The Trouble With Debt

The three ways accountants can get in trouble with debt financing their practice are: Using short term debt to make long term investments. Doing this creates problems as the short-term debt will need to be refinanced well before the long-term investment returns are available. If the short-term debt cannot be refinanced, the lender will either sell or close the business. Failing to consider that when increasing debt it increases business risk. Borrowers need to ensure their cash flows have a Read More…

Introducing New Services to Existing Clients

This strategy is about creating new services that you can provide to your existing client base.  It is similar to the low hanging fruit strategy, but involves more work.  The practice has to create the new services, train the staff on delivering the new services, and develop a marketing plan. When considering what new services to provide ask yourself two questions. Firstly, what service would provide immense value to existing clients? Secondly, does the practice team have the skills or Read More…

Sturgeon’s 10% of Practices

If a Purple Cow practice is not achievable, then being part of Sturgeon’s 10% of practices would still be a worthy goal. This would be financially rewarding of course with annual principal profits of $1m plus. If you are already achieving this, well done. If you are not, how do you get there? Firstly, you need to start with your strategy. If you currently have a stuck-in-the-middle strategy, you need to take Michael E Porter’s advice and chose one out Read More…

SMSF Advice Options

At June 2015 the ATO advised that there were 556,998 self-managed super funds in Australia with 1,049,840 members. During the 2015 financial year 32,073 funds were established and 1,350 funds closed (by either the members or ATO). On 1 July 2016 the accountants’ exemption was repealed and ‘Recognized Accountants’ can no longer recommend the establishment or winding up of a self-managed superannuation fund unless they are appropriately licensed. Previously Regulation 7.1.29A of the Corporations Regulations 2001 permitted this without being Read More…

Time Management

Time management is the act or process of planning and exercising conscious control over the amount of time spent on specific activities, especially to increase effectiveness, efficiency or productivity. The Pareto analysis can be applied to time management. This is the idea that 80% of tasks can be completed in 20% of the disposable time. The remaining 20% of tasks will take up 80% of the time. The 80-20-rule can also be applied to increase productivity as it is assumed Read More…

How Should I Structure My New Business

When clients come in to see me about starting a new business they have many different questions depending on the type and size of business they are commencing and their own understanding of business. One of the more common questions is; what type of entity should I use? There are several different entities, or business structures, that can be used to run a business. These are, sole trader, partnership, company and trust. Some of the advantages of being a sole Read More…

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, Read More…