The answer to that is it must always be relative to the value you receive as a result of the business advice provided.

You should be able to equate the value any product or service you use to a financial benefit to your business.

Like any other investment decision you should expect a multiple return on every dollar spent.

If you are advertising and there are no new customers or sales as a result stop the exercise and find a better way.

Often when we review clients business financial we find the amount spent annually on accounting and business advice is more or less non existent. That is there just enough to address the compliance and record keeping requirements and nothing more.

At the same time we find the business owner are paid poorly for their endeavors or worse there are trading losses.

Now all of this is avoidable with good business advice, a proper financial plan and budgets and regular monthly reviews.

When a business ceases to trade and goes into liquidation the creditors will agree to appoint a liquidator. The cost of this exercise can be as much as $50k which rapidly diminishes the outcome for everyone – creditors, staff, owner.

Again this situation is avoidable at a very modest cost by comparison.

If you are experiencing any trading difficulties you most act fast and seek advice.
For every day that you leave your call to action the cost escalates rapidly.

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If you are a first time, start-up business owner and you are considering signing an offer to lease or the lease itself, please before you do any of that come in and see us for proper advice.

A lease is a very significant and binding contract with a substantial opportunity but largely in favour of the landlord and not the tenant.

It is also likely to be the single largest financial commitment you will make after buying a house.

Just for a moment consider not just the monthly rental but also the out-goings which could together could add up to $2,000 – $7,000 a month or more.
The commitment  you are making is that amount x the number of months of the lease term.

So that could be 36, 48, 60 or 84 months. So in reality we are talking about a binding legal agreement of $80,000 to $600,000 in total.
It is not a level playing field and there is nowhere to hide if your business does not plan out as you believe it might.

In the event that your business goes away the financial commitment does not.

None of this should be overlooked even when you are offered rent free periods or contributions to fit-outs and other inducements.
This should not be an arena that a small business owner with very limited financial resources and no prior experience should be operating in.

Of course the landlord or managing agent will not tell you that information – your due diligence is what is required to be fully informed.

We have all heard the old adage “if you fail to plan you plan to fail”.  Sometimes we hear it and think, yes, that makes sense I must write a business plan. On other occasions we write a business plan to get a loan. Once we have the plan written and the loan approved it is put on a shelf and never referred to again.

What is a business plan?

Think of your business plan as your road map to success. This is a journey – you know your starting point (well you do don’t you?); it is where you are right now. You know your destination – what you want to achieve from your business. This may be fame and fortune or it may simply be to earn enough to live on by doing something you love. Your business plan is your map to achieve this.

A business plan shows what you need to do to achieve the results you want.  I have seen too many business plans that start with ‘what sales do you think you can achieve’? It starts with a guess so how can it give realistic results?

A better way to develop your plan is look at what net profit you need. You can then work backwards through what are your expenses, what is the cost of the goods or services you are selling and what is a realistic mark-up on those goods. When we have all these figures we can look at how realistic is it that you can provide those goods or services.

Good business plans develop into a budget and then the budget is updated with current results to produce a forecast.

Add into your business plan not only a view of your profit and loss but also your cash-flow. The cash requirement can then be identified for the coming months. Many small businesses fail at the first hurdle because they do not have enough working capital.

Finally, remember a business plan is a living, working document; it is never finished until you sell the business and retire.

If you need help with your business plan, bookkeeping or accounting please contact us.

Direct experience in business and all of it’s issues is a great teacher!

No more so than the process of selecting new staff members and enrolling them in your vision for your business.
Get it right and your business can take a huge leap forward with enhanced performance, profitability and personal satisfaction for all parties including your customers, your biggest advocates.
Get it wrong and the cost can be oh so very expensive, stressful and unproductive.
One of the greatest point of leverage in your business are your staff. Don’t know where this quote is from but I love it!
Success is business is always a team project. Great results are rarely achieved going it alone.

David Osborne of Profitable Personnel is a great advocate and practitioner of hiring the right person the first time around.
An hour spent with David would be very valuable for any business owner about to go through the selection process.

We provide practical and cost effective business advice and financial management services we consider essential to the success of all small businesses.

Your provide an initial FREE phone consultation plus a No Cost one hour face to face meeting.

Our range of services include business advice and consulting, accounting services, bookkeeping services, Xero online accounting and tax agent services for small business.

We are truly a one stop shop!