Connect with us

Business

Exclusive: If you must conduct layoffs, don’t be a jerk

Published

on

If you must conduct layoffs, don’t be a jerk

#conduct #layoffs #dont #jerk

Since our last column, another smattering of tech startups has laid off employees. We get it. Layoffs happen. But as we conduct yet another week of analysis into a depressing time in tech, we’re thinking about how these difficult conversations could be a bit less awful if we learned to prioritize care for workers over increasing profit margins.

We know that the startup ecosystem is volatile, but severance pay and extended healthcare benefits give employees much more peace of mind as they search for their next opportunity. “Where do you expect us to find this money?” you might ask. That’s a good point, but if your startup has ever thrown a swanky party with expensive alcohol that you didn’t really need, maybe start there. Also, rescinding offers is bad, conducting layoffs via email is like sending a breakup text, and lest we forget the time when Buzzfeed acquired HuffPost, then immediately laid off 47 writers by inviting them to a Zoom meeting with the password “spr!ngisH3r3.”

Some companies like Coinbase and Vtex have offered employees who were laid off (or rescinded) the option to list themselves in a public talent hub to help them get more job opportunities. This is a nice gesture, but only time will tell how effective these tactics are — is anyone really scrolling through a list of 326 rescinded Coinbase candidates? For their sake, hopefully, yes.

Otherwise, we’re still observing the same trends we’ve noted over the last few weeks — edtech companies like Eruditis that thrived during lockdown are becoming less active as remote learning eases, leading to job cuts. ID.me, the identity verification service, overhired to meet pandemic demand, then hit a wall. Clubhouse, once the buzziest new social app, is also fading out from relevance, in part perhaps due to the return of in-person events, but also, established social networks like Twitter have ripped off the live audio concept and deployed it more effectively.

One new trend, if we can call it that, is that some of the workforce reductions also come with a chunk of staff leaving voluntarily as companies pivot strategy and change their mind.

Without further ado, here are the startups leveraging layoffs this week:

Superhuman, a buzzy e-mail startup that has received over $100 million in venture funding, laid off 22% of staff last Friday, CEO and co-founder Rahul Vohra wrote on Twitter. “As we head into a downturn that could last years, we made this difficult choice so that we can deliver on our vision sustainably,” he wrote. The workforce reduction impacted 23 people, who Vohra says will be provided with severance, mental health support, health insurance throughout the year and job search help. TechCrunch reached out to Vohra for comment on how the support will look and what roles were impacted and has yet to hear back.

Clubhouse laid off a portion of staff as part of a restructuring and “rethinking of the audio app’s strategy,” reports Bloomberg. The company told the publication that some roles were eliminated, and some people left to pursue new opportunities. One person who fits the latter bill is Aarthi Ramamurthy, who led international product efforts for Clubhouse for over a year before leaving last week. TechCrunch reached out to Clubhouse for comment on how many people were impacted and what roles will be focused on going forward. Clubhouse responded with the following statement: “A few individuals have decided to pursue new opportunities and a handful of roles were eliminated as part of streamlining our team. We are continuing to recruit for roles in engineering, product and design.” When asked for further details, a spokesperson said that the statement is all the company has to share at this time.

Eruditis, an edtech unicorn, has laid off 40 people and had 40 people resign voluntarily, reports Inc42. The publication says that people on the talent acquisition, or hiring, team were impacted as Eruditis scales back its hiring plans, from bringing on 1,300 people over the past 12 months to only wanting 150 more people, at most, this year. Like many other startups conducting layoffs, Eruditis significantly increased its hiring pace over the last two years, when online learning became more of a priority in the pandemic. Now, a representative from the company tells TechCrunch:

Given the recent economic and geopolitical uncertainty, we are realigning our operating model as part of our commitment to growing the organization sustainably and responsibly, and making decisions that focus firmly on profitability. We have restructured, including combining consumer and enterprise marketing functions under global leadership and right-sized in select areas.

A bike- and scooter-sharing startup, Bird plans to lay off 23%, our own Rebecca Bellan reports. With about 600 employees, that means around 138 people will lose their jobs across organizations and regions. This move was unfortunately expected. In May, the company announced financials from Q1 2022, which showed a continued decrease in revenue every quarter since going public via SPAC in Q3 2021 — though the company started trading at about $10 a share, shares are now worth just 57 cents today. At the start of the pandemic, Bird laid off 30% of its workforce, or about 406 out of 1,387 employees. Now, the company’s total workforce will be just a third of the size it was in the beginning of 2020.

Advertisement

The personalized, direct-to-consumer clothing retailer Stitch Fix cut 15%, or 330, of its salaried workers. After going public in 2017, the styling service experienced a sharp decline in a pre-pandemic 2020, which has only gotten worse. Shares of the company traded at about $68 a year ago, but now, they fall below $8. The company tried cutting costs in summer 2020 by laying off 18% of its stylists, then brought in a new CEO Elizabeth Spaulding, whose inflexible policies around work schedules led another third of stylists to depart the company.

The identity verification service ID.me laid off some corporate employees after too-fast growth since the pandemic. Insider reported this week that after hiring 1,500 new workers to meet the demands of its high-profile clients like the IRS, the company suffered lapses in security, sometimes allegedly sharing sensitive information like social security numbers via Slack.

Hospitality unicorn Sonder laid off about 250 employees: Twenty-one percent of its corporate employees and 7% of front-line staff. A competitor to Airbnb (which is doing relatively well), Sonder rents out serviced apartments that are like boutique hotels. The company says its layoffs are part of a general restructuring and that management remains optimistic about the future of the travel industry. Yet according to an SEC filing from this week, the company aims to cut costs by $85 million annually to become cash-flow positive by 2023.

Yet another multibillion unicorn conducting layoffs, security startup OneTrust is reducing its headcount by 25%, affecting 950 employees. “I know this news is surprising, especially as you heard last month that the business is on track with record quarters and increasing customer demand,” CEO Kabir Barday wrote in a note to employees, published on the company blog. “However, capital markets sentiment shifted to a more balanced approach between growth and profitability, and at this time, we have decided the best course of action is to reorganize.” OneTrust is providing severance packages, extension of medical coverage, equity and an opt-in talent network.

Convoy will lay off 7% of its 1,300-person staff, GeekWire reports. Less than two months ago, the Seattle-based trucking marketplace raised a $260 million Series E round, bringing its valuation to $3.8 billion. But now, a company spokesperson says, Convoy is making this decision to best position itself to wade through a market downturn.

Softbank-backed creator economy startup Jellysmack laid off 8% of employees this week, shutting down commercial operations in Italy, Germany and the Netherlands. In light of the challenging market, the company plans to focus on projects that bring the most immediate value to creator partners. Like its competitors, Jellysmack buys limited-time licensing to creators’ back catalogs, giving them upfront cash in exchange for their slower (yet potentially larger) income stream.

Let’s hope for a shorter list next week.


Advertisement

Business

Exclusive: 6 Essential Elements of Getting More Customers – TalkOfNews.com

Published

on

By

6 Essential Elements of Getting More Customers

#Essential #Elements #Customers

Opinions expressed by Entrepreneur contributors are their own.

There’s no one way to get customers. It should be a multi-faceted approach, not only for the near future, but also to create enough inbound traffic so that two years from now, having taken the right actions today, your offerings practically fill themselves up. This is why getting customers needs to be a system. Like cogs in a wheel, there’s an integration, and if one gear is off, you can’t expect the most effective results.

Here are six essential elements that go into getting more customers. The system is the acronym PEOPLE. It is, after all — more people, more customers — that we are striving for.

Related: 3 Easy Ways to Attract More Customers Fast

1. Prospecting

Often, the number one stop-block keeping a business from getting more customers is that they are starting with too small of a number at the top. There are not enough prospects to begin with to convert to customers. This leaves too much pressure to convert the limited number of prospects. What happens when there’s pressure to make a sale? Or worse yet, the customer feels the pressure? They back up, and it becomes a self-defeating cycle.

The solution is to have various active and continuous prospecting systems in place, feeding in prospects all the time. It’s best if these prospecting systems can run like a machine with tasks being delegated until you or a sales representative may need to step in.

With continuous prospecting systems in place, this is where the greatest reward may be down the road a bit. But here’s a forewarning: When do most people stop or ease up on prospecting? When they’re busy. What happens then? When they slow down, there aren’t enough people knocking at the proverbial door. So, the feast-or-famine cycle continues. Systematize your prospecting so that there’s a constant and steady stream of possibilities.

2. Exposure

Again, this is more longer-term thinking, but it’s so important for your future. Exposure comes from the content you are putting out —writing articles, podcasts as host or guest, books, live streams and social media. Rarely are the results immediate, which is what causes many people to give up before rewards are seen. Think of it as building lurkers (people watching you that you have no idea are there). Although it can sometimes feel like you’re shouting into an echo chamber, chances are, there are prospects watching what you’re doing.

These “lurkers” are building a relationship with you. They are finding you as a trusted resource for their needs. If you keep providing value, they will step forward and then begin the journey from onlooker to customer.

Advertisement

Exposure takes discipline. Keep putting out valuable content. Gain exposure in whatever mediums you can. But don’t attempt to do it all! Strategically put yourself in front of your intended customers as frequently as possible.

3. Open to relationships

We know businesses are built on relationships, right? The suggestion here is to be open to relationships. Sometimes the value in connecting with someone can’t be seen right away. Perhaps in our attempt to protect our time and keep at bay the number of people that want to “pick our brain,” we may not be remaining as open as we might think. If you have all the business you need right now, maybe this is not the most essential element for you. However, it also holds the greatest possibility of a pretty immediate return.

There’s no doubt you’ve had the experience of a random meeting leading to something — a chance meeting or moment of synchronicity. It may have led to immediate business, a great introduction or the building of a relationship. It has also been the story of great romances.

The point is, we don’t always know what’s around the corner and who we might meet. If you remain open to relationships, you increase your willingness to put yourself in situations where a beneficial meeting of the minds, or heart, just might occur.

Even now, quite sometime after the lockdown and pandemic, many people are not as actively interacting with other people. Perhaps they’re not going to networking events or attending professional meetings, leaving themselves less open to relationships than is best for business growth. Create as many opportunities for something good to happen as possible!

Related: 4 Steps to Getting More Clients Right Now

4. Promotional

Promotional efforts will tend to be paid advertising with anticipated shorter-term results. It could be paid ads on social media, email marketing, marketing pieces or any effort where you are expecting a bit more of a direct ROI.

Promotional efforts are a good balance to other efforts and satisfies the desire to take action now and hope for more immediate results. That’s not to say it’s always a short-term strategy. An entire business can be driven by paid and unpaid promotion over a long strategy. The difference is, for promotional effort to be effective, there is typically a need to closely monitor the ROI, whether it’s return on money or time invested. A proactive promotional strategy assures that you’re taking action towards your goals.

5. Lead magnets

The concept of a lead magnet says it all. You are leading a prospect to a deeper relationship by offering something truly magnetic. It’s a point of direct value exchange. You provide value. The potential customers opt-in to a more committed relationship with you, at least in the form of providing an email.

The goal here is clear and intentional. You are leading a prospect closer to you through an exchange of value. It’s like the ask in a sale. If you don’t ask, rarely will you get. If you don’t lead, you’re not offering your expertise. Or as Wayne Gretzky famously said, “You miss 100% of the shots you don’t take.”

The goal of a lead magnet is a direct request, or exchange, to open up the channel of a prospect to becoming a customer. This more direct action is an excellent balance to other actions that are longer-term.

Advertisement

6. Exceptional

What’s the absolute easiest way to get more customers? Make the ones you have insanely happy by being exceptional. Yes, exceptional.

Anything less than exceptional may not be enough to make your business memorable or to inspire referrals. This also requires a system to maintain your existing customers and to inspire referrals.

To feed this potentially bountiful system of getting customers, I highly recommend carefully tracking and constantly implementing strategies to increase customer loyalty and referrals. It’s often the lowest hanging fruit, and it can reward you with the quickest results.

Related: Want More Customers? Get Quality Referrals From Existing Customers

As a good system should be, this is about a healthy balance. Amongst these six essential elements are efforts that will pay off in the short term and in the long term. Consider these six elements like a checklist or elements of a healthy ecosystem. When each element is taken care of, you create a consistent flow of incoming customers now and in the future.

Business Strategies, Entrepreneurial Advice & Inspiring Stories are all in one place. Explore the new Entrepreneur Bookstore.

Continue Reading

Business

Exclusive: MTD for VAT: 7 tips to help clients with Making Tax Digital – TalkOfNews.com

Published

on

By

MTD for VAT: 7 tips to help clients with Making Tax Digital

#MTD #VAT #tips #clients #Making #Tax #Digital

Got new or existing clients looking to change their processes so they adhere to Making Tax Digital for VAT?

With all VAT registered businesses having to follow Making Tax Digital (MTD) for VAT rules, the number of clients you need to help in this area will increase (if it hasn’t already).

To help you support your clients with MTD, we’ve created this article.

It covers the benefits of digital working and how to educate your clients on how they need to submit their VAT Returns, and plenty more too.

Plus, discover how your practice can save time and money with this ROI calculator.

Here’s what we cover:

Which clients does Making Tax Digital for VAT apply to?

How to encourage clients to move to digital ways of working

7 tips to get clients with Making Tax Digital for VAT

Advertisement

Final thoughts on Making Tax Digital for VAT

All VAT-registered businesses have to follow the Making Tax Digital for VAT rules.

Since 2019, MTD for VAT applied to businesses with a taxable turnover that was over the VAT threshold (currently £85,000).

The remit for MTD for VAT expanded in April 2022. Now, the rules also apply to businesses under the threshold that are registered for VAT (unless they’re exempt).

One of the key reasons for Making Tax Digital existing is to encourage businesses to adopt digital ways of working.

To resist this is not only to risk breaking the law but it also puts the business at a competitive disadvantage.

When attempting to comply with MTD’s rules, businesses that cling to old ways of working and rely largely on paper have to put in more effort than those that don’t.

But you can help your clients by communicating this to them, while emphasising the benefits.

Using HMRC-recognised accounting software means business admin tasks can be reduced from days to just hours.

It means businesses always know their cash flow position, so they can make smart decisions (and spot any problems before they become out of control).

And creating a VAT Return if the accounting data is already within the software is just a matter of clicking a few options, then perhaps applying adjustments, and clicking to submit the return.

Advertisement

It’s this positive and inspiring message that can often be buried underneath what seems to businesses to be yet another mandatory requirement from the government.

And it’s not just clients that benefit.

Making Tax Digital means that you, as an accountant, are in a better position to assist your clients and offer an even better service to them.

Start your clients on the journey today by helping them use software that’s MTD-ready and that will support all future MTD compliance requirements.

In April 2024, many sole traders will have to use MTD for their income tax. While from April 2026 at the earliest, incorporated businesses will have to use MTD for their corporation tax returns.

Here are seven ways you can help and support your clients with Making Tax Digital for VAT.

HMRC is relying on accountants to educate about the specifics of MTD for VAT.

Since you intimately understand the situations of your clients, this makes sense.

So how can you do this?

Here’s three easy and simple suggestions:

  1. Tack on information to the end of existing conversations. Use every client touchpoint as an excuse to educate, and ensure all members of your staff have the knowledge to do so. Some practices have even added MTD messaging to their email signatures to ensure it’s always included in communications. Updating your website and social media accounts is a wise move.
  2. Email blasts can keep your clients up to date. In fact, treating this just like a marketing campaign will pay dividends because you should be selling new or different service offerings that fit with MTD’s requirements and what your clients need. Treat this as an opportunity to sell increased awareness of what you offer.
  3. Webinars can help you reach lots of people. If you run the webinar as a Q&A session, the initial prep requirement is reduced too. Worried about being stumped by a difficult question? Let people know you may have to respond with an answer after the webinar. And video conferencing tools such as Zoom and Microsoft Teams are essentially free, easy to use, and widely adopted.

This might catch out clients who ask you to take care of their VAT Returns for them.

They might think they can simply forget about Making Tax Digital for VAT, and carry on as they always have.

Advertisement

But they’ve still got to keep VAT accounting records digitally, and know about the digital linking rules (no copy/cutting and pasting of key VAT data from one destination to another).

This might seem like an education issue. But it’s more than that.

You may need to help your clients adopt a digital solution that’s right for their needs.

At its most basic, this could be just a spreadsheet – although the MTD for VAT rules mean it needs to include more details than just input and output VAT amounts (for example, invoice-level details such as tax point dates, VAT rates, and so on).

But if the client uses accounting software that connects to your systems, which in turn makes producing VAT Returns much easier, it’s a win-win situation for both you and them.

When clients first hear that Making Tax Digital is going to affect them, you can expect four W questions in rapid succession: Why, when, who, and what.

The ‘when’ question is likely to be one of the most pressing that clients will ask of you because they’ll be afraid of getting penalised.

You can answer it very easily by providing deadlines for the client to meet. This includes registration deadlines, start days, and first filing dates, as follows:

When do clients sign up for MTD for VAT?

Clients shouldn’t sign up less than:

  • Seven days before their return is due; or
  • Five days after their return is due.

When do clients start using MTD for VAT?

For clients who file quarterly VAT Returns, these are examples of what start dates look like:

  • 1 April 2022: If the previous VAT quarter ended 31 March 2022.
  • 1 May 2022: If the previous VAT quarter ended 30 April 2022.
  • 1 June 2022: If the previous VAT quarter ended 31 May 2022.

When do clients first file VAT Returns using MTD for VAT?

Again assuming quarterly returns, these are examples of when initial VAT Returns for MTD for VAT must be filed:

  • 7 August 2022 for a VAT quarter beginning 1 April 2022.
  • 7 September 2022 for a VAT quarter beginning 1 May 2022.
  • 7 October 2022 for a VAT quarter beginning 1 June 2022.

Before clients can register for Making Tax Digital for VAT, they need to know which MTD-recognised accounting software they’re going to use. HMRC won’t let them proceed unless this is known.

The software can take different forms, depending on the client’s needs, and you should be prepared to help with solutions.

Some may choose to use bridging software with their existing spreadsheets.

Advertisement

Others may use their existing software but add in an MTD for VAT submissions module.

Then there are those who find their software is already MTD-recognised and they simply need to register for MTD, and then authenticate within the software.

Make sure your clients realise that. Just because the software is MTD-recognised, it doesn’t mean they are.

Helping clients with software is one of the immediate messages to communicate, because some may need to switch accounting packages if the one they use can’t be updated.

While you have to educate your clients about Making Tax Digital for VAT, you also need to cover myths, misinformation and incorrect assumptions.

For example, clients may assume there’s another soft landing period this time around for MTD for VAT.

In April 2019, this provided additional time for businesses to be less strict when interpreting the digital linking rules, meaning they could continue to copy and paste from one place to another.

However, there’s no soft landing period now for new adopters of MTD for VAT.

There’s a new penalty points system to consider too, which starts from January 2023.

By far the biggest misconception will be that MTD doesn’t apply to your voluntary VAT-registered clients (it does, of course).

There might also be beliefs that businesses can opt-out of MTD for VAT, with clients perhaps having heard about digital exclusion.

Advertisement

But this is limited to exceptional individual circumstances, such as where somebody lives in a location without internet access, or for people who can’t use technology because of physical or mental impairments.

Education on Making Tax Digital for VAT may be just the first step for you to take with your clients.

You may need to help some of them translate their existing processes into ones that are compatible with MTD for VAT.

If invoices are created outside the accounting software, for example, the details need to be entered into the system to be compliant with the digital records requirement.

This needs to be something that always happens for each and every invoice, otherwise there’s a risk of penalties from HMRC.

Key to helping clients create MTD-compatible workflows is identifying the points at which accounting data is generated or manipulated.

Typically, this will be at the point at which sales and purchases are made.

In this instance, ask your clients when paperwork is generated for VAT purposes, because it’s that VAT data that needs to be captured (such as tax point, VAT rate, VAT number and so on).

It’s when they receive receipts, bills and invoices, for example, that they’ll need to be aware of MTD for VAT’s requirements.

Having gained experience from the 2019 rollout of Making Tax Digital for VAT, you can segment clients into lists that will determine how and when you help them.

You might segment out those that need help first (such as monthly VAT filers), or those that are more technically savvy and will perhaps need less help overall.

Advertisement

And it’s likely that some of your clients will embrace MTD for VAT more wholeheartedly than others, who may consider it a difficult and painful process.

So why not leverage the clients that can in order to help the clients that can’t?

There’s a number of ways you can do this, such as via client get-togethers (in person or online).

Some practices even run their own private online chat forums on their websites, where clients can gather to speak to each other.

Onboarding clients to Making Tax Digital for VAT might feel like a duty for accountancy practices, but it’s actually a way to increase exposure for what you do.

Savvy practices are using it as an opportunity to create new service offerings that are more aligned the way the business world operates nowadays.

Why not do the same?

At the end of the day, helping clients with new processes can be a rewarding experience in itself, and can help increase client confidence and satisfaction in what you do for them.

Editor’s note: This article was first published in January 2022 and has been updated for relevance.

Making Tax Digital: A practice survival guide

Need support with Making Tax Digital, for your clients and your practice? This free guide will help you get ready for MTD for VAT, Income Tax Self Assessment and Corporation Tax.

Download your free guide

Advertisement

Continue Reading

Business

Exclusive: Housing shortage starts easing as listings surge in June – TalkOfNews.com

Published

on

By

Housing shortage starts easing as listings surge in June

#Housing #shortage #starts #easing #listings #surge #June

A “For Sale” sign is seen outside a home in New York.

Shannon Stapleton | Reuters

A historic housing shortage brought on by the one-two punch of slow construction and strong pandemic-induced demand is finally starting to ease.

Active listings for homes jumped 19% in June, the fastest annual pace since Realtor.com began tracking the metric five years ago. And the number of new listings during the month finally surpassed typical pre-Covid levels, up 4.5% from a year ago. Overall inventory, however, is still about half pre-Covid levels.

Some markets that saw the biggest surges in demand during the pandemic are now among those seeing the biggest gains in supply: Austin inventory was up close to 145% from a year ago, Phoenix was up 113% and Raleigh up nearly 112%. Other markets are still seeing supplies fall: Miami is down 16%, Chicago is down 13%, and Virginia Beach is down 14%.

“We expect to see additional inventory growth in July, building on accelerated improvements seen throughout June,” said Danielle Hale, chief economist at Realtor.com, adding that the supply gains increased as the month progressed.

And Hale said even more homeowners could decide to sell, adding new supply as buyers grapple with higher costs and difficulty finding homes that fit their budgets. 

Still, the expanding supply is not easing sky-high home prices yet. The median listing price in June hit another record high of $450,000 according to Realtor.com. Annual gains are moderating slightly, but still up almost 17%. That’s partly because the share of larger, more expensive homes is rising.

Advertisement

The costs of owning the median-priced home in the second quarter required 31.5% of the average U.S. wage, according to a new report by ATTOM, a property data provider. That’s the highest percentage since 2007 and up from 24% the year before, marking the biggest jump in more than two decades. Lenders generally see a 28% debt-to-income ratio as the ceiling for approving a mortgage. It’s why some potential homebuyers today are no longer qualifying for a mortgage.

As a result, the affordability of buying a home in the second quarter dropped in 97% of the nation, according to ATTOM. That’s up from 69% in the same quarter a year ago, and the highest reading since just before the housing crash in the Great Recession.

ATTOM calculates the affordability for average wage earners by determining the amount of income needed for major home ownership expenses on a median-priced home, assuming a loan of 80% of the purchase price and a 28% maximum debt-to-income ratio.

“With interest rates almost doubling, homebuyers are faced with monthly mortgage payments that are between 40% and 50% higher than they were a year ago — payments that many prospective buyers simply can’t afford,” said Rick Sharga, executive vice president of market intelligence at ATTOM. 

A few factors could thwart the continued growth in inventory levels, including a pullback from potential sellers who might decide to wait for the market to strengthen again. Still, Hale of Realtor.com noted that new and pending home sales were up this month, so some people might feel now is time is right to buy.

“As expectations of higher future mortgage rates rise, today’s home shoppers could be more motivated, especially now that they’re seeing more options to choose from,” Hale said. 

Continue Reading

Exclusive

Copyright © 2022 Talk Of News.