RTA Business Asks Whether You Should Pay Your Staff a Living Wage

RTA Business asks whether you should be paying your staff a living wage if you want to attract the best talent and sell your business for a tidy profit.

RTA Business: We Secure the Best Deal for the Sale of Your Company

When you want to reap the benefits of all your hard work by selling your business, and walk away with a tidy profit, RTA Business Consultants is here to help. We use our teams experience and skill to ensure you walk away with the best possible deal for the sale of your business.

Our experience has taught us that attracting a potential buyer is nowhere near as easy as just showing them that you’re making money. You need to show them that when they take on your company, they have everything they need to make a sustained profit.

Skilled Workers Want More Money

A company is nothing without its staff. If you don’t attract the right workers with the right skills, you’ll never advance beyond your initial business model, and never make enough profit to make your business truly lucrative. Furthermore, if you’ve got sub-par staff, a buyer will notice, and it will undoubtedly turn them off.

So how do you attract the best talent? To answer this question you need to ask yourself what kind of jobs attract quality staff. The answer; jobs that pay. If someone is skilled and they know it, they’re not going to go for the first position they find, they’re going to wait until they can get the most money for their services. That’s just human nature.

What is a Living Wage?

Naturally, this is why staff in managerial positions receive the big bucks. But at RTA Business, we would argue that you need to take this philosophy and apply it to every single worker, by paying them a living wage.

A living wage, according to the Living Wage Commission, can be defined as: "an hourly rate of income calculated according to a basic cost of living in the UK and defined as the minimum amount of money needed to enjoy a basic, but socially acceptable standard of living."

RTA Business Concludes: You Should Pay Low Level Workers a Living Wage

Basically, it’s paying someone enough to give them a decent quality of life, and we would argue that you should pay low level workers a living wage to make yourself competitive. There are so many low level positions out there, that workers are spoiled the choice. Providing a living wage will make you stand out, giving you the edge you need to attract the talent that’ll take your business to the next level. 

The Benefits of a Profit Boost!

Sometimes in selling your business, milestones mean everything. When you announce major profit gains, it can make your business look so much more attractive to a potential buyer and this week RTA Business Consultants outline why.

It’s an obvious conclusion to reach isn’t it? The more profit you are making, the stronger your business, the more opportunity there is for growth. Even then, there are levels of degree when it comes to how influential profit margins are with potential buyers.

The Differing Benefits of Profit

There are two types of profit boost- gradual and spontaneous. Both have value in any strategy to attract a buyer to your business. A gradual rise in profit margins suggests a long term business model that is perfectly positioned to make money sustainably. This is an attractive to a buyer because it shows them that purchasing your company will provide them with a secure opportunity to grow their own venture.

The benefits of gradual profit rises are obvious, however the benefits of spontaneous profit boosts are not to be ignored either. A company will see a spike in profit levels usually after the introduction of a new product or service that has diversified their business.

There are benefits to this type of profit rise too, and it all relies on timing. Timing is a key issue – when is the right time to sell your business? If you put it on the market just after a profit spike, it shows buyers that now is the perfect time to buy your business and capitalise on your heightened profit capability.

LG Electronics: A Case Study

We can see how this plays out in the case of LG Electronics. The technology company recently reported a profit jump of more than a staggering 300%! Consequently net profit at LG Electronics measured 93 billion Korean Won in the first quarter of 2014. It stood at 22 billion Won the previous quarter.

Notably, this profit boost came at a time of great change for the electronics firm, as strong demand for its smartphones and TV’s were responsible for sales. Plans to expand its product range and introduce its new G3 smartphone later this year are set to keep profits high.

It’s important to remember that because of this news, LG shares rose 2.9% to 71,000 Won in Seoul this week. We see a direct correlation – a bump in profits made the company much more valuable in the blink of an eye.

If this exploration of profit margins should remind you of anything, it’s that timing is everything when you are looking to sell your company. At RTA Business we always suggest waiting for the time you can make the most money from selling your business.

Crafting an Effective Business Leadership Style

If you ever hope to sell your business, you need to make it attractive to potential buyers first, which means you need to show its capability for profit and expansion. One of the best ways to foster these qualities in your business is to craft an effective business leadership style. So how can you go about that?

There’s an old saying that applies here; cut off the head and the body will follow. The head of the company is vital to its success; they are its face, its decision maker, its resource provider etc. Everything falls apart if that leadership is taken away.

From this we can also argue that a business has no hope of ever becoming profitable if you don’t craft an effective leadership style. For those people who have never been in positions of leadership before, this can be a tall task. This is why RTA Business Consultants has compiled this list of top tips you can use to become an effective leader.

Delegate

No man is an island and no one can ever do it alone. This is why you need to learn how to delegate. Effective delegation proves that you trust your workforce and that you rely on them to help grow your business. It creates a more positive work environment and increases productivity.

Think About Who You Hire

In order to delegate you need to make sure you are hiring the right people. One person who fulfills the job specification is worth ten people who partially fill it. Look for people who are problem solvers and who you can work with. You can only be an effective leader if you have the right ‘tools’ to work with.

Express Yourself

One of the worst offences you can make as a boss is to present your expectations in an unclear way. It slows down productivity, lowers your profit margins and makes you look like a weak leader who isn’t capable of communication. Always be clear with what you expect from employees.

Foster Respect, Not Friendship

Whilst you want to have a good working relationship with your employees, you don’t want to get too pally with them. At the end of the day, you are the boss, and establishing a certain professional distance reminds your employees of your position within the company. If people think you are a push over, they won’t listen to you.

Open Your Ears

We can’t stress this enough, always listen! Think of it as a creative process. Your employees bring fresh experiences and perspectives to the table that you can use to expand your business. They might know something that you don’t, or they may have an insight that you haven’t considered.