Archive for Business advice

The Ten commandments of cash flow management

Fundamental to business success is sound cashflow management, underpinned by three principles: collect income, increase income and cut costs.

Big business often has an opaque financial department, obfuscating the reality of its cash flows. Here’s where you as the owner of an SME has an advantage: you can rapidly make adjustments to take advantage of opportunity or change direction before hitting a cash flow crunch.  Check out my article published in the Business Review Weekly (BRW).

What SMEs should consider when voting

VotingThe regulatory and economic environment within which we all operate our businesses is influenced significantly by the party in power at the time. Many people vote based on their family history – “My father would turn over in his grave if he thought I voted for X Party”. If you happen to be someone who wants to consider what you are actually voting for, then as a businessperson there are a few areas where you should assess the policies of each of the competing parties.


Employment: As an employer I am looking for who gives me the best options on how to employ and manage my staff in the current economic environment. Flexible but fair- the ability to manage a safe working environment.

Industry: Are any of the parties putting forward policies that are either detrimental or alternatively positive to my business?

International: What impact if any will their policies have on my business and me?

Taxes: Are there any changes in the tax system that will genuinely impact on me?

Consider the real consequences – don’t just take everything at face value. Does a change to the corporate tax rate really impact you if you take out all the business profits, for example? It might affect you on the other hand if you leave the profits in the business. Looking at it from another angle, will it leave more funds in your customers hands and as a result you will pick up more business because your customers have more to spend?

Superannuation and retirement: What will the policies relating to individual,  family, unemployment and elderly support and other policies mean?  Sometimes the impacts can vary between you, the individual, and your business.

As an individual when it comes to superannuation and retirement you are focused on how can you get the most into super effectively and how can you grow the amount more quickly. As an employer you are going to be reviewing how increases in the super guarantee will impact your business. As a business owner you might find that more funds being directed into superannuation might mean less money is now in the hands of employees or employers for other kinds of spending. Or if you are in the financial planning arena you might be seeing improved business activity and potentially more clients.

Don’t forget though you are more than just a businessperson. You live in this country. What kind of a country do you wish to live in? Our taxes go towards creating and maintaining the kind of place we want to live in – and sometimes that might mean your decisions won’t always be exactly what your business interests alone might dictate.

One way or other we all get the opportunity to have our say, and this in my view makes it a place worth voting to look after … however each of us sees that happening.

See you at the booths on Saturday!


How to set up a self-sustaining business

Risk ManagementIt’s amazing how many business owners work significantly harder than their team, have less time off, and sometimes earn less per hour than their own employees.

Having a business that cannot operate whilst you are away is worse than having a job. It’s like having all the risks of being a business owner but none of the benefits….

We all have a limited number of heartbeats but no one knows how many that heartbeat count will be for them. At the end of the day the purpose of owning a business is to give you the freedom to enjoy life – to spend as many of those heartbeats doing what you want to do, when you want to do it, with the people you want to do it with.

Someone said to me just last week “I don’t like having staff”. Unfortunately unless it’s a purely web based business, no staff really means no business. A business where nothing happens if you are not there, is just a job. By definition a business is more than you, more than a job, it has a life of its own.

To enjoy life you need to give yourself  choices. But you can’t do this unless you have set up the business to operate even in your absence.

Here are 6 steps to set up a self sustaining business.

  1. Hire people for the roles you need.  Give them authority to do what they need to do. Hire people better than you.
  2. Put in place an organisational structure that sets out roles and authorities. And surround yourself with people who are good at what they do and don’t just do what you say. You need independent thinkers who contribute ideas.
  3. Establish systems and procedures so that the people have guidelines and clear instructions.
  4. Be large enough. Five years ago I didn’t have enough people in the office ?to back me up for a long period of time.
  5. Have a vision that will guide them in your absence. If they need to make a decision they must understand what you are trying to achieve.
  6. Accept that mistakes happen and ensure that there is a back up plan in terms of ?contact. At the end of the day all decisions do stop with you.

All this is also good business risk management practice. To be viable any business needs to be sufficiently robust for you to have a day off. It needs to be able to keep trading successfully even if you disappeared suddenly for a week or a month due to unforeseen circumstances.

When you are away, don’t ring every half hour. Constant checking shows your team that you don’t trust them and it discourages them from using their initiative to resolve challenges and take responsibility.

While you cannot expect them not to contact you at all, ensure your team is aware that, like them, you are entitled to holidays. They should interrupt your break only when the need to communicate with you is sufficiently important.

On that note team – I’m off to Switzerland. Ring if ….


“But you said “later’!” Understanding your customer’s language

market: traditional paper umbrellasWords have meaning … which is great as that’s their purpose – to convey a meaning. The only problem with this is they don’t mean the same thing to every person who hears them. And when it comes to business and to sales, it is crucial that you and your customers are ‘talking the same language’ if you want to improve communications and maximise sales.

Nothing highlights a problem so effectively as when it occurs while you are travelling in a foreign country, and so it proved for me with this issue of business communication.

Recently I had to visit Myanmar/ Burma. Myanmar has only just begun to develop much of a tourist trade, so unlike regional neighbours, tourists are not yet being heavily bombarded by street sellers as they travel around. On route to the few tourist spots I noticed that if we rejected an offer to buy from a local vendor on the way to visit the sights they would respond with “later?” If we politely responded in any way, then it meant that they would watch for us on our return journey, and chances are we would find a young Burmese face looking at us in all innocence saying, “But you said ‘later’…… you promised me!

This is a country where are very good salary would be $200 per month. The impact of a single $1 is huge to them – and a lot of the wares they are trying to sell you are so cheap that you almost give in. But if you do, it confirms their version of what ‘later’ means. ‘Later’ becomes a commitment that you are going to buy – just that you are going to do so ‘later’.

Now this might represent clever marketing on their part – shaming the customer into a purchase.  Or it might be an example of a genuine misunderstanding of what the word means. Either way, we are seeing a clear disconnect in understanding which is going to effect either the buyer (who might feel tricked into the sale), or the seller (who was confident they had a sale lined up), adversely.

In business regardless of extenuating circumstances (third world country, bad day back at home leaving the seller tired and irritable), the onus is on the seller to get it right.  The purchaser needs to understand clearly what they are getting, what your terms of trade are, feel well treated, and not feel they are being tricked or forced into a purchase.  People more often report a bad experience than a good one, and that can affect your sales to prospective future customers.  A seller cannot afford to confuse or upset the buyer if they are looking for repeat business.

Living in Australia means that we have a wide diversity of cultures in our population. For many amongst us English is a second language, or even simply one of a number of languages. Maybe your customers are mothers with young children in city suburbs, or retirees in country towns, or tradepeople, or first generation migrants to this country.  Each of these groups have a certain kind of culture and a ‘language’.  If you want to ensure that your message is clearly understood in the way you meant it, you need to communicate in terms that the hearer understands and  follow up to check that they have properly got the message and know what the next steps are to work or do business with you.

Catch you ‘later’!




In business as in life, it pays to ask

I am writing this having today been to a funeral.

A funeral of a client and a friend…. someone whom I have known for about 17 years and who, over that time, has been someone that I felt knew how to get the most out of life.

So it’s with both sadness and a lot of thought that I write this.

You see recently he had been going through tough times with the economic climate and the fact that his industry has been hit hard. His stress, some of which was a result of business issue and some of which I can only surmise came from other personal matters, impacted upon his health. Eventually he couldn’t cope and chose to escape by leaving the country. He died from a diabetes attack – alone and overseas.

Up until that sad end he had lived and enjoyed a great life, and for that I am thankful. I hope that is one thing we can all say when we look backwards….. that we left the world a better place by being here.

It does however raise the issue as to why he didn’t reach out for help. Business wasn’t irretrievably bad; there is a great deal that could have been done to help him had he asked. But this time he didn’t ask, he stayed silent until the pressure and anxiety caused him to flee from home, family, business and country – and ultimately from life.

As his business advisors, we could have helped him had we known; there is always a way. In his case the situation with his business truly wasn’t that desperate at all. I have seen – and sorted out – far worse.

So, if you take one thing away from this blog entry it’s this: ask us (your business advisors and accountants), and remember the sooner you ask us the better. Sometimes people feel that they have no one to talk to in these circumstances but they do….. we are here to help no matter the situation.

To Len I say goodbye, you made all our lives richer, and I do count myself lucky to have known and been a part of your life.

To everyone else I say, live life like Len to the fullest – but when you need help, guidance or simply someone to discuss the issues, just pick up the phone and call me.