Wednesday, March 23, 2016

Four Important Steps in Planning for Aged Care

Four Important Steps in Planning for Aged Care

Getting old is one thing that those of us lucky enough will need to deal with.

One of the more challenging and complex areas to deal with is aged care.

Planning for aged care, although includes structuring assets so as to minimise the costs associated with aged care, needs to include being aware and understanding as best as possible  what the costs associated with aged care are.

With awareness and preplanning you can maintain control over the process, have access to the financial resources to pay for care and avoid nasty shocks which can occur.

Step One: Plan Ahead

Families are often reluctant to talk about aged care and its implications both financially and emotionally. The result is action is only taken when a crisis arises. This leads to limitations being placed on time needed to evaluate options and a sub optimal decision may be made, resulting in family arguments and conflicts at a time when clear thinking is required.
What to do:

  • Draw a family tree and identify family responsibilities and who will be involved in important decisions
  • Have family meetings to discuss preferences and expectations
  • Go to the My Aged Care website to find out more about what options are out there. This site also includes a fee estimator which can assist is costing the options you may have
  • Consult a specialist financial adviser in this area of speciality

Step Two: Understand the Fee Structure

Depending on the family member’s financial assets and income, the level and range of fees payable can be surprisingly high.

Planning early on can help you focus on how to fund the fees to provide you with the best support – this may not necessarily be the cheapest option available.
What to do:

With the help of the My Aged Care website and/or the assistance of a specialist adviser gain an understanding of the range of fees, including:

  • Paying for the accommodation. Most in care accommodation will require a lump sum deposit, called a refundable accommodation deposit. The level of this fee will depend on your level of assets but there is a minimum level of assets that you can be left with. Please note that this refundable accommodation deposit is not “lost” and is refundable if the resident leaves the accommodation either voluntarily or on death. There are options to pay this deposit bond in instalments but there will be an “interest” charge on the outstanding deposit bond balance. The level of the refundable accommodation deposit is subject to negotiation between the service provider and the potential resident. This could be over $500000 for an individual or over the $1m mark for a couple as a worse case scenario, depending on assets held. The ability to negotiate will depend upon the availability of accommodation and the preferences of the resident.
    Further there are daily accommodation payments which generally comprise two parts:

  1. A daily basic fee – which is the same for all
  2. A daily means tested fee – which can increase depending on your financial position but are subject to an annual cap as well as a lifetime cap. Once these caps are reached, the daily fee drops back to the basic daily fee only. Up to this point, both the means tested and daily care fees are payable

Therefore financial provision needs to be made not only for the refundable deposit bond but also for both the basic daily fee and the daily means tested fee.

  • The daily fees above will cover basic living expenses such as food, electricity, cleaning and laundry services whilst nursing assistance is subsidised to the provider by the government.
    However, any luxury, lifestyle and other additional items will need to be paid for by the resident on a user pays basis. This would extend to pharmaceutical, medical and other services such as hairdressing, clothing and treats.
    In many organisations, only a bed and chest of drawers etc are provided. You may also need to purchase an appropriate chair, television and other items to provide the lifestyle that is desired.
    Therefore, cost of these items need to be provided for as well.

Step Three: Structuring Finances

Accommodation costs are published on the My Aged Care website.

If assets and income can be reduced enough to become a low means resident before the move, the government may subsidise the accommodation and regulate what the residents contribution is.

This may reduce the accommodation cost but may not always be the best result for the resident. Choice and control of accommodation may well be lost. As a result, the resident may not be offered a position at their place of choice, but rather a place many kilometres from “home”. This may result in unhappiness, distress and depression.

Many accommodation places have places “reserved” for high fee paying residents such that having the funds and paying the price results in the accommodation of choice being offered, with a much better result emotionally for the resident. Don’t forget this as it is more valuable that the resident is happy than money saved!

What to do:

  • Be aware that a home owner will generally not qualify as low means unless their spouse (or other protected person) will continue to live in that home
  • If a resident wants to enter under the low means rules, unless planning has been undertaken at least five years earlier, there are not many strategies to reduce assets. Note that assets transferred/gifted within five years of entry may still be treated as assets  under the gifting/deprivation rules.
    This why consulting a specialist aged care financial adviser early is recommended
  • Gifting/transferring  of assets may incur stamp duty and capital gains tax – be aware of this before any action is taken.

Step Four: Ensure Wills and Powers of Attorney are set up

Dementia is a leading cause for the need for aged care services. It is very important for Wills to be reviewed and updated as necessary and appropriate Powers of Attorney executed whilst the resident has legal capacity.

Once legal capacity is lost, a Will cannot be renewed or amended. Further, it will be necessary to go to the Guardianship Tribunal to set up Powers of Attorney in these circumstances.

In conclusion, careful planning will ensure that the transition to aged care will be a relatively smooth and stress free process.

Thursday, February 4, 2016


I’d like to share with you an experience that may wife and I recently had in order to  demonstrate what can happen when customer service standards are flawed or fail.

Last year we had the fantastic experience of spending five weeks in India. What a great and enlightening experience! However, the memories of that experience were slightly tarnished by what we experienced on arrival back at Melbourne Airport.

Let me explain. Rather drive the car from home and leave it at the airport for five weeks, we took the option of purchasing return bus tickets. These were purchased online which would enable us to be delivered to the airport at the start and be picked up at the airport and taken back home on our return.

All went well for transfer to the airport at the commencement of our journey. The fun started when we returned and went to the bus stop to catch the bus home at around 7.30pm. We were first at the bus stop. When the bus arrived we presented our tickets to the bus driver. He told us that we were not on his list and that our return ticket must have already been used. We explained to him that this was not possible as we had just returned from five weeks overseas. He refused to let us on the bus as we did not have a valid ticket despite showing him our  tickets indicating that we were booked on the bus that day. We suggested that a good resolution would be for him to accept the tickets as it stands, take us home and it could all be sorted out the next day, given that the bus company had our phone number and email address in their data base. He stated that he could not do this as the system would not allow it.

He then said that all he could to get us on the bus would be to sell us replacement tickets and we could go into the office the next day and sort it out. Reluctantly, we agreed to do this and handed him our credit card to make payment. At this point he informed us that he did not accept credit card and that he could only accept cash. The cost of the tickets were $76. Fortunately we had $80 on us so we could pay for the tickets. Prior to paying I asked the driver “would he leave us stranded at the airport at 8.00pm at night of we didn’t have the cash?” He promptly answered YES!

All this went on in front of other passengers who had turned up during this discussion. They, as well as us, were shaking their heads in disbelief!

After reluctantly making payment, we boarded the bus at which time we immediately went to the bus company Facebook page on our iPhone and vented our frustration at the deplorable customer service we had experienced and shared it with as many people as we could.

Within 10 minutes, the bus company responded on Facebook with a promise to contact us first thing the next day, which they did. So, what was the result? We got:

  1. An apology (most important)
  2. Refund of the additional fares we were forced to purchase
  3. Two complimentary return tickets on the bus service

What can be learnt from this experience :

  1. Avoid making rules that are designed to avoid circumstances which may rarely occur (fare cheats) that may penalise genuine honest customers
  2. Arrogance and pig headed company representatives are a recipe for disaster
  3. Customer service systems must have compassion. This is particularly the case where there is a genuine dispute and the financial risk to the company is low (in this case $76). In this case it would have saved them having to avoid providing complimentary tickets (cost to them $76 and negative exposure via social media
  4. Social media gives customers incredible power to get a negative message out quickly to a wide audience. Incredibly, we noted that our Facebook post was deleted by the company. I think a much better action here would be for them to respond to our post in the manner that the issue was dealt with – which we would have then posted a thank you. This left on their page would demonstrate how the company positively managed the situation. A great marketing opportunity missed by ignorance!
  5. Companies must monitor their social media pages regularly and respond quickly (but not just be deleting comments)

One final point – on leaving the airport on the bus, we observed the bus driver radioing head office – surely he could have just radioed head office at the bus stop to get appropriate advice as to how to handle the situation.

Thursday, June 4, 2015

Do You Have Disaster Recovery Plan For Your Business?

Most business owners are optimists! That is why they went into business in the first place.

However, being optimists, many business owners don’t consider the risks that can threaten the very existence of their business, and as such, their own and their employees’ financial well being.

The purpose of this blog post is to get you, the business owner, thinking about the very things that could occur and the impact of these events on your business.

Alan Weiss, a respected American business consultant talked about managing risk and how to assess it. This was simply to:

  1. Identify each risk
  2. Assess the likelihood of the risk event occurring
  3. Assess the financial and other impact of each event on the business
  4. Put in place steps to mitigate the risk of each event occurring, whether it be the actual event occurring or the financial impact on the business if that event occurred.

So, what are the types of events that could occur that could threaten the viability or future of a business? This will vary for different businesses in different industries. However, some examples may be, not necessarily in order of any importance:

  • Fire or flood
  • Employee theft, including theft of goods, cash or intellectual property, such as customer lists
  • IT breakdown – including computer crashes and computer viruses
  • Breakdown of key equipment
  • Resignation of a key employee
  • Death of an owner or key employee
  • Workplace accident resulting in serious injury or death of an employee
  • Movements in exchange rates if importer or exporter
  • Insolvency of a major customer
  • Loss of a major customer/s
  • Loss of a major supplier/s
  • Major disruption in your industry, such as experienced in film processing, buggy whip manufacture, typewriters and video stores

And the list goes on!

We strongly suggest that you take the time to brainstorm the potential disaster events that could impact on your business and put in place plans to minimise the chances of an event occurring, minimise the financial impact of these events and steps necessary to recover should an event occur.

Steps to minimising an event occurring might be to:

  • Review the operating procedures in the business, putting in place the necessary checks and balances. Ensure these are being followed
  • Ensure business has appropriate HR management processes in place such that team members feel engaged – a good culture is critical to business success
  • Ensuring that an appropriate OHS procedures are in place
  • Having appropriate insurances in place, including business interruption/loss of profits, property, equipment, public and/or product liability, death and disability and income protection – and reviewing these on a regular basis eg annually
  • Ensuring there are IT back up procedures in place, with back ups kept off premises. Backups regularly tested to ensure that they are working. Note: Cloud based products provide for this in many cases
  • If there are business partners in a business, having proper partnership/shareholder and buy/sell agreements in place
  • At least annually undertake a strategic review of the business, including an assessment of the industry structure in which the business operates. This may identify trends that the business needs to adapt to.
  • Have a credit management policy in place
  • Have a business plan that is reviewed at least annually, linked with the strategic review above. This doesn’t need to be a thick document – it may be simply one page.
  • Having a customer and supplier nurturing system such that regular contact is made with key suppliers and customers
  • Legally separate private/investment assets from the business and from potential claims against the business
  • Register interests in assets under the Personal Properties Securities Register

There are many other strategies that could be identified and employed. The purpose is of this blog is not to be all inclusive, but to get you thinking and acting.

There are many resources available on google under disaster recovery planning. Your starting point may be to look at these and then start your planning, assessment then implementation.

Don’t delay – start now!

Wednesday, February 4, 2015

Failure - Avoid or Embrace?

Failure is something that most people try to avoid. This is perfectly natural as no one likes to admit failure – particularly if that failure results in the collapse of a business and the impact that has on the owners, team members, suppliers and customers!

However, the fear of failure also has the effect of hindering the growth of a business. Failure in the context of this is not necessarily the failure of a business, but maybe the failure of a strategy in that it did not reap the reward relative to the investment made, financial and/or time.

However, it’s important to recognise that reward is inherently connected to risk. That is to say, if you take no risk at all, you will most likely have a business that will at best be average or most likely below average.

That may satisfy some – however, for most business owners, their aim is to grow their business and the financial rewards that come from it. To do this, they must distinguish themselves from what their competitors are doing. In other words, lift themselves out of the sea of sameness and look to provide something different or unique that their customers will see value for and be willing to pay for that privilege!

This means that businesses need to experiment with both new products and services and how they can be delivered. Technology is also a significant interrupter in how customers wish to deal with a business.

Experimentation comes with an element of risk – but without risk, you are guaranteed that whilst current profits may be maintained, future profits will most definitely be eroded.

I came across a simple method of assessing the implications of risk – which is simply answering two questions in respect of the identifiable risks associated with the possible change?

  1. What is the likelihood of a negative result?
  2. What would be financial implications of the negative result?

So, if the likelihood of failure is high but there is a negligible financial impact on this, it still might be worth a try as something great might be developed, but the downside is low.

However, if the likelihood of a negative result is low, but the negative financial consequences high, it still may be worth testing, but having strategies in place to minimise the both the possibility of the situation occurring but also minimising the financial impact should the idea fail.

Any failures that may occur under these criteria could be termed “smart failures”. These are failures arising from actions that have been carefully planned and assessed and outcomes monitored.

This leads me to the next important step in this process – learning from ones mistakes! It’s one thing to say this and another to actually learn and grow because of a failure. This is where the US Army’s After Action Review (AAR) system is a really useful tool to apply in business. The purpose of this process is to find the cause of failure, not the culprit. At the core of the AAR are these five questions:

  1. What was supposed to happen? ie what was the aim of the strategy?
  2. What actually happened?
  3. Why was there a difference in the expected and actual outcome?
  4. What can be learnt from this failure?
  5. What will we do about it?

Going through this process in respect of all strategies, both successful and otherwise, will result in the business learning and  therefore  growing – and will foster a culture that embraces change. This will be a critical element of any business in any industry as industry is disrupted through technology advances and other influences.

And one final point – maybe it’s best to refrain from calling a strategy a “failure” if it doesn’t work as planned as the word “failure” comes with negative connotations and fear. Maybe we’re best to say the outcome was not what was expected!

Monday, March 3, 2014

How Will You Gain Happiness in Your Life?

Recently I came across an interesting Blog post on the Harvard Business Review, HBR Blog network. Written by Dorie Clark, strategy consultant, it was headed “Why Can’t We Stop Working?”

The article spoke about the writer meeting with a friend she hadn’t seen for a couple of years. What she saw of what once was a handsome, dapper young professional was now 30 pounds over weight and a smoker.
Although this friend was financially successful with a booming business and beautiful holiday home, he didn’t have the time to enjoy his dream home or to start dating and meet someone special in his life.
Of course, this was all due to the choices that he had made.
In the book written by Harvard Business School professor Clay Christianson “How Will You Measure Your Life?” Christianson explains that the ROI (return on investment)on work/business is usually immediate apparent in the form of instant feedback and gratification in the form of raises, bonuses and  new contracts etc. However, family life is different – at times it can be banal, boring or discouraging!
In fact, Harvard happiness researcher Daniel Gilbert has shown that children don’t necessarily increase parent’s short term happiness. In reality, for many, on a day to day basis, parents prefer almost anything (from watching television to exercising) to spending more time with their children – and work is certainly one commonly accepted excuse! Yet many business owners and professionals are devastated to wake up in midlife and discover frayed relationships, divorces and alienation from their family. Therefore, it’s important to grasp the difference between short and long terms rewards of work and our personal lives.
The relationship between happiness and success is also misunderstood, according to Shawn Anchor, author of “The Happiness Advantage”. We assume that success comes before happiness. However, he believes that happiness is a precursor to great success.  Every single relationship, business and educational outcome improves when the brain is positive first. In other words, success is a result of happiness, not the other way around. And yet, so many executives and business owners work tirelessly, questing for a goal — happiness — that doesn’t necessarily come from professional or business achievement.
For many, it’s difficult to back off on their work load – they fear that they’ll stall their career or someone else won’t be able to do the job as good as them. In other cases, the push back from work colleagues in the form of phone calls and emails when not at work means that escaping work is nearly impossible. This is magnified by the fact that research has shown in general that humans fear loss or failure more than the covet gain!
Early in the calendar year, it’s a great time to review our personal goals, particularly whether they are consistent with our business and professional goals. I’m sure most of us are not like the investment bank intern who died in London after working 72 hours straight to impress his bosses. However, we may not be that different either – it may be a matter of degree and timing. Overwork may not kill us today, but, if not addressed, it may kill our most important relationships in 5, 10 or 20 years! True success means recognising our real, individual priorities and, as best we can, living them out today, rather than grasping at some mythical future state of “I’ll be happy when….” 

Tuesday, January 21, 2014

A Simple Smile Could Drive Profits Up by Over 200%!

Last week when I was on leave I was walking down the street to purchase a newspaper. On the way I passed a young girl busily setting up outside tables at a café.  I was about to say good morning but she turned away, totally ignoring me. I suspect this is what she did to anyone passing by that she didn’t happen to know. My first (and lasting) reaction to this was to feel inclined never to patronise this café in the future.

In the days since that brief encounter, I have wondered how I would have felt had she smiled and greeted me as I walked past. The reality is that I would almost feel compelled to support the café if I had been made to feel welcome at that first encounter. If every potential customer who encountered this young girl felt the same as I, what has been the cost to this business now and in the future? I would suggest significant!

This is reinforced by a blog post by Gareth Jones, a member of the Advisory Board at Bostwana Youth Portal. Titled “Driving Profits Up by Over 200%.... Quite Literally!” In this blog Gareth told a story of how a builder’s vehicles had had a significant impact of his business profits.
During a week of low activity, a couple of his marked/branded company vans went out and about with one intention ... to drive extremely and overtly courteously. They went out of their way (exceptionally so) to let other road users out of intersections, stopped to let people cross the road, helped any other road users or pedestrians in need and were generally over the top in their respect for others.

The outcome ... not only directly, via business cards handed out each time they stopped to help, but also via others who simply witnessed their courteous driving ... a 412% increase in calls leading to a huge increase in business activity and profits up over 200%!!! His other conclusion, consistent with mine, was that the reverse effect would most likely be true ie poor driving & discourteous behaviour in a marked company vehicle will drive down profits – fortunately, the company chose not to test this! Nor should it need to – what is the cost to a business to ensure that their team, whenever representing the business either at work, or away from work (but in a team uniform – or vehicle) goes out of their way to smile and be courteous? No cost at all – but with a great return on investment!

Every team member, like it or not, is putting out a marketing message. Don’t leave this to chance – as is clearly outlined above, the cost is too great. Ensure that your customer service (experience) standards include clear direction as to how all interactions with the public should be handled.
And remember, a smile uses less muscles than a frown!

Tuesday, December 10, 2013

How to Avoid Becoming a Commodity!

These days more than ever the competitive advantage pursued by many is to discount and commoditize an industry. Prime examples of this include warehouse pharmacy stores, electrical retailing and hardware. As a result, the relentless pursuit of being the cheapest product and service provider has meant that the smaller, service focused business is eventually forced out of business.

In many circumstances, the failure of these businesses has been due to the smaller business forgetting what made it successful in the first place – rather, trying to compete on price only, which was bound to be unsuccessful. Why? Because only businesses that will succeed by discounting will be those that have the lowest costs of operation, including buying power and whose discounting generates enough volume to compensate for the margin given away.

Now, with the continued growth in on line sales, the challenge of meeting this additional competition becomes even greater.

Businesses need to reinvent themselves in this brave new world.

But there is still hope. Studies like the J.T. Kearney survey “What Do 81% Of Shoppers Do in Stores That Only 19% Of Shoppers Do Online” indicated that a large percentage of customers (61%) still prefer to shop IN STORES for many reasons. That means that stores can survive and thrive by making some adjustments in their physical and psychological offerings. The key is for retailers to understand and focus on how and why their customers shop, and then retool and redeploy the store network accordingly.

Categories where customers especially favor the personal experience of in-store shopping include beauty and personal care products; footwear, apparel and accessories; consumer electronics, pharmacy and grocery products, home and furniture, home improvement, and office supplies.

In an article written by Gilon Miller of Upstream Commerce some suggestions are provided to transform themselves into more interesting and attractive places:

1)    Make the store a place of DISCOVERY. A place where consumers can learn more about products, try them out (think Apple) and hunt for (or happen upon) hidden treasures. This, by the way, is part of the thrill of the hunt for product and pricing consumers say they want.


2)    Make the store a place of ENTERTAINMENT. Provide an exciting in-store environment that engages shoppers, especially those who enjoy shopping and consider it a social experience. This can be literal entertainment -- music, shows, happenings, etc. A more entertainment-focused venue builds longer-term engagement with the retail brand and the lifestyle it represents, says the Kearney Study.


3)    Make the store a place of great RELATIONSHIP. That is, make the store the ideal place for personalized service—before, during, and after the sale. (Customer quote: "Stores that treat me like a person and not a number get my business.")


4)    Make the TRANSACTION the key. A convenient, enjoyable transaction through
short checkout lines and service-oriented cashiers helps build brand loyalty. The point of sale also affords an opportunity to boost profits by upselling or offering value-added services.

In summary, it is as important as ever to make your store the place where people WANT to shop. What are you doing now to innovate and transform your business – to ensure that it will survive and thrive in the brave new world of community pharmacy? A new world where price is not the only determining factor!

Some possible actions:

·         Brainstorm each of the four points above with your team

·         Ask your customers (a Client Advisory Board may be a great start) – what are you doing now that customers value and therefore you need to keep doing? What could you be doing to make their experience better?

·         Look at other industries

·         Do something!

We have facilitated many Customer Advisory Boards, It’s something that customers can really value and provide engagement with the business. If you would like to know more about this process, feel free to contact us.

And finally, we wish you all a Merry Christmas and happy and prosperous new year!