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EOFY and it's Time to Reset your Business Goals

Jun 27, 2019

Taking the time to reset your business goals throughout the year can provide great value. 

The old saying is that time flies when you’re having fun, but I think that needs to be upgraded to time flies when you’re running a business. Weeks fly by, then it’s months, and before you know it, we’re almost at the end of the financial year and halfway through the calendar year. Yikes.

While a new financial year is a great time to set goals and budgets for the next financial year, the key is not to set them and forget them. Goals and budgets need to reviewed and re-assessed throughout the year.  

There’s nothing more discouraging than setting a lofty revenue goal at the beginning of the year, falling short of it on a monthly basis for the first few months and then feeling like a failure for the rest of the year.

DON’T DO IT. INSTEAD, RE-ASSESS YOUR GOALS, ADJUST THEM, DOWNWARDS IF YOU NEED TO, SO THAT YOU ALWAYS HAVE GOALS THAT FEEL...

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Beware Tax Planning, It's not all it's Cracked up to be

Jun 26, 2019

Don’t Waste Your Money on Tax Planning Opportunities If You Don’t Need To.

The end of the financial year isn’t far away, and whether you’ve made a profit or suffered a loss, it’s time to focus on tax planning. Tax planning is all fine and good, but you have to have the cash flow or funding to reap the benefits of most of the opportunities available.  

Hopefully, you’re aware that as a small business, the ATO allows you to claim a full deduction for the cost of equipment, fittings, computers and so on up to a cost of $ 30,000 per item. 

Superannuation contribution limits are $ 25,000 for employees of all ages.

If you have a family business where both you and your partner work in the business, you have the opportunity to contribute $ 50,000 which includes superannuation guarantee on your wages.

LET’S SEE HOW THIS MIGHT LOOK FROM A CASH FLOW PERSPECTIVE.

1. Assuming that both family members take a salary of $ 90,000, that means...

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Going Solo Seeking Help

Jun 20, 2019

I started reading the book, Lean In by Sheryl Sandberg, and right at the very beginning she talks about how in her early life there were lots of coaches and mentors for the men in the various corporates that she worked in but not so much for the women.

It got me thinking about my life and what I've done and how that makes you a different person. I started off my accounting career, I was the only woman accountant in an office of 50. The other women on staff where in those days secretaries or the receptionist. It's like world of men, young men, the old men partners. Like it was a male dominated world.

You know what, I had no idea about mentors or coaches, that they even existed until many, many, many years later. So last year I was on a panel with American Express with Jo Burston from Rare Birds and I can't remember exactly the name of her other company. She talked about how she had a mentor right from pretty much from the get go in her business and she's in her, I'm guessing thirties...

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Productivity and Profit

Jun 13, 2019

I recently was talking to a client about productivity and the need for being really efficient about how the work is being done. 

This is a service-based business, it's kind of a consulting business, hourly rate, day rate type exercise.They had a job, and just for the purposes of this conversation, it was a $50,000 project. The plan was for $30,000 worth of consulting fees, a certain number of days. The project was done, the delivery was done. The contractor who was doing the days was monitored, and conversations were being had to make sure that the number of days on the job were as per budget and what was planned, and get to the end of the project, and yes, confirmed whatever the number of days were. Yes, those were the number of days. Great. Client thinks project has gone really, really well, we've made the gross profit we thought, and we had a $50,000 project. We've spent 30,000 on our contractors. We've made $20,000 gross profit, which can then be used to pay some overheads....

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How to get Paid on Time when Selling to Small Businesses

Jun 11, 2019

I regularly get asked the question “What do I do with xyz company to make sure I get paid, they owe me $$$, and it’s way overdue?”.

I also have situations where clients don’t pay me on time, and I understand the time and emotional costs in chasing up the payment not to mention the potentially disastrous impact it has on your cash flow and ability to pay the bills. While the Australian Small Business and Family Enterprise Ombudsman has been working hard to get Small Businesses paid faster by large corporations, it’s still up to you when you’re selling to Small Businesses.  

These three key areas will make a big difference to your outstanding invoices.

1. CREDIT CHECKING BEFORE PROVIDING CREDIT.

When we apply for credit with our suppliers, the chances are we’ve had to fill in an application form with details of our financial viability, references and possibly provide a directors personal guarantee. 

We need to apply this same...

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Break Even for Product Based Businesses

Jun 06, 2019

In a product business, you've got a more complicated calculation than service businesses. You probably know that, but the starting point for everyone is knowing how much money you need to pay your personal bills.

Starting off, looking at your home budget, how much money do you need to pay or contribute to the household costs? Rent, mortgage, fire, electricity, utilities. Internet, motor vehicles if they're not in the business, holidays, entertainment, food, that's an important one, and kid school fees, kids' clothing, extra curricular activities, holidays. Everything that you would normally spend at home, you need to work out what that is. If that's split amongst different members of the family, what your contribution needs to be for that.

If you're already drawing a particular set amount out of your business as a salary wage or drawings, depending on your business structure, that's great. But just double check that you have got the right number for the purposes of your household,...

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Do You Know your Minimum Income Required to Pay your Bills?

Jun 05, 2019

We all know that sales are the backbone of a business, but do you know how much income you need to keep the business going? 

When you start out in business the key is to focus on sales, sales and more sales whilst at the same time there are bills, bills and more bills to pay usually requiring you to use some of your savings to pay the bills.

Over time as your business grows, there will come a time when the income is sufficient to pay the bills. Happy days. The next step at this point is to start to pay yourself a salary (or start drawing from the business if you’re a sole trader) and then as the business grows more, you’ll employ staff to support you.

KNOW THE MINIMUM INCOME YOU REQUIRE.

At each phase of your business, it’s important to know what your minimum income is. This is what accountants call break even as it is when your income equals your expenses. However, there is a trap for young players in this definition as it doesn’t take into account...

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For a Sale to be Complete, the Money Needs to be in your Bank Account

May 30, 2019

It’s time to review the payment process in your business to ensure the money is in the bank.

Selling when you get payment at the time of sale is the best possible way to set up your business, and it doesn’t matter whether the sale is cash or on a credit or debit card. But for some businesses, particularly when you are selling to another business, it’s quite likely that you will be asked to provide an invoice and payment will be made at a later date.  

There are a few traps for the uninitiated in business with this scenario:

DON’T JUST PROVIDE AN INVOICE TO EVERYONE WHO ASKS FOR ONE.

Firstly, you should be asking them to complete a credit application where you can ask a series of questions about their business, get directors guarantees and ask for references.

Once you have this information, phone the references, do a Google search and see whether you can find out any information about them, good and bad, take into account your instincts if...

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Introverts need people too!

May 22, 2019

I spent the month of October traveling around, attending conferences, surrounded by people, and at a certain level, that is very tiring. You've got to be on your A game the whole time, talking to people, making new friends, making new connections, introducing yourself, all those things that introverts tend to struggle with. It's just full on. It's all day, every day, and it's very tiring.

Then I've come back, and I'm back in my office, where I work by myself. I have a team but they're remote, so they all work from their homes, and I'm now working by myself again, and I'm finding it a bit of a challenge.

I'm finding that it's a bit lonely. I'm finding that I get through part of the day and I think, "Gee, I want to have someone to talk to."

I want to have that human connection and interaction, and I found last week that I didn't even leave the house.

I do work from home, so it's a separate office. It's kind of in the basement, and the living quarters are upstairs, so it's a...

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Being Organised

May 15, 2019

Organisation is essential. Not just in your business but especially around your numbers. Putting a system in place to get a clear and accurate picture of your numbers at any moment.

I'm guilty of having papers everywhere and of having a desk that it's neatly organized in its piles, and I do know where everything is, but it's still this clutter on my desk, and today I've been forced to tidy my desk because I have a client coming in to see me and that means that I want to make the place look nice. So I have tidied my desk. I now can see the desktop and it feels so much better. I still have the papers, they're still in piles, they're just not on my desk, and when I need them I can go and get them and bring them onto my desk, work on them and then put them back again.

I was thinking about how that relates to our numbers, and it's exactly the same thing. It's about being organized and having particular places for paperwork.

If you're a paper type person, it may be that you have either a...

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