Just over a year ago we had a new client come to Harris Black. His business was making a loss and his initial comments were – "I just need more staff and more sales!"
Taking a look at his current position we realised that his Gross Margin was actually the problem...
More sales wouldn't = more profit… At this point, they would result in more losses!
We immediately got to work and developed a forecast for the 12 months ahead… After working through this with us, our client knew the following with confidence:
- His sales target per month;
- When to say "no" to a project (ie. No profit);
- When to say "yes" to a project (ie. Profit);
- The mix of staff to put on each project;
- What months his bank balance was going to be tight;
- The lowest rate at which he could charge out each staff member;
- At what level of revenue he could employee again; and
- That one staff member needed to be 50% on the tools and 50% in the office if he wanted to be more profitable.
Our client was now armed with a working plan!
To be certain he was able to keep an eye on things and see whether everything was going as planned, we imported our forecast into his accounting package… This allowed him to compare forecast to actuals over time. Keen to be sure he was achieving all we planned, Harris Black also kept in touch throughout the year on a regular basis.
The initial result?
All credit due to the client, he stuck to the plan and at the end of his first 12 months with Harris Black, he turned his profit (not revenue) around by 200%.
Great result! But the story goes further…
This year he came to us with concerns regarding the software program SimPRO… This is an application he uses to do all quotes and invoicing which in turn, syncs with his accounting package… The problem he was experiencing was that figures relating to profit, sales and expenses in SimPRO didn't seem to correlate with those in his main accounting package. We turned our attention to SimPRO and developed a strong working knowledge of the software. We then advanced our client's forecast further, working to ensure that he was better able to rely on the information from Simpro. As a result, both our client, and importantly his bookkeeper, now know what reports to look at and what to reconcile at the end of each month.
When we achieve, so do our clients…
Most recently, our client had the opportunity to employee someone that will now make his sales grow… AND, you guessed it… We sat down with him and planned it!! In this most recent forecast for his business, we included the potential new employee's wage, a car and a possible bonus. We further factored in the possibility of more new employees, identifying clearly a sales target that would need to be hit to make this all worthwhile. As a result, our client went into negotiations armed with financial facts and full of confidence to get this deal over the line.
We love it when a good plan works!
For further information on SimPRO please click here to read our 'Featured Add-On of the Month' article below.
Goals are exciting!… We all love to set them and have the absolute best intentions however, we often lack the focus to actually follow through and achieve them.
At Harris Black, we think we're onto something… The One Page Plan!
When developing plans and forecasts for our clients at Harris Black, we now start with a One Page Plan.. This is exactly as its title suggests... A focussed plan, on one page only, which encourages you to identify the following key points:
- "Now" What's happening now? Where are you / your business currently at?
- "Where" Where you want to get to? AND... most importantly
- "How" Just how you plan to get there.
The "How" is obviously a key factor… We break this down into 3 bite sized strategies and then into even smaller achievable actions to help you get to "Where" you want to be...
We are having great success with our One Page Plans when helping our clients achieve their goals… This video by the "experts" confirms their value and we encourage you to take a quick look!
Why You Can't Choreograph Success
by Amy Cuddy
Regardless of how good your business is, if people do not know about it, it is unlikely to make many sales.
A solid marketing strategy is essential for generating new business and retaining existing customers. There are four components that comprise a marketing strategy: product, price, place and promotion. All elements work together to carry out the overall marketing strategy and reach your target audiences.
Promotion is effective for all types of business; it can be used to create demand, differentiate products/services and reinforce a business' brand. Promotional activities involve the use of marketing tactics to build awareness, create interest and educate target audiences about your product or service.
There are a number of promotional activities that can be used they include advertising, sales promotions, direct marketing, personal selling and public relations.
Depending on a business's goals and budget allocation, one or a combination of these promotional activities can be used. Here are a few ways to utilise the three most popular promotional activities;
Public relations (PR) is the deliberate and planned effort to build mutually beneficial relationships between your business and its stakeholders. Some examples of PR include sponsorships, events, media relations and collaborating with influencers such as bloggers.
Sponsorship is a tried-and-tested way for small businesses to raise their profile. Sponsoring a good cause not only improves a business's reputation but the exposure can serve to remind your target market of your business.
Events are valuable promotional opportunities which are effective at reaching your target audiences and promoting new products and services. The possibilities are endless; businesses can take part in trade shows and exhibitions or host their own event.
Successful advertising delivers the right message to the right audience at the right time. Advertising has the power to reach a mass audience with one message. With the advent of social media, there are now more ways to advertise your business at a lower cost.
Advertising via social media lets you bypass the media and go straight to your customers. The instantaneous nature of the internet can help to accelerate your following faster than traditional offline advertisements.
Social media posts on popular networking sites can be shared thousands of times in one day providing added exposure for your business and more web traffic. Consider combining both traditional forms of advertisements, such as print and radio, with an online strategy.
Sales promotions provide an incentive for customers (existing or new) to purchase your product or service at a discounted rate. They differ from other promotional activities as their main objective is to sell rather than educate or change brand image. Sales promotions are great for businesses struggling with below average sales and are looking to boost short-term sales. Some examples include promotional gifts, seasonal discounts, contests, samples and coupons.
Accounting add-ons have evolved recently in the world of accountancy. Each month we feature a range of add-ons that will help keep you focussed and become more efficient within your own practice.
In this months' edition of Harris Blacks Featured Add-On, we feature a job management software called SimPRO which is designed for service, project and management contractors. For further information on how we work with our clients using SimPRO click here.
With over 2000 end users across Australia, SimPRO is one of the leading software for trade and service based businesses.
SimPRO is driven from an operational perspective covering all areas of your business from estimating cost to finalising an invoice. Internal links to all the relevant trade wholesalers means price files are always current. This add on will keep your cash flow positive, and enjoy complete visibility across your entire workforce. Take control of your business through SimPRO office and mobile solution and take advantage of real-time office-to-field connectivity.
In addition to these unique features, SimPRO Software integrates with major accounting software like MYOB and Xero.
Streamlining your business process whether you are specialises in service or project jobs in electrical, data networking, plumbing, security, HVAC or solar, SimPRO Software has a solution to suit your needs.
SimPRO Service is built for service businesses managing maintenance or installation jobs and quoted jobs or do-and- charge jobs.
Service enables smart, efficient scheduling, seamless field connectivity, on-site invoicing and payments.
If your business is managing a complex project and maintenance jobs, SimPRO Enterprise is for you.
Enterprise is designed to give you an extensive features for estimating, maintenance and project management guide to business owners like you to provide an exceptional service while maximising efficiency and profitability at the same time.
We all know that not all businesses operates the same way. SimPRO Corporate provides a software platform for field service and contracting firms with unique needs and workflows.
To know more about this add-on, please contact your Harris Black team member today.
The demands of every day work keep everyone so busy these days that we often forget the simple things that make us feel energised.
In this month's edition of Harris Blacks Top 5, we will give you some tips on how to supercharge your energy levels at work.
Forget about your unlimited coffee and energy drinks at work and follow these five simple tips from your Harris Black team.
- Drink more water: Dehydration can make people feel drowsy. Drinking more water throughout the day can help your body perform better.
- Exercise in the morning: Physical exercise in the morning can help give your body a bit more 'oomph' to get through the day.
- Schedule your day: Being organised can help you stay on track. Try creating a to-do list to ensure you prioritise your work.
- Declutter your workspace: A minimalist working space can encourage feelings of calmness.
- Practise breathing exercises: Have a go a meditating or stopping on the hour every hour to take a long slow breath in and out. Make sure you go outside to get some fresh air every day as well.
Small businesses should always be open to the idea of reinventing themselves to stay relevant to today's customers and marketplace.
Business owners who resist change and leave it too late to reinvent risk stumbling behind and at worst failing. Instead, businesses should focus on a proactive approach to growth for optimal business performance and success.
Making a commitment to reinvention before the need is obvious does not come naturally; it requires planning. Here are three ways to make sure your business does not get left behind:
Industries are continually shifting - competitors are introducing new products, customer needs are ever-changing and technology is transforming the way business was traditionally performed. Forecasting change is essential to be a competitive leader in your industry.
High performing businesses exploit existing businesses that have not yet peaked and recognise untapped markets. High performers also understand that remaining competitive means some form of risk taking is necessary.
Strategic planning is imperative to make reinvention possible. Businesses need to detect shifts in their industry ideally before they happen. The best way to predict these shifts is to involve line managers, frontline employees, store managers etc. into the strategic process, as they often pick up on insights business owners can easily miss.
For a business to reinvent itself, it needs a permanent strategy which continually scans the market for unsolved problems and untapped customer needs.
Successful businesses need teams of talent to run and grow the business effectively. Business owners need not only hire the right type of candidate but they must strengthen and prepare individuals for the challenges that will arise when reinventing. Businesses need to invest time into developing their employees to enable them to succeed in their work.
By first looking at what their employees are required to do day to day, business owners can assess what factors are fuelling (or limiting) their success.
The ATO has reminded people who earn income in the share economy that they have tax obligations. The type of goods or services you provide, and how much you provide, will determine what you need to do for tax. Popular sharing economy services include:
- providing "ride-sourcing" services for a fare;
- renting out a room or a whole house or unit on a short-time basis;
- renting out a car parking space; and
- providing personal services, such as creative or professional services like graphic design and website creation, or doing odd jobs like deliveries and furniture assembly.
The ATO notes that you need to get an ABN if you are carrying on an enterprise providing goods and services through the sharing economy, and register for GST if:
- your turnover is $75,000 or more per year; or
- you are providing ride-sourcing services, regardless of how much you earn from doing so.
No matter how much you earn or your reasons for providing goods or services, it's a good idea to maintain records of your income and expenses, so you can keep track of your activities and deal with tax obligations when they arise. Tax deductions may also be available in certain circumstances. Please contact our office for more information.
The ATO has launched the Super Scheme Smart initiative to inform people about retirement planning schemes that are of increasing concern. According to the ATO, people approaching retirement are most at risk of becoming involved in schemes that are "too good to be true". While retirement planning schemes can vary, you should be aware of some common features of problematic schemes. These schemes generally:
- are artificially contrived and complex, and usually connected with a self-managed super fund (an SMSF);
- involve a lot of paper shuffling;
- are designed to leave you paying minimal or no tax, or even receiving a tax refund; and/or
- aim to give you a present -day benefit.
The ATO has previously issued statements about concerning schemes that involve non-arm's length limited borrowing arrangements, dividend stripping and diverting personal services income.
The ATO encourages people to report their involvement in such schemes early. In specific circumstances, penalties may be reduced. Please contact our office for more information.
The ATO has recently released the following Taxation Determinations:
- TD 2016/14 states that business taxpayers are entitled to a tax deduction for the outgoing incurred for a gift made to a former or current client, if the gift is made for the purpose of producing future assessable income. The gift is not deductible if the outgoing is capital, relates to gaining "non-assessable, non-exempt" income, or is non-deductible under another provision.
- TD 2016/15 states that employer taxpayers are entitled to a tax deduction for annual fees incurred on an airport lounge membership for use by employees, if that membership is provided because of the employment relationship.
If you have any questions on this, please contact your Harris Black team member.
- Lodge the PAYG withholding payment summary annual report for payers whose registered agent (BAS agent or tax agent) helped prepare the report.
- Lodge Annual TFN withholding report 2016 when a trustee of a closely held trust has been required to withhold amounts from payments to beneficiaries.
- Pay annual PAYG instalment notice (Form N). Lodgement is only required if you vary the instalment amount or use the rate method to calculate the instalment.
- Lodge and pay quarterly PAYG instalment activity statement for quarter 1, 2016–17 for head companies of consolidated groups.
- Lodge and pay September 2016 monthly activity statement.
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This newsletter is for guidance only, any professional advice should be obtained before acting on any information contained herein. Neither the publisher nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this newsletter. We recommend that you contact your Harris Black team member before making any decision to discuss your particular requirements or circumstances.