Lessons in small business planning

AGL / Thursday, November 9, 2017

They say the best-laid plan can often go awry – but you definitely can’t go anywhere in small business without one. And no matter how well things are travelling, you still need to reassess your plan and give it a little love occasionally. That’s a lesson Melbourne architect Gary Windiate, who founded Windiate Architects nearly 10 years ago, learned five years into his bold small business venture. “Business planning is really an essential tool,” he says. “The first five years I set my goals in my business plan to have a couple of staff, and for myself to be working part time a couple of days a week so I could pick up the kids from school and I achieved that.” But after year five he says the foot came off the planning accelerator a little and, while the business is still running along smoothly, he learned that planning needs to happen much more regularly if he wants to grow the business. “The next five years kind of plateaued a bit and so over the last six months I have had this ‘where do I want to go’ internal discussion,” he says. “So now I need to put things into place to make the company better.”

Tailor your plan to your business

Windiate says the kinds of goals he sets for his business differ from others so it’s important to have a plan that suits you. Sure, there are obvious financial considerations, but in his line of work there are other factors. “How you run an architectural business is slightly different to how you would run a regular business because they are not driven by KPIs,” he says. “The staff are driven more by emotional satisfaction and work-life balance rather than deliverables and tasks within timeframes, as architectural timeframes move and stretch.” Winidate says because staff salaries are not performance or sales-based, as a manager he needs to work out a way to keep everyone motivated to drive the business forward. “I am definitely focused as much on the emotional and satisfaction side of my business as the financials when I am planning and reviewing my plans,” he says.

Calling in the experts

Like most small business owners, Windiate wears a lot of hats – but he has recognised that some tasks just need to be outsourced. So he has retained a respected business coach who once ran his own architectural firm to provide business advice. “I am in the process of working out where the next five years are going for my business,” he says. “But I need someone to help me structure my thoughts and have clarity to be able to move the business forward for the next five to 10 years. “I am an architect, I didn’t go to business school and I don’t have an accounting degree. So it’s a case of I understand my shortcomings and what I am good at.” Review the direction of your business with Pilot Light’s free downloadable business review plan.

Playing a long game

One of the main things Windiate has learned from employing external advisers is the importance of succession planning, something that was not front of mind when he began his firm 10 years ago. “I didn’t think I needed a succession plan because I would wind the business down and gracefully retire, but I have been advised that I am better off having a succession plan where I am grooming my staff to take over and then I gracefully step out,” he says. This means Windiate will now focus on his staff and his hiring practices over the next 10 years, keeping in mind that he could well pass the business to one of them. “I’m 45 now and will probably retire when I am 65 so I may very well have different staff then, but you need that plan in place regardless,” he says. “So when I look for new staff I will look for people who will grow into the company and eventually take it over – which I had never thought of before.”

Original article found here at SmartCompany.com.au

Naughty or nice: Is there a financial reward for acting ethically?

Jay L. Zagorsky, The Ohio State University

It is almost Christmas time, and the song “Santa Claus is coming to town” keeps playing over and over.

For me, the key lines of this jingle are “He knows if you’ve been bad or good so be good for goodness sake.” The implications of this are clear: Good kids will get more presents on Christmas morning.

I have been puzzling over these lyrics for years and wondered if the lines were true. Beyond being rewarded with more of Santa’s largess, does being ethical and honest lead a person to riches? And do bad people get their comeuppance? Or is it the other way around? Put differently, are rich or poor people more likely to engage in unethical behavior?

While this debate has lasted a long time, only recently has information been gathered that can start to answer these questions. I recently analyzed the data and was surprised by the results.

Bad or good

Despite Santa’s admonition, popular culture is full of examples of people being rewarded for being bad.

People often lie, cheat or steal or think about doing these acts in an attempt to get ahead. Unethical behavior is considered a shortcut for reaching money, power or fame.

Television is filled with shows such as “Game of Thrones,” “Mad Men,” “House of Cards” and “Boardwalk Empire” in which the main characters have reached financial success using underhanded means. While these shows are entertaining, they are fiction and cannot reveal if actually engaging in unethical behavior systematically improves a person’s financial situation.

Conversely, many religions are on Santa’s side, preaching the idea that individuals who follow ethical precepts will be richly rewarded.

Understanding the connection between behavior and financial success can be tricky, however, since it’s hard to know for sure the direction of causation. Is there is a relationship between the two?

Previous research has not presented a clear finding on the relationship between personal finances and ethics. Nevertheless, understanding the relationship is important.

For example, if financial success leads to less ethical behavior, then society needs more rules and punishment for richer people than for poorer people. In Finland the fine associated with speeding tickets is based on the driver’s income. Rich people pay a high fine, while poor people pay only a small fine.

On the other hand, if the argument is that the poor are more likely to break ethical standards, then perhaps more rules and punishment are needed for those who are unsuccessful financially.

If causation runs the other way and more ethical behavior leads to financial success, then people have a reason to do good, without needing to assume there is a heavenly reward after death or be deterred by threats of punishment on Earth. However, if less ethical behavior leads to financial success, then punishment should not only fit the crime but also the financial status of the guilty.

Tracking behavior

So what is the relationship between ethical behaviors and financial outcomes?

My recently published research investigated this relationship based on surveying about 9,000 randomly selected U.S. residents in their 20s and 30s. These people were asked detailed questions about their wealth over time. They were also asked a number of ethical questions that enabled me to create 15 different moral indicators.

Six indicators tracked unethical behaviors: stealing less than US$50, stealing $50 or more, ever being arrested, number of times arrested, believing that you often lie or cheat and having a parent believe you are a liar or cheater.

Nine indicators tracked ethical behaviors: donating money, volunteering time, returning extra change to a cashier, giving money or food to the homeless, believing people should help those less fortunate, believing that helping people in trouble is something to do, obeying societal rules, stating you follow religious rules and responding honestly to questions.

A surprising result

Surprisingly, I found little correlation between either set of behaviors and wealth when respondents were younger.

Small ethical breaches such as stealing less than $50 and appearing honest to the interviewer seem to have no impact on wealth accumulation. This suggests small ethical breaches do not have large financial impacts for most people.

There also was no relationship between financial wealth and being honest with a cashier or helping the homeless. While this suggests small acts of kindness won’t lead to great material wealth, at the least there appears to be no financial penalty. If this finding is replicated in other research, it removes an excuse for not helping others.

However, larger ethical breaches and wealth do have a clear negative relationship. Breaking rules, stealing and being arrested were associated with less wealth. Moreover, the older the respondents got, the clearer the association between these unethical behaviors and having less money.

Unfortunately, the direction of causation is unknown, so it is uncertain if breaking rules causes less wealth or being poor causes people to break rules.

Mom’s expectation

Are ethical people financially rewarded or penalized for their actions?

My research suggests some, but not all, ethical or unethical acts are clearly associated with financial changes.

So what should you do if you want to be rich? I would play it safe. If you want to be wealthy, then be honest and ethical. Doing small ethical acts like giving money to the homeless and giving change back to a cashier who made a mistake will not harm your wealth.

This means doing the right thing will not punish you financially, so what are you waiting for? Act the way Mom and Santa Claus expect you to act – the right way.

Jay L. Zagorsky, Economist and Research Scientist, The Ohio State University

This article was originally published on The Conversation. Read the original article.

The psychology of Christmas shopping: how marketers nudge you to buy

Paul Harrison, Deakin University

Many people see marketing as a form of manipulation, particularly around Christmas and the other retail bonanzas: Easter, Valentine’s Day, Mothers’ Day and Fathers’ Day. But rather than simply trying to trick people, the masters of marketing know it’s much easier to understand and work with innate human flaws.

By drawing on a plethora of psychological and sociological research, marketers subtly give us permission to buy and not to think too much, or too deeply, about why we’re buying. Not thinking all the time is a very efficient way for us to get by. It conserves energy, and allows us to live relatively easily by responding to our psychological predispositions, social norms, and general cognitive imperfections.

Here are some of our flaws marketers use to nudge us towards consumption.

Read more – Ready, steady, shop: shopping as sport

The scarcity effect

Scarcity theory tells us that if we think something is scarce or only available for a short time, our mind will give it more weight. Christmas is a hard deadline, so we are limited in our freedom to delay the purchase decision.

Scarcity influences our ability to think clearly when making decisions, and accelerates our perceived perishability of an offer. We feel that if we don’t participate in the Christmas ritual, we will miss out on a significant social experience.

Melbourne City, for example, has its annual “Shop the City” promotion in the first week of December, where major retailers offer discounts available only on the day. Similarly, many shops are offering Christmas-only bundles or gift sets, often at a “discount” (which “doubles” the scarcity effect). All of these tap into our willingness to respond to the scarcity effect and feel the need to buy things we would normally ignore.

Remember Christmas won’t be your only opportunity to show others how much you love them, or to spend time with your family. It seems obvious, but you can buy people gifts at any time of the year! All marketers are doing is tapping into your predisposition to value experiential scarcity during socially validated moments to encourage you to behave in particular ways.

Read more: Sustainable Shopping: the eco-friendly guide to online Christmas shopping

Overwhelming stimuli

By surrounding us with stimuli designed to overwhelm our cognitive processing, we are less likely to think through our decisions in any complete way. When we walk into a shopping mall filled with Christmas tinsel, Christmas music, lights and sounds, we are going to experience some form of ego depletion.

Ego depletion doesn’t mean you instantly become a humble, thoughtful person. In psychology, we use this term to describe how people don’t always think through their decision-making in a rational and linear way when placed under situations of stress.

So, all that noise, colour and movement, isn’t just the shopping centre or strip getting into the festive season. It’s also a technique to get you to think a little less completely, and respond to emotional cues, such as social norms, FOMO (fear of missing out), and rituals.

Our inability to forecast

Psychological research tells us humans aren’t very good at predicting the future. Or perhaps we just have an over-inflated sense of our accuracy in predicting the future – we rely on how we feel right now to predict how we might feel about something later. Psychologists call this affective forecasting.

So, in the moment, and just in that moment, we buy things we think we will need. But we discount all the other things that we have bought, and also discount how having all that stuff didn’t necessarily make things great last time.

If we think about Christmas lunch or dinner, few of us can plan how much food we will actually need and we aren’t very good at knowing how much we will end up eating (or need to eat). We pile our plate high, because we don’t really know how much we need, but do know how much we want. Lots and lots. Just in case we miss out on something great.

It’s the same with gifts. We often don’t plan, and so we are more susceptible to the gentle nudges of the marketers when we are stressed, in a hurry, and trying to do ten things at once.

How to resist the temptation

Despite our belief that we are all individuals, making independent decisions and choosing what we want and when we want it, humans are social, conforming and compliant creatures. If we see “our people” are doing something, we tend to assume this is something we should also do.

If we’re looking around and our environment is signalling this is what we do at Christmas time, then it’s easier to comply than to resist.

Christmas is a tough time to commit to reducing consumption, but it is possible. Resisting any natural response requires a commitment to the idea of resistance, a willingness to practise that resistance at all times (we know the more we do something, the easier it becomes) and, importantly, surrounding ourselves with people who will help us to resist, or at least won’t sabotage that resistance.

Read more – I think, therefore I buy: how buying nothing at Christmas time is harder than it appears

This doesn’t mean cutting yourself off from society. But it does mean coming to terms with the idea you are open to manipulation, framing, priming and persuasion, and coming up with ways to avoid it.

Focus on the idea of Christmas – time with family and friends, treating ourselves to novel food, eating all the great fruit that’s available this time of year – rather than succumbing to the commercial nudges that seem to have become imperative to Christmas.

Give gifts if you wish, but think about what is moving you toward buying those gifts. With this knowledge, you might make a few better choices.

Paul Harrison, Director, Centre for Employee and Consumer Wellbeing; Senior Lecturer, Deakin Business School, Deakin University

This article was originally published on The Conversation. Read the original article.

As privacy barriers have gradually been eroded online, it’s become harder and harder to keep control over what you’re revealing to the websites you visit when you open up a web browser. For many users now, revealing who you are is just an inevitable consequence of being on the web and using apps, but if you want to tighten the reins on where your data’s going, you do have some options.

Privacy tools

Starting with data reported to sites by your browser, a plugin or extension is probably your best bet for stopping data from leaking out. Try NoScript Security Suite for Firefox or ScriptSafe for Chrome, which prevent active items on websites from running when you don’t want them too. Other good options include the Electronic Frontier Foundation’s Privacy Badger, which blocks third-party tracking cookies while allowing useful, like those that record ones to continue operating, and Disconnect, which offers free add-ons that work in a similar way.

Image: Disconnect

We also like Ghostery, a privacy extension available for Chrome, Firefox, Opera, and Microsoft Edge. Like Privacy Badger and Disconnect, it stops cross-site, third-party trackers from running, and you can actually see a list of trackers on each site and choose to block or allow them as needed.

Built-in browser options

For more cookie settings beyond the extensions we’ve mentioned, head into your browser’s settings page. One of the settings will refer to Do Not Track, an agreed-upon protocol that automatically asks sites to not run any scripts designed to track your behaviour. It sounds like a perfect solution in theory, but there’s no legal obligation for websites to honour the request, and many will just ignore it. You can see some of the networks that respect a Do Not Track request, including Pinterest and Twitter, here.

Image: Screenshot

Opening up an incognito or private window can help. In these cases cookies are only kept for the current browsing session, so as soon as you close down the incognito window, they get erased from your system. From the perspective of the browser, it’s as if you were never online at all.

On the other hand, incognito mode doesn’t stop websites and ISPs from knowing you’re online. You’re still broadcasting your IP address, for example. And, of course, if you log into Facebook (or anywhere else) all the usual rules about tracking and data collection still apply. It’s best to think about incognito mode as hiding your browsing activity on your local device rather than adding any extra anonymity to your online travels.

Dial back tracking on services

Finally, there are the data-privacy options inside the services you use, which are worth reviewing. By visiting your ad preferences page on Facebook, you can limit the ways in which Facebook can target you, both on and off the social network.

Image: Screenshot

Google offers a similar account page where you can do everything from opting-out of seeing personalised ads to deleting all of the searches you’ve ever made through Google.

Using as few apps as possible and registering for as few websites as possible obviously reduces the exposure of your personal information. But even if you’re aware of and activate all of these options, staying anonymous on the web is becoming an ever-more challenging task.

Setting up a VPN or DNS service

Installing a VPN (Virtual Private Network) will cloak certain bits of identifiable information, such as your current physical location. You should only install a VPN once you’re completely sure about what it does and doesn’t protect you against — it’s more of a security measure against hackers and eavesdroppers than a cloaking device.

Sign up with a VPN provider (you really need to opt for a paid VPN to be sure it’s reliable), and you’re essentially transferring your trust from your ISP to the VPN company, which can see all the sites you visit and everything you’re doing. Many firms promise to not log this data – but again, it’s a matter of trust.

Image: Screenshot

The websites you visit will see the IP address of the VPN server rather than your actual location, but they will still be able to leave cookies on your machine, track you across multiple sites, and know who you are if you log in anywhere. VPNs can be a useful extra step in being less trackable, but don’t rely on them completely to block your personal data leaking out onto the web.

Alongside VPNs are alternative DNS (Domain Name System) providers, like the recently launched Quad9 service. You need a DNS service to direct you to the right place on the web when you type in a URL. By default, your browser will use the one supplied by your ISP, which means it will follow whatever logging and tracking policies your ISP wants.

As with switching VPNs, switching DNS providers isn’t foolproof — you’re just putting your faith in a different company instead of your ISP — but it’s another way of extricating yourself from some of the tracking that’s happening. Quad9 is run by IBM Security and promises not to collect, store, or sell any information related to your browsing habits.

Finally, we’ll quickly mention HTTPs – the secure version of HTTP that encrypts data between you and a website like Facebook or Amazon. Its main benefit is keeping your data safe and hidden between point A and point B, but in terms of tracking, it stops ISPs from collecting quite as much data: They can see that you’re on Amazon, for example, but not what products you’re looking for.

Image: Screenshot

Many sites now use HTTPS by default, particularly those where you’re going to be entering sensitive information like credit card numbers. The HTTPS everywhere extension from the EFF will force your desktop or mobile browser to always use the HTTPS version of a site, if the website has one available.

Trying to completely block information companies gather on you on the web is very difficult to do, short of quitting all your personalised services and being incredibly careful about how you go online, but the situation isn’t quite hopeless yet. Follow all of the above, and you’ll be off to a good start.

Uber was hacked, so change your password right now. Here’s what else you need to know

Rohan Miller, University of Sydney and David Oliver, University of Sydney

Uber has admitted that a 2016 data breach put at risk the personal information of 57 million Uber users worldwide and at least 600,000 drivers in the United States.

The ride-share firm’s CEO said that:

two individuals outside the company had inappropriately accessed user data stored on a third-party cloud-based service that we use.

Read more: Will Australians ever give up Uber?

Now it has been reported that Australian riders and drivers are part of the data breach.

It would be prudent for Australian Uber users and drivers to change their passwords as soon as possible. Here’s what else you need to know:

If you use Uber, your name, email address and mobile phone number may have been leaked

Uber says:

Rider information [put at risk in this data breach] included the names, email addresses and mobile phone numbers related to accounts globally. Our outside forensics experts have not seen any indication that trip location history, credit card numbers, bank account numbers, Social Security numbers or dates of birth were downloaded.

Breaches of this kind can mean an increase in people receiving spam email. Some experts have said that any personal information could be worth something to criminals.

What evidence is there that the hack included data from Australian users of Uber?

The public disclosures Uber has made so far make it very difficult to identify Australians caught up in the data breach. That’s because the firm was not very transparent about it.

Media reports that Uber worked hard to conceal the data breach suggest Uber’s corporate governance needs improvement.

In its recent statement on the data breach, Uber CEO Dara Khosrowshahi acknowledged the firm’s “failure to notify affected individuals or regulators last year” and promised to do better.

I’m an Uber driver. What do I need to know?

Uber has said:

Driver information included the names, email addresses and mobile phone numbers related to accounts globally. In addition, the driver’s license numbers of around 600,000 drivers in the United States were downloaded.

As with the message to riders, Uber says it has seen no indication that trip location history, credit card numbers, bank account numbers, Social Security numbers, or dates of birth were downloaded.

The firm says that it is directly notifying affected drivers by mail or email, and is offering them free credit monitoring and identity theft protection – but, in any case, it’s a good idea for any Uber driver to change their password.

The longer-term issue is that news of the hack might conceivably dissuade some people from using Uber at all, which would be bad news for drivers.

So a fundamental part of Uber’s crisis management strategy should be educating drivers on how to respond to consumer questions about data privacy. This will not only assure the drivers but also help rebuild the trust of customers.

That said, it is pre-Christmas party time in cities throughout the world, and that means boom time for the Uber, taxi and personal transport industries.

So it’s easy to imagine there would be only a small impact on Uber drivers over this period.

What’s the cost of online convenience?

Uber is not the first and won’t be the last to be involved in a data breach. As transactions are increasingly made over the internet, it is highly likely Australians will fall victim to more and more data hacks.

Read more: Sorry everyone: on the internet, you’re always the product

Consumers who may be left out-of-pocket, receiving increased spam email and risking other privacy breaches such as identity theft may be less than loyal to firms that don’t look after their data.

Moreover, as there is money and influence to be gained through online data crime, it is highly likely that criminals will become better organised to reap the incentives in a very strategic manner.

It’s worth remembering that, in many cases, the cost of convenience for using a service over the internet is your private information.

Many people do not read the terms and conditions they agreed to for internet transactions, and they may shocked by the level of exposure they face.

Consumers accept financial and privacy risk by trading over the internet, all for the sake of cheap tickets, discount car rides and other conveniences.

As these breaches happen more often, it may be impossible to totally avoid one’s exposure to internet-based transactions and online data storage. So there will likely be increasing pressure on politicians and regulators to add some real teeth to prosecutions (although many seem to be based in difficult-to-prosecute jurisdictions).

The Australian government’s notifiable data breach scheme will start on February 22, 2018. It only applies to eligible data breaches that occur on, or after, that date.

Read more: You may be sick of worrying about online privacy, but ‘surveillance apathy’ is also a problem

How can Uber prevent this from happening again?

In the short term, Uber says it has “implemented security measures to restrict access to and strengthen controls on our cloud-based storage accounts”.

The longer-term problem is changing the attitudes that led to the data breach being concealed for so long.

When Dara Khosrowshahi took over as Uber’s CEO last August, hopes were high that he would soften some aspects of the extreme-performance culture that led to earlier ethical lapses in Uber.

There may be a perception among consumers that the firm’s desire to keep secret its intellectual property relating to algorithms has spread to its broader operations.

A good start for Uber would be to increase its public reporting on its operations. A widely publicised code of ethics, whistleblowing protections and ethics training for all staff would certainly not go amiss.

Rohan Miller, Senior Lecturer, Marketing and Digital Business, University of Sydney and David Oliver, Senior Lecturer in Management, University of Sydney

This article was originally published on The Conversation. Read the original article.