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

Managing start up business

FEATURE – Ashgrove Serviced Offices

Ashgrove Serviced OfficesOne of the real challenges for small business owners managing start up business is making the transition from the home office, or even the back bedroom, to a commercial office.  Committing to a lease is a big step and often a financial challenge.

But take a little time to think about it and you soon realize that, in a world where an internet connection is a ticket to anywhere; where capable and self-sufficient virtual technical assistants are available at a fraction of the local cost; a dedicated office and fixed term lease may not be the best solution for you.

If you don’t need street frontage, don’t rely on walk-in trade, and don’t have a physical storage need, physical location may be not be your priority presence.

managing start up businessGreg Cusack, owner of Ashgrove Serviced Offices, fills a need gap for those managing start up business.  With his wife and co-owner Terri, he offers a virtual office solution to those who don’t need a dedicated physical office.    That means they do everything and you don’t need to be there.

Knowing that your calls are being answered professionally in your business name; and your mail is being received and forwarded, leaves you to get on with your own high-payoff business activities.

What you save in dedicated office leasing you can apply to building your online presence, which the whole world can see.

My favourite - The BoardroomOf course serviced offices are also available if you need a fulltime, part time or representative onsite presence.  However, my personal favourite, apart from Greg and Terri’s warm welcome, is the stunning boardroom.  Located on Level 1 Highpoint at 241 Waterworks Road, brisbane, this is a perfect near-city location for boardroom presentations; training small groups; and conducting client meetings and interviews.

For all your physical and virtual office needs, visit Ashgrove Serviced Offices online at www.asoffices.com.au or call Greg or Terri on 07 3510 2100.

Gary 5Author’s Note

If you are a small local business and you would like to join our referral group, just get in touch.  I am very willing to feature your business on this site.  You found it and so will others.  Call me on 0408 756 531 or email me at gary@garyweigh.com

 

Lose your temper, lose your self

“If you can’t control your anger, you are as helpless as a city without walls waiting to be attacked.”  The Book of Proverbs

business buildingLosing self-control on an individual level is problem enough, but collectively, the inability to exercise self-control is mankind’s enemy number one.  Why?  Because it inhibits the process of peace and harmony!   It leads to aggressiveness and violence with the occasional outbreak of peace.   Welcome to the world we live in.

 Once negative emotions such as anger, contempt, and disgust are out of the box, they can’t be put back in.   The poorly chosen words and behaviours that follow in an eruption of uncontrolled weakness can’t be undone.   It is a volatility that gets noticed for all the wrong reasons.

 If self-control is lacking so too is the ability to lead or to attract people to your cause.  True leaders are calm and inspirational people, not ranters or politicised mouthpieces.  And a cause doesn’t have to be a country or a campaign for change.  It could be your business, career or a personal relationship.

 Whatever the goal, wherever the journey leads, it is the inner qualities of the person that shape each and every step taken.  Inner calmness and the ability to control the self are the starting points – regardless.

Business owners and superannuation

Business Planning Consultancy Brisbane

It is not uncommon for business owners to be imbued with self-belief and the need for control.  They generally need these attributes to succeed.  Unfortunately, many extend the self-belief mantra well beyond the point of common business sense.

Even when operating well inside your own field of expertise, it is wise to build a good team around you.  But whenever you move outside this zone, good advice from trusted advisers becomes a must.

It is not surprising then that many business owners having generated good returns by coordinating processes and influencing people around them; logically extend the notion to their superannuation.   However, self-belief and the desire for control are not enough.

Either you have the time, the desire, and the necessary expertise to generate your own superannuation returns and comply with the law, or you must pay someone else to do it on your behalf.  The law and the ATO (who administers the laws relating to self managed super funds) are fairly unforgiving.

Even managed (e.g. retail) superannuation is not easy, which is why many Australians are reluctant to engage with it.  Self-managed superannuation is even harder.  It encompasses all of the laws of superannuation, and then some.

Most business owners regard their business as a large part of their superannuation.  Rightly so, and the government recognises this.  For instance, the law does recognise the connection between a ‘real business property’ asset and a self-managed superannuation fund by allowing business owners to transfer business premises to their self-managed funds and lease back.  The rules are strict so advice is crucial.

The link between business and superannuation is further recognised in the small business CGT (capital gains tax) concessions, allowing eligible business owners to convert all or part of the ultimate sale proceeds of their business into superannuation with prescribed CGT concessions, after meeting certain gateway tests.  In this case, independant tax and accounting advice is crucial.

The value of appropriate advice from suitably qualified professionals cannot be emphasised enough.  As well as gaining access to the necessary expertise (e.g. financial, legal, tax), timely advice well in advance of any property transfer or sale allows for appropriate eligibility, structuring and compliance planning.

General advice only

This information is of a general nature only and does not take into account what you currently have, or what you want and need for your financial future. It is important for you to consider these matters, seek professional advice and to read the appropriate Product Disclosure State-ment (PDS) before you make a decision to buy, cancel or continue to hold any product. Call me for a copy of any relevant PDS.

Important

Gary Weigh is the Director of Gary Weigh & Associates Pty Ltd ABN 41 084 228 679, Authorised Representative (no. 256617) of The FinancialLink Group Pty Ltd ABN 12 055 622 967 AFSL No. 240938

Featured business

Musas Boutique, Santa Ana, El Salvador

In the second largest city of the developing country of El Salvador, Musas Boutique is a must-visit women’s clothing shop in picturesque Santa Ana.

Santa Ana is the second largest city in El Salvador and is home to almost 300,000 residents.  Located 64 km northwest of the capital San Salvador, it is a tourist destination full of Salvadoran culture and traditions.

Proving that entrepreneurship is alive and well regardless of economic conditions, Musas owner, Kenia Sifontes (pictured below) saw an opportunity to supply stylish, affordable clothing of good quality to the women of Santa Ana.  She found a central location and made it her own.  Well stocked and beautifully decorated inside, she makes clothes shopping mix and match a pleasurable experience.

 With a keen eye for fashion, Kenia scours local import wholesalers to find style at an affordable price for her growing legion of customers.  Offering a range of unusual local accessories Kenia has proved that fashion needn’t be expensive.

So if Santa Ana is on your travel itinerary, drop in and say Hi to Kenia at Musas Boutique, located at 1 av. sur entre 1st  y 3rd calle ote local # 2. B San Sebastian.

Superannuation – will you retire on it?

Business consultancy Australia

business consultancy AustraliaMy cynical view is, “For the majority, probably not!”  Younger workers with time on their side perceive no immediate need and therefore, have little interest.  Older workers have the need and the regret of not acting sooner, but lack the time to accumulate sufficient retirement savings.

I believe that if it wasn’t for compulsory superannuation and union super funds, most workers wouldn’t have any superannuation savings at all.  Nor would they have any personal insurance protection.   To most people, superannuation is just another form to fill in when starting a new job; and to get life insurance is just another budget impost with a benefit that the life insured will never see.

It is only when it is too late that the benefits of needs-based superannuation savings and insurance protection are fully realized.   I regularly receive enquiries from people who are two years off retirement or who have been diagnosed with cancer.  As much as I feel their desperation and regret, we are planners, not magicians.

But then the phone rings and the person on the other end tells me that they have taken stock of their life and they have realised that they need to budget; address their debts; start saving for the future; and protect their family (while still healthy) in case life deals them an unfortunate blow.

These are the clients I live for – people who live for today and want to plan for tomorrow; people who look past their own mortality to the financial welfare of their spouse and children.

I again remember why I chose this profession – to help people who are willing to help themselves.

The pitfalls of buying income protection without advice

Business planning tips Brisbane

Business planning tips BrisbaneThis is the true story of a client who purchased over-the-phone income protection without advice, and cancelled his quality income protection policy that had been recommended and sold some years earlier by a reputable risk insurance adviser.  The policy he cancelled was an affordable policy which suited his needs at the time. However, these needs had not been reviewed in a while.

After repeatedly seeing the TV advertising for one of the many over-the-phone, no-medicals insurance offers, he decided to cancel his existing income protection policy and buy what he believed was a cheaper price for a similar product.

After being notified of the cancellation by the insurance company, the adviser rang the client to see what the story was. The client’s response was that he believed that all income protection policies were much the same and he had gotten a much better deal by going direct and cutting out the middle man.

The adviser made an appointment to see the client and proceeded to compare the two policies by laying them out side by side. What the client had actually purchased from the direct insurer (and was completely unaware of) was this:

  •  He had been given a restrictive 5 year benefit period and no other choice. The cancelled policy would have paid the benefit all the way through to age 65
  •  He didn’t realise that the premium of the new policy was actually more expensive. It seemed cheaper because it was quoted as a fortnightly premium. The policy he cancelled was quoted and paid as a monthly premium, but was in fact significantly cheaper for a far superior contract.
  •  The policy he cancelled was an ‘agreed value’ style policy while the new policy was the generally inferior ‘indemnity’ style policy. The difference in definition wording between these two styles of income protection contract is significant in terms the benefit ultimately paid
  •  His needs were never reviewed nor were the consequences of the new policy ever explained. He said he was replacing a policy but he was wasn’t provided with a replacement policy advice showing the comparison between the two policies, which is a mandatory industry requirement

All income protection policies are NOT the same. There are many different types on the market and they are designed to suit particular circumstances and particular occupation types.  One size definitely does not fit all so please seek professional advice when considering personal insurance.

General advice only 

This information is of a general nature only and does not take into account what you currently have, or what you want and need for your financial future. It is important for you to consider these matters, seek professional advice and to read the appropriate Product Disclosure State-ment (PDS) before you make a decision to buy, cancel or continue to hold any product. Call me for a copy of any relevant PDS.

Important

Gary Weigh is the Director of Gary Weigh & Associates Pty Ltd ABN 41 084 228 679, Authorised Representative (no. 256617) of The FinancialLink Group Pty Ltd ABN 12 055 622 967 AFSL No. 240938

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’.