Accountants and bookkeepers see numbers as a way into a deeper discussion. Not just about financial mistakes or decisions made, but also the hidden barriers to our client’s success and how they can be broken.
Despite the inevitable challenges that will occur, here are five ways to help your business continue to thrive:
Tip 1: Beware of the deadly squirrels
As a business owner, it is easy to get distracted by the next idea or project. However these distractions can prove to be deadly, something referred to as ‘squirrels’. Focussing on what’s ahead is key to implementing your plans and realising your vision, while also keeping focus on what’s happening right now. Do this, and more rewards will be sen in the long term.
Tip 2: Don’t underestimate the power of small
Being a small business can give you a massive advantage over competitors. While they are too slow to move or have larger hurdles to overcome when reacting to market changes, you are able to be quick and nimble in making these moves first. Therefore, use this to your advantage and make it into a point of difference. Knowing what makes your business different in the marketplace is a great benefit, and being nimble can be one of them.
Tip 3: Don’t bury your head in the sand on tax
As you grow, tax liabilities can sneak up on you, especially if your business is only just starting to perform after a couple of years. Lodging your tax return with a large increase in your profits compared to the previous year will cause the ATO to get you to start paying tax in advance. Therefore, you will be paying almost two years of tax in a short time frame. To avoid this, make sure you know your tax timeline!
Tip 4: Sales are vanity. Profits are sanity. Cash is reality.
When starting a business, sales are the main focus. However as time goes on, keep track of the three main drivers – cash, profit and sales – to ensure you don’t confuse them. Most importantly to remember: until the cash is in your account, it isn’t your to spend. In the meantime, know your ‘profit formula’, so you understand in advance how your business is doing. This formula reflects the driving forces of profit for your business – start by separating your variable and fixed costs.
Tip 5: You don’t know what you don’t know
You don’t need to be an expert at everything regarding your business but you should know who to go to when specific advice it needed. Therefore, surround yourself with a team of advisors or like minded business owners, all who make you feel as though there is no such thing as a silly question.