Nothing makes us procrastinate more than the “too-many-tasks” trap when you are already feeling overwhelmed and you don’t know what to do next.
But it’s your business (and your cash) that will take the hardest hit.
If you are overwhelmed by your business and the workload attached to it, the first thing to outsource is your tax, accounting and bookkeeping tasks – because this is where the money is – and don’t you want to look after your money?
You need to be across you accounting and bookkeeping, but you also need an expert who knows these areas like the back of their hand and can guide you in the right direction so you can lower your expenses and tax and increase your profits and cashflow.
Vibrant Business is now a one-stop accounting, bookkeeping and mentoring business with a team ready to help you understand your numbers and grow your business with more profit.
We can help you in 3 main areas:
Tax and Accounting
Business Mentoring and Courses
Tax and Accounting
Our tax and accounting service is ideal for all business owners. Being compliant in this area of your business can be easily be overlooked if you don’t have a specialised accountant on your team.
We can help you build a system to keep your business running smoothly, stay compliant, ensure accuracy, and organise and maintain your financial records.
We specialise with sole traders, partnerships, trusts and companies that require assistance with tax and accounting.
Bookkeeping isn’t always fun but it is a must. We let you do what you are good at in your business while we do the “stuff” you don’t like or don’t have time for.
Not only that, but we keep you updated with real-time reports so you can stay up to date. Keeping in check with what’s going on in the background will help you make strategic business decisions to grow and develop a vibrant business you love.
This can all sound overwhelming but with our business mentoring and courses we can help you get clear on the steps required to grow your business.
Our quarterly or monthly coaching programs and our 8-week Planning for Success online course can provide you with increased accountability and support so you can achieve the results you want from your business. The outcomes include increased profitability and cashflow, customised reporting templates to measure actual performance against forecasts and access to an expert sounding board to ensure you continue working towards your goals.
At Vibrant Business, we will set you up for success with our five-step system to ensure clarity, direction and purpose. (It’s a RIPPA! 🙂 )
REVIEW: Step back and see where you’re at. What have you achieved since last year? Do you have accurate and viable systems in place?
IDENTIFY: What’s holding you back? Did you miss anything or overlook something that can affect you in the long run? Now is the time to knock out any burning issues.
PLAN: Now that you have clarity over what you have achieved, now it’s time to plan what needs to be done. Write down your goals and check them every day.
PUT: Get cracking! What do you need to put in place to achieve your goals? How long will it take you?
ACCOUNTABILITY: Who will keep you in check? Being a business owner, it’s easy to become overwhelmed and lose sight of your goals and end result. Having someone outside of your business to keep you in check is essential for you to stay on track and never lose sight of your dreams.
Taking the next steps for your business success
Gaining clarity, direction and purpose will help your business grow – and the biggest success driver is having a qualified finance team on hand.
Vibrant Business will help take care of all of your financial needs. From tax and accounting to bookkeeping, coaching and mentoring, we can help you plan and structure your business to achieve your milestones.
Not sure where to start or what you need? Book a session with us now to discuss your situation.
COVID … The “C” word no one wants to hear because it has stolen the livelihood from so many businesses since it came into existence in Australia.
With 60% of businesses reported to be affected greatly by COVID in March alone, active cases ramping up again, and states and suburbs going into lockdown and self-isolation again, there’s a high probability you have been affected in some way too.
Adding to the pain people are suffering right now is the fact that JobKeeper payments (as we know them) will end for some businesses from the end of September.
However, while these payments will remain available for eligible employers until March 28, 2021, the light at the end of the tunnel still feels so far away and these combined factors are adding to the stress businesses are facing.
So what do you do now?
How can you shield your business from another hit?
It comes down to putting a plan in place – just like many businesses have with their COVID-safe strategies.
Putting a plan in place to protect your business
The step is looking at your current business plan and upgrading it. If you don’t have a business plan, it’s time to get one in place.
Take a look at your expenses and cashflow. Cashflow is the single most important factor in your business.
Like blood to the heart, without cash, a business won’t succeed. To safeguard your cash and future cashflow, here are four actions you can take right now.
Prepare a cashflow forecast and make this part of your annual business planning.
The first time you prepare this type of forecast it can be confronting as you really look at your situation and challenges.
Having your forecast in place can set you up against any issues you might face in the short and long term. You’ll be able to predict those months when there is more cash going out than coming in. You’ll also know in advance about any seasonal fluctuations in your business.
Incorporate your forecast into your accounting or reporting software
Doing this allows you to report actual results against your forecast every month to show you where you are against your targets. You’ll also learn how to become aware and comfortable with your cashflow cycles and where you can improve them.
Understand your Cash Conversion Cycle
Having a cashflow forecast in place is one thing. Using that knowledge to change how your cash flows is another. To do that, you have to understand your Cash Conversion Cycle, improve your business processes to shorten it, and set goals.
Get a coach or mentor
Having someone to encourage and support you ‘work on your business’ is the fastest and easiest way to get ahead. It’s best to have someone outside of your family life and business, so they can be objective.
The difference between cashflow and profit
Now that you have your cashflow forecast in check, it’s time to understand the difference between profit and cashflow.
Here is a simplified version: Profit indicates the amount of money left over after all expenses have been paid. Cashflow indicates the net flow of cash into and out of a business.
It sounds like flowers and rainbows, but if you find yourself with cashflow issues or blocks, it can send your entire business into chaos.
There are many causes of poor cashflow, here are the top 7:
Poor accounts receivable process – resulting in debtor days (the time between billing and banking) being too high, stifling your cashflow.
Accounts payable process – a review of all supplier’s terms may identify ways to improve cashflow or just get better Terms of Trade.
Carrying stock for too long – this might mean full shelves but an empty bank account. This is no different if you’re a service provider with work in progress that is yet to be billed.
Debt/capital structure needs to be reviewed – perhaps your debt should be consolidated and paid off over a longer-term. Maybe you need to have an honest look at your drawings from the business, or the business needs an injection of capital to fund its growth. Often significant cashflow and interest charge improvements can be achieved with a regular review of existing debt.
Overheads – every business should do a thorough review of its overheads every year.
Low gross profit margins – this is another way of saying that your variable costs are too high. There is a large number of strategies you can implement to improve margins.
Sales levels are too low to support overheads and other cash demands on the business – this comes down to how viable the business is right now. If the businesses in high-growth mode and sales are increasing rapidly, then the business needs finance to support that growth and we need to review a financing plan. If the business isn’t in growth mode, we need to focus on how we grow sales.
How to counteract the negative effects of the economy
With the loss of jobs and no tourism, the economy has taken a hit. This means when we all get up and running again, the ability to grow and build your business will be harder, especially with a tougher economy.
You now need to consider what might happen in your business as a result of tougher economic times and put some measures in place to counteract any (more) negative effects.
– Increase customer retention – Get to know your customers. Building a relationship with your customers increases their loyalty. It’s always easier to keep pre-existing customers, but making new connections will be harder.
– Increase leads – First, ensure you have a strong online presence. Most people find new products or services on the internet, so make sure you’re easy to find. Use Google My Business to increase your visibility in Google searches.
– Maximise your SEO ranking – Ensure your website is modern, demonstrates your value, and has clear contact information and calls to action.
– Turn those leads into customers – A customer should receive the same awesome experience, no matter which person they deal with or product/service they buy from you. Ensure you have a sales process in place and train the team on how to follow it.
– Make more money per transaction – The most obvious way to do this is to increase your prices. While discounting can be a good way to get customers through the door (online or physical), it can lead to a lower transaction value. Where possible, try to limit discounts and only discount end-of-line products or those becoming obsolete.
– Lower your cost of sales – Ensure you’re taking full advantage of any early payment discounts offered by your suppliers or contractors. Have a look at how you can give the same experience and quality at a lower cost to you.
How to improve your cashflow
There are hundreds of ways to improve your cashflow. As part of our service, we focus on how to improve your cashflow with practical and proven strategies relevant to your business.
Here are just a few ideas:
Make sure you have a robust process for debt collection and ensure you adhere to it. Consider outsourcing your debt collection to a third party.
Communicate your Terms of Trade from the beginning. Contact customers the day their invoice becomes overdue. Be persistent with your contact and try different methods, for example, phone, email, social media messenger, and traditional letters.
Get credit references or personal guarantees from customers, set credit limits, and require goods and services to be paid upfront.
Regularly monitor stock levels and get rid of obsolete stock.
Ensure you understand buying trends so you can plan for quieter times.
Create a personal budget and stick to the amount of the monthly drawing.
Consider financing asset purchases instead of paying cash outright.
Take the next steps to help your business succeed
As Richard Bach said: Every problem has a gift for you in its hands.
With the current circumstances, you can run or face what must be changed within your businesses with gusto.
Vibrant Business is holding a Cashflow Webinar so you can understand your business figures and inject more cash when it’s needed at any time of the year.
In this online training, you will learn:
Your break-even point and how to reduce the cost of sales
To identify management strategies to boost your cash stocks
How to determine your Cash Conversion Cycle
How to differentiate your business and prepare for economic downturns
Simple tips and strategies to inject more cash into your business
It is happening on September 9, 2020, from 1-2pm AEST. Register to get your link to this webinar here.
It’s a question many (many) business owners are asking themselves right now.
And the answer might be very simple…Only if you innovate.
Almost every business in the next 6-12 months is going to change, if they haven’t already.
This could mean changing your services or having your team work from home or changing the entire structure of how your team works. It could mean taking your events online, like we have, or introducing new products and services. It could also mean a completely new business.
Whatever it means for your business, now is the time to make the changes.
The secret of change is to focus all of your energy not on fighting the old, but on building the new. – Socrates
The Five A’s of change breaks it down simply:
First we must be aware of what needs to change. Perhaps we want to work smarter, not harder, so we can have more family time and better financial returns.
We have to accept that in order to work smarter we will need to do things differently. There is no magic bullet; effective planning is critical to achieving change.
Once we have a plan; we must actually implement it. Taking action can be simpler than imagined; one step at a time, the momentum for change will grow. But, if we don’t act, planning is pointless.
Having someone independent to hold us to account is typically a foolproof way to ensure we act. A bit like going to the gym before work… we’re more likely to show up if we’ve committed to a friend or paid for a personal trainer.
Humans are habitual creatures. It takes 21 times to change a habit. By celebrating the success of taking action and forcing change, we help to reinforce that good behaviour. The reaction is a chemical one.
So I ask you this: What innovations are you making in your business at this time?
How to get more profits in your business right now
As well as looking at what you can create and build in your business right now, you also need to look at how your business makes a profit.
Making a profit isn’t something that happens overnight and right now everything could have changed for you.
To create a good return from your business you need a clear focus and a well thought-out strategy for increasing profitability.
This means reviewing your business model and looking at every area of the business, to see where you can cut costs, increase margins and maximise revenue.
Focus on your key drivers
Having surplus cash at the end of the year allows you to invest back into the business, fund your growth plans and increase the size of your own dividends and drawings as the owner. And, yes, you can still finish the tax ear on a high.
To achieve these profits, it’s important to focus on the key financial drivers in your business.
To drive profits:
Boost sales – the more sales you make, the bigger your net revenue, so investing in marketing, sales activity and business development will be key to a better bottom line.
Increase prices – by setting a higher price point, and keeping your ‘cost of goods sold’ number low, you create a larger profit margin on each sale – upping your profitability.
Cut costs – operational costs and overheads eat into your potential profits. So spend management and cost reduction are vital to creating a more profitable model.
Reduce taxes – tax liabilities will be one of your biggest costs, so sensible tax planning and use of tax reliefs will help to reduce your taxes and ramp up your end profit. There are plenty of tax reductions and subsidies right now too.
Talk to us about boosting your profits and making changes within your business right now.
These powerful tips are simple and effective. Consider the things in your business that you would like to change and what stage in this process you’re at. What is your next step? Whatever your current situation, empower yourself and make a commitment to real change.
If your business goal is to increase profitability, we’ll help you review your business model, identify your key financial drivers and proactively drive your profit performance, even in our current times.