Post on 04-Dec-2014
description
BEGINNING IN BUSINESS
Small Business Overview
Alan Lewis AAccccoouunnttaannttss
www.lewistaxation.com.au
"A business in which all the critical management decisions are made by one or two people, without the aid of internal specialists"
1. Characteristics Of Small Business
www.lewistaxation.com.au
95% of businesses are small
2. Size
www.lewistaxation.com.au
Self motivated Seek business independence Very little knowledge of:
◦ general management◦ bookkeeping skills◦ management reports
Do not understand the "business of business"
Neglect can erode the business base
3. Who Are Small Business Operators?
www.lewistaxation.com.au
75% failure rate within three years
4. Lack Of Success
Inadequate planning Lack of professional
advice Insufficient capital Management skills Bookkeeping systems Accounting systems
www.lewistaxation.com.au
5. Particular Problems Facing Small Operators
www.lewistaxation.com.au
Cashflow - especially payment of GST and PAYG tax
Lack of cash for growth Debt financing Cash management Taking too much money out Meaning of profit Poor debtor, stock, work in progress
control
5. Particular Problems Facing Small Operators cont'd....
www.lewistaxation.com.au
Bank relationship Location Pricing Partner Delegation Big outside
organisations Disinterest by owners
5. Particular Problems Facing Small Operators cont'd....
www.lewistaxation.com.au
People management skills Equity finance Succession Thinking through problems Mixing personal life and
business Staff relationships Major customers
5. Particular Problems Facing Small Operators cont'd....
www.lewistaxation.com.au
What business are you in? Not understanding the market Relations Business Plan Budget and Cashflow Forecasts Lack of outside advice No strategic planning Empathy with customers
5. Particular Problems Facing Small Operators cont'd....
www.lewistaxation.com.au
In focusing on the problems of small business
6. Government Attitudes
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Cost of labour Charge out rates Documentation of estimates Control of business overhead
costs Break-even level Cashflow control - especially
related to GST and PAYG
7. Weaknesses Of Small Business Operator
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Control of work in progress Progress claims Changing economic conditions Review of Government decisions Taxation Office requirements Taxation Office power to fine
7. Weaknesses Of Small Business Operator cont'd....
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Subcontractor control Non recording of important matters on paper Funding of debtors, stock and work in
progress Submissions to banks and financial
institutions Regular periodic financial reports Budgets, Cashflow Forecasts and other
estimates
7. Weaknesses Of Small Business Operator cont'd....
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Relationship with bank manager Business Plan Board of Directors/Board of
Advice Customer Advisory Committee "Think Big" in small business! Quality control Keeping records in a shoe box
7. Weaknesses Of Small Business Operator cont'd....
www.lewistaxation.com.au
Get advice before starting Business Plan Budget and Cashflow
Forecast Accounting records Regular financial reports Review Budgets and
Cashflow Forecasts Conduct market surveys
8. How Do You Succeed In Small Business?
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Contact with customers Business location Update your product and technology
knowledge Review quality control procedures Hire and keep good staff Use financial data for managing the business Know your customer
8. How Do You Succeed In Small Business? cont'd....
www.lewistaxation.com.au
Use an accounting firm Some accountancy practices
offer a wide range of services Use professional advisors as a
team Appreciate that you will need
outside advice
9. Achieving Expectations