#Accounting Answers: Review How You Pay Yourself
Before you can decide about the best way to pay yourself for your hard work in your business, you need to understand about structures.
9 times out of 10, if you’re a young family in a small business, your ideal structure is a company and a discretionary trust.
Another name for discretionary trusts are family trusts. Young family, family trusts.
Why are family trusts a great thing for young families and small business?
They’re called discretionary trusts because you can have the discretion about who and how, and maybe even when, taxes paid on money that you earn.
This is really important when trying to figure out how you’re going to pay yourself for all your hard work.
Let me give you an example, let’s say your kids are at uni right now, which means they’re over eighteen, but they’re earning a minimum wage to keep them going while they’re studying.
They’re perfect opportunity for us to distribute income from the family trust to them so that the tax is paid at a far lower rate than if it is was in your name.
Let me get another example, parents who are on the pension, those who are retired, they’re another perfect opportunity for us to distribute income that’s earned in the family trust to them so it’s paid at a far lower tax rate. Family trusts, 9 times out of 10, are the way to go.
How do you pay yourself out of your business?
First of all, here’s how not to.
If you’re currently set up earning a salary out of your business, not ideal. Because in a salary, if you’re in an employee of your own business, you don’t have the discretion or the freedom of choice about if and when and how super and tax is paid.
You have to pay because you’re an employee. If you are taking a loan or drawing out of your company, that could trigger all sorts of ugly things like Div 7A, which makes life really tough and you end up paying a really high tax on it. That is not ideal either.
You could be paying yourself as a dividend out of a company.
Again, equally as ugly and nothing is as beautiful as a loan or a drawing out of your trust.
Here’s your next steps: If you’re a young family in a small business, and you don’t currently have a company and family trust, we need to talk.
If you do have a family trust set up but you cannot tell me, hand over heart, that you understand how it works, how to maximise the tax paid, or what the long-term strategy is, we need to talk.
If you’re paying yourself a salary or treating yourself as an employee of your own business, if you’re taking a drawing out of a company, or if you’re got a dividends is paying, or you’re taking a dividend from your company, again, we need to talk.
Why? When we spoke to the Ponters they were doing things the way that their accountant had them set up. They were being paid a salary out of their own structure.
Now, we’ve rejigged how they’ve been paying themselves using the power of a family trust or a discretionary trust.
Remember, you can have the discretion about who, how, and potentially when the tax is paid, and in so doing, save them $37,000 in tax.
So, we need to talk. Thanks guys.
The Power of Building an Empire Using Social Media
Many Business owners tell us that GROWTH is amongst the top items on their agenda for 2016.
To grow you need more customers.
More customers means more sales.
Before Sales you need Marketing.
You probably dabble in Social Media.
But not many of us generate tonnes of leads from Facebook.
So to help out, we’ve brought in an expert with some serious BTDT “Been There Done That” experience.
Check out this video on our Inspiring Business Community where he’ll be teaching us how to –
“Build an Empire Using Social Media”.
I asked Brett to speak because he ‘walks the walk’ – he has 500,000 collective Facebook Followers.
- His extremely popular podcast and video show, 10X Achievement debuted #1 in iTunes in the health and self help category, and is listened to by tens of thousands of people from all over the world.
- His message and work is seen by over 1,000,000 people per week via his network and social ecosystem.
- Having built a community of over 400,000 people in less than 3 years, places Brett amongst the world’s leading experts in the fields of online marketing, lead generation, systems and social media strategies.
Now you might be thinking …
“What do I need 500,000 Facebook Followers for?? I’m just running a Small Business in suburban Brisbane.”
And you’d be 100% right thinking that.
It’s not about millions of followers.
You’ll soon realise it’s about the philosophy of Thinking BIG.
It is about multiplying your impact…
Check out this video on our Inspiring Business Community where he’ll be teaching us how to –
“Build an Empire Using Social Media”.
Book Review: What the All Blacks can teach us about the business of life.
At this level, sport – like business and life – is a mind game, won primarily in the head.
In his latest book, Legacy, James Kerr goes deep into the heart and mind of the world’s most successful sporting team, the legendary All Blacks of New Zealand, to reveal 15 powerful and practical lessons for leadership and business. What the All Blacks can teach us about the business of life.
Hi #LoversOfBusiness.
This week’s book review is a little different.
Instead of giving you a longer personal story and application, I want to just give you an excerpt of the book. This small chapter changed my life forever.
It’s about the ability to run a business in such a way that you can simultaneously change the world.
My story:
I’ve always been a huge fan of social enterprises like ThankYou.
We recently raised $1,700+ for Hummingbird House QLD’s Only Children’s Hospice.
My mentor is the founder and Chairman of the Buy 1 Give 1 Business for Good movement.
The happiest years of my life we’re those spent volunteering in some of the poorest parts of the world Brazil, Mexico, Thailand & South Africa.
So enjoy the life changing words of James Kerr, and I look forward to seeing you build your Legacy.
Excerpt from the Book Legacy:
Our social footprint.
Our social footprint is the impact our life has — or can have — on other lives.
It begins with character — a deep respect for our deepest values — and it involves a committed enquiry into our life’s purpose.
What do we hold most sacred?
What’s our purpose here?
What can we pass on, teach?
Great teams play with great purpose.
From ‘Uniting and Inspiring New Zealanders’ to ‘Ubuntu’ from ‘Semper Fidelis’ to ‘democratising the automobile’ better place’, to ‘making the world a better place to ‘I Have a Dream’ most inspiring leaders play a bigger, more important game.
Not long ago, we respected bankers and hedgefund financiers and vulture investors though making money alone was enough. Patently — after the sleazy collapse of financial standards — this is not true any more.
There is nothing wrong with making money but as a sole ambition it certainly isn’t inspiring an emerging generation that values human connection, social interaction and authenticity more highly. In a society badly let down by the promises of corporations it seems that capitalism has an opportunity to re-define itself and play a different game. It’s not enough just to win anymore, we must win with flair.
We must leave the jersey in a better place. Fortunately for the more hardheaded business person, the result of this shift in approach is not just an altruistic fantasy or a meaningless sop to society. It is a very real driver for organisational performance, cohesion and conviction.
It is likely that the teams — whether companies or causes — that contribute a healthy social footprint will be those that survive and thrive over the coming decades.
They’ll recruit better talent, engender more loyalty and profit from a virtuous cycle of purchase and recommendation, and build a sustainable culture of contribution and success.
From their value to society will come their value as company.
The cynics — those just in it for the money — have been found out. Theirs is no longer a sustainable model; increasingly, wealth on its own is no decent definition of success.
It doesn’t play well at dinner parties or in a eulogy. By taking responsibility for something more than profits, we tap into a collective vibrancy that is not only good for the world but also good for business.
To ‘leave the jersey in a better place’ means to work incrementally towards a better collective outcome.
It means to be a custodian of the future, an architect of tomorrow, a steward of society. It means to live with respect, humility and excellence. As leaders it means that we will truly lead, not just manage, and that others will spill blood for our team. People want to believe in something bigger than themselves; purpose propels and moves people, and moving people is the purpose of a leader.
‘Service to others’ ‘is the rent you pay for your room here on earth.’
But it’s about more than rent, it’s about respect: honouring that which we are capable of becoming, being great rather than just good, playing a bigger game, a more expansive game, a more ambitious , said Muhammad Ali, It all comes back to sweeping the sheds.
The word ‘character’ comes from the ancient Greek, mark that is left on a coin during its manufacture. Character is also the mark ‘kharakter’ left on you by life, and the mark we leave on life.
It’s the impact you make when you’re here, the trace you leave once you’re Character rises out of our values, our purpose, the standards we set ourselves, our sacrifice and commitment, and the decisions we make under pressure, but is primarily defined by the contribution we make, the responsibility we take, the leadership we show.
Character is formed by the way we respond to the challenges of life and business, by the way we lead our life and our If we value life, life values us. If we devalue it, we dishonour ourselves and our one chance at living. This is our
Leadership is surely the example we set. The way we lead our own life is what makes us a leader.
Be a Good Ancestor Our time is limited. Understanding the fragility of life is the first step of life is the first step in understanding our role and responsibility as a leader.
Our greatest responsibility is to honour those who came before us and those who will come after, to leave the jersey in a better place.
We are the stewards of our organisations, the caretakers of our own lineage. Our actions today will echo beyond our time.
They are our legacy.
SMSF Myths Busted! Self managed super fund
Is a Self Managed Super Fund (SMSF) right for you?
Already have a SMSF, but want to make it work harder for you?
Over 900,000 Australians run their own SMSF. But the news media is in a frenzy at the moment about SMSF’s and property investments.
We understand that SMSF’s don’t suit everyone, so it’s important you get the right information to decide for yourself.
To assist you to make a correctly informed choice, here are the FACTS:
Why do people set up their own SMSF?
● To be able to make their own decisions about where their super is invested.
● To invest in your own chosen property (business premises “commercial” property or residential property).
Is it expensive to set up a SMSF?
No, it isn’t.
You need a SMSF Trust Deed (the document that contains all of the rules for running your super fund) and we recommend you incorporate a Company to be the Trustee (the decision maker) for the SMSF. Our price for this is $3,000 plus GST, which includes preparation of all required documents, and everything legally required for a SMSF.
For example, if you have $200,000 in super, then the setup costs are 1.5% of your super balance – very low for setting up your financial future!
What are the ongoing running costs of a SMSF?
The ongoing costs start from as little as $250 + GST per month for the administration of your SMSF (includes tax returns, annual financial statements, minutes of Trustee’s meetings) plus $500 + GST for the annual audit of your SMSF.
How much super do I need to set up a SMSF?
Some new media stories suggest you need at least $200,000 (or even higher) to make it cost effective to have a SMSF.
We disagree.
A SMSF is your family wealth creation vehicle. Even if you have as little as $100,000 in super right now, it may make sense to establish a SMSF and then set up life insurance (owned by the SMSF) on SMSF members while they are still fit and healthy.
Also, in many situations, using a SMSF can give you much better estate planning options.
As an example, if you have $100,000 in super and purchase a property (using a borrowing arrangement) valued at $400,000, then you would have a SMSF with $400,000 in gross assets. Assuming a capital growth rate of 5%, you would generally expect the larger amount of $400,000 growing would provide a better outcome than the smaller amount of $100,000 growing.
This is why many people consider a borrowing arrangement for a SMSF.
What investments can I make in a SMSF?
Typical investments include shares, cash, term deposits, and property. There are specific rules about what you can invest in, so it’s important you seek our advice before you make any decisions.
Is an SMSF right for your family?
To help you make an educated decision, book in for a Quick Chat with one of our Advisors.
The next step may be a 30 minute education session with your family. We can clearly explain the benefits of a SMSF and whether or not a SMSF is the right thing for you.
Don’t delay.
The sooner you get started with the right advice, the sooner you will grow your assets to have a better financial future!
A self managed superannuation fund (SMSF) is a popular option for investors seeking flexibility and greater control of their superannuation.
There are many advantages of using a SMSF, and there are also many obligations that you need to be aware of.
We can assist you with understanding these obligations and guide you through the whole process to make it easy for you.
Ben Walker of Inspire SMSFS Pty Ltd (1243433) is an authorised representative of Finance Wise Global Securities Pty Ltd ABN 60 146 708 045. Finance Wise Global Securities Pty Ltd holds an Australian Financial Services License (No. 397877).
The Four Hour Work Week
Escape the 9-5, Live Anywhere and Join the New Rich.
Build an Inspiring Book List with Harvee Pene (Partner & Business Advisor at Inspire CA) as he undertakes his 2016 Challenge: Read (implement & review) a Book a Week.
The Four Hour Work Week or 4HWW is a very popular and well known book. You’ve probably read it, but have you implemented it?
If you’re a ‘Yes I’ve read it and No I’m not living a 4 Hour Work Week yet!’ then you’re not alone and keep reading lol…
Like most Small Business owners, I work 50 – 60 Hours per week too.
So a Four Hour Work week is very appealing, and achievable. I’ll aim for 40 as a start!
How do you achieve a Four Hour Work week?
The book teaches about the sweet spot between 2 economic principles.
The 80 / 20 Rule – Do only the activities that will give you the biggest bang for your buck.
Parkinson’s law – Limit the available time to complete these activities.
You need to read the book to get a couple of chapters of explanation of these 2 ideas.
Master them and you’ll soon master a 4HWW.
My key implementation from the Four Hour Work Week right now is Ask for unrealistic things.
Tim teaches that you should aim for the bigger more unrealistic goals because they have the least competition!.
He gives the example of how to reach out to famous people like Bill Clinton, with success.
I recently tried the exact same strategy, with success.
A year ago when we started doing Inspiring Business Events, I wrote down a list of DREAM SPEAKERS I’d love to have come speak.
One of the names on the list was Phillip Di Bella, founder of Di Bella Coffee.
Last week I didn’t just get a response from him but an agreement to speak at the April 6, Meet the original King of Coffee, Phillip Di Bella – Inspiring Business event. Woohoo how cool!
So next on my hit list is Daniel Flynn, Lorna Jane. Lisa Messenger, Karen Jacobsen (the Australian Voice of Siri) and John McGrath.
Ask and you shall receive I say!
4HWW is in my top 3 business books list and top 3 books I’ve ever read list.
So it’s a highly recommended from me. Not just to read once, but to read and re-read and implement.
Have a great week ahead.
HP
8 ways to know if you can afford to hire your next employee Part 2 of 2
The opportunities for growth in your business will come in ebbs and flows, like waves. Hire too early and you’re a sitting duck waiting for an opportunity off in the distant horizon. Hire too late and you’re playing catch up trying to keep your newest clients happy. Hire at the sweet spot where opportunity meets capacity and with seemingly little effort, a couple of little paddles allows you to ride the wave. So to help you hit the sweet spot, we welcome you to Part 2 of the Can I afford my next Employee series.
Crunch these 3 numbers before you sign that Employment Contract!
Number Cruncher 1
[Cashflow] Can your Business Cashflow afford 3 consecutive months of NIL productivity?
Ultimately you want to make a return on any investment you make, and an employee is one such investment.
Think of Apple who is reported to make $1,865,306 revenue per employee per year!
You will in time make a return but we’ve found it take a good 3 months to be able to assimilate the new team member into your systems and processes.
Budgeting for worst case scenario then, before signing an employment agreement could the business afford 3 months of NIL productivity?
An even better question to ask yourself is do you have [Annual Salary / 4] set aside in a Cash Reserve?
For example –
Proposed annual salary of $100,000 for a Sales Manager, divided by 4 equals $25,000 in reserve to account for little to no productivity in the first 3 months.
If you chose well in hiring process and she turns out to be a winner, then congratulations! Treat it as a bonus.
Number Cruncher 2
[Growth] Does Your Business Growth forecast for the next 12 months exceed 2 x their Annual Salary?
Let’s start with an example.
Say your current turnover is $1M and you have a documented budget and plan for 10% growth this year.
That means your turnover should be $1.1M in 12 months time or growth of $100,000.
But your prospective employee is going to cost you $100,000 too. So you’re on track to grow the business in line with your expenses.
Which mean you’ll be bigger, but there’s no more profit in your pocket for all the additional stress and effort.
Sounds silly but this is the very reason why many business owners tell us that they are now making more money than they ever have, but still experience the samestart up challenges of lumpy cashflow and low profitability.
This is why you need to have a documented budget and plan that exceeds at least 2 x the annual salary in year one.
Using the above example, the growth would need to be 20% or $200,000 to satisfy the 2 x Annual Salary test.
Errmmm… I know I need a budget but I don’t have one. What exactly is a budget and how important is it?
Imagine Entrepreneurship to be like a long voyage on a boat (in fact it does sound a little like Entrepreneur-SHIP!). You the business owner are the explorer, charting waters you’ve never been before.
As an explorer, your 12-month forward-looking budget is your telescope. Every time you stand on deck and look through your telescope, you can see the forward-looking direction, the condition of the ocean and the point you’re aiming for on the horizon.
This lets you know what’s coming up and how you can best prepare your ship and crew for the seas ahead.
Number Cruncher 3
[Sales] Do you confidently have at least 1 / 4 of the Annual Salary in your Sales Pipeline?
I recently conducted a Look Under the Hood for a consulting business who was considering coming on board with Inspire.
He asked our opinion as to whether his numbers indicate that he could afford his next employee – with an annual salary of $60,000 + SUPER.
When we crunched the numbers on his sales pipeline and he had $180,000 in Sales about to close.
This was both good and bad.
Good because all the focus on Sales over the last 6 months worked!
Bad because the sales had already started to close, and he was forced to roll up his sleeves and get on the tools because he hadn’t hired ahead of the growth.
Which means sales would have stopped while he worked IN the business, delivering on his promises.
So here’s how to run the numbers on your Sales Pipeline (you do have a pipeline don’t you?? If not do it now with the following template)
A Sales Pipeline needs to answer the following Questions –
- Who – Who is the prospect?
- What – What is the service / product that would help them and what is it’s value?
- Where – Where did we meet them?
- When – When did they enquire of this service / product and when do we expect this deal to close?
- Why – Why do they need this product / service?
- How – How far along the buying journey are they?
You need to know the typical stages a customer / client goes through along the buying journey and for each stage how likely is it that they will ‘close’.
For example – An IT company who helps small businesses implement cloud technology.
- Enquiry (20%)
- Product Demo (30%)
- Proposal (40%)
- Custom Implementation Plan (70%)
- Verbal Agreement (90%)
- Signed Contract (100%)
FAQ: What is a sales pipeline?
It’s a central spreadsheet where you track any opportunities for Services / Products you sell. This document is a MUST USE for any Business that relies on SALES to make a living. You can download this Inspire Template and build your Sales Pipeline today.
FAQ: What is a weighted average pipeline?
It the total value of what you have in your sales pipeline multiplied by how likely it is that the sale will be accepted.
For Example –
Business 1 has made an enquiry for your $1,000 Cloud Transition service. Historically 20% of opportunities at this stage have proceeded through to a signed contract. So for now, instead of counting on $1,000 in pipeline value, we plan on $200 ($1,000 x 20% or Value x Likelihood).
Where do I get my conversion rates from?
You have to start measuring them, starting now! The more reliable your conversion rate percentages, the more reliably you can make decisions about how much of the money in your pipeline will typically convert into as cold hard cash in your bank!
Let’s bring it all together
Remember the story about Mick Fanning surfing the waves at Snapper Rocks?
It’s about timing. Not too early, not too late.
Crunching the 3 numbers in this guide (Cashflow, Growth and Sales) are tests to make sure you’re covered in the Now, the Short Term and the Long Term.
Those 3 tests again –
The NOW
[Cashflow] Can your Business Cashflow afford 3 consecutive months of NIL productivity?
The Short Term
[Sales] Do you have at least 1 / 4 of Annual Salary in Sales that are ‘ready to drop’.
The Long Term
[Growth] Does Your Business Growth forecast for the next 12 months exceed 2 x their Annual Salary?
The opportunities for growth in your business will come in ebbs and flows, like waves.
Applies these principles and you’ll be riding the waves of opportunity like Mick Fanning.
Let’s just hope a big great white shark doesn’t get ya!
Is donating to charity tax deductible?
There’s three rules at play:
- Is it more than two dollars?
- Are they a DGR? You want to ask the provider that.
- Are you a profitable business?
Now, why three is important is because of the ATO.
If you are in loss, they’re going to give you the benefit of not paying any tax that year.
So, you can’t get an additional tax deduction when you’re already in loss!
So… Let me give you four examples using Hummingbird House – which is the charity we love to support here are Inspire.
Hummingbird House is Queensland’s only children’s hospice. Inspire recently raised $1,724.63 for HH and we aim to raise another $2,000 at our next Inspiring Business Event.
Is it Tax Deductible?: $3 in a can for Hummingbird House
Would that be tax deductible? YES.
Because –
- It is over $2.
- Hummingbird House is a DGR.
- We are a profitable small business that is paying its fair share of tax.
Lets give another scenario…
Is it Tax Deductible?: $10,000 transfer to Hummingbird House bank account.
Well, first off… Paul and Gabrielle Quilliam (the founders of Hummingbird House) would be very happy with you.
And second, that would be tax deductible because it’s over $2, they are a DGR and you are profitable (if you’re not a profitable business or as profitable as you’d like to be, come along to our next Cash Rich Business Workshop)
Is it Tax Deductible?: a $250 ticket to the Hummingbird House Gala Dinner, May 21.
NO.
And here’s why:
There’s a fourth rule –
If you receive a benefit in return for your giving, you can’t receive a tax deduction.
So in scenario 1 and 2 when you gave $3 and $10,000, it was a one way gift.
However, when you pay for a Gala Dinner ticket, you receive a lot of benefit in return.
- Delicious 3 Course Meal
- Unlimited Drinks
- Great Entertainment
I really encourage you to save the date May 21st because it is an absolute ball.
Excuse the pun.
The Hummingbird House Gala Dinner is not tax deductible as a charitable gift because you receive value in return. Lot’s of value!
Is it Tax Deductible?: You sponsor the Gala Dinner and receive tickets for your family, team, clients and prospects.
YES!
Not because it is a charitable giving…
But because it is a marketing activity.
And I really encourage you to do this.
Inspire has a dream to reserving a giant table of 100 at the Hummingbird House Gala Ball, May 21.
RSVP here and we’ll let you know the plan: https://www.facebook.com/events/994697667250287/
Be it tax deductible or not, my recommendation is to –
“LIVE EVERYDAY, GIVE EVERYDAY.”
It’s the most rewarding way of life.
If your giving turns out to be a tax deduction, treat it as a bonus!
See you on the 21st!
At Inspire CA (Chartered Accountants) we are number people and we believe Family is Number 1.
If you’d like some advice on reducing the amount of tax you pay (so you have more to give!) then feel free to book in a 10 min call with one of our Advisors.
Famous Fashion Blogger opens Fashion Boutique
We believe that every business owner has an inspiring story to tell. A story of how they began. A story of how they overcame the odds. A story of what drives them. A story of when they had a breakthrough. A story of who inspires them to keep going. Entrepreneurs of Brisbane is where we tell these inspirational stories, one entrepreneur at a time.
Hi Entrepreneurs Jessica Kate here, Editor of Entrepreneurs of Brisbane (EOB) and Community Manager at Inspire CA.
Like most women in this world I love the feeling that comes with wearing the most beautifully designed outfit. Especially the one that seems to take you to a new dimension as the delicately woven silk brushes your body as you slip it on.
This driven young man, Joshua Kilroy gets out of bed because he has a really strong passion for Australian fashion.
“I love it. I love what I do. I love the happiness that a girl or a woman feels when they are styled to perfection! “
Introducing Joshua Kilroy, Founder of Tyson & Peppa Fashion Boutique:
Harvee Pene: How long has Tyson & Peppa been a business?
Joshua Kilroy: I launched Tyson & Peppa as a fashion blog in November of 2014 and it took off quite strongly, but I realised it’s not something that I was passionate about so I opened my Retail Store on James St in July 2015. I think searching for that fame thing is ridiculous. You should do what your heart desires, and my heart desire was to work with Australian labels, which I’ve always done and loved, and to bring a sense of something a little bit different to Brisbane and give women a little taste of something a little bit different to what they’ve seen here.
Harvee Pene: It’s been 7 months then. If you had the ability to go back and speak to Joshua back in July, what would be the one piece of advice you’d give yourself?
Joshua Kilroy: Slow down. Slow down, you don’t have to do everything at once. By that I mean, I outlaid a lot of money at the beginning for a lot of things that I shouldn’t have done now in hindsight. Which were great things now for the business, but realistically I could have done it without them. It was more thinking that I needed to do massive VIP nights and outlay money for events and things like that I see now is people were coming here because I’d created an ambient space. It became a celebrity within itself, which I now regret doing that the way I did it because people want to come here and hang out and get their photo taken. For me, I don’t want those people here. Fans are great, but fans don’t pay the bills.
It was money, money, money and really keeping an eye on that money, but you think you need certain things that you actually don’t and that’s what I wish I could have seen six months ago, because I would have saved a couple of thousand dollars which would have been nice. You live and you learn, don’t you? You’ve got to go through a few of those downs just so you know when you’re at the highs that you can create those highs yourself.
Harvee Pene: Is this your first business that you’ve been in?
Joshua Kilroy: I’ve been styling since I was about 19 so my styling business was my first business but it was never anything much… Being a stylish is a completely different business because you’re literally working out of suitcases and cars and planes and tour buses and all of that. Being a stylist, you’re the one being paid so you’re working based on your credentials, what you know, who you know and how you can fulfil a brief.
Harvee Pene: Now you’ve got 4 walls, you’ve got a front door.
Joshua Kilroy: Yes, now I’ve got bills to pay. It’s things, it is boring number stuff but that’s what it is. It’s a different ballgame now dealing with accountants and invoicing and all that stuff that comes into it. GST and invoices all of that fun stuff you just go, “Oh yeah, good.” But the last thing I want to do at the end of my day is go to an event.
Everyone thinks that being a business owner in a fashion boutique is so glamorous, it’s not. You’re selling glamorous things, but it’s hard work. I’m up until 11 o’clock at night going through invoices and it’s not what people think it is. It’s not all Instagram posts and f*ing fashion events. At the end of the day the last thing I want to do is go to an event.
Real business owners and real people who get invited to those things, never go. Which is why you always see their staff there because the people who are actually doing something are actually doing something, they’re not going to the open of a letter and having f*ing canapés and a free glass of wine, I’d rather be at home, watching television because I’ve had a long day talking to strangers, why the heck do I want to go out and talk to more?
Harvee Pene: Speaking of that, Why do you do what you do? What gets you out of bed? Why do you put the hard work in?
Joshua Kilroy: I get out of bed because I have a really strong passion for Australian fashion, I love it. I love what I do. I love the happiness that you bring to a girl or to a woman. I’ve had girls that I’ve dressed and then now I’m dressing their daughters for their formals and it’s crazy. It’s not just about beautiful clothes, it’s about creating relationships with people that will last a lifetime.
Harvee Pene: That’s awesome. Speaking of those generations, for us, family is a really important thing. Our focus is on helping people get the business side of things sorted so that family can be put first, what is your family situation look like? What’s your heritage?
Joshua Kilroy: I’m indigenous, my dad’s indigenous and my mum’s Caucasian/Australian. I come from a working class family who, my whole entire life I’ve seen my parents work full time jobs, study more than one degree at a time, while also going through all of this different types of media coverage throughout their lives. Being in the media spotlight for whatever reason that may be. I’ve grown up quite heavily with that. I have a really grounded sense of who I am and where I come from. It wasn’t until later in life where we started having a bit of money so I grew up my whole entire life really working for everything. I had my first job at 12 and a half, when I was in year 8 and I had to get my mum to write me a letter.
I’ve always come from, you work hard and the rewards are even greater but you’ve got to put the hard work in. Hard work is hard. That’s what it is. You’ve got to get through it and every day you’ve just got to go, “Okay, today’s a new day,” and you don’t think about yesterday and you’ve just got to get up and keep going. I think that’s the hardest thing with a small business, you don’t know what’s going to walk in the door. It can become very m
undane and it can get sad at times because you’re like, “I’m doing everything right, what else could I or should I be doing?” You sit here and you wrap your brain about things.
You just have to get up everyday and keep cutting away at it and one day, the tree will fall. You just have to keep chipping at it.
Harvee Pene: There’s been so much cool things that you’ve said, to connect yours and mine’s path, one of the reasons that I do what I do is when we came here from New Zealand, Australia was the land of opportunity for us. We had nothing and by us helping families I feel like we’re giving more opportunities to that little Kiwi family who arrived on Australian shores back in ’88. As a fellow indigenous of our land, I know part of it is giving an example for them, so do you have any advice that is culturally related to your people?
Joshua Kilroy: Follow your dreams. Don’t let society, especially the society we live in dictate who you can be and what you can be. It’s one of those things where when I say that I’m indigenous, the first line that comes out of people’s mouths is, ”Oh you don’t look indigenous.” What’s your idea of what an indigenous person is supposed to look like? For me, it’s changing the footprint of that. Indigenous people are calm, beautiful, creative people most of the time and we’re very intelligent people. We’re the longest living race in the entire world, of the history of time.
People really want to downplay indigenous people in this country and it really upsets me but there’s so many great indigenous people out there doing great things and not just in sports. There’s so many diverse indigenous people out there that are doing such good things that aren’t being recognised how they should be. Adam Goods is a very clean example of that, of the racism that’s within this country… “We’ve got to change that. Something’s got to f*ing give here.”
Harvee Pene: That’s awesome, I can see from your example of what you’re doing here and how you compose yourself, you are part of that change and that’s awesome. So cool.
Joshua Kilroy: Yeah, thanks! And that’s another reason why I do what I do. At Tyson & Peppa instead of trying to create this idea of class women are typically earning 36,000 dollars a year, so stop trying to act like you earn 130,000 dollars a year! F* off. You don’t have to be a millionaire to appreciate great design, to appreciate beautiful things. Why can’t we be normal and have a normal conversation? We’re all humans.
Want more Inspiration?
- If you’d like to nominate an Inspirational Entrepreneur of Brisbane to be featured email me on jessica@inspireca.com with who and why.
- Want to read more Entrepreneurs of Brisbane stories, like the Facebook Page and read more on the EOB Blog.
- Want to rub shoulders with fellow Entrepreneurs of Brisbane in person? We run a monthly Inspiring Business Event just for you. Tickets will be released soon!
- Are you an Entrepreneur of Brisbane who needs help getting their tax sorted? Book a 10 min chat with a Chartered Accountant (at no cost)
- Cashflow got you stuck? Register for our next Become a Cash Rich Business [Workshop] on Mar 3, 6:30pm – 8:30 pm.
If 10x Business Growth is on the 2016 agenda, read this today.
Many Business owners tell us that GROWTH is amongst the top items on their agenda for 2016.
To grow you need more customers.
More customers means more sales.
Before Sales you need Marketing.
You probably dabble in Social Media.
But not many of us generate tonnes of leads from Facebook.
So to help out, we’ve brought in an expert with some serious BTDT “Been There Done That” experience.
Brett Campbell is our guest speaker for the Inspiring Business Event with 60 #LoversofBusiness at 6:30 pm on Thursday night (There’s still a handful of seats left!)
He’ll be teaching us how to –
“Build an Empire Using Social Media”.
I asked Brett to speak because he ‘walks the walk’ – he has 500,000 collective Facebook Followers.
- His extremely popular podcast and video show, 10X Achievement debuted #1 in iTunes in the health and self help category, and is listened to by tens of thousands of people from all over the world.
- His message and work is seen by over 1,000,000 people per week via his network and social ecosystem.
- Having built a community of over 400,000 people in less than 3 years, places Brett amongst the world’s leading experts in the fields of online marketing, lead generation, systems and social media strategies.
Now you might be thinking …
“What do I need 500,000 Facebook Followers for?? I’m just running a Small Business in suburban Brisbane.”
And you’d be 100% right thinking that.
It’s not about millions of followers.
You’ll soon realise it’s about the philosophy of Thinking BIG.
It is about multiplying your impact…
Think about one area in your life that you’d like to multiply 10 times…
- 10 x Your Profit or Income.
- 10 x People who hear your Message.
- 10 x Personal Mission in Life.
- 10 x Freedom you desire for your Family.
- 10 x the Love & Joy you get from your Relationships.
Then keep those aspirations in mind as you watch the special video from Brett Campbell to our Inspiring Business Community –
Special Message to the Inspiring Business Community: Think BIG! Why the world needs YOU
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And if you can shuffle things around to see Brett live at our Inspiring Business Event at 6:30 pm Thursday night, there are a handful of Online Tickets still available.
8 ways to know if you can afford to hire your next employee – Part 1
Can’t afford to hire your next employee?
It’s an age-old dilemma for small business owners: You need help to grow your business, but you can’t afford to hire anyone.
This common situation is a catch-22 that has driven many an entrepreneur into early burnout, if not an early grave.
There is an answer to the merry-go-round of “I need more help but I can’t afford to hire anyone.”
You can get off this ride!
We’ve broken these 8 ways into 2 parts.
- Do these 5 things before you put that seek ad up!
- Crunch these 3 numbers before you sign that employment agreement! (coming next week)
Do these 5 things before you put that seek ad up!
I’m not anti-employment. It can be the most rewarding part of entrepreneurship. But in a modern world, employment is in my opinion a last resort.
Here are some options to consider before hastily employing someone (in order of priority).
- Elimination
- Systemisation
- Automation
- Delegation
- Utilisation
Doing something unimportant well, doesn’t make it important.
Tim Ferriss.
Elimination
You’ll be amazed how much wasted resources (time, energy and money) go into tasks that simply don’t add value.
I worked as an external consultant for 500+ of the top Accounting firms around Australia. Accounting firms are typically ‘old school’, and when I’d ask ‘why are you doing things that way?’ it would often be met with a “because we’ve always done it that way!”
Not a valid excuse, sorry.
It’s that type of thinking that will keep your business in the dark ages, while your competitors have innovated ahead of you – taking your profits & your clients!
Think of this systems review as the scraping off of barnacles on the bottom of a ship that slow forward motion.
Ask Yourself: Will this task either make a client happy or make our business more efficient? If not, stop doing it.
Most Entrepreneurs are merely technicians with an entrepreneurial seizure. Most entrepreneurs fail because you are working IN your business not ON your business.
Michael E Gerber
Systemisation
I recently had a coffee with Michael Gerber when we both spoke at the same Business Conference in Hawaii.
Michael is very well known for championing the need for SYSTEMS in a business in order to free up the owner’s time.
In fact he would argue, a business IS a system.
I was taught that SYSTEM stands for Save Yourself Time Energy and Money.
Most businesses don’t have the systems, which in turn CHAINS a business owner to the business.
But won’t a new employee free the owner up to create more systems?
Maybe. From the sheer number of system-less businesses we’ve seen, it’s seems most get caught up in the busyness of running a business and never get around to prioritising the things they know deep down should be done – like building systems.
Having systems in place will help get a prospective team member up and running sooner, meaning you get your Return On Investment (or ROI) quicker and ultimately freedom you from the business.
Ask Yourself: Do I have a system in place to run every key aspect of my business so that if I were to be absent for 3 months, it would be business as usual?
Once you have the system, ask the Elimination question above [does this task / process either make a client happy or the business more efficient? If not, delete], then ask…
Intellectuals solve problems, Geniuses prevent them!
Albert Einstein.
Automation
Ask Yourself: Could this be done by a ‘robot’?
Now you’ve trimmed the tasks that add little to no value, we’re now looking at the wonderful ecosystem of cloud apps and integrated technologies that promises to make our life easier.
For example –
“Xero has really cut my accounting time by 80%. It gives me goosebumps thinking about all that extra time I have.” Bridget Labus
So often I hear stories of business owners staying up until midnight as they “do their books”, or retailers sitting in their store on a Sunday doing their books on their laptop as customer come in and out of the shop.
But that’s no longer necessary with simple, cloud based technologies like Xero which intelligently automate a lot of the repetitive tasks that keep us Entrepreneurs working late.
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Do what you do best and delegate the rest
Chris Ducker
Delegation
There are 3 different types of Delegation – Outsourcing, Offshoring and Junior Staff
Number 3 has worked best for me in the past but I’m interested to see what’s working for you.
- Outsourcing
Outsourcing is finding another australian company that specialises in a certain activity, to do the job for you.
Marketing is a great example of an activity that could be outsourced to a local agency. Not only will you leave the experts to do what they do best, but usually the continuation of a contract is dependant on success and an agency will be be able to scale up as your business grows.
- Offshoring
Outsourcing is often mixed up with Offshoring, which is getting tasks done by remote teams in other countries like India & Philippines.
The major benefit of Offshoring is the low hourly rates.
For example, I just found an Architect on Upwork and found one in Ukraine, with 15 years experience for $8 per hour. Compare that to a Seek ad for a Sydney based Architect with similar experience for $130,000 per year.
Offshoring is a complex strategy. The businesses who I see are KILLING IT with offshoring, first sought professional assistance from an Offshoring expert.
Before going all in with Offshoring, why not dip your toe in the water? I’d recommend looking for what low value, repetitive tasks could that easily be offshored.
For example, when we conduct an interview for our page Entrepreneurs of Brisbane, we send the recorded audio file offshore to be transcribed for $1 per minute of audio. A 15 min interview costs $15 and is returned in 24 hours with 98% accuracy.
That’s a practical time saver for the editor to focus on organising great events for Entrepreneurs.
- Junior Staff
Which brings me to my final point in the delegation series.
Utilising Junior staff to complete low value, repetitive tasks that currently take senior staff away from the high value work they are qualified and excited to give, could be your alternative to employing another experienced superstar or sending stuff offshore.
Often the most underutilised team member in a business is the owner himself!
Mike Michalowicz
Utilisation
I include this because I’ve been guilty of thinking that moving from working IN the business to working ON the business was as easy as ‘flicking a switch’.
I’ll tell you my personal story about under-utilisation –
When going into business, we often fantasize about the freedom it will bring us. I looked at the lifestyle of an Entrepreneur I admire, who drives amazing cars (you know the type that when they drive past you think – ‘seriously, is he a drug dealer??’), wears incredible clothes (always bespoke and tailor made, never off the rack) and was seemingly on a Business Class international flight every time I looked on Facebook!
I ignorantly just saw the team of 5 he always had in the office and assumed my ideal lifestyle was just a couple of hire’s away.
I employed aggressively and holidayed even more aggressively! I thought working on company vision was a full time job.
It’s not.
Our profitability quickly went through the roof when I left the ego at the door and got my hands dirty again on the activities I’m best at.
So if you like me, need to be temporarily woken from your entrepreneurial daydream, take this as your alarm clock!
Freedom from your business is the dream, but there’s a few steps that come first. Systemisation is the most important of them.
Let’s bring it all together now…
Let’s summarise our steps to date with the example of a busy restaurant with overworked head chef.
It’s first reaction might be to find another Head Chef to increase capacity.
But Head Chef’s are expensive, hard to find and usually high maintenance (with their years of experience comes an insistence on doing things their way)
Here are some alternatives to consider –
-
- [Elimination] Reduce the number of dishes by deleting the 2 least ordered dishes. This simplifies the back of house operations and eases the load on existing staff.
- [Systemisation] Adjusting the kitchen layout to make the flow of food preparation more streamlined.
- [Automation] Investment in a technology like a Thermomix, which does the same job that otherwise would have taken 3 x junior chefs 3 hours each.
- [Delegation – Outsourcing] Securing a supply deal with Pasta specialist ‘Angelos’ for a weekly order of 20 kg of fresh fettuccine, instead of making it in house. Saving 2 x Sous Chefs 10 hours per week.
- [Delegation – Offshoring] Sending minor website updates offshore to a wordpress specialist for $5 / hour saving the owner’s wife spending 4 hours per month announcing a menu change.
- [Delegation – Junior Staff] Collaborating with the local TAFE or engaging more junior staff who are eager to gain experience. Utilising lesser experienced staff gives you more choice (there are more apprentices than chefs!), at a lower per hour rate, while opening doors for juniors and providing a pipeline of experienced staff in the future.
- [Utilization] – Taking a step back and seeing the whole operation in action can help you find ways to better utilise existing resources. But don’t step back too early as the answer to an employment shortfall might be looking you in the mirror!
Get Cashed Up
