to be self-assured, but not arrogant. It serves as the backbone to your success in building a profitable business. The key is to check your ego at the door.
  • Pragmatism: Entrepreneurs can see the big picture: not only ‘what the business currently is’, but ‘what the business can be.
  • Empathy: An entrepreneur has an inherent nature of putting themselves into their audience’s shoes, ‘experiencing’ the issue with all their senses and realising how to build a customer-centric business.
  • Self-discipline: You need to have a high pain threshold which can manifest in many ways, particularly financially and personally. You’re going to need to be a jack of all trades, juggling your overall vision at the beginning of your journey.

Situational strength”

An entrepreneur must be able to sense particular cues in any situation and use their strengths to obtain the most favourable outcome. This may not always work, but it’s how they react when their back is against the wall that will make them stronger as they move forward.

According to workforce solutions company, PSI, “the concept of “situational strength,” which is based largely upon the work of psychologist Walter Mischel. While he was a strong proponent of personality traits, Mischel believed we could better understand personality by considering how it manifested itself in different situations.”

  • Learn valuable lessons from mistakes

You’ll make mistakes; it’s a reality. However, you’ll learn valuable lessons that will mould your perspectives about entrepreneurship. One of the fundamental mistakes many aspiring business owners make is letting errors in judgement break their drive and sap up energy. Mistakes are beacons aimed to push you onto a less-travelled path; the reason for it will become apparent in the future.

  • Spending too little or too much money

An article published on Entrepreneur South Africa comments, ‘There are two mindsets I tend to see among new entrepreneurs: Either “You have to spend money to make money” or “I’ll spend the bare minimum until I have some decent cash flow.”’

Once again, it’s a fragile balancing act. Many new businesses, for example, will tend to spend minimal amounts on marketing when, in reality, specific marketing mechanisms such as SEO, content creation, and analytics and tracking are vital for online visibility.

  • Trying to achieve unrealistic goals

As mentioned earlier, having an idea of the bigger picture is essential, but you need to set short and medium-term goals as well. Trying to shoot too far, too quickly, can have catastrophic consequences. Ajay Wasserman, Founder and CEO of the Fio Group, provides valuable insight ‘when setting goals multiply everything by 10. For example, if your goal is to turnover R2 million per year, set your goal for R20 million. So, if you only turnover R1.5 million, you’re close to your original R2 million target. In contrast, if you set a R1 million turnover goal and only achieve R100,000, something is clearly wrong with your business.’ It’s unrealistic, but that’s the point.

It may be best to sit down and chat with an independent financial adviser from a financial perspective. They will help you plan a roadmap explicitly designed for you to hit your targets at the right time in the journey of your business.

Please take a few minutes to gain more insights from Ajay by subscribing and watching his informative videos on his new YouTube channel. In this video, Ajay gives you valuable tips about how to register a business.

  • Not investing in your employees

Whether employers like it or not, job seekers are more tech-savvy than ever due to the advancement of technology; they have many avenues through which to access critical information about your business. Your reputation, staff turnover rate, reviews and overall success can be found in numerous ways. So, ensure everyone (from yourself to your managers) knows exactly how to take good care of your employees. If treated well, they are your most significant investment and will provide you with a favourable return on investment (ROI).

 Key takeaways

An entrepreneur must be able to sense particular cues in any situation and use their strengths to obtain the most favourable outcome. Situations that may arise include

  • Learning valuable lessons from mistakes
  • Spending too little or too much money
  • Trying to achieve unrealistic goals
  • Not investing in your employees

From a holistic perspective, accept that things won’t always run smoothly; there will be times of stress and self-doubt. However, if you genuinely have the attributes of an entrepreneur inside you, you’ll find a way to ‘squeeze success from a stone’. More than anything, it’s your unrelenting grit that will keep you focused on tackling whatever lies ahead. Remember, it’s only under immense pressure that a diamond can emerge from coal.


UPDATED: Business Risks in 2021: What You Need to Know

UPDATED on 13 July 2021

There is appalling looting taking place in South Africa as you read this article. We sympathise with businesses that have been affected. We want to assist in ensuring your livelihood is safeguarded. This is a form of unmitigated business risk that will take an emotional toll on retailers. We, therefore, urge shop owners to speak to a business consultancy that has access to independent financial advisers who can recommend comprehensive business insurance coverage. Please chat with one of our consultants today.

How secure is your website? Does it have an SSL certificate, advanced firewall and comprehensive anti-virus software? These are only three of the essential cyber protection tools required to mitigate cybersecurity risks to businesses.

According to an article published by BusinessTech, “The latest Allianz Risk Barometer for 2021 shows that, while South African businesses are concerned about interruptions brought about by the Covid-19 pandemic, cyber incidents and security issues remain the biggest risk to their operations.”

 

Cyber Incidents: Protect your business

As you can see from the infographic below, 56% of companies reported that they are concerned about data breaches and information technology (IT) vulnerability caused by the massive increase in remote working due to the pandemic.

These are cybersecurity business risks that need stringent strategies that can be implemented now! Our consultants can recommend and implement crucial cybersecurity IT solutions for you. Failure to do so will impact the other types of business risk that are discussed below.

cyber-risks

©Allianz Risk Barometer 2021

One of the traits of developing a successful business is having contingency plans for risks that you may face. Insufficient planning can lead to profit loss and even permanent closure. In this article, we’ll define and explain the different types of business risk. Here’s what you need to kno

 

What is business risk?

Business risks are factors that threaten and inhibit your business’s overall operation, which in turn prevents it from achieving its targets and financial goals. Numerous sources contribute to the risk; they may be internal, external or a combination of both, such as poorly managed policies and procedures and the overall state of the economic climate.

 

Business red flags

  • Market risk

Market risk, also known as systematic risk, affects the whole performance of a business. Sources of market risk include recessions, changes in interest rates, political instability and natural disasters.

Amid the coronavirus pandemic, businesses in many sectors are struggling and may be looking for a cash injection from potential investors. If this is the case, it’s essential that you can prove effective incident-protection strategies are ready to be implemented; a lack of planning is a massive red flag and will deter investors quickly.

  • Credit risk

Many start-ups and SMEs need to take out a business loan to fund start-up and necessary operational costs such as rent of office space, purchasing of material and equipment, set up of internet, and other IT solutions. As a business entity, you are obligated to pay the lending institution (e.g. a bank) an agreed-upon amount every month. This means that you must have sufficient cash flow to budget for this expense. If you cannot pay (default) on the loan, compound interest will accumulate, increasing the amount you owe.

Credit risk is calculated according to the five Cs: credit history, capacity to repay, capital, the loan’s conditions, and associated collateral. If your business is considered to be a high credit risk, it’s possible that you won’t qualify for a loan in the future, or you may have to use a subprime lender that charges inflated interest rates. You must be able to manage credit correctly. This means having enough cash flow to pay creditors. The consequences of defaulting can be dire and liquidation, business rescue.

  • Liquidity risk

Liquidity is your business’s ability to repay its debts without suffering significant losses. Potential investors will utilise liquidity measurement ratios when analysing the level of risk of a business – the result will determine whether an investment is worthwhile. They’ll usually compare your business’s liquid assets and short-term liabilities. Liquid assets include but are not limited to cash or cash-equivalent assets; these comprise stocks, bonds, and mutual funds. They are considered cash-equivalent assets because they generally won’t lose value when sold.

Liabilities are usually a sum of money that a company owes to creditors such as loans, accounts payable and other accrued expenses. It’s critical to understand liabilities because they are used to finance the operations of the business.

Businesses will sort their liabilities into two categories: current and long-term. Current liabilities are classed as debts payable within one year; whereas, long-term liabilities are debts payable over a longer term. An investor will ideally want to see that a business can pay current liabilities in cash and long-term liabilities paid with assets accumulated from future earnings.

  • Operational risk

Operational risk is viewed as any hazards or ambiguities that can hinder the daily activities of a business. This can be caused by internal factors such as poor policies and procedures. An example may be poor maintenance of equipment and IT systems. Something as simple as not checking the stability of your internet connection can cause havoc if it’s not working correctly. There are also external influences, which in South Africa can include load shedding of electricity and economic events that contribute to market risk.

  • Cash flow

Cash flow is the net amount of cash (and cash-equivalent liquid assets) transferred in – and out – of a business. A business’s ability to generate positive cash flows creates value, which is a factor that will encourage investors to put their money into the business.

There are three forms of cash flow:

  • Operating
  • Investing
  • Financing

Operating cash flow is all money that is generated from the business’s daily activities.

Investing cash flow includes but is not limited to purchasing capital assets and other investments.

Prospective investors will also be looking at the business’s ability to maximise free cash flow (FCF), which is the cash that a business can produce after it has accounted for money needed to sustain daily operation and maintain capital assets. Essentially, free cash flow is a measure of profitability that excludes any non-cash expenses but includes spending on equipment, assets as well as any changes in working capital (which is the difference between your current assets and current liabilities.) Financing cash flow comprises all money gained from issuing debt, equity, and all payments made by the business.

Key takeaways

The different types of business risks include.

Market risk: Sources of market risk include recessions, changes in interest rates, political instability and natural disasters.

Credit risk: Credit risk is calculated according to the five Cs: credit history, capacity to repay, capital, the loan’s conditions, and associated collateral.

Liquidity risk: Liquidity is your business’s ability to repay its debts without suffering significant losses. Potential investors will utilise liquidity measurement ratios when analysing the level of risk of a business

Operational risk: Operational risk is viewed as any hazards or ambiguities that can hinder the daily activities of a business. This can be caused by internal factors such as poor policies and procedures.

Cash flow: Cash flow is the net amount of cash (and cash-equivalent liquid assets) transferred in – and out – of a business.

Steps needed to create a risk management plan

All businesses need a risk management plan. Here are the primary steps that you need to take.

  • Identifying risks

Find out the risks that are most likely to occur. It would be best if you also determined which risks will cause significant disruption and minor disruption.

  • Analysing risks

Once these risks have been identified, financial planning specialists need to be analysed who can help develop strategies that will minimise or eliminate the risks.

  • Planning for risk response

A specific contingency plan needs to be developed according to your business’s size and type (sector-specific) because certain risks will be more prevalent than others. Therefore, the plan needs to be customised to address those risks effectively.

  • Monitoring risks

All the types of risk that have been identified should be continually monitored to ensure your business can run as smoothly as possible.

Key takeaways

Your risk management plan must include the following steps.

  • Identifying risks
  • Analysing risks
  • Planning for risk response
  • Monitoring risks

These are 10 of the risks facing South Africa in 2021.

business-risks

©Allianz Global Corporate & Specialty

We are a world-class business consultancy with in-house independent financial advisers. They understand your needs and wants and give you the peace of mind that your business is strategically prepared for all relevant risk factors. You can focus on building your brand and driving revenue growth to achieve your financial goals.


Do I Need To Add Influencer Marketing To My Business Strategy?

SUMMARY. Influencer marketing can be a valuable addition to your business strategy. However, it’s vital that you understand the concept – you’ll be surprised how many people think they do, but they don’t. Ensure that you take the time to study the different types of influencers meticulously. It’s essential you find someone who aligns with your brand values and beliefs and can share your product authentically and honestly.

There are a lot of misapprehensions about influencer marketing: what is it, exactly? Is it an effective asset to your business’s marketing strategy or a trend that will eventually fade into obscurity?

According to an article published by Forbes, “Influencer marketing has existed in the modern era since the 1930s, but in truth, it could be traced back to ancient Rome when gladiators actually endorsed products. However, the word “influencer” only entered the modern lexicon in the past decade and was only officially added to the English dictionary [in 2019].”

Read on to get a better grasp of influencer marketing and for our tips to determine if it’s right to integrate in your business strategies.

 

What is influencer marketing?

So, answer this question before you read any further, “what does influencer marketing mean to you?”

Have you just rattled off a bunch of celebrity names, particularly those who upload content to Instagram (IG) every day? Do a quick Google search and you’ll find that the top IG ‘influencers’ include popular personalities, sportsmen and brands such as Kim and Khloe Kardashian, Neymar and Nike. The number one spot goes to Juventus football legend Cristiano “CR7” Ronaldo with 282 million followers. This doesn’t necessarily mean that they are valuable influencers and would guarantee a huge uptick in your business.

One of the biggest mistakes that the media makes is a failure to see the difference between celebrities and online influencers.

 

What is an influencer?

An influencer is someone who has:

  • The power to affect the purchasing decisions of others because of their authority, knowledge, position, or relationship with their audience.
  • A following in a distinct niche, with whom they actively engage. The extent of the following depends on the size of their niche topic.

On a surface level, influencer marketing is a form of social media marketing by which influencers (individuals who have a dedicated social following and are viewed as authorities within their niche) endorse or mention brands’ products and/or services.

The volume of authority and trust are two of the main criteria that can cement someone with the moniker of being an effective, specialist social influencer. Due to their following, any recommendations or mentions serve as their social proof to help a brand attract and retain a customer base.

 

What is social proof?

Social proof is a term created in 1984 by author Robert Cialdini. He states that it’s the idea that people tend to emulate the behaviour of others in specific contexts and/or circumstances.

From a marketing perspective, social proof exists in the form of people reading other people’s reviews and recommendations of products and/or services they’ve used. Let’s say for example, you’re shopping for a coffee table. There are many brands that offer this piece of furniture, but if one brand has 500 4.3-star reviews and the other has 200 2.2-star reviews, it’s likely you’re going to purchase the table with the better review score. Why? Because you have been influenced by social proof.

In marketing, social proof built by content including but not limited to:

  • Case studies
  • Reviews and testimonials
  • Awards and accolades
  • User-generated content (UGC)

These are essential elements that should appear on your website and other appropriate brand material. We’ve helped clients implement these necessities and recommend you consult us to assist you in developing a review management strategy as well as setting up a Google My Business profile which provides customers with a convenient way to add reviews that will appear on Google search result pages (SERPs).

 

What influencer marketing is not!

Influencer marketing is not simply about paying a celebrity lots of money, expecting an entire campaign to produce conversions just because you paid them $1million for a single post. True influencers spend most of their time building and nurturing an audience and care about the content they generate. Please don’t forget this statement.

Furthermore, like SEO and content marketing, quality results take time. It’s about adding current influencers’ power to assist in boosting your authority, credibility, and thought leadership within your industry.

 Key takeaways

  • An influencer is someone who has:
  • The power to affect the purchasing decisions of others because of their authority, knowledge, position, or relationship with their audience.
  • A following in a distinct niche, with whom they actively engage. The extent of the following depends on the size of their niche topic.
  • Social proof is a term created in 1984 by author Robert Cialdini. He states that it’s the idea that people tend to emulate the behaviour of others in specific contexts and/or circumstances.
  • In marketing, social proof is built by content including but not limited to case studies, reviews and testimonials, awards and accolades and user-generated content (UGC).

The different types of influencers

There are actually different categories of influencers: the primary metrics that determine their level of influence is by follower count, and the content they upload.

Influencers by follower count

The Influence Marketing Hub has provided the following breakdown. It’s important to note that a mega influencer is not better than a nano influencer; each has their pros and cons. You need to identify the type of influencer that suits your holistic marketing model best.

  • Nano influencers (1K–10K followers)
  • Micro influencers (10K–100K followers)
  • Macro influencers (100K–1M followers)
  • Mega or celebrity influencers (1M+ followers)

 

  • Nano influencers (1K–10K followers)

Nano influencers ooze authenticity and therefore tend to have an engaged following on social media. “They have a very close relationship with their followers and take the time to engage with their followers to cultivate those relationships.”

When to use and find nano influencers

Nano influencers are best suited to SMEs with a limited marketing budget that require brand awareness, reach and consequently, cost-effective engagement. Instagram is your ideal first port of call. They can be found quite easily if you use  social media listening tools such as BrandMention, Buzzsumo and Hootsuite Insights.

 
  • Micro influencers (10K–100K followers)

Even though micro influencers have a more significant following they, like nano influencers, are considered to be relatable and boast high engagement rates because they typically specialise in a particular niche such as fashion or mobile technology which draws a targeted audience.

When to use and find micro influencers   

Micro influencers are also suited to SMEs who want to generate targeted, quality leads for a niche campaign. Their message, endorsement or recommendation will pique the interest of their dedicated followers. It’s best to use social listening tools to find them, but you should also search for hashtags that relate to your brand’s industry and speciality. 

 
  • Macro influencers (100K–1M followers)

Now, we’re heading into the territory of well-known influencers who generally have paid partnerships with prominent brands. “They can include social media stars, bloggers, vloggers, or podcasters.” Macro influencers are experts at nurturing followers. The drawback is that because they generally have a more widespread appeal, their engagement rates are lower than nano and micro influencers.

When to use and find macro influencers

Macro influencers are perfect to spread brand awareness and fortify brand reputation. Their popularity will give you the opportunity to increase engagement rates yourself. Macro influencers are characteristically frequent content creators who post content predominantly on popular social media platforms such as YouTube, Facebook and/or TikTok.

 
  • Mega-influencers (1M+ followers)

Mega influencers are generally global celebrities. They command an extremely broad audience and you’re going to need a substantial marketing budget if you’d like them to promote your brand. For example, with 138 million followers on Instagram, Jenner is alleged to charge up to $1 million per sponsored post or advertorial when working with brands. If you want to get a campaign viewed internationally by as many people as possible, consider a mega influencer.

When to use and find mega influencers      

Mega influencers are usually known across the globe and so they’re not difficult to find. It’s best to define the type of mega influencer that will fit your brand and search for them directly.

Key takeaways

There are different types of influencers. You need to do your homework and identify which one would be best for your marketing strategy. They include:

  • Nano influencers (1K–10K followers)
  • Micro influencers (10K–100K followers)
  • Macro influencers (100K–1M followers)
  • Mega or celebrity influencers (1M+ followers)

How we can help you create an influencer marketing strategy

 
  • How to find the right influencer

One word: research. Start with the core platform that you want to use e.g. Facebook or Instagram, YouTube, Tik Tok or Twitter (you can always expand onto other platforms later.) Remember, certain platforms are better suited to your business’s industry. As mentioned earlier, it’s worthwhile using social media listening tools to assist you to find the ideal influencer for your brand and overall business.

 
  • Set a budget and strategy

Today, depending on the platform and type of influencer you choose, one influencer can cost anything from $25 to $1million! So, you need to have a watertight budget with a diverse strategy that covers all the touchpoints to achieve your overall goal. Perhaps, it’s worthwhile drawing up a few strategies to find out which one is financially feasible and logical? If you budget is $1million and you use it all on a single Instagram post that doesn’t yield a favourable ROI, you, and the influencer, are not going to happy. This could damage your brand reputation.

Don’t forget that you’re also going to need capital for all other aspects of the campaign. It’s a good idea to speak to a business consultancy with direct access to independent financial advisers who can look at your campaign holistically and compartmentalise your budget spend optimally.

READ: How to Repair a Negative Online Reputation.

 
  • Define what you want to achieve

What are you looking to achieve from this campaign? Engagement rates? Brand awareness? Strengthen brand reputation? Or perhaps you’re looking for a smaller targeted audience that has a high probability to convert? There’s nothing wrong with using influencers for high level campaigns, but don’t forget the value they possess in their specific niche.

The answer to these questions plus your financial budget should determine the type of influencer that will help generate the best return on investment (ROI). It’s also vital to ensure your strategy and touch points are innovative so they can produce maximum value.

Part of your research should be looking at what your competition has done in the past. Gather as much performance data as possible, dissect it to find the strengths and weaknesses and make yours better!

 
  • Measure influencer marketing performance

If you don’t have data-capturing tools in place to measure the performance of the campaign, it’s meaningless; it’s essentially a hypothesis. There are a plethora of tracking tools available. However, it’s best to employ a marketing consultancy that specialises in analytics and tracking. An example of what they will likely do is add a UTM tag.

UTM stands for “Urchin Traffic Monitor” It’s a snippet of simple code that you can add to the end of a URL to track the performance of campaigns and content. There are 5 variants of URL parameters you can track:

  • Source
  • Medium
  • Campaign
  • Term
  • Content

These dimensions you track via UTM codes will be displayed in your analytics reports to give you accurate data-based insight into marketing performance.

 Key takeaways

©Mediakix

The four stages of creating an influencer marketing strategy include:

  • Finding the right influencer for your business.
  • Setting a financial budget.
  • Defining your goals.
  • Measuring performance of the strategy

We spoke to the Head of Social Media at Fio, Laura le Roux who provided her valuable insight which sums up the importance of finding the right influencer to assist in marketing your brand.

“When looking for an influencer to work with your brand, obviously the size of their following will play a role but the most important metric to consider is their engagement. Is their audience leaving comments? Are they sharing the content? The amount of followers becomes irrelevant if the audience is not actively engaged.”

The search for the right influencer for your campaign shouldn’t be a quick process. A lot of research needs to be done first to make sure that you find the right influencer for your campaign. Choosing an influencer purely because they are popular and have a big following is the downfall of many campaigns. It is essential you find someone who aligns with your brand values and beliefs and will be able to share your product authentically and honestly.”

 

Relevant content

  1.  

UPDATED: Business Growth Strategies in 2021
Summary. Since the onset of the pandemic, businesses have had to change their growth strategies due to the current socio-economic environment. Franchising, affiliates (independent agents), acquisition and human capital are four of the top agile business growth strategies recommended in 2021 and beyond.
Are your marketing and operational strategies running smoothly, and the business is achieving a stable ROI? That’s fantastic! You’ve reached a significant milestone. Now, you may feel it’s the right time to expand your business to elevate business growth, but how – and what – do you need to kick off this journey?
Answer: You have to decide on a business growth strategy that suits your business needs. This article serves as a guide to the best business growth strategies available to you.

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Top business growth strategies

Franchising strategy

In an informative article published on Entrepreneur South Africa, author and franchise consultant Mark Siebert discusses some of the advantages of franchising: capital, speed of growth, ease of supervision, increased profitability and risk reduction. Let’s take a closer look.

Please note: This article is a foundation on which the discussion is based. It has been used as a high-quality resource, and nothing has been copied verbatim. We’ll be focusing on the following five advantages.

  • Capital

Access to enough capital is one of the primary reasons that inhibit SME’s business expansion plans. However, franchising offers entrepreneurs an alternative way of acquiring capital without running the risk of getting into debt.

The benefits stem from the fact that the franchisee (the individual or company that buys into the business) provides the funds needed to open up a branch. It allows the franchisor’s business to develop through other entity’s resources. Furthermore, the franchisee signs the lease and other necessary contracts, so expansion occurs with minimal contingent liability to the franchisor.

Franchising significantly lessens the amount of capital needed to expand with minimal risk. In addition, there is hypothetically no limit to the number of franchisees. So, suppose you have many interested parties. In that case, franchising is a growth method that will expose your product/service to a broad audience quickly, which creates a plethora of marketing opportunities to spread brand awareness, drive quality traffic to your website, and establish your business on social media platforms.

  • Speed of growth

For start-ups and SMEs in particular, ousting the competition is one of an entrepreneur’s biggest challenges. You may have a revolutionary product/service that will sell extremely well but to do so; you need to grab a chunk of the market share quickly. Franchising gives a business this much-needed jumpstart because the franchisee does the majority of the work.

Many franchisees working concurrently can give the franchisor the necessary human resources and capital to compete with larger companies. In this way, they can saturate markets before their competitors.

  • Ease of supervision

The effectiveness of management can dictate a business’s success. Poor employee management and unclear policies and procedures can derail a business’s growth efforts.

In this regard, franchising is beneficial because the franchisee(s) are responsible for the daily operations of each unit – you don’t have to micromanage at all. The onus is on them to ensure the franchise meets required targets; they are also solely in charge of negotiating and paying staff salaries, so your financial returns won’t be affected.

  • Increased profitability

Franchisees are required to take on potentially timeous activities, including site selection, lease negotiation, marketing, and hiring and training of employees. Critical operations such as payroll and accounting are also their responsibility. For these functions to run smoothly, it’s a good idea to speak to a professional HR consultancy that can give you access to all the resources you need.

Therefore, the franchisor can financially leverage a group of self-supported units, meaning that the franchise organisation can increase profitability.

Due to franchising growth strategy infrastructure, a franchisee can generate a higher revenue than a manager of another establishment. Also, they usually have their cost structure and operate the unit more cost-effectively even after considering what needs to be paid to the franchisor.  

  • Risk reduction

As mentioned above, the inherent nature of franchising reduces a franchisor’s risk. They are in charge of everything from equipment purchasing and maintenance, employee appointment to any working capital needed. In addition, any liability that takes place in the unit is the franchisee’s responsibility, such as employee and/or customer litigation or accidents that happen on the premises.

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Key takeaways

  • The advantages of franchising include capital, speed of growth, ease of supervision, increased profitability and risk reduction
  • Franchising offers entrepreneurs an alternative way of acquiring capital without running the risk of getting into debt.
  • Franchising gives a business this much-needed jumpstart.
  • No micromanagement is required because each franchisee is in charge of their unit.
  • A franchisee can generate a higher revenue than a manager of another establishment.
  • The intrinsic nature of franchising reduces a franchisor’s risk.

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Affiliate strategy (independent agents)

Do you want to earn passive income? It’s possible if you utilise an affiliate marketing growth strategy correctly. So, what is it exactly? Firstly, let’s answer these central questions.

  • What is an affiliate?

An affiliate is a person or company licensed by another business to market its products and/or services. Essentially, they help a business spread brand awareness, garner interest from a broader audience and make new sales.

  • How do affiliate programmes work?

Affiliate marketing is based on a revenue distribution model, which essentially means that third parties undertake the promotion of products and/or services. The revenue from sales is shared with the affiliate marketer.

An article published by Forbes says that by 2022, “the affiliate marketing industry is forecasted to eclipse the $8 billion (approximately R130 billion) mark, nearly double what it was worth in 2015. Today, affiliate marketing is one of the most effective ways to earn an income online, drive sales and increase brand awareness.”

The author of the article, Amine Rahal, provides a clear breakdown of the typical parties involved in affiliate marketing.

The creator: Otherwise known as the vendor, the creator is a business or brand that offers a product or service and shares revenues with affiliates.

The affiliate: The affiliate, or publisher, is a business entity or individual who advertises the creator’s product or service and receives a share of each sale that they help generate.

The consumer: The consumer is the customer of the creator, who buys their product or service via an affiliate marketing channel.

The power of affiliate marketing stems from the unique distributed networking model. There are a lot of opportunities for lucrative passive income to be generated.

The following are a few key takeaways from how affiliate marketing works, according to Neil Patel.

  • You hire affiliates who are paid to bring customers to you.
  • You only pay affiliates if visitors to your website convert to customers.
  • Each affiliate has its strengths. For example, they may be very adept at content creation, meaning that they can ‘package’ your product/service in a way that reaches a particular audience that would otherwise have not been tapped.
  • It’s a beneficial strategy for start-ups because it is generally cost-effective, so if your business is operating on a shoestring budget, this may be the best growth strategy to consider.

It needs to be noted that there are three different payment structures involved. The one chosen is based on vendor and affiliate preferences.

  • Per sale

The affiliate is paid a commission for each sale via the affiliate’s custom product link.

  • Per lead

The affiliate receives payment for every prospective customer who completes the desired action, such as signing up for a newsletter.

  • Per click

The affiliate is paid an agreed-upon amount for every user that they redirect to the vendor’s website.

 

Acquisition strategy

An acquisition happens when a company purchases most of a company’s shares to gain control of the company. Suppose more than 50% of the stock and other assets are acquired. In that case, the purchasing company has the authority to decide what may happen to the assets without the approval of the acquired company’s shareholders. Interestingly, you’ll find a trend for companies to acquire SMEs more frequently than between large corporate companies.

A properly understood and well-crafted acquisition strategy is ideal for business expansion as well as reinforcing cash flow. Furthermore, it adds significantly to the company’s value offering, which plays a substantial role in reaching a broader audience, generating marketing-qualified leads (MQLs) with a higher probability of converting.

At this point, it’s important to remember that an acquisition strategy should always dovetail a growth strategy of the core business, and don’t let it take over. In other words, the central organic marketing and growth strategies should be running seamlessly before an acquisition is considered.

 

How can an acquisition strategy enhance organic growth?

  • Acquisition to increase market share

In saturated industries, acquiring a business to increase market share can boost organic growth by reaching a broader demographic of prospects. Furthermore, acquiring a larger piece of market share significantly entrenches the business’s position to open up opportunities to increase profitability through economies of scale.

  • Acquisition to add products and/or services that are complementary to the current portfolio

The adding of new products and/or services ensures that the parent company can sell more to existing clients and provide opportunities to target potential new, larger audiences. The apparent benefits are an increase in revenue and profits. Still, it’s also an opportunity to create long-lasting strategic relationships with clients, which open up access to previously untapped markets.  

  • Acquisition for Diversification

History has shown us that even industry titans with successful business models such as Apple, Samsung and Amazon are not immune from taking hits to its core market. Whatever the causal circumstances may have been, it propels the need for asset diversification to strengthen a business, especially during periods of uncertainty such as the current global pandemic that has severely hurt the world’s economy.

It can be deduced that an acquisition strategy should only be considered and implemented if it will clearly enhance and complement the long-term growth trajectory. Ensure that the acquisition is never made to compensate for another failed strategy or as a way to restructure a business model.

The good news is that if acquisitions are conducted correctly, they have enormous potential to accelerate complementary business growth strategies and revenue. The primary reason for acquisition should be to offer more value to potential and existing customers more efficiently. 

 

Human capital strategy

A human capital strategy is the practical application of a sound overarching business strategy that outlines the resources and skills needed for a business to operate effortlessly to achieve established objectives. At its core, it’s based on extensive workforce planning supported by proficient management policies and procedures.

The reality is that without a team with the required skills to implement and execute a business strategy, revenue growth and expansion won’t come to fruition.

 

How to formulate a human capital growth strategy successfully

  • Align your human capital with your goals

Start by revisiting your company identity and company profile which contains the foundations of your business: your vision, mission and values. Ensure that these tenets reflect your business’s objectives.

  • Assess and define the processes that contribute to achieving your business goals

Before you go any further, it’s vital that all of your policies and processes are well written and clearly understood.

New processes will likely be implemented during this time, but once you have a solid foundation, decide on whether your core and supporting procedures are as efficient as they can be.

  • Identify the key performance indicators (KPIs) used to measure performance

Establishing and refining processes is what the business needs to function. What KPIs are required for each department and employee to help achieve the business’s goals?  Assess skills and traits that an employee needs to fulfil the job role.

  • Who will fill the critical job roles?

The KPIs are a blueprint that will help you identify which person would be best for the job role. The next step is to start assigning staff to positions and/or begin the recruiting process.

Everything isn’t likely to fall into place straight away, so patience is paramount. It’s going to be a journey, and along the way, you’ll learn critical lessons and methods to improve your human capital strategy. If done correctly, you’ll be well on your way to growing revenue as well as fostering trust and loyalty from your employees. Remember that your staff members are your most important assets, period.

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Key takeaways

  • Affiliate marketing is one of the most effective ways to earn an income online, drive sales and increase brand awareness.
  • A well-crafted acquisition strategy is perfect for business expansion as well as reinforcing cash flow and adds significantly to the company’s unique selling proposition (USP).
  • Acquisition strategy assists in generating marketing-qualified leads (MQLs) with a higher probability of converting.
  • A human capital strategy is needed to implement and execute a business strategy which will in turn drive revenue growth.

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UPDATED: How To (Properly) Interview a Job Candidate

The pandemic has had a significant impact on South Africa’s unemployment rate, which now stands at an unprecedented 32.6%. Couple this with the economic instability that has caused many businesses to retrench staff or shut down permanently, and you have thousands of people applying for fewer job vacancies. It’s now more important than ever for employers to know exactly how to interview job applicants to ensure top tier employee acquisition.

All businesses want to attract top talent, the perfect-edged puzzle piece that fits the company like a glove. I’ve heard many interviewers complain that they can’t find the ‘right person’ for the job. In truth, you might have, but unfortunately didn’t ask the correct questions or, even more importantly, listen properly to the candidates’ answers. In this article, we will analyse why ‘traditional’ interview methods may not reveal the true forte of the person sitting on the other side of the table. To remedy the problem, we’ll introduce techniques that will draw out revelations to ensure you view candidates from a different, holistic perspective.

 

Traditional methods

We’ve all experienced the following scenario: you’ve received a call to come in for an interview. Soon, you find yourself sitting in a room being asked blanket questions by the interviewer from a piece of paper that simply requires a ‘Yes’ or ‘No’ answer. A few of the questions may provide you with a chance to scrape the veneer of your character subtly…and then it’s over.

 To all potential employers out there, an interview process shouldn’t mirror a courtroom cross-examination; when you’re looking to hire a new staff member, it’s vital to be cognisant that you’re investing in the person. There is no way that a litany of ‘Yes’/’No’ questions and direct, side-by-side comparisons of their answers against their CV is going to provide you with the necessary insight into the candidate’s personality to make the correct decision of whether or not they are a good fit for the job role and company as a whole. This misguided ‘cold-call’ approach needs to be scrapped from your recruitment policies and procedures.

 

What you should do

We spoke to Fio’s [former] Head of Human Resources, Rory Theron, I was able to glean valuable insight about the RIGHT way to interview a potential staff member. The following summary of the discussion is based on initially asking a straightforward question, ‘How should a potential employee interview be conducted?’

From the outset, forget about the ‘the glove either fits or it doesn’t’ mentality. In fact, start with a metaphorical blank canvas so that you can have a well-rounded idea of the big picture by the end of the interview; based on that outcome, you should have enough evidence to make an informed decision.

The point of the interview is to get to know the person behind the CV. Conducting an interview is an art; questions should be designed to directly, indirectly and subtly elicit responses that uncover whether the candidate has all the correct attributes to fulfil the job role successfully.

An example of a veiled question that is asked to determine a trait without the candidate even realising they’re telling it to you could be, “What does your house look like?” Clearly, this question is way out of left field, but that’s its beauty. Suppose they say that everything is always neat, clean and all items have a designated spot for a specific reason. In that case, the interviewer can gather that the individual is meticulous, ensuring that nothing is overlooked.

This is a fantastic trait for a job role-based mainly on research. It can further be confirmed by asking them to explain a random topic in 30 seconds. Do they become flustered, finding it difficult to articulate a coherent explanation? Should this happen, it’s an indication that they aren’t the type of person who likes to be put on the spot and talk to an audience, entrenching the notion that they are strong candidates for a research position. If this is the type of job being offered, those candidates should be considered seriously.

The questions should cover a spectrum that allows an interviewer to determine the candidates’ comfort zones all the way to aspects that may be stressors for them. As mentioned above, questions shouldn’t require a ‘Yes’ or ‘No’ response but rather be leading questions, guided by the candidates’ answers to the previous questions. This essentially continues a drill- down deeper into understanding the attributes of the individual.

 

Understanding body language

A skilled interviewer also needs to be a master of deducing answers based on body language (also known as non-verbal communication.) Three main branches should be monitored. An article from the Maiberger Institute, published on Medium, defines the following non-verbal communication cues.

  • Proxemics

Proxemics describes an individual’s perception of and use of space, both personal (how much space do they take up) and social (distance from another).

  • Kinesics

Kinesics describes an individual’s use of body language, including the study of postures, gestures, facial expression, and eye contact.

  • Paralanguage

Paralanguage refers to non-linguistic components of speech that are related to verbal communication. Paralanguage includes voice volume, tempo, pitch, intensity, emphasis, timing, and pauses in speech.

Each of these cues ought to be built into the questions asked. For example, a candidate may have a CV containing all the preferred education and experience. Still, if they continually look at their watch, seldomly make eye contact and are hunched over during the interview, it can denote they aren’t really interested in the questions and/or they are extremely uncomfortable – these are strong signals that the individual is not suited for the position.

Conversely, an individual may not have a CV that ticks all the perceived ‘perfect’ boxes. Still, they are eager, demonstrate in-depth knowledge, and convey positive body language; they are a much better candidate for the job. This is a classic example of interview techniques working well to peel back the layers and see the person beneath.

It cannot be reiterated enough that employers need to understand that investment in the person is a critical step; revenue generated from their job performance results from aptitudes identified in the interview. 

Need some help? Consult a professional human resources consultancy dedicated to drawing out the character, traits, and overall personality of the candidates sitting in front of you.


UPDATED: How Do I Value My Employees’ Worth?

We truly believe that employees should be cherished. Many employers know this, unfortunately, others take them for granted and this can result in a high staff turnover and negative brand reputation. It’s in this light, that we’ve written this article to harmonise the employer-employee relationship. Our HR consultancy is available to recommend and implement strategies to assist you find the ideal balance between qualitative and quantitative value that should be ascribed to employees.

Employees’ worth (or value) is a complicated question to answer; it’s a real dichotomy due to the concurrent subjectivity and objectivity of the parties concerned. Therefore, this article will analyse, interpret the quantitative data points, and qualitative emotions to try and find a mutually satisfying method.

 

Differentiating between qualitative and quantitative data

Before we go any further, it should be understood that a business’s employees are its primary asset. You’re investing in people first. The skills they bring to the table should be seen as secondary. Employees need to be viewed from a holistic perspective. However, this opens a dichotomy: on the one hand, employees are hired to perform a job for which they will receive compensation, but they’re also red-blooded human beings and deserve to be treated with dignity and respect. These two aspects are not mutually exclusive. So, firstly, let’s differentiate between employees’ quantitative and qualitative facets.

  • Qualitative

Qualitative data describes the qualities or characteristics of the employee. It generally appears in narrative form (such as notes taken from a discussion in an interview.) While this data may be challenging to analyse, as an experienced employer, you should have the ability to glean the qualitative data you require to know whether the employee will be a good fit for the role and the business as a whole. In a previous article, we explained How to (properly) interview a job candidate. It provides insight into how to build qualitative candidate-interviewing strategies. Here’s an excerpt:

“From the outset, forget about ‘the glove either fits, or it doesn’t’ mentality. In fact, start with a metaphorical blank canvas so that you can have a well-rounded idea of the big picture by the end of the interview; based on that outcome, you should have enough evidence to make an informed decision. The point of the interview is to get to know the person behind the CV. Conducting an interview is an art; questions should be designed to directly, indirectly and subtly elicit responses that uncover whether the candidate has all the correct attributes to fulfil the job role successfully.”

  • Quantitative

This is the data that can be measured, analysed and interpreted to satisfy objective criteria such as key performance indicators (KPIs) to determine whether the employee fulfils the requirements for the job role. There are numerous ways through which you can extract this data. One of the most widely used methods is to ask the employee to complete a carefully designed task that will test their abilities to understand and perform the job. The method of measurement is up to you but make sure it reflects the criteria accurately. As mentioned above, qualitative and quantitative factors should have a symbiotic relationship, meaning both sides benefit from the interaction. In this case, correct interpretation will provide the employer with an in-depth view of the total value an employee brings to a business.

At this point, you may be thinking, ‘okay, I understand that amalgamating qualitative and quantitative data to form a balanced perspective of an employee is best in an ideal situation, but, at the same time, I’m running a business that has finite costs to the company. How can I utilise the above information pragmatically?’ You are 100% correct. The extraction of employee value through qualitative and quantitative data is only part of the puzzle; now, it needs to be ‘inserted’ into a business’s balance sheet to determine an employee’s cost to company (CTC) value.

According to an article published on Baseline, author Paul A. Strassmann says, “Economists have long viewed compensation as an employee’s worth. I argue that one must turn to the competitive marketplace to determine the true worth of an employee. And chief information officers should understand how to calculate the worth of their employees before they move to cut information-technology costs.” This is a subjective statement that, for many, would be right on the money. Any business-savvy employer knows that compensation should align with the industry’s market value for a particular job role. They have to use relevant metrics to calculate a ‘real world’ salary for the employee.

It’s worthwhile consulting a reputable HR company that offers tools to assist you in making this decision. Numerous aspects need to be considered when evaluating compensation; this is where a salary scale comes into the equation. It considers that salaries will vary depending on the potential employee’s experience, mandatory job requirements, geographical location, the company’s internal hiring structure, and the methods of negotiation utilised.

Scaling salaries can be a complex process depending on the type of job role being evaluated. That’s why it’s vital to speak to an HR company that’s experienced in this area.

 

Conclusion

It can be deduced that employees’ worth should be based on ALL of the information mentioned above, working together to form a result based on emotional and logical reasoning that gives you an all-rounded perspective of their value to you and your business.


UPDATED: Give Your Employees the Benefits They Deserve

We’ve seen businesses struggle with top talent acquisition and retention because they either undervalue their employees and/or don’t provide benefits that other companies are willing to offer. Job candidates are now more discerning than ever about finding a job that compensates them for their work and looks after their financial and physical health. It’s in your best interests to speak to a reputable HR consultancy to find out whether you’re offering employment packages that appeal to job-seeking candidates. 

Your employees are your prime asset. Period. All employers need to know the benefits to which your employees are legally entitled; they include but are not limited to paid annual, parental, family responsibility and sick leave. In addition, an employer has the choice to provide voluntary benefits such as a provident and/or pension fund and membership of a medical aid scheme. This article will discuss the multifaceted, mutually beneficial reasons why employers should invest in their employees.

From an employee’s perspective, a benefits package increases the value they receive by working for a business; appreciation leads to all-important trust and loyalty. From an employer’s viewpoint, it’s a reciprocal relationship because it promotes happiness and a commitment that will reflect productivity and the quality of work produced.

 

‘Customers come second, employees first.’

Richard Branson put it best: ‘Customers come second, employees first.’ It’s a philosophy that generates an emotional ‘profit’ to both the company and, by extension, its clients. So, in addition to the required legal and voluntary benefits mentioned above, allowing your staff to take training courses is an investment that yields high returns in the form of employee development. Think of it as a ripple effect: the initial drop is the catalyst for widening concentric circles representing your business’s potential revenue growth.

The sentiment is reiterated in an article published by Entrepreneur South Africa. It says ‘A study revealed that employees who do not feel they are developing in a company are 12 times more likely to leave. Companies often see staff training as an expense rather than an investment and end up paying dearly in terms of low productivity and high turnover.’

A survey conducted by global analytics and advice firm, Gallup, found that the overall engagement among the employed population in 142 countries worldwide was only 13%; even more disturbingly, 24% were classified as ‘actively disengaged’. These are concerning statistics that reinforce the need to go beyond the call of duty and conduct an intensive research about what this generation’s potential employees are looking for when considering business opportunities.

One of the issues that contribute to the abovementioned statistics is that employers don’t always realise that investing in employees profoundly affects the business’s current – and future – objectives. Let’s use a financial investment analogy to illustrate this point: A short-sighted investor is likely to be looking for funds that, on paper, seem to be ideal for quick, lucrative returns. This may work for a bit, but funds that claim to offer high returns in a short amount of time are high-risk as well as more susceptible to market volatility. Read this paragraph again but now replace the word ‘funds’ with ‘employees’.

It can be argued that this is an unstable, unsustainable investment that Is likely to result in a toxic working environment and possibly cause a high employee turnover rate. The lesson that needs to be learned here is that if staff members are seen as disposable assets and have no long-term investment aspirations, it may cost your business everything.

 

Implement bespoke benefits packages for your staff

The reality is that we live in the age of digital disruption. Job candidates are more tech-savvy than ever. Due to the advancement of technology, they have many ways by which they can find out information about your business. In this light, HR managers and employers need to find innovative ideas that grab job seekers’ attention – this can be achieved by offering benefits tailored to best suit your employees.

  • Pension and provident funds offer the following specific benefits

 

  • It attracts and retains valuable employees, stabilising the workforce.
  • Employees are forced to make tax-efficient retirement savings contributions monthly which assist them in securing financial freedom at retirement.
  • Tax benefits – contributions are tax-deductible up to 27.5% of the annual salary or R350 000.
  • ‘Group insurance costs’ are usually significantly less expensive than individuals can obtain in their personal capacity.

 

  • Group health benefits can also be considered

 

  • Group benefits are paid on death, disability, and any other insured benefit.
  • Medical underwriting on group schemes is far less demanding than individual policies, with a free cover limit available to all employer groups.
  • Death and disability benefits will cover all employees up to the free cover limit against serious illnesses without providing medical evidence. This is subject to pre-existing condition exclusions for a new cover or recent recruitments.
  • By offering health benefits, employees can go to the doctor for routine check-ups; when they are unwell, they receive high-quality care more quickly than their uninsured counterparts. This leads to an increase in productivity for the business.

The significant overarching advantage is to provide health coverage for all the employees to ensure everyone is protected and that there is a limited operational loss because of an illness.

 

  • Additional Group Insurance Benefits

 

Apart from death and disability cover, ‘group insurance’ benefits may be included to create a customised, competitive benefits package that meets their employees’ needs and expectations.

  • Funeral cover which may include protection for the employees’ spouse and children
  • Education cover for children of deceased employees to pay for the child’s education expenses.
  • Dread disease cover that pays to diagnose serious illnesses such as cancer, heart attack and/or blindness.

The above benefits can be structured either for a specific category of employees or for all of them. Moreover, it can provide financial security for almost any eventuality.

 

Conclusion

It can be argued that professional and personal growth is a prerequisite for any candidate searching for a job vacancy. It’s critical that, as an employer, you have their best interests at heart and want to see them grow in parallel with the business. However, the diverse options to consider can be time-consuming.

As independent employee benefits consultants, we can assist you by obtaining several quotations and negotiate with insurance companies to ensure the most appropriate package for your staff contingent.


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Pretoria 0043

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