Interesting financial News from Dubai

 

 

At the start of 2018, taxes will be formally introduced for the first time in Dubai. The implications are deeper than they may first appear.

It’s not so much the actual tax itself, I understand that there will be VAT at 5% (after a period of 0% to allow companies to implement the changes), it’s the fact that many businesses have not previously kept formal accounts.

Typically the bigger companies do have proper financial controls in place, but, it appears, that there are some companies which do not have robust financial controls in place.

Some business owners have been looking to sell their company before the requirement for more formal accounting; but who would risk buying an enterprise where you couldn’t be sure of the actual results the business has achieved.

It is a great opportunity for financial experts, accountants and bookkeepers to assist in putting proper financial management systems in place.

It will be interesting to see how Dubai develops with the new taxation approach.

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What sort of business model have you chosen?

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There are many ways to build a business; I’m thinking in terms of long term or short term.

Most of the companies I work with are what I’d call long term.  Businesses that develop from a small kernel of an idea; or a fairly large investment to create a business with a reasonable size team.

These businesses develop their client base and position in the marketplace and continue to trade for a long time.

In my experience, some business owners have a clear idea of what their business will achieve, spanning many years (even decades).  They’re in it for the long term.

Many business owners I ask, haven’t thought much about the details beyond a few years, if that far.  This is a fairly typical model of the S of the SME world.

What about a different approach?

Here in Dubai, and I know it’s not only here, I learnt more about a culture of quick in and out.  Build a business quickly make a big profit from an opportunity, and move on.

It led me to think about the way a number of business owners I’ve talked to, plan (or rather don’t plan) the model of their business.

What is the end game, and how long should a business run?  Is the business something long term, or could it be that it would be better to gain a quick return from a specific opportunity.

I’ve met a number of people who now have a portfolio of long term business investments, built on the profits of a short-term opportunity.

One example I can think of, was when Ireland changed to the Euro.  Lest just say that there were a number of people who had savings in Punts that they didn’t want to transfer to Euros.

I’m thinking of one specific sector for my example.  The marine sector. Namely the building of racing yachts.  In 2000, Cork Week (a big sailing competition), there was a massive increase in new yachts.  A number of boat building companies took the opportunity to up production within a specific timeframe.

The thing is, people that were ready to take advantage of the boom years, made significant profits; and then, either finished with that business, or descaled back to a previous operating level.

So, if you’re looking at an opportunity in business, there may be some that arise around the changes due to Brexit; Could you set up a short-term business that has clear goals and a specific timeframe/targets?

From my point of view, it would be an interesting and exciting opportunity to mentor business owners of short term/specific target businesses, and help them then develop long term companies.

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Does your technology pay for itself?

Those that know me, know that I love my tech. I like the way my Apple kit coordinates and syncs across all the linked phone, iMac, MacBook and iPad. Other platforms also work well.

Underlying all this tech is the need for it to make my business more efficient. I have this kit to make my company easier to run – and I would be the first to admit, I like how it looks. Yet; it has to work well or I’m not interested!

Make sure that the new tech you are buying for your business, actually pays for itself.

All too often a business will acquire new technology that makes working ‘better’.  Be careful that it doesn’t just make work prettier.

For example… many years ago, a company that I worked for, used a simple word processor system on green (or orange) screens.  We had to send reports on the weekly success of a project for the production meeting.  All the reports were around 80 to 100 words – succinct and to the point.

Then we got a wonderful new system that allowed the reports to be created in differing formats and layouts.  The reports looked great! Colourful, beautifully laid out and….. verbose! Some were 250 to 300 flowery words long.

The reports became weekly works of art; and the upshot was that the contents of the reports, what was actually required, became almost useless.

It was just an example of how our office became excited with the format, rather than keeping the content useful and to the point.  With all the new tech toys, it is so easy to get carried away and forget what the aim of the task is.

Be strict, and make sure the tech you buy for your business, deliveres productivity- whatever that means to your product or service.

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People are becoming too expensive to employ; bring on the technology!

A new industrial revolution is on the way!

With the ever tighter squeeze on company profits from the ever increasing raise in wages, UK businesses are replacing more and more operations with technology or a cheap ‘hidden’ imported workforce.

This is actually happening all over the world, slowly in some places and quickly in others. Lets focus on the UK for the moment.

After the second world war, our country created a benevolent society; where the needy are supposed to be supported.  The concept being that the taxes collected from the parts of society that were working, contributed to supporting those that could not work – for reasons of health or other situation.

At the beginning, it worked. For example, our health service improved and could be provided to all – free at point of delivery.

More recently we see many examples of a part of our society that cannot make ends meet – many of those actually classed as working poor (in work, but not enough income to support a basic lifestyle). There are people who have reasonable jobs who still need to receive top-up benefits, just to break even. Some don’t and struggle to heat their homes or put food on the table. I’m not going to get into the debate here about those who appear to be getting more than their fair share of benefits or the amount of fraudulent claims.

With the gap between the very wealthy and the less well off becoming ever wider, maybe now is the time to start thinking of how everyone can make a decent living in our society.

In a BBC article about 2017 tech trends: ‘A major bank will fail’, By Matthew Wall, there is a section on the ‘automation’ of the workplace.

‘…automation continues its takeover of manufacturing, the big question is what new jobs there will be for all these redundant workers.

We’ve already seen how the effects of globalisation and automation have stirred up voters in the US and potentially across Europe this year. [and UK with Brexit]

Could there be a new Luddite revolution brewing? After all, who benefits most from cheaper production? It’s certainly not the poor.

“We’re going to start confronting some hard truths about technology and the labour force,” says Tien Tzuo, founder of subscription technology platform Zuora.

“We’re going to have to figure out how to create jobs for people in this new economy, and if there literally are going to be fewer jobs, then we’ll need to establish some sort of living standard or basic income for people.”

So 2017 could also be the year the world is forced to deal – finally – with the tangible impacts of technology upon human society.’

We cannot continue to just increase wages, not many businesses can afford it. Also, not many business owners are receiving the rewards that the media portrays.

I believe we need to start looking at how we will ensure that all of our people have a valued and valuable life. One of the key aspects for the well-being of the human soul, is hope – for without hope, what is there?

I feel that our world is creating a ‘celebrity status’, where people are held in high regard for being famous, not necessarily for what they contribute; at a cost to our world as a whole. At what point will we say, enough is enough.

The fundamental problem is that our nation is not receiving as much income, to provide our ideal of supporting everyone, as we choose.

Unless we have some changes as to how we run our nation, we are going to see more cuts.

There is an argument that there is sufficient money, but that it is distributed unfairly. This is a difficult one – Why should we despise a banker for getting a massive salary yet be happy for a football player to earn more in the first week of the year than the average person earns in a whole year?

Apart from our possibly skewed values on how much certain people are worth, it seems that we have a culture of ‘I’m alright jack’ rather than the supportive communities we used to have.

Whatever we decide, we cannot bury our heads in the sand anymore.

Ask yourself, are we going to continue to bumble on, oblivious of the impact of deprivation caused to a strata of our society?

Maybe the ‘real world’ debates need to focus on the legacy we are leaving for future generations?

Whilst there is still plenty of employment at certain levels, those jobs replaced by machines have left a UK generation feeling that they don’t have much opportunity.

Great Britain is still one of the world leaders in innovation, so let’s see what we can come up with for our society.

Finland has already started looking at this problem.

Come on Great Britain, let’s work out how every able UK citizen will actively contribute to the benefit of the nation.

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Rob Goddard meets Kat Orman from BBC Radio Oxford

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“Are you free on Thursday to support me at my interview this week on the Kat Orman show at BBC Radio Oxford?” was the call I received from Rob on the Monday before, never one to miss the opportunity to join in, I enthusiastically agreed.

Rob was going to be interviewed about the topic of suicide amongst men, seemingly successful ones at that.  This came about as Rob had shared his own personal story in his book ‘Suicide to Success‘. Suicide is the biggest killer of men under 45 in the UK!

Rob agreed to share his story to “help inspire and provide hope to others that there is a life worth living and it’s within the reach of everyone”.

So, on the 8th of December we rocked up at the studios.  I was a little apprehensive as to how it would go, knowing a little bit about the media; but Kat couldn’t have been nicer or more empathetic to the topic and Rob in particular.

The next thing I know, I’m in the studio too, with a mic in front of me!  I was delighted to be able to participate. I orginally thought I would be listening to Rob, not actually part of the interview.  As Kat said, the story behind Rob’s rise to success was having people to turn to when things got tough.

The message Rob shared, is that everyone needs the support of family and friends; and those feeling like things are really dire need to reach out to those who want to be allowed to help.

If we all take a few minutes each day to reach out to those around us, and provide a strong support network, then those who maybe feel it’s not worth going on, will realise they are loved.

Rob’s book, Suicide to Success is so much more than his personal journey, it shows others that there is always hope and a kind friend wanting to help.

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Marketing – Exhibition stands

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With 2017 upon us, there are lots of opportunities to attend exhibitions/business shows as part of your overall marketing strategy.

Correctly focused, it’s a quick way to let many potential prospects know you exist and are ready to serve their needs.

Like any marketing strategy, the return you get is proportionate to the effort you put in.  An exhibition stand can be seen as expensive, although I have seen some pretty cheap looking ones.  Some companies spend on their stand, whilst others invest.

Having attended a number of business shows this year, I’ve seen the good, the bad and the downright embarrassing.

A great looking stand is so important.  It may surprise you to know that it’s not just about how glossy and expensive it is – It would be foolish to try and compete with the marketing budgets of Microsoft, Sage, Vodafone, Honda et al.

The key to a great stand is the people.  There are the basics, such as team kit, that should be considered.  The main thing is the knowledge and attitude of the exhibitors.

I’ve seen some great looking stands in 2016 and some ‘cost effective’ ones.

For example, A small insurance company had a long table, with a neat table cloth with their company logos on.  There were three people sitting down at the table; all in team polo shirts.

On the face of it, how would this work? Well, there were 3 other people feeding them with potential clients from the front of the stand.

These lively people, also wearing the team kit, were passing visitors to the insurance experts.  There was a queue of interested prospects, waiting to ask the expert about the insurance they would need for their business/car/home.

The experts were collecting details to send more information out after the show.  And they were also signing people up for insurance and taking payment details.  I suspect that this company will have more than covered their costs of the show.

Then there were the embarrassing stands – some with no-one there.  I’ve seen stands with the company name on the stand banner – provided by the show – that haven’t even shown up at all.  That’s negative marketing, by the way.

My personal pet hate is the pushy/rude/uninterested people on a stand.  One of my clients was even blanked after they shared the size of their business – so very rude!

As good a resource as exhibiting is, it does require proper preparation and a great attitude to the visitors.  The first thing is to turn up!

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What happens when your Zero really changes

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I have this theory (thinking of Ann Elk from Monty Python; for those that know the dinosaur sketch) about how we can choose how well off we are.

I believe that everyone has their own Zero.  In financial terms, that’s, what we expect to be bringing into our home each month/year.  This is the amount you need to live at a level that you have accepted.

This may actually mean you don’t have enough to pay all the bills you deem important to survive.

I feel it’s connected to our expectations of our worth.

For example – If your monthly outgoings are £2000, that’s about what you will bring in.  People often seem to accept that minimum; to cover a level of wealth they feel they are worth/need.  I have often heard the phrases – scraping by, or head just above water.

For most of us, that’s just an excuse to not do anymore than we need to survive at our self-imposed Zero.

Having worked with a client for a while to help them raise their Zero to a new level, they have seen a threefold rise in income.

This is because they are no longer satisfied with the zero they originally chose.  The new zero includes ‘profit’.  Profit is money left over from the basics to have the life they dreamt of.

So, have a look at your zero, is it giving you the life you really want?

The human mind is amazing.  When we realise we can be, do and have more (whatever that means to you) we open up the opportunities to grow.  For some it may just mean doing more of the same, for others that may mean a change of direction.  One thing I’m very sure of – it needs activity (correctly focused hard work).

We often see in the news, that someone has risen from nothing to achieve great things.  It’s because they just did it – they believed they could and put a lot of hard work into their success.

When are you going to raise your Zero?  NOW might be a good time to start.

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