Is using your cash reserves to grow your business the best strategy? Most likely not. 

The Irish economy is performing well, and Irish SMEs are in confident mood. However, instead of using smart borrowing to grow their businesses, they are dipping into their cash reserves to expand, which may not be the best strategy.

According to new research into Irish SMEs, conducted by Red C, 78% of Irish SMEs are confident in their ability to borrow – if they need more capital over the next twelve months.

However, just one quarter (23%) say they will borrow in the coming year, as they look to grow.

“The research findings have shed light on current borrowing habits and expectations of SMEs across the country,” says Michael Lauhoff, director of Business Banking, Bank of Ireland. “Interestingly, 60% of SMEs report using personal funds to invest in growth over the past three years. It is important that business owners remember to engage in smart borrowing to grow their business while maintaining sufficient cash reserves.”

VIDEO: Watch this video on how smart borrowing, rather than using your cash reserves, can help your business grow and ensure you don’t run out of cash.

National Enterprise Week

Brexit is a concern for 53% of firms, along with staff recruitment and being able to retain excellent staff, suggests the Red C poll of 450 Irish SMEs which was carried out in August and September 2018.

However, 53% feel positive about the Irish economy in the next twelve months with more than half (58%) expecting turnover to grow. Only only 9% expect their business to decline over the coming year.

Bank of Ireland is inviting business owners to attend the various National Enterprise Week events taking place nationwide starting on October 5. Book your place now. It’s free to attend and open to all businesses. 

“In addition to SMEs gaining insights into financial discipline, achieving growth and greater returns and enabling efficiencies, the events will also examine the potential impact of Brexit and how best to prepare. Events will cover all sectors,” says Lauhoff.

As SMEs across the country look to grow; working capital, new machinery and equipment are the top reasons for borrowing according to the research. 81% of SMEs looking to raise finance, say they would consider Irish banks over the Credit Union or private investors.

70% of firms polled for the research say they would like an easier loan application process from a bank.

If you would like to easily apply for finance and get a result within 48-hours, go here.

The most significant reform of the PAYE system since its introduction in 1960 is underway. Businesses and employers have until the start of 2019 to get their houses in order.

PAYE Modernisation – what’s the main issue, what’s being reformed? In a nutshell, it’s about filing returns to Revenue in real time.

Employers will have to calculate and report their employees’ pay and deductions as they are being paid.

“Current practices will have to change,” says Ray Rogers, CEO of Surf Accounts (pictured). “This is especially true if you pay employees net. Revenue now wants to see all tax deductions returned in real time, on the day people are paid.”

As this is a Revenue reform, there will be strict fines for businesses that don’t comply with the new rules.

“Big changes like this rarely run smoothly,” says Rogers. “I’d advise any business to look into this reform and put the necessary fixes in place. There will be a €4,000 fine per employee that hasn’t been returned,” says Rogers.

Revenue expects all businesses to comply with these changes from the minute they come into force on January 1, 2019.

“For small businesses who feel they may have knowledge gaps in the handling of payroll, they have two options,” says Rogers. “The can train their payroll operators if their PAYE knowledge isn’t up-to-date or, they can outsource their payroll to an accountant.”

Goodbye to the P45

Another major part of the reform will be the abolition of all Revenue forms as we know them – namely, the P45, P30, P35, and the P60.

From January 1, 2019, people looking for a mortgage won’t be able to get a p60 to prove their earnings, they’ll just go to the ‘My Account’ portal on the Revenue website and print out what they need.

For full details on the changes to happen, you can download this guide from Surf Accounts.

Revenue is hosting a series of seminars across the country in the run up to the modernisation deadline.

You can find out more and book your place here.

“The difference between success and failure is a great team.” – Dave Kerpen.

What is a secret of a great team? A study of 133 teams found that psychological factors such as higher levels of interpersonal sensitivity, emotional stability and curiosity result in a more cohesive and productive work. Do psychological factors, personality, and emotional intelligence predetermine growth and development within the team? What makes a great team?

Teams are more innovative and productive than just a group of people. Today’s teams are far more different compared to ten years ago. In the past teams included relatively homogenous members who worked face-to-face and had a similar mindset. They perceived themselves as a joined cohesive group. In face-to-face teams, nonverbal communication and contextual cues provide a deeper insight into what’s going on.

Digital and diverse

Today’s teams are Digital – diverse, dynamic and dispersed. Lots of them work remotely, and if you imagine a group of different nationalities, age, gender, and race with their values, beliefs, norms and behaviour working on a distance in differing time zones – it makes the whole teamwork process much more complicated. The question arises: ‘How to break down the barriers to cooperation and information exchange, and make a perfect team in the whole complexity of today’s digital environment?’ The answer is building ‘team effect’, making each member feel part of the team even on a distance, feel strong mutual commitment to work, and most important – feel “We’ instead of “I”. This ‘We’, this mutual commitment creates an enormous potential for the team’s interpersonal growth and great motivation for business development. How can this feeling of ‘We’ be achieved?

J. Richard Hackman, a pioneer in the field of organisational behaviour, identified the basics of team effectiveness: a compelling direction, a firm structure, and a supportive context. Every team feel inspired when they have a clear path – a goal. The goal should be explicit, consequential and also challenging. A compelling direction highly benefits the emotional stability of the team, as we usually feel much more motivated working toward a particular goal.

A team can be a mix of different nationalities, age, gender, and race with their values, beliefs, norms and behaviour. Such groups can quickly become disintegrated and even isolated unless they have a mutual goal and a structure of what each of them is responsible for. When there is a clear structure within a team, there is a clear structure inside each member of the team. Support is another condition that contributes to team effectiveness. Supportive context includes sharing reward when your team member succeeds, and, at the same time, letting them know if they fail to perform. Support is about giving only objective feedback. Also, feedback is never negative as we learn from mistakes and achieve higher results in the future.

What team Google knows

Google’s recipe for a successful team is “being nice and joining”. Google’s research has found that effective team performance is determined by the team’s average level of emotional intelligence and a high level of communication between the members. Moreover, the broader scientific evidence proves that individual’s personalities play a significant role in team performance. Why? It is an individual’s personality that affects our position within the team, how we interact with the rest of the team, whether our values and beliefs correspond with the team’s. 

Imagine your team with a high level of interpersonal sensitivity, emotional stability and curiosity, a group of inquisitive, cool-headed and altruistic people. Now consider team members who are results-oriented, relationship focused, process and rule followers, innovative and disruptive thinkers and, definitely, pragmatic. It can be not that easy to keep the balance of all these features in a team, and there can be success and failure in some of them. However, it is possible. Also, it’s highly essential to take small steps to gain this balance.

Now, let’s think about emotional intelligence and its substantial impact on a team. First, let us ask ourselves – how emotionally intelligent are we? Also, are we emotionally intelligent? We can be great professionals, successful, experienced managers, fantastic leaders, great leaders. However, are we great on our team, for our team? This is a tricky question. So sometimes it is tough to answer. Let us remember first, what is emotional intelligence.

Why EQ is so hot at the moment 

EQ first appeared in 1995, and the decades of research have revealed that emotional intelligence is the critical factor for a star performance. It is something intangible in each of us, that affects how we behave and manage our behaviour, how we tackle social complexities, how we make decisions and achieve results. EQ consists of two main competencies: personal and social. Personal competence is our self-awareness and self-management, while social skill is social awareness and relationship management. When we try to understand other people’s mood, motives and behaviour, we improve the quality of our relationship and manage interactions successfully.

Emotional Intelligence (EQ) is the capacity for recognising our feelings and those of others, for motivating ourselves, and for managing emotions well in ourselves and our relationships.

How much of an impact does emotional intelligence have on your success? The short answer is a lot.

TalentSmart found that “emotional intelligence is the strongest predictor of performance, explaining a full 58% of success in all types of jobs.” Above all, EQ is not only the most significant predictor of performance in the workplace, but it is also the most reliable driver of leadership and personal excellence.

Travis Bradberry in his profound study found that 90% of top performers are also high in emotional intelligence, and just 20% of bottom performers are high in emotional intelligence. Let us remember one critical point – we can always develop high emotional intelligence, even if we’re not born with it.

Now we are ready to answer the question ‘What makes a great team?’ The answer is all of us. We make a perfect team. We – a group of inspired and motivated people, united by the mutual goal, having a clear direction where to move and develop, and continually giving support to each other.

We are all great professionals with excellent professional skills. So we are also highly aware of the importance of personality, psychological factors and emotional intelligence within the team. 

This guide was written by Ekaterina Voznesenskaia. (pictured above)