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5 alternatives to word-of-mouth marketing for small businesses

Wed, 11 Jul 2018 23:00:00 GMT

"I get all my business from word-of-mouth marketing."

"I'm a referral business."

"I don't have the budget for marketing."

"I'm just too busy to market my business!"

If you find yourself saying any of the above, it's likely that you experience considerable peaks and troughs in your small business.

Why?

Because it means that you are not actively pursuing marketing to generate leads and opportunities for your business. There is no steady flow of new business to help even out the peaks and troughs - so you are either flat-out busy or twiddling your thumbs.

When times are good, it seems like everything is in place and your business is a resounding success.

More often than not, however, the leads dry up and there is nothing churning away in the background to generate new opportunities. No mechanism is in place to bring new prospects in to help you grow.

But the bills still need to be paid.

That's why EVERY small business should be investing in marketing, regardless of size, turnover, or budget.

There's nothing wrong with word-of-mouth leads. In fact, they're wonderful! It's just that you are reliant upon others. You are not in control of your own destiny. You are essentially playing a game of hope.

Word-of-mouth leads and referrals should be considered the icing on the cake – not the cake itself . Build a strong 'base' from the right 'ingredients' and you have a creation that will sustain your business for years to come!

But if you just have the icing, there will be periods when you inevitably go hungry!

Here are five ideas that will help you bake something to create a consistent flow of opportunities to protect your business from famine in the years ahead…

1. Build a client referral marketing system

Word-of-mouth marketing needs systemising or it is just a game of hope. It's all well and good waiting for referrals to come to you but you can achieve much more by implementing a simple system

To do that, go through these steps:

2. Get smarter with LinkedIn

LinkedIn is the world's largest database of professionals. Somewhere in the region of 500,000 professionals use the platform. It's free to use – or low-cost for paid membership.

Depending on your type of business, it's possible to make LinkedIn the hub of all your marketing activity at very low cost. It will take a bit of time but if you focus on the following areas, you will have a head start on the many other LinkedIn users:

The two mistakes that many business owners make are:

LinkedIn is a superb marketing platform for small businesses to generate a steady flow of leads if you get the strategy right as per above.

3. Put resources into SEO marketing

Search Engine Optimisation (SEO) marketing can be time-consuming – but it is essential for getting found by your target audience.

SEO is the process of optimising your online content for the search engines (Google, Bing, Yahoo etc.) This includes your website's standard pages, but also its blog posts, and anything else you have published online-such as videos-that can be found through 'organic search'. (Organic search means 'free search', as opposed to paid search such as Google AdWords or Facebook Advertising).

Understand the basics of keywords and SEO – then hire reliable and recommended SEO professionals to look after your campaigns.

It is unlikely that you will have the time or expertise to effectively manage your own campaigns but your SEO professional should be able to guide you with on-page SEO (keyword placements), off-page SEO (link-building etc.), and the content required to improve search rankings.

If you take informed and consistent action, results will come. Think long term with SEO – and if you are largely targeting your local market, be sure to optimise well for local search.

4. Reach out with email marketing

If you have spent time and resources to connect with prospects online (on LinkedIn, Twitter, etc.), and offline (at various networking events), you will rapidly build a large database of potential clients.

How do you reach out regularly to these prospects and stay top of mind?

As well as through your activity on LinkedIn, you can get your prospects' permission to include them in your newsletter marketing and in email marketing campaigns for other offers you may present from time to time.

Well-written email marketing campaigns have the power to convert prospects into customers – or at least move them along the sales funnel so they are closer to signing up.

Get professional copywriting assistance here to increase open rates, click-throughs, and conversions.

5. Build authority with content marketing

Nothing beats regular, original, relevant content for improving the relationships with prospects. And, in the long term, that's what marketing is all about.

Why?

If you focus on the main questions going through your prospects' minds, you establish authority status. It builds trust and confidence and you will be top of mind when they are ready to sign up for the types of services you offer.

That may not be today or tomorrow – it could be six months down the track or even longer. But this longer-term marketing activity will pay dividends in the future, as part of a multi-pronged marketing strategy.

The types of content you can focus on include:

Market your small business – no excuses!

There are literally no excuses for not marketing a business.

No time? Make time.

No budget? You don't need it.

Don't know how? You do now.

Don't need it? You will.

Got enough leads? You soon won't.

Marketing is the key to bringing a steady flow of opportunities in – and leads are the lifeblood of any small business. With a good sales system to convert leads, you have new revenue, healthy cash flow, and growth.

But generating leads can be an awkward subject for accounting and financial professionals with little to no marketing or sales experience. It's easier to rely on leads coming to you than to go out hunting for them.

Don't confuse marketing with sales: marketing is the process by which you bring in leads. It doesn't need to be salesy. Sales is the process of converting leads into revenue.

Remember that your word-of-mouth leads always have the potential to completely dry up. Such passive marketing is dangerous and stressful for any small business owner: suppliers still need to be paid and things can quickly go south if the cash flow dries up.

Get proactive and market your business on multiple fronts and you have a much better chance of not only maintaining a healthy cash flow but growing your business for the future.

If you need assistance with developing marketing for your small business, get in touch with us and we'll be able to point you in the right direction, as we know a number of marketing specialists in different areas.

What are 3-way business budgets - and why should you be using them?

Tue, 12 Jun 2018 23:00:00 GMT

Any business that isn't planning for the future is planning to get left behind.

While most business owners know that budgeting is a critical part of their planning, there is some confusion about which components should be included in a budget.

There are three critical elements. Together, they provide the oversight you need for your business - and the key targets to work towards.

They will allow you to make informed decisions based on the reality on the ground, and realistic projections of what will happen in the future.

Just like a pilot monitors a flight plan and may need to change it according to prevailing conditions and advice received from air traffic control, your budget becomes your business's path into the future.

Remember: what gets monitored gets managed . Budgeting is about preparing for what lies ahead. This is rarely steady and constant, so it needs to be consistently monitored and forecasts managed according to the reality.

This will help you gain an edge over the many businesses out there that are not so agile or prepared for what's around the corner.

Here's what your three-way budget should include:

1. Profit and loss

Budgets should begin with a detailed look at profit and loss. What are the costs and revenue-drivers in your business? When these change what is the impact? How many existing customers do you have and what is the average invoice value, for instance?

Use past and present information from management accounts and financial statements to work out your anticipated profit for the next 12 months; and be aware of industry changes that might affect the business.

NOTE: Profitable businesses can go broke! When budgets are solely designed as profit and loss predictions, potential problems can be overlooked; alone, the projected profitability of your business doesn't consider managing growth and it won't help you avoid cash flow problems.

There's a saying, "Profit is theory, cash is fact," which leads us to the second element of your three-way forecast…

2. Cashflow forecast

One of the main reasons that small businesses fail is poor cash flow management.

As already noted, it is possible to make a good profit but not have enough cash in the bank account to pay bills or repay loans.

Unless the profit is converted to cash in your bank account (e.g. you are invoicing regularly, customers are paying you promptly for services delivered, and your money is not tied up in stock), you may be at risk of insolvency. After all, you pay staff and bills with cash -the money in your bank account-not with the profit figure that appears on a financial statement.

So cash really is the 'life blood' of a business. By adding a cash flow forecast element to your budget, you create more consistency in your business. You will make it more 'future-proof' and be better equipped to ride things out when cash flow hits harder times. You are prepared and can take corrective measures in the business before a full-blown crisis develops.

Planning ahead for the timing of your likely cash inflows and outflows allows you to identify the need for a capital injection, an increase in credit or to boost your cash flow in some other way.

3. Balance sheet

A balance sheet provides a projected statement of assets, liabilities and owners' or shareholders' equity and is the final piece of your budget jigsaw. A simple way of describing what your balance sheet summarises is: what does the business own (its assets), what does it owe (its liabilities) and what's the difference in those amounts, which is the equity.

You may have heard the phrase, "a healthy balance sheet." This refers to a balance sheet where the assets well exceed the liabilities and the business is able to comfortably meet its obligations.

It's important to track the health of your balance sheet because looking only at your revenue and cash flow and not taking into account your level of liabilities would be like only caring about how many goals your team scores, and not keeping an eye on how many goals are scored against you. The "for and against" ratio matters in business, just as it does in sport.

The three parts of your three-way budget complement each other. Together, they provide a complete picture of the financial health of your business AND your future targets on three fronts:

How often should you revisit your 3-way budget?

The purpose of your three-way budget is to try to realistically predict future numbers and to give you targets to work towards.

You may not get this right immediately. In fact, it's likely that you'll need to revisit it multiple times before you become adept at accurate forecasting.

Even then, things change. So it's a good idea to review the budget on a monthly or, at least, quarterly basis.

You'll need to recognise and interpret differences between actual and forecast results, and decide on actions to keep your business on track.

In business it can often become a case of 'not being able to see the forest for the trees,' where you get caught up in the day-to-day operational details of your business, and lose sight of the bigger picture and how your business is travelling compared with expectations.

That's where it pays to have an independent advisor help you:

Just as any sport involves players, coaches and scorekeepers, so does business. You and your team are the players in the heat of the battle, and you need not just independent scorekeepers but also the support and guidance of an experienced coach.

That's where we come in for you, as that support.

Are you prepared for the future?

What happens if your circumstances change? If costs go up or sales and revenue goes down?

Changing circumstances are a given in any business. While it's impossible to predict the future, it's how you react to change that will ultimately determine the success or failure of your business.

Rather than simply estimating figures based on last year's numbers plus a few percent growth, put work into a three-way budget. This will help you take the necessary action and adjust your business practices according to actual results and future changes .

This type of budget will provide a full overview of the impact on your business and you'll be in a position to make informed decisions based on this new 'reality'. It may even help you to receive financial backing from banks or investors.

You will be able to pre-empt any number of scenarios and assess where your business can improve, avert problems before they develop into crises, and take advantage of growth opportunities that arise.

This is the real power of the three-way budget. Implement it in your business and see what a difference it makes to your decision-making, motivation levels, performance, and ultimate success.

How to pay less tax, boost your super and ease into retirement

Thu, 24 May 2018 23:00:00 GMT

Two things first up: (1) If you want to (or have to) work past the age of 55, you need to read this article; or (2) If you know someone else who that applies to, please forward them this article or a link to it.

They'll thank you for it.

There are now ways you can ease into retirement, tap into your super before you fully retire, save tax and potentially boost your super as you do it.

Before this legislation came in, people had to fully retire and leave the workforce before they could access their super. These days, the 'cold turkey' approach to retirement where all of a sudden one Monday you're fully retired, is far less common.

It makes sense, for many, to instead gradually transition to retirement.

So continuing to work at least part-time past the age of 55 makes sense for many people.

It also makes sense for our economy. With the ageing population and fewer people in the traditional working years age bracket, the government has introduced various legislation to encourage people to stay active in the workforce.

One of these measures is called Transition To Retirement (TTR).

TTR allows you to wind back your work hours and reduce your income from that source, but then offset that with an income stream from your super.

The purpose of this article is not to give advice as such-as there are a number of variables to consider for each person's circumstance, so you will need to sit down with your advisor here to discuss TTR further-but rather to make you aware of the main considerations so you can determine if you qualify.

Either way, that's a nice deal.

People who are unaware that they can access a TTR pension while they continue to work past age 55 stand to pay many thousands of dollars of tax needlessly .

Here's how you can avoid that happening to you or your loved ones…

Firstly, some terminology: Your 'age pension age' differs from what's called your 'super preservation age'. The latter is age after which you're allowed to access your super.

You can use this ASIC Super and pension age calculator to work out your preservation age. Just enter your month and year of birth and then click the Female or Male button.

Do that now, then continue…

You have hit your preservation age; but

You are under the age of 65; and

You are still working.

If you can tick all those boxes, you can withdraw 4% to 10% of your super each financial year.

Note that you cannot withdraw money as a lump sum.

Also note that not all super funds allow you to do this, and if that's the case with your fund(s), you might need to change super funds if you want to take advantage of the TTR measures. We can help with that process.

So if all three of those above points apply to you, you should contact us as soon as possible to make a time to go through the specifics of your circumstances, your super fund's TTR options and a number of other very important details. We'll make it easy for you and will make the paperwork happen.

There's more we could share with you here about TTR, but rather than burden you with all those details, we figure that's what you want us to handle for you!

TTR is one of the smartest retirement strategies available. It makes sense to take advantage of it if you can.

Key Person Insurance: Could your business survive losing one of its key people?

Tue, 10 Apr 2018 23:00:00 GMT

As much as you try to share skills, knowledge and information in your company, you probably have some people who are key to your business' success.

It might be a Director or the CEO, whose vision made it a success in the first place. It might be your star salesperson, or someone in your IT area who knows the system backwards. It could even be someone who doesn't create any revenue but does a fantastic job of boosting your company's reputation or perhaps running your admin and back office systems.

Now, what would happen if you suddenly lost one of those key people?

And if you think it would never happen because they love your business so much, think again. Sure they may not resign. But they might decide to start a family and want to leave the workforce. Or what if they suffered a major illness or injury, or even passed away?

In addition to the obvious issue of lost productivity and their contribution to the business, you also have to spend time (and money) to recruit and train a replacement. And losing such a key person in your company could even affect your reputation and credit standing.

Could your business survive until you find someone who can fill their shoes?

Key Person Insurance can give you the financial support you need while you're getting back on your feet. It can offset both your costs (e.g. hiring temporary help or recruiting and training a replacement) and your losses (e.g. not being able to do as much business until they finish their training).

It can also help with:

And you can take out a policy (which is usually tax-deductible) on anyone you feel is a key person in your company.

You can set the policy amount to be anything from $500,000 to $10 million. Of course, the amount you specify will depend on the size of your company and the person you're insuring.

The amount can be calculated in a few ways, including:

What if the key person happens to be your partner in the company? Yes, the Key Person Insurance may well cover the finances involved in buying your partner's shares from their family. But do you really want to be negotiating a deal at such an emotionally trying time?

Having a Buy/Sell Agreement in place can save everyone from a lot of anguish. It's a legally binding agreement that determines what will happen to each stakeholder's shares if they suffer a major illness or injury, or pass away.

It has two parts:

Before you take out Key Person Insurance you should first speak to us (contact Bill Pugh or Donna Reberger at 02 9545 3599) about the overall approach and details required for a proper assessment and taxation/financial planning advice. You need to make sure you get the cover you need without paying for the cover you don't need and guidance.

After all, it may well be the key to your company's survival.

Your step-by-step guide to setting up an SMSF

Sun, 11 Mar 2018 22:00:00 GMT

Are you worried that your hard-earned money is not working hard enough for you ? That your dream of your retirement spent on the golf course or with loved ones on the beach is fading fast?

Think you can do a better job yourself - by managing your own super?

You may be right. A Self-Managed Super Fund (SMSF) may provide an excellent opportunity to better build wealth for your retirement. But only if you get the right advice and set it up correctly.

SMSFs are not for those who just want to dabble in investment. They are serious undertakings that can have serious legal and financial ramifications for the years ahead.

Consider the pros and cons first and, if you do decide it's the right move, make sure that all the I's are dotted, and the T's are crossed.

As the name suggests, an SMSF is a superannuation fund that members run for their own benefit. It is for the sole purpose of providing retirement funds and can be set up for between one and four members. These members become trustees of the fund.

Rather than contributions being paid into a fund that is managed for you (as with a traditional super fund), all contributions are managed and invested according to what you (and the other trustees, if applicable) decide.

In the past decade, the number of SMSFs has grown significantly: perhaps an indication that Australians have become more financially savvy.

The main benefit of a self-managed super fund is that you achieve more control over your finances and your investment decisions.

But a word of warning: this is only a benefit if you make suitably informed decisions that are able to grow your wealth.

With a standard superannuation fund, professional fund managers generally make the investment decisions on your behalf; they are trained investors.

By running the fund, yourself, you will need to invest some of your own time and expertise into it. Even then, most people will need to avail professional advice to ensure that they are making sound investment decisions.

You also probably want to have at least $100,000 -$200,00 in your fund to consider running an SMSF or have to build up to these levels.

Many people transfer their assets into an SMSF and then use the fund buy residential or commercial property. This is with the aim of it increasing in value, thereby growing their investment.

But what happens if you make a poor decision? Like with any investment, there are no guarantees that it will grow.

Another potential advantage is that your SMSF can include up to four members or trustees. This means that you are able to pool resources to achieve more potential investment 'power'.

However, it also makes decisions more complex as the needs of all members must be taken into account with each decision.

Make sure that your SMSF complies with all legislative and regulatory frameworks, as laid down by the ATO. Failure to do so can lead to heavy penalties.

Ensuring that you set your fund up correctly will also make it eligible for applicable tax concessions, as well as making it easier to manage once it's up and running.

You can set up an SMSF for individual trustees or with a company serving as a corporate trustee.

Each structure has its own set of requirements and fees (as well as penalties for non-compliance) that should be discussed with a professional advisor before committing.

You will also need to decide on a name for your fund and, if applicable, for the company that you register.

The trust deed is a legal document that covers how to establish and operate your SMSF. It details all the members and trustees, as well as the rules and regulations of the fund, and investment and contribution information, as well as wind-up procedures.

This is a document that you can refer to when making decisions about the fund. All trustees must sign and date the deed.

To establish your trust, the fund must have assets. This can be a token amount until members are able to roll over their existing benefits from elsewhere or make contributions themselves.

All members must sign the trustee declaration, confirming that they understand their duties and responsibilities.

It must be signed within 21 days of becoming a trustee (or director of the corporate trustee); a signed copy should be kept on your files.

Your SMSF must register through the Australian Business Register – and you should elect to be regulated by the ATO.

Once registered, your SMSF will be listed on Super Fund Lookup. This will allow other funds and your employer(s) to check your fund's eligibility to receive rollovers and contributions.

Opening a bank account in the fund's name allows you to manage the fund and for members to pay in cash contributions or rollovers of super.

Note that this account should be completely separate from individual members' bank accounts.

Make sure that you provide each member's Tax File Number (TFN).

If a TFN is not provided, your fund will be unable to accept personal contributions from members; the fund will also be liable for more tax on their employer contributions.

If you need to receive employer contributions into your SMSF, you will need an electronic service address to enable it to receive SuperStream data.

The employer will need to know your ABN and bank account details, in addition to your electronic service address. We can assist you with this.

It usually makes sense to roll over benefits from other funds into your SMSF. This will then centralise your assets in one place and allow you to use them to carry out your fund's investment strategy – whatever that is.

It may sound strange to prepare an exit strategy at the beginning – but this will avoid any confusion. What will happen if and when the fund winds up and how will members be paid?

Some funds lay out this specific information in the original trust deed.

Deciding on an SMSF is a big decision - not to be taken lightly. Weigh up the pros and cons and get the advice of a professional adviser or accountant to see if it's right for you. Few people can manage everything themselves.

SMSF advisors can also help you with the initial start-up process. Get this right so that it is fully compliant and easier to manage once it's up and running.

An SMSF expert can help you avoid delays, disappointments, or penalties for non-compliance. But remember to choose your advisor wisely – as members are still responsible for all aspects of their fund.

Exit Plan: How a succession plan can save your business (and protect your family)

Wed, 07 Feb 2018 22:00:00 GMT

While everyone wants their businesses to be successful and operate for a long time, you may not necessarily want to remain at the helm.

At some point, you may want to pass the business on to your children, or to someone else in the company. You may want to sell your share to your business partner. Or you may want to sell the business to another person or company, and retire on the proceeds.

Ideally, you will choose the timing and method of your exit from the business. However, the way life unfolds sometimes, business owners do not always have a choice in what happens, or when.

For example, what would happen if you or your business partner suddenly passed away or became incapacitated?

That's a stressful enough time for everyone as it is, without having the business (and the financial well-being of the families involved) suffer as a consequence.

To ensure the future of your business, and to cater for loved ones, you need to plan for a range of possible exit scenarios.

This is what's known a Business Succession Plan .

Every business needs a succession plan, just as every person needs a professionally prepared Will and Estate Plan.

Horror stories happen. Don't be one of them.

You may not think you need a succession plan. After all, you may have children old enough to take over the reins. Or perhaps you have people in your company who'd love to run the business.

But without a business succession plan, anything could happen.

Imagine this scenario...

A business with two partners or shareholders suddenly experiences the loss of one of the partners in a car accident. Without a succession plan in place, the surviving partner automatically goes into business with the deceased partner's spouse. They might have had a great relationship on a personal basis, but running a business together and making financial decisions changes the nature of the relationship, instantly. The partners may not agree on the direction of the business, the growth plans for the business, or on how much various people in the business should be paid.

It's a recipe for conflict.

Or perhaps the surviving spouse wants nothing to do with the business and wants to be bought out of the business as soon as possible.

But what if the surviving business partner does not have the available funds to buy the remaining share in the business, despite being offered a very reasonable price.

They're stuck. The business--and their stress levels--will suffer.

So, what can you do to avoid such horror stories?

So who will be your successor? Will it be someone in your family? A senior employee of your company? Another business owner?

While you may want to "keep it in the family", it might not be such a good idea with research showing that more than 65% of family businesses fail in the hands of the second generation and another 20% fail when the business passes to the third generation.

Your successor needs two things above anything else: a passion for the business and the skills to run it. And while you can bring them on board early to learn the skills, passion is something you can't create for them. They either have it or they don't.

If it turns out someone in your family is passionate about the business, and they have the skills needed to run it (or can learn them), then great. But if that's not the case, you may be better off handing the baton on to someone else.

So when should you create your business succession plan? According to Craig West, chief executive and president of the Australian chapter of the Exit Planning Institute, you should have started about two years ago.

In an interview with Startup Smart , West says it can take up to two years to get a business ready for sale, and to find the right buyer.

"It takes 18 months to two years to exit successfully. If you do it quicker, you'll leave money on the table," he says.

So if you don't have a succession plan in place for your business, you need to get started now. (If you're not sure how to get started, get in touch so we can help .)

And like nearly all business documents, a succession plan needs to be kept up-to-date. Families grow and mature, employees come and go, and your plan needs to take all of that into account. There's no point in planning to appoint a son who's lost interest in the business, or a senior employee who has since left the business. Review your plan annually.

But first things first… you need to document your Business Succession Plan.

We can guide you in developing an effective succession plan and also ensure you have insurances in place that, for example, can fund the purchase of a deceased or incapacitated partner's share in a business.

A well thought out and properly funded (insured) Business Succession Plan will make sure the business can continue to operate as smoothly as possible, and conflicts between surviving business partners and spouses, avoided.

You've worked hard to build your business. Don't let it all fall apart once you move on.

Social media hype or substance? Are Twitter and Facebook relevant to business owners?

Sun, 07 Jan 2018 22:00:00 GMT

Isn't Twitter a waste of time? Isn't Facebook for the kids?

Not anymore.

It's true that Twitter and Facebook started out with very 'non-business' objectives. The founder of Twitter actually did invent it so you could tell everyone you were going to the shop to get some milk; and anyone who has seen the movie The Social Network knows about the very lowbrow origins of Facebook.

Other social media platforms include LinkedIn, Google+, YouTube, Pinterest, Instagram, Snapchat, Foursquare, Quora, Tumblr, Vine, Flickr and MySpace, among others.

In recent years savvy marketers and business owners have worked out how to use social media VERY effectively for communicating with the market place, in a new way.

Traditional marketing, like advertising, is a monologue . A one-way conversation, coming from the advertiser. There's no interaction in a TV or newspaper ad.

Modern marketing-including social media-is about engaging in a dialogue with people. It's about creating two-way, value-adding conversations (albeit, online ones) with people who are interested in what you do: your 'followers', 'friends' and 'connections'. It's about helping them, listening to what they have to say, and letting them know about useful, relevant information.

This creates a sense of community and stronger relationships. Certainly stronger than any advertising can ever create. We have entered a whole new era, and social media is not just reshaping the marketing landscape, but it's changing journalism and media, and is even acting as a catalyst for social change, allowing people to combine their collective voice. We've witnessed that in world affairs, for example in Egypt where Facebook was used to organise protests.

If you're still not convinced that your business should actively get involved with Twitter, Facebook, LinkedIn, Google+ or other social media platforms, consider the flipside.

Can you afford not to at least monitor Twitter, for example, to see what is being said about your industry, your business, you? Using social media management software like TweetDeck, HootSuite or SproutSocial you can efficiently monitor your various social media accounts using the one app to display your feeds from a number of different platforms, notifying you when people mention you, your brand, reply to you, 'favourite' or 'like' your updates and posts, and so on.

We think it makes sense for any business to monitor what's being said about them-and about their competitors-in social media.

We also know of many success stories of small business owners who are using Twitter, Facebook and LinkedIn as a very effective way to generate referrals and to drive traffic to their website.

Social media works if you learn how to work it.

Obviously the purpose of this article is not to teach you how to use these tools. That would take a book or complete course, not an article.

Its purpose is to open your mind to the possibilities-if it hasn't been opened already-of how your business can learn to use and benefit from social media as part of your business' marketing mix.

To start you along that learning curve, take a few minutes to watch this Socialnomics video . The statistics mentioned in it are phenomenal.

At the 1-minute mark you'll see a quote by best selling author Erik Qualman, "We don't have a choice on whether we DO social media, the question is how well we DO it."

And at the 3:50 mark, "Social Media isn't a fad, it's a fundamental shift in the way we communicate."

We are just starting on the path of learning how to best use social media, and by no means are we proclaiming any degree of expert competency. (Yet!)

The question, we believe however, is not whether your business should use social media, but how should your business best use social media.

How to ensure your family gets all your assets when you die

Mon, 04 Dec 2017 22:00:00 GMT

Let's face it: no-one likes to think of death, especially their own. It's not exactly a great conversation starter, is it? This might explain why so many people end up "dying Intestate" which means they die without a will and, as a consequence, have their assets distributed according to State law.

Sadly, the way State law distributes a deceased person's assets among family members can often be a lot different to the way a deceased person wanted their assets distributed

It can create a lot of unnecessary stress and conflict within a family.

So unless you're living as a hermit with no contact or relationships with others, and you also don't have a single possession to your name, you need to not only think about preparing a will, but do something about it.

And you need more than just a will. You need an estate plan.

In NSW you will also need an Enduring Power of Attorney (EPOA) for financial decisions and Enduring Power of Guardianship (EPOG) for personal lifestyle decisions which come into effect when you loose capacity to make decisions for yourself. Each state law is different.

Why having a will is not enough

If you have a will in place, you may not think you even need an estate plan. After all, your will spells out your "Who gets what" instructions regarding your estate, right?

Unfortunately, the estate you've specified in your will may not include all of your assets. By law, your will doesn't include assets such as:

To control what happens to these assets, you need an estate plan.

6 more reasons to have an estate plan

A well-written estate plan can do more than just distribute all of your assets the way you want. It can also help:

Who should help you create your estate plan?

While an estate plan is a legal document, its creation shouldn't be left solely to your solicitor. You need someone who knows about you, your family and your financial situation.

And the person who generally knows the most about that is your accountant or financial planner.

However, while they may know all about your finances, they may not have the legal qualifications needed to create a watertight estate plan. So you actually need your accountant or financial planner and a solicitor.

"The financial planner's job is to try and identify if the estate plan is funded properly, and if it is funded that the insurance is owned by the right person; the accountant's job is to make sure that the client's affairs are structured appropriately from a tax point of view; and the solicitor's job is to make sure the documentation is all drawn up."

Avoid leaving family upheaval behind you!

Whether or not you have an active will in place, without an estate plan there's no telling who your assets may end up with. Avoid creating stress and conflict for your loved ones, and give yourself the peace of mind in the here-and-now that your affairs are well in order. Get in touch and we can start the ball rolling to get a solid estate plan in place for you and your family.

It Pays Off: 7 reasons business owners should pay themselves a salary

Wed, 01 Nov 2017 22:00:00 GMT

Think back to the days before you started your business, when you were working for a boss. Chances are you were rewarded for your hard work with a regular salary. It may not have always been the same amount, but it came through like clockwork. And for the next week, month or however often you got paid, you'd do your best to make it last.

But now you are the boss, and so you don't need to be restricted to a set salary, do you? You can simply draw money out of the business whenever you need it, right?

Wrong.

7 reasons to pay yourself a regular salary

As a business owner, here are seven reasons why you should pay yourself a regular salary instead of treating your business like an automated teller machine.

When you first started working for someone else, you couldn't ask the boss for more money whenever you ran out. All you could do was hold out until the next time you got paid. And having a regular income also made it easier to budget for your income and expenses, manage your money, and save up for a mortgage or investment.

So why change now?

It's easy to think all the money sitting in your business' bank account is yours. After all, it's your business, isn't it?

But that money actually belongs to the business-not you personally-and is needed to cover things such as:

It doesn't matter how profitable your business is. If the money isn't there to pay the bills when they're due, your business is as risk of becoming insolvent (i.e. you have more commitments and bills to pay than cash or available funding to pay them with).

Having sufficient cash flow is vital for any business. And it's far easier to manage cash flow when you have predictable expenses you can plan around-including your salary.

A growing business is a cash-hungry business. As it grows you may need to move it to a larger premises or invest in new staff or technology to grow your capacity. Even if you can keep a lid on your fixed expenses, your business may require an increase in variable inputs such as materials.

And all this ties up cash.

So whatever your growth plans, you'll need enough money in reserve to fund them. And that's on top of the money you need to keep the business running at its current level.

As you can see, knowing exactly what cash is flowing in and out of your business, and saving as much of your profits as you can to build up your cash reserves, is important for a growing business.

But if you keep 'raiding the till' whenever you're short of cash, you'll never know how much cash you have in reserve, or when you have enough funds to initiate the next stage in your growth plans.

The lifestyle we lead is largely dictated by the amount of money we have readily available. So if your business does particularly well one week and the bank balance is up, you might be tempted to draw a little extra money and spend it on dinner at a fancy restaurant, a weekend away, a new 'toy' or some other indulgence.

It's okay to spend money in these ways if it's a bonus for achieving a certain result or milestone in your business. But these bonuses should still be within the planned and documented salary and remuneration package the business pays you.

If you're not disciplined in this area, it doesn't take long for these indulgences to become part of what you consider a 'normal' part of your lifestyle, and so you start drawing extra cash on a regular basis.

And that's not good for the health of your business.

By living off a regular salary (and nothing more) instead, you'll learn to live happily within your means, which is a key to building wealth.

Governments' tax departments are used to people being paid a regular salary. It's generally how things work. And by giving yourself a regular salary, you'll be seen as just another salary earner and be more likely to fly under the radar.

If, on the other hand, you start drawing large amounts from your business at irregular intervals, you may raise a few eyebrows with the governments' tax auditors. And that's never a good thing.

When wage and salary earners are paid, the employer must withhold and set aside a portion of their pay as tax, which is periodically paid to the government on the employees' behalf.

When you withdraw money from your business, it's not 'free money' (i.e. tax-free). These amounts need to be properly accounted for as:

depending on your business structure.

Your actions here could be building up a potential debt that will need to be paid at some point. And that debt could lead to severe cash flow problems down the track, especially when it comes time to sell the business.

You're much better off accounting for, setting aside and paying taxes as they fall due. It will not only help your business, but also the quality of your sleep.

When it comes to assessing a person's ability to service a potential loan, banks much prefer consistently earning wage and salary earners to sporadically earning self-employed business owners.

The bank wants to know you can comfortably service the loan each month, and by paying yourself a regular salary you'll have the payslips and bank statements to show a steady cash flow history.

So the sooner you set this up in your business, the better.

A successful business is a great way to create and accumulate wealth. But don't disadvantage yourself by presenting a poor case to the banks when applying for a mortgage or other type of loan.

How much should you pay yourself?

As you can see, there are many good reasons to pay yourself a regular salary instead of continually raiding the till. The question is, how much should you pay yourself?

That's a question we can help you answer.

Obviously you need to pay yourself enough money to cover your basic living and lifestyle requirements. The last thing you want is to be stressing about your personal finances, especially when you're trying to make business decisions.

But it's not a good idea to pay yourself too much in salary-even if the business can easily afford the cash flow. Depending on your business structure, there are probably more tax-effective ways to receive income from your business, such as dividends.

Every business and person's situation is different in this regard, so it's important to get one-on-one advice in this area. Don't view this article as personal advice to you-it's not . We're simply opening your eyes to the many benefits of paying yourself a consistent salary as a business owner.

To work out the right amount to pay yourself regularly, you'll need to consider things such as:

As you can see, it makes sense to get professional advice on calculating your salary as a business owner. We'll help you work it out by taking into account your current business and personal situation. We'll also set up payroll systems to automatically create and distribute the necessary tax-related paperwork each pay period.

You enjoy being your own boss.

Now it's time to also enjoy being your own employee.

3 Reasons Personal Budgeting Is Brilliant, Not Boring!

Sun, 08 Oct 2017 22:00:00 GMT

If a business owner said to you that they run their business without a budget, what would you think? You'd think they were incompetent. Or perhaps lazy? Or both?

But what do most families do?

When you think about it, a family is actually a mini business. There is income, there are expenses and there is, hopefully, something left over to invest and to enjoy.

So why don't most families operate to a budget?

After all, a personal budget helps you to see your financial direction and helps you stay (or get back!) on track. It's a great comfort.

One reason some people don't put together a budget is a feeling of overwhelm, of being too busy, of feeling like life is too complex to keep track of all that.

Well the good news is we can handhold you through the process and make it easy for you.

But before we look at the 'how' aspects, let's consider 3 more reasons why a personal budget is such an important tool to help you achieve your financial goals and dreams.

The money you earn has already been promised to keep the electricity on, make the loan repayments and pay for the insurance. Most of what many people think of as budgeting is really honouring the commitments you have already have.

Now since we are all honest people and plan to pay these bills, the first step is to track these bills and see what is left over for your day-to-day living.

Some of your day-to-day living money is in the bank. Some is in your purse or wallet. Some is with your partner or children if you have them.

You need a simple system that allows you to track day-to-day expenses such as fuel for your car, shopping and your discretionary spending expenses.

We suggest you don't attempt to keep track of every cent of your day-to-day living money. It's not worth the effort for the benefit you'd get out of that level of detail.

Instead, you need to identify your main day-to-day expenses and make allowance for all other minor day-to-day expenses as a total expense.

Here's a key: You need a system that is so easy to use that you keep using it.

You can track these day-to-day expenses by entering them into a spreadsheet, or better yet, use a tool such as Pocketsmith or Pocketbook that can automatically pull in bank feeds to save you a lot of data entry.

It's ALL in the attitude!

Have you ever attempted to budget and given up in frustration? What is the reason your budgeting attempt failed? What will make you stick to it?

Think about this…

One of the top reasons-if not the top reason-so many people give up at budgeting is attitude. If you think of it as a penny-pinching sacrifice instead of a means for achieving your financial goals and dreams, how long are you likely to stick with it?

It's like the difference between going on a diet and eating healthily. One is negative and restrictive; the other is positive and allows you to indulge every now and then and yet still achieve your goals.

To increase your chances of success, work on your attitude first.

Many people refuse to budget because of budgeting's negative connotation. If you're one of them, try thinking of it as a 'spending plan' instead of a 'budget'. Once you've attempted to budget and failed, the bad feelings associated with any type of failure can keep you from trying again. Don't give up!

The cold hard reality

Let's face it. Money is a tool that enables you to reach your goals in life. But the cold hard reality is that until you know where your money goes, you can't make conscious decisions about how to use this tool effectively.

A budget (or spending plan!) shows you exactly where your money goes and provides a clear plan that lets you save for the things that are important to you: a new house, a new car, a comfortable retirement, a tertiary education, high quality health care, travel, or whatever your particular goals and dreams happen to be.

And that's exciting.

Whatever YOU decide you want to save for and achieve, you can. With the right attitude, a focus and a (spending!) plan.

Avoid This Pitfall

There are several universal budgeting concepts that every successful budget will include, but one of the most important features of a successful budget is for it to be easy to use and suitable for your needs.

Don't try to use a generic, complex, one-size-fits-all budget. A simpler approach makes it easier to stay committed. If you stick with a realistic, effective budget long enough, the rewards will keep you motivated. In the meantime, do whatever it takes to keep yourself going.

The 3 steps for effective personal budgeting (spending planning!) are:

Once you start budgeting with a positive attitude, you will see the difference a budget or spending plan can make in your life.

Your next step ... Call Bill or Donna on 02 9545 3599 or email us on wpugh@bfaa.com.au to make a time to meet. We'd love to discuss this with you and help you to get on track towards achieving your financial goals.

Is your family home at risk? The one mistake many business owners make

Wed, 06 Sep 2017 23:00:00 GMT

As a business owner, there are plenty of things you need to manage, and two of the most important of these are assets and risks .

In other words, building your wealth and protecting your wealth.

There's no point building a lot of wealth if the way you have things structured behind the scenes means that someone could take your assets away from you.

Sadly, many business owners are in precisely this predicament, without knowing it!

Following are some crucial concepts that, if you as a business owner don't understand them and put protective measures in place, your family home (and all personal assets of you and your family) are at risk of being lost if someone decided to take legal action against your business.

Consider these facts...

This presents significant risk.

So what can you do about it?

If you haven't looked at your asset protection structure in the past 12 months, you need to make that a priority.

Then this should be reviewed annually.

Why?

As your life changes, your asset protection strategies-your 'wall'-needs to be checked that it is still appropriate.

As part of this process we also ensure your wills and estate planning are in order . Remember, the standard type of will can bring down your wall.

In addition to wills, there are other important documents to have in order such as an enduring power of attorney. This is a legal document that can give someone else-the person you choose- the power to make personal or financial decisions on your behalf .

You see, it is far more common for someone to become incapacitated through accident or trauma such as stroke, than it is to suddenly die. If this happens to you, you may not be able to communicate your wishes and make decisions when you need to.

The consequences of this are dire and tragic.

Why?

It's all about choices and about ensuring you protect your family and your assets. Without sound asset protection and effective wills and estate planning in place, the legacy you have been working so hard to build may not end up in the hands of the people you intend.

The potential tragic nature of this type of scenario is why we feel so passionate about asset protection and estate planning ... because it's all about protecting the families we serve.

If you're anything like our many other clients who have these structures in place, we think you'll find the costs of 'building these walls', so to speak, relatively minor compared to the protection they give you and your family.

Your next step ... Call us on 02 9545 3599 or email us on admin@bfaa.com.au to make a time to meet and discuss your options. We'll then outline the costs so you know exactly what lies ahead.

Get It Done. Get It Read. Get Ahead.

Thu, 03 Aug 2017 23:00:00 GMT

Success in business requires a number of essential ingredients. A sound strategy. A robust business model. Effective planning. Strong financial control and bookkeeping. A good team. Great systems. Measurement. Focus.

But you know what? Even all those elements are not enough without this skill: Execution .

Call it "Getting Things Done", making things happen, the action habit, extreme focus… call it what you like, for many entrepreneurs it's what separates mediocre from magic . It's the difference between a business that plods along from one year to the next, and one that grows, evolves, impresses, enriches.

Execution is a skill . Sadly, we're not taught it at school. (Gee, but we all use those good ol' quadratic equations each day!) The good news is that, as adults, we can go out and find the information and principles of effective execution, then apply them. Daily.

To fast track you on your journey towards becoming brilliant at execution, here are some books that we highly recommend that you not only read, but you study, practice, live by:

Read (or listen) to those books, and your mind will be permanently re-wired. Obstacles and frustrations will become Projects, Tasks, or Wildly Important Goals. And you'll have a pragmatic framework for achievement and creating the change you want in your business.

And in your life. It's powerful stuff.

We'd love to hear of your favourite books on this 'execution' topic . Please share them and after you read (or if you have already read) any of the books above, please share with us the key principles and practices that have made the biggest difference to you in terms of "getting things done" and executing your ideas.

Why small businesses are going to the cloud!

Sun, 09 Jul 2017 23:00:00 GMT

"The cloud" is a phrase that means something very different these days, due to the increasing use of cloud computing. But what exactly is cloud computing? And is it a good option for small businesses?

First, a quick definition. Without getting lost in 'geekspeak', cloud computing simply means both the software apps you use and your data are stored on remote servers on the Internet, rather than 'locally' on your computer's hard drive or your own server(s).

That idea-of the data not physically being in the same place as you-used to sound scary to many. What about security? What about the risk of losing your data? Surely it's best to have your data on a computer you can see and touch on your own premises?

Well, that's out-dated thinking these days.

Counter-intuitively, your data is likely to be more secure when stored in a cloud app, compared with storing it yourself on your own computer or server on your premises.

Why is that?

Security

Your own IT security is likely to be far less robust than that of a cloud app provider. If you access the Internet and use email, then you're vulnerable even if you don't use any cloud-based apps. Hackers can access the data on your computer or local network simply due to the fact that you have Internet access. It's like a door. And they often know how to pick the lock.

Reputable cloud app providers, on the other hand, use solid security measures such as SSL certificates that support-sorry, some geekspeak coming up-256-bit SSL (Secure Sockets Layer) encryption. This is the same level of encryption used by online banks.

Let's face it: This bank-grade security protocol is likely to be far more secure than your own computer and IT security protocols.

Theft

Another advantage of having your apps and data stored "in the cloud" is that if your computer, server, smartphone, tablet or other device you use is lost or stolen, your data is safe because it's not on the device. It's in the cloud, stored securely behind encrypted passwords.

And your data is far more valuable than hardware. Hardware is easily replaced. Data is not.

Disaster

This same "you can relax because your data is in the cloud" factor also applies to disasters such as flood and fire. A business using cloud-based computing could have its premises burn to the ground overnight and continue "business as usual" from another location as long as they had access to the Internet. (At least from a customer, financial, accounting, human resources/personnel and other business data perspective. Clearly it does not apply to physical operational aspects of a business.)

Hardware

Computer hard drives are like car engines. It's not a question of if they will ever break down, but rather when they will break down. That's why we all diligently do daily data backups, right? And we all take these backups off-site each day, don't we? And we all do weekly tests where we restore the backups to ensure the backups are working as intended?

No? Really? Potential for disaster!

And yet it's precisely what most small businesses fail to do.

That's another great aspect of cloud computing. No more data backups to do. The cloud app providers back up your data automatically and they simultaneously store your data in multiple locations around the globe. This means that if one of their buildings was subject to, for example, a catastrophic earthquake, your data would be safe because it is also stored in different cities, on different continents.

But even if technology got to a point where computer hard drives never failed, there's one thing they always do, eventually: fill up. They run out of space.

And that's a major inconvenience with the old-school approach of storing data locally rather than in the cloud: You have to (or you have to pay IT providers to) move data across to new hard drives or servers, and reinstall the various apps and databases. It's an expense and a disruption.

With cloud computing you can kiss that inconvenience goodbye.

Software

For many small businesses, when they fully adopt cloud computing they can reach the "no IT person required" stage. By that, we mean you won't need an IT contractor to come on site to upgrade servers, maintain databases, fix software conflicts and so on, all of which is the norm when running old-school desktop apps and local servers.

Why is that?

With cloud-based apps there is no software to install. No software updates or "patches" to install. You just log in to each app and it's always up to date. Nice.

The one exception

There is one exception here of course. If your business is in a region where you do not have reasonable Internet speed (e.g. 5 Mbps or more) with reliable connections, then cloud computing is not for you. Not yet.

Technology continues to evolve in this area, and it won't be long until every business on the planet has Internet speeds that support cloud computing.

Here's where cloud computing gets exciting…

While the security, risk and convenience aspects of cloud computing are worthwhile, they are not the most exciting and compelling benefits of cloud computing to a business owner.

Let's look at some of the "wow" aspects of cloud computing.

Efficiency via Data Flows

Every business wants to be more efficient. It saves money. Saves time. And it allows you to provide even better service.

By adopting cloud computing and building an "app ecosystem" for your business you can eliminate a number of inefficiencies where data is being manually re-entered into multiple systems.

Your data can seamlessly flow from one app (area of your business) to the next without the added step of manual data entry. Manual data entry is not only an expense and an inefficiency that slows down your business processes, it introduces the opportunity for error.

Work to eliminate all manual data entry in your business. If you see anyone in your business manually entering data into an app, you should question why it's being done. Look for ways that data could automatically flow into that system from another app where the data is already stored.

App Ecosystem Example

Imagine your business has fully embraced "the cloud", and has connected various apps so data flows automatically from one app to the next.

Let's say someone then searches Google for your type of business, product or service. They find your website. They see something on your site they would like to access, such as a PDF document with helpful information in it. They enter their email address and perhaps their first name in order to receive it.

They are now in your business' marketing database and Contact Relationship Management (CRM) system. And they did the data entry.

Over the following few weeks this prospective customer or client receives email updates and e-newsletters from your business that gradually educate and build trust with the prospect simply by being helpful and sharing relevant hints and tips based on what they previously downloaded.

And this happens automatically thanks to your marketing automation app such as Infusionsoft.

The prospective customer then clicks on a link in an email and comes back to your business' website. They're ready to talk to someone, so they enter their information into the Contact Us web form. This time they enter their last name and their telephone number.

This data also flows straight into your business' CRM.

Next, you're speaking with them on the telephone and they like what they hear. They request a quote or proposal. You use a cloud-based proposal creation app (such as Proposify) that integrates with your CRM to automatically pull in the prospect's information. You click a few boxes on screen to select the product and service options to include in the proposal.

You click a button and the proposal goes to your prospect via email.

They open the email, click on the link to the electronic proposal and view it online. They decide to go ahead so they click Accept, sign it digitally (on screen) and then enter their credit card details to purchase.

This automatically adds them as a customer to your cloud-based accounting app such as Xero It also enters their credit card details into your secure eCommerce payment processing platform linked to your marketing automation app. And then your payment processor (e.g. eWAY) processes the credit card transaction.

Xero automatically emails them an invoice marked as Paid, and the live bank feed will bring in the transaction ready to be reconciled (matched) to the invoice within 24 hours. So your bookkeeping and accounting is up to date, and yet no-one in your business had to enter-let alone re-enter -any data.

You have a new customer, the money is in your bank account, and you're ready to deliver.

The purchase also triggered a fulfilment list and email instructions to your relevant team members, and added the job to your workflow (job tracking) system.

Your business is amazingly efficient. You move with velocity thanks to data flows. You amaze your prospects and customers with your service, and impress them with your tech savvy. You're saving tens of thousands of dollars a year on old school IT and administration approaches that would require a additional staff and contractors.

You're a modern, cloud-based business. And you're loving it.

Where to start with 'going to the cloud'

The process of going to the cloud starts with deciding on your cloud-based accounting and CRM systems . That's because your financial and customer data are crucial, and will receive and send data to and from your other operational areas.

Your ideal accounting system and CRM platform will depend on your type of business and the apps you already use. Building your business' app ecosystem is one of the most important areas for any business owner or entrepreneur to focus on.

That's why we love advising businesses as they move to the cloud.

If you'd like to sit down with us and have a chat about your move to the cloud, get in touch to make a time .

Going to the cloud is no longer an option for a modern, competitive business.

Why business budgeting is more about being accountable, than it is about accounting

Mon, 05 Jun 2017 23:00:00 GMT

For many, the word 'budget' is about as appealing as the word 'diet'.

It seems to imply what you will go without , rather than what you will achieve .

To a successful business owner, however, the word 'budget' has a very different meaning.

It's more like a map than a diet. It's an outline of where you want to take the business, and what you need to achieve to get there.

Running a business without a budget is like a ship's captain setting off on a voyage without a map. Sounds ridiculous, doesn't it. Who would do that?

Yet this is, figuratively speaking, what many business owners do.

Successful business owners, on the other hand, not only set clear targets and budgets each year, they monitor them closely each month, even each week, and adjust them as they go throughout the year.

Here are 3 compelling reasons your business needs a budget, now:

One: If you don't know where you're going, how do you know you're not already there?

If you're not satisfied with how your business is performing, unless you set clear goals for where you want to take it, it's probably as good as it is ever going to get. At best, it will just meander along, subject to the whims and vagaries of the economy and general market conditions.

The good news is that your business doesn't need to meander along.

The first step in charting a clear course for growing and developing your business is objectively measuring 'where it's at' right now.

And the numbers do tell a story.

For some, they act as a wake up call. For others, they just confirm the journey's starting point.

It's paradoxical that a large part of the value in a business budget is not in the numbers themselves. It's in the realisation and acceptance of where you are and where you want to be.

The numbers are just the signposts for the journey.

A factual look at the numbers that describe where your business is right now takes away all the subjectivity, opinions and 'reasons' (often excuses, disguised as reasons).

This is the naked truth.

In fact, it is like standing on the scales, naked, looking at yourself in a full length mirror. That may or may not be a pretty sight!

For your business, these factual numbers are the sales, the variable costs, the margins, the overheads, and, lastly, the profit. After all your work, this is the reward you're left with.

Then comes the first of a series of 'hard questions'...

Answer those questions, and you've just described where you want to be. Congratulations! You have charted your course, which is the first step to ensuring your success.

Two: What's more important to treat? Symptoms or causes?

As you well know, sales don't just happen. Costs don't drop just because you want them to. Sales and costs are a result of other underlying factors. Put another way, they are symptoms of causes.

The business budgeting process quantifies the symptoms, and by asking a series of 'What leads to this number?' questions, it also identifies the underlying causes.

For example, underlying factors contributing to a sales (revenue) figure could include:

These are all called drivers . The sales figures are simply a result of these drivers. Costs are no different.

For example, the rent paid may be a result of the storage you need for your stock levels. Wages costs may be blowing out as a result of overtime paid but underlying that may be inefficient staff. Or a lack of clear processes. Or both.

So in reality what came first was not the sale or the cost, but their underlying drivers. The budgeting process forces you to name and to quantify these underlying drivers.

That's one of the most valuable aspects of preparing your budget. Not the budget itself, per se, but identifying your business' drivers.

Why?

Because then you can focus on improving them.

That's what will produce the improved results in your business. No focusing on last quarter's figures. That's history.

It's more fun to create history. And that is, in essence, what you are doing when you are in your own business. You are captain of your own destiny, and you can steer it in any direction you want.

Note that word ... direction . A key point is to have one .

You will enjoy how effectively the budgeting and planning process will get you crystal clear on your direction.

Three: Budgeting is not about accounting. It's about being accountable .

Once you are clear on the handful of drivers that creates your business' results, the next question is…

What are you going to do about it?

Your budget won't just give you a monthly sales target, for example, it will help you quantify the drivers that will produce the result.

For example, if next month's sales target is $120,000, that end-result figure is not your focus. Not on a day-to-day basis. Knowing the underlying drivers, your focus will instead become, for example:

Now you and your staff have a clear focus and are 100% accountable.

That's good for them, and good for you and your business.

People in a business want a clear scoreboard and a 'game to play' so they know whether or not they are winning. Research has found that a lack of measurement in a job is demotivating to a staff member. Patrick Lencioni's book '3 Signs of a Miserable Job' gives some great examples of this.

Knowing these drivers, and quantifying a target for each you can then ask questions like:

You can then decide to improve skills, or systems, or attitude, or all three!

As you can see, the power of the budget is in the process of preparing it, and then the budget itself is a tool to hold you accountable to the measurable indicators you've chosen.

An added layer of accountability is... us.

We work with a number of clients where, on either a monthly or quarterly basis, we act as a sounding board and independent party to ask you the hard questions about the drivers and the results. This focuses your mind, allows you to form a clear Action Plan to improve results, and then increases your chances of success because you know you need to report in to us next time.

It's a powerful process that you'll enjoy due to the focus it creates and, in turn, the results that focus achieves in your business.

To take more control of your business and its performance, get in touch to make a time to come in and see us. Depending on the size of your business, we might work out that a quarterly process might work best (and be the most feasible, cost-wise), or your business might be at a point where monthly or even weekly guidance would be ideal.

Either way, we'll outline your options and your costs so you know precisely what's involved.

We look forward to helping you chart your course, helping to get a clear direction, and then keeping you and your business on course.

After all, you won't end up at the ideal destination by drifting.

How to have a seasoned CFO help guide your business decisions

Wed, 03 May 2017 23:00:00 GMT

Larger businesses have a Chief Financial Officer (CFO) on staff. But what can small and medium sized businesses do in this regard?

Clearly, larger businesses can afford an in-house CFO. But it goes beyond an affordability issue: Large, successful businesses also understand how crucial the CFO role is to their business performance.

The CFO in a business:

This is management input that all businesses require regardless of their size. But how can small and medium sized business access CFO-level input and guidance?

The answer: You out-source it. You get a part-time, out-sourced CFO until you can afford one full-time.

That's where we play a role for many of our business clients.

Our 'Your CFO' service has been developed with input from our clients to make sure it's the ideal mix of support services and affordability.

As your CFO we roll our sleeves up and work with you in management meetings throughout the year on:

As business owners we all need to measure and monitor Key Performance Indicators (KPIs). That is, the handful of numbers that really matter in running our business.

It is also important that you have a 'KPI dashboard' to display your KPI targets compared with your current KPI performance. This helps tremendously in monitoring and managing your business' performance and, ultimately, hitting your targets.

As your outsourced CFO, we will bring to each meeting that we conduct with you clear financial reports, easy-to-understand KPI information, as well as our commercial experience to interpret the information, make suggestions and help guide your decision making.

Items we'll discuss each meeting include:

By helping with your forward planning for achieving the next period's targets, and by being a sounding board for you as you strive to meet your targets, our 'Your CFO' service and support gives you a crystal clear focus for what needs to be done to achieve the goals of your business.

Your next step ... Call us on 02 9545 3599 or email us on admin@bfaa.com.au for a no cost and no obligation meeting to discuss how we can work with you as your outsourced CFO. We'll outline for you what's included and what costs are involved so you can see how the service can be comfortably included in your budget.

A 9-point checklist for paying less tax (providing you act quickly)

Sun, 02 Apr 2017 23:00:00 GMT

Time is running out.

If you want to take a few simple preventative measures to minimise or defer how much tax you will pay for this financial year, you need to do two things:

Depending on your situation, this tax planning process could save you many thousands of dollars. That's cash in your bank account, rather than the Tax Office's.

After all, why pay one more dollar in tax than you have to?

I'm sure you have better uses for your money, such as investing in your future or just investing in the here and now and rewarding yourself with a little 'lifestyle indulgence'.

Now ... to the checklist. Tick each item you think is relevant to you:

Let your software do the talking: 4 apps to manage debtors and late-payers

Mon, 06 Mar 2017 22:00:00 GMT

Debtors and late-payers-the bane of every business owner.

No matter how profitable your business is, it won't survive without good cash flow. If you can't pay your bills on time, you may end up trading while insolvent. And that's not just bad business-that's illegal.

But to do that, you need your clients to pay their bills on time. And that's something you can't always rely on. Sometimes they forget. Sometimes they don't have the money. And sometimes they just decide they don't want to.

Unfortunately, you don't get out of paying your bills simply because they haven't paid theirs. So you have no choice but to:

Depending on how many clients you need to contact, that could take a while. And that's assuming they pay up the first time you ask. What if you have to remind them several times? It can add up to a lot of time-time you'd be far better off spending on your business.

Fortunately, you can now use software to automate the entire process. Once you link it to your accounting system it will automatically search for any late-paying customers and send them a personalised reminder about their overdue payment.

Here are some of the apps currently available:

Chaser

Chaser sends your debtors reminder emails that look like personal emails from you. Merge fields in your email templates bring in information such as the customer name, invoice number and amount.

You can create differently worded templates for use with different customers so that the wording is appropriate for each relationship. You could choose to have formal wording with some customers, and more informal wording for those customers you have a closer relationship with.

You can select which days of the week to send out your debtor reminder emails and if a customer has more than one outstanding invoice, the system is smart enough to include mention of each invoice in the one email, rather than send one email per invoice.

Another time-saving feature is that Chaser will attach a PDF copy of the invoice(s) to the reminder email. That saves you time and speeds up payments because your customers don't have to go searching for invoices.

Chaser also makes it easy to see the 'chasing conversation'-the history of payment reminder emails-without you having to search through your inbox to work out what happened with a particular invoice. All invoice and payment-related information is displayed on the one screen.

Chaser works with Xero accounting software.

Debtor Daddy

Debtor Daddy lets you set up a series of reminder emails to automatically send to customers both before and after the due date.

You can base your reminders on a number of different (debt) "collector" personas ("Audrey adds humour to her reminders", "Harry is no frills, no nonsense, straight up and down", etc.), and then tailor the wording of the emails used by each collector. You can then assign different collectors to different customers which not only customises the wording of the emails, but also the number and timing of reminder emails.

Debtor Daddy makes it easy to filter your outstanding invoices on how overdue they are, and from the Hit List view you can action further communication, change Collectors, see what reminders have gone out and what's due to go out tomorrow, this week and so on.

Debtor Daddy works with Xero, MYOB and QuickBooks.

ezyCollect

If you'd like to send emails and SMS reminders to late-paying customers, then check out ezyCollect . It also lets you set up postal and telephone reminders, send a pre-approved legal letter and escalate the debt to a collection agency. You can even perform credit checks.

It includes a schedule (and adds the phone calls you need to make to customers), graphs and reports to see how much debt you've managed to recover.

ezyCollect works with Xero and MYOB.

Late Fee Manager

If your Terms and Conditions include fees or interest charges for late payment, Late Fee Manager might be just what you need. As well as sending reminders to late-paying customers, it will calculate and automatically apply to the original invoice any late fees or interest charges.

Late Fee Manager works with Xero and QuickBooks.

This is by no means a complete list of what's available. There are plenty of others, including Web Ninja Collect , InvoiceSherpa , xocashflow and Debtze . And they all offer a free trial, so you can try them all and decide which one will work best for your business.

To save you time in this process, we can advise you on which debtor management app is likely to be the best fit for your business based on the accounting app you are already using, or are considering switching to. Get in touch with us and we'll make a time to sit down with you to run through your best options in this area.

You can't afford to have late-paying customers putting your business' cash flow at risk. And now, thanks to these software packages, you won't need to.

So you’re in business: Are you an entrepreneur, a manager or a technician?

Mon, 06 Feb 2017 22:00:00 GMT

"You need to work on your business, not just in your business."

Made popular by The E-Myth Revisited author Michael Gerber, it's advice I'm sure you've heard dozens of times over the years (I certainly have). But despite being told over and over again, many small business owners still don't seem to truly understand what it means.

Let's look at a common scenario.

David is into making things out of wood. He loved woodwork at high school, and was pretty good at it too. And while David has a 'regular' job during the week, he also does quite well selling his wares at the weekend markets.

If fact, he's been thinking about making a career of it for a while. And after a particularly bad day at work (which ends with him giving his boss some directions about "where he should go"), David decides to give it a go. He finds a place to set up shop, hires someone to deal with all the paperwork and other business stuff, and soon after Good with Wood is open for business.

At last David is 'living the dream' and 'following his passion'. He's earning a living doing something he enjoys and gets to be his own boss, which he loves. He doesn't have to fill out timesheets or attend boring meetings. He can just spend his days sawing, hammering, planning and sanding to his heart's content.

It's perfect, right?

Unfortunately, no.

David's situation is a classic example of what Gerber calls 'an entrepreneurial seizure'. Someone gets the urge to 'be their own boss' but then (to quote Gerber) "goes to work for a maniac"-themselves.

The business owner ends up spending all their time working in their business. Now in David's case he gets to do what he loves. But it isn't long before he realises there's a lot more to business than just making and selling products.

And unless David effectively deals with those other aspects of running a business as well, he won't have a business for much longer.

In his classic book The E-Myth Revisited (the 'E' stands for 'Entrepreneurial') , Gerber describes this type of person as the technician of the business. They're an expert in their craft, and love doing what they do. Unfortunately, it's often at the expense of everything else associated with running a business.

Gerber describes three archetypes when it comes to business owners:

In David's Good with Wood scenario:

As you can see, technicians and managers work in the business and an entrepreneur works on the business.

An entrepreneur's focus is to design a business that can work without their own personal exertion on a daily basis. Their objective is not to be 'self-employed', or to create a job for themselves. They think of a business as a machine that can be designed, built and eventually sold.

That doesn't mean all entrepreneurs aim to sell their business in the short term. Some like to build and then hold onto their 'cash cow' businesses over the long term.

Ask yourself:

If so, you're chained to your business. And it's unlikely to become one you can sell when it comes time to move on or retire.

Let's think about David's Good with Wood business. What happens if he's sick or injured for a month or more? Sure, some insurances will replace income and pay lump sums in certain circumstances. But what about the business? Orders need to be delivered. Customers need to be satisfied. The business would grind to a halt, and its reputation would be tarnished.

Clearly, being your business' operational linchpin isn't so great.

In fact, it's the opposite of what you want. You want a business that isn't 'key person dependent'. You don't want your business to rely on any one person- especially not you.

In David's case, he needs to step away from the hands-on work. (He can still do some of it, but the business shouldn't rely on him as a key technician.)

What are some of the things David could do?

By doing these things, David could get to a point where his business produces the same goods to the same quality whether he's there or not. And quite profitably.

David would be working on his business, not just in it. He'd be an entrepreneur.

Other things David could focus on to build his business include:

As you can see, the things Good with Wood needs to do as a business go far beyond 'making things out of wood'-the thing that motivated David to start his business in the first place.

This entrepreneurial perspective doesn't mean David won't get to enjoy the sweet smell of sawdust. On the contrary, by learning how to build a business-and a team-to create his products, he'll enjoy success and satisfaction on a scale far more rewarding than (to quote Gerber again) simply "doing it, doing it, doing it" as the business' main technician.

So, what about you? Are you still 'on the tools'? Or are you designing and building a business that can eventually work without you so you don't have to keep "doing it, doing it, doing it"?

If you want to build something great with your business, let's talk . Make a time to sit down with us to map out your plan for working on your business so you don't get trapped in it.

Business owners: How to eliminate the administration of saving and filing receipts

Sun, 29 Jan 2017 22:00:00 GMT

They say only two things are certain in life: death and taxes. For a lot of people, there's also a third certainty in life: the pain of keeping track of every receipt when it's time to do the taxes.

How many times has your bookkeeper or finance manager asked you for a receipt (that you swore you stuffed somewhere in the wad of receipts in your wallet) that you've then had to scramble and search everywhere to find?

You think to yourself: "I've got better things to do than this," and you're right. It's a waste of your precious time that you could otherwise be investing in the growth of your business or maybe even going on a shopping spree and filling your wallet with a fresh wad of receipts!

Thankfully there are now some pretty cool apps* out there that can take the pain out of tracking your receipts. Read on to see a list of the top four apps below.

*(The word "app" is an abbreviation for application . An app is a piece of software. It can run on the internet, on your computer, or on your phone or any other electronic device. The word "app" is a more modern usage, but this is really the same thing as a software program. In modern use, most people refer to apps as applications or software programs that run specifically on phones or other mobile devices.)

Traditional bookkeeping is dead. Live bank feeds killed it.

Keeping on top of the books is hard. But what's even harder is making good business decisions without real-time and accurate financials. If you want real-time financials, you need a real-time (cloud-based) accounting package like Xero, Quickbooks Online or MYOB Online.

The hallmark of cloud accounting is the live 'bank feed' functionality, where your bank transactions are automatically imported daily, which eliminates the majority of the tedious data entry associated with traditional bookkeeping.

This not only saves time and labour cost, it also allows you to have accurate numbers on your business – especially when you get into the habit of matching your bank transactions to your bills and invoices on a regular basis and asking your accountant for support when you need it.

Automatic vs "Automagic"

We need to be realistic about the efficiency gains of using the cloud. Although your bank transactions are automatically imported into Xero, for example, your financial data can still be inaccurate because of two reasons:

Ideally, you want your scanned receipts to 'live' in your accounting software so all your information is in one place. But isn't it incredibly time-consuming to scan each individual receipt and then attach it to the respective transaction?

Thankfully not.

Receipt-keeping add-on apps such as Receipt Bank or Shoeboxed can help by 'automagically' pushing your receipts from their software into Xero or MYOB.

Bookkeeping on cruise control

If you've ever been on a long road trip, you know how helpful it is to switch on cruise control so you can worry less about maintaining the right speed and focus more on steering. Using a receipt-keeping app is the cruise control of your accounting toolbox!

The core benefit of using a receipt-keeping app (there will be slight differences in your workflow depending on which add-on you choose) is that you're able to ditch the scanner and forget about manually dragging and dropping your receipts in your accounting software.

The top two reasons for using a receipt-keeping add-on are:

Here a four popular apps for you to consider integrating with your accounting software:

If you're falling asleep behind the bookkeeping wheel because of boring manual data entry, it's time we had a chat about how paperless receipt-keeping solution can shift you into cruise control.

Get in touch to make a time for us to have a chat about your receipt handling systems. If we do it over a coffee, it'll be our shout. (And we'll scan the receipt!)

Where did it go?: Taking the mystery (and pain) out of managing your money

Thu, 08 Dec 2016 22:00:00 GMT

Most people will quite literally earn millions of dollars in their lifetime. Yet many people struggle financially and live from one pay period to the next.

With the ageing population and many Baby Boomers now continuing to work-at least on a part-time basis-past the traditional retirement age, people are working more years than ever. Even if a person works only 40 years, at average earnings, that's a lot of money.

It is said, "Money talks", but for many, all it ever says is, "Hello, and Good-bye".

Have you ever found that the month lasts longer than the money? Or have you ever got your tax return and looked at all the money you have earned over the past 12 months and then thought, "Where has it all gone?"

You're not alone. And the good news is, now there's a simple solution.

There's a great quote from Charles Dickens' book David Copperfield where the character Mr. Micawber says to Copperfield, "Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

This is so true, regardless of the income level.

Yet keeping track of what you spend your money on, for many, is too hard, too laborious. The benefits of doing so are obvious to anyone, yet the discipline to keep all your receipts, enter the information into a program like Quicken Personal or MS Money (or just to write it into a paper ledger), and keep that going consistently over time is beyond most of us.

Well ... and here's the good news ... what if a piece of software could track and categorise what you spent your money on, but it involved very little effort by you?

Imagine the clarity you'd get if you knew exactly how much you have spent and what percentage of your income is going on the various areas including mortgage/rent, vehicles, groceries, schooling/education, eating out, entertaining, mobile phones and internet, medical and pharmaceutical, and so on.

For most people, it would be a real eye opener.

It is said that knowledge equals power.

That is very true when it comes to your personal finances.

Once you can objectively see exactly how your lifestyle and your habits-that is, you -are spending your money each year, and month-to-month as you go, you then have the power to make decisions on where you can change your spending (and saving!) habits.

In this information age and electronic era, many of us use credit cards, debit cards and EFT when buying things. We have now reached a point for the first time in history where more money is exchanged electronically than through cash transactions.

That's a lot of transactions. And it's a lot of data.

This data is available to be analysed on a societal basis, industry basis, business basis and ... a personal basis.

And that's where a brilliant tool comes into play: Xero Cashbook

Here's how it works ...

Xero Cashbook is online software. It's the non-tax-tracking version of the Xero software used by businesses.

It analyses and categorises all your electronic transactions to give you a snapshot of your complete financial position in an instant. This also organises a view of all your bank accounts and credit card accounts in one place. Very handy.

This is precisely what a lot of people have been waiting for: An easy way to track and control your finances.

Xero Cashbook categorises your spending and saving, so you can tell whether your money is being used for essentials or you're splashing out on other things.

If you are concerned about security, Xero protects your financial data with 128-bit SSL encryption, the same as online banking. Your data is well protected.

You can also invite people you trust, such as your spouse, accountant or other financial advisor, to access your Xero reports for free. This means that as your advisors we can see the true picture of your finances and spending habits, and help you stay on track.

This allows us to help you plan ahead and make the most of your money.

You will never before have felt so in control of your personal finances.

Being web-based, rather than being stuck on one computer like traditional software, you can access Xero from home, work and even on your smartphone such as an iPhone and Android device.

If you'd like us to step you through getting set up with Xero Cashbook, or their Xero equivalent for Business, or both, get in touch and we'll hand hold you through the process. It's not difficult, and once your bank accounts are set up, it happens automatically from there.

The way we see it, the more clients we help keep track of their finances in such an easy way, the more clients who will prosper and find financial happiness instead of financial misery, to paraphrase Dickens' Mr. Micawber.

Your next step ... Call us on 02 9545 3599 or email us on admin@bfaa.com.au to make a time to meet and discuss your options. We'll then outline the costs so you know exactly what lies ahead.

It's time to stop saying "good-bye" to so much of your money each year!