The motivational benefits of knowing your numbers

We believe there is a quantifiable psychological benefit to having a clear view of critical numbers. But instead of trying to quantify them here, early on a Monday morning, let’s just focus on proving to ourselves anecdotally, that it’s true – more inspiring that way.

To me, it’s hard to think straight when there’s sweat in your eyes and your body is crying out for a break from burpees, sit-ups, wind sprints and squats but that’s the consequence joy of signing up for a weekend session with a personal trainer. Here’s what does make sense in the middle of all that straining and “paying the price” for those pastry delights with your morning coffee: knowing how many reps to go, before you can take a breath and relax if only for a few, fleeting moments.

When the trainer roars, “c’mon, only 20 seconds to go” during an exercise, a weird thing happens. The focus almost immediately shifts from dealing with the pain and regretting ever signing-up for PT, to counting down towards the goal and realising that you’re almost there. Five seconds to go. Suddenly, you know that successfully completing the session is in the bag. Weirdly, the pain has stopped, you’re focused and you can actually see the finish line. And time! You’ve done it. Believe it or not, you’re smiling. It could be relief, achievement, pride or a combination of all those things.

And you wouldn’t have made it if your trainer hadn’t given you a magic number to aim at: 20seconds to go.

To business then

Sales professionals the world over, dating back more than half a century from 1960s real estate offices to modern day outbound call centres, know that having a sales target is a motivator, a compass and a necessity. You can’t hit a target you can’t see. In many cases, the shorter range targets are easier to hit. Tell your staff that they need to hit $1.75m in sales in the next 12months and it might happen. Break it down to weekly goals, even daily and chances of success will have increased significantly.

Unless…

…the numerical targets allocated out are not aligned to the overarching goal, the big number, the one that counts. It’s all well and good to get everyone from the front desk/counter/room to the chief decision-makers motivated with target numbers but it all falls flat if they achieve them but the business does not.

Start with the most magical of magic numbers: turnover, expenses and PROFIT (yup, all caps, italicised, underlined and bold). If everyone’s individual numbers (KPIs, SLAs and other three-letter acronyms) flow from that critical number, they will have something solid to aim at. This will absolutely allow them to have a real and quantifiable impact on your business’ goals. The key though, is to align your big goals and from there, identify the numbers that will get you there. Feel free to contact us if you’d like to identify and work towards your magic numbers.

Then, cue relief, achievement, pride. And as personal trainers and physios the world over would say, take a quick water break and get ready to do it all again.

Let’s GO!

Before we go… You’re not a bank, so don’t act like one

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.

Cash flow remains a hot topic and so it should. We have spoken about it before both in our articles and during some of our videos and facebook live sessions. However, I thought I’d leave you today with this one point to ponder and reflect on over the weekend.

“Am I a bank and/or does my business make its money on the futures market?”

Well maybe, in which case stop reading and get back to studying the various money markets.

If you’re still with me, it means that we need to talk about something Paul Clitheroe send on one of the morning shows yesterday and it’s something that deep down, we all know. We need to spend less than we earn to get ahead. Here’s the thing though, maybe you do and you still find yourself unable to shift the needle. Perhaps you even find yourself sliding backwards a little bit. Why? How? How is this possible? What do I do?

Hope for the best, plan for the worst

Have you heard that before? Rather than looking at this as a pessimistic view, think of it as realism. The mistake a lot of small businesses make when looking at their expenses is that they calculate them based on what should come into the business and ignoring what might.

If you believe the simple formula: expenses = income – profit, well good at least you’ve not simply said, “well the expenses are the expenses and we’ll just settle for whatever’s left over.

Tip: Protect your profits, put them to one side, you’ve worked for them, you’ve earned them, they are yours.

Okay, so you know that in a good month your million dollar business might turnover $100k. Great. And you know that on average you’ll turnover $83,333. Alright but what about the down months where, because of seasonality or what-have-you, you’re only going to make $60k… for two of the next three months. If you’ve simply averaged out your expenses to say $63k/month you’re in for some pain through this time if you have not adequately planned for these eventualities.

Tip: Look more closely at your numbers by hitting the zoom-in icon on your finances. Looking at individual months is sometimes more helpful than predictions based on annualised numbers.

Let’s be upfront

The other thing you can do and should do to get the cash flowing in the right direction is invoice for at least a part if not all of your fee upfront. This indicates that you are committed and that the customer/client now has a vested interest in the goods and/or services you provide. Importantly, it also places you in a better position cash flow-wise.

Another important point: obviously, you wouldn’t agree to say, 30day payment terms and then add an interest component to the invoice. You can’t – that’s not what you agreed to and, as already mentioned, you’re not a bank. If the payment is late, maybe but by then the horse has bolted in a way – you’re already 30days+ without any kind of payment. Let the pains begin.

Tip: remember, offering generous payment terms is not a must. Get comfortable with setting terms on your terms and sticking to them.

With a sound reputation for getting results and providing valuable customer service, you’ll find, as we do, that people won’t mind paying upfront.

Have a great weekend!

(Facebook) friends don’t let friends pay through the nose

If we didn’t care, we wouldn’t bother. But we do and that’s why we like to stay connected with clients past, future and present by any means necessary. There are those that believe that an accountant is a “suit” to be visited once a year or once a quarter if you run a business or if things get really messy. And who could blame them for thinking that’s the case. Many people have told us that this is their belief because they themselves are treated like a quarterly tick in the box or worse still an ATM. Ouch!

But it’s a good point. As accountants, we can’t just tell people we care, hit them with a bill and “see you later”. Accounting, just like trust, should be a two-way street and to us that means providing more than filing, processing and billing.

We have a lot to share… for free

Every business is different so to do our job well, we listen first then offer advice, strategy and services accordingly. But we also love to share as much as possible. After all, a well-informed client is the best type of client to have. If you check out our facebook page/ on a regular basis, you’ll see content ranging from

tips and tricks,
short vids with “how to’s”
Shout outs to clients that are doing well and business and life leaders that inspire us
Ways in which we try to positively impact lives
Opportunities to attend specialist sessions that benefit your business in the short and longer term
The odd rant
Invitations to weekly interactive live sessions
Links to articles that inform, inspire or instruct

So why do we do this? Are we disruptive for disruption’s sake? No, not at all. Inspire is here to help, young families in particular, reap the benefits of well-run, profitable businesses. And even though there’s a lot that can go wrong with small businesses, there’s an awful lot of things that can (and should) go very, very right. Ensuring as much as possible goes right with the numbers side of our clients’ life’s work is our primary focus but it’s not something we can do well using just one medium.

By any means necessary

Social media is fantastic because we get to connect with clients, followers and friends on their terms and as time permits. However, we see (and seize) opportunities to meet up in the office, at talks and events, dinners both planned and spontaneous – anywhere. And ultimately it’s not always about the numbers but the number of positive impacts we can have on people’s businesses and lives – whether we know them yet or not.

So if you’re yet to try us out , meet with us or give us a call, hopefully we’ll see you on facebook where we’ll do all we can to save you tax, maximise your cashflow and keep small businesses heading in the right direction… for free!

What’s not to like about that?

We liked this… Take your work home with you… and leave it there

The rising cost of office space, particularly in the CBDs, highlights the need for businesses to get even smarter about how and from where they run their enterprises. The traditional office can work, so do co-workspaces but have we forgotten one obvious option?

One of the things we hear quite often from business owners, employees and people in general, is that they have to deal with a “killer commute”. Hours and hours are lost each week on public transport and gridlock in big cities but some business owners decide to simply work from home. A step further actually. They have based their business at home.

Now, we are all about ensuring your business does the best job it can to support your family and make your life better. Yet here, we are encouraging you to blur the line between work and family. Well not really. Well, not at all. If you are say, a consultant of some kind, maybe client-facing meetings only really happen at their place or at conferences, it’s not a bad way to save on expenses and even reduce tax. And that is something we do advocate. Strongly.

The best rent-free offices we’ve seen to date

This whole idea came up when I first noticed some of these really cool home offices. They range from the simple to the absolutely stunning but none of them look like the owner had settled for a space in which to merely slump over a laptop. Home offices can (obviously) look great and if you’re heading down that road, you may as well do it really well and take pride in it.

Besides, you will be able to:

Eliminate your commute or at least limit it to a (really) short walk
Claim a portion of your utilities such as water and electricity at tax time
Claim a portion of the interest charged on your mortgage! (yup!)

Have a word to us about your circumstances if you’re looking at better ways to work. If your business can be run from home, we’d love to help you sort through the numbers so feel free to drop us a line.

House rules

Isn’t a home office a bit limiting though? Well you don’t have to usher clients to the nearest coffee shop to have meetings because you could of course welcome them to your home office. To make sure that those work/home lines don’t get too blurry though, there are a couple of pointers:

Separate entrances work best – clients shouldn’t have to trip over toys or rub shoulders in the corridor with your teenage kids. A lot of home offices have separate approaches or are entered via a side door.
Common walls are the enemy – Loud music heard through the walls are distracting and may paint an unflattering picture of your business.
Really lean into the office décor, look and feel – if you really want to work well at home, ensure your space doesn’t remind you of your bedroom, or broom closet. Invest in its functionality with some of the money you save on office rent.
Keep a coffee machine or beverage bar in your office – if you find yourself wandering towards your own kitchen to make tea or coffee 4 times a day, eventually you’ll realise that your lounge and TV is just a few steps further on from the fridge! Yikes!

We’re sure there are few more important tips to consider but for now, think about how you could decrease your expense burden (both time and money) within your business and increase family time… and we’ll do the same.

What does a healthy business look like?

Is it just me or have there been a lot of baby birth announcements on social media lately?

Despite the Australian population swelling beyond 24million it may still come as a surprise that a child is born every 1 minute and 40seconds. Which is quite mind-boggling because that means that over 30 times an hour, at least for a moment, a doctor, midwife and or parent(s) are carefully and possibly anxiously staring at a vital signs monitor. Is the pulse rate good (130bpm is good)? Blood pressure? Fingers and toes all there? Arms and legs?… You get the picture. These are all important checks and again, we don’t call them “vital signs” for nothing. They are a good indicator of what the outlook may be.

My baby turns over a million dollars a year!

There are quite a few business owners who care about their business almost as much as they care about their children. Sure, there are parallels but for those of us who have children, there’s really no comparison. That said, for business owners who do feel this way or at least depend on their business profits to support their families, it seems odd that they would neglect their commercial vital signs.

It’s not unusual for business owners to not have a handle on their turnover, how much tax they are or will have to pay, how much profit should be protected, what the owners should be getting paid, payment terms… The decisions made around a thorough understanding of these numbers are a good indicator of what the outlook may be. So whether your baby is turning over $250k or into the millions – you need to keep a close watch on the numbers and what they are telling you.

It’s always best to have a professional standing by

We’ve all seen those movie or television situations where a heavily pregnant lady doesn’t make it to the hospital on time and a kindly cabby/fireman/panicky husband/anxious friend steps up and delivers a healthy baby and all is well.

It’s important to keep in mind that in real life, everything is less stressful when you have a trusted and experienced professional in your corner. Someone who can monitor the numbers and knows the best course of action to take if the unexpected should occur.

Delivering peace of mind

Remember all the things on your list of reasons to get start or run your own business? Do you remember seeing “white-knuckled” stress there?

We’re inspired by the opportunity to provide our clients with an understanding of how to get the most positive impacts from their business. Profit, time to enjoy with the family, fulfilment, pride and the means to help those less fortunate – that’s a good start. In order to achieve these objectives we recommend getting a team of trusted professionals working for you. A team that will happily keep an eye on your vital signs (numbers) and teach you how to do the same.

Feel free to contact us if you’d like to deliver more of the good things in life to the best people in yours. Let’s have a great week.

Before we go… I’ll have the steak, extra fries, hold the tax

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.

Can you feel it? Tax season is getting closer and closer and as we’ve often said, the key to victory is all in the planning. If you’re planning on forking over less tax to the government going forward, you’ll need to have a handle on the rules that affect deductibles from the largest piece of capital (10-colour large format printer anyone?) all the way down to the humble cup of coffee.

Yes coffee – it’s deductible in many circumstances because it can be considered an integral part of a “coffee” meeting with a client or indeed part of a more expansive work day snack.

I can’t believe coffee’s tax deductible, tell me more!

Look, this is very exciting news, especially to those of us with a fiendish coffee addiction but again, you must consider the circumstances. Lining up soy milk, cappuccinos at your favourite weekend breakfast spot while you peruse the sport pages does not conform to the spirit of the law. Paying for the coffee and triple choc muffin a valued client orders during the course of your business meeting, does. You are well within your rights to claim coffee as deduction if it is purchased and consumed in the furtherance of your business endeavours and yes, meetings with clients or fellow team mates when things simply need to get done, certainly qualify.

Here’s what else qualifies

Food. Within reason and under the right circumstances.

Tip: do not head down to your local supermarket, do a weekly shop for yourself and try to claim that. This will eventually lead to problems and a sweaty-palmed Q&A with the ATO.

Here are four circumstances under which you can confidently claim food:

While travelling interstate on business. It can be within your state though, as long as you’re away overnight (easy done in WA with its 2.646million km2 ). $100/day is a safe and fair figure so help yourself to that pub grub or reasonably priced two courser but reconsider the 9 course degustation with matching wines in the city
As part of a working lunch. Again, the ATO understands that sometimes business imperatives demand we work through lunch or stay back past dinner time. Within reason, you can claim that late night office pizza or lunchtime sandwich tray in the conference room.
Inhouse/onsite catering facilities like canteens, hired chefs may serve up deductions for the company.
Once again, those muffins and coffee that you paid for when you sat down with your visiting client – deductible.

The aim here is not simply to see how many deductions you can accrue. That would mean you’re losing sight of the larger goal: to increase profit so that your business can positively impact your family life. Make sure that there is a significant return on investment in the form of efficiencies or profit before you start ringing up deductions.

Have a great weekend and if you’re away working for the next couple of days, don’t forget to keep your receipts.

Protecting your home: What’s yours is yours – let’s keep it that way!

Why are we here? A wonderful question that people from all walks of life, in a number of locations around the world have asked down through the ages. Today, I’d like to focus on those of us who have stepped out and decided to create the best life they could for their family and themselves but entering into private enterprise. I’m talking to the business owner.

One of your measures of success may well be the ownership of the family home. This is one of the things that make the hours of toil worthwhile. We’ve often spoken about how to minimize those hours of toil by the way but again, this is about protecting what you’ve worked so hard to achieve. Home ownership.

A hard luck story

A gentleman owns a small, “hole-in-the-wall” style restaurant. It’s a neighbourhood favourite for those that like great food at a good price… you know the drill. Long story short, this little nook becomes pretty popular, growth opportunities beckon, he moves up the street to a larger location and the cash floodgates are open. So, wildly successful, years of toil have well and truly paid off – and they’ll continue to do so because now the whole family is helping out. Brother doing deliveries, wife taking care of takeaways, kids part-time waiting tables and learning the business.

Until…

One day, something goes wrong, only a handful of people know exactly what but it was most certainly avoidable – admin/bookkeeping anomalies, tax, something like that, apparently the business partner may have dropped the ball. The upshot?

Financial Armageddon! Suddenly, the fines, bills and recompense needed to be paid and made and what’s worse, the neighbourhood loses the best thing that happened to local food.

Even worse than that? Eventually, the family home and private assets came into play…

Take luck out of the equation with the right business structure

Okay, so that was a partnership that went horribly wrong and we’ve spoken about “partnership panic” previously. This was the other side of that coin, where personal assets (the home etc) were left exposed to the ravages of business debt. Here are just two of many steps to avoid that loss and heartbreak:

Shelter under the protection offered by a company or trust business structure. With the guidance of a knowledgeable and helpful accountant, you can sleep easier at night (or the day if you’ve taken the late shift). Life becomes a lot easier when you know that whatever happens, the family home that you have worked so hard for is so much safer than if you chose another structure under which to operate.
If you are a sole trader or in a partnership, you have potentially pared down the costs of doing business but in return you have taken on a fair bit of personal liability and risk (and potentially tax). You are the risk-taker. You need to recognise that and consider your spouse or relationship partner the asset-holder (which means the house etc would be exclusively in their name). Keeping these two entities separate goes a long way to insulating your assets against business risk.

At Inspire, one of our primary aims is to ensure that our clients achieve the best possible lifestyle for themselves and their families. Another is to ensure that they get to keep it.

In part two we’ll share ways you can (and should) minimize your tax.

Stop what you’re doing and learn how to stop procrastinating

Yes, I see the irony. Unless reading our Inspired Daily article is a scheduled part of your everyday work routine, there’s a chance that you’re procrastinating. You are doing almost anything else rather than simply getting on with what you are supposed to be doing. It happens to almost all of us at one point or another. Unfortunately, it’s happening with increasing regularity to almost everybody when they are supposed to be at their most productive.

Before I get to a couple of tips to help you stay on track, let’s look at some rapid fire examples of what stops us from getting started:

Wow, I am actually really hungry, I better get a snack before I get into this
Maybe I should read Inspired Daily, I just need some inspiration
I work better under pressure
I better check my messages, I am waiting for an important update
Goodness, that benchtop is filthy, let me just wipe that down before I get started
Oh wow! (insert name here) just got (fired/promoted/robbed/busted/hooked up/upstaged/embarrassed/harassed/arrested/awarded/rewarded…)

Let’s face it, many of us have never cleaned so diligently, read so intently or absorbed as much near useless data than when we have a looming deadline. It happens – unfortunately.

Great! We’ve admitted there’s a problem, now what?

The next step is always to try and understand a problem. Understanding the problem helps us to adopt or devise solutions that are sustainable rather than band-aid solutions that are temporary fixes at best.

Here’s part of what we know. Firstly, we are very good at associating environment and stimulus with a specific response. At night I go to bed… and fall asleep. I sit on my sofa and… watch TV. I arrive at a coffee shop… I ask for coffee.

Tip: Don’t take your laptop to the lounge room, park yourself in front of the TV and expect to study/work effectively if that’s where you normally binge watch your new favourite show. You’ll end up “just having a quick flick” and that will be that. Construct a work association in a particular place under specific conditions and get to it.

Your brain is full of chemicals and other stuff and no one’s actually certain about what all of it does but we do know that when we’re exposed to certain favourable stimuli, a reaction takes place that releases chemicals making us feel good. Alright, there’s more to it than that but that is definitely the gist. And it’s the reason why, when our mobile device pings and alerts us to the fact that someone:

Likes our post
Likes us
Has sent a message
Has tagged us or
Generally given us some attention in some way or another

…we love it and we want more of it. The wanting more is the reason we keep our mobile devices so, SO close. All that is okay but let’s face it, it is burning a hole in our productive “doing stuff” hours. Which is not okay.

Tip: Put your phone on “flight mode” while you work on that one important thing. No pings, no alerts, no messages to stop you from starting.

Tip: There is such a thing as a newsfeed eradicator. Which is great if you can’t stop yourself from scrolling through your feed, robotically looking for something, anything to make you laugh or shake your fist or feel… something. Use it.

Halting procrastination is about understanding your triggers and limiting the negative effects by neutralising or controlling the cause. Remember, getting inspired is only half the battle, now it’s time to go and achieve something.

Simon says, “dopamine is dope”

Well not in so many words, but inspirational author, thought leader and speaker Simon Sinek blames part of the so-called “dealing with millennials” problem at the feet of dopamine-peddling social media. Agreed. We echo the notion that a disproportionate amount of time, energy and emotion is devoted to accruing likes and shares (not that kind) by those of us born since the mid to late eighties. He goes onto describe how legions of us are zoning out of the real world, to spend more time on line. It’s addictive and can be, if left unchecked, all-consuming. And if it’s a problem in business (and yes, sometimes it is), what do we do about it?

Shall we start with why?

A well-known biology lesson derived from a 2012 study, confirmed to the world that getting likes, PMs and replies on social media releases the “feel good” chemical dopamine. And true to its claim, it feels good. And we like to feel good – especially when we’re down so we have developed a tendency to pursue online affirmation – seemingly at all costs.

But we touched on all this during yesterday’s Inspired Daily focus on overcoming procrastination. The point to be made, absorbed and understood today, thanks to the thought catalyst that is Simon Sinek? Good interactions, blossom into great relationships, which eventually bear fruit in the form of sustainable business results and oftentimes an overflow of shared wellbeing. Sounds terrific.

Feeling good about business, can’t be that simple. Can it?

No. No it’s not. There’s far more to it than that but staying with the millennial theme, Simon does go on to boldly critique and expand on the four pillars of workplace unrest. They are entitlement, technology, impatience (or instant gratification) and environment.

Spend 15 minutes listening to this terrific and insightful sit down with Simon, courtesy of the Tom Bilyeu interview on Inside Quest and just drink in the common sense and logic.

One of my big takeaways from this is that we, the business owners, need to accept and embrace responsibility around setting expectations and building an environment where excellence wants to come and work. All of that said, I would recommend this video as not only a two-way eye-opener but a bit of a self-assessment as to where we are, where we’re coming from and therefore, where we’re going.

Needless to say, we liked this.

Autumn’s coming – enjoy the sun, embrace the cloud

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.

Many small business owners around the country are, as we speak, in a white hot BAS panic because the deadline is just around the corner.

The world does not slow down so that we can fulfil our reporting obligations, in fact, it can seem like time speeds up the closer various due dates get. I’m not surprising anyone when I say this can affect family and leisure pursuits, so as we set sail for another weekend, unfortunately, many will already have allocated their time to “hitting the books”.

Even more unfortunate is the fact that many resign themselves to these intrusions on family time with a sigh and a “what do can you do?”

Here’s what you can do to reclaim your free time

Embrace the cloud – If you haven’t already switched to a cloud-based accounting software solution like Xero for example, you really need to look into. It basically uses automation and intuitive software to capture trends and complete basic admin jobs making tasks like invoicing and reconciliations less time-consuming.

Additionally, the various add-ons can arm you with the ready access to information you may already have trained yourself to wait ages for or simply go without. Now, if you need/want information that may help you make a business critical decision or seize on an opportunity, it’s there waiting for you. The next step is for you and your accountant to turn this ready availability of data into actionable steps towards securing and growing more profit and getting more out of life.

Tip: Selecting the right software solution that actually brings you benefits rather than muddying the waters can be confusing. Our tip is simply to speak to us about what information you might need. We’re more than happy to make a recommendation based on what will help you.

Are you sure, you’re sure?

Tip: get a second opinion when it comes to the important stuff.

Getting a second opinion is not just a sensible thing to do if your medical practitioner tells you to give up ice-cream. Anytime the opinion of a professional is going to influence an important decision that may affect your livelihood or the outlook of your loved ones, you want to be doubly sure about the advice. No better way than getting a second opinion and comparing the viewpoints and possible outcomes.

We’re heading into tax season very soon. This means that you’ll be making some decisions: deciding whether to continue down the road with the process you’ve become used to (lodge return, pay the bill) or seeing if you can reduce that tax bill by speaking to one of our team.

Fun fact: last tax year we saved our clients over million dollars just by taking a closer look at their situations and ensuring that they didn’t pay more than was necessary.

If you’ve been in business now for at least a couple of years and are turning over more than $250K per year, we feel really confident that we could save you $5,000 in tax savings immediately.

It might be worth having some second thoughts about this year’s tax strategy over the weekend and embracing some new opportunities.