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COVID brought us uncertainty and you could say with the recent tsunami of unpredictability particularly from the fallout of trade tariff policy changes, uncertainty is alive and well!
This raises the question; how prepared and well placed are you and your Business to respond to the challenges this uncertainty presents?
Smart Businesses plan ahead. To prepare they identify critical uncertainties, then build flexibility and adaptability into the Business model, strengthen risk management strategies and embrace innovation. These initiatives are supported by fostering open communication and building strong relationships across sectors.
Be smart, consider these 7 Steps to prepare your Business for the uncertain of uncertainty!
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Create a Risk Management Plan – Carefully examine all aspects within your Business to identify potential threats and vulnerabilities. Operations, including Accounts receivable, payable, Balance sheet, forecasts and vital cashflow. Identify any risks, develop strategies to mitigate, know what it takes to keep your Business financially fluid, operational.
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Develop a Robust Financial Plan – Create this Plan by exploring if or what opportunities you might find. Consider diversifying income streams, if possible, to provide financial flexibility. For example, Government subsidies, grants, and speaking to your Bank about loan reserves. Consider cost savings, can staff take leave or drop-down hours if needed and negotiate best deals and terms with Suppliers. Vital, ensure you have sufficient cash reserves to manage during these uncertain times.
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Focus on Best sellers – Know your ‘winners’, popular products and customers. Concentrate your marketing efforts on those, audience, types and preferences. Value, build loyalty and befriend your customers by delivering exceptional service and products.
The importance of structures in Businesses can't be stressed enough!
How strong are your Business arrangements?
You may be a family Business of close-knit members, likeminded and wanting the best for all. You may be thinking that is enough, that you don't need formal processes documenting how decisions are made or who makes them. But as the family changes and grows so do visons and expectations. There comes a time when formal governance structures are critical to provide direction and to reinforce the family's vision and goals.
In essence, for Family Businesses, strong structures are crucial for the long-term success and sustainability of the business and relationships.
Without clear governance structures Businesses can lack direction, experience miscommunication and be vulnerable to tensions and family-dynamics conflict.
The benefits of strong Structures include:
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establishes clear roles,
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facilitates transparent decision-making,
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better manage potential conflicts,
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ensures a smooth transition of ownership and leadership across generations,
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supports best practice and professionalism by providing formality, authority and clarity.
What can a Family Business Structure look like
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A Board
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Family Council/Forum
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Advisory Board
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Senior Executive Team
Business Structures come in two forms (Bodies) and Documents. Bodies including the above and Documents, for example; Family Constitution/Charter, Mutual Obligations Charter, Meeting Procedures and Decision Making, Pre-Nuptials and Binding Financial Agreements.
4 Reasons why Structures are Important
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Governance structures, such as a Family Business Plan or Family Constitution establish clear roles and provide a framework for decisions and effective communication, serving both the interests of family and the Business. This framework that separates Ownership and Management provides a clear distinction between family members as owners and those in management roles, helping avoid conflicts of interest. Also, formalizes decision-making procedures and processes by outlining who has authority, and ensuring decisions are aligned with the Strategic plan.
7 Strategies and Tips to help You and your Business Achieve Success!
What does it take?
Ask a successful small Business owner and no matter the decade or era, sentiments expressed include; hard-work, commitment, having a dream, belief, giving good ‘old-fashioned’ customer service, a little good luck, careful financial management and stamina!
And throw in being open to change and the unexpected!
Sounds daunting! But don't give up!
Whether you are starting out or are already established there are sound Business practices and strategies that if adopted provide direction for success.
First, it’s important to define what success means to you, how it looks and means to achieve it. High profits, supporting local communities, going viral, or social impact, whatever the measure or motive there are some common Strategies & Tips to achieving Business success. Here are 7!
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Have a Clear Vision – identify, know what your Business is. What do you and your Business stand for, what do you want to achieve, deliver. Your purpose, message!
Tip: Be true to your mission, have belief, passion and commitment. Picture Blue Sky but avoid having your head in the clouds!
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Develop a Solid Business Plan - This is crucial, as the foundation of your Business and your guide. Create goals, short and long term with KPIs, along with financial projections. Monitor and measure progress.
Tip: Reassess your goals and adjust if needed. Scrutiny of KPIs is imperative to identify results and underperformance.
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Embrace Digital – Technology and Business automation is key to growing your Business. It's staying agile and scalable, from cloud computing to smart Business tools like project management software. There is a range of digital solutions to help small Businesses, by improving efficiencies and cutting unnecessary costs to enhance profit margins.
Tip: Key to leveraging technology solutions is to determine what tech aid can benefit your Business operations.
The headlines say it all! Read and decide for yourself if this is the Budget to save our nation!
Highlights for Taxpayers and Small Business include:
New Tax cuts for every Australian Taxpayer:
The Government will deliver more tax cuts to all Australian taxpayers, to be delivered over the next two years.
- From 1 July 2026, the 16 per cent tax rate, which applies to taxable income between $18,201 and $45,000, will be reduced to 15 per cent.
- From 1 July 2027, this tax rate will be reduced further to 14 per cent.
Supporting Small Businesses
Easing the pressure on small Business:
- The Government is extending energy bill relief for six months to the end of 2025. Around one million eligible small businesses will receive up to $150 in rebates directly off their bills.
- The Energy Efficiency Grants for Small and Medium Sized Enterprises program is providing $56.7 million in grants of up to $25,000 to over 2,400 businesses, funding a range of energy upgrades, such as replacing inefficient appliances and improving heating systems.
- The Government is supporting the hospitality sector and alcohol producers, by pausing indexation on draught beer excise and excise equivalent customs duty rates and by support available under the existing Excise remission scheme for manufacturers of alcoholic beverages and Wine Equalisation Tax Producer rebate.
- In addition, the Government expects around 1.5 million sole traders to benefit from the Government’s tax cuts for every taxpayer.
Levelling the playing field:
- The Government will work with states and territories on extending Unfair Trading Practices protections to small businesses.
- The Government is providing $7.1 million over two years to strengthen the Australian Competition and Consumer Commission’s enforcement of the Franchising Code. The Government will extend protections from Unfair Contract Terms and Unfair Trading Practices to businesses regulated by the Franchising Code, subject to consultation.
Digital and Cyber security supports:
Strategy 1:
Adopt these 'healthy' practices to get your cash flowing:
- Profit margins: with the current ever-increasing costs of doing business, it’s critical to have true-cost pricing. Don’t let your profit margins be eaten away.
Whether it’s the price of eggs, utilities or wages, you need to consider how to manage the increased cost of doing Business.
- Firstly, do you know what your profit margin is for your business?
- Secondly, do you know your profit margins for the goods and services that you offer?
- Thirdly, which project lines are not profitable and are affecting your business?
Tips:
- Regularly check the cost of goods and products and determine realistic profit margins by setting prices not too low or too high.
- Pricing points are needed to keep you competitive and ‘in the red’.
- Be balanced, with inflation affecting your purchases you need to increase your sale prices accordingly.
- Offer value for money and your customers will keep coming back!
- Contact Blackburn Accounting to help you to work this out.
Watch for more in this series!
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Your Management Accounting Partner
Your Expansion Engineer
Your Special Projects Partner