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Finding An Accountant To Suit Your Business

For all small businesses, whether retail, service based or otherwise; day-to-day management can get hectic to say the least! From taking care of staff, to dealing with orders and other areas of daily operation, for those in charge of a small business there are simply countless areas to contend with and as a result, the financial side of a business can quite easily get neglected.

From payroll, to invoices to expenses and cost management; maintaining the financial side of any business is crucial to its success. Whatever the business, a healthy financial profile and good control is key; knowing just what is going where, what is costing the business too much and where crucial savings can be made really can make all the difference to a business. With so many other areas of a business to focus on however, it is often easy and often the safer decision to entrust finances in the hands of an accountant.

Whether you know what it takes to control the financial side of your business or are new to it all, the right accountant can make all the difference, working with you to strengthen your business all the whilst freeing up your time to focus on other areas.

Investing in an accountant could be the best decision you make for your business and the below tips are designed to help ensure that whatever the business, you get the right accountant for you…

  • Experience – For small businesses in particular, it is often agreed that specialist small business accountants are the best option. Although it may seem enticing to go with a large financial company you have to remember that you may just be the small fish in the big pond and easily get neglected as the least important client. For those accountants specialising in small business finance you stand a far better chance of getting a dedicated service from an expert who can understand how your business works.
  • Services – Whether you require all round accountancy services or a specific service; generally speaking it is often best to go with a rounded accountancy firm that knows how to deal with all areas of business finance. You may have everything under control and feel as though you only need assistance with a certain area but as a small business, it is often all too easy to require a little advice and support here and there (particularly when it is time to file a tax return) and the more your chosen accountants know; the better looked after you will be.
  • Trust – When it comes to your business finances, trust is everything so when searching for an accountant for your business so why not consider selling recommendations from friends and family? Whether you know someone who has a business or know someone who is an accountant themselves, it is important to go with a trusted source to ensure your businesses best interests. You could even seek recommendations from other businesses too!

A healthy financial profile can help ensure any business stay on the path to success. Whether you require bookkeeping services, payroll assistance or all round financial support, find the right accountant for your business and you’ll be surprised as to just how easy things can get!

Starting a New Business – Learn the Basics

“I’m going to start a new business,” you say with enthusiasm and excitement. You have a great new business idea and tell your friends and family all about it. Then you realize that you’re not sure where to start. This article will give you a new business basic checklist. I’ll cover business names, products and services, insurance, bookkeeping and marketing, to help make your new business a reality.

Business Names

So you are ready to take the plunge and get started. First things first, decide on a business name. Consider names that are easy for your customers to remember and not too long that it limits itself with social media or web page design. Check your local state for a business name register and see if your business name is available. There is usually a charge for this service and most countries require you to be registered. In Australia you may also need an Australian Business Number to meet your taxation obligations, and this is usually done at the same time.

What product or service will you provide?

The next step is to decide on what you are selling, whether it is goods, services or both. Do your local market research and look at your competition and analyze what they are providing to customers. Ask yourself if your prices are competitive and the services comparative to what you are trying to market. Let’s use a new lawn mowing business as an example. Joe’s Lawn Mowing provides only lawns and edges to customers, could you provide more? You would need to decide on what services you will be providing, for example: lawns, edges, rubbish removal, and gardening. By providing more services in some cases this may give you the competitive edge over the competition. Check your local council for any rules, restrictions or licenses that may apply to your new business.

Business Insurance

What if something goes wrong? You are mowing away and crash, a rock goes through the car window of a Porsche. Insurance is really important to any business if something goes wrong, it’s imperative that you are protected from loss or damage. Get some quotes on public liability, and if you are consulting or advising you may need professional indemnity insurance.

Bookkeeping

I know how much we love the bookkeeping side to the business, however don’t put it off and be the one who gives the shoe box to the accountant. Take some time and learn the basics, these days you can learn over the internet on You Tube and many other sites. You can always buy an easy accounting software package to get started or if you’re a wiz at excel make up some simple accounting sheets. There are also many template examples free on the internet.

As a business you need to know how your business is doing financially at a glance. You need to know what your breakeven point is, what mark-up you will use and what your profit will be. A successful business knows what their finances are doing. With the right package you can control your stock, know what needs to be ordered and what is most popular. Put together a cash flow forecast with actual and projected figures for the next 12 months. This information is vital for your business’s survival in today’s economic climate. Your bank manager needs this information should you need a business loan and you need to know what cash is flowing in and out of your business.

Marketing Your Business

Put a marketing plan in place, there are many good ideas and templates online. Some simple marketing strategies to help you get started are:

  • Set a budget and stick to it, sometimes it can be really easy to get caught up in the moment and spending more than you need to.
  • Look at your target market – who are your clients? Male, Female, under or over 30, families, or tradesmen etc.
  • Build relationships with your clients and find out what they need.
  • Network – take business cards where ever you go, but don’t be pushy, talk, listen and build a relationship to work out their needs.
  • Social media sites – fairly easy marketing plan and advertising templates.
  • The local newspaper.
  • Create a great easy to read and navigate website.
  • Be a professional – be confident, be approachable, be understanding, and be knowledgeable about your products and services and how it fulfills their needs not your pocket.

5 Valuable Ways Business Funding Will Scale Your Business

Most businesses think that business funding is something that you need when your business is short on cash or times are hard. A lot of businesses go out looking for business funding when the business is not good. The time to get business funding is not when your business is doing horrible or you are strapped for cash.

If your business is doing great, there is no better time to go out and get business funding. Why?

1) It’s easier to qualify
2) You can get better rates and terms
3) It’s easier to grow your revenues with a capital infusion
4) It’s easy to utilize the simple formulas that we have in here to scale your growth.

DON’T WAIT FOR THINGS TO GO BAD; IF YOU ARE DOING GOOD – BUSINESS FUNDING CAN SCALE YOUR BUSINESS TO THE NEXT LEVEL.

This is how you can determine if business funding can help your business grow. There are 5 simple steps which will show you the value of business funding.

Step 1: What Do You Need To Grow Your Business?

While this may sound like a stupid question, it is a very important question.

The FIRST STEP you need to take is determining what your business needs to grow sales. Most businesses need one or more of the following?

• Inventory and More Products
• Expanding Existing Line of Products
• Adding Additional Services
• Marketing and Advertising
• Sales People or Personnel
• Machinery, Equipment, Software or Hardware
• Expanding into other Territories or Adding Another Location

Step 2: How Much Money Do You Need to Achieve That?

How much money do you need to achieve that? Again, another simple question and it may sound stupid. But you need to start off with basic questions.

How much would you like to invest into your business or how much do you need to grow your business?

$10,000, $20,000, $40,000, $50,000, $100,000 +

Step 3: Where will the come from?

There are only three forms of cash that flow into a business:

REVENUES FROM SALES
INVESTMENT DOLLARS
DEBT: A LOAN OR LOANS

Where will the money come from to help your business grow?

If you have an existing business and you want to invest in your business you either sell more or you have great close out balances and have enough reserves to re-invest. If you plan on selling more; most sales and marketing strategies require some sort of cash infusion. If that is not the case you only have two options: an investor or a loan.

Step 4: If you had the amount of money you need to do what you want in your business – there are two key questions: If you know the answers to these two basic questions; you will know immediately how to increase your sales fast.

1. How much money will you make with that money?

In technical financial terms – What will be the ROI (Return on Investment)?

2. In what time frame will you make that money back?

In what time frame will you achieve the anticipated or projected ROI (Return on Investment)?

EXAMPLE (CASE STUDY): (Simple Version)

If someone gave you $100,000 – what would you do and how would that impact your business.

Example:

I (YOUR NAME) would take $100,000 and allocate that money into marketing and increase personnel. (NEED AND WANT)

I (YOUR NAME) would take $100,000 and make 50% return in 5 months. The equivalent of 10% return per month…

Based on this information, you are clear on how you would use the money, what type of return you would make and in what time frame.

The next step; is to determine if you can?

• Increase sales to $100,000 and have the extra money to do this.

• If you obtained an investor how much would they want? Most investors will either charge you anywhere from 10% to 30% in interest or they will want 20% to 50% of net earnings. You have to figure out the cost of capital versus your return.

• If you obtain a loan the interest rate may range from 7% to 30%. You need to factor in the cost of capital versus your return.

EXAMPLE (CASE STUDY) – Crunching Numbers:

For Existing and Operational Businesses

Food Distributors of America currently generates $50,000 per month on an average. At the end of the month they close out $5,000 positive which is about 10% net. Currently, there cost of inventory is $20,000. This means every month they purchase $20,000 to make $50,000 Gross. The question you need to address is: How much are my costs to generate gross earnings? Once you know that, you know how much you need to increase gross earnings by 10%, 30%, or even 100%. In this example, we can increase earnings by 100% by making a capital infusion of $20,000.

We know that $20,000 generates $50,000 per month. We know that $20,000 and $50,000 of gross sales generates $5,000 per month net; which is 10%. They want more inventory because they have prospective buyers.

Conclusions:

• An additional $20,000 would generate an additional $50,000 in gross sales; increasing earnings to $100,000. This is a 100% increase in gross sales.

• An additional $20,000 would generate an additional $5,000 in net margins; increasing earnings by another 10% monthly = 20% monthly.

• If this business can do this every single month, they would increase net earnings by 10% x 12 months = 120%.

Not all businesses can do this. Even if you increase your net earnings by 2% per month = 24% increase in 1 year.

Businesses that carry inventory have an easier time achieving this.

Businesses that sell every day; such as restaurants, hair salons, and anyone who sells consumer products; have an easier time achieving this.

Seasonal businesses can also achieve these types of returns.

Step 5: Calculating Cost of Capital versus Return on Investment (ROI).

If you don’t have the extra money; you will need an investor or some sort of business funding or a loan.

There is nothing wrong with taking on investors or a loan. Most successful businesses have grown with capital infusion. Think of this way. Would the New York Stock Exchange or would the Chicago Board of Trade exists if businesses did not take on investors or debt? All businesses on major stock and debt exchanges have investors or debt.

How do you calculate ROI and Cost of Capital? Easy as 1, 2. 3.

Let’s assume you are able to obtain a loan for $50,000 to invest in your business. You project that you will make 5% return per month for the next 5 months = 25% return. Let’s assume you get a loan with a 12% annual rate = the same as 1% per month.

5% per month (your return) minus 1% = 4% your new return
4% x 5 months = 20% (after cost of capital)

The interest rate on a loan is important. However, if you know how to make a Return on Investment with a loan you will WIN in the end. More important, this is known as OPM (Other People’s Money). Making money with other people’s money! Read the Art of the Come Back, by Donald Trump. Do you think Donald Trump, Warren Buffet, and others utilize their own money to make money? The answer is NO.