Business Tips – 21 best business advice tips for success by small business owners who are killing it – news.com.au

21 best business advice tips for success by small business owners who are killing it – news.com.au

Here are 21 great business tips to get your enthusiasm back and get you focused on what you want to achieve in your business, by Emma Reynolds at news.com.au

STARTING a small business is a dream for many Australians, but it can be daunting.

Here, entrepreneurs who are killing it in a range of industries share their best piece of advice for making your company a success.

1. Deliver a consistent customer experience

Damian Cerini, owner of cycling tour business Tour de Vines, says you need your business to almost run itself before you look at growth. “The thing about working for an employer is that the business model is already set, it’s about the execution of the idea, whereas a new business is about testing the idea first and developing the systems.”

2. Add a personal touch

Angus Askew, co-director of commercial asset financing company Magnolia Lane Financial Services, says: “In our industry like most service industries everyone is essentially selling the same thing, you’ve just got to do it better. Our number one goal when dealing with a new client is to establish a relationship and make them feel special. Make sure you are remembered. We make it our priority to see all of our customers face to face. Create a rapport as this is what will result in repeat business and an income stream for life.”

3. Leverage social media

A strong marketing strategy is essential in every industry, says Anthony Kittel, director of manufacturing firm REDARC. That means social networking — on LinkedIn, Twitter, Instagram, Facebook or all of the above. “Our brand is everything, so whatever we can do to promote that brand and consumer awareness is critical.”

Author and Flying Solo editor Kelly Exeter says a less frantic life made her more productive.

4. Write your own business bible

Matthew White, whose firm Ergoflex sells memory foam mattresses, says the volume of information available can be overwhelming. He recommends writing ideas and tips in a notebook or tablet as they come up. “It has helped me make some major decisions, and also saved me hours of searching for something I’ve read somewhere.”

5. Focus on your specialty

In the first few years, there can be a lot of pressure to diversify your offering, says Paris Cutler, director of cake decorating company Planet Cake. “Stick to what you do best and do it better and with more focus than anyone else.”

6. Outsource the things you don’t do

Resist the temptation to chase work outside your offering, and use a specialist to fill in any gaps, says Rhys Roberts from accountancy firm Viridity. “I outsource my HR, my IT, much of my marketing and more. The time you free up you can spend doing what you are good at.”

7. Aim high and be persistent

Determination is one of the vital qualities needed when you start on the long road of setting up a small business. Rochelle Miller, co-founder of fashion retailer Another Love, says: “Believe in yourself and your strengths. Don’t take ‘no’ for an answer. There will be bumps along the way, but everything has a solution or another option.”

Consultant Andrew Griffiths thinks about ways to improve his business each day.

8. Embrace a life less frantic

Kelly Exeter, author and editor of small business community Flying Solo says it’s all about finding the right balance for you. “I am learning that I don’t just need physical space to thrive, I need mental space too.”

9. Follow your own path

Designer and illustrator Beci Orpin says she’s not naturally business-minded, but has always worked really hard and built up a strong folio of work. “My business is all about me: my style and what I create, so an important part of developing that was staying true to myself — not worrying about what other people were doing.”

10. Take time out to think about how to improve

Use your best hour in the day to consider ways of moving forward, advises Andrew Griffiths, a small business author and consultant. He does this first thing every morning. Then, each Friday, “I find a quiet place and ask myself a question: ‘How is my business better this week than it was last week?’”

11. Harness your ‘keystone habits’

Entrepreneur and blogger James Clear says we should find the one or two habits or routines that make everything else fall into place. “Improving your lifestyle and becoming the type of person who ‘has their act together’ isn’t nearly as hard as you might think.”

Life coach Kathryn Hocking researches what competitors are doing.

12. Practice mindfulness

Freelance journalist and editor Jodie Macleod says it increases productivity, reduces stress and improves memory and focus. “Mindfulness is when you are aware of your thoughts, feelings, sensations, breath and everything occurring in the present moment, without attaching judgment to those observations.”

13. Every setback is a stepping stone to success

Lucinda Lions from branding agency Slogan Creator says it’s important to stay positive wherever possible, and see feedback, not failure. “I remind myself tomorrow is a brand new day, a new opportunity to think differently and make better choices.”

14. Hire from within your networks

When Sarah Wilson from I Quit Sugarbegan feeling overwhelmed with work, she decided to get an assistant. She put a call out to her community, knowing taking someone on would involve sacrifice. Five years later, they still have a successful working relationship. “Start out small and then leave the invitation open for expansion.”

15. Keep it manageable

Kate James, start-up coach at Total Balance, says it’s important to remember that it’s not all about non-stop growth — bigger isn’t better if you’ve stopped enjoying what you do. “You need to define your own version of success. Mine is that I need to love my business.”

Sarah Wilson says you need to know when to ask for help.Source:Supplied

16. Know when to work for free

Vanessa Emilio from Legal123, says sometimes working for free is worth it. “‘Free’ doesn’t mean offering an entire job or product for free. It could mean a free initial consultation, free component of a project or complimentary muffin with every coffee.”

17. Stay excited and believe in your business

SEO copywriter and consultant Kate Toon says start-ups should think about clients’ needs and possible issues and create rational responses to persuade them your business is the solution. “Inject warmth, professionalism and even humour, where appropriate. Being human beats boring every time.”

18. Learn to say no

Recognise when a client has unrealistic expectations and nip it in the bud early, or consider referring them on, says author and media commentator Andrew Griffiths.

Try a formal, structured response and keep returning to it. Try, “Thank you for the opportunity, but we are so heavily committed we can’t give your project the time and attention it needs.”

19. Create fans

If you’re on a tight marketing budget, think about how you can trigger word-of-mouth interest. Warren Harmer of The Business Plan Company mentions a small florist that did this brilliantly by 1) Offering quality; 2) Providing value; 3) Inspiring team members to love their job and clients and 4) Creating a physical environment that excited their market.

20. Turn competition into inspiration

Life coach Kathryn Hocking suggests you research what competitors are doing to help identify what makes you unique. Your relationship doesn’t have to be adversarial: they could be a mentor, partner or friend. “Focus on your own purpose and connect with peers that have similar values and who inspire you to greater levels of success.”

21. Know when to take a ‘dream detour’

Sometimes it’s hard to know whether to grab a fresh opportunity or stick to your path. Business mentor Lynda Bayada says you need to outsmart your head so you can listen to your heart. “Give yourself space and trust yourself. And you’ll find that’s half the battle won.”

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Business Tax Tips – Reducing Red tape in Australia

Reducing Red Tape In Australia

Did you know there is a current 4 year plan where the ATO is working hard at reducing red tape in Australia for tax payers?

The ATO says at Reducing red tape – Reforms to the Australian Taxation Office –

In the 2015–16 Budget, the Government announced it will provide funding over four years to deliver an improved experience for clients in their dealings with the Australian Taxation Office (ATO).

Red tape will be reduced and future administrative savings delivered through investment in three foundational initiatives: a digital by default service for provision of information and making payments, improvements to data and analytics infrastructure and enhancing streamlined income tax returns through the my Tax system for taxpayers with more complex tax affairs.

The package of service improvements supports the Government’s commitment to reduce red tape and forms part of the Government’s digital transformation agenda.

This measure delivers on the Government’s election commitment.

Click for links with information on the legislation

A detailed website on tracking the initiative is https://www.cuttingredtape.gov.au/  – It says –

The Government has committed to reducing the cost of unnecessary or inefficient regulation imposed on individuals, business and community organisations by at least $1 billion a year. An important part of this commitment is the development of a Framework to review the performance of Commonwealth regulators.

This Framework isn’t just for regulators. It will benefit business and the community, including individuals. Find out more.

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Business Finance 101 – What is Working capital – and how it can be used

What is Working capital – and how it can be used

Working capital is defined as the difference between current assets (CA) and current liabilities (CL) at a specific date. The CA and CL amounts are found on your company’s balance sheet. For example, if your company’s balance sheet has current assets of $150,000 and current liabilities of $120,000 then your company’s working capital is $30,000.

Working Capital = Current Assets – Current Liabilities
Normally we want cash and assets that can be turned into cash within 12 months, such as Inventory, debtors who owe the company etc (ie “Current” means within 12 months) to be GREATER than Current (12 months) Liabilities.

But with a significant amount of working capital, a company can still have a period of cash shortage if its current assets are not turning to cash. As an example, a company with most of its current assets locked up in inventory. Or if a company has a large accounts receivables that are not being collected, but even still, this large working capital situation isn’t much immediate help when you can’t meet the payroll run!

There are also other financial ratios use the working capital components such as the current ratio, quick ratio, accounts receivable turnover ratio, and inventory turnover ratio.

Good management means keeping watch on current assets (receivables and inventory) to keep the cash coming into the bank.

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Cashflow Tips – I’m making a profit but no cash – why does this happen?

Cashflow Tips – I’m making a profit but no cash – why does this happen?

Is your business making a profit but no cash and you wonder why?

This may be because company reports like Profit & Loss may show you are making a profit but have no cash because profit is an accounting record using revenues and expenses, (accrual accounting) which are different from the company’s cash receipts and cash disbursements (cash accounting).

Put another way, there is a difference between revenues (invoiced sales) and receipts (actual cash receipt of payment of invoices (banked)). There is also a difference between expenses (purchase orders still to pay) and expenditures (actual payment of purchases, and overhead expenses).

Examples

1. As an example a new company that sells $10,000 to its clients in a month and the clients are given 30 days to pay. The company will have $10,000 of revenues in its first month, but the cash will not be received until the second month. If the company’s expenses are $7,000 in the first month, the company will report a profit of $3,000 but will not have received any cash from its clients. It may not have been paid, and it may not have paid its expenses either.
2. Another company might report a profit of $60,000 in its first year, but during its first year it uses $65,000 of cash to acquire equipment that will be put into service at the beginning of the second year. This company will have a profit, but will not have the cash.
3. Other times cash is paid out, but the profits are not reduced at the time of the payment, because they don’t pay for expenses but pay loans, payroll PAYG or super or for stock – they go to the Balance Sheet and include prepayments of insurance, payments to increase the inventory of merchandise on hand, and payments to reduce liabilities.

Keep in mind that Profit does not equal cash: It is as simple as that!

Profit is the accounting record of what is left after you have made sales and raised all expenses. Of course, remember there is tax on the profit as well. The remaining amount is then reinvested back into the business or distributed to the owners.

Cash is what the business needs to operate every day and can come from 5 different main sources — profit, selling assets, contributing your own personal funds, bank loans or new investor money.

Cash and Timing

The key to remember is that you don’t spend profit in our business — you spend cash, and it is all in the timing.

There are 2 timing situations to be aware of –

Firstly as the old saying goes, you have to spend money to make money. To make a profit, you first need to purchase goods or services to sell, so you will need cash before the sale is made. By selling your product or service at a higher price than what it cost, you make a profit.  The point is you need the cash before you get the profit, or get credit and pay the supplier later!

Secondly (that catches most businesses) is providing credit to customers. The longer the customer takes to pay, the longer you have to wait for the cash, and in the meantime you have wages, rent, stock and other expenses to pay. This is where the trouble begins and often ends.

Focus on what matters – cashflow

You need to focus on not only profit but also what drives your cashflow. If you have regular loan repayments, rent and other expenses that have to be made on time, then you will need enough cash to cover these while you wait for your customers to pay. Keeping track of your accounts receivable and following up on late payments will definitely help your cashflow. The other thing to remember is if you can get credit from your suppliers, this may mean that you don’t have to pay for stock until you have sold it — again making a big difference to your cash flow.

The business needs to be profitable to stay in business. Be careful of sacrificing profits to generate cash. Offering discounts to pay early will definitely help your cash position but will reduce your profit.

The best management is to make sure you have enough cash buffer to cover ongoing expenses. Having a finance facility (overdraft, credit card) can help that will tide you over during a cash flow shortage, but this will cost in the form of fees and interest, which again, will reduce your profit.

Remember profit does not equal cash!

See more help at Cashflow Tips

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Bookkeeping – Holiday/Annual Leave Payout deducts from the Accrual, but Holiday Cash Out doesn’t – Why? (Updated Article)

Bookkeeping – Holiday/annual leave payout deducts from the accrual, but holiday cash out doesn’t – Why?

( 31 Aug 2017 – Information corrected, due to Sue’s advice in comments below – I learn new tricks every day, even when right before you !!! Thanks Sue!)

Client Skype’d – Hi Paul, I’ve had a look and our special Pay Category, Holiday Cash Out doesn’t seem to be deducting from the balance of Holiday Leave Accrual. It’s not listed under entitlements under the Payroll Category List window.

Answer – Yes it is NOT linked to the accrual entitlement because it may only have one wage category (can be) linked (at a time to a) to the pay wage category – the Holiday/Annual Leave wage pay category that is regularly used, is linked to the Holiday Accrual and deducts from the accrual – if you go to Entitlements, and then open the Holiday Leave Accrual, you will see down at the bottom it says it is linked to Holiday Leave.

Your Holiday Cash Out is not an a usual entitlement (only with some awards) – it will be under the Wages Payroll Category to be used when paid :), but it has no effect on the accrual if not linked – until linked.

Client Skype’d – Thanks. So how do we reduce the accrued holiday leave by the hours that have been paid as a holiday cash out which is allowed in the award, up to 2 weeks per year? Can we put it as an entitlement that gets deducted or can we manually deduct from accrued holiday pay?

Answer – You tick it to link to the Holiday Leave Entitlement Accrual at the bottom for linked cateories! It needs be manually deducted – the more automatic way is to set up the Hol Cash Out as a separate entitlement, and choose to link it to the Holiday Cash Out wage category.

BUT – If the 2 weeks are optional and it is linked to the Accrual, it will adjust the hours WHEN Holiday is cashed out – automatically adjusted for you! it will be difficult to balance with the regular Holiday accrual if not taken every year – it becomes messy – if not used regularly but occasional years.

(with this correction of the info, past Cashed Out Holiday still needs to be adjusted to the Holiday Accrual as follows –

I would adjust the Accrual in this way – do a paycheque with ZERO hours, and in the lower lines at Holiday Accrual, adjust the holiday accrual with NEGATIVE the hours cashed out, and write a note in the memo for the reason and date the cash out occurred, there should be no super generated, ensure any other allowances etc are ALL ZERO also – then record, and this pay updates the accrual and there is a clear record with note and date for the reason for the adjustment.

Client Skype’d – OK I will try that. There’s only a few done so far. So will need to do that for those ones. May make an adjustment today so these are all done now and up to date. Thanks.

Answer – Yes, do as a pay, then it updates and provides a note and proper record on the staff pays record.

Client Skype’d –  Thanks. Is the other option to use the “Unused Holiday Pay” for Cashed Out pay as well?

Answer – NO Unused is for a different reason – when they leave and still have Unused Leave owing due to them on leaving. The Unused Holiday can ALSO be linked to the Holiday Accrual will ALSO NOT decrease the Holiday Accrual, but it is used to be clear what the pay is for – and when you enter the Termination Date in the card it closes OFF the entitlements.

Client Skype’d –  OK thanks. Thought I’d check. Will org. Cheers.

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Business Tax Tips – Taxable Payments Annual Report – Building Industry

Taxable Payments Annual Report – Building Industry

Are you a business in the building and construction industry? You will probably need to report the total payments you make to each contractor for building and construction services each year.

If you’re a business that is primarily in the building and construction industry, you need to report payments you make to contractors if both of the following apply:

• you make payments to contractors for building and construction services
• you have an Australian Business Number (ABN).

Contractors can be sole traders (individuals), companies, partnerships or trusts.

You need to report these payments to us on the Taxable Payments Annual Report by 28 August each year.

Activities and services that are considered to be building and construction are broad. Some examples include architectural work (including drafting and design), certification, decorating (including painting), engineering, landscaping and construction, project management and surveying.

Payments you need to report

Report only payments you make to contractors for building and constructions services.

Contractors can be sole traders (individuals), companies, partnerships or trusts.

If invoices you receive include both labour and materials, whether itemised or combined, you report the whole amount of the payment, unless the labour component is only incidental.

The definition of building and construction services is broad – it includes any of the activities listed below if they are performed on, or in relation to, any part of a building, structure, works, surface or sub-surface:

• alteration
• assembly
• construction
• demolition
• design
• destruction
• dismantling
• erection
• excavation
• finishing
• improvement
• installation
• maintenance (excluding the maintenance, service or repairs of equipment and tools)
• management of building and construction services
• modification
• organisation of building and construction services
• removal
• repair (excluding the service or repairs of equipment and tools)
• site preparation.

Get more details from the ATO website HERE             

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