Ideate

Finance tip:  Credit

Get a credit report at least once a year. It’s one of those unavoidable truths in life, but our credit history is destined to follow us around for years, and affects so many different aspects of our lives – applying for a homeloan; getting credit from the bank; trying to open an account at a store; even applying for a job.  It’s for this reason that it’s imperative to keep tabs on what your credit status is as you move through life.  The easiest way to do this is do get a credit report from a credit agency, and to go through it with a fine-toothed comb.  The main credit information agencies in SA are TransUnion and Experian (these two also feature pretty much around the world, along with other agencies in some countries). Their reports reflect your personal information, your payment history, credit enquiries against your name, as well as any adverse information or judgments that you have against you.  The information contained in these reports is ever-changing as well, as you take on/drop credit facilities, and make or miss payments from month to month.  Everybody is entitled to one free credit report per year, and after that you generally would pay for each report you request.  The prices are extremely reasonable – approximately R20 to R40 per report – and well worth the expense if you want to keep track of your status.  As different credit providers list with different agencies, it’s also important to get a report from each agency, to ensure you get the full picture of where you stand…

Business tip:  Strategy

Use the 80/20 rule.  Also known as the Pareto principle, the 80/20 rule dictates that 80% of results come from only 20% of input. For those wanting to run their businesses more efficiently, and maximize time and profitability, this rule should be applied readily throughout their organizations.  If you were to take the time to track your clients and sales closely (surprisingly few business owners and managers actually do this), you could well find the pattern emerging: 80% of your sales come from only 20% of your customer base; 20% of your product lines account for 80% of your revenue; 20% of your time and focus produces 80% of your results.  And the rule also applies to the negative sides of your business:  80% of your complaints and problems probably come from 20% of your clients (and these are often not the 20% who buy from you most often, either).  So what does this mean for the business owners and managers out there? Essentially, they should focus on the highest-value areas of their business, and either drop or delegate those areas that suck up their time and energy.  Spend more time focusing on the 20% of your customers that buy from you most.  Drop the 20% of clients that buy from you least, or give you the most headaches.  Focus the time and energy that you’re saving by not doing the unproductive actions in your business, and redouble your efforts in the areas that are paying off.  These can be difficult paradigm shifts, uncomfortable at first, but to be the most effective and efficient businessperson that you can be, they are definitely necessary ones…