I was asked this question today and this was my answer: I run a chartered accountant firm and I see a lot of different types of people and different types of business models. I can tell you as a fact that if you are creating a business around selling a product or service that the consumer can get somewhere else, you are doomed to under-achieve and probably fail. Consumers are too savvy these days and can check prices with your competitors too easily. A discounting spiral begins and doesn’t stop until most of the players close down. The big caveat here Read more

What are Reportable Employer Superannuation Contributions for Payment Summaries? Whether you’re an employer or an employee you need to read this. In 2010 the Australian Taxation Office added a new label to the annual payment summaries (group certificates) for Reportable Employer Superannuation Contributions. The ATO has since broadcast a number of warnings stating that many employers have made errors in reporting this label. The consequences for getting it wrong can be significant for both employers and employees so it’s important for everyone to understand how the reportable amount is calculated, otherwise you could end up paying too much tax. Reportable Employer Superannuation Contributions are Read more

It concerns me a great deal that the majority of SME’s that I meet have never used a budget for their business. A simple revenue target is not a budget and neither is “last year’s expenses plus 10%”. There are a few excuses that I’m often given that on the face of it seem valid, but when you think about it a bit longer they are dangerous assumptions. Here are a few of the common excuses, make up your own mind and tell me what you think: 1) It’s impossible to predict the future, I need concentrate on living in Read more

I’ve made a profit but where’s the cash? This is a common question that I get asked regularly from business owners across all industries. Luckily the answer is really easy if you know what you’re looking for. But sadly I often get asked this question after the business owner’s existing accountant has failed to give them a straight answer and it’s almost too late. The truth is you don’t need to be an accountant to work it out anyway, so power to the people I say. The secret is that most of the things that really affect your cash flow are not Read more

How to value your own business in 15 minutes Every business owner should have a good idea of what their business is currently worth even if they don’t intend on selling the business soon or at all. In the words of the current leader of the opposition in Australia “S**t happens”. How true this is, especially in business. You would need to know what your business is worth in the following non-exhaustive list of circumstances. How many reasons do you have to find out what your business is worth? Buying a business or division externally or internally Selling a business Read more