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"Mark has been working with me since May 2004 on many aspects of my business.
He is very approachable & offers me practical advice and his communication skills are excellent. I would have to say Mark gives his all and is determined to help his clients succeed".
Phil Goad, Owner, www.earth-garden.co.nz
"Mark Gwilliam and his team at Business Advisory Accounting & Tax Services has been my full service accounting department for many years for my companies.
I rely on the fast, friendly and accurate information they provide me to analyse and concentrate on running my business. Any information that I need is readily available. To eliminate the costs and hassles of in-house accounting, I highly recommend Mark's team."
Sina Mead, Engineering & Industry Training Ltd
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‘Business advice’ archive
07.03.2008
by Mark
Gwilliam
Your company’s vision statement is the statement of its potential and of what you want your business to become. Your vision statement should be meaningful to you and your organisation. It should be shared will all of the employees in your organisation in order to create a unified direction for everyone to move in.
Crafting a vision statement is a challenge for many business owners, so I have included several strategies in this article for you to make this process easier to complete.
Begin by describing the best possible business future for your company, using a target of 5-10 years in the future. Your written goals should be dreams, but they should be achievable dreams. Unachievable goals can create frustration for all parties involved and can cause a decrease in your organisation’s morale.
When writing your vision statement, use the present tense, speaking as if your business has already become what you are describing. Use descriptive statements describing what the business looks like, feels like, using words that describe all of a person’s senses.
Your words will be a clear written motivation for where your business organisation is headed. Your words can be as long as you would like them to be, but a shorter vision statement may be easier to remember.
Ask yourself the following questions as you craft your vision statement:
• What do you want your organisation to look like in the future?
• What is your organisation currently excelling at? How is your organisation currently competing in the market place?
• What do you currently use to judge your organisation’s effectiveness?
• What do your employees see for the company’s future? Ask for their advice.
• Visualise the end result of where you would like your business to be. Visualisation will help you choose the words to craft your vision statement.
Once you have completed your draft vision statement, summarise your thoughts into a single, powerful phrase to describe your entire vision statement. Your employees will remember this powerful single statement, and it will become a motivation tool within your organisation.
Share your vision statement with everyone that supports you and your entire organisation. It can take some time for the vision statement to become a common practice, but if regularly discussed and reviewed, your vision statement will become a part of your organisation’s culture.
04.03.2008
by Mark
Gwilliam
Are you tired of working constantly without a vacation and having the money to show for your efforts? If you are wondering whether you are in the right business, consider the following questions:
Do you know the ins and outs of your business?
Understanding the ins and outs of your business and the industry that your business is in is a crucial component that will determine whether you will be successful. Are you aware of the key metrics for your business success?
If not, take a moment and complete a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats. Draw a T-chart on a blank sheet of paper and diagnose your current business successes and failures.
If there is not enough opportunity and too many threats and weaknesses, you are potentially in the wrong business. If there are strengths and opportunities, revise your business plan to cater to these listed items.
Do you have a solid business plan?
Developing and executing a solid business plan is a crucial step toward ensuring that your business will become successful. Include accurate cash flow projects and forecasts for your expected profit so that you can review this information and make informed decisions about what your next business steps will be.
Are you spending time on non crucial tasks?
Choosing the core tasks to focus your energy on can be challenging. Many small business owners spend most of their time putting out fires and working in the business instead of strategically working on their businesses. Define the core tasks in your business that drive its bottom line and structure your schedule so that these tasks are dedicated the most time and that they receive daily priority.
For more information on how to leverage your time, read my article called Leverage your Time and Use it More Effectively.
Do you know the business that you are in and have passion for it?
Lack of passion will almost surely cause business failure. Ensure that the business you are working on is something that you are familiar with and that you can fully get behind, as it is passion that will provide the needed energy to fuel the business toward success.
When you are familiar with a particular industry or field, the training that you have received, the knowledge of the industry and the network that you have built will better enable you and your business to achieve success.
Choosing the right business to invest your time into can be challenging and if you are currently a small business owner who is not seeing the levels of success that you desire, as yourself these questions to reposition yourself for a higher chance of success moving forward.
If you have not already signed up as a website member to receive valuable information such as this regularly, I encourage you to do so today.
08.01.2008
by Mark
Gwilliam
How did you spend your Christmas break?
Often for many small business owners, it’s a great time to catch up on a few of those administration jobs that you’ve been putting off. Or, without the ‘phones ringing, it’s an ideal time to focus on some strategic tasks.
I’ve just finished a 32 page draft of my business plan. I have had a Business Plan in place for Business Advisory Accounting & Tax Services from the 1st day I began the business. When I look back now on what the original was, I’m amazed at its simplicity.
The business plan has had a few changes over the years and I have always been quite good at revisiting my plan once or twice a year. However now that our tax and business consulting practice is growing, I really needed to revisit where we were and where I wanted the company to be. It was an exhausting but rewarding process and I found some things out about my market and my competition that I hadn’t previously given much thought to.
When I say the plan is a draft, it’s been sent to my dependable virtual office assistant at www.theofficeelves.com to proof read and format, so there will probably be more work on it soon when I get back from a short break in Wellington.
Not that a business plan is ever really finished in my view. I see it as an evolving, living document that should be updated regularly and referred to often. If we fail to plan, we plan to fail. I also really like this quote from Brian Tracy: “A clear vision, backed by definite plans, gives you a tremendous feeling of confidence and personal power.”
I have previously written about the benefits of preparing one which can be read here
Although, we prepare comprehensive business plans for many of our clients, you can prepare a simple one by buying one of the many available software packages available. Try this one from Palo Alto by visiting here
16.11.2007
by Mark
Gwilliam
Debt Affects Everyone
More and more families are saddled with debt nowadays. The average American family is in debt to the tune of $12,000, the average UK family to around £8,800 sans mortgage. Even students are getting affected, with those attending various courses having debts ranging from $8,000 to over $20,000. Businessmen are in no way exempt to the general trend towards indebtedness. However, their debts usually include loans which were taken out for capital or operational expenses.
Five Ways to Deal with Bad Debt
Why does bad debt happen to good people? The answers vary widely. If you’re one of the people saddled with this debt, all is not lost. There are still ways of getting out from under that crushing burden and getting back on track.
1) Take stock of your cash flow. Some entrepreneurs with debt problems don’t know how much they’re spending, sometimes not even how much they’re really earning. The first step towards handling debt is to find out how much money is coming in (your income), and how much is going out (operational expenses, debt servicing, etc.). This information is needed so that you can figure out a) how to make “inflow” greater than “outflow” and b) how much more you need to increase inflow or how much more outflow you need to reduce to make this a reality.
2) Establish certain fiscal guidelines to live by. Establish a maximum amount you can spend, and keep below it. No ifs or buts.
3) Start cutting down on outgoing money. Personally, this means reducing the number of times you go to the mall, brown-bagging lunch to work, commuting instead of driving, halting non-essential expenditures like subscriptions and vanity purchases, etc. For your business, this is streamlining operations so you spend less to achieve the same business ends.
4) Think about restructuring your debt, and if that can help you. You have various options available to you. One is to talk to your creditors and see if they’ll agree to lower your payment rates. This can free up more money per month, at the cost of extending the loan lifetime. Another possible option is to take money from any investments you have, such as an idle property you haven’t found use for yet and use these to pay off your high-interest debts.
You could also consolidate your loans to obtain a lower interest rate and reduce your payments each month. Still another possible debt payment scheme is to snowball your debt, meaning you pay off the smallest debt first, followed by the next-smallest, and so on. This is a way to keep motivated paying debts, as you see those amounts disappear one by one. Take note, if you obtain the services of a credit repair company, you may get a negative mark on your credit history.
5) Discuss your options with an advisor. Look for a reputable one and he or she may be able to help you make your repayments more manageable. Ultimately, though, you’ll have to be the one to follow through with any suggestions the advisor might make.
31.10.2007
by Mark
Gwilliam
Should you or should you not buy your equipment? Often at times, we are faced with the decision of whether to simply purchase the office equipment we need or lease it for the time being. Depending on your needs, there are upsides and downsides to both leasing and purchasing. Before deciding one way or another, consider how long you will need your equipment, the cost, the returns on purchase or lease investment, etc. Basically, use efficiency, economy and cost-effectiveness as your criteria for deciding whether to lease or to purchase your equipment.
Purchase
If you have a long-term use for the equipment, purchasing it is the better option. Leasing an item of equipment that will be a fixture in the office for a long time coming could be more expensive because you will end up paying more than its actual price after a couple of years’ lease.
Consider also the warranty that comes with new equipment. A warranty is convenient because you can get a replacement for defective equipment or parts as well as free service. Since office machines are used round-the-clock most of the time, they have a tendency to either go totally kaput or act up once in awhile; you need this warranty to ensure a quick, as well as an economical resolution to equipment problems.
Leased equipment usually does not come with a warranty; you may get preferred service but this, you usually have to pay and wait for. When you lease equipment that turns out to be defective, you could end up waiting in line until the company has the time to check your machine and get it working for you – a common problem with leased equipment repairs. This in turn, could drastically affect work flow in the office.
Lease
If you will need the equipment for only a short period of time, leasing is the way to go. There is no point in purchasing equipment that you only need for several months because equipment value always depreciate. Thus, even if you sell your equipment after just two months from the purchase, you will still lose money.
In some cases, however, leasing equipment may be better than purchasing it – even if you will need it for a long time. If you have limited capital and have many things to spend money on, you might find leasing to be the better alternative. This is true if other expenditures have more priority than equipment.
To illustrate, let us suppose that you have started your own cakes company on a shoestring budget. Of course you need professional ovens, but you also need money for supplies, rent, employee salaries, and advertising. In this case, you may lease your ovens first. Once you have a steady income from your business, you may decide to purchase the ovens that you need.
When you lease your equipment, you can also upgrade as newer models come. With purchased equipment, you’re pretty much stuck with it for as long a time and your resources allow. Leased equipment lets you request a newer model as it comes and keep you apace with the changing times.
Unfortunately, however, leased equipment is usually used equipment. This may mean drastically reduced performance and output unless the company from whom you leased the equipment has a good maintenance crew and program.
25.10.2007
by Mark
Gwilliam
Employers have come to realise that one of the best things they can do for their business is to get feedback from their own people. While listening to customers’ suggestions and complaints is important, soliciting the input and ideas of employees can be priceless.
What You Learn from Listening
Your employees are your “contact people” as they are the ones who directly deal and interact with your customers. If your employees are dissatisfied with their working conditions, they are unlikely to pass on a good vibe to your customers. They cannot serve with a smile if they have nothing to smile about.
When employees are dissatisfied, moreover, they will not stay long. Employee turnover rates would be high and this can not be good for your people’s morale – why be friends with your office mates when you or they’d be gone soon, anyway? With high turnover rates, moreover, you’d be forced to devote a lot of time (and company resources) on hiring and training new employees so you’ll have little or no time to growing your business. You’d be dealing with the employee learning curve again and again. Inexperienced employees also means more mistakes.
Employees, moreover, are not machines. When they work, they think and they usually have an opinion about the way things are being handled, the company policies and how the business operates. Your employees are therefore good sources of ideas for your business’ overall improvement.
Imagine, then, what mere listening to employees can do and give you. If you listen to your employees, you will LEARN a lot of things. You will learn what your employees think about the way you run the business, what company policies are hindering your company’s growth and what needs improving on your product or service. If you listen to your employees, you will know what pleases and bothers them so you can introduce programs that will improve your employees’ satisfaction with their jobs. By so doing, you will retain more of your employees. This, in turn, means better and more experienced employees dealing with customers (this means greater customer satisfaction), satisfied and happy employees (motivated employees who have the good of the company in mind) and less time/effort/money wasted on training new hires (efficient use of company resources).
Overall, if your listen to your employees, your company can improve for the better.
Listening to Your Employees
How do you listen to employees? There are many ways.
Survey: You can do an employee survey; you can formulate a questionnaire and distribute it to your employees. To make sure you’re capturing the information that you need, you can ask professional researchers to make the questionnaire for you.
Meeting: You can also set a meeting with your employees and directly ask them what for their feedback. You must be careful here; you don’t want to offend people by shooting down their ideas just because you personally think such ideas have no merit. During the meeting, just listen and take down notes. Then, you can analyse the information you have gleaned on your own.
Discussions: You can meet with each of your employees for a more in-depth and personal discussion. This will give you the privacy that you need so you can get useful suggestions without being wary of embarrassing your employees.
23.10.2007
by Mark
Gwilliam
It’s very common nowadays for managers to resort to extreme measures such as firing employees just so the business or company can stay afloat. Then there is the other, more common reason for firing an employee. That is, when an employee has become a non-performing asset, a liability so to speak, he or she is usually fired. One other reason for firing employees is the “greater good”. This usually applies when an employee, through their own behaviour and attitude, disrupts the peace of the entire company. Whatever the underlying reason, however, firing an employee is never an easy task.
The right way
You must remember that there is a proper way of letting go of an employee. If you choose this path, you will avoid creating an enemy and perhaps even save your company from a costly legal battle.
1. You must have the right reasons. Why are you really letting your employee go? If you are firing your employee because of their dismal performance, that’s understandable. If you are letting them go because it is crucial that your company be downsized or because the employee has behavioural problems, that’s unfortunate yet still understandable. However, if you are letting personalities – particularly the clash of theirs and yours – colour your decision, then you must think again.
2. You must follow common courtesy. You must sit the person down in your office and talk to them privately. It is even more important that he or she hear it from you first. Moreover, do not let other employees know about the dismissal before the involved employee knows about it. Inform your employee about your decision as soon as it has been made so that they can prepare for the inevitable.
3. You must follow standard operating procedures. You must be careful to keep the matter legal. Before you proceed with the dismissal, review your company policies that concern firing employees. You must follow the details of your employee’s employment contract to the letter. If a month’s notice is necessary, you should abide by that. Furthermore, it is required that you file a written report of the dismissal, let the employee read and sign it, then file it for record purposes. The employee must also be fully appraised of the reason for their dismissal and you must listen to what they want to say as well as answer their questions, if there are any.
4. You should be civil and professional. It is important to remember that while the interview cannot be really pleasant (you are firing an employee, for goodness’ sakes), it can still be civil. Thus, you should be professional. Do not scold the employee and go through their transgressions; proceed in a matter-of-fact manner, instead. It would be even better if you can be empathetic; just never be antagonistic.
The wrong way
Doing anything that violates the above is to fire an employee the wrong way. Personal reasons, gender discrimination and avoidance of workers’ compensation (firing injured employees) should not be reason for firing an employee. Moreover, never treat the matter unprofessionally; telling all others before the employee concerned, engaging in rumour mongering and callousness on your part encourage bad feelings. All these can leave your company vulnerable to litigation.
17.10.2007
by Mark
Gwilliam
Starting on the path of business is hard and choosing the specific path is even harder. Nevertheless, no matter what path you choose, there will always be risks that you’ll have to take when starting a business. Going into business, though, doesn’t always have to be a leap of faith. Although there will always be an element of risk involved, you can considerably lessen the risks by buying an existing business.
1. Facts vs. theories: You will have a great deal more facts to work with. Some of these facts are the average revenue per month, the inventory turnover, the number of new customers, average profit per month, etc. More facts mean fewer theories and less guesswork.
2. Existing system vs. experience: With an existing business, all you have to do is to improve on the systems and infrastructure that are already in place. If these were working right before you bought it, then there will be less chance of making the expensive start-up mistakes that entrepreneurs always charge to experience.
3. Shorter ROI time: Typically, ROI timeframe is shorter. You don’t have to spend as much time building the business; operations can commence the day after you sign the papers. You do away with the development stage and go right to the production stage.
4. New vs. second-hand: Most (if not all) of the equipment, furniture and other assets are second-hand. This represents considerable negotiating leverage when it comes to the business selling price. Second-hand assets are always cheaper than new ones although they are not always inferior in quality.
5. Existing customers: When buying an existing business, you get the business’ existing customers as well. This means you don’t have to go through nerve wracking months of hoping for customers to stumble in.
6. Experienced employees: You also get the business’ experienced employees. This means less training costs, fewer mistakes and fewer aspirins on your part. But then of course, the task of breaking bad habits falls upon you as well.
7. Better financing options: When you buy a business that is at least two years old or more, you also get to buy the financial options that come with the track record. Banks are ‘friendlier’ to businesses that have been up and running for at least two years. This gives you the option to take out a loan to augment the business capability or to upgrade the operations.
8. Known vs. unknown: An existing business would also have (for good or bad) an established place and identity in the market. This means that you don’t have to fight hard for a place in your target niche.
9. Having a mentor plus flexibility: When you buy an existing business, you also get a mentor (the seller) who can help you learn the business thoroughly. This is almost as good as going into business as a franchisee. Unlike a franchisee though, you will have more options, more flexibility and total control when it comes to making crucial decisions about your business.
10. Less risk: From all of the above reasons, buying an existing business means less risk. Of course, this also depends upon the care you have taken to make sure that you have chosen the right business to buy. Good luck and good hunting!
15.10.2007
by Mark
Gwilliam
The hardest thing to admit for a business owner is the fact that their business is slowly dying. After all, what business owner would want to admit that their once future hope of building an empire is forever to remain in the realm of wishful thinking? Thus, the owner of a failing business continues to hold on and on until their knuckles turn white and face becomes so blue from holding their breath.
Before this happens to you, look out for warning signs that impending death to the business could be lurking just around the corner. This way, you can still do something and not give up without a fight.
Tell-Tale Signs that Your Business Could Be in Trouble
1. Exodus. Your employees are doing an exodus a la Moses towards the promised land of another company. You just can’t seem to hold on to them any longer although not much has changed with the way you’ve been regarding them from Day 1. Perhaps herein lay their issues – that there is no growth in your company. You are perhaps the reason why they’ve become stagnant.
Do an exit interview and find out why your employees are leaving. From what you learn, you can improve your employee relations and perhaps keep the new ones or prevent the rest from leaving as well.
2. Paying off debtors has become hard. Although the original idea was to borrow more so you can meet your other payments and perhaps turn things around, you ended-up having more debt than assets. Now, you find yourself asking your secretary to keep debtors’ calls at bay and you have fallen into the nasty habit of giving post-dated cheques way after your due date.
At this point, talk to your accountant (if you have one) or a financial consultant. Find out what your assets and liabilities are, and explore your options for paying off your debts once and for all. Find out, too, how you can prevent yourself from getting deeper in debt.
3. Your loyal clients are jumping ship. Suddenly, regular customers are no longer visiting your store or returning for more. Find out why. Are your customers deserting you because your service has deteriorated? Are your customers leaving because of quality or price problems?
Find out why your customers have stopped buying your products or using your services. After you have done so, look for the underlying reasons. Has your service deteriorated because of staff morale problems or lack of manpower? Has quality deteriorated because of carelessness? Has your competitor cut prices? Solve the root problems that you uncover.
4. You offer your products and services at below profitable prices just to keep your clients or get new ones. It doesn’t help to lower your price drastically just to be able to keep your business afloat. In the long run, you will still end up losing your business.
5. You feel more tired, pressured and unfulfilled than in all the years that you’ve been running the business. While it’s natural to feel these from time to time, it becomes another matter entirely when you start feeling like this everyday due to your business worries. If you’re not happy anymore, perhaps it’s time to swallow the bitter pill and admit that it’s time to fold-up and move on.
12.10.2007
by Mark
Gwilliam
The success behind any business lies mainly on three things: your product or service, its affordability and you (or the people) who run it. Make just one of these components mediocre and your business and everything for which you’ve worked hard will go down the drain.
Therefore, once you have an excellent product or service idea, done your research on the market and have come up with a consumer-friendly price for your product or service, the next thing you need to do is to look for a business partner. While going at it alone could be a better choice, it isn’t always the best because a partner could actually help you achieve your vision – IF you have the right one, of course.
Choosing a Business Partner
1. Specify what you need in your business partner/s. First of all, list down your strengths – your skills, talents and capabilities – or what you can bring to the business. If you are thinking of putting up a graphic design and web development business for instance and you already are a good graphic artist with years of experience, there really is no point in getting another artist as your partner. In this case, your partners (you’d probably be looking for more than one) should be someone who is an excellent marketing strategist and someone who is an excellent website programmer. You’ll need the programmer for web development and the marketing strategist for selling your services to the market.
2. Be strict about your business partner’s qualifications. Remember that you want your business to become profitable – and unless your partner or partners can deliver their end of the deal, your business will never take off or will not last for very long.
It might be easier to choose your friends or relatives who know a little something about the business you want to put up or have a moderate proficiency for the tasks that your business partner will be expected to perform. However, a partner who knows “a little something” is not someone you’d want to begin your business with. Choose only people who can do an excellent job, whether they are your friends or not.
3. Check his/her credentials. When presented with a potential business partner, you should not take him/her at face value. You should research his/her background and track record. You need someone with loads of experience so he/she should have a portfolio bursting (or near bursting) at the seams with past work samples, references/testimonials and other proof of skill/talent/capability.
4. Designate. After deciding on your business partner/s, you should list down the tasks that need doing in your business. After specifying the tasks, you should assign these tasks accordingly. You know what you can and can’t do, and you know why you picked your partner/s; thus, task designation should be easy. Make sure that task assignments are clearly understood by everyone involved.
5. Make everything legal. You should draw up a contract that lays down – in black and white – the details of the partnership. The contract should be quite specific on what is expected of each partner (including you). There should be sections on each partner’s obligations and responsibilities, share of capital, profit share, dispute resolution, and partnership dissolution. Have a lawyer draw up the contract for utmost detail and protection.
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