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More Super confusion on the way

business coaching BrisbaneFor employers and employees there is yet another major change to superannuation just around the corner.  And it will probably impact you.

Chances are you aren’t aware of this.  This monumental change in Australia’s superannuation system is one of the country’s best kept secrets.

The federal government and the superannuation industry know about it because they have been talking amongst themselves about MySuper for a couple of years now.

But most people in Australia’s work force (i.e. the consumers it actually affects) are still largely in the dark.  This is unfortunate because many employers and employees will have to take action; and soon.

MySuper is the government’s initiative to replace employer default funds with a cheap; one-size-fits-all super fund offering; with no investment choice and basic insurance benefits.   Everyone gets the same and, to the extent that you do nothing, you will get what you are given.  They will look very much like union super funds (i.e. industry funds).

For employees

So what does MySuper mean to employees who chose to go with their employer’s default super?

  • You may have an additional super fund on New Year’s Day
  • If so, you will have two sets of fees
  • You may also have a duplication of default insurance which you will pay for
  • Your employer will only be permitted to contribute to your new MySuper fund
  • In mid-2017 your current super will be transferred to your MySuper fund
  • For older workers it removes the option of the ‘transition to retirement’ strategy because there are no immediate plans to have a pension version of MySuper
  • You may lose access to advice from an adviser associated with your employer’s fund
  • Fortunately, you can roll your money out of MySuper at any time to a fund of your choice

Will you be asked first if any of this is ok with you?  No!  This will happen without asking you.  So if you want another choice that puts you in control of your retirement savings, SEEK ADVICE NOW!

For employers

By 1 January 2014, you must have categorised all of your employees for superannuation purposes.  Categories include MySuper members, choice members and transitional members.  This probably means adjusting your payroll system to accommodate the payment of employer contributions to one or more MySuper funds.  Doing as you’ve always done is likely to result in penalties.

Conclusion

This is real money we are talking about.  Your money!  So take control of it.  Your superannuation plays an important role in your personal finances.  Ignoring it for decades is sheer madness.

This change is a great opportunity for both employers and employees to side-step ‘MySuper’ and take control.  Doing so will provide the opportunity for your own super and that of your employees to work hard for your retirement.

MySuper is the ‘do-nothing’ option for employees, but not for employers.   I am here to tell you that with superannuation, as with every other product and service – you get what you pay for!  There is so much more you can do with superannuation these days.   SEEK ADVICE NOW!

Call Gary for

  • financial planning Brisbane
  • business coaching Brisbane

Call direct on 0408 756 531

Business coaching Brisbane

WHAT IS RISK MANAGEMENT?

Gary Weigh business coaching BrisbaneAnd what does it have to do with your business?

Risk management is:

(a)   Identifying the risks in your business and taking steps to eliminate, reduce, cover, or in some way manage those risks: AND

(b)   In dealing with arguably the biggest risk of all (YOU) – identifying and rectifying the balance between ‘unfocused daily activity’ activities and ‘business building’

For most small businesses, most of the risk resides with the owner!!!

DO YOUR OWN RISK ASSESSMENT

Q1. Do you feel that you are in total control of your business?

Q2. Do you do the important high-payoff tasks or only the stuff that you like?

Q3. Do you act decisively or do you tend to procrastinate about it and delay action?

Q4. Are you persistent or do you feel discouraged at the sound of the first “NO”?

Q5. Are you and other key people insured against loss due to left-field health events?

If you don’t score 5 out of 5 then you know you can improve.

For help, encouragement, a mentor and business coaching Brisbane area, call Gary on 0408 756 531 or email to gary@garyweigh.com

Who says you can have only one income source?

Business Coaching Brisbane

business coaching BrisbaneThere is no rule that says all your income must come from one source.  There is nothing wrong with having a job, a part time business and making money from an investment as well, or from your own entrepreneurial efforts.  Don’t be reliant on just one source for all of your income.  It’s a risky thing to do.  Anything could happen!  You could lose your job, become sick or injured and be unable to work.

Getting a job and being employed sounds like the safe and secure option but it’s not.  It is merely the easy option.  Besides, who is in control?  Let me assure you that it is not you!  To be totally dependent on one employer means giving control of your financial life to someone who can sack on the spot and will certainly not employ you long term if you become unable to work due to sickness or injury.

For the time you need to be employed, be in demand.  Take back some control by having knowledge and experience that employers want and develop an attractive work ethic that revolves around reliability and results.  But what ever you do, don’t stop there.  Complacency limits your income!

Consider passive investments (e.g. shares, managed funds, investment property) that earn income but don’t require much of your time.  Find other sources of income that don’t involve selling your time.  The more sources of income you can build, the better.   Best of all are what is called ‘recurring’ income streams.   That means you earn repetitive money from selling a product or service, or making an investment.

For business coaching Brisbane and personal financial planning for business owners, call me on 0408 756 531 or email me at gary@garyweigh.com

The real power of breakeven

Business coaching Brisbane

business coaching BrisbaneThe breakeven calculation is great financial management information for any business.  It tells what you want to know, but of course it doesn’t tell you how to fix it.  That is your job.  But at least you know there is a problem and where to look.

So where do you look?  Think about the variables (things you can change) that are involved in this calculation, and what you can do about it:

  • Sales – you can increase sales by increasing price and / or volume
  • Cost of sales – you can find some efficiencies in costs and / or processes to decrease cost of sales
  • Gross profit margin – will improve if you increase sales and / or decrease cost of sales (above)
  • Fixed costs – are often fixed for various periods of time, but not permanently.  These costs always come up for review

I can’t stress enough how important the concepts of pricing and costing are in determining your breakeven point and profit.

Of course, the real power of breakeven is in financial forecasting.  It is the number one financial tool of the business planner.

If you are competent with Excel, you can build a financial model of your business on a spreadsheet.   That way, you can know before you hit the street, whether or not (on paper at least) your business will make a profit.  The implementation is up to you, but if you hit your targets you can be sure you will be successful.

Breakeven analysis – the quick profit check

Business coaching Brisbane

Business coaching BrisbaneThere is a very simple calculation you can do to see if your pricing and costing is correct, and that you are making money.  It is the all-important ‘Breakeven’ calculation.

Let’s say that your fixed costs of running your business for a year total $50,000.

Fixed costs are those costs that represent your business base, regardless of whether you turn up for work or make a sale.  They include commitments such as rent, leases, admin, power, office costs, and interest on borrowings, but it excludes depreciation because that is a non-cash expense.

Now let’s assume that last year you made $180,000 in sales at a gross margin of 25%.

Gross margin is what’s left over (expressed as a % of sales) when you subtract from your sales, the cost of making those sales.  It includes costs that are directly associated with the manufacture and selling of your product and service (e.g. time, materials, other manufacturing costs, the cost of paying sales staff, other marketing costs etc).  If you do these things, don’t forget to add in the cost of your own time.  It is not free!!

The breakeven sales calculation = Fixed costs / Gross margin % 

In this case, breakeven sales = $50,000 / .25 = $200,000

Therefore, you needed $200,000 in sales to breakeven, and you achieved only $180,000.  You needed another $20,000 in sales.   As a result, your bottom line will be a loss of $5,000  i.e. ($180,000  x 25%) – $50,000

The calculation is simple but it might take you a little time to gather together the right information to perform the calculation.  In my next post I will show you the real power of knowing your ‘breakeven’.

Are you pricing yourself out of business?

Gary WeighBusiness Coaching Brisbane – An Expert Fix

I visited a new client recently.  His business was building company websites.  He wondered why he wasn’t getting ahead even though he and his staff were reasonably busy.  There were a few problems but his pricing was such that at full capacity his gross margin couldn’t cover his fixed costs.  That means the more work he did, the more money he lost.  Who would have thought?

I know that all this ‘margins’ and ‘fixed costs’ stuff all sounds like accountant ‘gobbly-gook’ speak but this problem has been sending many enterprising business owners to the wall for thousands of years.

Mis-pricing is a common trap for many inexperienced business owners.  If you over-price, customers will buy from your competitors if you have nothing else to retain them.  Under-price and your profit (and your business) could be non-existent.

It is the one critically important variable you must get right to be competitive, make a profit and stay in business.  Common pricing mistakes include:

  • Following rules of thumb
  • Comparing with competitors and discounting by 10%
  • Not taking into account the unique cost structure of your business
  • Not taking into account your own time when considering cost price
  • Not pricing to a target volume at a target gross profit margin

Good financial management skills are never needed more than when you are determining the cost prices and selling prices of your products and services.   If you need help give me a call.  Coaching is an investment in the future profitability of your business.  CHECK OUT OUR SERVICES   SIGN UP NOW

Did you know that GARY WEIGH & ASSOCIATES  is not only a leading business coaching Brisbane company but also a leading financial planning firm (authorised representative of The FinancialLink Group Pty Ltd) specialising in retail & self managed superannuation advice and personal protection insurance advice?

The Secret to a Very Happy New Year

1. Guard your health; get a medical checkup

2. Start your household budget (I can send you a great easy-to-use template)

3. Save for the present and invest for the future

4. Protect your income and your family

5. Set goals that really mean something to you

2013 is the year to take action to make a difference. No more procrastination; no more excuses. Just start. Others will help and support you but it needs you to kick it off. Don’t just make it a new year resolution. Doing that simply puts a 12-month use-by date on it. Make it a life change. Get emotional about it and get friends and family involved. Go do it for your own sake. How good is the feeling of achievement and self satisfaction.

Featured Business

VOODOO DOUGHNUT

22 SW 3rd Avenue Portland Oregon, U.S.A.

Whilst walking through the Old Town district of Portland Oregon last weekend, I saw the long queue of people out on the sidewalk and down the street.  Just as I was starting to think there was free beer, I saw an inconspicuous doorway and a sign over it saying, “VOODOO DOUGHNUT the magic is in the hole”.

I noticed the pink boxes before I took notice of the many people walking around downtown Portland.  Once again “VOODOO DOUGHNUT the magic is in the hole”.

It just goes to show how a great product presented in a crazy fun way which, in this case satisfies just about every cake, doughnut, sugar, chocolate and candy craving all at once. And it’s available 24/7.

I take my pink hat off to the creative business genius of  founders Kenneth “Cat Daddy” Pogson and Tres Shannon.  There is not much more I an say except check it out for yourself at http://voodoodoughnut.com

My north American business adventure continues

Gary

Business coaching Brisbane, Australia

gary@garyweigh.com

Can you take a holiday from your business?

Business coaching Brisbane

If you can’t get away from your business for a holiday, maybe you don’t have a business at all.  The majority of people who say they are in a small business are in fact self-employed.  That means you are the business and without you, there would be no business.  It also means that you have little to sell when you retire.

A real business is one which will run smoothly with you or without you.  It is also a valuable retirement asset.  Being able to take a holiday is the true test of whether you have a business or not.  If you can’t take a holiday, you are probably self-employed.

So if you want a real business, start building one.  If you don’t know how simply visit www.garyweigh.com or call Gary on 0408 756 531 and ask how.


Dying with nothing

“Protection is critical!”

A young work-at-home business Mum with an inoperable brain tumour has less than 12-months to live.  She has no partner to support her and is unable to continue working.  She has a personal loan, two maxed-out credit cards and little cash savings to fall back on.  She relies on charity and the financial generosity of friends.

Her greatest regret is that she can no longer provide for her young children.  She is distraught at the prospect of what might become of them after she passes away.  She knows she is leaving them in poverty.

A friend asks her if she has any insurance.  She discovers that she has a small amount of life insurance through her last employer’s superannuation fund.    That will help her children a little after she has gone but is of no use to her while she is alive.

She has no Total & Permanent Disability insurance (TPD), critical illness (trauma) insurance or income protection, all of which could have helped her while she is alive.

She doesn’t know it but had she held her life insurance policy outside superannuation, she may have qualified for a terminal illness lump sum benefit in advance of the death benefit.  Benefits like this are not always available in superannuation.

Whilst financial planning and insurance advice can’t cure her inoperable brain tumour, it will solve the problem of dying with nothing; or worse, dying with nothing but debt.

For business & personal financial advice tailored to your needs call Gary personally on 0408 756 531