Tag: planning

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  • 25

    6 signs you need help managing finances

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    So you have managed your money well most of your life and without the help of anyone else. You have your pride and don’t want to seem needy, but you wonder if you could use help managing your finances. What are the signs, and what should you do about them? 1. You have credit card debt Once of the most common signs of trouble with finances is when you are unable to pay off your credit cards monthly and can just about make the minimum repayments. If you can’t close your purse or wallet because of the number of store and credit cards, it’s time to sit down and assess your debts. Maybe seek help from a debt counsellor or a financial planner — and put a plan in place to manage or consolidate debt and focus on repayments. 2. You receive late notices Another common sign you need help is that you cringe when utility bills or rates notices arrive. Many of them have overdue stamps or late payment penalties on them. It’s time to budget properly for these bills. Maybe move to a monthly payment plan so that you do not get hit with quarterly or annual bills that just seem too hard to cover. Do not ignore bills by shoving them in a drawer or leaving them unopened. Most credit providers and utilities are required by law to work with people in financial hardship. 3. Your kindness is abused For older readers or those with too kind a heart, please be aware of the friend or family member who starts to drop around all too frequently — and the conversations always end up with a veiled or outright request for monetary assistance. I know many people who just feel very sorry for others and try to help. This can get out of hand, and your savings can be depleted before you realise the damage. If you feel your trust and kindness is being abused, then talk to another family member just to get a second opinion. 4. You aren’t on top of business finances For those in small business, if your end-of-year financial reports are not received until near the end of the following tax year and the results are a surprise, then you need assistance. While it may all seem fine as long as bills are paid, being in control of your business requires timely reporting. You must be informed so that you can be proactive in your response to fund obligations, such as superannuation and tax payments, equipment financing, and funding the severance pay of a long-time staff member with built-up holiday and service leave. 5. You are using home equity for lifestyle purchases Beware of equity dipping! Examine your debt levels now compared to five years ago. Asset prices have risen significantly in that period, but we find that many people have been dipping into to their mortgage accounts to fund lifestyle assets, such as cars, pools and holidays. You need to be on top of your mortgage by your 50s so that you can start saving for retirement. The last thing you want is to retire with the uncertainty of a mortgage over your home and unpredictable interest rates ahead. 6. You don’t have plans in place Each week, more than 1,700 new cases of dementia are diagnosed in Australia — approximately one person every six minutes. This is expected to grow to 7,400 per week by 2050. Currently 24,700 people in Australia from ages 30-65 live with Younger Onset Dementia. Please plan in advance, as it is often too late once you have lost capacity. I believe everyone over 18 years of age should have an Enduring Power of Attorney who can act on their behalf in relation to financial matters should they be incapacitated. There are a number of great sites for more information on this and other estate planning matters. To learn more: Australia: The Royal Australian College of General Practitioners have a great state-by-state breakdown for Australia. New Zealand: Family Justice Website provides the required forms for specifying power of attorney.  Don’t let your pride or excuses get in the way of seeking help, and don’t despair because there is assistance out there. You are not the first and will not be the last to need help getting back in control. It is important to address financial issues upfront, but it is never too late.  *source: Summary of dementia statistics in Australia by Alzheimer’s Australia

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  • 12

    I am a small business getting big – How do I manage my growth?

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    Many successful small businesses get big without even realising they are no longer a small business. The most important thing is to recognise and accept that you are now bigger and can no longer run the business the way you used to. Then, and only then, can you take the necessary actions to manage your growth: Seek help Many small business owners are great at their own trade, service line or profession but just haven’t had any experience in running a bigger business or managing staff or finances. If that’s the case, it’s necessary to face this head-on by seeking help from experts in the areas where you are lacking. This may include a great accountant who is prepared to help beyond tax and accounting, a practical lawyer, employment specialist or a really useful business coach. Yes, this will cost money, but it’s better that than the consequences of getting it wrong or experiencing total business failure. Get training There are some great short courses in areas like financial awareness, corporate governance, systems and business planning — and some of these are subsidised by the taxpayer. These can be generic or tailored specifically to your needs, so take a few days away from your business and up-skill yourself in those all-too-important disciplines rather than remain in the dark. Keep up with reporting and KPIs It’s no good relying on annual financial statements that are way too late and only show historical performance, such as reports that simply compare your current sales with those from prior years. It’s absolutely vital to know what’s currently going on in your business. For example, is your gross margin holding up? Do you have more customers or fewer? What is the average sale in dollars? How much working capital do you have tied up in the business? How is your labour productivity? Which overheads have increased or decreased? In conjunction with your accountant or business coach, decide what reports to prepare and the Key Performance Indicators to monitor. Your Key Performance Indicators — typically no more than a dozen — should track those things which are critical to business success. Hold monthly meetings The best place to consider those reports is at formal monthly management meetings attended by all key team members. If sensitive financial information is being discussed, perhaps split the meeting into two. There should be an agenda for each meeting, together with formal minutes and an action plan for getting things done where remedial action is required and the allocation of tasks to specific individuals who are held accountable for achievement at future meetings. Spend time planning Unfortunately most small business owners spend more time planning for their family holidays than they do in their business. They drift with the tide like flotsam and jetsam, being reactive to circumstances rather than proactive. It’s necessary to be decisive and make things happen the way you want them to. For example, what plant and equipment are you going to need? How many staff? What growth in sales are you looking for, and where will you be operating from, and so on? So, as the first step, hold a planning day with your key team members — and maybe your advisers — and craft a plan for the future. Stay involved in budgeting and forecasting Getting a clear idea of your financial future is an important part of planning. The first step is to prepare a Profit and Loss budget. Unless you’re a new business, start with the previous year’s figures and adjust accordingly for things like cost increases, growth and planned changes. MYOB software is very handy for budgeting, as at the touch of a button, you can export last year’s actual monthly figures to a spreadsheet. Having finalised your budget, you can move on your cash flow forecast by adding GST to receipts and payments, moving these to the months they’ll be paid, and adjusting for non-cash or cash-only items like depreciation, loan repayments or drawings. Yes, these tasks can be delegated to your accountant, but I find that business owners understand their businesses much better and get a lot more out of the process by staying involved. So don’t let circumstances and your business dictate events; take control of your business and manage your growth proactively.

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  • 05

    How to grow your business in 6 bold steps

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    Lets face it: growing a thriving business is not easy. If it were easy, then we would all work 10 hours a week and be millionaires. Growing your business is difficult. It takes time, discipline, and hard work — there are no shortcuts. You need a structured, disciplined approach that you must consistently do each and every day. However, most business owners are not naturally disciplined, consistent and focused. We tend to jump from one crisis to another — and from one good idea to another — only to end up growing in spits and spurts. If you want to achieve sustainable, consistent growth then you need to follow a sustainable, consistent process. It’s a science, not an art. It’s not easy, but if you follow these 6 bold steps, then you will be well on your way to steady growth in your business. Step 1: Pursue passion, not money If you don’t enjoy what you do, then you will never truly get sustainable, long-term growth. If there’s no buzz or excitement as you jump out of bed in the morning to get ready to go to work, then growth will elude you. The fastest growing businesses are driven by owners who absolutely love and feel passionate about what their business stands for and what good it can bring to their customers. Step 1 is to take a reality check and ask yourself as the business owner: “Do I really enjoy what I do and what my business does?” If you answer with anything less than passion and enthusiasm, then it’s crunch-time for you. Maybe you need to close down or sell your business. I know this can be a difficult and confronting decision to make, but life is short. If you don’t love your business and all the baggage that goes with it, then get out. Love what you do, and your business will thrive. Grudge what you do, and your business will dive. Once again, these are difficult but critical steps. I said this wasn’t easy. Step 2: Use micro-plans Now that you have decided you’re really passionate about your business and have found your calling, Step 2 is all about harnessing that passion into a structured plan. I don’t mean a full-blown business plan. I find most business owners, whilst they start with good intentions in creating a business plan, tend to shelve it after a few months. The main reason is that business plans are too long and are focused too far into the future. If you want to create an immediate growth plan, then you need to focus on what you need to do today — or this this week or next month — rather than for the next 12 months. Daily and weekly focus, tied to a loose plan is far more effective. You can’t control what happens next month or next quarter in your business. Plan for growth by focusing on what you need to do today and this week. Ask yourself: What customers must I call today? What prospects am I going to visit this week? What new products must I start selling now? When this week will I increase my prices? These short-term, micro-plans are all highly focused on the here and now and are designed to get quick and immediate results. Step 3: Constantly innovate Innovate, or your business will stagnate. Businesses that keep doing the same thing, selling the same products and services, run the risk of being left behind when the market moves on. If you are not constantly looking at ways to innovate and improve your business — how it operates, the products, the delivery — then I guarantee you that your competitors will be innovating what they are doing. Look across your entire business and see how could you continuously improve what you are doing. What efficiencies can you create? What product lines are getting old and outdated? Where is the future in your industry in terms of customer needs and tastes? Where will you need to position your business in the next 3-5 years to capitalise on future growth opportunities? These are the critical questions that you as the business owner must find the answers to. If your business looks, feels and does the same thing it did 3 years ago, then you could end up being left behind. Business growth doesn’t come from standing still and playing it safe. If you want to grow, then you must constantly innovate what your business does. Step 4: Pivot to change direction So you have decided you love and are passionate about your business. You are focusing daily and weekly on micro-growth plans. You have done a complete analysis of your business and have identified some areas where you can innovate what you do. But nothing has worked. Growth has continued to elude you. You start to get frustrated. It’s like trying to lose weight. You’re following the exercise plan; you are following the recommended diet; and you are slogging away in the gym — but the weight isn’t coming off! What do you do? Most business owners do nothing. They just keep slogging away, hoping things will change. There is no magic formula for getting business growth. There are a million magic formulas — you just need to keep experimenting, adjusting, reinventing, and pivoting until you get the formula right for your particular business. Most business owners think persistence will solve all their problems and that eventually, given enough time, money and effort, they will crack the “growth code.” But they don’t. Be persistent, but be persistent in changing direction or pivoting until you get it right. You may need to pivot so much that your business may require wholesale changes or pivot completely into a totally different industry. Once again, these are 6 bold steps to business growth, and you need courage to do whatever is required to find, chase, then nail-down business growth. Step 5: Repeat Growth can be fleeting and usually comes and goes. Nothing lasts forever, and business growth is the same. That’s why it’s critical that as a business owner you keep repeating these steps so far. Just because you’re passionate about your business today doesn’t mean in 5 years’ time you won’t fall out of love with it. Will the great innovative ideas you have created today guarantee sustainable business growth and new opportunities tomorrow? You need to repeat the process. The pursuit of business growth is a constant cycle, and you must never stop. Step 6: Always keep an eye on the exit door Every business has a shelf life, or it will reach a plateau that could last for years. It’s a given, and as a business owner, you must have an exit plan. I see too many business owners trapped for too long in their business, waking up each morning and not wanting to go to work. By then, it’s too late. No matter how many times you repeat these steps, you are beyond turning around a growth slump. Most businesses end up going backwards, and, out of shear desperation, the business owner sells the business in a fire sale just to get out. Always plan to exit your business. The best time to sell, for the maximum sale price is when it’s growing, not when it’s declining. Time your exit strategy with care, when your business is expanding and not when it has plateaued or is in decline. In summary, chasing business growth is a structured, disciplined and scientific approach. Don’t leave it to chance and hope. If you want to grow your business, then follow these 6 bold, but rewarding steps, and get ready for taking your business to the next level. You might also want to read: 10 ways to increase your profit margins

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  • 15

    Does your accounting firm have a marketing plan?

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    The unexpected question The next graduate arrives, interviewing for a position at a small to medium-sized accounting firm: your accounting firm. This graduate will be one of the top performing employees for the employer of their choice.  It takes you a while — nearly fifteen minutes into the interview, to fully realise that they are actually interviewing you. Methodically, the graduate carefully crafts their answers and questions. When you look up from your notepad, direct eye contact takes a fraction of a second to re-connect: this graduate is absorbing the environment, the workspace and your body language. As you take notes, this graduate is also checking boxes on their own mental checklist: assessing you as a partner and the firm as a whole. They don’t fit into your standard interview guide or assessment criteria: they are impressive in every aspect that a young aspiring graduate could be. They are energized and prepared to embark on a exciting career — just not with your firm. You think you lost her when you answered a simple question about marketing: “We don’t do marketing. We don’t need to do it. We rely on word of mouth, and it brings in enough work.” You were also hopelessly prepared for the discussion about your aspirations for the firm: it’s growth, talent management and career paths. Although you help others plan and grow their businesses, you neglect your own business in need to generate your day-to-day cash flow, pay your current employees and convert those word of mouth opportunities. What about the marketing? Marketing is an essential part of your business. You must market. Every touch point is a customer experience that helps shape how your brand is viewed and determines if potential and existing customers choose to spend their next dollar with you. If you have not done so recently, set aside your next team meeting to white board the following way of looking at your business: A fresh look at your brand: Regardless of the size of your business, you need to establish a brand identity and tone of voice to ensure brand consistency. Any good marketing book will help you shape your brand to appeal to your target market. Your logo, values, premises, standard of dress (corporate or casual) and way you answer the phone all need to be consistent with your brand. Does your current branding appeal to the type of customers in your overall strategy? If you specialise in medium-sized businesses in a certain industry, your brand should appeal to your target market. New client acquisition: What is your marketing plan for new clients? Have you set a target? Are you planning to grow? Develop a plan to reach new customers beyond traditional advertising. What conference are you speaking at or what topic is your white paper on? When did you last generate a newsworthy story about your business that the local press covered as a news item, instead of a paid advertisement? Existing client base: Your existing customers already know you. Do you have a loyalty or referral program? Should you? Look at potential ways to better help your customers by up-selling or cross-selling additional value added services to meet their needs. For example, are they aware you also offer a new product or service? How are you marketing this into your existing customer base? Client retention & win-back: Do you have a process to identify at-risk clients or know which ones you want to win back? Is there a communications plan to re-engage with lost clients or those on the brink? Your team should discuss this. Brand hygiene: This is the basic of maintenance of your branding values and image across everything you do. I think of this separately to building your brand — this is more than consistency of outdoor signage, business cards, websites and letterhead. Brand hygiene extends into everything you do and the overall customer experience. If you are about quality, accuracy and professionalism, you can’t have unclean toilets, worn carpet or torn magazines on the coffee table. Your brand needs to permeate through everything you do. It is not just a logo; it is every aspect of the customer experience. Internal Communications: Large companies have internal “comms” teams that specifically handle internal communications. They write content for and design newsletters, intranet sites (employee-only websites) and marketing materials and programs for employees. This is important, and having structure to it helps, even in small teams. How you — a partner, senior or team leader — communicate internally has a powerful impact on how your employees see the firm. It will impact staff retention, recruitment, and staff morale. Marketing channels: Selecting smart, strategic ways to use the right mix of media channels for your business goes hand-in-hand with taking a fresh look at your target market. Test strategies and learn approaches for the channels that suit your target market. Get your marketing mix right: be strategic and measure the return on investment. With the proliferation of media options these days, television, print, radio and digital advertising are more and more affordable. Of course social media has become a game changer, and content creation may play heavily into your media mix decisions, together with the use of events, sponsorships and outdoor marketing. Recruiting: I began this story talking about an interview and will end it in the same way. In developing your unique marketing plan, put yourself into your customers’ and employees’ shoes (potential and existing) and take a good, hard look at yourself. If you don’t invest in marketing, doesn’t that mean you are not planning to grow? Are you happy with the status quo? Others are networking — should you be as well? In my fictional introduction, both the accounting firm and the interviewee were marketing themselves to each other. Not having a marketing plan to grow your business or investing in marketing says something about you. Are you on social media? Should you be? It says something to your target market if you are — or are not. While in this example it is a bright employee that was lost due to poor marketing (the message received was we are not planning to grow), it could well have been a major new client walking away. Your brand promise and marketing must be tangible in the customer experience, or you will lose credibility with your customers.

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  • 29

    Holiday plans or business plans?

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    Most people spend more time planning their holidays than they do planning their business. I strongly believe this statement to be true. Many business owners fail to plan because they get too busy. They are also often focused on the wrong things, such as running a tight ship, rather than investing in the appropriate resources to enable the business to grow. The upshot of this is that in many cases, the owners run out of hours in the day to hold regular Board or management meetings, and it is extremely rare to find a small business with the discipline to hold an annual planning session for the year ahead. Going back to the original statement, you would have to think that business owners do not spend much time planning their vacations either (if, indeed, they even take them!). So my conclusion is that the amount of time allocated to planning is pitiful. I considered calling this article Strategic Planning for SMEs, but I had a change of heart, fearing that the term Strategic Planning might scare off many of the readers of this blog. Let me make something very clear; I am not advocating that you write a 39-page business plan. Most business plans are not worth the paper they are written on and rarely see the light of day once they have been written. What I do think you should be doing is holding an annual planning session, preferably facilitated by an independent professional. (For example, if you have a proactive accountant, he or she could play this role very effectively.) The desired output of such a session is a concise action plan with clear accountabilities for implementation.

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  • 24

    What could possibly go wrong?!

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    She’ll be right ... or will she? My favourite bit of brainstorming is coming up with everything that could conceivably go wrong with a project, product, campaign, launch, business plan etc. Apart from being great fun, this process really helps you anticipate and avoid pitfalls you might otherwise never consider. So let’s give it some thought. Great minds When I worked full time for an advertising agency, there was a business development manager with a psychology degree and a passion for brainstorming. (He’d probably cite something like this.) As I had a reputation for ‘unusual ideas’, he often invited me to his brainstorming sessions.

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