With the new financial year well underway, I have come across several small business owners that are still reviewing their plans and strategies for the rest of the year ahead. This was the topic of conversation that I had with a group of friends I meet with each weekend for our coffee catch up and discussion forum.
This group comes from a cross section of professions; an auditor, a chippy, plumber, a water proofer and an electrician. What they all have in common is that they are small business owners. Amongst this group there is a wealth of practical knowledge with at least 120 years of combined small business experience. They are living the ‘day to day’ life of small business owner; and as you can imagine, they are pretty handy group when it comes time to do some renovation work at my place.
Our conversations cover many topics and there are a lot of opinions about business and political ‘issues of the day’. So to ‘fire up’ the conversation, I posed the question to all of them: “what are your tips or lessons, for a small businesses survival?” I distilled their answers and suggestion to the following four points:
Fundamentally you need to have a plan:
I have found over the years that many businesses ignore this, not because they are being inept, however normally because they’re just too busy, and it just falls into the ‘too hard’ basket. Good businesses have plans, mediocre businesses don’t, this was the common consensus.
The discipline of writing your plan down is time well spent. It will give you focus and direction, this was agreed by all. Even a simple SWOT analysis is a good discipline, it is not just a tool for big business. I was a little surprised when this was suggested, and I thought it was insightful.
It’s not just about outlining strengths and weaknesses of the business, it also lists the opportunities and the threats that you might confront, and how you plan to cope, manage or take advantage of them. What was emphasised was that plans will change. These changes will can come from any directions; it could be a new competitor, a business opportunity, or even a legislative change. Just don’t ignore them!
You have to watch your pennies:
The old saying that ‘Cash is King’, is right. Business owners that have created a plan normally are better at setting a budget and sticking to it. It might be stating the obvious, however setting a realistic budget is important for all businesses. Just make sure your assumptions are realistic. A properly prepared budget can be empowering and shows how delivering on your business plan will impact on your cash flow.
The biggest ‘bugbear’ for all business and in particular small business owners is cashflow.
I learnt many years ago, all the best made plans are worth the paper they are printed on, if you aren’t keeping your receivables ‘in check’. I also learnt to be methodical about chasing outstanding debtors. It is all about what is in the bank account; hence ‘Cash is King’.
Get trusted advisors:
This group are great sounding board for each other, however this is not professional advice. They are pretty smart however when it comes to the crunch, you should listen to professional advice, and deal with specialists in their relevant fields. I know it will cost, however that is cost of doing business and getting the right advice.
Also when considering advisors, there are some basic fundamentals, which really is just good logic; research the company, interview at least three candidates, check references from their current clients, and you have to feel that you can trust them. They will be partners in your success and you will need to speak openly and honestly with them. Trust is key.
Tech & Software Solutions:
I have to confess that I have a love/hate relationship with today’s technologies. Businesses are becoming more reliant on various software solutions; apps, websites, payment gateways, the dashboards and it feels like the more software the better. On this subject there was unanimous groan from the group as it seems everyone has found it hard to decipher technology and software solutions. “I shouldn’t need to have a science degree to work out how to use them” was the comment.
Tips are: don’t over capitalise on technology and software solutions this can be a trap a lot of small businesses can fall into. You can ‘over gear’ and end up paying too much; I only needed a Morris Minor, not a Mercedes. This is a familiar issue with several of the accounting packages discussed. There are software applications in the market that can help small businesses address specific issues. These are a fit-for purpose solutions. Easy Payslip is one of these that offers a simple solutions to a simple problem – Payroll and STP reporting.
Recently the Australian Tax Office introduced their new Single Touch Payroll (STP) reporting for all employers. This came into effect July 1 and all employers must report employees’ pay and superannuation details to the ATO through its new single-touch system. This new ATO regulation is mandatory for all businesses and it needs to be implemented.
Easy Payslip has developed a fit-for-purpose payroll app and website solution, it will take ten minutes to setup and is a fraction of the cost of the large accounting packages.
Look at what you need and complex it not always right; personally I like easy to manage and understand solutions.
You can find out more about Easy Payslip and how to get started go to www.easypayslip.com or visit your Android or IOS app stores. Click here to get started with a 30 day free trial.