How to break through your own business barriers
John Knight is managing director ofbusinessDEPOT, a marketplace of business specialists working together to help SMEs reach their goals. An accountant by trade, John shares some shortcuts to help business owners stay on the right side of their numbers, and get out in front, faster.
As accountants and bookkeepers, we see more than just the financial mistakes business owners make. In fact, the numbers can act as a springboard for deeper discussions about the hidden barriers to our clients’ success – and how to break through them.
We’re happy to share our top five ways you can help your own business thrive, despite the inevitable challenges along the way.
Tip 1: Beware of the deadly squirrels
In business, it is very easy to be distracted by the next idea, next initiative, or next project. But those bright shiny objects that grab your attention and distract you can be deadly. I call them squirrels. Focus is the key to implementing your plans and realising your vision. Look ahead, but always focus on what’s most important right now. Do this, and you’ll reap more rewards in the long term.
Tip 2: Don’t underestimate the power of small
When you’re small, you’re usually also nimble. This can be a massive advantage when your competitors are slow to move or have bigger hurdles than you to overcome before reacting to the market. Use this to your advantage and build it into your point of difference. Know what makes your business different in the marketplace – being nimble can be one of them.
Tip 3: Don’t bury your head in the sand on tax
As you grow, your tax liabilities can sneak up on you – especially if your business is only a couple of years old and just starting to perform. If you lodge a tax return with a big jump in profits compared to the previous year, the ATO will also ask you to start paying tax in advance. This often results in what I call the ‘double whammy’ of tax. So make sure you know your tax timeline!
Tip 4: Sales are vanity. Profits are sanity. Cash is reality.
At the start-up stage of business, sales are the focus. But as you grow, you need to make sure you don’t confuse sales with profit or even cash. Track and predict all three drivers: sales, profits and cash. Most importantly, until that cash is in your bank account, it’s not yours to spend. Keep sane in the meantime by knowing your ‘profit formula’ so you understand in advance rather than in arrears, how you’re going. Your profit formula reflects the drivers of profit in your business – start by separating out your fixed and variable costs.
Tip 5: You don’t know what you don’t know
There are many hats to wear in business. You don’t have to be an expert at everything yourself – but you do need to know who to go to for advice or a shoulder to lean on. Surround yourself with a network of like-minded business owners or a team of advisors who make you feel there is no such thing as a silly question.
Known for being more than a traditional accountant, John is also a public speaker and leads a forty-plus strong team of specialists. They’re based in Brisbane and Toowoomba but provide a range of business services to clients across Australia.
Source: Xero Blog