A lot of business owners will set new financial year goals – but good intentions fall away into old bad habits quickly, so how do you get back on track? Small business finance specialist Darren Butterick talks to The Pulse on some of the tips he uses to whip businesses into shape.
The Pulse: Just to get us warmed up, tell us a bit about yourself
Darren: I left school at 16 and went straight into the public service. I cut my teeth in several federal government departments before really hitting my stride in the Australian Bureau of Statistics and Australian Financial Security Authority.
During my time there, I also completed a commerce degree part-time at the University of South Australia. After 23 years in government, I decided to start my own bookkeeping business in 2012.
I get to work with all sorts of different businesses — from sole traders to SMEs with up to 20 employees — across the finance, manufacturing, IT and trade sectors. The diversity of opportunities and challenges facing my clients certainly keeps things interesting!
The Pulse: What are the signs of an unfit business?
Darren: The common symptom is tardiness.
They’re usually late with things like lodging their BAS statements, paying the ATO, paying their suppliers and employee super, and they tend to let their books slip into disarray.
When businesses begin to fall behind, they typically struggle to focus on what they can be doing to improve and grow because they’re spending their energy firefighting their business administration problems.
The Pulse: So, how would you get a business back into peak condition?
Darren: There are several things you can do to get a business back into shape, but there are five key ways to approach it.
First up, I’d advise businesses to allocate money for liabilities such as superannuation, GST and accounts payable. This means paying close attention to the cash flow to make sure what’s coming into and out of the business is in balance. Lack of cash is the leading cause of business falling over, so it pays to keep your finger on the pulse by regularly looking at your financial statements.
Elsewhere, many of my clients have multiple loans and credit cards, all of which attract fees and interest. Debt consolidation can reduce these costs, and can solve the headache of managing multiple by turning them into one payment. Anyone considering consolidation should do their research because it’s important to find a reputable finance broker.
Business owners can also look at their expenses. Do we really need all that floor space? Can we use subcontractors rather than full-time employees? These are just some of the things savvy business owners ask themselves in a bid to cut costs and drive profit.
Every business owner is stretched, but clever ones make time to set goals and measure performance. They’ll use this time to assess the competition, how they can innovate new products, and improve customer service, sales and business operations and they’ll create a plan and commit to making it happen.
Finally, appropriate use of technology can cut the time it takes to do business administration in half. Some of my clients can be a bit resistant because they fear the unknown, but in most cases, once they see how simple the software is they’re totally on board. Those who still insist on using that ‘trusty old spreadsheet they’ve always used’ run the risk of errors and wasting time that could be spent growing their business. Apps like Receipt Bank, Tanda, and ezyCollect are just some of the tools I use to streamline and automate time-consuming tasks like logging expenses, managing staff, and chasing up debtors.
The Pulse: Is it okay to call in help if your business is struggling?
Darren: Hours spent Googling how to fix your computer or trying to solve a complex bookkeeping problem is a waste of time if you don’t have the skills in these areas. My advice is to either recruit or outsource the tasks you aren’t good at to the professionals. Chances are they’ll be able to fix the problem quickly, will save a whole lot of stress, and allow a business owner to focus on what they’re good at — growing the business.
Darren Butterick is a First Class Accounts bookkeeper with over twenty years’ experience in finance. He prides himself on providing businesses with customised bookkeeping solutions that allow them to focus on growing with confidence.
This feature was originally published on MYOB’s blog here:https://www.myob.com/au/blog/how-to-get-your-business-into-peak-shape-this-financial-year/