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#1 goal “financial independence”

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Business coaching Brisbane

Life is much more than money but when living in such a structured society, money matters a lot.  Without it, participation in our society is challenging.

Achieving financial independence does not mean being among the richest 100 people in Australia.  It simply means being able to pay your bills and buying the things you need without being dependent on someone else for money.

You are not financially independent if you have to rely on your partner for money.  You are not financially independent if you have to rely on a job.  Why?  Because both can disappear or conditions can change overnight!

Financial independence is the ability for you personally to maintain income even if your relationship status changes or your job status changes.   Financial independence means maintaining adequate income even though you can’t work (e.g. become ill or have an accident) or choose not to work (e.g. to take a holiday or have a family).

Your capacity to physically go to work and your capacity to earn money are two different things.  You know you are financially independent when you are not relying on someone else to pay you for your 8 hours work each day and when you have broken the nexus between earning money and selling your time.

Financial independence is not a hard to achieve.  However, it does require a different way of thinking, and it does require that you break the bad habit of reliance on others.   Once achieved however, it represents peace of mind!

Until next time

Gary

#1 Business Coaching Brisbane

Call direct 0408 756 531

Email gary@garyweigh.com

Read how the secrets of aikido can change your life http://www.aikido-secrets-to-calm-success.com

What exactly is financial control?

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Business coaching in Brisbane

An important part of my business coaching in Brisbane is teaching financial control.  It is a fact that many small businesses fail because of poor financial management.

Financial control is about understanding the financial performance of your business and then taking steps to improve it.  To be effective, the control measures must provide financial information in real time. 

So what about your annual financial statements, are they of any use? 

Your accountant typically prepares an income statement and balance sheet several months after the close of the financial year.  The purpose is not financial control.  It is purely and simply compliance – the preparation of your business tax return.

Obtaining financial information via your tax accountant some 6-18 months after the event is useless for meaningful decision making .  Information that will truly aid your business decision making needs to be current.  That is, captured today, acted on tomorrow. 

There are a few key measures used by financial performance specialists that will reveal all about your business.  However, none of those can be calculated until you have a system that will capture current information about your business in a usable form.

So the first step is always to have a user friendly accounting system that is built to handle Australian accounting standards and protocols.  To make it work effectively though, you must set up the accounts properly in the first place.  This is the base upon which you will build your financial control system so it is important to seek professional help upfront.

Until next time!

Gary

#1 for business coaching in Brisbane

Call direct on 0408 756 531

Email gary@garyweigh.com

MLM business – go in with your eyes wide open

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For business coaching Brisbane call Gary direct 0408 756 531

Gary Weigh

Lesson #1 in my business coaching Brisbane practice is, “Go in with your eyes wide open!”  There are many things to think about if you are considering being a distributor in a Multi Level Marketing (MLM) organisation, including:

  1. Many people are going to cringe at the offer of an incredible ground floor business opportunity and relationships may be burned along the way.  However, if the products are good enough, customers should be asking you how to join as a distributor.
  2. Don’t be enticed by the perception of easy money.  Focus on the products and everything you do to satisfy and support your customers.  The product should be something of quality with high repeat demand.  It can’t merely be a cover for the flow of commission through a pyramid shaped network.
  3. Don’t be hooked by ‘the dream’ – the vision of wealth and lifestyle.  If you do, building a business may become a secondary consideration.  It is essential to set goals but keep your feet firmly on the ground and your head out of the clouds.
  4. There is a certainty (mathematically at least) that in time, your market area will become crowded with the very distributors you recruited; and by some you didn’t recruit.  There is no contractual protection of markets or territories.  It is survival of the fittest, so you must ensure that you and your business are the fittest.
  5. There must be a balance between selling product and recruiting distributors.  While many focus on recruiting only, someone somewhere along the line has to buy the product.  As in any business, your customers, together with quality products and quality service should be your primary areas of focus.

Understanding what you are dealing with is the first step in making your part of the MLM organisation a success.  Realise now that the majority of distributors will be unsuccessful.  Some will get caught up in the hype and will not focus on reality, while others will simply wither on the vine because they can’t sell product and / or can’t recruit distributors.

Those who start earlier or are nearer the top of the pyramid in their target geographical area are more likely to make money.  Those who start later and find themselves nearer the bottom of the pyramid in an area that is becoming distributor / product saturated are more likely to struggle.

So it will pay you to do some research in your target area before you commit.  Like any business, customer care and repeat sales are the keys.  They in turn depend on the quality of your communication and support, together with the strength of your relationships.

Note: I do not operate any form of MLM business, and I have no affiliations with MLM organisations.  I am an independent, professional specialising in business business coaching in Brisbane.  I am expressing my own views based on 25 years of coaching experience.  I have coached and advised clients who have participated in MLM business, and some who have sought advice before committing.   I have coached many more clients who have not participated in MLM business.  So if you would like an independent appraisal of any business opportunity, please contact me.

Business coaching Brisbane for MLM businesses

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Call Gary direct on 0408 756 531

A reputable, well-established Multi Level Marketing (MLM) company can be a great opportunity, particularly when it offers products that all but sell themselves. However, it takes ingenuity and hard work to build your own network sales organisation.  So consider my business coaching Brisbane practice!

About 90% of home-based businesses in Australia are owned and run by females.  A MLM network business is a very popular home business choice because it involves a low start up cost and product distribution is often handled by the MLM head office.

Nevertheless, there are several issues to consider when building a MLM business from home:

  1. The majority of distributors have never been in business before
  2. Family commitments make work-life balance challenging for many
  3. Many regard MLM as a low commitment family income supplement only
  4. Building sales is not the same thing as building a business – it is only part of the story
  5. Your introducer is involved in the business and may give you basic training and guidance but is not a business coach
  6. You must be careful that in building a network organisation, you build it on a firm footing
  7. Many MLMs offer online planning and coaching tuition, but they are one size fits all and not all are tailored to the Australian business marketplace. 

 Knowing and doing are two different things.  If you are not experienced in Australian business it helps to have an Australian business coach.  It is even more important if you work from home.  It is essential that you stay committed and focused in the face of family and household distractions.

You can’t rely on your introducer forever.  You should start thinking like a business owner, not a sales rep.  You need your own business blueprint because your life and individual circumstances are unique.

Start your business coaching today and start building your business.

Until next time

Gary

Build a financial services business worth paying for!

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Business coaching Brisbane 

Call Gary direct on 0408 756 531 for trusted advice.

My business coaching Brisbane practice is already one of the fastest growing businesses in Australia.   That is because many financial planners and financial service providers are having a good hard look at their businesses in the near future.  Here’s why!

Most financial planners offer a combination of the following financial products:

  • Superannuation
  • Managed funds
  • Shares & other securities
  • Risk insurance (income protection, life, trauma, disability)

To date, many financial planners are not paid by the client.  Instead they have been paid by the providers of financial products.  That is about to change!

From 1 July 2012, financial planners will be paid by the client.   If they are to be paid by the financial product providers, it will be only for a year maximum, not forever.

Being paid by the client instead of a product provider is not merely a change to charging fees.  It is a fundamental change in the way an adviser conducts his or her business.  For many, there will have to be a service worth paying for.

The first decision a financial planner has to make is which business he or she is in, and who is the client.  For many, providing advice is going to be difficult because their knowledge has been skewed towards justifying and selling products.

Making money out of advice is a whole new ball game and it won’t be easy for a lot of long standing advisers.  It will also be difficult for newcomers because it takes a long time to gain the level of knowledge required to be a quality adviser.

Looking for a trusted financial services business consultancy? 

Call Gary direct on 0408 756 531 or email gary@garyweigh.com

Use milestones on your goal journey

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Good goal setting can help you set up the whole picture of your business.   If it helps you, break down your main goals into bite size bits so that you can organise yourself around them.

To do this, insert some milestones along the way.  In other words, you may have to pass two or three milestones before you reach one of your main goals.

Milestones are signs along the way that show you that you are still on the right path and reassure you that your journey to the main goal is closing fast.  So instead of one main goal that takes months to achieve, you now have a multi-part goal that allows you to tick off completed tasks every month or even every week.

Example 1

For example, let’s say my main ‘build or create’ goal is “to start a specialist consulting business in the building industry by 30th June”.  My milestones along the way might be:

Milestone 1. Find an office space at desired rent by end of February

Milestone 2. Lease / buy equipment and fitout office by end of April

Milestone 3. Hire & train staff or arrange outsourcers by mid June

Achieve main goal. Open for business by end of June

Example 2

Let’s say my ‘customer attract’ goal is “to attract 200 customers by the end of year 1”.  I can simply break this down to what must be done each week – i.e. about 4 paying customers per week.

Example 3

Let’s say my ‘future exit’ goal for my consulting business is to build a saleable asset (i.e. my business) that has a value of $1M in 10 years time.

(For the sake of simplicity I am omitting the effects of inflation and the present value of future dollars)

So working backwards, I will need sustainable earnings (i.e. bottom line, before interest and tax), of say $200,000 per year.  That assumes my selling price ($1M) is the equivalent to a capitalisation of 5 times my sustainable earnings rate ($200,000).

(Be careful – the 5 times capitalisation rate I used is an example only and varies widely with the type of business, industry factors and economic conditions)

I will probably need to demonstrate 3-4 years of stable, sustainable earnings for my sale at year-10, so I will set the first time that I earn $200,000 net earnings as my year-6 goal.

Therefore, I will make my year 1 profit goal $50,000 and I will endeavour to add $30,000 to my net profit in each of the following 5 years to boost it to $200,000 by year-6.  This is as big as I want to grow and it is also the limit of my current service capacity.

So in year-1, to achieve a $50,000 net profit, my sales will be $150,000 at a gross profit margin of 60% with fixed overheads of $40,000 (example only).

To achieve $150,000 sales I must sell my services to 200 customers at an average of $750 each (example only).  At a 5-to-1 strike rate, I will have to make 1,000 calls in the year which is about 20 each week or 5 each working day.

So starting at your ‘future exit’ goal and working backwards is another way of arriving at today’s ‘customer attract’ goal.

By breaking down your goals and adding milestones, you are creating a ‘goal journey’.  Now you can decide before you start whether your goal journey is achievable or whether it sounds a bit too hard.

Until next time!

Gary

Business coaching Brisbane – read my previous post for more on goal setting

Interested in the art of business peace?

Check out http://www.aikido-secrets-to-calm-success.com

To learn Aikido in Brisbane visit http://www.griffithaikido.com.au

In 2011 set a goal to start your journey

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In goal setting, every journey starts with a destination in mind.  Operating a business is a major life journey that is rivalled in time and commitment only by your major life relationships.

One of the real risks of rushing into business without adequate planning is that if you don’t control your business early, it will control you.  There are so many forces and influences that can pull, push and buffet you all over the market place.  So it is good to start as you mean to go on.  That is, in an organised way, with you at the helm!

It is critical to start the control process early by having control over what you ultimately build and where you take it.  That, in plain English means starting out with a plan; not a 300-page business plan full of boring detail, but a brief and to-the-point chart of your journey, as you know it now.

I would argue that the most important feature of your plan is your goal setting.  Although dreaming up a few goals sounds easy, this is the part of business planning that most people struggle with.

What goals should I set?

If you are stuck for ideas, try formulating these three (3) main goals:

    1. A ‘create and build’ goal
    2. A ‘customer attract’ goal
    3. A ‘future exit’ goal

The first two goals are self explanatory but the last goal sounds as if it doesn’t belong.  Why worry about exiting before you have even started?  Because ‘future exit’ means eventually extracting the ‘value’ of your business in cash by sale or other means.

Therefore, you need to concentrate on building up that value from the start.  The value you build up is a function of assets purchased, goodwill built up, and profits made over time.  ‘Future exit’ is a great way to bundle all your financial goals.

How do I set goals?

Your main goals need to be AAA goals.  That is:

  • Attractive (you must truly want to achieve it)
  • Achievable (it is within your grasp)
  • Action-linked (it must link directly to actions on your action plan)

A word of caution!

In setting your goals, you are preparing to live your truth.  That means you will achieve your goals only if you truly want to.  If you set goals that deep down you are not motivated to achieve, then you have set the wrong goals.  You are setting yourself up for a fall.  Set your heartfelt truth as your goals.

This is why I bang on about starting a business for the right reasons.  If you are in it for the wrong reasons then achieving goals is going to be the world’s biggest chore.

Until next time!

Gary

Internet Marketing

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The internet has become the source of information on products and business for users around the world. Mastering even the most basic concepts of internet marketing can increase income for any online or offline business.

Being able to market a product, service or information, globally online, to the demographic of your choice is very convenient and ideal for those on a tight budget.  The use of internet marketing still does not appeal to all businesses or all customers, mostly for security reasons.

However, it can attract a whole new segment of online customers and enhance any business.

Search engine optimisation (SEO) is an aspect of internet marketing that allows any business to advertise their product and business by focusing on the search facilities of major search engines (e.g. Google, Yahoo, etc).

Whilst there is a lot more to comprehensive art of internet marketing, SEO is a cost effective strategy for every static web site that hangs out in cyber space with no passing traffic.  And there are millions of them!

Whilst SEO is not simple and requires the services of a skilled technician, it has been far more cost effective for my clients than the offline equivalent of renting offline advertising space on roadside billboards.

I dare say that internet marketing will also spell the end for printed book-form directories.  Even now, my clients are giving me feedback that they are expensive and largely ineffective.  The reason is that every body searches online.  So why not go where the customers are?

Although internet marketing provides global reach in a very cost effective manner, it does come with its own disadvantages.  These are mostly to do with the perception of poor security as the result of the rising incidence of cyber-criminals, mean spirited hackers and the prevalence of PC viruses.

Until next time

Gary

Financial management 4 – Breakeven point

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Once you have made some realistic estimates of your sales and expenses, it is time to move to the next important financial management tool.   That is your ‘break even point’.

Break even point is that point where you stop making losses and are about to make a profit.  Break even point is different for every business because no two businesses are the same.

I will show you a simple example:

Let’s say you make $80,000 sales for the year.  Whatever it is you sell, there is a cost of making it, creating it and delivering it.  The total cost includes things such as raw materials, parts, the cost of your time or someone else’s time and freight in and out.  Even if it is only your time and expertise involved, there is still a cost.

So let’s say that the total of the costs directly related to making / creating / delivering your product or service is $50,000 for the year.

That means your Gross Profit for the year is $30,000 (i.e. $80,000 – $50,000).  Before you go thinking that this is your profit for the year, this amount left over must now be used to pay your overhead expenses.

All businesses have overhead expenses, and yours will be no different.  These are expenses incurred in running your business but are not directly related to making / creating / delivering your products and services.  Overhead expenses include things like rent, telephone, vehicle expenses, leases and other financial commitments that you must pay whether you make a sale or not.

So let’s say your overhead expenses are $30,000 for the year.

Recall above that your Gross profit (contribution to overheads) was $30,000.  If your overheads are more than this figure, you make a loss.  If your overheads are less than this figure, you make a profit.  (Profit is a strictly defined accounting term but let’s not complicate the example).

In this simple example, your overheads are $30,000, equal to your Gross Profit.  You make neither a profit nor a loss.  This is your breakeven point!

So the way your business is currently organised, and with your current pricing and cost structure, your break even sales are $80,000.  If you make any more sales, the Gross Profit from those sales (i.e. deducting the cost of the sales) will fall straight to the bottom line because your overhead costs are paid (providing they remain fixed).

This is great information to have – to know that if sales fall below $80,000 (or $6,667 per month, you are in trouble.

You can achieve gains either by increasing price, increasing sales volume, or by reducing your overhead costs, or by reducing the costs of making / creating / delivering what you sell.

Any change in these variables will of course affect your break even point.

You must check out these sites:

http://www.aikido-secrets-to-calm-success.com

http://www.griffithaikido.com.au

Until next time!

Gary

Financial management 3 – forecasting sales

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In recent posts in business coaching Brisbane, I highlighted the need for regular accounting and for comparing actual results against your budgeted target.

Now for the really tough part of your budget!  That is forecasting revenue.  This is difficult because any realistic revenue forecast depends on what your plans are to attract potential customers and convert their interest into sales.  Most people do not have a clear idea of this because they are inexperienced.

If you have no real plan, or you adopt a shotgun approach to see what works and what doesn’t, then your budget revenue is probably going to be low.

In my experience, the majority of people make the mistake of assuming sales will somehow just happen, as if by magic.  That’s the ‘rose coloured glasses’ effect.  You can’t be complacent!  You have to make sales happen and you must have a clear plan of action.

So forget about assuming a one line sales figure in your budget.  Dig in behind the figures and think about what specific actions on your part will generate sales.  Any financial forecast should be merely a reflection of your intended actions.

The sales equation is ‘Sales Revenue = Price x Volume’.  Now there are two variables but even this is too general.  You must dig down further and determine the day-to-day drivers of ‘price’ and ‘volume’.

Get specific and assume nothing.  Get real with your pricing and take off your rose coloured glasses when figuring out where your sales volume will come from.  You must build your sales budget from the ground up, group by group, customer by customer if necessary.

This is the only way that you will be able to find out why your actual sales, in any month are under or over your budgeted sales.  Knowing where you over-performed or what you need to work on next month is priceless management information that can only come from taking the budgeting process seriously and building a useful sales history.

So why do I give you this valuable information free?  Because I know from experience that only a handful of the 40,000 readers of this blog will take any notice at all.  But to the few who do, it will put you one step closer to controlling your business, instead of allowing it to control you.

Check out previous Financial Management 1 & 2 posts by business coaching Brisbane.

Two interesting sites I highly recommend you visit are:

Spiral Photography at http://www.spiralphotography.com.au

Griffith Aikido Institute at http://www.griffithaikido.com.au

Until next time!

Gary