To me, the statistic says we are working longer, not harder. To be working harder, the statistic would be about output, results, even job satisfaction; not about how long we sit at our desks.

As a freelancer, I am always conscious about how I am valued. I have learnt that my value is assessed first and foremost by whether I get the job done. How long I will take, or how much I will charge is a secondary issue. If I do the job well, but take longer to do it than is really necessary just makes me more expensive, not better. Who do you know that would pay for unnecessary hours, or for poor quality?

And yet, that is what many employers do. They pay workers to be at their desks, measuring their contribution in time and cost, not quality. This charade is also played by employees, who are willing to put in extra time at work for free, perhaps hoping that this show of commitment secures their place in the company.

Do you value each employee by their cost, by how much time they spend at work, or by what they do for you?

Without wanting to start an argument there and then, I realised that I have a lot of work to do to get the business owner to understand what he really needs to know, why he needs to know these things, and what he needs to do about things when they are not good.

I have often talked about the Balance Sheet being more important than the Profit and loss, and I still stand by this statement. The Balance Sheet tells you what you own, who owes you money, and who you owe money to. These three facts give you a far better snapshot of your businesses health than any other measurement.

Take cash in the bank as an example. It doesn’t include cheque payments to suppliers that have not cleared. It doesn’t tell you how much you are owed by customers, or how much you owe to your suppliers.

Profit is a nice measurement if you are the taxman, but it doesn’t tell you how profitable you are. Making more profit than last year might sound good, but what will you do if you are only making 10% net profit, when last year you made 15%?

Running a business requires focus on the future. A review of the past is helpful, but only if you do things differently as a result of the lessons you have learnt. If you are measuring your performance by the wrong indicators, do you even know what those lessons are?

The thought crossed my colleague’s mind that the problem the client was describing might be something he could help them with. But on reflection he knew he had to stop the conversation and direct the call to the right person.

My colleague and I chatted about how important it was that the right person helps at the right time. The “presenting problem” is rarely the real issue. As a business consultant/coach, my role is to find the heart of the real issue, and to help suggest and implement some solutions. Sometimes it’s gut instinct, sometimes it’s noticing particular words, sometimes it’s just about asking the right questions.

Consultants are sometimes accused of borrowing your watch and then charging you to tell you the time. But if your problem is that you don’t know how to tell the time, then asking a consultant for help seems like a good idea to me.

Life is difficult, and there are enough challenges for each of us without having to feel like we must do everything on our own. Asking for help from the right person at the right time can sometimes be the difference between success and failure.

The new VAT conversion fraction is 1/6 (much easier to remember than the old one for 17.5%, which was 7/47).

If want to know the net cost of something, then divide by 6 and multiply by 5. For example, something sold for £100.00 has a net value of £83.33 (100/6*5).

If you want to know the gross cost of something, then divide the net value by 5 and multiply by 6. For example, a net value of £25.00 would cost £30.00 including VAT (25/5*6).

It may sound obvious, but changes to the rate of VAT affect the VAT amount, which in turn adjusts the gross value. £20.00 is not 20% of £120.00, it is 1/6 of £120.00.

VAT is an amount added by the supplier of most goods and services to what they sell, and which they must by law pay to the government. As individuals are usually not VAT registered, what we buy includes VAT, and is not reclaimable as it is to most businesses.

Offers by shops to cover the rise in VAT mean that they keep the sale price the same, but reduce the amount they get to keep after deducting the VAT they owe to the government. For example, if you buy a sofa before the increase for £500.00, the VAT due by the seller is £74.47; after the increase, the seller has to pay £83.33 to the government, meaning they are £8.87 worse off.

To most of us, the increase will mean very little, as the impact of adding 2.5% to the cost of a purchase is pretty small. For example, assuming no other changes to its price, an item costing £100.00 in the shop will be re-priced at £102.13. To incur, say, an extra £20.00 per month as a direct result of the extra VAT would mean you were spending £940 per month.

As an individual, it’s doubtful you will feel a financial impact from this change.

So although an increase from 17.5% to 20% sounds a lot, the only real winner will be the government. Some things never change.

When working out how much to charge for something, do you start with its cost, or its value?

From a customer’s perspective, they are interested in value for money, so your question should be whether there is enough of a difference between what they pay (Value) and what you spent on it (Cost). Assuming you sell for more than you paid, you make a profit. The eternal question is whether it is enough profit. And how much is enough?

It is a curiously English attitude that says we should “only” make a certain profit margin. I speak with many business owners who feel that to make “too much profit” is wrong. Some feel uncomfortable with making “too much profit”. But how much is too much?

I would encourage you to charge as much as you can; after all, if the customer is buying then they must feel they are getting value for money. Competition is the best gauge to what the market is prepared to pay.

But what if there is no competition – is there a limit to your profit margin?

The balance sheet tells you what you own, how much you are owed, and how much you owe to other people. Broadly speaking, assets are those things you own, or are owed, and liabilities are those things that you owe to others.

Liabilities include things like overdrafts, loans, and debts to other people (creditors). But are all liabilities bad?

Borrowing money means you have cash to do something with. If it costs you 5% to borrow £10k, and you are able to generate a profit of 7.5% through the activities you can make happen, then you are making a profit of 2.5%. Without borrowing the money you would have made no profit at all. So a loan can be a good thing, as long as you are making good use of the opportunity.

Investments in your business are liabilities. They represent the amount you have been loaned and, as above, you need to be sure you are making the most of the cash. Even “non-profit” organisations need to demonstrate that they are fulfilling their “non-profit” objectives. Is the cash sitting in the bank, or being used properly?

Liabilities also include Trade Creditors – money owed to your suppliers. It is important that you pay them within agreed terms, but don’t pay early if you don’t need to. This enables you to do something with the money.

All business owners and managers should know how much they owe to other people. Not just so they know how much they owe, but so they know how much cash they are sitting on that belongs to others and to be thinking about what they are doing with it.

Some lead, some follow – the world has always been this way. But what are the leaders trying to achieve? As a self employed person even I have to balance the “doing” with the “pioneering”.

But to what end. When I am no more, what will be left? What impact will I have made? Will the world be a better place?

The burden of responsibility rests on us all. Philosophers have always maintained that every one of us has the power to make a difference. It is not good enough to look around and expect someone else to make the difference for us. I agree with this.

I was recently introduced to a remarkable book called “The Tipping Point”. Its premise is that big things often happen as the result of the smallest of things. It is rarely possible to know what that small thing is until afterwards.

Standing still and waiting for everyone else to do something is not helping.

Is it your turn to be the tipping point?

Talking this over at half time, the difference seemed to come down to two points, France had had two lucky breaks, and seemed to be passing the ball out of the tackle more than Wales. And yet neither of these were included in the statistics shown on TV.

If lucky breaks can change the result of a game, then they should be counted and analysed. Do lucky breaks just happen? Or can a team prepare and train to spot them and take advantage of them?

In business, do we look at the statistics that really tell us what is going on? The amount of cash in the bank, or profit, are easy to measure and give us one indication of how we are doing, but they do not explain why the result is what it is, or whether it is better or worse than reasonably expected.

Whether as a Finance Director, or the coach of a national rugby team, I always look for the information and data that tells me what is really going on. Traditional statistics tell one story, but is it the most useful one?

Specific
“Joining a gym” is too vague, as is starting jogging. Ask yourself, why am I doing this, what is my objective – is it too lose weight (how much?), to give yourself some “me-time” (again, how much?).

Measurable
As above, how will you know when you have achieved it? If you want to “get fit”, how will you know you are fit? Is there an event you can take part in to demonstrate you have reached your goal?

Achievable
Do you want to run a marathon in 2010? Unless you have already started, you aren’t going to suddenly be able to complete the London this spring… Don’t set yourself up to fail. Pick one in a few months time to give yourself a good chance of succeeding.

Relevant
Why do you want to do it? Why is your goal important to you? Doing something for someone else is not as powerful a motivational force as doing it for you. It may be of benefit to others (as in “I want to start volunteering”), but what will you get out of it?

Time
When will you start, when will you aim to finish, are there milestones along the way to show that you are on track to succeed?

Succeeding in business uses many of the same principles we use in our personal lives. Sometimes you can succeed on your own; sometimes you need a little help. The trick is to know when to ask for help…