Why didn’t coalmine canaries have fitbits?

Every Friday we just want to stop the world for a moment and give you a couple of real tips to think about that will make a real difference to your business and in your life.

There’s an old saying advising us all that prevention is better than cure.  And it’s absolutely true – in health and in business.  The problem is that oftentimes, illness strikes and has us in its grip before we realize what has happened.  This also happens in small businesses.  You wake up one morning, the sun’s shining, breakfast, off to see the accountant and suddenly you’re being presented with a P&L sheet written in red blood ink.  Where’s the warning?  Is it too late?  Will panicking help or will open-mouthed shock save us?  So many questions as hysteria starts shutting off oxygen to the rational parts of the brain.  And yes, sadly, sometimes it is too late… sometimes.

Canaries are “lag indicators”

A long time ago in lands far, far away, canaries where taken down mine shafts with coal miners.  The theory was that if the canary lost consciousness (okay, died) because of the presence of noxious gases, it was time to evacuate the mine.  Okay, two things here.  Firstly, yes canaries lack the capacity to survive poisons in the quantities that we can but also they don’t need as much oxygen to stay alive (hmmm).  Secondly, and closer to the point, by the time anyone noticed the deceased canary there was very little time, if any, to escape.  Kind of like having a reverse parking warning tone go off after you’ve hit the car behind you.  Too little too late.

Fun fact: an elevated heart rate (even in canaries) can be a sign that an avoidable oxygen crisis is somewhere around the corner.

If only 19th century coal miners had fitted their canaries with fitbits, they would have noted the elevated avian pulse rates and headed for the nearest exit. Alas…

The value of “Lead Indicators”

Unlike the canary, a fitbit uses facts to offer precursors to what might happen next as opposed to what has already happened.  Newspaper reports, P&Ls and almanacs are basically, historical records.  From this we can deduce what went right and what went wrong.

You, we, all of us are often better serves by “lead indicators”.  A “Value of Sales Pipeline” is a great example.  It’s useful because it will tell you what is going to happen (good, bad or indifferent), well before it actually does.  This gives you time to make adjustments – strategic, operational etc – that will benefit your business.  If you are genuinely interested in how you can proactively drive your business forward and grow and protect your profits, we’d love to chat with you about that proactively instead of re-actively.

For triple extra-small fitbits… can’t help you.

Enjoy your weekend.

 

…and here’s the other half of your success formula

Because we’re all about helping families derive more benefit from the business they own rather than merely working in a business that owns them, we need to shine a light on the whole truth about commercial success.  It’s a little unconventional but there again, I already started a paragraph with “because” so what could be worse than that, right?

It’s not all about the numbers

Knowing your numbers, working with them, understanding that they are indicators and/or contra-indicators of future success is vital to the long term success and growth of your business.  That’s the truth!  And so is this:

“Your pipeline is your lifeline”

Without a sales and/or services pipeline that is constantly full or being filled, all your tomorrows may be filled with uncertainty.  Again, understanding and using your numbers to great effect will ensure the revenue you generate offers maximum benefit – but without pipeline replenishment, you’ll have less and less to work with.

Here’s what we all need to know

Brands make businesses sustainable.  It’s true.  Whether large or small, your business runs on reputation and what people perceive to be the value of your goods and services within a defined market.  I’m pretty sure that’s written down somewhere.

In our opinion, “Dent: key person of influence” is one of the best in the business of business branding and for that matter, so does the Huffington Post.  They dubbed them “the world’s leading personal brand accelerator.”

An offer as close to free as we could make it!

Okay, back to making your revenue do more for you and your business: I have a discount code that will save you 50% on the price of admission to Dent Business Brand Accelerator events in Sydney Melbourne and Brisbane.

The focus is on:

Scalability – freeing yourself from the day to day demands of running your business.

Differentiation – it feels like “unique” is becoming extinct.  Here’s how to stand out from the crowd.

Influence – helping you to set yourself and your business as a destination which in turn draws the market to you.

Aaaand here’s the code  that unlocks the huge discounts and details the dates and venues.

I can’t make the Brisbane event but such is the value to businesses of the principles taught here, I’m heading down to the Sydney event which is Saturday 25 February.

Seriously, what’s not to like?

 

 

Like a rolling… tennis ball

To say things got a bit warm over the weekend would be like suggesting too much tax is an inconvenience.  As the mercury soared, I stayed close to the air-conditioning while my thoughts were with small business owners.

Something we hear quite often from our new and prospective clients is that they are trying to grow and increase profits but it can feel like two steps forward, two steps back – on a good day.

Why?  Well one reason is tax.  And one of the reasons we at Inspire exist is because so many small businesses find that they are paying too much tax.   That explains the demand for accountants that are committed to easing the tax burden so families can benefit from the business that provides for them.

As people come to this realisation, we are becoming more and more involved in businesses and the business of helping people achieve tax savings (to help give and spread an understanding of necessary steps, we’re making a webinar available to everyone who’s interested but more on that tomorrow).

Tax helps those that help themselves

So, the long held premise upon which the concept of tax was built was that it would help the powers that be provide public works and armies.  This morphed into exploring (and probably conquering faraway lands), public buildings and satellite launches (I’ve probably skipped over about 1500-2000years here… to save time).

Here’s the interesting part: over the years (and centuries) governments around the world have become more and more creative when it comes to instituting new and interesting taxes.  Yet the average small business owner continues to apply a “medieval” approach to insulating themselves against profit-sapping taxes.  I’m not suggesting that an exotic array of tips and tricks need to be employed to ensure you don’t simply “give away” close to 50% of your profits in taxes.

However, let me just reinforce an important point.  If upwards of 45% tax on your hard-earned profits seems steeper than your next electricity bill after a summer of stiflingly hot weekends – it’s time to test drive a new accountant .

Quick tip – to help minimise tax, check out the feasibility and benefits of structuring your business as a trust or company as opposed to a sole trader… and be pleasantly surprised!

If you’re not moving up, you’re rolling backwards

World champion basketball coach Pat Riley once offered that teams should think of themselves as a tennis ball on a hill.  If they are not actively be propelled up the hill, they are actually rolling down the hill – there is no in between.

This absolutely applies to your business results in general and your tax situation in particular.  A “she’ll be right” or “I’ll just keep plugging along” leads to the same curious ending as the example of a child opening a savings account with a $5 deposit, only find that at year’s end not only has the deposit disappeared in a puff of account-keeping fees but an amount is actually owing.

Quick tip – a profit improvement plan, carefully crafted by your accountant can safeguard your hard-earned returns.

Okay, there’s a break in the hot weather, you might want to give your business a break as well by calling us for a chat about how best to keep your cash in your pocket.

Little (coffee) shop of horrors (part two)

If a familiarity if not a deep understanding of the numbers in and around your business was not necessary, we wouldn’t be here.  But it is and we are definitely here for you.  So grab a coffee if that’s your thing and we can also finish the story about our café.

But before we go there, we wanted to help you understand why numbers are important instead of just saying they’re important over and over again.  Now remember, there are two sides to every coin and that goes for numbers that relate to your business as well.  Let’s take a look at the pros and cons and find out why numbers aren’t always enough.

The pros and cons of numbers

Numbers can’t be all good though, can they?  We think that numbers are all good but it takes a skilled listener and experienced practitioner to interpret and translate them into profitable actions.  Nonetheless, here are the pros and cons – shortlisted.

Pros:

• Honest – When it comes to profit and loss, the numbers are absolute quantities.  They don’t lie because they cannot lie.
• Translatable – language, especial the English language is very much open to interpretation. Income of say $800k per annum versus $1.2m in outgoings per annum means trouble in any language.
• Indicative and interpretative – a number of financial services providers are at pains to ensure that you (potential clients) understand that past performance is not an accurate predictor of future performance.  Numbers however can and should be used to let you know what is working in your business and what needs to be adjusted.

Cons:

• In the hands and calculators of the uninformed numbers can be made to paint pictures that are not entirely accurate or even misleading.  It’s important that the people working on your numbers are on your side and share your code of ethics.
• Numbers can become more and more complex the deeper you dig.  Knowing when to say when to avoid “analysis paralysis” is key.
• Delving into the figures before arriving at a conclusion isn’t as sexy as just going on gut feel and running with an idea – but dealing with sizable losses isn’t very sexy either.

So whatever happened with the café?

We love coffee and we love numbers but we couldn’t serve two masters.  The numbers helped us to decide that doing good for our clients with our accounting skills was logical, practical and best for all.

We still love to give our all to our Inspire clients and we still don’t sic the clock and timesheet on you if you need to enquire about something.  And we most certainly still relish the opportunity to have a coffee with you – we’ll just get it from the local coffee shop instead.

Little (coffee) shop of horrors (part one): Numbers never lie

Did we mention we had a coffee shop – of sorts?  Yeah, we wanted people we met to be at ease and to share our fondness for constructive chats.  So we turned part of our somewhat oversized premises into a café.

It was a really cool idea and one that most certainly would have worked under a different set of circumstances.  Under the circumstances that governed our reality at the time though, we realised that in order to highlight our customer service culture, we had gone against other rules that we live by.  Diversification is good and creatively liberating etc but if it isn’t in line with your carefully laid plans and imperatives – shelve it for the moment.

Why did we do it?

We often talk about the fact that applying the timesheet to every facet of the business we have built is counterproductive.   Simply put, when you’re charging by the six minute increment, clients tend not to talk all that much.  Furthermore, understanding only part of their story as a result, limits the depth of service we can provide.  This is bad.

We felt like we needed to go further than getting rid of timesheets, doing good in the world and valuing our service based on the measure of satisfaction (tax savings) we provide.  “Alright then, let’s run our own café, so people really feel like we’re on their side and are committed to devoting time, effort and energy to what’s important to them.”  But there’s a fairly harsh saying that actually has some truth to it:

“the road to hell is paved with good intentions”

Two important definitions that applied to us, that may apply to you:

• Good business – working at aspects of your business that you (and your accountant) agree are logical, profitable and efficient
• Good intentions – as trying to run additional activities, based on a good idea, that are time-consuming, confusing and are eating into your profits.

So just do my job? Where’s the fun in that?!

Alright, you sound upset.  But we’re not saying, don’t step outside the box, don’t push the boundaries, don’t try new things.  The point is that if your heart and brain say something’s a good idea, let the numbers confirm that before you charge in.

Numbers are great for double-checking theory, logic and feasibility.  Some of you may be thinking that adding a new and interesting wrinkle to your business that you can “learn as you go” will eventually pay for itself.  Good but first test that theory with an analysis of the numbers which should also include the time costs.  Not everything’s about dollars and cents.

Keep in mind that your business should be a vehicle, an enabler of some of your life goals shared by both you and those most important to you.

To be continued…

Things to think about when thinking about payment terms

Newsflash:  Cash flow is still the number one priority to many businesses out there today and rightly so.  Some have described it as oxygen keeping their businesses alive, others see it as fuel that drives their commercial success.

For something so widely understood to be of such high value to enterprises, it’s surprising that more isn’t being done to safeguard it.  That doesn’t mean people are necessarily being careless with income and expenditure – far from it.  It may simply mean that the numbers behind the numbers are not being recognised for what they can do for or to your business.

What really counts

We’ve often said it but here at Inspire, we are numbers people and we’re proud to say that we’re the type of numbers people for whom everything counts.  That’s not just a snappy pun, it means that we like to think about why your costs and earnings are the way they are.  These days, going beyond mere reporting of what’s taken place is far from enough.  We (you) need to know where improvements can be made, how, why and when.

Here’s a way of improving your cash flow position starting right now

When you receive a hefty electricity bill, car rego notice or even a chunky supplier invoice there can often be feelings ranging from mild concern to white hot panic depending on your circumstances.  The further along the panic continuum you find yourself, the more urgently you find yourself looking for the due date.  And it feels great when you realise you still have a month to pay.  At this point you are relieved and grateful for that grace period and you might move on with your day from there.

But just because the government, the utilities suppliers or your telecommunications provider is happy to wait for its money, should you follow suit?  Keep in mind, they may be a national or international service provider, you might be a start-up.  They may have a cash sheet that looks more like old-school binary code because of the clusters of zeroes in the credit column, you may be slowly building something that will benefit your family.

Let’s contextualise this: If you’re a $1 million business and your customers, on average, take 30 days to pay you, imagine for a moment if they only took 29 days to pay you.  The positive effect on your bank balance is almost $4000 (based on $1m divided by say 253 normal work days).   That’s just one day’s difference.  $4000.  What if you brought that number from 30 days down to 10?  Suddenly you’re looking at numbers like $50-60k in additional liquidity!  These are important little equations that make a big difference to small businesses.

Why then, should you extend the same generous payment terms that essentially tie up your cash as a large corporation?  You’re not obligated to extend 21, 30 or 60 terms if it simply doesn’t suit your business model and your cash flow requirements.  If you are a small business or even a medium sized enterprise, base your payment terms on your cash requirements.  Here are a couple of tips to employ right now:

• Speak to your accountant about what your cash flow should look like.  Ask about what kind of terms would best benefit your business and accommodate growth and sustainability – based on the numbers.
• The moment a customer engages your services, ask for a deposit.  It signals to them that you are now committed to the work and by the same token it gives you a little bit of liquidity – and peace of mind.

We love a chat here at Inspire, as long as we’re chatting about numbers (only half joking here), so to make these tips and more part of your business as usual, drop us a line about your number one business priority along with the rest of them.

 

Life in the best lane

Towards the tail end of the weekend I remember seeing some hype about the Superbowl which is the grand final of American football for those that aren’t familiar.  It’s beamed around the world to a HUGE worldwide audience – a massive event.

So huge and all-consuming is it, that even those with less than a passing interest in giant, helmeted humans attempting to kill each other over a football will slip away from work to watch the fighter jet fly-overs, the half-time show, the star spangled awesomeness of the whole spectacle.

I mean, if they choose to.  And choice is what I got around to thinking about on the weekend once the Superbowl commercial had finished.  We have a number of guiding principles here at Inspire CA and it is our hope that our clients see the value in them all – especially the one about lifestyle.

 

Create Your Lifestyle

“Never get so busy making a living that you forget to make a life.”

That’s about choice too.  It’s a choice because if you own a small business or even a larger concern, you have the opportunity to work hard and be rewarded… or work harder still and be rewarded.  Even the most efficient, business savvy people in the world realise that they could literally find enough work to do to take up every hour of every day – if they wanted too.  But a wise person once said, “No one lies on their deathbed and thinks, I wish I had spent more time in the office!”

If you’re smart, you’ll be efficient enough to ensure that you’re not overworked and have time to give to your family and other interests.  If you’re wise, you’ll choose to make a difference to those important to you by cashing in those extra hours for family time or new adventures.  Maybe even sample some American beer, gorge yourself on hotdogs and marvel at the carnage being played out on the gridiron (American football field) right before your very eyes whenever you want.

 

Work out why you work

My last thought for this edition of “How was your weekend” is actually a tip.  Revisit your vision for your business and then go one step further: what did you want it to help you achieve in life.  Write it down, tattoo it on your arm, tattoo it on a friend’s arm but just make sure you remember that your business is supposed to work for you, not necessarily the other way round.

 

WARNING: The more things change the more they stay the same unless

Every Friday we just want to stop the world for a moment and give you a couple of real tips to think about that will make a real difference to your business and in your life.

So we’ve reached the end of another week and we are now hip deep into February – already!  2017 is off to a very fast start and if we’re not careful we may become too busy to keep learning and improving our businesses, lives and business lives.

However, there are some things you can change to make sure you don’t fall back into repeating mistakes from years past or simply missing out on the opportunity to build momentum.  Alright, some tips, then.

Protect your profits

Profits are like the most endangered species – from a small business perspective of course.  As soon as we spot a profit, large or small, we can’t help ourselves – we capture them and then they’re gone.  Profits become an instant answer to a short-term operating cost issue; a quick and easy way to make a payment; lunch money – whatever.  And then before you know it (or reach the end of the month or the quarter) they’ve vanished.  “What happened to my profits? They were right here!”

TIP: Take your profit and set it aside first.  That’s the reward for your hard work – keep it safe.

Concentrate on where you add the most value and outsource what you can

Google just informed me that a team of artisan bakers can produce up to 5000 loaves a day.  So why would we spend hours of our own time baking bread unless we wanted to?  This doesn’t just apply to baking bread it applies to making money too.

If you have some highly sought after skill or product, pour your time into that instead of sacrificing family time or leisure activities.

TIP: Start by outsourcing your bookkeeping and spend more time doing the things that are really important.

Learn how to win at the numbers game

Visiting your accountant can be like watching TV: mildly entertaining if they’re the cheery, chatty type but worst case scenario it can be a bit a like a documentary on erosion without the time-lapse photography.  All you’re doing is watching something play out while you sit there.  Understanding the numbers is the key to changing all of this.  When you “get it”, you’ll become more involved in driving the positive indicators, not just during your visit but most likely, every day.  And that’s a good thing.

TIP:  Ask your accountant to teach you about what’s going on with your numbers, not just “report” on what’s already happened.  You’ll be glad you did.
Okay, the weekend is almost upon us, have another read of this week’s tips on making a change and have a great one.

How to avoid partnership PANIC!

Everything ends badly.  If it didn’t, it wouldn’t end…

That is a very pessimistic view – let me say that right out of the gate.  But is it the view of a pessimist, a realist or perhaps a pessimistic reali… I’ll stop.  Take for example the fairly recent case of Mercedes Corby’s business partnership with her “bestie” that went horribly and quite probably, irreversibly wrong!

Here’s the link.  Yikes!

If you don’t think you can stomach the news clip or are simply averse to broadcast journalism – here’s the skinny.

Going down with the (partner)ship

The two ladies, by all accounts very good friends, went into business under the partnership structure (as opposed to a trust or a company structure) suffered some business-related adversity, turned on each other and the business is now in tatters.  Presumably, aspects of their lives may also be in disarray and this is an all-too-common occurrence when people enter into a partnership with ineffective or zero, safeguards, by-laws, advice…

No doubt partnerships are absolutely the right business structure for certain entities but even so there will be good times full of laughs (Boston Legal – old school but funny) and trying times full of fears and paranoia (Suits series 1 – forever).

Avoid sleepless nights and ugly fights

After the proper due diligence and talks with trusted advisors a lot of people opt for the relative safety and peace of mind that a Trust or Company structure can offer.  In very basic terms (and please do contact us/ if you want to learn more) these structures protect you and your personal assets from aggrieved stakeholders, workers, teammates in the business and so on.

On the other hand those locked into partnership business structures may lay awake at night wondering if an oversight by one of their partners may mean a teary farewell to a chunk of their assets.

Sleep on it (if you can) and maybe give us a call for a chat if you are thinking about which business structure might be best for you.