Business Link’s new Growth and Improvement Service

The demise of the local Business Link service and what this means for contractors and small businesses was mentioned on our blog last month.

This month Business Link have opened up a new microsite (http://www.improve.businesslink.gov.uk/), which aims to support businesses in growing from the start-up phase to being an established medium sized business.

Here is a short review of the website that should help you to find your way around on your first visit.

What is the Growth and Improvement Website for?

Business Link have content covering a number of areas that have been identified as being major hurdles to overcome in establishing and growing a new business.

The content ranges from videos, case studies and tools to articles on key business topics, like:

  • Getting access to finance.
  • Increasing your market share and winning new customers.
  • Winning government contracts.
  • Improving your cash-flow.
  • Taking on staff and getting the best out of them.
  • Doing business overseas.

Social Media Tie-in

Business Link have a tie-in with LinkedIn so that you can find useful groups that can help you to achieve all of the above and more. This can be found in the “Discussions” section under the “Resources” tab. Links to various established industry blogs and websites can be found on the site providing relevant supportive articles and videos.

Additionally, a twitter feed can be found on the homepage. A weekly competition for the best tweet is held, participants have to submit a tweet with the hashtag (#BLbizideas) and the winning tweet is published on the homepage.

Finding Events

 

There is an events section (http://www.events.businesslink.gov.uk/) where users can search for local events to attend for business support and networking. Although there are some free events, some will range in price from nominal fees to pricey.

Business Tool Finder

The business tool finder (http://www.improve.businesslink.gov.uk/resources/business-tool-finder) is a searchable database with links to articles from a range of websites that have been vetted by Business Link as being authoritative in their niche area. There are some excellent resources for information. In addition there is none of the spam and dodgy content that is often found through Google or other general search engines.

Business Support Finder

This tool allows users to search the Business Link database of publicly funded sources of financial and informational support for business such as loans, grants and bursaries as well as free advice and mentoring services. There are also a limited number of paid services included too.

Resources

There is an abundance of articles, both internally and externally produced, that have good solid advice that users can be confident has been vetted by the government for accuracy so can be trusted.

At the time of writing there were 170 videos in 15 different categories.

There is a contracts finder and an option to subscribe to various different RSS feeds depending on your specific interests.

There are also links to the Events, Tools and Business support sections mentioned previously in this article.

People and Assets

Information, tools and advice on the hiring process as well as general people management. There are videos and articles covering this as well as business assets and how you should effectively manage them.

Plan for Growth and Options for Growth

These two sections help users to go through the necessary thought processes and then plan effectively for growth.

Options for Growth takes you through the different ways you could go about growing your business and how it can be done effectively based on your circumstances. Again there are videos and articles as well as external links to support.

Finance

Whether one is looking to improve cash flow management, gain an investment or reduce costs the finance section (http://www.improve.businesslink.gov.uk/finance) has some good videos and helpful articles.

Finally, here is a short video that Business Link have created to summarise the new service:

Overall the website is quite impressive; it does not have everything that you could possibly need but it at least gets you a part of the way there and then points you in the direction of more specific expert help when you need it.

Of course, it does not replace a personalised one to one service with a human advisor and perhaps the only other thing that is not prominent enough on the site is advice on how to find similar services to the one that they withdrew – both paid and free.

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Number of UK Contractors up by 12%

Recent research by Kingston University and PCG for National Freelancers Day shows that the number of freelancers in the UK now totals 1.56 million, which is 5% of the total UK workforce. The University’s initial study in 2008 found that there were 1.4 million contractors in the UK, so over the 3-year period there has been an increase of 12%.

When looking at the reasons for this it is impossible to ignore the fact that the country has been in hobbled economic health over this period and has undergone mass unemployment. Unemployment has increased by almost 50% to 2.49 million since 2008 and employment has declined by 400,000 (dataset analysis of April to June statistics by Kingston University). Since this data was taken, unemployment has now risen further to 2.62 million. Therefore, perhaps about a third of the 400,000 that left employment decided that they would make a go of it themselves rather than battle it out in a stagnant and opportunity poor jobs market.

As this is written it is National Freelancers Day 2011. This week freelancers received a supportive message by the Prime Minister, David Cameron, who said:

“I have a huge respect for all those who make the brave decision to branch out on their own and take control over the way they work. This Government recognises the valuable contribution that freelancers make to the economy and, as more and more people choose to join your ranks, you have all our support.”

Of course, there have been promises over the past 3 years that the government is committed to supporting small businesses and freelancers but there is still no visible solution to the lack of funding coming from banks; only initiatives to squeeze current agreements (such as mortgages and overdrafts) for more cash.

The Chancellor George Osborne will be making his autumn statement on Tuesday 29th November when he has promised to unveil some big plans to support UK businesses in getting the finance that they need.

Within the freelance sector the Kingston University survey revealed that the highest proportion of freelancers work in arts literary and media occupations (265,000), followed by management (161,000), then teaching/education (110,000), with IT/Telecommunications (93,000) also extremely well populated.

The study was commissioned by PCG, the founders of National Freelancers Day. PCG’s Managing Director, John Brazier, commented on these figures:

“The figures underline the steady growth in the sector in turbulent times, and confirm a widely held belief that more and more skilled and talented individuals are opting for freelancing as a work/lifestyle choice, or because of economic circumstances. Freelancers are offering industry and commerce a flexible talent stream when and where it is needed.”

It would be interesting to see how many of the new freelancers have found success or at least survival in their new roles. As we all know it is not an easy route to take but if you are good at what you do and know how to be creative in finding work then freelancing can provide for a very fulfilling and enjoyable career.

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How Should a Contractor Set Their Fees?

Setting fees is a complex balancing act, which if done well can help ensure a steady flow of contracts.

But how should you set fees? Should it be based on an hourly fee, a daily fee or even on a bespoke quote on each project based on the specific requirements?

Generally speaking for IT contractors, the more senior the role is, the more likely it is that the role will be paid on a daily rate. For other sectors, this is not necessarily true as there may be far less established practices and jobs may vary in nature to a much greater extent.

The benefits of working to an hourly fee:

  • In the event that a project over-runs, an hourly fee guarantees that any additional time spent working on the project will be invoiced.
  • Typically a weekly invoice is produced when an hourly rate is charged, which increases cash flow.

 

The benefits of a daily rate

 

  • This generally appeals more to clients as it allows them to forecast and control their costs more accurately.
  • However, some contractors prefer the daily rate due to the reduced administration involved as clients are invoiced monthly as opposed to weekly if a daily fee is used.

 

Researching fee structures for similar roles is a good starting point. If one is working through an agency, advice on the best fee structure for different roles can be obtained. It is also possible to research what other contractors are charging. If you are with an agency then you will find that they can advise you on the best charging structure for each role that you put yourself forward for.

Covering for the unexpected

 

Contractors should ensure that rates being charged will cover eventualities such as but not limited to:

  • Time spent not working between contracts.
  • Time off for holidays (we all need them).
  • Time off when unwell.
  • Time needed for invoicing and admin.

 

In a full time role you will probably work 40 hours per week for 47 or 48 weeks of the year. That calculates to approximately 1900 hours per year. Whereas working as a contractor you can expect to only bill for about 1000 hours because of the above noted considerations.

Therefore, one way that you could decide your hourly rate is to look at a fair annual salary for your kind of work and then divide it by 1000. You could do the same with a daily rate by assuming about 130 days per year are worked.

It may be worth beginning the process through doing some research on industry jobs boards to see what rates are being offered in your local market. Do not make the mistake of comparing to international freelancer recruitment sites such as Elancer or Fiverr as you will not get a fair judgement of the local going rate.

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Specialise to Win New Clients In Tough Economic Times

The news is currently awash with doom and gloom stories of the economic situation unfolding in Europe, as there will undoubtedly be consequences for the already struggling UK economy.

In fact, Contractor UK is reporting a 27% drop in contract roles in the financial services sector in the UK.

When feeling under pressure from the economic climate there may be a solution in specialisation. Specialising is one way to ensure that one has a sustained steady flow of work.

It is also worth noting that in difficult times it is necessary to step outside our comfort zones to survive. When struggling to find work it is necessary to start marketing properly. This has long-term benefits in that it can securely embed a reputation and status in an industry.

Why specialise?

 

Have rates of pay declined in your industry over the past few years? Declining pay rates may be a result of clients finding people willing to do the work for less. In areas of specialism, however, there are less people available to do the job. This results in specialist contractors being in a better position to charge a higher rate, it also increases the chances of securing the job due to the decreased level of competition in highly specialist markets.

It is possible to cut marketing or business development costs significantly through specialising as similar clients congregate in the same places; read the same trade magazines, go to the same conferences, and visit the same blogs and websites.

Word of mouth will become more powerful; if a recommendation is received through a similar business then it will be an instant given that you have the necessary skills to fulfil the task.

A specialist can provide a better solution than a generalist and will potentially have a deeper effect on a clients business. This will in turn bring future work and recommendations.

It is possible to charge higher fees where there is significant past experience e.g. having developed 25 similar websites in the past rather than 25 unrelated websites suggests an understanding of the specific issues and needs of the area of specialism.

Greater job satisfaction occurs through having happy clients.

A specialist may be chosen before jobs are put out to tender, and may become an obvious choice for the work.

 

How to choose a target market

 

It is necessary to choose a target market that is large enough to ensure that acquiring a small share of that market will be profitable. For example, becoming a database consultant for retailers allows for a large enough market to make a successful business out of only taking a very small percentage of the market.

Make sure that there are not too many other specialists in the niche already. Determine this by searching on Google in the local country using the name of the specific niche that is being considered as well as the job title e.g. “Retail Database Developer”.

It is ideal to choose an area where experience and an understanding already exist. This can then be leveraged and built upon.

It should be an area where it is possible to get in front of the right people who can make a decision i.e. that there are email lists available, trade shows that can be attended, conferences and local chambers of commerce meetings etc.

How to be successful in the target niche

Firstly, identify where the market is going next in the chosen industry and understand how a unique skill set can be applied to these needs.

For example, an IT consultant may need to position herself from a customer’s viewpoint. An IT consultant who understands my unique problems, needs and language rather than just another IT consultant.  

Create a website/Blog that meets the needs of the specific industry.

Speak at industry trade shows and events.

Create white papers, articles and press releases and distribute them out or offer them for download on a website.

Build a database of contacts, clients and potential clients and aim to keep in contact with them regularly by being helpful and informative about the things that have been learned or changes that relate to their businesses. Not on the hard sell.

Form strategic partnerships with related but non-competitive businesses in order to help each other out through referrals.

Collect and use testimonials from existing clients and also recognised industry experts.

Hopefully, this has given you some ideas on things that can be done to turn around a bad situation. It may not be necessary to go all out in this way; things could be taken more gradually. The main thing is that action is taken and that there is no procrastination and worrying in a state of paralysis. There is no need to fail but it is necessary to be proactive in order to be successful and to effect a change in circumstances.

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The Importance Of Having A Plan

When working as a consultant it can be relatively easy to slip into a false sense of security due to the relative simplicity of the business.

Contractors can often move seamlessly from job to job for a while and as long as the money coming in is enough to get by on then planning and business growth can easily be put aside. Or can they?

Many contractors have received stark reality checks over the past few years so here are a few ideas and guidelines to maintain a healthy business.

Make a business plan

 

It may sound obvious but there are many contractors that do not have a plan at all and are just winging it. It is important to have a clear plan of what the business should achieve over the next 2-3 years with specific and measureable goals that are SMART (specific, measurable, achievable, realistic and time-led).

Once a clear plan exists then performance can be measured against that plan. This may sound like overkill for a contractor but if there are clients knocking down the door for business then there is much less stress and worry as well as the opportunity to demand higher fees.

 

Setting Key Performance Indicators

 

Key Performance Indicators (KPI’s) are the specific measurements that are applied to measure success.

As well as financial targets contractors can use a number of measurements for their KPI’s

  • Customer satisfaction; this may not be an exact science but it could be graded 1-10 based on the dialogue during the contract term, comments at the end of the contract from the client, renewal of contracts, number of contracts from the same client.
  • Personal recommendations received – what percentage of the contracts over the past year came through personal recommendations?
  • How many leads are coming through the website?
  • Percentage of jobs finished on time and within budget.

 

Financial measurements should include revenue per month, details of costs as well as cash flow and timeliness of payments received. Money borrowed and working capital levels as well as how these fluctuate over time should also be considered.

Having a Clear Direction

The point of a plan is to know what the aims of the business are and how they are going to be achieved, preferably broken down into small simple steps.

Here are some questions that it should be possible to answer:

  • What is the direction of the business, where will it be in 2 years time and how will we get there?
  • What are the threats to the business over the next year? What is changing in the market and what needs to be actioned as a result?
  • How can a competitive advantage be gained? What can be learned that will give the business a significant benefit over the competitors?
  • How is success being measured? Are the KPI’s working and if not then how should they be changed?

If these questions can all be answered then the business is probably in a good place. However, if there is no clear direction and answers to these questions are a little hazy then it may be time to get planning.

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H M Revenue & Customs bank an estimated £150million in late tax return fines

1.5million people have been hit with fines for filing their tax returns late-raking in an estimated £150million by HMRC.

Figures were revealed following a Freedom of Information request lodged by Jason Collins, a tax partner at McGrigors law firm. The figures showed that more than one in four of the 6.9million people who filed a self-assessment tax return online missed the January 31 deadline.

These late filers were hit with a £100 fine and so although HMRC are refusing to reveal the total; it is estimated to be £150million.

The level of fines represents an 8% rise on last year and an enormous 56% increase from 2006, when there were 962,000 fines.

A new penalty regime this year means fines could be issued up to £1,500 if people submit their returns late.

Collins has expressed worriment over this, saying: “This wouldn’t be such a concern if HMRC had not developed a reputation for unfairly issuing fines and stubbornly refusing to cancel them, even when the taxpayer complains.”

HMRC guidance states that late filers will not have to pay a penalty if they have a “reasonable excuse”. However, it has not outlined what constitutes a reasonable excuse.

McGrigors warns that HMRC is adopting a “draconian” approach. However, an HMRC spokesman has countered: “We want tax returns back, not penalties, so nobody will receive a penalty where they file a tax return by the deadline or have a reasonable excuse for failing to do so.”

The next deadline for those submitting paper returns is October 31. People who choose to file online have until January 31 next year.

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Are Umbrella Companies on the Decline?

When a contractor comes to us we go through the process of assessing their position in terms of salary, expenses and the nature of their business. This helps us to determine the best business structure for them, be it sole trader, umbrella company or limited company.

In the majority of cases it ends up being that a limited company is the best financial solution for the individual due to the tax benefits of limited companies. However, there are other considerations that are taken into account such as lifestyle and the level of responsibility that the individual wants to carry.

With the details of the new AWR we have been wondering what the future holds for umbrella companies.

If you missed our article last week on this then you can find a good summary of how the Agency Workers Regulations affect UK Contractors here. In short though, it means that those working under an umbrella company may become less attractive to agencies and employers as they will have additional costs through employing them.

Additionally, it could mean that the process followed by many umbrella companies; of paying workers an hourly rate of or about the level of the minimum wage, with the remaining income being passed on as a ‘variable’ bonus or commission payment, will come to an end. Many umbrella companies do this in order to increase the workers net pay through enabling them to collect significant temporary workplace related expenses.

There was an interesting post on IT Contractor regarding this last week. The blog owner asked one of his advertisers to comment on the issue. That advertiser happens to be the founder of a large umbrella company so obviously has strong opinions on the matter, which led to some humorous banter in the comments.

The umbrella company in question said: “Those that offer unrealistic take home pay calculations, or use offshore schemes, or even do creative things with foreign currencies in order to pay their contractors will be looked at by Government and will be clamped down on”.

 

But on the other hand, they stated that umbrella companies that focus on being an employer and meeting their responsibilities fully would adapt and survive.

Of course this all remains to be seen over the course of the next few years. We are still finding as much demand as ever for our umbrella company service, so believe that the jury is still out on the matter.

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Churchill Knight and Associates Ltd Nominated For Two Hertfordshire Business Awards

Churchill Knight and Associates Ltd are pleased to announce that we’ve been shortlisted for both the Medium Business of the Year Award and the Training and Development Award at the Hertfordshire Business Awards 2011.

The Medium Business of the Year Award is open to any business that has a turnover of £2m-£20m, whose growth, drive and quality of management has led to its success.

The key aspects of the award include a strong performance in a particular market and the provision of employment and training opportunities.

We are proud to be a finalist in this category and feel we deserve to win the award.

We have worked hard to reach our goals and have come a long way since the company was founded 13 years ago, with just one staff member. Now we are a team of over 75 employees, each of whom are committed to delivering a high level of service.

With this commitment in mind, it is no wonder why our client base is growing so rapidly. Since the start of the year, it has risen by over 15%.

On top of this, a massive 75% of new clients that join us do so as a result of a direct recommendation.

Despite our growing success though, we are still continually looking for ways to improve. Our dedicated Customer Service department help to identify areas in which staff may require further training and we’re all involved in the development of our systems and processes to better cater to our client’s needs. From minor system changes that enable us to work more efficiently to the creation of the SDE, which was launched following a number of client requests for somewhere to view particular company documents.

The second award we have been shortlisted for is the Training and Development Award. This award is given to a company that can demonstrate a high standard of employee training and development.

The company owners of Churchill Knight and Associates Ltd put a lot of emphasis on personal development so that we, as a company, can improve. They understand the vital connection between team members’ abilities and the performance of the organisation as a whole.

To ensure we are the best we can be, there is a high level of staff training provided, both in-house and externally. Sponsorship programmes are also offered to support employees in achieving professional qualifications; such as AAT, CIMA and ACCA.

Training and development is considered fundamental to Churchill Knight and Associates Ltd; not only because it helps staff members to progress, but also because it’s highly beneficial to our clients. Training in other departments ensures we each have a greater understanding of the business as a whole; which in turn leads to better customer service.

We’re all extremely excited to be nominated in these two categories and would like to say a big thanks to all of our clients who have helped us develop over the years.

Company partner, Louise Payne, said: “Churchill Knight entered the Hertfordshire Business Awards at the end of September in two categories.  I had a telephone call last week saying we were finalists in both.” She added: “I was so pleased that our efforts and company had been recognised and feel immensely proud.  Whilst in my heart I knew we would get through, hearing the news was very exciting.”

The awards presentation is on the 24th of November and is set to be an exciting event.  Until then, we’re all just waiting in anticipation.

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Do I need to have insurance as a contractor?

As a contractor you may carry a significant amount of risk with your work. If something were to go wrong then legally it could be your responsibility.

Therefore it is a good idea to have a think about the kind of work that you do and what kind of worst-case scenarios could crop up if things were to go wrong.

For the majority of contractors there are 2 kinds of insurance that are most commonly used, professional indemnity insurance and public liability insurance.

I will focus this article around these two types of insurance so that you can determine if you need them and if so how you can go about getting the insurance organised.

Professional Indemnity Insurance

Any contactors who give advice to businesses or individuals should consider taking out professional indemnity insurance.

Professional indemnity insurance will cover you in the event that you give advice to a client that turns out to have been negligent. It also covers you for the event that you made a serious mistake with the work that you carried out and this resulted in a compensation claim by your client.

For example, if you are a carpenter and you accidentally make windows that are 10cm smaller than the planned size for a building and then the glass turns up to be fitted but will not go in due to your mistake then you could be liable for the costs of fixing the issue so that the glass does go in. If you have professional indemnity insurance it would cover the costs of this work as well as any legal expenses that you incur too.

Public Liability Insurance

There are many different types of liability insurance but public liability insurance is the most commonly used by contractors and small businesses.

This type of insurance protects a business by covering the cost of a claim if an accident happens with a member of the public, resulting in injury or damage to them or their property.

An example of this may be that you set up an exhibition stand and it collapses and breaks a table, vase and hurts somebody. Public liability insurance will cover the costs of replacing the damaged items, including the exhibition stand if necessary, as well as any health care costs incurred by the injured person.

Buying insurance as a contractor

Although we cannot make any specific recommendations to good value business insurance providers there are a few good places that you can start:

Business Link have a very detailed section on the different types of business insurance giving more in-depth information than our summary above:

These are both business insurance comparison pages so you will be able to see what the options are:

Money Supermarket

Simply Business

Disclaimer of liability:

The information on these pages is provided free and for information only, and is provided ‘as is’. Whilst believed to be correct, it is in no way comprehensive. It is provided for your interest only and is not intended to be relied on as formal legal advice. You should not act or rely on this information without seeking professional legal advice. No liability is accepted therefore for any errors, or for any losses that may be incurred if it is relied on.

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Are you a good communicator?

As a contractor we need the ability to mold ourselves into many different organisations in a short space of time. This is not always easy to achieve.

We have to communicate well with business owners and the senior executives, we have to get along with and work efficiently with the full time staff of the company and to deal with the politics that exist within the company.

Whether you are a specialist in mobile telecommunications systems or rail safety software you need to develop skills that are outside of your core professional skill in order to be effective at your job.

Of course full-time employees need to be good communicators too in order to get things done. However, they do have a lot more time to settle into their role and forge the necessary relationships that allow them to do their job effectively.

What I am getting at here is that as contractors we need to be great communicators.

Communication is widely acknowledged as the greatest difficulty businesses face. If something is not explained clearly enough or buy in from key stakeholders is not achieved then the job will not be done well.

Therefore I thought that it would be helpful to mention a few techniques that could help you to better communicate with those around you.

Becoming a great communicator can be relatively simple. There are two main principles which underpin this skill.

The first is awareness; awareness of the differences in communication and processing styles between you and the person you are communicating with.

The second is to be an effective listener, being calm and creating enough space to listen and absorb what is being said to you. If you are too busy talking and preparing what you will say next, how will you know what is really being said to you?

With every person that you interact with you should always take into account their personality and their communication preferences in order to get the best results out of your communication with them.

Of course, everybody is unique but it is possible to group people based on their over-riding characteristics, for example:

  • Are they analytical and data focused and like to think things through carefully and in their own time and through using rational argument?
  • Or do they prefer stories, anecdotes and human interaction rather than data? Maybe people like this enjoy reaching a consensus with others in order to make a decision and will use their feelings in deciding what to do.
  • Finally, there are some people who seem to intrinsically know what they want and what needs doing. Decisions are made quickly and without too much detail.

Everybody uses all of these styles of communication to an extent but all of us tend to lean towards one preferred style of communication.

It helps communication if you take into account what style of communication you and others around you prefer and to adapt your spoken and written communication accordingly.

Even if you do not make a conscious effort to change the way you communicate with different people just having raised awareness of how others are communicating to you and what styles of communication they prefer will help you to better understand them and accept their ways which will in turn improve communication.

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As a contractor we need the ability to mold ourselves into many different organisations in a short space of time. This is not always easy to achieve.

We have to communicate well with business owners and the senior executives, we have to get along with and work efficiently with the full time staff of the company and to deal with the politics that exist within the company.

Whether you are a specialist in mobile telecommunications systems or rail safety software you need to develop skills that are outside of your core professional skill in order to be effective at your job.

Of course full-time employees need to be good communicators too in order to get things done. However, they do have a lot more time to settle into their role and forge the necessary relationships that allow them to do their job effectively.

What I am getting at here is that as contractors we need to be great communicators.

Communication is widely acknowledged as the greatest difficulty businesses face. If something is not explained clearly enough or buy in from key stakeholders is not achieved then the job will not be done well.

Therefore I thought that it would be helpful to mention a few techniques that could help you to better communicate with those around you.

Becoming a great communicator can be relatively simple. There are two main principles which underpin this skill.

The first is awareness; awareness of the differences in communication and processing styles between you and the person you are communicating with.

The second is to be an effective listener, being calm and creating enough space to listen and absorb what is being said to you. If you are too busy talking and preparing what you will say next, how will you know what is really being said to you?

With every person that you interact with you should always take into account their personality and their communication preferences in order to get the best results out of your communication with them.

Of course, everybody is unique but it is possible to group people based on their over-riding characteristics, for example:

  • Are they analytical and data focused and like to think things through carefully and in their own time and through using rational argument?
  • Or do they prefer stories, anecdotes and human interaction rather than data? Maybe people like this enjoy reaching a consensus with others in order to make a decision and will use their feelings in deciding what to do.
  • Finally, there are some people who seem to intrinsically know what they want and what needs doing. Decisions are made quickly and without too much detail.

Everybody uses all of these styles of communication to an extent but all of us tend to lean towards one preferred style of communication.

It helps communication if you take into account what style of communication you and others around you prefer and to adapt your spoken and written communication accordingly.

Even if you do not make a conscious effort to change the way you communicate with different people just having raised awareness of how others are communicating to you and what styles of communication they prefer will help you to better understand them and accept their ways which will in turn improve communication.

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