6 Things You Can Do for Your Business While Streaming Netflix

6 Things You Can Do for Your Business While Streaming Netflix

#laptoplife is here to stay. We’ve all seen the Facebook and Instagram images of friends running their business from beside a pool or overlooking the beach. However, my Laptop Life destination of choice is actually Netflix. I love binge watching TV and i do some of my best work at home with Netflix streaming in the background. I’m watching season 4 of Grimm right now!

I know productivity experts will tell you to avoid TV until you’ve completed your work for the day. It’s your life and your business so i say do whatever suits you! Personally, i like to have my cake and eat it too! Here are a few projects you can work on while binge watching your favourite TV shows on Netflix. Lets prove the productivity experts wrong!

Create content

Things to do to help your small business while watching Netflix - Create content

In the digital age content is king. if you have the budget you can spend a fortune driving traffic to your website through various advertising platforms. For me, nothing beats organic traffic lured to your site via well written, valuable content. While your sitting on the couch with your feet up watching TV take the opportunity to plan and create content for your market. I’ve seen small business owners create a months worth of blog material during a 6 hour Netflix binge session. That’s productive!

 

Scheduling your social media content

Things to do to help your small business while watching Netflix - Schedule Content

Writing great content is only part of the battle. You need to share it with the world in order to engage with your audience. Remembering to share your content at the appropriate times during the week can be difficult. Thankfully tools like <a href=”https://buffer.com/”>Buffer</a> can make sharing your content at the right time a whole lot easier! Simply load up your content for the week/month and let Buffer post to your social media platforms for you. – Note, this is not a sales post for Buffer, there are loads of competitors on the market!

 

Improve your Product and Sales pages

Lets be honest here – a lot of small business owners built their website because everyone said “your business must have a website”. In the Google age i’m certainly not disagreeing with that advice but simply having a website isn’t enough. If your domain name leads would-be customers to a glorified online brochure it’s time to review and adjust. If a page on your site is intended to sell a product or service it needs to ‘sell’ rather than merely ‘describe’? A good product page needs more than one or two lines of copy and a photo. It should drill down into the real benefits the product is offering to your ideal customers.

 

Update your About page

Your business is constantly evolving and every day you acquire new skills, knowledge and experience your customers should know about. When was the last time you updated your ‘About’ page to reflect these changes? Do it now, while Kevin Spacey is scheming his way into the White House on House of Cards in the background. if your About page doesn’t sell you and everything you’re capable of you’re doing your business a disservice.

 

Review your pricing

Things to do to help your small business while watching Netflix - Review Prices

Pricing is a complex process and i’m not suggesting you should change all of our prices on a whim while watching TV. However, take the opportunity to review what your competitors are charging for similar products and services. Time spent researching your competitors is never a waste, its a crucial element of understanding your market. Large supermarket chains send employees to physically walk the isles of their local competitors and price match particular items.

 

Check your inventory health

If you run an inventory based business reviewing the rate at which your stock is moving and/or accumulating is absolutely crucial. Shifting redundant stock before you end up getting stuck with it can mean the difference between success and failure. While you’re relaxing on the couch take a moment to review your stock levels and the rate at which each item is selling  Most inventory systems will have a report you can generate to show this information. If you sell through Amazon (FBA) they have a report specially designed to help sellers monitor stock movement.

 

Do you have other productive, business related things you complete while watching Netflix? let us know!

Lets Get O.C.D About Pricing

Lets Get O.C.D About Pricing

Client’s often ask how I determine the prices for my services. Usually this is done in the hope of learning a new pricing method they can apply in their own businesses. Until now I had never really ‘written it down’ or considered displaying it in any sort of structured way.

Recently I read an article that was able to effectively summarise the general approach I take to pricing. It just didn’t sound like ‘me’.

So here it is – My Objectives, Considerations and Decisions (O.C.D) approach to pricing any good or service.

Objectives

When pricing a product or service it’s important to be clear on what your pricing objectives are. Usually a business has two clear objectives when determining price:

1. To offer their customers a price at which they perceive the good or service to be great ‘value for money’ – we want them to buy it!; and

2. Deliver as much Profit as possible to the business.

The right price for your product or service is usually the sweet spot between those two Objectives. The point at which the business receives an acceptable profit level while ensuring that enough customers see value and make the purchase.

Undoubted the relative importance of each object will vary from time to time. On some occasions your profit-making objective will take the lead and the resulting pricing will be higher – even at the risk of the customer saying No. Other times your desire to win the work will take over and you may reduce the price to guarantee the win. While I don’t necessary advocate ‘discounting’ as a pricing strategy sometimes you want to build a relationship with a business owner and winning their work could be the starting point for a larger plan.

Considerations

Once you are clear on your pricing objectives its time to gather some data. What should you consider when determining your price?

1. Costs

It’s important examine the costs associated with delivering the product of service. Raw materials, labour inputs, transportation etc. You can’t determine your profit margin until you fully understand your costs.

As part of this process it’s also important to consider capacity. If you need 100 labour hours to complete the job and you only have 50 available can you deliver? Will you need to engage higher priced labour services for the shortfall?

2. Value

Value, as with beauty, is in the eye of the beholder. You need to get in the head of the customer and understand how important your product or service is to them. If you product is highly important to them they are likely to be far less price sensitive which, in turn, means you can charge more.

3. Competition

The internet has made to easier than ever for your customers to quickly research your competitors and the prices they charge. I’m not suggesting you price match your competitors. Small businesses trying to race each other to the lowest price are all heading for failure. However, understanding who your competitors are, what they offer and how much they charge will help to ensure your pricing is realistic. If your competitors sell widgets for $25 each and you charge $200 each for identical widgets you better have a great sales strategy to demonstrate why you and your business still represent good value at that higher price!

Decisions

Now that you have clear objectives and you have the relevant data available you can look at putting a dollar value on the product or services. When setting the price you will usually have to make 3 decisions:

The Structure

In a service-based business will you charge by the hours or a fixed fee? Will you bill in stages or on completion? For businesses delivering physical goods will your sell the individual items or packages containing multiple/assorted items?

There is no perfect pricing structure. Usually it will depend heavily on customer preferences and the relative bargaining power between the parties.

The Level

The amount (level) of your pricing within the chosen structure. If you are going to bill by the hour will it be “$50 per hour” or “$500 per hour”? If you are selling individual products then it is “$1,000 per unit”.

The Pitch

This is your system for presenting and discussing prices with your customers. Will you present them with multiple pricing options? Will you list the prices publicly (menu pricing) or make the customer contact you to have the price customised to them? How will you articulate the value of your goods / services so that the customer has the right context with which to consider your price?

For me personally I use fixed priced, 12-month service packages in my business. The package price is billed monthly and clients always have 3 different pricing options when entering into a new service period. After much trial and error, I’ve found that approach best suits most of the clients I work with. Do you want to see how the packages are designed and presented? Why not contact us for a quote on your Accounting, Tax and Profit First needs?..See what i did there?

It’s not an exact science

You will have heard the saying ‘pricing is an art and a science’. For hundreds of years pricing consultants have tried to deliver exact formulas with which business owners can price their products. Ultimately, there are just too may moving part to look at pricing that way. Getting it right takes all the relevant data you can gather, a lot of experimenting and sometimes a little bit of luck!

Just remember to be O.C.D about your pricing. At the end of the day it means the difference between success and failure…

Better business bookkeeping for Profit First success

Better business bookkeeping for Profit First success

One of the reasons I love Profit First is that it allows business owners to manage their cashflow and improve their profitability without the need for complex financial reports. But Profit First can’t do all the heavy lifting! You need to give yourself the best possible chance to succeed with the system. One of the ways you can xdo this is through maintaining accurate, up-to-date business records. This is where your bookkeeping process comes into play.

Given that I spent a lot of time last week providing software implementation and training I thought this was a perfect opportunity to cover off on some general areas where software can help you keep better records.

 

Bookkeeping Systems

I know you hear this all the time from your bookkeeper and/or accountant, but we harp on about this stuff for a reaso…I promise! Keeping accurate, up-to-date accounting records is crucial. Business decision making requires data and your bookkeeping is a big part of that. In fact, I doubt you could find a single business that is truly successful in the long term that hasn’t treated their accounting data as a priority.

Ok, now that I’ve had my accountant rant lets be honest..bookkeeping is really boring, right? Most days you’d rather vacuum the office and scrub the toilet than sit down and do your books. I get that. Which is why it’s so important to have the right bookkeeping system in place. The system must be:

  • Easy to maintain – if it’s overly complex to use you will get lost and make mistakes..or worse, you’ll just avoid doing it altogether;
  • Affordable – Price is relative, focus on value. You can use free systems like Wave but are they accurate? Do they provide everything your business needs (for example, payroll)? Will they grow with you?
  • Connective – It’s important to have a bookkeeping system that will integrate with external platforms. The business world is shift and the ability to export/import data for analysis is more crucial than ever.

 

My Recommendation:

When it comes to bookkeeping systems you should always choose the option that works best for you. Having said that, if you are looking for a change and not sure which way to go I’m firmly on team Xero! The system has been designed from the ground up to be far more user friendly for people who aren’t native to accounting and bookkeeping. Myob and Quickbooks are scrambling to offer viable alternatives to Australian customers but so far my experience with them has left me less than impressed.

 

Expense Capturing System

The rise of cloud-based accounting systems like Xero that are driven by data sent directly from your bank has resulted in a lazy approach to bookkeeping. What do I mean by that? Many business owners (and professional bookkeepers) wait for bank data to be imported into the accounting system and then code each line to an income or expense account. This is what accountants call ‘cash accounting’. The bookkeeping system is only recording data from bank statements which means it’s only picking up payments received and made by the business.

What’s wrong with that approach and why did I call it lazy? The issue is that it only tells half of the story.

  • Your accounting records shouldn’t just show how much income has been received from customers. You need to know how much is still receivable from them and how far overdue it is;
  • We don’t just want to see how much money you’ve spent on various expense items. You need to know how much you still owe each of your suppliers and when the payments are due.

Unfortunately, cash accounting falls short here. Thankfully most modern bookkeeping programs will allow you to generate invoices directly from the platform so that takes care of the ‘how much do our customers owe us’ side of things.

What about how much we owe? This is where expense capturing apps like Hubdoc and Receiptbank come in. These relatively inexpensive programs link directly to your bookkeeping package. They allow you to easily import electronic copies of supplier invoices and ensure you have a clear picture of how much you owe.

They are literally as simple of taking a photo with your smart phone via their app. The software scans the image and pulls out the relevant data. You check it to ensure it’s accurate before exporting the data and the image to your accounting system.

As well as being a time saver these programs also allow you to throw the paper copy of the receipt away. The electronic version is sufficient for ATO audit purposes.

 

My Recommendation:

Right now I’m loving Hubdoc. I was previously using Receiptbank but switched all my internal procedures over to Hubdoc a couple of months ago. Not only does Hubdoc help you maintain your accounts payable and store digital copies of all receipts it also has an automatic ‘fetch’ feature. Fetching allows Hubdoc to grab copies of your bank statements directly from your bank. This means your accountant and bookkeeper will stop asking for them.

 

For the Best Result – Outsource!

I know many business owners ‘can’ do their own bookkeeping and in the early stages of Profit First an easy cost to cut could be your bookkeeper. My question to you is this – Just because you can do your own bookkeeping does that mean you ‘should’? In most cases the answer is no. Bookkeeping is not part of your core skill set. It can be quite time consuming, especially if you don’t really know what you are doing. I’d prefer to see most business owners find a good quality, Australian based bookkeeper to look after their records. In the long run you and your business will be better off if you spend the hours you would have wasted on bookkeeping focused on business development activities. Do what you do best and let a professional help with the stuff you’re not so good at.

A quick side note – yes, i did say ‘Australian based’ bookkeeper. I’ve had many clients use very cheap offshore options for bookkeeping. The results have been terrible and in some cases I’ve completely deleted the file and rebuilt it from scratch because it faster than trying to fix the thousand’s of errors made.

 

How will these systems help Profit First?

Good business records are a huge help in the Profit First process. Particularly in the initial set-up phase and during any future troubleshooting.

  • Initial Set-up: great business records make the process of calculating your Current Allocation Percentages (CAPS), setting your initial percentages and starting the process of cutting costs so much easier;
  • The moment something goes wrong: For example, you realise your Opex account is starting to fall short of paying your bills. Having accurate, up-to-date business records will allow you to undertake an analysis of your spending immediately with confidence that the data you are using is correct.

 

Further Information

Read our comprehensive review of Profit First here

Join the Facebook group here

Tax Planning Tips – Pay Employee Superannuation early

Tax Planning Tips – Pay Employee Superannuation early

Paying your employee’s superannuation on time, in full, is essential. Especially now that the introduction of Superstream means that superannuation funds will report employers who fail to meet their payment obligations to the ATO.

What if I told you that making this payment early, rather than late, is actually a effective tax planning tool?

 

A bit of background information

Each time your employees come to work they accumulate a superannuation entitlement. The current rate for superannuation is 9.5%. Some employees don’t qualify for superannuation payments but for the purpose of this exercise I’m focus on those that do.

At the end of each financial quarter (e.g. July to September, or January to March) we need to pay this superannuation amount into the employee’s super fund.

These payments are due on the 28th day of the month after the quarter ends. For example superannuation that relates to the January to March quarter is due on the 28th of April.

What most business owners are not aware of is the fact that until the superannuation is paid it is not deductible and if you miss the payment deadline (the 28th) the amount is no longer deductible at all, even after you pay…but you still have to pay!

 

How does this strategy work?

Your employees superannuation payments for the April to June quarter are due on the 28th of July.

If we pay them on time they are not claimed as a deduction until next year because they were paid after 30 June.

If you paid $100,000 in wages during the March to June quarter that’s $9,500 of superannuation you’ll need to pay in July. This payment will be claimed as a deduction next year.

What if we brought the payment forward? Just one month? You’d get the tax deduction in this financial year. Assuming you are managing your business cashflow well the money should be set aside each time you process payroll. If the money is just sitting there, why not bring the deduction forward?

Assuming you pay an average of 30% tax the $9,500 payment, which you have to make in July anyway, would reduce this years tax bill by $2,850 if you paid in June!. That’s extra cash in your bank account now rather than after you lodge next years tax return.

 

Option 1 – No Tax Planning: Pay the $9,500 superannuation bill in July (next financial year):

You make the $9,500 Superanuation payment in July 2018.

The $2,850 Tax Deduction is received in September 2019, or later depending on when you lodge your tax return.

This means you don’t get the cashflow benefit of the payment for over 12 months after you pay it!

 

Option 2 – With Tax Planning: Pay the $9,500 superannuation bill in June (this financial year):

You make the $9,500 Superannuation payment in June 2018.

The $2,850 Tax Deduction is received in September 2018, or earlier depending on when you lodge your company tax return.

The net result is $2,850 of cash in your bank account 12-18 months faster just by making the superannuation payment 1 month early. I know a few $thousand here and there may not seem like much but this is an easy win and it’s just one of the tax planning options you should be exploring with your accountant at this time of year (April-June).

 

Other Points to Notes

1. You need to make your payment before business closes on 30 June. The funds must have left your bank account. Ideally, process the amounts at least 3 working days before 30 June.

2. Paying your superannuation obligations early might inadvertently push your employees over their contribution cap for the year and be detrimental to them. Currently your employees can contribute a maximum of $25,000 per year to their superannuation fund.

 

Profit First Australia

A common issue during Tax Planning is a lack of cash. All the great ideas in the world are useless if you don’t have the cash available to implement them. This is just one of the many reasons we recommend Profit First. If the system is up and running in your business the money required to implement this and many other tax planning strategies will have been accumulated through-out the year. When you reach year end it’s just a matter of chatting with your accountant and implementing the plan!

If you’re interested in getting your cashflow on track you can learn more about Profit First Australia here.

 

Next Steps

What should you do next?

  • Look out for more tax planning tips in the coming weeks!
  • Ensure you and your accountant are working towards a year end tax planning strategy, and
  • If your accountant isn’t doing tax planning then contact us!
Using Profit First to improve your relationship with the ATO

Using Profit First to improve your relationship with the ATO

In recent years there has been an escalation in the conflict between the Australian Taxation office (ATO) and small business owners. It’s been a hot topic in the media this week and was discussed at length on 4 Corners last night. The ATO have been accused of deliberately targeting small business owners, rather than big business or high net wealth individuals, because they lack the funds to fight back. They’ll just “pay up so the problem goes away”.

I honestly can’t say whether that is true or not. In my 10 years of dealing directly with the ATO on a daily basis I’ve experienced significant variation in the treatment my client’s have received for what I believe were exactly the same issues. Most of this I had  chalked up to the different phone operators I was dealing with. It’s an inside joke in the accounting industry that if the ATO doesn’t give you the answer you want just hang up, call back and hope to get someone in a better mood.

I will concede that many small business owners (and their advisors) have been guilty of not taking the ATO seriously. Ignoring requests for information, consistently paying late and generally not managing thee relationship very well.

Rather than bash the ATO, I wanted to cover off on a few things you can do to improve your relationship with them. That way you can try to avoid being on the receiving end of the powers they seem to be increasingly happy to use.

 

Use Professional advisors

I often hear comments along the lines of “I don’t need an accountant, I just lodge my own tax return online”. Is this a good idea? In my opinion, only taxpayers who meet the following requirements should consider taking a DIY approach to tax:

  1. They earn a Salary/wage with PAYG withheld from it (they are employed, not self employed);
  2. They claim very basic deductions – amounting to a couple hundred dollars at most; and
  3. Have no investments or other complex tax issues.

Everyone else should be using a professional.

You’re free to disagree with me. However, my opinion is shared by the majority of tax professionals in Australia. Everyday we hear examples of taxpayers having their businesses crushed by the ATO for having misinterpreted a section of tax legislation.

 

The ATO Website

The ATO website is a great resource but should be used in conjunction with professional advice. The general information they publish is intended to simplify what is otherwise quite complex tax legislation. Their aim is to present it in a way that the general public will understand. While this is a noble venture you must keep in mind:

  • The information is often over simplified;
  • It gives very limited guidance on how to apply it to your specific set of circumstances; and
  • None of it is binding on the tax office – if you inadvertently misuse the information you have no defence. Their response will be “you should have obtained professional advice on the matter”.

 

Implement Profit First

Using Profit First will dramatically improve your relationship with the tax office. That might seem like an odd statement to make but let me explain:

Benchmarking

Every year the ATO compares the information you report in your tax return with the data collected from everyone else in Australia that uses the same industry code as you. They calculate averages and standard deviations and use that information to look for tax payers who are reporting profits well below average for their industry. They want to audit these businesses to see if they are claiming tax deductions incorrectly.

By implementing Profit First you can ensure your business is above average from a profitability stand point and lower your risk of an audit.

Meeting tax obligations

For decades now small business owners have used withholding taxes, GST  and unpaid superannuation as a source of working capital. Personally, I believe the real reason the ATO seems to be targeting small business owners can found right here. As business owners we should be taking out business loans at market rates and managing our cashflow effectively. What’s happening in reality is that business owners using the ATO as a source of interest free capital. What we are seeing is the ATO’s attempt to ‘call in the debts’.

In recent years the ATO has:

  • Rolled out super stream so that superannuation funds can report late super payments to the ATO;
  • Started regularly rejecting payment plan applications where the debt is GST and PAYG. In the words of an ATO operator I was speaking to just last week “business owners shouldn’t need a payment plan for GST or PAYG. It was never their money to spend in the first place!”;
  • Referred debts to their internal Debt collection team just days after the first reminders have been issued to the taxpayers;
  • Launched single touch payroll (effective 1 July 2018). Now your own payroll system will report your withholding tax obligations directly to them.

Profit First helps fix this situation via the Tax Account. The whole purpose of the Tax Account is to accumulate the amounts you need to meet your various tax obligations. Taxpayers who regularly lodge on time and pay in full are far less likely to be audited.

My initial interest in Profit First as a service offering for my Accounting firm was specifically to help my clients break out of the tax debt cycle and get the ATO off their back!

 

Further Information

Read our comprehensive review of Profit First here

Join the Facebook group here

Use a Joint Venture to rock your market!

Use a Joint Venture to rock your market!

In December 2017 Metallica were invited to perform their track ‘Moth Into Flame’ at the Grammys. As a lifelong Metallica fan I couldn’t wait to see the guys on stage performing some of their new music live. This performance was different though. Lady Gaga was joining James Hetfield on stage to share the vocals. After the performance (which had a few technical difficulties) I found myself listening to Metallica albums on Spotify. No big surprise there. What was surprising is that a number of Lady Gaga songs made their way back into circulation. I hadn’t listened to those for years. The Joint Venture had worked. A Metallica fan was revisiting Gaga songs!

In between my head banging and air guitar the performance got me thinking. How can we use the same approach in our business to achieve this sort of result? How can we team up with another business and have that relationship increase interest in both of our products and services?

 

What is a Joint Venture?

A Joint Venture (JV) is a project or promotion involving two or more distinctly separate people or business. The aim is to combine forces in some way to produce a desired outcome for both parties. Joint ventures can be as simple as swapping website links to drive traffic from one site to another or they can be as complex as whole combined business operations.

How is this different from a partnership? In a JV each party maintains their own separate identity and goes into the JV with their own set of objectives to achieve. It’s not one business sharing its profits between two people but rather two businesses working on something together that helps to grow them both independently. Metallica and Lady Gaga didn’t form a new band for one performance, the existing artists just worked together on the project.

 

Why Joint Ventures Work

Why should you use joint ventures as part of your business development plan? The beauty of joint ventures is that they allow the parties to leverage their assets to build something neither could have built alone. Something that is (hopefully) far more value than the sum of its individual parts.

It may appear that joint ventures are about the benefits they deliver to the businesses. It’s true that the participants hope to benefit from the project. However, first and foremost the JV must deliver increased value to the customer. Buyers are well educated and have infinite research capabilities literally at their fingertips. If your JV is about you and not your customer they will see straight through it.

A successful joint venture can offer:

  • access to new markets and distribution networks;
  • increased capacity;
  • sharing of risks and costs; and
  • access to greater resources, including specialised staff, technology and funding.

A joint venture can also be very flexible. It can have a limited life span and/or only cover part of what you do. This limits the commitment for both parties and the business’ exposure to each other.

 

How to choose a JV Partner

To ensure the success of your JV its important to choose the right partner(s). When choosing an appropriate business to join forces with you’ll want to consider the following:

  • Your partners should have a similar target market without being direct competitors;
  • Ideally, you will share similar values and beliefs. This will help your joint venture in the long-term;
  • Consider a blended skill set, so that roles and tasks can be shared among you;
  • A shared commitment to the success of the project is essential… if one party has too may ‘irons in the fire’ and shows a lack of commitment to your project that can be disastrous.

 

What can go wrong

If you go into a JV for the wrong reasons or choose the wrong person it can go horribly wrong. We are seeing this a lot in the accounting industry with professional bookkeepers going into JV’s with Accounting firms. Initially the bookkeepers are unaware that the accounting firms they are partnering with also offers bookkeeping services. Despite entering the JV for the right reason, to ensure their clients get a better overall service, the bookkeepers gradually lose clients to the accounting firms.

If your JV is struggling you might want to consider the following:

  1. Have the objectives of the joint venture been clearly defined and communicated to all parties?
  2. Is there an imbalance in the levels of expertise, investment or assets brought into the venture by each party that needs to be addressed?
  3. Are different cultures and management styles from the separate businesses failing to integrate with each other in the JV and stopping collaberation?
  4. Have the partners failed to provide sufficient leadership and support to their teams in the early stages of the venture?

Any one of the above can serious damage what could have otherwise been a great collaboration opportunity. Early detection and corrective action is absolutely essential.

 

Ready to start using JV’s to build your business? get out there, meet other business owners and look for interesting opportunities. The only limit is your imagination!