Monthly Archives: January 2015
OK, so you have re-charged the batteries over the summer holidays, committed your goals to paper and formalised a plan. Now comes the next step – have you determined whether the plan will work? Or are you just hoping and guessing? This is where most business owners’ plans fall over. Too many plans fail to model possible outcomes from changing key drivers of the business. All too often, the only goal is to increase sales with little or no regard given to anything else including such things as:-
- What extra costs will you incur?
- Will your expenses increase proportional to increased revenue or will some increase in steps?
- Do you have all the required skills or do you need to find (and train) others?
- Will you be able to deliver the same level of service and/or support?
- Will you have to cut prices to expand (and what will be the profit and cash flow effects thereof). Is this an area where owners get it wrong!
- Do you need to inject sufficient capital or do you need to borrow?
- Or do you even need a capital injection – can say debtors and stock turnovers be improved?
Each of these issues raise a number of questions as to how the business does and should operate. I can raise dozens and dozens of say debtors collection strategies and considerations. And there are also more issues than the simple 7 listed above. It is amazing how often owners expand their business only to be crunched or even fail to due to cash flow issues (even where profits have increased). We have tools that can model and show you the outcome of any decision you may wish to make to your business – and do so in a way that you will understand. Why not escape the fog of uncertainty and let us help you to see and change your future.
For those of you who are employers, Wednesday 28th January is the end date for satisfying your SGC super obligation for the December quarter. Late payments will attract substantial interest and penalties. Furthermore, a tax deduction can’t be claimed for the late payment. This is therefore the most important obligation to be paid. I therefore recommend that payments be made by Friday 23rd at the latest to guard against processing delays.
For those who lodge a quarterly BAS or IAS, your December quarter activity statement is due to be lodged by 3rd March. As these quarterly activity statements already receive a one month extension, the ATO doesn’t grant any further extensions. Please remember that from 30th June 2014, electronic lodgement of any activity statement will result in no further paper activity statements being issued. We again recommend businesses to register for the ATO Taxpayer Portal to enable electronic lodgement and to more easily liaise with the ATO, check various tax records and transact in a more efficient manner.
Please note that lodgement of an activity statement (even if it is nil statement) and payment are two separate requirements. Late lodgement attracts a minimum non-deductible fine of $170 for every 28 days that a form is lodged late whereas as late payment results in an interest levy. Not that we encourage it, but should you not be able to pay an activity statement in full, do not defer lodgement as the possible fines are significant. The ATO will of course in time identify that an activity statement liability has not been paid and follow it up; but by this time though the liability should be paid in full anyway and at worst, incur a deductible interest charge far less than any late lodgement penalty. The ATO still seem to be granting payment arrangements on reasonable terms (although not as easily as before).
So you have set your goals.
Once committed to paper, the next step is to set out the actions that will ensure these goals are reached. Crucially, the actions must incorporate who is going to what, when and how.
Herein lies a great lesson – most business plans are way, way too long. My experience has been that the best ones are often only a page long. They are concise, clear, and assign accountability within set timeframes. Critically, they are reviewed regularly; weekly at times but not more than monthly.
What you can measure, you can manage …
… and what you can manage, you can control …
… and what you can control gets done.
With a fresh mind and before business life gets back to normal, the start of a new year is the best time to re-set your goals and moreover, put in place the action steps that will get your business to where you want it to be.
It is no coincidence that our more successful clients have a clear and stated vision of what their business does.
With this in mind, perhaps the best thing you can do this week, whether it be for the first time or simply re-visiting them, is to commit to paper your firm’s mission statement and customer value proposition. Having these critical statements in your head is not good enough as they will be unclear or even incapable of being understood by customers and employees alike. More importantly, you will be surprised how your thoughts crystallise once you see them written in front of you.
It is critical to get these two foundation stones in place before you start to address other areas of your business operation.
Please keep following these weekly blogs for other key business tips.