Let the Money Flow

It seems like an obvious answer to some, however, there are many who have jumped straight into running their own business and charge fees for their skill level, according to their level of experience and some basic knowledge of which rates to charge. Sometimes this actually works, for a while. For some, it might actually work for a long time. The question is though, did you begin your business with the concept of making a profit or just to get by?

After an amazing journey along the east coast of Australia, including Tasmania and meeting resilient and inspirational business operators from all different backgrounds, experiences, industries and operation dimensions, one thing stood out: So many do not have a true connection with how much they actually earn and whether what they are doing is actually sustainable for the long term. Too many work longer hours than they would for a boss, and for less pay, certainly less super in a good amount of cases. These people have often invested more than they can walk away from and just keep plodding away the best they can. Some keep going, despite not making as much as they need, by having a partner (family or otherwise) comp their income, by holding down a job separate to the business. Sometimes, they even hold down a job themselves and operate their business to the best of the ability. Others want to be at home to care for their children as much as possible, especially when childcare fees are so expensive. All of these efforts are commendable, but not necessarily in their best interest. I would think it is fair to say that the Aussie spirit is one of hard work and mateship. Running a business for now and the future requires something a little more though.

As everyone knows, we are now in the age of digitalisation. The alpha gens, those born from around 2009 only know of telecommunications as being digital mostly. My under ten year old nieces and nephews can ramble off their username and password like it was the alphabet before they even begin primary school. This age group will be password wizards, they will undoubtedly need to be because their world will largely evolve around technology. It is definitely not the be all and end all of business operations, as many may try and lead you to believe. It is merely a tool that can aid your business to grow or hinder it, dependent on how it is implemented, where and when, plus how it is managed. Each component of this magic carpet ride, through the enterprise skyline, will be important, but only one will determine if you have a business that will be worth keeping.

Yes, it is all about the money. How many sales you make is not going to help if your prices are too low, unless you can sell excess amounts. To do this takes excess marketing, which in turn requires additional funding. So either way, the dollars count. How much you turn over is not the determinant, how much you have to live on for yourself and your family does, combined with enough to keep the business afloat and able to progress forward. If you have registered a company you will need to be solvent at all times or you could land yourself in hot water, in more ways then one, with the governing bodies, such as ASIC in Australia. This rule is for your protection and for that of those interacting and relying on your business. Equally, is the comparison rate of how many hours work it takes to earn the income you are able to take from your business, without taking away from your venture and its goals. Your time is the most valuable, as it is not replacable, so it is wise to give it more consideration. That is why befriending your accounts and how all those seemingly tricky little terms, like proposed budgets and actual budgets, balance sheet, income statement and accounts payable and receivable are not only interesting, once you get to know them, but very, very useful in determining the outcomes you are capable of.

It is not uncommon for people to tell me they have a book keeper or an accountant who takes care of their bookwork and accounts. You would think that would be a relief to hear, but, all the business owner is often expected to do, is put the receipts and invoices into a box when payments are made and the bookkeeper/accountant does the rest or provide access to the accounts recorded on an excel sheet. That is a good start, however, the problem that often arises here, one that too many don't give much thought to, is...the added charges you are receiving for the accounting professional to pay their administration staff to enter all the transactions into a system to be in sync with theirs, is money you could be saving with just a few minor adjustments to your system setup. Further, the main goal of engaging an accountant is for tax compliance purposes. Unless you know the right questions to ask your accountant they are not always forthcoming with tips and answers about how to run your business finances or otherwise. They have so much demand often enough that they don't need to focus on such things. If they do, it has to be remembered, with all their knowledge that many of them have never actually operated a business and all the technicalities that go with such a responsibility. There are certainly the exception, but they are usually in high demand and you will pay accordingly for their services. Alternatively, many accountants and chartered accountants and even book keepers doing the data entry and BAS, struggle to bring their own businesses up to speed with all the constant bombardment of the many working pieces of operating a business in the 21st century. Many accountant businesses are exiting, as a good percentage of the owners are nearing the retiring age and a lot are simply not interested in more than the basic account keeping for compliance purposes for their clients. These are simply reasons why it is crucial that you become more familiar with the internal workings of your business on a higher level. It helps to seek out an entrepreneurial accounting firm also, one who is proactive and even specialises in the areas you require assistance with. One who is not only focused on those who have reached a set level of turn over and profit.

It is not as complicated as many would believe and yet the end result could be the dividing difference between receiving a good income and a great one. Learning how to direct the flow of your future is easy at a SAISR 'One, Two, Three Accounts Seminar', where we make dwelving into the nitty gritty fun. Join up to our social media pages for updates when these are due to commence. Being entrepreneurial is more than just working hard, it is about working smarter to achieve best outcomes for your venture and self.

https://www.facebook.com/saisirsuccess/

https://www.instagram.com/saisir4/

https://www.linkedin.com/in/donna-johnston-mba/