Buy and Sell Agreement in Business Planning

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Is it your wish to have the spouse of your business partner as your next business partner?

The issue is that you and your partner have worked together to build a business successfully. But you are sure that you don’t want to run the business with your partner’s spouse in the event your partner dies. In all likelihood your partner’s share in the business would go to their beneficiaries who lack the experience and qualification to contribute to the running of the business or you may not get along well.

Here’s what you have to do:

You may want to buy the exiting partner’s interest in the business, but you lack either the financing or anything in a contract entitling you buy at an approved price.

Ask these basic questions when you sit with your partners and advisers:

  1. In the event a business partner dies or become completely disabled, would you wish to purchase their interest in the business?
  2. Would you be able to mutually arrive at a means to value the business?
  3. If a partner leaves, dies or becomes disabled, should you set up a business succession plan that offers every partner the right to purchase other’s interest?
  4. What financing would you use for this type of plan, and would you set up a facility or strategy to finance it?

A highly recommended strategy is to include a Buy/Sell Agreement in your Business Plan and to specify that the risk of death or disability be financed by insurance. The funds needed by the remaining partners to keep control of the business, and to financially take care of the family of the exiting partner would be provided by the insurance.

Case Sample

Dave and Matt co-own a business, D&M Pty Ltd. The business is a producer of specialised metal parts for the oil and gas well drilling industry.

Their spouses are not employees of the company and don’t actively participate in the running of it. The partners have wills, which grant all of their assets to their respective wives.

First Scenario

Matt took a skiing holiday to Perisher where he had an accident and died. His death gave his widow a 50% interest in the business. She’s financially strapped and wishes to divest her late husband’s interest in the business. However, Dave has informed her that it’s not possible because he doesn’t have the money to buy her shares.

Matt’s wife doesn’t get his wage, and is clueless about the business. Because she fears that she won’t get anything from her husband’s share in D&M Pty Ltd, she went to meet a lawyer.

Second Scenario

Dave and Matt had thought of the possible consequences if one of them dies, becomes disabled, gets sick, becomes bankrupt or just wishes to retire. Their advisors had set up a buy/sell arrangement between them, which contains a specific series of actions to undertake to estimate the value of the business and buy out the shares of Matt’s widow.

To finance the buyout, the partners have bought Life and TPD andTrauma insurance for each of them, with the money to be provided to the family of the departing partner in exchange for the interest in the business.

Under this scenario, you can see the many problems that are often encountered by business owners and the solution for each one. Contact your financial advisor or accountant to set up a business planning strategy for you.

It pays to be prepared for any eventualities when it comes to your business, and planning in the event of death, disability or retirement of one partner is one of them. PJS Accountants offers a full range of services, including tax planning and compliance, accounting and SMSF services, and bookkeeping. For enquiries regarding our services, contact PJS Accountants.

Strategies to Minimise Taxes for Small Businesses

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What small business owner wants to pay more tax than they need to? No one! So, here are tips to ensure you get the most out of your money during tax time.

Utilise the $20,000 immediate tax deduction.

In the budget issued on 12 May 2015, the Federal Government announced that qualified small enterprises can claim an immediate tax write off for assets bought for less than $20,000. This law will replace the $1,000 limit until 30 June 2017.

In order for the deduction to qualify for the 2015 financial year, you have to make sure the assets are set up and operational by 30 June 2015. If you don’t need any assets, or have not got the money to pay for one prior to the end of the year, don’t forget that you can deduct the balance of any small enterprise pool with a deductible amount of less than $20,000 and receive an instant write off.

You have to make sure that your assets are qualifying assets. For example, capital works are not covered by the basic depreciation guidelines and are covered by various rates, which are way below the general pool and immediate deduction rates.

Maximise contributions to your super fund.

Plan for your future – in the form of superannuation. The concession limit beginning 1 July 2014 is $30,000 for all persons. However, the limit is $35,000 if you were 49 years old or older on 30 June 2014. When making the most out of your concessional contributions, take note that your mandatory 9.5% is included in the cap and all contributions must be sent to the super fund before 30 June.

Prepayments – a no brainer!

Making prepayments, if you have the available money, is a wise move. Businesses can write off prepayments given in the amount of over $1,000, provided the eligible service is used in under 12 months. Consider making prepayments for part of your rent or interest on loans. You can write off prepayments below $1,000 no matter what the service period is.

Time Capital Gains Tax events appropriately.

Whether you are trading as a single entity or on behalf of a trust, find out if the 50% General Discount is valid for any planned asset sale. This means that it is a prerequisite for you to hold the asset for no less than 12 months. As a result, you have to study the timing of the sale.

Furthermore, you may also have the right to claim more concessions and discounts for your small business, including Rollover Relief or Active Asset. If you’re thinking of selling an asset, it is recommended that you meet with a tax specialist to advise you on the possible outcomes of transactions and the allowances that you are entitled to.

Consider writing off bad debts that you will never collect.

It is advised that accruals basis taxpayers with bad debts consider writing off those debts prior to 30 June to make sure they can claim tax deductions for the present year. If your GST payments are made on an accruals basis, any changes made to bad debts will probably cause a refund of the GST that has already been paid on a past BAS. When you write off bad debts, comply with the guidelines to make sure that it is really a bad debt and the required measures have been taken to get payment for it.

Ensure outdated stocks are written off.

Always perform an inventory of your stocks prior to the conclusion of the financial year. Make sure you write off obsolete stocks that you have identified. Your tax liability will decrease as a result of this.

Change your tax planning for the better by investing in good online accounting software and heeding the advice and recommendations of your accountant or bookkeeper. PJS Accountants can help you organise your tax, accounting and bookkeeping affairs. We work with large companies, SMEs, family businesses and individuals. For enquiries, contact PJS Accountants.

Is your Small Business Profitable but Has No Cash?

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Small businesses typically have cash flow problems. However, it is hard to understand why if your business is making money. The reality is many businesses fail because they don’t have sufficient funds to keep their operations running.

Being profitable doesn’t mean you have cash. You can make profit only after you’ve generated sales and taken care of all expenses. Obviously, you’re required to pay tax on any profit you earn. The amount that remains is then spent on the business or shared to investors.

You need cash for daily operations. There are many sources where cash can come from – profit being one of them. The other ways of generating cash is divesting assets, giving your own money, getting bank loans and signing up new investors.

Determine the Right Time to Spend.

Always remember to not spend profit in your business – spend cash – and spend at the right time. The old saying “You have to spend money to make money” is true. To earn money, you first have to buy goods or services to sell. This means you require money before you make a sale. You earn a profit by selling a product or service at a price that is higher than their original. Bottom line is: you get the profit after you spend the cash.

Another timing issue, which trips most businesses, is giving credit to customers. The longer you receive payment from your customer, the longer you wait for the cash while you have monetary obligations to fulfil such as salaries, stock and other expenses. This is the point where the problem starts and frequently culminates.

Pay Attention to What’s Important.

You have to pay attention not only on your profit but also on what propels your cash flow. If you have payment obligations that need to be met on time, then you require sufficient cash to pay for these while you await payment from your customers. Monitor your accounts receivable and follow up on late payments to help keep your cash flow going. Another thing to take note of is if your suppliers give you credit, this may allow you to not pay for the stock until you have sold it – which could deliver a significant boost to your cash flow.

Your business will need to be profitable in order to stay afloat, but you also need to be cautious when forfeiting profits to earn cash. Giving discounts for early payment will strengthen your cash flow but will cut down your profit. To relieve the dilemma of cash versus profit, the best course of action is to ensure you have sufficient cash to pay for ongoing costs. You could go for getting a finance facility to tide you over when you’re short on cash, but the downside is you have to pay fees and interest, which will reduce your profit.

PJS Accountants offers expertise in helping improve your business and take it to the next level. We can help you come up with a custom plan to implement your business strategies and methodologies, boost profit and increase market shares. Contact PJS Accountants for enquiries.

How can your Accountant Help Improve your Profit?

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If you are not satisfied with the profit that your business is generating, the first person should call is your accountant. They are your most reliable advisor and the foundation of the financial sector. The first person who you must contact to guide you in expanding your business, especially your profit, is your accountant.

Accountants can identify ways to increase your profit that you may overlook because you are in there battling it out for profit and growth every day. Your accountant can help you improve your bottom line through these ways:

Evaluate spending.

Your business operating costs can be evaluated by your accountant to find out which ones are too steep according to industry standards. Your business earns profit directly from the money saved by analysing your operating expenses.

Bargain for a better deal with your suppliers.

By scrutinising your material sources and evaluating your suppliers, your accountant can determine if you can bargain for better terms with your material suppliers.

Minimise disadvantageous debts.

Your accountant can make sure you don’t incur losses from bad debts by putting advising on a sound debt collection process. Your profits can easily be diminished by bad debts. You can revamp your current debt collection process and provisos of trade with suggestions for improvement from your accountant. Your cash flow and your profits could only improvement with these changes.

Remove loss-making goods or services.

The unprofitable products or services in your business can be reviewed by your accountant. The ones that have to be let go because they are costing your business money can be identified by your accountant.

Reorganise financing.

You can save interest on your business loans by considering finance restructuring. You will improve your profit by saving on interest.

Maximise the price levels of your products or services.

Your accountant can scrutinise your pricing systems covering all products and services to find out if your pricing is in accordance with market expectations. Perhaps it’s time to raise your prices, which would significantly increase your profits.

Analyse the cost of labour.

You can also find out if you can use your labour in a more efficient manner with the help of your accountant. Saving on wages and ongoing labour costs can improve your bottom line.

Monitor the returns on advertising costs.

You can compute the rate of return of each dollar you spend on marketing and advertising your business through your accountant. This would allow you to determine if you are earning sufficient sales and more profit from this investment. A lot of business owners ignore how much they are financially getting from spending on marketing and advertising. They don’t know of the rate of return or whether it’s a profitable investment.

Create a business plan for profit.

You, with the guidance of your accountant, can come up with a business plan designed to improve profit. You must plan for your profit because it just doesn’t fall on your lap. Your business can benefit from having a flexible business plan that establishes important targets and plots a course of action towards profitability.

Know your important customers.

By reviewing customer database and figuring out how much profit each customer contributes to your business, you can identify which of your customers are most valuable. There are cases where your smallest customers are giving you less problems and the most profit, but they are being overlooked.

Seek the help of your accountant to improve your bottom line. You may have knowledge of the inner operations of your business, but your accountant has years of experience in helping other clients with their profitability. Use their knowledge and experience, and you will soon see your profits boom.

PJS Accountants offers expertise in helping improve your business and take it to the next level. We work to understand your business and its inner workings and how it can compete effectively in the present business environment. From this knowledge, we can come up with a custom plan to implement your business strategies and methodologies, boost profit and increase market shares. Contact PJS Accountants for enquiries.

Your Guide to Organised Accounting

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Keeping your accounting organised must be an attainable objective when running a business. However, the lack of discipline can sometimes result in problems later. So instead of getting into trouble in the future, here are some tips that can help you keep your accounting in order.

1. Separate your bank accounts.

You are courting disaster when you mix up corporate and private transactions in your bank accounts. Separate corporate bank accounts for your business transactions at all times, and keep your private bank accounts strictly for private transactions. It doesn’t cost much to open and maintain business bank accounts these days, so there’s no reason for you not to have one or more. Practice making frequent transfers of drawings from your corporate account to your private account.

2. Don’t use cash, if possible.

Avoid using cash for business transactions. In case you use it for an emergency, repay yourself with an appropriate expense claim, which evaluates the spending between spending categories. In this way, every business transactions are logged and the GST is securely captured.

3. Pay your credit card bills.

It is fine to use a credit card for your business, but pay your business credit card bills from your business bank account at all times. This would help you to easily track all business transactions and capture all GST. In the same manner, if you utilise the incorrect Eftpos card by error (like the one for your personal bank account), pay yourself utilising the correct expense claim.

4. Put a system for accounts receivable in place.

Implement a process for tracking whether your accounts receivable have been paid by your customers, clients or patients.

Similarly, record how long the accounts receivable have been left unpaid so you can ask for payment immediately. Your process must also log any special plans to pay over time or the reasons given for not paying. It need not be refined – it will be handled by your accounting software. If you are not utilising invoicing or accounting software to send invoices out, just note on the front of the invoice whether it has been paid or not, recording separately those that have been paid or those that are unpaid. You’d be surprised by how many business owners are not aware of who is indebted to them, which is crazy if you think how difficult it is to make money in the first place.

5. And don’t ignore accounts payable.

Likewise, put a process in place for your accounts payable. It is important to keep your accounts payable in order and pay your suppliers, etc. on the 20th of each month so that they are aware of when they are going to receive payment and you are aware when you are sending payment to them. According to study, the most successful enterprises are never late paying their bills.

6. Keep your paperwork in order and go digital where possible.

All your business paperwork should be kept in an organised manner. These days you can scan documents and store them electronically, either on your accounting software or in a basic electronic filing system utilising the date system so that all things are filed chronologically. Organise them in a separate e-folder for every month and year. If you are hesitant to adopt modern ways, you can store them in physical form. However, almost everything today is sent out digitally that it’s not smart to keep printing them out, wasting ink and paper.

You save time and money, as well as make your business a success, by keeping your accounting in an orderly fashion. Maybe, the more important thing is that it should prevent you from getting stressed.

PJS Accountants offers a full range of services including accounting, taxation, business improvement, superannuation, business valuations, asset protection, succession planning and bookkeeping. We have over 30 years’ experience with local businesses in Capalaba, Cleveland and the Redlands. Our team will be at your disposal, ready for your call to assist you to stay in charge of all aspects of your business. For enquiries, contact PJS Accountants.

Get Invoice Reminders and Get Paid Faster

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It is frustrating to do some work and not get paid.

So many business owners can’t manage their time well. They’re out on the road for most of the day doing tasks related to their business and customers. They come home at the end of the day with hours of invoicing to do. Many are exhausted or have personal commitments to attend to, thus the task of invoicing is put on the backburner. They sometimes delay this task for a day, a week or even longer. They want to complete the invoicing, but cannot find the time to do so.

Invoice Immediately.

With the emergence of mobile technology, invoicing on the spot is now possible. There are various apps or software designed for just this purpose. For example, the MYOB Pay Direct.

With a smartphone, you can invoice your customers and email the invoice promptly to them. You no longer have to wait to go back to the office or get home to use the computer.

You can also take payment on the spot. It’s easier to invoice customers immediately after you have completed the job, take the payment and sync the figures to their accounting software,

Cash flow is normally stretched for the majority of enterprise owners.

Having the ability to invoice on the spot allows you to begin collecting income faster.

If you delay sending an invoice, it sends the message to the recipient that it is not important to you. As a result, they will not prioritise paying you. This is human nature.

Including clear-cut payment policies on your invoices, and sending them on time sends a message to your customers and suppliers that it is a priority for you, and so they will send payment on time.

Establish good relations with your customers.

Regardless of what your business is, it is important to create great relationships with your customers. In an ideal world, there would be no need to doubt your invoices or experience uncomfortable debt collection talks. However, this rarely happens.

Here are steps to ensure your accounts are merely the result of these good relationships, rather than the means that destroy them.

  1. Make sure your customers receive the invoices fast and you eliminate the possibility of them getting lost by emailing them.
  2. Minimise any cause for misunderstanding or disagreement with your invoicing. Prevent questions by putting clear, full descriptions on your invoices. Questions or disputes will just hinder payment.
  3. Make various payment options available to your customers.
  4. Send invoice immediately and maybe provide incentives when customers pay early. For example, offer a discount if they send the payment within a shorter time period.
  5. If a customer is unable to pay on time, talk to them about it. Find out if they are experiencing any problems. This would make them feel heard.

Watch your receivables report closely.

Monitor your receivables report, perhaps look at it once a week. If you see a customer hasn’t completed payment, act on it immediately. Finding out about a problem after a month or months have passed can hurt your cash flow – and your relationships.

Prioritise your invoicing and receivables and you’d be surprised to discover that your customers are doing the same.

Turn on your bank feeds for easier reconciliation.

Reconcile your transactions using bank feeds to narrow the cash flow gap. The debits and credits from your bank account are captured through bank feeds. You can then drop them into your online accounting software. You save valuable time by trimming down data entry and remove potential data entry mistakes.

Consult a good accountant to help you send out invoices and collect payments on time. PJS Accountants offer the help needed to handle accounting, compliance, and strategic planning challenges. We provide a range of services that assist in reducing the challenges businesses face – so you can have more time to do what you do best, and that’s running your business effectively. Contact PJS Accountants for enquiries.

Tips to Avoid Payroll Errors

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One of the most crucial aspects of running a business is payroll. However, managing everything can be a little challenging for a lot of employers, particularly while in the middle of growing and expanding their business.

Payroll is an essential element of the business process, and employees cannot afford to commit blunders on this. Follow these important tips to avoid making payroll mistakes:

1. Make sure all employee details are correct.

Here are some employees details that you have to make sure are current and correct:

  • Tax file number
  • Full name
  • Employment start date, or termination date
  • Date of birth
  • Present address
  • Pay information including gross salary, allowances, hourly rate and period of employment

2. Review your reporting process.

Each state has different reporting requirements. Payroll tax, in general, is paid monthly. A monthly payroll tax form is required to be completed by the employer and filed with the state tax office.

An Annual Reconciliation Form must also be completed and lodged with the state annually. It must include the yearly taxable salaries and premiums received by the employee during the year. Employers can work out their tax amount, whether they still owe or if they are due a refund. If they have employees in multiple states, they must fill up Annual Reconciliation Form in those states.

You can prevent mistakes by reviewing these rules and processes.

3. Be updated with changes in payroll tax rules.

You can’t do your payroll and then just forget about it afterwards. Every year, tax rates vary, and so ensure that you are compliant with up to date tax rates from 1 July.

4. Don’t ignore payroll requirement deadlines.

You have to know when your deadlines are because you can’t afford to miss them. Three deadlines are important for you to remember:

  • PAYG withholding – This is the tax employers deduct from monies given to employees.
  • Payment summaries – The abridged details of the wages given to each employee over the year,
  • Superannuation reporting – Paying and reporting super payments have multiple deadlines. Don’t forget these dates and make sure you are up to date with the government’s SuperStream system for super contributions.

If you find doing payroll for your business a struggle, hire a good accountant. This prevents costly payroll mistakes and ensures you are compliant with constant tax rate changes.

If you want a business partner that will help you with your business, then you. Here are some of the services we offer: Tax planning and compliance, Accounting and other booking services, and Bookkeeping. Contact PJS Accountants for enquiries.

10 Important Questions to Ask your Potential Bookkeeper

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Your business can truly benefit from having a bookkeeper. Whether one works for you full time or part time, you still must make sure they are the right one and have the skills to meet the requirements of your business.

You can ensure they are the right fit for you by asking these 10 important questions:

1. What are your qualifications?

You have to make sure your bookkeeper is qualified. If you are hiring a bookkeeper to do your Business Activity Statement (BAS), then they must be either a registered tax agent or BAS agent.

2. Do you have any experience in my particular industry?

Make sure your bookkeeper has particular experience in your line of business or similar business because they would know how your business is run and would require less training specific to your industry.

3. What kinds of clients do they currently serve?

This would let you know if they are serving clients that are the same as you in industry, size and growth. You can even request to talk to a few of their clients to learn of their experience with your potential bookkeeper.

4. Are you at ease using my accounting software?

Choose a bookkeeper who is familiar with your accounting software and other added technology, like the point of sale systems.

5. What are the other services you offer?

A number of bookkeeper also offer support with technology, such as point of sale systems, scanning receipts and invoices straight to your accounting system, and software for online invoicing.

6. Can you offer assistance in growing my business?

The services offered by many bookkeepers go beyond bookkeeping. They can use your financial reports to offer guidance on how your business can perform better and also impart what they experience with other clients.

7. Are you a part of a bookkeeping organisation?

The right bookkeeper will make sure your business always conforms to laws. Thus, they have to be current with changes in rules. They are expected to have frequent trainings in these aspects, if they are a part of a legit bookkeeping organisation.

8. What are your fees and how do you charge fees?

Ask whether they charge hourly, monthly or for tasks accomplished. There are bookkeepers that offer packages that consist of accounting software and regular monthly services.

9. Will I get savings from my accounting bills?

Find out from the bookkeeper what jobs they can perform that your accountant is presently doing for you. You may save plenty of money on accounting fees if you pay a bookkeeper for some services.

10. Do you have a back-up plan if you get sick or injured?

If you intend to use your bookkeeper for only part of the time, find out what happens if they can’t do their task for whatever reason.

Picking a suitable bookkeeper is similar to picking an employee, so use these questions to help you find the bookkeeper that fits your business.

PJS Accountants offer a full range of services, including tax planning and compliance, accounting and SMSF services, and bookkeeping. For enquiries, contact PJS Accountants.

6 Tips to Grow your Business

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It is not easy to grow a flourishing business. If it was, people would work beyond eight hours and be rich!

Growing a business takes time, discipline and hard work. You can’t take a shortcut because there isn’t any. Adopt a structured, disciplined approach that you have to make sure you follow daily. Sadly, being disciplined, consistent and focused are not innate in most businesses. They are prone to skipping from one emergency to another, and conversely from one plan to another – only to see growth in spits and spurts.

A sustainable, consistent growth can be achieved by following a sustainable, consistent system. Running a business is a science, not an art. It’s not simple, but you can be on your way to consistent growth in your business by following these six bold steps:

Step 1: Go after passion, not wealth.

If you are not passionate about what you’re doing, then sustainable and long-term growth is impossible to reach. If you don’t experience buzz or excitement when you wake up in the morning to dress up for work, growth will be elusive. The owners of the fastest growing businesses undeniably feel love and passion about the mission of their businesses and the value they provide to customers.

In Step 1, it’s time to take stock and ask yourself if you really enjoy running your business. If the answer is no or even a lukewarm yes, then it’s time for you to make a decision. Perhaps the right move for you is put the business for sale or close it. Certainly, it will not be an easy decision to make, but life is short. You have to get out if you don’t love your business and all the problems that go with it. Be passionate about what you do, and see your business flourish. Dislike the work you do, and see your business take a dive.

Step 2: Utilise micro-plans.

After you have made the realisation that you love your business, Step 2 involves harnessing that feeling into an organised plan – not a full-blown business plan. It is common with most businesses to begin with good intentions when making a business plan, but they tend to abandon it after a while. This is because business plans are lengthy and look very far into the future.

When creating an immediate growth plan, include only what needs to be done today, or even this week or next month, instead of in the next 12 months. It would be more doable to have a daily and weekly focus that is integrated into a loose plan.

Here are the key questions to have to answer:

  • Which customers need to be called today?
  • Which potential customers should I visit this week?
  • What new products should I begin to sell now?
  • What day this week will I raise my prices?

These immediate, micro-plans are very focused on the present and are intended to bring about fast and instant results.

Step 3: Always innovate.

Your business will stagnate if you don’t innovate. Businesses that don’t change things, sell the same services and products, is in danger of being left behind when the market moves ahead. If you don’t find ways to innovate and improve your business, your competitors will undoubtedly be innovating the ways they do things in their business.

Take a look at the entirety of your business and think of ways to make what you are doing better. See where else in your business you can create efficiencies; if you have product lines that are getting old and obsolete; where the future lies in your industry with regards to customer requirements and tastes; and where you need to direct your business in the next 3-5 years to take advantage of impending growth and impending growth prospects. This is important information to find out for the stability and growth of your business.

If your business has been the same for the past three years, you run the risk of being left behind. You can’t grow by being stationary and not taking calculated risks. Growth requires constant innovation in your business and products or services.

Step 4: Turn to adjust your direction.

So you are sure that you love your business and what you do. You’re doing daily and weekly tasks per your micro-plans. You’ve analysed your entire business and have spotted certain parts where you can implement improvements and innovation. But you’re not getting the desired results. You still can’t achieve growth.

Frustration is beginning to set in. Majority of business owners don’t do anything. They continue the way they are, hoping change will come.

Business growth is not achieved using a magic formula. A million magic formulas are available – what you need to do is continue experimenting, fine-tuning, reinventing, and turning until you hit the right formula for your business.

Majority of employers believe they just need to be persistent and all their problems will be solved, and that eventually they will find the right ‘growth’ code given sufficient time, money and effort. This doesn’t work. You need persistence, but adopt this pivoting until you find the right direction. Perhaps you have to turn so much that your business may need wholesale adjustments or turn fully into a completely diverse industry. Remember that these are 6 bold steps to business growth, and you have to be courageous to find or to do whatever is needed to achieve growth.

Step 5: Repeat.

Growth can come and go. So, it’s important for business owners to continue repeating these steps. Yes, you love your business but don’t expect to feel the same way in five years’ time. You don’t have the assurance that the great innovations you have implemented today will be enough to sustain growth in the future.
Repeat the process. Pursuing business growth is never ending, so you shouldn’t stop.

Step 6: Keep the exit door in your sights.

Your business and every other business have a shelf life, or it will stay on the same level for years. This is reality, and so business owners should have an exit plan. Many business owners are getting themselves trapped, just going through the motions of running their business. If this is the case, it’s impossible to turn around a business slump, regardless of how many times you repeat the process. Instead of moving forward, the business is backsliding further, and due to desperation, business owners are forced to sell in a fire sale.

Have an exit plan for your business. There is no better time to sell and get the maximum price for your business than when it is growing. Be careful when timing your exit strategy, do it when it is growing, not when it is already on a decline.

To summarise, business owners need to adopt a structured, disciplined and scientific approach when chasing business growth. Don’t rely on chance and hope. Follow these 6 bold steps if you want your business to grow, and be prepared to take it to the next level.

Starting your own business and making sure it is growing steadily can be challenging. Get support from a business partner who can guide you every step of the way. PJS Accountants are the partners you need to expand your business and help it overcome any challenge or trial. We offer a full range of services including accounting, taxation, business improvement, superannuation, business valuations, asset protection, succession planning, estate planning and bookkeeping. Contact PJS Accountants for enquiries.

3 Tips to Save Money when Starting your Own Business

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A business is like a human being – it will grow when you nurture it or it will die when you neglect it. Owning a business means you have to take care of it like a newborn baby. You have to look after it and provide the basics. If not, your business will fail.

Similar to raising a family, opening a business involves making a considerable financial commitment. If you’re in the same situation as the majority of new business owners, funds are tight and your resources are limited.

However, being resourceful with your limited funds and being smart with your start-up capital will help you open and expand a successful business. Here are three tips to help you save money when opening a new business, and turn it into a lean operation that has a high potential of turning into a success.

1. Use free marketing.

Get on social media.

Promote your business using all the free social media platforms available. Create Facebook, YouTube and LinkedIn pages where you can post content about your company, your products and services, and what sets you apart from other businesses similar to yours. Go through all your contacts, from your email address book to family and friends, and add them to your contact lists on social media. Then send them an invitation to connect so you can rapidly develop an online presence for your company.

Talk about your business.

When meeting new people, mention your business and what benefits it provides to people. Don’t be pushy and do a hard sell, but always subtly integrate your business story when talking to people. Take your business cards with you all the time so you can give them to people you’ve talked to, and make an effort to get one from them also.

Make a cost-effective website.

You don’t have to pay thousands of dollars to create a working website with all the bells and whistles. You just need a basic but effective website that contains all there is to know about your business, your products and services, and the reasons why you are better than your competitors. Many website development packages and tools are available to you online for free. Use any of them to make a smart looking, professional website that can be uploaded in mere hours, not weeks. But remember this: make a cheap looking website and you are sending a message to the online community that you are also running a cheap business.

Buy low print run but high quality business cards.

Purchase low run but high quality business cards. You would only look back if you hand out cheap looking business cards that look like you printed them at home. There are online business card provides that offer quality for a reasonable price.

2. Maintain a minimum number of employees.

Pay for staff only when you need them.

Hire part-time employees or contractors that you can pay by hour. This way, you only need to pay for help when you require it. If it is the off season for your business and you are busy meeting prospective clients, you don’t need to pay huge salaries when your employees are doing little or nothing.

Another benefit of having casual employees is that it allows you to roster them on and off to efficiently use them and pay them only when you need their help. You are not required by law to pay casual employees holiday leave or sick pay.

Ask for help.

Ask help with your business from family and friends. Use this network to spread word about your business. Relatives, particularly the retirees, will usually be eager to take on a challenge of helping a family member set up and grow a profitable business.

Use offshore contractors.

Get offshore contractors to manage your infrastructure and provide support. Virtually all kinds of offshore contractors are available today, from manufacturers to virtual assistants. The things you can offshore today are limitless, from building professional websites to full-scale manufacturing. Doing this would give you significant time and money savings. The realm of business is international and business back-office support has also expanded into a worldwide phenomenon.
Adopt it and reap the benefits.

3. Save money on equipment and business space.

Set up office in your home.

Think about operating your business from home if you want to save money. This is a strategy that you need to seriously take into account if you wish to run a lean operation, particularly in the early days. Today, business technology is more affordable and the Internet can connect you with anyone in almost every corner of the world, allowing you to virtually operate a national or even an international company from the comforts of your own home.

Lease or share.

If you don’t want a home office, then think about sharing an office or sign a short-term lease for a serviced office. You get a professional ‘shop front’ appearance and ambience with a shared office or serviced office. This is crucial if clients favour going to you. You can get full secretarial services, such as taking messages and sending mail, and answering phone calls on your behalf, from most of these shared office facilities. You can save money by not signing a long-term lease for a costly office space. As an alternative, consider a shared office arrangement or a serviced office facility.

Save cash by renting equipment or outsourcing.

Opt for the temporary use of business equipment or lease it, rather than purchasing it. An important tip, particularly to those engaged in manufacturing, is to make your product without investing so much cash on many pieces of plant and equipment. Nearly any kind of equipment, even those used to produce small quantities, can be outsourced. Instead of making a capital equipment investment, rent or lease the equipment, or even hire a contractor to perform your entire manufacturing operations. This strategy allows you to keep your production costs at a minimum.

Avoid building up your business costs and squander your money when opening a new business. Majority of newly created businesses close within a year due to the owners ignoring these important tips to run a lean business and keep costs at a minimum. When starting a business, the key is saving money where you can.

If you are starting a new business, it would benefit you a lot to hire an accountant or a finance specialist to increase your chances of making a success of your business. PJS Accountants offers a range of business planning services including Tax planning and compliance, Accounting and other bookkeeping services. Visit one of our specialist advisors or contact PJS Accountants.