Identifying Business Opportunities
Operating a small business is one of the most rewarding yet challenging experiences and the difference between business success and failure is sometimes marginal. There are also specific activities that can be undertaken to improve business outcomes depending on your position in the business life cycle.
An experienced commercial accountant can “add value” to your business far beyond tax compliance by reviewing your business performance from a commercial and risk management perspective. Cash flow management, efficiency through maximising production rates, market position, pricing points, logistical and inventory management, business location, web marketing and website design are just some of the myriad of factors that impact on the financial performance of your business. Identifying the key business drivers that will allow you to differentiate your business from your competitors is a niche opportunity to maximise profits and improve margins.
What differentiates them from us that draws mores sales and higher margins?
Some of the easiest to implement improvements can bring the biggest results. In management parlance it is about “grabbing the low hanging fruit”.
Is the market you deal in price sensitive?
If you answered yes, are you sure? Why have you determined that the market you deal in is price sensitive? Are there other opportunities to exploit in a sub market that is less price sensitive? The end result is that if you can increase the price point at which you sell your goods or services then your margins will improve, if all other inputs remain the same. Understanding your market and your market position is important in determining your pricing point. In the end you may have multiple pricing points to reflect the market niche. A review of pricing points may also lead to recognition that the part of the market you are operating in does not reflect the goals and objectives you have set and it may be prudent to exit that segment of the market.
Are you paying too much tax?
Now that is an interesting question and inevitably most people will say yes but making a profit and paying tax is not necessarily a bad thing. However, if you are not minimising your tax payable then there is a problem. In most instances, tax planning is a by-product of the taxation payable process and in many instances it is too late to implement effective tax saving strategies after the fact. As such, it is very important to implement a tax planning strategy that reflects your current position and future ambitions at the same time. This may include having the correct business structures in place or ensuring suitable substantiation and administration processes are in place to capture the right information correctly. Setting up correctly in the first place is the best position to start a new venture.
Assets protection and are you vulnerable?
You work hard and your business is starting to “bear the fruit” of success. You have surplus funds to buy those important assets such as a house for your family. After all of the hard work are you willing to jeopardise these important hard earned assets? The current business structure you have may not be protecting your assets or the current ownership structure in place does not protect your assets. Therefore, it is very important that the structures you have in place reflect your priorities and you may unwittingly jeopardise your assets. Reviewing your risk profile is an important part of your business planning.
As you can see from the examples above, there are numerous issues that may be affecting the operation of your business. We can support the growth and development of your business through:
- Business Performance Reviews
- Development of Risk Management Protocols
- Implementation of the Correct Business Structures
- Asset Protection Strategies
- Process Flow & Management Control
- Tax Planning & Cash flow Management
- Financial Control
- Segmentation & Market Identification
Become the leader of the pack and not just a follower. The commitment you make to the development of your business is a multiplier of its performance. However, we believe that working smarter is a better option rather than just working longer. More hours expended will not necessarily translate into greater profitability.
By Chris Black, Success Tax Professionals, Labrador, QLD