It’s challenging enough being a business owner, even more so when you’re having to deal with endless issues day after day, or trying to grow or even start your business, or simply trying to survive through tougher times.

Dealing with everything that is going on in your business can be a burden, is quite often time consuming, and something that some owners struggle with and understandably so.

Not everyone is good at everything or has the time to focus on all aspects of a business and do it well. You got into business in the first place because you were good at what you do and wanted to make something of it, but running a business quite often involves a lot more.

Most business owners quickly build a support network around them that includes lawyers and accountants, insurance brokers and bankers, to use as and when they are needed.

You may even have a book keeper too to handle the accounts and administration, a time consuming but important function.

But what about support around making key business decisions, about making changes to your business, about exploring new investment opportunities or deciding how to improve business performance and profitability.

Some accountants can take up that responsibility, but not all. I don’t mean that in a derogatory way, I mean that from the perspective of being able to do it when you want it done, not when they can free up time to do it, i.e. they work to your schedule, not you to theirs. (more…)

The break-even point is essentially your minimum target to attain. Once this target is reached, and assuming your mix of fixed and variable costs hasn’t changed, any additional sales will generate a profit. To understand at a high level what that number is, is important, because it can then be broken down into units, products or service packages that are need to be produced and sold to cover your costs.

By default, it forms the basis of your first and ongoing plans. It’s a disciplines all business owners should master.

Why is Break-even point so important?

• It gives you a point of focus, your minimum financial & operational performance level.
• It provides an insight into the characteristics of your true cost base, which costs are fixed and which vary depending on your level of income or production.
• It provides an opportunity to review what optimum mix of products or services works for your business.
• It highlights the financial performance standards that need to be reached to start making money.
• It forms the basis for key pricing decisions and volume considerations in running your business.
• Its an important consideration when looking at new investment and the opportunities that may bring. (more…)

Competitive Advantage

With the inclusion of smart, relevant and efficient systems, quite often the right mix of people, systems and processes, can create greater customer value and a competitive advantage for businesses over their competitors. With that opportunity in mind, it becomes a strategic decision to embrace technology in parts of your business where it can make a difference. For small businesses, the affordability of cloud technology allows them the luxury of smart efficient systems that in the past were reserved for only larger businesses.

Areas where cloud technology could benefit your business!

Accounting – Stock management – Job management – CRM – Data management – Communication-

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So what are the symptoms of failing to manage your cash flow?

• You’re struggling to pay your bills on time.
• You’re struggling to meet the wages bill each week or month, or to pay the rent.
• You’re forced to pay cash for new stock and supplies due to a poor past credit record.
• Some suppliers are paid earlier than they need to be.
• Customers are slow in paying you for work done or products sold.
• Your struggling to meet your tax requirements; PAYE, GST, or income tax.
• You’re leaving your invoicing until the end of the month to send out, thereby giving customers extra days of free credit.
• You have insufficient reserves to handle unexpected additional costs or expenses.
• Business growth is constrained by the fact that any extra resources needed, have to be paid in advance of extra revenues generated. Places extra pressure on existing funds, resources and reserves.
• Your management style is more reactive than proactive.
• You have too much stock and a need to off load quickly, usually at a discount.
• Your fixed costs are too high which limits your ability to react effectively to a downturn in revenues.
• Your margins and volumes suggest you simply aren’t covering your cost base.

While not exhaustive, the list is compelling enough to suggest a catalogue of faults in your cash and business management approach can quickly accentuate your cash flow problems, especially those of small businesses who generally have shallower pockets.

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For some business owners who have run their business for the last 10, 15 even 20 years, it’s sometimes hard to break the mould of cruising from one year to the next. New years’ celebrations are over, resolutions have been set, with some already broken. For businesses it’s not that much different, it still involves reflection and it still involves thinking about the future as you see it. It needs to be an annual ritual, but should be taken further than that and seen as an opportunity to either reaffirm previous goals that continue to provide focus, or maybe it’s time for change.

Planning affects all aspects of business, from business start-ups, to overcoming difficulties associated with growth or survival, to a desire to do things better and more efficiently, through to adventuring into new horizons with new products, services or markets, and on to setting up new projects and even planning to exit your business.

Why should it be the first thing you do?  Because it provides focus, it provides an opportunity to assess the status quo and whether that still fits with your business, it provides an opportunity to evaluate the landscape and identify potential risks or opportunities you hadn’t identified in the past, it provides an opportunity to change things, realign, redirect or discontinue.  It provides a platform to think through the pros (more…)