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Archive for October, 2012

What is Cloud?

There are lots are opinions and arguments about what is a Cloud System and there is no point getting into that.

As Accountants North London, I feel Cloud computing will have a major impact on business so wanted to give some background to this development.

Simply put, Cloud Computing is the ability to access data, software applications, storage, communications capabilities, and computer processing power from a “Cloud” of online resources.

My guess is that we all use the Cloud. Google and Facebook are examples.

The idea of calling remotely located resources a “cloud” goes back to the early days of the Internet and, even before that.

In concept this is really nothing new. As far back as the 1960’s, there were solution providers called “Service Bureaus.” Mainframe computers, the only ones that existed at the time, cost millions of dollars.

Service bureaus allowed small businesses to share the costs of computing by letting those companies submit their data or run their programs on the service bureaus’ computers.

The media may have been punched cards and printed reports, but the underlying concept was the same as with the Cloud. Cut costs by sharing resources.

Even earlier in the 20th Century, companies that once ran their own power generators eventually bought electricity from a select group of utility providers because it was cheaper and easier to do so.

At first, companies were reluctant to give up control of part of their infrastructure, but once they did, they were able to focus on getting better at their business. And everyone came out ahead.

Industry experts have long known that once information technology got to be fast and reliable enough, the world’s computing infrastructure would come to resemble the electricity infrastructure—and that’s exactly what’s happening with Cloud Computing and it is happening right now.

Attention families with children

From  7th January 2013 one in seven households receiving Child Benefit will be effected by a claw-back of the benefit through the tax system.

Child Benefit is going to be progressively withdrawn from households where one partner earns more than £50,000 a year. The claw-back is at the rate of 1% for every £100 above this threshold.

For example, if you earn £56,000, you will lose 60% of the Child Benefit currently paid to your household. So, if one person earns more than £60,000 then all Child Benefit is repayable.

The claw-back is collected through the tax system as a ‘high income benefit charge’. This will be done on your self-assessment return or PAYE if you do not.

However, like many other areas of tax there is an anomaly. If one person earns £90,000 a year and the partner has no income at all then you lose all your Child Benefit. But, if you both earn £45,000 a year you would still receive the full Child Benefit with no restrictions.

There are tax planning opportunities including making  additional pension contributions and transferring income generating assets into joint names so that you share income equally between you.

If you are self-employed, you could consider entering into a partnership so that business profits are shared between you. If you trade through a limited company, you could make your partner a shareholder and possibly share dividend income.

How much is knowledge worth?

We all know that education pays but business education pays much bigger.

Want to raise your income 68%? A degree will do that according to research from the Office for National Statistics. That is worth over £500,000 over your working life.

But, it may surprise you to learn that you a professional degree will raise your income by over 250%? This is a degree that’s focused on a profession like a doctor or lawyer.

The study reported on different estimated lifetime incomes of various education levels. They projected that someone with only a high school diploma will earn about £750,000 over their entire careers. A degree ups that lifetime income to about a £1 million but someone with a professional degree a whapping estimated £2.7 million.

  • Education pays
  • Business education pays much bigger


But, how much business education did you get?

Is it such a mystery that so many business owners don’t get out of their business what they want. The majority end up bust within the first five years and those that survive never really grow; 96% of UK businesses employ less than five people.

The bottom line is that your level of education about business predicts your level of success with business. So, if you want to be out of control with money and wealth then stay uneducated about business.

If you want money, wealth and financial independence then get business education. Education pays. Business education pays much bigger.

So what is a business education and where can you get it? And, most importantly where can you get education that you don’t need to invest years and years and hundreds of thousands of pounds in but they can still make a big difference in bottom line in your business and life?

Well, you could do what I’ve done; spend years becoming a qualified accountant then learning from other accountants and clients, reading and studying books about things like strategic  planning, pricing and management and all other areas of business and attending all kinds of seminars and trainings on these topics.

But, I think I have a much better idea for you. And, that idea is to sign up for my newsletter and I’ll send you articles and videos.

Over the weeks and months this will be an in-depth education about business; how to change your thinking, perspectives, skills and behaviors so that you enjoy success in terms of higher profits, healthier cashflow and enhanced capital value.

Here is an example of a video about how to approach marketing click here.

How to be happier

As we have seen from previous posts, being happy is important and there are a number of things you can do to improve your mood.

These idea are taken from The Hapiness Advantage:

Some overriding principles:

• Pursuing meaningful goals
• Scan the world for opportunities
• Cultivate an optimistic and grateful mindset
• Hold on to rich social relationships

Things you can do for yourself:

• Consciously think of things that make you happy
• Take time for positive visualisations
• Listening to your favourite songs
• Talk regularly to friends
• Spend five-minutes a day meditating
• Have something to look forward to
• Commit to conscious acts of kindness
• Have pictures of loved ones on the desk
• Taking time to go outside in good weather
• Watch less TV, especially negative shows
• Do regular exercise
• Spending money on experiences rather than goods – compare at the end of the month
• Spend some money on other people
• Weekly self-review of what went well
• Write down three positive things in a daily diary
• Make sure yourself talk is positive – words and tone

Things you can do for your team:

• Allow pets at work
• In-house massage parlour
• Football table at work
• Small gift of chocolates (with no need to eat them)
• Circulating funny articles and YouTube videos
• Frequent recognition and encouragement (pat on the back, an email or put an Excellent Elephant on a desk)
• Talk about someone in front of everyone
• Voice tone when speaking to someone

As proactive accountants North London we are always looking for ways our clients can gain a competitive advantage.

Where does profit come from?

If rent comes from land/property, and wages come from work, where do profits come from?

My suggestion is that profit (like losses) come from risk.

With any risk there are five options:

  • Avoid it
  • Reduce it
  • Transfer it
  • Accept it
  • Increase it


If you eliminate risk completely you eliminate profits, so the goal is to take calculated risks. But, the problem with many businesses is that they are structured not to lose, rather than to win.

They do what everyone else is doing, the are normal or average and they produce at best average results. So, one of the things recommended in the On-Track programme is to a) see risk as positive and b) innovate so you stand out from the crowd. You literally need to become “outstanding”.

Peter Drucker (one of the most well known a d respected business consultants) split risks into three categories:

  • Affordable
  • Non-affordable
  • Compulsory


Affordable risk is innovation that if it doesn’t work, won’t cost you much. And, if it does work probably will not create a significant competitive advantage.

Non-affordable innovation is where a business lacks the knowledge around the innovation. And, if the innovation goes wrong you could end up building the competitions business!

Compulsory risk is what you need to do to avoid being overtaken by the competition.

As Accountants based in North London we encourage all businesses to innovate and create the difference that makes the difference.