Don’t Let Fraud Infect and Damage Your Company

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“In a way, fraud in business is no different from infidelity in marriage or plagiarism in scholarly work. Even people committed to high moral standards succumb” (Miroslav Volf, Director of the Yale Center for Faith and Culture)

Fraud (in this context) is the act wherein an employee or trusted partner makes a financial gain through criminal behaviour or deception within an organisation and it is extremely common. Recent studies suggest that as much as 46% of all companies will succumb at some stage or another. Given this, much thought has been put into how to prevent fraud and lower the impact that it can have on a business. Unsurprisingly, the issue is extremely complex and there is a lot that you as a business owner will need to do if you want to avoid the financial loss and reputation damage that fraud can cause to your business.


What is fraud?

Business fraud has many aspects, and generally comes in three defined categories:

  • Asset Misappropriation 

    This is the most common type of fraud. Some numbers suggest that 90% of all fraud is this kind, in which employees will either steal or exploit their company’s resources. Examples include where employees make false expense claims, help themselves to cash or even non-cash items, the creation of ghost employees, “buddy clocking” systems or under recording of the cash that is received for goods.

  • Financial Statement Fraud 

    Significantly less common than asset misappropriation these schemes are, however, significantly more damaging to the company itself. This is the deliberate manipulation of financial statements to mislead those who would use those statements for legitimate purposes. Usually, this is done to make a company appear more profitable than it is, or to avoid tax payments.

  • Corruption

    Corruption occurs when employees use their influence or positions in a company to benefit themselves to the cost of the company or agency for whom they work. An example of this would be when someone agrees to hire a less than ideal candidate because they are being paid a kickback to do so.

Tips for detecting and preventing fraud

  • Know your employee

    According to the Association of Certified Fraud Examiners the average fraudster will operate their scheme for 18 months before getting caught. The reason for this according to employers’ reports is that quite often it was the employee they least suspected

    It is therefore vital to have regular feedback sessions with employees, even those who have been with the company for a long time, to discuss their personal circumstances and be aware of any significant changes in their lives. Someone who has been a model employee for years, may, due to changes in their life’s circumstances, feel they have no choice but to steal to make ends meet.

    Look for those employees whose habits have suddenly changed or who exhibit a change in attitude. These habits can point to problems in their personal lives, or potential bitterness at their employer resulting from perceived slights they may have received, such as a poor raise, or lack of promotion.

  • Fraud policy

    Set up a fraud policy and communicate this to all staff. Staff should be aware that management is fully clued up on all the types of fraud, knows what to look out for, is actively searching for it and that the punishments for being caught will be severe.

    In doing this you also trigger honest employees who are not tempted by fraud to become aware of the signs and symptoms of fraud and empower them to report suspicious behaviours to you. Refer also to ‘Be Available’ below.

  • Internal Controls

    This is potentially the most important step as it is not subjective. It is extremely important to set up systems within your company which safeguard the company’s assets and ensure the integrity of record keeping. The first step is to make it abundantly clear to whom responsibility lies in each situation. Do not, for instance, leave the key to the petty cash in a cupboard, but rather assign one staff member to take full control and sign for all expenses and payments into the cash box.

    Use a paper trail and have those responsible for each transaction or sale personally sign for each element of their part of the process. If the preparation of bank deposits is personally signed for in a ledger that is then passed to a manager, then it becomes much harder for either of those parties to deny their role in the process.

    Make sure all payments are authorised, that purchase orders and invoices are numbered consecutively and cross referenced to prevent the passing of false invoices. Require new vendors and employees to be personally vetted and authorised by a senior manager to stop ghost accounts from being set up. Require two signatures on any payment above a minimum amount.

    Internal controls need to be re-examined regularly and any discrepancies with the procedure followed up with rigorously. Don’t be afraid to bring in an external team to set up these procedures for you should you not have the means to do so yourself.

  • Watch those who take no leave

    This may sound strange to anyone who has never dealt with fraud, but one of the surest signs that something suspicious is going on is if an employee never goes on holiday. On the surface, these employees may appear to be diligent hard workers, but the truth is much more likely that they are afraid of having their schemes uncovered should they allow someone else to do their jobs when they are on leave.

  • Be available

    Your best line of defence is your other employees. Being the kind of business owner who has an open door, is approachable and who listens is the best way to ensure that honest employees come to you if they have any suspicions. They should know that you are trustworthy, and that their names will never come up in any discussions you have with the people they have pinpointed. At the end of the day, having everyone looking out for you, is much better than trying to do it all yourself.

  • Work with reputable partners

    Companies do not operate in a vacuum. Many of the services you use may need to be brought in from the outside and when it comes to your finances it’s vitally important that these companies are reputable. Good bookkeeping services will be at the frontline of defending your company from fraud and will be able to quickly pick up discrepancies in the books. Therefore, when hiring any professional who will have access to your accounts and books it is vital that they be registered with the relevant professional bodies and that they come with a reputation for integrity and providing top-class service. Ask your accountant’s opinion in any doubt.

  • Do spot checks

    Once a month pick random employees and go through their expense accounts, travel allowances and claims for cell phone usage to make sure that these are on par with what is expected and do not ring any alarm bells. If they have signing powers take a close look at what they are signing and the reasons and flag any unusual signatures for a follow up. Even if you only do this for one employee a month it will be known that you are checking, and that any fraudulent activity will ultimately be caught.

  • Reconcile 

    Reconcile your bank accounts at the end of every month. Ideally, this should be done by an independent person who does not have bookkeeping or cheque signing powers within the company. This person should also check invoices and payments (EFT or Credit card) to make sure they are cross referenced.

    They should then sign off on the reconciliation personally.

It is impossible to close all the gaps that fraudsters may use to take advantage of your company, but if you implement the above changes and controls you will either deter them from trying or find them quickly once they have started. The best tip is vigilance, both by you and your honest employees. Building an honest and open company culture that fosters communication will ensure your employees are both aware of what needs to be done and open to telling you when it isn’t.

Your Tax Deadlines for October 2022

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  • 7 October – Monthly PAYE submissions and payments
  • 25 October – VAT manual submissions and payments
  • 28 October – Excise Duty payments
  • 31 October – Value-Added Tax (VAT) electronic submissions and payments & CIT Provisional payments.

Is Your Pricing Model Killing Your Business?

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“The moment you make a mistake in pricing, you’re eating into your reputation or your profits.” (Katharine Paine, founder and CEO of KDPaine & Partners)

It may seem a simple concept but getting your pricing right is an integral part of any business’s true sustainable success and can be a critical part of its failure too. Bad pricing leads to missed deals if you are too expensive, and lost profits if it you are too cheap. It also leads to painful brand damage as high prices can make your business seem aloof and out of touch, while low prices can make good products seem to be of poorer quality than they really are.

Harvard Business Review says that a 1% improvement in a company’s pricing can make an enormous difference to a company’s bottom line.

“For a company with average economics, improving unit volume by 1% yields a 3.3% increase in operating profit, assuming no decrease in price. But, as Exhibit 1 shows, a 1% improvement in price, assuming no loss of volume, increases operating profit by 11.1%,” says McKinsey & Company pricing expert Michael V. Marn in “Managing Price, Gaining Profit” here.

One study by OpenView of over 400 business pricing strategies, revealed that 84% of respondents reported at least a 10% increase in annual recurring revenue (ARR) after a pricing change and even more dramatically, 25% reported an increase of at least 50%.


How do you know if your pricing model is wrong?

It is clear to see that pricing strategies can have a huge impact and that quite often a lot of money is either being left on the table, or deals are missed because of incorrect pricing. But how do you know if your products have been priced badly? Here are a few of the critical signs to look out for if you don’t want to become a victim of your models.

  • You aren’t covering costsThe most obvious sign you have not priced your product correctly is a simple one. You are struggling to make costs. If you have a significant sales book and are still struggling to make ends meet the chances are your pricing model is wrong.

    Pricing needs to take into account all expenses and then add a profit on top of that. Making sure you include all your costs in this expense calculation is critical to being able to build a thriving business. While most people will remember to include staff costs, advertising, property costs and the cost of raw goods, there are numerous other costs that must not be forgotten such as licensing costs, shrinkage, employee discounts and seasonal fluctuations in raw product costs. If you are struggling to realise your true financial situation approaching your accountant will be absolutely key to your efforts going forward.

  • Pricing by competitorWhen it comes time to price your product you should be aware of what your competitor is charging, but do not let it be the be-all and end-all. What happens if you are copying them, and they are pricing themselves out of the market? Work out what your costs are, what a fair profit is and stick to that. Remember, if there is a price difference it may come down to you adding extra value, having a better-quality product or going to places they can’t service. You need to be true to your own unique situation if you want to be sure your prices aren’t going to land you in hot water.
  • You don’t know the value of your productValue and price are two different things. You may know every inch of your product and understand why it’s better than the competitors, but that’s useless if you don’t know what your product is worth in cold hard cash to your customers. If you build an amazing product that’s best in its class but it can only save the customer R100 a month, you are going to struggle to sell that product for R10 000. Likewise, if your product saves a customer R25 000 a month, why are you selling it to them at R1 000? Under-pricing on that scale can lead to the customer mistakenly believing that your product won’t do what you say it will or thinking it’s likely poor quality. Understanding the value your product brings to the consumers goes a long way to knowing exactly what you can charge for it.
  • What do you want from sales?Immediate profit may be only one of the reasons why you price a product low. Initially, your aim may be to claim market share and as such you price your product competitively to ensure you can grab a stake in a tough industry, before moving the pricing to better reflect your costs and profits. Perhaps you need a certain amount of market share to reach economies of scale in which case your current low price may be justified? Or perhaps you benefit from a network effect in which the value of your product increases with the more people that use it? The point here is that you need to understand your motivation for pricing before you can price accurately. If you don’t, then your pricing is probably inaccurate.
  • Can you predict the future?The best business leaders can sometimes seem like clairvoyants who can see into the future. If you understand where your industry is headed and what challenges it may face in the future you will be better able to position your product. Depending on your industry these factors can include changing energy needs, climate considerations, weather patterns or general lifestyle changes. Understanding these challenges will help you foresee which of your products may be likely to lose money in the future and which may grow in demand allowing you to adjust the prices to match. The more intelligence you have on the factors that affect your industry the more you will be capable of weathering any challenges and selling your products.
  • You rely on cost-plus pricingIf your business relies on cost-plus pricing, in which the selling price is determined simply by adding a specific fixed percentage to the product’s unit cost, then chances are you are leaving cash on the table. Even a simple corner store owner can make more money from milk if he is the only one in the suburb that sells it. Being aware of your market and your customer’s needs and demands will ensure you take advantage of your strengths to maximise profit.

    According to Bain & Company there are three main behaviours in pricing that pinpoint the top achieving businesses. Those companies that make the most profit do so by:

    • Aggressively “employing tailored pricing at an individual customer and product level,”
    • “Aligning incentives for frontline sales staff with the pricing strategy” and
    • “Investing in ongoing development of sales and pricing teams through the use of training and tools.”

What is clear is that in this space there is no call for cost-plus pricing.

The savvy business owner does not leave their pricing to chance. The rands and cents that you let leak away through missed deals or profits not taken could one day be the difference between a booming organisation and bankruptcy.

Are You Claiming Your Full Tax Relief for Disability-Related Medical Expenses?

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“South Africa is aligned with the practice in many other countries of granting tax relief for medical expenditure.” (SARS)

In South Africa, tax relief for medical expenses is provided through a medical tax credit system. This means the tax relief is provided as a tax rebate – a reduction in tax payable.

If you are a non-provisional taxpayer, you have only a few more days to ensure you have claimed all these rebates.

SARS allows two types of medical tax credits.

  1. Medical scheme fees tax credit (MTC) for contributions to a registered medical scheme. This is normally applied through a company’s payroll system and reduces the monthly income tax due. Otherwise, it is claimed on the annual ITR12 income tax return.
  1. Additional medical expenses tax credit (AMTC) for other qualifying medical expenses, including those related to a disability or physical impairment. This tax relief is often under-utilised, and is explained in greater detail below.


How SARS defines disability

It is important to note that the definitions used by SARS to define a disability for the purposes of the tax rebate are not the same as the definitions used in general.

For tax purposes, a disability is defined as a moderate to severe limitation of any person’s ability to function or perform daily activities, as a result of a physical or sensory or communication or intellectual or mental impairment.

For a disability – whether physical, sensory, communication, intellectual or mental – to qualify for a SARS tax rebate, it must be diagnosed by a duly registered medical practitioner trained to diagnose the applicable disability or to express an opinion thereon and must also last, or have a prognosis of lasting, for more than a year.

However, a diagnosis alone is not sufficient. For each type of disability – physical, sensory, communication, intellectual or mental – listed in SARS’ definition of a “disability,” there are prescribed diagnostic criteria that assess the functional impact thereof on a person’s ability to perform daily activities.


In real life – with a practical example

An example will help to clarify. Let’s say a taxpayer’s dependent has been diagnosed by a medical practitioner with a mental disability such as autism spectrum disorder, which includes among others autism, Asperger’s syndrome, and childhood disintegrative disorder.

SARS will use the prescribed diagnostic criteria below to determine if the dependent’s condition qualifies as a mental disability for the purposes of claiming a tax rebate.

“With the exclusion of intellectual disability, a person is regarded as having a mental disability if that person has been diagnosed (in accordance with accepted diagnostic criteria as prescribed in the Diagnostic and Statistical Manual DSM-V) by a mental health care practitioner who is authorised to make such diagnosis, and such diagnosis indicates a mental impairment that disrupts daily functioning and which moderately or severely interferes or limits the performance of major life activities, such as learning, thinking, communicating and sleeping, amongst others. A moderate impairment means a Global Assessment Functioning Score (GAF-Score) of 31 to 60. A severe impairment means a GAF-Score of 30 and below.” (SARS)

Similarly, physical, sensory, communication and intellectual disabilities have their own prescribed diagnostic criteria.

This means that whether or not a certain disability – whether physical, sensory, communication, intellectual or mental – will qualify for the medical tax credits, can only be determined on a case-by-case basis.


Tax credits for other physical impairments and brain dysfunctions

In cases where a condition does not meet the prescribed diagnostic criteria to qualify as a disability (and is therefore “less constraining” than a disability as defined), the taxpayer may still be able to claim some medical tax credits for expenses for physical impairments related to the condition. These include, for example, poor eyesight, hearing problems, paralysis and brain dysfunctions such as dyslexia, hyperactivity or lack of concentration, but excludes medical conditions such as diabetes and asthma.


Which expenses may be claimed

SARS further publishes a prescribed list of physical impairment or disability expenses, which, in addition to other qualifying medical expenses including out-of-pocket expenses, can be claimed if you have paid for and not recovered such expenses.

The current list includes for example:

  • Travel and transportation expenses
  • Personal care attendant expenses
  • Alterations or modifications to assets
  • Insurance, maintenance, repairs and supplies
  • Prosthetics
  • Aids and devices such as orthopaedic shoes and mobility aids
  • Prescription spectacles and contact lenses
  • Services such as special education schools or rehabilitative therapy
  • Service animals.

However, just because an expense is listed, it does not automatically qualify as a rebate. To qualify for the tax rebate, the expenditure must be “necessarily incurred,” and paid by the person “in consequence” of a qualifying disability – whether physical, sensory, communication, intellectual or mental – or physical impairment that does not qualify as a disability according to SARS’ definitions.

For example, if a person in a wheelchair who has no visual impairment buys a hand-held GPS, the cost of the hand-held GPS will not qualify as a deduction even though the expense appears on the list. This is because the hand-held GPS is not “necessarily incurred” in connection to this person’s disability. In the case of a visually impaired person, the cost of the hand-held GPS may qualify as a deduction.

SARS says the guiding principle is to identify those additional expenses a person with a disability would incur, without which the person would not be able to perform the activities of daily living.

For example, part of the school fees paid by taxpayers whose children living with a disability attend a private special education needs school, can be claimed. The amount that can be claimed is currently the difference between the fees paid to a private special needs school and the closest fee-paying private school, or the difference between the fees paid to a public special needs school and the closest fee-paying public school.

How much tax relief can you get?

Because the AMTC is a rebate against taxes payable, it is limited to the tax payable before the offset of employees’ tax and provisional tax, and does not create a refund, nor can the excess be carried forward to the next year of assessment.

How much you can claim also depends on whether it is you, your spouse or child that has a disability, or whether it is another dependent that has a disability, or if the claim is for physical impairment where the condition does not meet SARS’ definition of disability.

If you, your spouse or child has a disability, you can claim 33,3% of the qualifying out-of-pocket medical expenses (which includes disability related expenses), paid by you (and not recoverable) during the relevant year of assessment, as well as 33,3% of the fees paid (if any) to a registered medical scheme or qualifying foreign fund that exceeds three times the amount of the medical scheme fees tax credit (MTC) to which you are entitled.

If a dependant other than your spouse or child (such as a parent or sibling) has a disability, or if the claim is in respect of physical impairment (rather than a disability as defined by SARS), qualifying medical expenses may still be claimed, subject to more limitations.

These include that AMTC is limited to 25% of the amount by which the sum of the amounts listed below exceeds 7,5% of the taxable income:

  • all contributions made by the taxpayer to a registered medical scheme that exceeds four times the MTC; and
  • actual qualifying medical expenses (including expenses for a physical impairment or for a disability that is mild and not moderate to severe) paid by the taxpayer and not recoverable from the medical scheme.


What are the requirements for a successful claim?

The tax rebates for qualifying medical expenses can only be claimed in the year of assessment during which they are actually paid.

You can claim the qualifying medical expenses when you submit the income tax return (ITR12) for the relevant year of assessment. The deadline for this year is 24 October.

For SARS to consider the deduction of qualifying expenses in respect of the disability you will need a completed “Confirmation of Diagnosis of Disability form” (ITR-DD form) as supporting evidence of the disability.

The ITR-DD form is completed partly by the taxpayer and partly by a duly registered medical practitioner who is trained to diagnose the applicable disability or to express an opinion on the disability.

You are not required to submit the ITR-DD form with your income tax return. However, in the event of an audit or inspection SARS will request a copy, which must then be produced.

As with any tax rebate, it is always advisable to check in with your accountant and rely on professional assistance to ensure you minimise your tax bill that is due before the end of the month if you are a non-provisional taxpayer.

9 Key Metrics Every Business Should Track

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“If you can’t measure it, you can’t improve it.” (Peter Drucker)

Metrics are defined as a set of numbers that give information about a particular process or activity. In a business context, a metric is a quantifiable measure used to track, monitor and assess the performance of various business processes.

Also known as key performance indicators or KPIs, business metrics allow you to track the growth and performance of a business, so potential problems can be identified and effective solutions developed, and well-informed decisions can be made.

There is a range of metrics that a business can track in terms of sales, financial results, human resources, customers and work progress. In the complex world of business today, using just one or two metrics will not provide a complete overview of the business performance. For example, focussing only on the sales revenue metric may create the impression that the company’s performance is on target, when adding the net profit and gross margin metrics will reveal a more accurate picture.

To truly gauge your business’s performance, you need to measure your growth in a multitude of ways, tracking the relevant metrics together for a big-picture understanding of performance across the various functions.


The 9 key metrics

The selection for your specific business should be based on your own business’s unique goals. However, where the aim is to increase profits and maximise growth, 9 key metrics will enable you to track, monitor and assess the performance of various business processes.

  1. Sales revenue and growth

Sales revenue or income is the key metric every business uses to measure its financial performance.

It is measured by adding up the income from sales, less any costs associated with returned products and/or refunds. A further, related metric that is more indicative of your business’s financial performance is year-on-year revenue growth.

These metrics allow businesses to evaluate the company’s sales, how the products or services are performing in the marketplace, and how successful the business’s marketing efforts are, compared to previous years.

Sales income can be increased through price increases, or through boosting sales by finding new customers or selling more to existing customers.

  1. Net profit margin

The next crucial metric every business should track is the net profit margin.

This metric determines how much profit was made by deducting all the expenses incurred from the income generated, including the cost of goods sold, interest, taxes and operating expenses.

The net profit margin compares the income generated to the costs associated with generating that revenue, effectively evaluating the company’s ability to deliver a profit. As such, the net profit margin can predict a business’s sustainability and potential for long-term growth.

The net profit margin can be increased by increasing income and / or lowering the costs of generating that revenue.

  1. Leads and lead conversion rates

Increasing income requires more sales, which means finding new clients, and this requires access to new business leads, as well as the ability to turn those leads into customers.

This metric helps businesses establish how many new leads it gets, and from where, and how many of these leads become new customers.

Lead conversion rates can be calculated by dividing the number of new leads per month by the number of new customers per month.

This metric can be increased by, for example, extending marketing and advertising efforts to generate more leads, or by investing in factors known to increase lead conversions such as quality products and services, professional salespeople and processes, and excellent customer service.

  1. Gross margin

A company’s gross margin measures the percentage of income that goes toward costs of producing your goods and services, but excluding other operating expenses, interest and taxes.

It is calculated by subtracting the cost of goods from the total sales revenue and then dividing that by the total sales revenue (multiply that result by 100 to get gross margin as a percentage). Other metrics in this regard include average fixed costs per month or unit of production, as well as average variable costs per unit of production, which depend on the number of sales, such as sales commissions and raw materials.

To calculate your average variable cost, add all total variable costs of the product or service together and divide by the total number of units delivered.

This metric reflects the efficiency of the business processes and basically states overall productivity in numbers.

This number can be increased by improving the efficiency of processes and productivity, thus reducing costs which will improve cash flow.

  1. Cash flow

Cash flow is a key metric, particularly for smaller businesses where cash is crucial.

It is measured through carefully managing accounts receivable and accounts payable, as well as tracking and forecasting your operating cash flow based on the sales revenue and gross margin metrics.

Essentially, this metric shows which areas of the business are generating and using the most cash; reveals how readily a company can meet its debt and interest payments; enables informed budgeting and spending decisions; and allows potential cash flow problems to be identified and managed in time.

Tracking and forecasting your cash flow allows the business to manage this crucial aspect better, while using credit lines responsibly can help during inevitable pinch periods.

  1. Customer acquisition cost and lifetime value

Acquiring new customers involves various costs, such as advertising or marketing, as well as the time and administrative costs of onboarding a new customer. However, these costs must be evaluated in terms of the lifetime value of a customer.

Customer acquisition costs are calculated by dividing the costs of acquiring and onboarding during a specific period by the number of clients acquired during that same time.

This metric is even more insightful when compared to the lifetime value of the average customer, which reveals how much revenue the business can expect to earn from a typical customer.

It can be calculated by multiplying the value for an average sale by the retention time for a typical customer and the number of transactions a typical customer usually generates in that time frame.

This metric highlights what is affordable in terms of acquisition costs per customer and can help distinguish higher-profit customers from those who are too expensive or difficult to convert.

One of the ways in which to improve this metric is to focus on customer satisfaction and retention.

  1. Customer satisfaction and retention 

This metric reveals how satisfied your customers are and thus how likely you are to retain their business. Satisfied customers are easily retained over the long term, make repeat purchases, and tell others about your business, generating both leads and conversions.

It can be measured through customer satisfaction surveys, or even by simply making regular calls to your top customers.

This metric can be vastly improved with a focus on quality services and/or products, and excellent customer service relationships, and this is in great part achieved through satisfied and loyal employees.

  1. Employee satisfaction

This metric measures how satisfied your employees are at your company.

It can be measured through feedback and surveys.

By regularly measuring employee satisfaction, you can address any issues timeously.

This metric can be greatly improved by treating employees fairly and creating a positive company culture they feel proud to belong to. Employees determine the overall success of the business because satisfied employees are more productive and will enhance your progress towards the achievement of the business’s goals.

Top managers need to be accessible to employees at all levels and encourage open and safe communication. Opportunities and problems with customers need to be communicated immediately to enable positive responses and action.

  1. Progress toward goals and deadlines

This metric provides insight into the company’s capacity for production and its performance in this respect, and flags potential issues. Performance measurements and performance accountability are key.

Every business has goals and deadlines, which are achieved in milestones. This means you can track progress through the number of milestones that are met, on target and/or overdue.

The company’s overall efficiency in meeting the milestones and deadlines can be improved by developing effective solutions to identified issues such as unrealistic expectations, insufficient resources and low productivity.

Tracking all these business metrics may seem challenging and time-consuming, but for improved profitability and business growth, it is crucial to do so. Your accountant will be able to assist you in tracking many of the metrics discussed and provide advice in respect of tracking non-financial metrics, allowing you to monitor and assess the performance of the most crucial business processes and to make informed business decisions.

How The Gig Economy Is Changing Traditional Businesses

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“If you’re trying to create a company, it’s like baking a cake. You have to have all the ingredients in the right proportion” (Elon Musk)

The move to the gig economy has been in the works for years. Even before the pandemic people were leaving their jobs to “consult independently” from small towns around the big cities. Younger generations with in-demand skills found themselves capable of earning more money, and having more flexibility, while working at home, and this situation was only exacerbated by the huge retrenchments and wage cuts demanded by the pandemic.

Now, more than two years after the start of the Covid-19 crisis, gig workers and freelancers have become a common way of doing business. With greater control as to who they work for, and the ability to spread their time over multiple employers thereby lowering their risks regarding retrenchments or layoff, gig workers have more control than ever before when it comes to their day-to-day lives. The gig economy also allows its freelancers to work on new skills, while keeping up with the work necessary to pay the bills. There are, however, guaranteed downsides too. The gig economy is not as stable for those who work. Month-to-month employment is not guaranteed. Holidays are a rare commodity with client needs dictating time off rather than mental fatigue or family commitments.

Companies who hope to bring in the skills they need will have to be cognizant of both the positives and the negatives of freelance life in order to maximise the happiness of those they contract with, and so achieve the best delivery at the best prices for themselves.

Here are our tips for how the gig economy will impact businesses going forward and how best to weather the changes to benefit your brand –

  1. Is Corporate culture a dinosaur?With the Covid pandemic moving to endemic status many corporate managers are demanding their teams return to the office. The belief is that “Corporate Culture” is suffering and this will impact the quality of work done in the long term. Corporate culture is a term generally used to explain the sense of camaraderie and teamwork that employees are meant to feel toward their jobs. This sense of belonging and sense of loyalty toward the brand they work for has long been shown to impact the level of work employees are prepared to put into their positions and team leaders believe this is eroded by working from home, and non-existent in freelancers. This is however not necessarily so.

    A recent study here has shown that the sense of corporate culture and commitment to a brand’s long-term goals can in fact be felt by freelancers but cautions employers that they may have to change the way they have traditionally imposed this culture. In the traditional employment model commitment to a brand is driven in three ways:

    • Employees stay and work hard because they feel affection towards the company and enjoy working there
    • They fear the consequences of losing their work, and
    • Over time they also develop a sense of duty and obligation to the company that has looked after them.

    The study conducted by Stefan Süß and Markus Kleiner suggests that brand loyalty in freelancers is won only through “Affective commitment.”

    Affective commitment is that feeling of connection one feels to an organisation or group when they believe that their own personal goals and beliefs are aligned with those of the organisation or group and when they feel that they are an integral part of any team within that organisation. Freelancers tend to feel no obligation towards one employer and their fear of losing their job is significantly decreased by the presence of multiple employers.

  2. How can you inspire commitment in freelancers?Affective commitment has always been an important part of employee retention. For freelancers, however, affective commitment is the main reason they remain driven and invested in their work for that organisation. So how does a company inspire this kind of commitment?

    Open and clear communication: If an employee is to believe they are personally aligned with a business, the brand’s beliefs and messages must be strongly communicated. It must also be clear how the employee fits within these beliefs, what their role is and how they contribute, both now and in the future.

    With freelancers, companies should communicate openly, sharing its struggles and achievements. In order to feel concern for a team, the freelancer must feel trusted and part of the team.

    Make the job fun: Freelancers report greater attachment to brands when they enjoy their jobs and relationships. Allowing freelancers the opportunity to take on new challenges and roles within the company and expand their initial positions will give them the variety and mental stimulation they require.

    Inclusivity: Everyone wants to feel like they are liked and part of a team. Including the freelancers in activities just as you would your full-time employees gives them that sense of belonging and more importantly of being valued that is difficult to find in the freelancing environment.

    Demonstrate commitment: One of the largest downsides for freelancers is the feeling that their work is always temporary or that if you hit trouble, they will be the last in line to be paid. Thinking about how you can improve freelancer wellbeing will therefore go a long way to building trust and belief in your company. This goes well beyond always paying your freelancers on time. Your freelancers are working from home and often at all hours, so consider sending them a gift basket upon completion of a job, arranging a discount for good coffee with a local coffee shop or regular check-ins with management at which they are able to offer feedback and make themselves heard.

    Develop them: If you want to retain your freelancers long-term, then you need to think of their aspirations. Helping them to develop new skills and grow as people will benefit your brand in the long run in that it will position your company as being at the top of their list when it comes time to meeting deadlines and making space within their schedules.

  3. Agile HROne of the largest benefits for companies in the gig economy is that it gives them more flexibility to respond to changing situations. Companies can now scale their workforces up and down as needed to respond to new business opportunities or challenges and can also quickly assemble new teams for a single project or move people between teams to cope with staff shortages or leave. Why spend millions on recruitment when you aren’t even sure the new project is going to last longer than a year?

    Your HR team, therefore, needs to be trained and upskilled to take the gig economy into account when considering the employment needs of the company. They should be working directly with your accountant on a project-by-project basis to determine the most streamlined use of available resources. Your company can now work with freelancers from across the globe and those with the ultra-niche skills necessary to complete a particular task. Accordingly, HR needs to be up to the task of searching for talent wherever it may be, as well as things like international law regarding payments and tax.

    In fact, your HR team may be about to become even more valuable than they have ever been in the past. Whereas once they were managing a limited team of employees, they may now be required to deal with hundreds of different people working in dozens of different locations, while keeping everyone happy, delivering proper communication and ensuring many different payment styles and preferences are adhered to and regulations complied with.

  4. Empower flexibilityFreelancers and workers who generally work from home do so because it gives them more flexibility with their workdays. Dads are able to nip out to pick up their kids from school, and the plumber’s visit doesn’t have to be scheduled for a weekend. Employers, therefore, need to consider these benefits and lean into them. For example, it doesn’t make sense having dedicated office space for everyone when 80% of the time those people are working at home.

    This, together with the fact that your teams will be adjusting in size and purpose a lot more in future, makes creating agile workspaces critical. Building workspaces within your own office where multiple flexible workers can use the same general space will allow them to check in, grab a coffee, have meetings and fill a few work hours without hampering their desire to work where and how they like. There should be a variety of conference rooms to accommodate teams of various sizes and excellent connectivity throughout. Teams should be able to meet around a whiteboard while patching in workers from other countries on screen, or alternatively find small, comfortable corners to share a coffee.

    As an added bonus, this flexibility will also save your company a huge amount in rental for dedicated workspace and equipment and allow freelancers to come in and meet the people they are working with in a way that strengthens team cohesion and doesn’t interrupt the full-time employee’s days.

    Employers should also consider the mobile nature of work outside the office. Your employee who has to pick up their kids in the afternoon, would almost certainly love to work for the hour while they wait for their child to do karate so make sure they have the means to do so. Empowering them to work on-the-go will allow them to deliver more work, more consistently and get their jobs done well, wherever they may be. A good laptop and mobile connection are now vastly more important than an office chair.

  5. It’s cheaperDone right, leaning into the gig economy can save costs that are far larger than simple office space. Recruitment is expensive and full-time employees come with issues like benefits, severance pay and even leave, whereas the freelancer is responsible for taking care of these issues themselves. If you really need someone to work over a specific period you can hire for availability rather than worry that an employee’s sickness will keep them from delivering at a critical time.

It is clear that, while the gig economy may provide some short-term disruption, the long-term benefits of working with freelancers can vastly exceed the challenges. Companies need to accept that life has changed, and the days when they employed 100% of their staff to clock in from 9-to-5 are long gone. And for many businesses it’s going to be for the best.

Your Tax Deadlines for September 2022

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  • 7 September – Monthly PAYE submissions and payments
  • 23 September – VAT manual submissions and payments
  • 29 September – Excise Duty payments
  • 30 September – End of the 2nd Financial Quarter
  • 30 September – VAT electronic submissions and payments, PIT top-up & CIT Provisional payments.

Are You Ready for a COIDA Employer Site Visit and Audit?

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“The main objective… is to provide compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees, or for death resulting from injuries or diseases…” (Compensation for Occupational Injuries and Diseases Act)

Most employers – and particularly smaller businesses and domestic employers – are not able to provide cost-effective medical or insurance cover for their employees, even though the vast majority would want their employees to be compensated if they are injured, become ill or die at or because of their work.

This is the objective of the Compensation for Occupational Injuries and Diseases Act also known as COIDA: to ensure that anyone who is employed under a contract of service, whether full-time or on a casual basis, and receives wages or a salary, whether on a weekly or monthly basis, can claim compensation in terms of the Act and, where an employee is fatally injured, the dependents can claim compensation.


What are the benefits of registration?

Employers are obliged by the Act to register and to take out this insurance, because it provides a means to assist employees who are injured on duty or contract occupational diseases with medical costs and loss of earnings, and also protects against civil claims. The Compensation Fund is a no-fault system, which means there is no need to prove that an employer was at fault.

Employees who are injured on duty or contract occupational diseases are not left destitute and unable to work but have the means to cover the necessary medical expenses and rehabilitation costs, as well as to claim compensation for the loss of earnings. Where an employee is fatally injured at or due to work, the dependents will receive a pension. The compensation awarded does not form part of the deceased employee’s estate and can also not be attached to satisfy a debt.

COIDA prevents employees from suing their employers for occupational injury or disease, instead giving them this statutory insurance cover. So the Fund will still process claims from employees whose employers have not registered with it as required. But the Fund can then recover from the unregistered employer all the compensation it pays out, plus it won’t refund the employer for any medical costs the employer has paid. In other words, if you don’t register you risk having to pay out of your own pocket the full compensation claim, in addition to fines and penalties for non-registration. The total could be substantial, incorporating medical costs and compensation for loss of earnings, permanent disablement, death and even pension payments.


What is covered by COIDA?

The compensation is money paid by the Compensation Fund to employees who were injured on duty, to replace loss of wages and/or to pay medical expenses. The compensation is only paid if the employee is off work for three days or more but cover for medical expenses is not limited by this provision. The Fund does not cover pain and suffering.

Medical Expenses: Immediately after incurring an injury or disease on duty, employees can get medical attention from any medical practitioner of their choice in their area. Emergency treatment does not require pre-authorisation from the Compensation Fund. Medical expenses are paid by the Fund where it has accepted liability for the claim, covering reasonable costs incurred for the first 24 months. All reasonable medication related to the employee’s injury and prescribed by the treating doctor will also be covered.

Loss of earnings: If an employee is booked off from work for a serious injury, the employer is obliged to pay 75% of the employee’s earnings/wages (as at the time of the accident) during the time the employee is unfit for duty but limited to the first three months. This can be claimed back from the Compensation Fund. The salary/ wages of employees booked off work for more than three months must be claimed directly from the Compensation Fund.

Permanent disability: A permanent injury, such as deafness, blindness, amputation or permanent disablement, is assessed according to a percentage of disability specified in the Act. If a disability is assessed at 30% or less, an employee may qualify for a once-off lump sum payment for that injury. If the disability is assessed at more than 30%, the employee may receive a monthly pension for life, based on earnings at the time of the accident.

Death: If an employee dies as a result of the injury or disease, the dependents may receive a pension for life. All children will qualify up to age 18 years unless still at school or attending a tertiary institution.


Should you be registered with the Compensation Fund? 

All employers who employ one or more part-time, casual, temporary or full-time employees for the purpose of a business, farming or organisational activities must register with the Compensation Fund within seven (7) days after the first employee was employed.

Sole proprietors and partners, shareholders or “silent partners” who are only paid dividends or sharing profits, are not employees in terms of CIODA.

Following a Constitutional Court ruling that domestic workers should also have the right to access social security in terms of COIDA, all employers of domestic workers – including those employed before the ruling – must now register with and submit the necessary returns to the Compensation Fund. A “domestic worker”’ is defined as any employee who performs domestic work in the home of their employer, and includes gardeners, household drivers and care takers but not farm workers.

Employers must also notify the Compensation Commissioner within 7 days of any change in the particulars provided when registering.


What is required for compliance?

An employer is regarded to be in good standing when:

  • Registered with the Compensation Fund
  • Records of earnings and particulars of employees are up to date and ready to be produced upon request
  • Accidents are reported timeously
  • Annual Return of Earnings is submitted timeously
  • Assessments are paid up to date

For registration with the Compensation Fund, employers require Registration of Employer form (W.As.2); a copy of Companies and Intellectual Property Commission (CIPC) documents; and a copy of the authorised director’s ID document. (Companies with no employees who need to register to meet the requirements on tender documents, can request an exemption letter and do not have to complete the registration process.)

Employers are also required to keep updated records of earnings and particulars of employees and must be able to produce these records on request.

Furthermore, an employer is mandated to report an injury on duty within 7 days of receiving notice or an occupational disease contracted on duty within 14 days as soon as receiving notice. Employers can register and use the online claims registration system called COMPEASY.

The next requirement is to submit Employer Return of Earnings (ROE) forms as per the Government Gazette. These can be filed via the free online Compensation Fund ROE Online System. A penalty of 10% on the final assessment will be imposed if the ROE is submitted after the due date.

Once ROEs are submitted, assessments are raised before the financial year end on the basis of a percentage of the annual earnings of the employees. The assessment tariffs are fixed according to the class of industry, are reviewed annually and are calculated based on the risk related to a particular type of work. Annual assessments are paid by registered employers and cannot be recovered from employees.

Payment must be made within 30 days and a penalty of 10% of the assessment is charged if the account is not settled after the due date. Interest at 15% of the balance is then charged every month until the account is settled.


Facing a site visit?

The Department of Labour has on previous occasions encouraged employers not to be threatened by site visits or inspections, but rather to regard these as opportunities to achieve compliance, knowing that follow-up site visits may be conducted to ensure any non-compliance has been addressed.

Indeed, if the requirements for compliance as set out above are met on an ongoing basis, a site visit should be a quick and painless process.


Facing an audit?

The Compensation Commissioner suggests submitting the following documents if an assessment is referred for audit.

  • Affidavit stating the reason for variance or credit assessment
  • Signed audited or independently reviewed annual financial statement for the year under review
  • Detailed payroll report for the assessment year under review
  • SARS EMP 501
  • UIF Registration number
  • Manual Return of Earnings (W.As.8)
  • Power of Attorney if your company is represented by an accountant or consultant.

If the required information is not received within by the date stated, an assessment based on estimation will be made.


Getting ready

While these COIDA requirements may seem straightforward, small businesses may simply not have the resources to ensure continuous compliance. Failure to comply with the prescripts of COIDA constitutes an offense in terms of the legislation.

Having been pre-warned to expect site visits and audits by representatives of the Compensation Fund, you would be well-advised to seek professional assistance to ensure that the requirements for COIDA compliance are met at all times.

How To Avoid Bad Customers

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“Happy customers are your biggest advocates and can become your most successful sales team.” (Lisa Masiello)

 

Anyone who has started a business has had those meetings. The ones where you trade a dozen emails explaining what you do and how you do it, what your rates are and why you are the best, and now your potential client has asked for a meeting. You drive to the other side of town, have a two-hour meeting explaining all the things you had explained before, and get back to the office feeling like you did everything you could, and then you wait. Perhaps for weeks there is no response from the prospect and you wonder exactly where you may have gone wrong. The problem here might not be you, but may instead lie with the potential customer, and all that time and effort you sunk into trying to win their business was perhaps always going to be wasted.

Success for a small to medium business is built on resource management. Those companies that manage to get the most return on investment are the ones that will grow the fastest and last the longest. Getting this return requires not only that you create excellent products or deliver excellent services, but that you do this with the right people – and that includes your customers. Being able to tell the difference between good customers and bad ones is a skill no one starts with, but everyone can learn. Here is a guide to recognizing a bad client before you get too committed.


Recognise what makes a good client

Being able to tell the difference between good clients and bad clients will first require you to know exactly what makes a good client. At a very basic level a good client is one that doesn’t take much of your time but is profitable. The best ones are regular customers as well.

Using your accounting software, you will very quickly be able to see which of your clients are giving you the most return for the effort being put in. While some clients you think of as “good clients” because they always take you to lunch or invite you to company golf days may not be having as much impact as you thought, the numbers will never lie.

Try to see if there are any patterns in the clients that deliver the most value to you. Are they of a particular size? Do they come from the same industry or are they from the same areas? What is it about your service or product that seems to appeal to those kinds of businesses? What are you doing for them that your competition can’t? Are there any other companies like them?

Now try to see if there are any patterns among the personalities who work for those clients and who pay for your services. What positions do they hold and do they have the power to sign purchase orders themselves or must they go further up the chain? Knowing these things will help you to avoid dealing with people who may not have the power at the end of the day to order from you and you might be better served focusing on those who can.


The first impression

In order to find good clients or customers, it’s important that your first meetings with them be as much about you examining them as it is about you selling yourself. Do not be afraid to ask the critical questions of them to gauge how much effort it’s going to take to get your first payment.

Are they simply weighing up options or do they have a project that needs completion by a certain deadline? Why are they looking for a new supplier or service? What happened to the people who used to do it? Clients who bad-mouth the previous company they worked with clearly had an acrimonious relationship and it may be time to ask yourself why.

While they may prove valuable in the long run, clients who are simply looking at options are going to be a lot more work moving forward. You may be called upon to offer advice, or chat over coffee more than you would like, and at the end of the day, the work that earns you money may never arrive. Those with project specifics and needs, on the other hand, are looking for solutions that you can provide and want to be quoted. At the end of the day they have to deliver a completed project and will need your help. These customers are much more likely to not only earn you money now but are clearly actually doing things rather than talking about them, making them far more likely to offer you work in the future too.

But even those with work that needs to be done immediately can come with warning signs. Any small business owner should automatically be aware of the clients who want you to “prove yourself” or “do a test job for free.” Filling your time with discount seekers ultimately means you can’t take on work for those companies that would actually want to pay you and anyone who asks you for free or heavily discounted first jobs may not value you or your time and should perhaps go immediately onto the bad customer pile.

This is a good time to also be cautious of those who refuse to work with a written contract. Anyone who actively does not want to sign on the dotted line likely has a very good reason for avoiding commitment and usually, that reason is that they don’t want to pay what or when they say they will. Remember that although in our law most verbal contracts are binding, only by reducing your agreement to writing can you minimise the risks of misunderstanding and dispute. If you insist on a contract and they suggest you don’t need one, rather walk away.


Watch out for red flags in the first few weeks

You are through the initial introductions, have quoted for work and after negotiation have had your quote accepted, in writing. Now it’s time to buckle down and do the job. This might feel like the time when you just want to focus on delivering the best work you can, but it’s also a time to be wary. Watch the client’s behaviour carefully over this period because it’s at this stage that the first signs of an imminent bad relationship will start to raise their heads.

Does the customer respect your time or do they want you to be available 24/7? Are they calling you after hours, or looking for constant updates on your work? Are their deadlines reasonable or does everything need to be done yesterday? Do they micromanage you or nit-pick your work? People with high demands aren’t always problematic, but when it crosses over into your personal time, and they think nothing of calling you late at night to hash out tiny details then you know they are already becoming more effort than they are worth.

You should be equally cautious of those clients who work the other way around as well. These clients who don’t respond to your emails or take weeks to get you answers to important questions. Clients who can’t be bothered to live up to their own project timelines will also struggle to meet your payment deadlines.

The third thing to look out for is those clients who are constantly adjusting the scope of the project. Scope creep starts out with asking you for a few small unpaid favours and slowly slips into the entire project taking on a different life to what was negotiated. Clients like this are usually more disorganised or inexperienced than dishonest but as the project grows and expectations around your workload increase, so should your remuneration. Don’t be afraid to speak up and ask for an adjustment to the contract.

The final red flag is if clients come back to renegotiate your rates for a job that’s already begun. Negotiating up front is normal and healthy, but when they don’t want to accept what has already been agreed or want to fiddle with the details it’s time to reconsider. This renegotiation technique is a sure sign they can’t really afford the project and at the end of the day they’re going to be someone who is likely to leave you unpaid.


At any stage…

So far all the issues that have arisen are probably excusable or can be overcome if the compensation is good enough, but there are some signs that are just too dangerous to ignore. If any customer of yours ever does any of these things it is far better for the long-term survival of your company to immediately terminate any further partnerships or projects and rapidly move on.

The first of these is when they ask you to copy brand logos, ideas or products from a competitor. Anyone willing to ask this of you neither respects you nor your company and certainly does not respect their competition. Being dragged into tacky business projects such as this will only end in your company being made to look bad as when they are inevitably caught, they will pass the blame squarely on to you and your new brand.

This warning goes double for any client who asks you to ignore the law or break it outright. Examples can range from the small, such as when you are in construction and they ask you to just go a little outside of the building code to the large, such as when they ask for kickbacks or offer incentives to work with specific companies. Any form of corruption or criminality will eventually not only ruin your company but could also ruin your life.

If you have been in business for any small amount of time you are bound to have come across some people who tick some of these boxes and might be reliving the trauma of projects you would rather forget. Now is the time perhaps to head over to “Clients from hell” for a wry laugh from these people who may just have had it a little worse than you.

Recession on the Horizon: Here’s How to Survive

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“During recession greed dies, frugality survives.” (Amit Kalantri, Wealth of Words)

With yet another return of loadshedding in August, and major banks upgrading their forecasts to reflect an increased possibility of further economic downturns, recession feels inevitable in South Africa. A recession is simply where an economy stops growing and starts retracting. A generally held definition of recession is when the Gross Domestic Product of a country declines for two consecutive quarters, or half a year. Apart from the shrinking GDP, recessions typically come with reduced employment opportunities and incomes, and a stalling in industrial productivity, all of which then impacts all other aspects of life from retail sales to reduced travel and entertainment. To be overly simplistic, when people are scared about their futures, they stop spending, which in turn means businesses, particularly those relying on consumer spending, stop making as much money and the economy has nowhere to go but down.

Businesses, already on the edge from years of pandemic, are preparing themselves to take yet another battering. Managing these economically turbulent times has become an ongoing challenge. Fortunately, though we have had numerous recessions before, and unlike the pandemic, economists are better able to predict the beginning, if not the length of recessions. We also have evidence for the things you can do to make sure these economic downturns don’t close your business.

  • Manage your cash flow

    In even the best of times healthy cash flow is the key to a healthy business. This is doubly so in a recession. With recession coming it’s wise to take another look at all your expenses and cut out everything that isn’t 100% necessary, while also starting to build a healthy cash reserve. Is it possible to get a better price with another supplier while maintaining your quality? Can you renegotiate your rent? What extras can be trimmed from the budget, even if it’s just temporarily?

    Sadly, this attitude also extends to your workforce. If you can afford it and your cash flow looks healthy enough, then keeping staff on is always the best solution as rehiring and retraining when the recession is over is expensive. However, if things are looking touch-and-go it might be wise to consider just who among your staff is essential. Moving your business to a model where you hire freelancers during the good times instead of bringing on full-timers, will ultimately mean that your lean full-time staff quotient is better able to weather the tough times. Remember not to fall foul of our labour laws in the process.

    It is also important to ensure your money is coming in. In tough times it may not be as easy for your clients to pay you, and you need to get ahead of these situations. This is not a time to go easy on those who may have fallen behind on payments. Every cent you can recoup now is going to make the recession easier to navigate.

  • Take another look at your debt

    When the economy is booming debt is a good tool for growing a business, but in times of recession it can be the added millstone that sinks you. Debt doesn’t go away just because your business may be experiencing a downturn, so now is the ideal time to visit your accountant and take a new look at your debts, repayment dates and deadlines and how they fit into your projected, possibly reduced, cash flow.

    Paying off high-interest debt first is always a good idea. However, before things get bad it may, ironically, be a good time to renegotiate your debt agreements or even take on some added debt if you think you may struggle to meet other obligations during the recession. At the end of the day, lenders are much more likely to work with you on your repayments than see you go into default. Taking the initiative may well build trust between you and your business and lenders.

  • Don’t stop getting out there – recessions bring opportunity as well as risk

    If you are anticipating a bad time ahead, then it’s likely your competition is too and it’s wise to remember that periods of downturn can often make the perfect time to grab extra slices of the market.

    The first step is to nurture the client relationships you already have. Good relationships are going to help convince people to stay with you even if there are cheaper prices elsewhere and having strong relationships with suppliers and creditors will likely give you more wiggle room and time to pay off debts if the real problems start taking hold. Equally, there has never been a better time to market your business and start putting yourself out there for new work.

    In recessions it will be tempting for your competition to slow down on advertising spend, leaving you plenty of room to be noticed. The reason for this is simple; advertising during a recession is likely to be seen by clients at just the time when they are carefully considering their current service providers and what they are receiving. By having your offering in front of them when no one else is marketing you give yourself a better chance of turning their heads in your direction.

    Breakfast cereal manufacturer Kellogg is proof of this. Under the most difficult circumstances, when the market crashed in America in 1929, Kellogg doubled its advertising budget and invested heavily in staff and expertise. By 1933 their profits had increased 30% and they had grabbed their spot at the top of America’s breakfast company food chain.

  • Diversify your offering now

    Don’t wait until the recession has hit to start making panic station plans. By diversifying your offering now, you will be ready to take advantage of gaps in the market that may arise due to the struggles of your competition. By now most companies are already online and selling their services and products direct, but diversification goes well beyond your online store. If you are in an industry that struggles during recessions, then expanding into products and services that don’t take a hit during tough times is going to give your company longevity. For example, basic essentials like toothpaste, medical supplies, food, baby items and in-house entertainment are all things people will need when their budgets get tighter.

    Remember also to plan creatively. For example, the pandemic-fuelled shift to online purchasing hasn’t just boosted the profits of those suppliers and retailers that switched to online sales – companies that looked beyond the obvious and invested in packaging manufacture and in delivery services have also boomed.

  • Take professional advice!

    Now is the time to be ruthless with your company, your products and your marketing. Getting advice from your accountant will allow you to accurately evaluate just where money may have become unnecessarily lost and will help you to spot areas of improvement. Additionally, plans can be put in place to ensure you do not struggle with your cash flow and that ultimately, you come out the other side of the recession as strong, or potentially stronger than you were before.