Business Archives - Page 18 of 67 - Michael Horesh Business Coach and Mentor

8 March 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

About six weeks ago, I had a very bad experience using El Al, what I consider to be my national airline. I wrote a blog, which was widely read. I complained formally. I answered a customer survey in detail. What has happened since?

The original issue was sparked by price quote that was clearly a rip-off, but I was in a position of ‘take it or leave it’ in order to reach London in a hurry. This prompted me to create an unofficial survey of my own, where the overwhelming majority of respondents indicated that they try to avoid the airline for a range of reasons. Of those in the pro camp, one clear issue was that all the food is kosher.

As it turned out, last week, I had to make another unscheduled trip to the UK. The flight times of the cheaper charter flights did not suit me. El Al was in the middle of a labour dispute with their pilots and the outcome looked uncertain. So I booked, reluctantly, with British Airways.

If I sum up the outward and return flight, I can honestly not find a serious fault. Two very relaxing trips, where the staff even allowed passengers to organize evening prayers. The multimedia system was so much more varied and simpler to use. And guess what? While you had to order kosher meals in advance, they were tastier and more filling than with El Al.

What is so disappointing is that I have yet to hear from El Al – not even a short message to acknowledge my disappointment. The situation is so bad that Mark Feldman, a seasoned tour operator from Jerusalem, wrote an opinion piece in the Jerusalem Post newspaper.

“The vast majority of my business clientele eschew El Al for several reasons….”

In effect, what we are seeing is the demise of a national institution, the collapse of an international brand. And if the senior management and ownership of El Al truly cares about their customers, that are going out of their way not to show it.

2 March 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Earlier this week, I attended a meet up session in London, whereby ten Israeli start-ups pitched to an audience of potential investors, capital funds and strategists. Hosted by a Tier 1 financial services company, surely, this was a special opportunity for the visitors to link up with international players?

I had expected a crisp set of presentations. Depending on the type of company, each one was allowed between three and ten minutes to excite the audience. The unhidden rules were:

Look the part. Dress accordingly. Most of the audience were attired in “City of London” suits or equivalent.
Know your lines. Each spokesperson was expected to be word perfect, as on the opening night of a play in London.
Have an effective powerpoint presentation, not overburdened by unnecessary wording
Have 7-8 key slides.
- A dummied-down one liner of what you do
- The reason you have created the start up – the pain in the market place
- How you are doing it – What is unique / clever, and the validation
- The specific market size
- The business model, and the validation
- Who is the team, and why are they special
- What you are looking for and why
- Next steps

To cut to the chase, in my book, nobody scored more than a B+ for their efforts. I was astounded as to the low standard on show. The issues seem to repeat themselves, speaker after speaker – dressed for an outing with the kids, insufficiently rehearsed lines, awful graphics, meaningless slides, etc, etc, etc.

I was left asking myself the following question. If these people had paid good money for these meetings, in addition to their flight and travelling costs, why had they not invested a fraction extra in themselves?

With some ironic timing, also this week I came across an article surmising What The Best Mentors Do. Itemising four points, the author referred to:

Put the relationship before the mentorship.
Shout loudly with your optimism, and keep quiet with your cynicism.
Focus on character rather than competency.
Be more loyal to your mentee than you are to your company.

As a business coach and mentor with many clients in the Jerusalem region, I fully concur. And I began to wonder why those ten Israeli companies had not reached out to mentors when preparing for their trip to London. If I or a colleague had been working with them, we would have applied the aspects of the four principles, which would have resulted in many of the faults being locked away from the view of the audience.

For example? Take the issue of loyalty. I would have asked what they are prepared to do to secure a deal? What do they need to change? And I would have raised these challenges by giving examples of my own work.

After the presentations, the audience were given significant opportunity to engage with the companies on a one-to-one basis. Clearly, several left a positive impression. Hopefully, commercial opportunities will follow on from this first round.

And yet, I along with others felt that this was an expensive and wasted opportunity for some. And the concern was that for lack of investment in some practical external resources like mentoring, this miss would be repeated in the future.

27 February 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Geektime has just published an invigorating summary on the rise of Jerusalem as a start-up centre.

Jerusalem today is replete with accelerators, including for minority sectors. It has just hosted the OurCrowd conference for 6,000 delegates, looking at microfunding for start ups. Intel is restructuring its plant in the capital. Mobileye, the hottest item in global smart car tech, has its HQ in the holy city.

In other words, Jerusalem has fully entered the game of the “start up nation”. And that is not a phenomena that is slowing down. In 2016, according to IVC Research:

Israeli hi-tech companies raised an all-time high of $4.8 billion, which was an 11 percent increase above the $4.3 billion raised in 2015. The average financing round, which has been constantly rising over the past five years, reached $7.2 million in 2016, and most of the investment deals in 2016 involved later stage companies.

So which countries are capitalising on this economic and commercial growth? Well here are three very different uptakes.

The Germans are flooding in. Last week, the mayor of Cologne visited the Holy Land to prepare for a future delegation that will encourage entrepreneurial exchange. Next month, it will be the turn of a delegation form the economic powerhouse Westphalia to found out how they can benefit.

From downunder, the Australians have taken a different track. There are now 12 Israeli companies listed on the Australian stock exchange, with more expected to follow in 2017. Following Prime Minister Netanyahu’s visit to Sydney last week, the following statement was released.

Bilateral trade between Israel and Australia, as expressed in import and export, comes to $1.1 billion annually (2016). However, this data does not reflect the real scope of trade. Most Israeli companies active in Australia supply IT services, among them many companies active in cyber-security. Since service exports are not expressed in customs reports and in import/export reports, and since a significant amount of Israeli exports to Australia are carried out through third parties like the U.S., Singapore or European countries, we estimate that the scope of trade is closer to $2 billion.

And not to be left out are the Irish. Israel has been promoting a new airport in the desert near Eilat. Ryan Air simply dominates the territory there with 43% of the flights. They flew in about 10,700 travelers in January, at least 30% more than its nearest rival. The company intends to expand its scope to cover other destinations from Israel during 2017.

Jerusalem has a relatively high number of ultra-orthodox (Haredi) Jews. Last week, President Rivlin opened an incubator designed specifically for the needs of this community. Clearly, this very special city still has much more to offer the world.

21 February 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Israel’s economy continues to fizz along, consistently succeeding in defying the moaners and groaners. Last week, I reported how GDP growth for 2016 has come in at a very healthy 3.8%.

And while I have my gripes about how this new wealth is being spread – the gap between the haves and have nots remains excessive – there is much to welcome. So here are four pieces of news that are worth hearing about and allow you consider how others outside Israel can learn and / or benefit as well.

First, let me return to the macro statistics. For example, in the last quarter of 2016, imports dropped 6.7%, as exports gathered pace by 11.2%. And even though the minimum wage has continued to rise significantly as per a government agreement, unemployment has fallen for a fourth straight year and is now about 4.3%. Significantly, the country is seeing more females enter the workforce from the conservative sectors of the Arab communities and ultraorthodox Jewish domains.

What is encouraging is that these results have been achieved despite the continuing low level economic activity in Europe and in America, and despite the internal constraints posed by the defense establishment. It is also worth mentioning that one Israel’s largest exporters, Intel, witnessed sales to overseas drop off 24% due to structural changes.

Now let me turn to the housing market, where prices have risen and risen for years. The fear is of a housing bubble. If it is to burst, there will be a financial meltdown as happened in America.

The numbers from the real estate sector are contradictory. Yes, the quarterly survey from assessors shows an 8% leap in house prices. However, a survey by the Ministry of Finance has surmised a 1.2% drop. What is clear is that there has been a distinct slow down in the numbers of houses purchased overall, especially in the ‘hot opportunity’ areas such as Jerusalem. In other words, there are signs that maybe the market is finally sorting itself out.

Meanwhile, Israel continues to fulfill its title as the ‘start up nation’. For example, Apple returned for its fourth purchase, picking up Realface. The Israeli company has created a security package, based on facial recognition for mobiles. The previous three ventures were valued in total at about US$765 million, although this one is thought to be worth just a few million.

In a totally different sphere, the Israeli economy persists in showing off its openness and diversity.

A new startup accelerator has been launched in Haifa to assist Arab entrepreneurs. The programme targets startups that have completed Series A financing, already developed a prototype product and/or received funding from the government’s Israel Innovation Authority (formerly the Office of the Chief Scientist).

This effort matches a similar incubator in the Nazareth region. Here, a private cooperation initiative has brought together Jews and Arabs.

What would be super encouraging if the government could come up with a full strategic policy for the economy. Now that could make an enormous and long-term positive difference.

19 February 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Israel’s Prime Minister is currently facing two criminal investigations by the police. In a third case, a probe is considering whether his lawyer and others used their priviledged positions in order to push the navy in to purchasing submarines that were not essential.

While I am no fan of the PM, I would like to think that he is innocent. (This is what I had said some years ago about a previous PM, Ehud Olmert, who is now incarcerated in prison). In any event, it will be a big ask for the police to proof that Netanyahu took a bribe and also that he then handed out favours as a consequence.

So, let us assume that he is innocent. What is wrong with that? Well, the answer will eventually lead us back to those submarines.

Step back for a moment and look at which other politicians are under investigation at the moment. In February 2017, there are at least 32 municipalities, where senior politicos are either in prison or under investigation. Roughly half of the allegations are associated with various forms of corruption. About 10% of the cases centre around the theme of sexual abuse. Much of the rest involves abuse of power.

The municipalities include the well known such as Jerusalem, Tel Aviv and Netanya. They encompass the smaller units. They are located in the middle of the country and also out-lying regions.

The common denominator is the centralisation of power in the hands and minds of a few individuals, who operate with few legal (or, apparently, moral) restraints. As for the office of the Ombudsman General, it has only 60 members of staff with which to handle 250 such authorities.

Not good. So let me move onto another story. The Hebrew newspaper, “The Marker” has revealed that 3,037 people from Israel and around the globe donated 46 million nis between 2011 and 2015 to more than one Kenesset member. However, the beneficiaries are frequently to be found on different sides of the political spectrum.

The insinuation is not that the money was offered illegally. The problem is that the donors – a.k.a. vested interests – are hedging their bets. What for me is worse is that the politicians either do not know, do not want to know or just simply do not care!

What I am getting at is that there is a culture of bending the rules, pushing back the norms, and thus pretending that nothing ill is happening. Well, there is a reason that people instituted these laws in the first place – either because corruption had taken place in the past and / or in order to ensure it would not happen in the future.

All this brings me back to those submarines. They were ordered from a company, which has a track history of using bribes to win orders. Well, so do many defense contractors around the globe. However, it is partially owned by a Lebanese businessman, who is a sworn enemy of Israel. Thus, potentially, he is able to lay his hands on a whole load of military secrets.

So, why was the navy pushed into this contract? Why was Netanyahu’s lawyer so heavily involved in cementing the deal? Where is the smell coming from?

Benjamin Netanyahu has been close to the centre of power for the best part of two decades, either as Finance Minister or Foreign Minister. In addition, he has been elected Prime minister of four occasions.

I am sure Netanyahu will claim many successes during that time. And I am bound to add one more – the perpetuation of a culture that fudges the boundaries between good governance and not good. This is a situation where the bad has become the new norm. It is so engrained that its perpetrators cannot see why it is damaging to the society they purport to protect.

16 February 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

There is a well-known joke in Israel about how to make a small fortune. Answer – start with a large one. And jokes are usually coated in a bitter truth.

Often, the odds seem stacked against you – bureaucracy, cumbersome banks, regulation and more. For all that, the spirit of enterprise and innovation in the “start-up” nation remains as high as ever, a message brought home by an inspiring new commentary from Wired.

So today, I want to concentrate on two success stories that reveal the true potential of the Israel economy.

I will start with the story of MobilEye. It was founded nearly twenty years ago by a researcher from the Hebrew University of Jerusalem. By 2007, its initial sales had impressed Goldman Sachs to invest US$100m.

And what does the company do? It creates smart solutions for a car to perform safely. Its website refers to partnerships with 27 global manufacturers. In addition, there are 13 agreements with conglomerates looking into the space of driverless cars. And for now, nobody else can match its abilities.

The latest agreement has landed the catch of Volkswagen, which “will use Mobileye’s Road Experience Management (REM) camera-based map and localization technology ……..to implement a new navigation standard for autonomous driving starting in 2018.”

This latest news sent the price of the company’s stock through the roof. Trading trebled. With a share price of around US$45, the company is thus valued at about US$10 billion, a very handy number for the investors, not to mention the founders.

I must add that the irony of Israel now being a key player in the automotive industry is not lost on its citizens. Remember the 1973 Yom Kippur, which led to the quadrupling of oil prices? Well now Israel a leading technology centre for smart cars. Honda and Volvo are the most recent additions to establish r&d centres.

Moving on to a completely different field, Richie Hunter is a British-trained accountant. Until recently, he headed the McCann Erickson advertising agency in Israel. He has since gone on to create and manage several other successful retail adventures.

In addition, he owns 30% of Holmes Place and its 33 gymnasiums. Annual income is estimated at 380 million shekels – say about US$100 million. Pre-tax profits have grown 25% annually in each of the past three years.

Hunter is now looking to take his keep-fit empire, and I believe that he does participate in charity races, on to the Tel Aviv Stock Exchange. The aim is to raise 400 million shekels, which will allow the chain to treble in size through acquisition.

I have not hidden my qualms about how the Israeli economy is being managed. For all those gripes, it is wonderful to be able to recognize true success and be able to write about it. The Hunters and the Mobileyes are not alone.

14 February 2017

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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

One of the ironies of being a business coach is that I regularly come across people who claim to be happy and comfortable in the work place. Yet I often do not have to dig very far to find a much harsher truth.

So let me introduce you to two interesting articles and a fascinating case study from the Jerusalem area, which together highlight some ways forward.

Amy Morin’s blog on “5 exercises that will train your brain for happiness and success” introduces several helpful concepts. I particularly liked the line about ‘giving yourself the same advice that you would offer to others’. As she says, we so often judge ourselves by standards that are either too high or simply irrelevant.

A more comprehensive item featured an interview with Andy Molinsky, a professor of organizational behavior, who paves the way forward to ‘leave your comfort zone’. Comfort zones are false. They create a sense of happiness, which has no meaning. The only place they exist is in our heads, but not in any reality.

As Molinsky explains, they hide our true competences. He goes on to argue in his new book how so many of us shrink back from networking, public speaking, or even approaching colleagues. And yet: –

What often sets successful people apart is their willingness to do things most of us fear. What’s more, we have the false notion that successful people like to do these things, when the truth is that successful people have simply found their own way to do them.

These themes come up regularly in my discussions with CEOs and others as their business coach. Even though, they have knowledge and training, they shrink back from doing what they know needs to be done, often with the most creative of excuses. It is easier to remain where they are, theoretically happy in that spot, rather than move ahead.

Some weeks back, I was talking with a female entrepreneur, who had been sent for a series of consultations with an expert in her field. Half way through the meetings, she gave up. She cited several reasons for opting out, and the one she stressed referred to the fact that the person had a long waiting list of people who deserved the time more than she did.

Sounds very noble. Now think again. Who is she to make such an assessment? How can she compare her needs with those of others, who she has not met? Does she know what advice she may be missing out on?

So why did she run off? The probable answer is that the expert was beginning ask questions, which were forcing her to go beyond what she had achieved. that raises the thought of not succeeding fully. And that implies failure. This is what I call the “ouch factor”.

The funny thing is that the opposite of success is not necessarily failure!

Meanwhile, my intrepid entrepreneur is happy where she is, wondering what to do next, although not having the support of the expert who probably knows the answer!

13 February 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

The IMF has just handed the Israeli economy the thumbs up sign. And the stats are impressive.

Israel has strengthened its economic achievements in 2016, reduced the debt-to-gross domestic product ratio, and the government’s deficit stood at 2.1% of GDP, compared to a target of 2.9%. Israel’s economy grew by 3.8% and its unemployment dropped to a historic low of only 4.4%.

And the positive signs keep rolling in.

Tax collection in January 2017 was at a record high, even if bloated by some one-off anomalies.
Exports for the second half of 2016 recovered all the downturn of the first half of the year.
Unemployment has dropped again, now at 4.3%.
Even the BDS campaign, promoting an economic boycott of Israel, has had no measurable commercial effect.

So where are the concerns?

I would sum them up under two categories.

First, in the words of the Governor of the Bank of Israel, Karnit Flug, there is a lack of “inclusivity“. In a wide ranging interview, she pointed out the lack of serious investment in primary education, the widening gaps of inequality between different sectors, regulation that helps those who have, and several other concerns.

Personally, all this points yet again to what I see as an economic success, which secures the place in society of the few rather than enhancing the wealth of the overwhelming majority. That does not bode well for the future.

Second, there are clear structural issues that demand resolving. Israel’s transportation system is a mess – continuous traffic jams between cities and within the main cities. As the ports cry out for privatisation, the consumer continues to pay out for their over-manning and burdensome costings. Food companies – local manufacturers and importers – seem to have near monopolies. You do not have to look very far to see how the protected interests continue to be protected.

I am not a lover of government interference. I do believe that central policy makers should facilitate change and improvement that will encourage its population to take initiatives. However, whenever I look at today’s government in Jerusalem, I feel that I am confronted with a coalition determined primarily to hang on to power. Thus, bettering the lives of others is of secondary importance.

Yes, they would argue otherwise. All I want to know is what is the clear and precise economic vision of these controllers of power – a string of sentences not coated in empty political slogans but replete with purposeful direction. Sadly this is lacking. And thus, I fear that the wonderful numbers quoted by the IMF will not be felt by the majority of the country. That is not acceptable.

10 February 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

It is known that Israel is the place for start ups. What is not so well known is why Jerusalem is now one of the world’s leading hubs for bio start ups. The change in the past decade has been phenomenal.

Yes, until recently, one associated Jerusalem with phrases like religion, history, tourism and probably a series of terms associated with conflict. Jerusalem merely hosted a few drug companies, such as Rafa and Teva. The latter had grown to become the world’s largest generic drug firm. It was one of the country’s few almost giants in the medical sector. Unfortunately, the board and management structure in recent years has seen Teva bring home a very poor performance.

Since roughly 2006, the city has deliberately set out to change that set up, specifically by tacking on to the world of bio and pharma. They identified that Jerusalem possesses three core sources of talent. It hosts a world class university, several excellent hospitals and a population of diverse backgrounds yearning to be part of the start up nation.

Just over a decade a passed by. This week, I attended a presentation by Dr Shai Melcer, the outgoing CEO of BioJerusalem, who delivered a very interesting summary of pthe progress achieved. BioJerusalem is the official arm of the Jerusalem Development Authority (JDA), a body which has created a plethora of benefits for the sector, and Shai has been a quite, subtle and highly effective communicator in his role for the past three years. Consider these stats: –

The number of bio / pharma companies in Jerusalem has risen from 93 in 2013 to 149 by the end of 2016.
Other cities in Israel are barely able to sustain their previous numbers.
In the same period, sectorial employment has shot up from 2,581 to 4,085.
The JDA is now helping to plan the new National Institute of Precision Medicine, which will be located in the holy city.
Several new bio incubators have been set up and / or have been expanded in the past five years.
In addition to Shai’s networking group “Bios4Bios“, JLM BioCity has been launched with tremendously exciting results. Both groups have regular meetings, securing opportunities for entrepreneurs and for investors.

There is still much more than can be effected from these efforts. To give just two examples, the Givat Ram university campus and the Har Hotzvim industrial area are providing more land for pharma comapnies. Jerusalem is clearly on the world map in the bio arena.

4 February 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel

El Al is considered the national airline of Israel. It was privatised many years ago. It is has to cope with the high cost of security, as well as the multiple demands of Israeli travelers, who are never considered an easy bunch of tourists.

For years, the joke was that its initials stood for Every Landing Always Late. However, for all that, be you an Israeli, Jew from overseas, evangelical, business tourist or whomever – there is a feeling that you want to travel with the national airline of the Holy Land.

Thus, when I had to make an emergency 2-day visit to England last week, I too wanted to book with my national airline. I went to the website, made the booking, paid, and all seemed to be just hunky dory. That is when the fun started

It turned out that I had made a mistake. I had not realised that I had organized the return trip for 10 days time. No problem. I called up the help line. I was answered quickly by a pleasant sounding male assistant.

A) Yes, I could change. As with many airlines, El Al rips you off – my assessment – for US$120 approx for altering your ticket, a process which takes about 90 seconds. So be it. I had made a mistake.

B) Yes, a place was still available on the return flight I had originally targeted. There is a price difference – Why? Same flight, but one week earlier in the dead month of January – of about US$100. So be it. I had to return as planned.

C) And…wait for it…here comes the juicy bit….as I was staying in the UK less than three nights and / or not over a weekend, there would a further excess charge of ………….US$350! (The original return flight was costing US$477).

As you can imagine, I was somewhat distressed by this. However, I kept my cool. It took me a couple of minutes to make the helpline understand that I might as well just order a one way ticket from one of their competitors. From his voice, he did not seem to comprehend the logic of this, nor why I should jump to another company, nor why I might be a “tad upset” for being ripped off.

Eventually, he began to use his brain. He converted my points………you see, until now I have been a relatively loyal customer…..to cover the US$350 surcharge. Well, I was never going to use them anyway.

All I had left to pay was about US$220. Now get this. That sum included a US$5 handling charge, as this had been a sale made over the phone!!!!!!!!!!! I kid you not.

So, for all those reading this, let us agree. El Al’s policy of this US$350 – for staying less than 3 nights or not staying over a weekend or whatever other pathetic reasoning is used – is what is called in best Shakespearian English as a SCAM. It is nasty. It is the typical abuse of power of defenseless consumers by a large company, just trying to ‘get away with it’. It disgusts me. And it offends all those who I have told the story to.

However, I wanted to be fair to El Al. Therefore, before I wrote this blog, I posted a simple question on a Facebook page, frequented by hundreds of people who fly regularly, both for work and pleasure. I wrote:

I am conducting some research into El Al. Would you say you are pleased with them or have horror stories – price, service, schedule, etc – and why?

I received nearly 100 comments. I counted at least 21 positive responses, many citing security considerations. As for the rest, the overwhelming majority of the statements were full of frustration if not down right damning. I quote four examples:

The last time I flew El Al I went to London and my suitcase went to New York. It took them five days to get it back to me and then it was delivered at 2 am…..Their attitude during the five days the luggage was lost was deplorable.
Many airlines are still using similarly-aged aircraft but through refurbishments are able to provide up-to-date IFE and comfortable seats. El Al made a choice not to do this
Part of the problem is leg room, they do have leg room, the problem is that most of us have two legs. (My favourite comment, that one, MH).
Once they put chicken in my vegetarian meal, I though it was tofu but my daughter tasted it and said it was chicken. I complained but never got any compensation. The last time I flew I didn’t get a meal at all they had run out of veggie meals even though I had pre-booked.

One of the respondents did refer me to a more professional survey, which compared international airlines. El Al turned up trumps in terms of safety, but sucks when it comes to punctuality.

To be fair, the service on both of my flights was very good and attentive. And I have made my complaints known to the company in their standard post-flight survey.

What did the US$350 buy El Al? As things stand at the moment, I have to order several more tickets to England during the coming year. Unfortunately, I guess that I will be joining, very sadly and very reluctantly, that growing crowd of former regularly El Al customers who do their best to avoid their national airline.

2 February 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel

I rarely quote in full from another blog. But rules are there to be broken. And in this case, I think that I have a great excuse.

Understanding modern taxation systems is beyond the capabilities of even your average accountant. To do so in Israel, a country where legislators rarely shirk from complicating the most simplest of procedures, is especially daunting.

My clients often ask me if I have a summary of the salient points. Now, for possibly the fist time, a good acquaintance of mine, Leon Harris, has done the seemingly impossible. He has almost codified the salient point of the Israeli corporate and commercial taxation levels for 2017.

For those of you with business dealings in the Holy Land, I suggest you read in full. For others, comparisons are often helpful. The following is copied directly from Leon’s appraisal.

Businesses:

The regular company tax rate is 24%.

The regular dividend tax rate is 30%-33% for 10%-or-more shareholders, 25%-28% for other shareholders, resulting in a combined tax burden on distributed corporate profits of 45%-49.08%,subject to any tax treaty in the case of foreign investors.

Preferred income derived by preferred industrial and tech enterprises is liable to company tax of 7.5 – 9% in development area A, elsewhere in Israel 16%, without time limit. Dividends are taxed at 4 %-20%. The resulting combined tax burden on distributed profits is 11.2% – 32.8% subject to any tax treaty.

The VAT standard rate is 17%. Exempt dealers must have annual revenues below NIS 98,707.

There are tax breaks for: capital gains of foreign resident investors, trust owned vehicles (TOV‘s), approved rental buildings, oil exploration and production, movie productions.

Real estate:

Home rental income of up to NIS 5,010 per month is exempt. Thereafter, several possibilities exist.

A multi-home tax applies from 2017 to the owners of 2.49 homes or more in Israel at the rate of 1% of a prescribed value but no more than NIS 18,000 per year, subject to various rules and exceptions.

Real estate acquisition tax rates range up to 10% generally. For an Israeli resident purchaser with no other home in Israel, the first NIS 1,623,320 may be exempt from acquisition tax.

The gain from the sale of an only home in Israel by resident individual may be exempt from tax provided its value does not exceed NIS 4,456,000 (in 2016). Otherwise home sales are generally taxed at 25%. A partial exemption applies to the sale of up to two homes bought before 2014 and sold before the end of 2017 by a resident individual.

Foreign expatriates in Israel:

Israel’s tax treaties sometimes grant an income tax exemption for employees resident in those countries but working in Israel.

Otherwise, non-residents working in Israel lawfully in their field of expertise for an employer who are paid at least NIS 13,100 per month, may enjoy a deduction for accommodation expenses and a daily living expenses deduction of up to NIS 320 for up to 12 months as “foreign experts,” provided they are invited by an Israeli employer that is not an employment agency. But employers may be subject to a foreign workers’ payroll levy of 0% to 20%.

1 February 2017

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We have all worked with bosses, who you know are making the wrong decisions. And occasionally, we have wondered about the wisdom of our own actions. However, is there some kind of “internal algorithm” that acts as a key indicator to tell us STOP AND THINK?

Over the years as a business coach and mentor in Israel, I have come across many different types of characters in a thrilling array of commercial enterprises. Just about all of them have brought a challenge that has been overcome. In parallel, I like to keep up with how other executives have coped with and triumphed with the demands of their own bosses – the board, investors or even just the marital partner.

I have just finished an autobiography by Mike Malloy, called the Happy Hack. It is a humourous look back at journalism in the UK over four decades.

The most intriguing part of it was the final section, where, as editor of a large newspaper, he details working with the owner, Robert Maxwell. To recap briefly, Maxwell was Czech refugee, who built up a commercial empire, and was sought after by just about everyone in power. However, his methods that brought success also led to his downfall, that saw him raiding pension funds of employees and on to eventual suspected suicide.

Malloy recalls meeting a psychologist, who asked about Maxwell’s characteristics. By the end of the conversation, the diagnosis was that Maxwell shared similar traits to some very unworthy historical notables. Malloy was cautioned to be wary.

One of the questions was:

Does he (Maxwell) micromanage trivial matters but leave important decisions deliberately vague, and then blame others when they go wrong?

Surely top managers would never act in this manner. But just hold that thought! How many times have we seen this in those around us? How often are we guilty of the same crime? And why do we do it? What issue of pain inside ourselves are we trying to cover up, and do so with such intensity?

Well, the rest I will leave to psychologists, but it is food for thought. Fortunately, most of us are in a position to correct our own fault……once we are prepared to recognise it.

31 January 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Well known case study number 1: Do you remember the story of the music agent who turned down the opportunity to manage The Beatles, citing the excuse that groups with 3 guitarists and a drummer were passé?

Lesser known case study number 2: At least two young Hollywood stars turned down the chance to take the lead roles in La La Land, the film that is set to sweep 2017 Oscars awards.

Now I assume that many of you are thinking: “What crass idiots people can be. These are mega mistakes!”

Well, I agree that an error of judgment was made. If the same people were to repeat these considerations, then I feel that they are making a mistake. And that is when their decision-making process must be called into question.

Back to reality as most of us are not on the level of celeb pop groups and actors. However, we all face such issues regularly and they are equally important for us within our own paradigms. And yet we are quick to place blame, maybe when we should not do so. Here’s what I mean.

I am a business coach and mentor, with many of my clients situated in and around Jerusalem. Whether a classified SME or a larger corporation, I have several CEOs too ready to blame their employees – and sometimes myself also – for things that go wrong. A “mistake” has been made, and it is awful!

Rethink. More frequently, all that happened was that an error occurred. Yes, it should not have done so, but also reflect that it was probably a one-off action. Before rushing off to criticise, I ask the CEO to consider how many times they have thanked their staff for all the good things that these workers have done.

And if it is a mistake that has happened repeatedly, who really is to blame? The person at the centre of the storm, or the senior manager and supervisor? Ouch, mega times over, because this often means YOU, the CEO!

26 January 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Google the phrase “Israel cyber industry” and you will find a mass of descriptions of one of the most powerful cyber armies in the world. It is if young Israelis are born with an extra gene that drives them towards the subject.

If that is not enough, the army and security services provide yet more training, free so-to-speak. So before the age of 30, thousands of entrepreneurial Israelis are pouring into the commercial world of cyber technology.

Only yesterday, three more cyber companies from the Holy Land raised money, primarily from overseas investors: –

Cybellum – US$2.5 million
Secret Double Octopus – US$6 million
SentinelOne – US$70m, and the investors include Ashton Kutcher’s team.

To quote research from PitchBook and released to Bloomberg:

365 Israeli cybersecurity companies raised a total of $581 million in 2016, (a 9% increase on last year, and) about 15 percent of all capital raised by the industry globally. About a quarter of the 65 Israeli cyber start-ups founded last year have already succeeded in raising funds.

Roughly speaking, 60% of Israeli cyber companies manage to raise funds within two years of set up, with an average about US$9 million per round. That figure falls to 21% for other hightech sectors. No wonder that President Trump has asked Giuliani to lead a mission to Israel to evaluate the levels of future cooperation on the subject.

One stat that may have future significance. There is less of a tendency towards exits. It will be interesting to see if that trend continues in 2017.

Where to next? TechCrunch observed that:

Even as the global cybersecurity market experiences a slowdown in investment, the Israeli sector continues to grow. Companies are raising significant capital, even in tough times. Innovation from Israeli companies is a real bright spot as new security fields keep emerging. We are optimistic about the ability of Israel’s cybersecurity entrepreneurs to continue to innovate on a global stage.

25 January 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

This week’s press conference in Jerusalem, organised by the Minister of Finance Moshe Kahlon, was an occasion for celebrations and showing off. Israel’s economy has raked up some impressive achievements in the past twelve months.

Kahlon pointed to a 3-leveled triumph. First, tax revenues have continued the trend since 2012, constantly that bit higher than initially predicted. This in turn has meant that the budget deficit has consistently been lower than estimated – about 2.2% as opposed to 2.9%. And therefore, and this is the big news, the ratio of the GDP to the overall national debt is now down to 62.1%.

To explain: This stat is important because it demonstrates a country’s ability to pay back debts. When too high, it is difficult for both a country and corporates to raise money overseas. To give a comparison, when the Greek and Spanish economies were at their lowest point, their debt ratio went soaring over 100%.

How do other leading economies fair today? Britain has clocked up 89% and the USA 105% – remember how Wshington’s finances were gridlocked during part of the Obama administration. The Euro zone average is about 92% – and recall here that in order to join the EU years ago, 60% maximum was a prerequisite.

In parallel news from Jerusalem, the governor of the Bank of Israel, Karnit Flug, cited several positive reasons at her regular monthly briefly to keep the rate of exchange low at 0.1%.

The low rate of inflation reflects the effect of the (shekel’s) appreciation, and possibly structural change and enhanced competition in the economy. Short-term inflation expectations are below the target, while longer term expectations derived from the capital market remain anchored near the midpoint of the target range…..The picture of real economic activity remains positive. …… Foreign trade data indicate a recovery of manufacturing exports, after a prolonged decline since 2014. The picture conveyed by the labor market remains very positive, and the increase in employment and wages was led by the business sector in the past year.

Yes, concerns remain elsewhere. For example, the housing market bubble has yet to be controlled, although there are some signs of hope, finally. Small businesses are still waiting for politicians to release legislation to help them. Powerful unions continue to control the ports. Food prices are absurdly high, due to a series of interested parties exerting control behind the scenes.

I am sure that Mr. Kahlon’s press conference was a political stunt. That said, let us give the Israeli Minister of Finance his due. The Israeli economy has notched up a series of successes in 2016 that others in the OECD can only dream about.

23 January 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem, Palestinian Society, Palestinians

I have just returned from a visit to a large medical in clinic in Jerusalem. People of all persuasions and languages – pensioners, soldiers, Arabic, English, Hebrew and Russian.

And this started me thinking how some of those in the waiting room might define themselves as Palestinians. Surely there are other areas of cooperation between the sides that the world media just does not allow others to learn about. A quick consultation with Rabbi Google, and I was stunned to learn just how embracing are the joint areas of activity. For example: –

Let us start with a practical example of everyday life. A dog sanctuary, located in Beit Sahour near Bethlehem, is often short of resources. A way has been found by the Palestinian Authority (PA) to enable Israeli animal lovers to help out.
The Negev desert has seen many projects involving both Israelis and Jordanians. Much of the effort is focused around the Arava Institute For Environmental Studies. With nearly a thousand graduates over two decades, “about 29 percent are Israeli Jewish, and about 24% are Arabs from Israel, Jordan and the Palestinian Territories“.
Israel’s scientific partnerships with the EU are well documented. However, I came across this EU sponsored consortium, the SESAME Project – Synchrotron Light for Experimental Science and Applications in the Middle East.

Based in Jordan, it is an independent laboratory formally created under the auspices of UNESCO nearly 15 years ago. The founding members of SESAME include Israel and countries that do and some that don’t have diplomatic relations with each other, including Iran, Bahrain, Cyprus, Egypt, Iran, Jordan, Pakistan and Turkey, as well as the PA.

Water has often been a cause of sharp rhetoric for those campaigning against Israel. Last Sunday, “Israel and the PA signed a water cooperation agreement , the fourth major infrastructure deal agreed to in the past year and a half.” Other accords refer to electricity, mobile phones and mail distribution. Significantly, the document on water takes a long term approach, allowing for parallel changes in population for many years to come.
And finally, if all of that is a tad too gentle for you, yes, cooperation between Israel and the PA exists over security issues. Maj. Gen. Majid Faraj is the powerful head of President Abbas’ General Intelligence Service. He has also been seen as a potential successor to his octogenarian boss. Interviewed by “Defense News” last year, at the height of tensions with Israel, Faraj confirmed that in previous months “PA intelligence and security forces have prevented 200 attacks against Israelis, confiscated weapons and arrested about 100 Palestinians – claims that were not rejected out of hand.”

The past month has revealed a flood of stories from university campuses in the USA and the UK, where Jewish and Israeli students are physically and verbally abused. This is part of the BDS campaign to boycott anything remotely resembling a link to the Jewish State.

As I have frequently observed, such a campaign is nothing short of anti-semitic. It is certainly hypocritical because has less to do with Palestinians and more to do with denigrating Israel. And BDS proponents simply lie, because they will not admit that Palestinians – from top leaders down – are also working, very well, with their Israeli counterparts.

20 January 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Wednesday’s event at the Jerusalem Business Networking Forum (JBNF) was a phenomenal success. The large crowd departed, highly motivated by the amazingly diverse set of practical tips about how to become an entrepreneur. Where to begin?

Actually in Las Vegas. Earlier this month, Israel once again proved its credential as a ‘start-up nation’. As ever, the Israeli pavilion at CES – Consumer Electronics Show – in the American desert was packed with dozens of companies. Personally, I find it ironic that so many applications today from the Holy Land are aimed at the automobile industry, an area of commerce where for decades Israel had been considered the undesirable.

Back in Jerusalem, the JBNF audience was treated to a feast from three speakers, all closely associated with the world of entrepreneurship, innovation and start ups. However, without wishing to detract from the words of wisdom of Harold Weiner and Nathalie Garson, I want to concentrate on the success story of Ran Poliakine. To be more precise, I want to understand what are the key factors that bring about his triumphs.

Ran started life as an arts student at the prestigious Bezalel Academy in Jerusalem. In his 15 minute presentation, he introduced just four of his companies.

Powermat allows you to recharge your phone by placing it on a disk the size of drink’s-coaster. No need to plug it in. All done whilst you are sitting down, relaxing in a public spot. I was stunned to learn just how wide spread this tech is available, as a student from a Chinese business school observed that it is available throughout her country. It can also be found on Virgin Trains (UK), Cadillacs, several Samsung products…..to mention a few clients.
Wellsense has created a wonderful solution for that horrific problem of bed or pressure sores. Whether in hospital or at home, this is one of those awful yet not often spoken about topics. The company has created a fibre that allows the pressure of the mattress to be altered in designated areas, thus relieving distress from sores. It has been installed in thousands of hospital beds across America, including at Mayo clinics.
Years of Water enables poor villages in the Third World to irrigate their crops and to sustain their inhabitants. The Israeli comapny designed and manufactures a “manually-operated, self -sufficient, maintenance-fee purification system capable of producing drinkable water within 10 seconds of deployment“. The stories are phenomenal.
TAP eliminates the need for the computer’s keyboard. After a brief tutorial, you communicate with your hardware or phone via a flat surface next to it. Amazing.

Ran denies having a magic formula, which makes him a successful serial entrepreneur. That said, several factors did recur throughout his talk. And it is not just that he is based in the Jerusalem area.

A) His starting point is the problem itself, which others accept as given.

B) He realises that he is passionate about really wanting to solve it.

C) He does not accept the impossible.

D) He almost always uses the same core team.

In addition, I suppose that his artistic background allows him to be creative. Which leads me to one final observation. Two innovation indexes were published recently, from the World Economic Forum and by Bloomberg. They place Israel – 50% desert and with a population of barely 8 million – at 2nd and 10th respectively. The efforts of Ran’s team are a prime example of this ability.

Because of such teams, billions around the globe are benefitting. Could you imagine trying to stop or boycott such progress? May it long continue.

18 January 2017

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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

I am about to leave for another session of the Jerusalem Business Networking Forum (JBNF). Nearly a hundred people are registered to attend this month’s double event: “Doing business in China and great serial entrepreneurs“.

I will be moderating the second session, a task I have had the honour of conducting for about a decade. And its tremendous fun.

I am a big fan of JBNF, and not just because I was one of the founders. Over the years, our events have seen countless members find employment, many more sell and buy services, investments secured, advisors discovered, and so the list of success continues. Not surprisingly, I regularly plug the events amongst my clientele, whenever I am mentoring or coaching in the Jerusalem region.

Just this morning, I was talking to a savvy CEO of a small tech-based outfit, who was anxiously looking forward to adding extra networking dates into their diary. However, when I asked them what they were going to do at each event, I was greeted by a puzzled look. Not for the first time I was asked to answer the question: “Good point. Just what is networking?”

To clarify: In the first instance, networking IS all about helping others! It is NOT about you walking into an event room, looking for your next victim to clinch a deal.

Consider the following scenario. When you meet somebody new, you tend to assume that they want you ‘sign up with them a.s.a.p.’ It is off-putting if not threatening, to say the least.

However, if you hear somebody taking an interest in you and your background, and then find the approach to be sincere, you are more likely to open up in response. A recent video-blog described this methodology as focusing your emphasis on others, not yourself. Move away from just talking about yourself.

Well, that will garner you lots of fans. However, let us not be naïve. You too need to make a living. So, here is the second rule of networking. Be patient! As I was explained by a very British successful business mentor several years back: “What goes round, comes round”. You will eventually find that others will wish to seek out your services.

Can I prove that last statement? Since adopting these networking principles over the years, they have turned out to be very beneficial. As for my clients, they have learned to garner similar results.

Yes, another word for networking is ‘helping’.

13 January 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Earlier this week, I questioned if it was still possible and even moral to boycott Israel, both economically and culturally.

The events of the past week have taken the discussion considerably further.

Let’s start with Amazon, that multinational with an ability to sell to literally every corner of the world. They have struck a deal with Kornit, a digital printing outfit. Located east of Tel Aviv in Rosh Ha’ayin, the outcome is likely to revolutionise how t-shirts are sold on-line.

Next there is Microsoft, no stranger to cooperating with Israeli tech. Together with Qualcomm, it will invest in the development of Team8, which specializes in cyber services. They will join others like Cisco and Google, who are partnering with this ex-Israeli army intelligence team. One estimation puts overseas investment in Israeli cybertech at 20% of the global scene.

If that sounds rather incredible, let us turn officially to the world of make-believe. This week, Israeli actress Gal Gadot, otherwise known as Superwoman, made one of the presentations at the Golden Globe awards. And yes, the film is shown around the world, except in places that boycott her.

And staying with the theme of arts, Coldpaly will finally have a chance to perform in Israel – two concerts – in November of 2017. One of the biggest acts currently performing on the world circuit, they have found the correct balance to meet the needs of all fans, and thus ignoring the narrow-minded protesters along the way.

And where does that leave BDS proponents? I am not sure, but this package of news is a clear dent in a campaign replete with its moral bankruptcy.

12 January 2017

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

One of the common problems that I see regularly are those company owners and senior managers, who work their guts out, but feel that they leave the desks at midnight with more work unfinished than when they started the day.

And we know the standard responses whenever a solution is suggested.

What will my boss think?
Nobody else can do this.
I can’t be seen to be slacking.
I promised myself that…..this is the last time, or…….that I will do this before I go, or……..
etc

This is self-perpetuating nonsense. And for most people, late night sessions often results in poor quality deliverables and which has taken much longer than normal to complete. So what has really been achieved?

There is another approach that I have developed over the years and tried to impress on my clientele as their business mentor and coach. Call it the “5 point Horesh guide” to being commercially successful without thinking about strategy and without preparing a spreadsheet.

Exercise. There is increasing evidence that regular exercise jolts us into thinking more effectively and creatively. As many of my customers live in Jerusalem, Israel, they have some inspirational scenery to motivate them. By way of contrast, one of them creates training programmes. So instead of extra running, they took up a course in the arts, which has been equally beneficial.
Eat properly. No, this is not a lesson in why to eat broccoli and almonds. Start your day with a full breakfast. Your body is just like a car, which needs quality fuel in it so that it complete its daily journey.
Listen to others. That means networking. Find an opportunity to liaise with others in your field and also those outside your direct interests. It is amazing how insular we can become, and so quickly. “We only know best, as far as the information we once learnt is still relevant!”
Don’t overwork, continuously! Why? Because you cannot keep beating your body into the ground. Just look around you and see how many friends, family and colleagues have come back from a blood test and been commanded to ‘slow down right now, or else’. If you regularly require more than 10 hours to complete your average work day, then there is a need for an immediate review.
After 9.00pm, walk away from the computer. Neurologists have been telling us for years that computer screens often impact negatively on the amount and quality of sleep we strive for.

Little of this has to do with time management. Nor is this blog about strategy. However, if you cannot handle yourself properly and appropriately, do not expect that your assignments will be completed to the standard you desire. You might get away with it once, but it does not work in the long term. That means that the higher up you are in your corporate, the more likely that the organisation may not deliver the correct profit margins, because of you.

And by way of a bonus, here is one last idea. Try to find a way to spend time helping others. It is amazing how this can give you a feel good factor and then how this inspiration can be transposed back to your work space!

Pages

El Al – a brand determined to lose customers

Best business mentors – Best business presenters

An Australian, Irishman and German meet in Jerusalem. Why?

4 unusual items you will not have heard about in the Israeli economy

Has Israel’s Prime Minister committed a crime, or is it worse?

Making a small fortune in Israel – 2 success stories

Happy and comfortable at work? Ask your business coach

Israel’s economy – where is the government direction?

When you think biotech, it is time to think Jerusalem

El Al, a woeful lesson in how to throw away loyal customers

Breaking down the Israeli tax code – is it possible?

One key indicator that shows the manager or boss has got it wrong

The error, the mistake and the business coach

The size and importance of Israel’s cyber industry, globally

Look who’s jealous of Israel’s economy, and why

BDS? Those surprising Palestinians who do not boycott Israel.

Entrepreneurship and problem solving. A lesson from Jerusalem

That is when they asked the biz coach: “What is networking?”

The BDS game. Is it possible to boycott Israel?

5 tips for the boss who works hard, but cannot clear their desk

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