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Planning and goal setting

As a Business Manager, it is part of your job to plan for the future of your business, and set goals and objectives that you would like to see your business achieve. Effective goal setting will help you to plan and control your business more efficiently, improving your chances of success and profitability.

A valuable method used to help you manage your business, employees and the planning process to assist you in the achievement of your goals, is the Management By Objectives approach.

— Management by objectives

Traditionally, job descriptions for employees have focused on the functions or activities related to specific roles within a business or company. This can be of particular use when training new members of staff and laying out their daily, weekly and monthly tasks.

The Management By Objectives (MBO) approach, however, encourages your employees to set goals for themselves, which will ultimately help to achieve the overall objectives of the business.

To help you plan your business more effectively, and to convey those plans clearly and concisely to your employees, it is important to get your team thinking of the results that they were hired to achieve for your business, rather than simply the functions they are expected to perform.

Having a team that is dedicated to achieving a set of goals designed to help improve your business will be much more beneficial to your business than having a staff that is simply going through the motions.

Using the Management by Objectives approach in your business means getting your staff more involved by asking them to set their own work goals, that will ultimately help the business to achieve its overall objectives.

— Defining your business

In order to properly plan your business’s goals and objectives for the future, you must first understand and be able to define what your business is. If you are just starting out and do not yet have a business plan, ask yourself, what business am I in? Think about what kind of product or service you are offering, what industry your business fits into, and where it will be located in the marketplace, when compared to your competitors, i.e. high-end or budget products, etc.

Clarifying what your business is will be a crucial step in the planning process. This definition will help you to position yourself when devising marketing and product development strategies, deciding what materials, equipments and assets will be needed to run your business, and what your business’s financial and personnel requirements will be.

— Setting Goals

There are two main types of goals that you should focus on when planning for your business’s future success, long-term and short-term. The long-term goals, which you should set yourself, are they are going to be the most important on a large scale, and will help you to determine the direction your business is going to take, how it is going to grow and where it will be in five to ten years.

Long-term goals

Focus on specific areas of your business that you would like to improve, expand or simply develop, and indicate how you want them to have changed in your allotted time period. If you are starting a new business, try to set goals that you would like to achieve within five years of operation. If you are new to the marketplace, you are less likely to be able to predict what you can achieve and how the marketplace is likely to change over a longer period.

When setting these goals, try to include all of your managers, asking them to help decide what the business’s objectives should be. You are going to need their interest and cooperation to help you to achieve these goals, and they are likely to show a greater commitment if they have a hand in formulating the plan.

Some areas to consider when setting your long term goals are:

Short-term goals

Setting short-term goals, especially when you are just starting out in business, will help you to manage the progress of your staff and encourage them to work towards their long-term objectives as they achieve each of their short-term goals.

It is a good idea to ask your staff to set these goals for themselves to get them involved in the process and thinking about they can help to improve your business. Short-term goals should be achievable within a shorter time frame, possibly weekly, monthly or bi-annually.

All goals should support the overall objectives that you have set for your business and help you and your staff work toward achieving them.

— Types of goals

Regular work goals

These goals relate to the major functions of each of your managers, and at the next level the functions of every member of your staff. They should help your staff to focus on managing the operations of their departments more efficiently, improving the quality of the product or service that your business offers, and expanding the area of your business that they are in charge of.

Problem-solving goals

Ask your managers to define the problems that they experience while carrying out the operations of their departments, and to set goals that will help them to solve these problems and to avoid them in the future.

Innovative goals

To keep up with current trends in the marketplace and continue to contend with competitors, it is important in many industries to set goals for innovative practices, whether they relate to developing new products or to more efficient production methods, better management procedures or more effective customer service.

Development goals

These goals should include the continued training of staff, encouraging the acquisition of new skills and growth of individual employees to help them improve their performance and achieve their goals.

— Devising a work plan

To implement the Management By Objective approach in your workplace, you will need to draw up a work plan that will allow each of your managers, and each member of their staff to effectively set their goals, in order to make them clearly defined and more easily achievable.

The following should be taken into consideration when putting your work plan into practice:

To ensure that this management process is working for your business and your staff, it is important to regularly review the progress that your employees are making toward achieving their goals, and monitor how their performance is helping you to achieve your business’s goals.

— Following up

It is possible that, after implementing this approach to management in your business, you will find that it is not working for your business. There are several reasons why this may be the case, the most common of which are not involving upper management in the process of setting and monitoring goals and progression, inadequate or unachievable corporate objectives or not putting proper preparation into installing the planning process. If the MBO approach has not yielded the results you wanted for your business, consider why and how you can fix these problems before deciding that it will not work for you.
No matter what approach you use to help plan for the future of your business and the development of your staff, it is important to find a planning process that works for you and will yield the results that you want for your business. Planning and goal setting will provide clear targets for you and your staff to achieve, and will ultimately help your business to develop, grow and become more successful.

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Using A Corporate Trustee Instead Of Individuals For A Family Trust

Posted on July 19, 2021 by admin

A family trust is a great structure.  It provides tax flexibility whilst giving you asset separation in two directions.  But what does asset separation in two directions mean? And why might we suggest it to you as a recommendation?

First of all, why do you want asset separation? If there are multiple assets, you want to make sure that if someone makes a claim against the owner of a particular asset that your other assets can be quarantined from that claim. This isolation will mean that they can’t gain access to the assets that are yours and separate from the claim.

If you own a business and have a successful financial claim made against your business where the claim is for an amount that is more than the assets of the business, you will first need to use the business to cover the claim, and then find something additional to supplement the shortfall. In this case, if you also own your own home, and its worth is enough to cover that shortfall, it may be used to meet the claim by combining the business assets’ worth and the family home’s value. You could lose your family home!

However, if we structure your business in a particular way then the person making that claim will only have access to the assets in the business and you will be able to keep your family home.

This is what is called asset separation. Generally, it’s a good thing to employ, but it does have one flaw – it usually only goes one way.

If someone claims on your business, they won’t get the house but if they successfully make a financial claim against you, they will successfully get all of the assets that you own, including those of your business.  This is a risk that you must be willing to take if you own a business.

When you operate a business through a family trust instead of owning that business, you will merely “control” it, and have but a “mere expectancy” of being considered in the distribution of any profits or capital from that business.

The good part here is that although you only have a mere expectancy to be considered, we would set it up so it is YOU that “considers” who gets the money.  This means that if someone makes a claim against you then they can’t get access to assets in the family trust. What this does is give you two-way asset protection.

There is a bit of an issue with family trusts though – although you will see the debts of the trust as debts of the trust at law, they are in actual fact the debts of the trustee. If you are the trustee, all of the debts of the trust are your personal debts. You can use the trust assets to pay down those debts, but if the trust assets are insufficient to pay the debts, it will be up to you to pay off the rest.

When you’re an individual trustee of a trust, you lose the perk of asset separation, which is why a company may be used as a trustee, as the company does nothing other than act as the trustee of the trust. If there are insufficient funds in the trust to cover the debts of the trust, then those debts fall on the trustee and the creditors have no access to your personal assets because you have no individual debts owing.

Want to know more about asset separation? Interested in trusts? We’re here to help.

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