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CUSTOMISING WEBSITES

September 12, 2020 by keitht

If you are frustrated at not understanding mark-up language used on websites and want to make minor changes to your site, here is a good place to start the learning curve.

Get up to speed with html / css – two of the fundamental 2 codes needed.

These will enable a surprising amount of design and customisation:

W3 Schools

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What is VBA .. What use in accounting? ..

September 7, 2020 by keitht

History of VBA

Visual Basic For Applications arrived in 1995 for use in non critical office grade applications – yes, MS Word, Excel and the like.

It is a “subset” of a “proper” coding language , Visual Basic.

Think of it as one step up from macros in Word and Excel . There is a vast range of “objects” which the user manipulates in code type language – but it is slow by comparison to VB so really it still produces “macros” and is not mainstream IT.

Structure

You manipulate Objects (eg a range in excel, a paragraph in word) with statements / commands. We can change both properties (colours etc) and create actions / use methods (copy or paste contents).

In the case of Excel, functions (in VBA language as well as on the face of a spreadsheet) then exist to perform calculations and return values, stored in variables.

Thats it in a nutshell. Although there is a lot of detail to hand, the user requires only a few key statements (eg if.. then ..else) , objects (ranges), methods (eg file open, copy, paste) and properties (eg bold) in simple macros.

However it can go on to produce some gnarly routines and crunch big amounts of download data.

Use in accounting – Conclusion

There is no doubt VBA has its place and many accounts departments became XL havens long ago. Reliant on it is a risk. It was never intended to be a mission critical element.

Tips

Stay tuned to the blog for some curated code snippets.

Filed Under: IT, Uncategorized

Bank reconciliation – screens confusing ?

June 14, 2020 by keitht

With Xero all accounting is apparently now simple and quick. I beg to differ, the fundamentals still very much apply in order to properly use the screens Xero provides. This is perhaps particularly true with the humble bank rec, which got a huge makeover. Here is a short video overview guide.

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Mind matters

September 22, 2019 by keitht

One of the symptoms of an approaching nervous breakdown is the belief that one’s work is terribly important. — Bertrand Russell

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Developing New business

August 6, 2019 by keitht

Finding New Customers

Accepted wisdom tells us it is far cheaper to sell old customers  than find new customers, but – new sales are the lifeblood of business.

Naturally referrals may come from existing and happy customers, but still the vital area of entirely new business leads cannot be neglected, and should form part of business development plans.

It’s all about communicating with the customers you could have as well as those you’ve already got.

Where to start?

You could apply some logic and attack the challenge in 2 stages.

First take a look at overall market / product segments. This applies if your business is already established – for new startups see below, its all about acquiring the first 10 customers to get going.

Are you trying to sell existing products into new markets? Or new products into existing markets (ie  developing current customers)? Or perhaps new products into entirely new markets ( the most risky)?

Options 1 and 2 are clearly going to be less risky and expensive, while option 3 , a greenfield of dreams, is the most risky.

Having a clear idea of the big picture from this analysis, you can move on to the nitty gritty – getting customised messages out to those who may be interested and profitable customers in each of the segments identified, and tailoring the sales process.

Dan Kennedy coined a term for this – split the work into 3 areas and address “MMM”:

  • The market
  • The medium
  • The message

In this idea the whole picture is covered from the internet / social media to old school billboards. Simply break up the task into manageable parts and drill down to devise activities which are cost/effective in each area, rather than take on the whole thing at one go.

Start ups

For new starts, developing opportunities from zero is the name of the game. What do customers really want, that they cannot find now, and how can you supply the demand at a profit?

To keep it simple ignore the threats and weaknesses in your fledgling idea, focus on the upside.

To start with you may have an idea, based on industry knowledge, but failing that you will start with some research and financial estimations to see what ideas may be profitable based on assumptions about pricing, distribution, and marketing/selling costs.

Almost everything in marketing research is expensive, but there are some free sources to try:

  • Your own records
  • Your competition
  • Your suppliers
  • Government trade assistance and statistical research
  • Getting out and about with your eyes open – asking questions
  • Trading platform reviews – look for solutions to compaints

Once a likely candidate product surfaces the work has only just started. All aspects need to be examined and somehow documented for assessment.

Then the key – find 10 customers by whatever means possible – to transform your idea into a real business with cashflow. The key will be actually talking, toe to toe, and the selling proposition.

Conclusion – Product succession

One thing is constant and that’s change.

Having one success is only the start, the process must be repeated and ongoing in order to stay up with trends and keep the new sales coming in.

–

Filed Under: Uncategorized

First Year Tips For Small Business Entrepreneurs – My experience

August 4, 2019 by keitht

Expert Author Keith M

The Number One first year tip – it’s ALL about finding customers and keeping them happy

Whether you are at the feasibility, seed, or launch stage, you need customers!

If someone is showing interest but is not asking about prices, then you may have a new hobby, which is nice, but not a business.

Ideas and plans are a dime a dozen. Cashflow is King. A potential customer is proof positive you may have found a genuine demand or gap in the market – but only when they start talking price.

A vision means squat without a plan for customers.

“A customer base equals capital”

Attracting investors will be much easier if they can see you are already generating a cashflow.

Also customers will attract people interested in working with you – and eventually you will need a team to go anywhere significant.

Having a few customers means you are not dreaming!

Don’t wait for qualifications

You could be forgiven for thinking that in the 2020’s you will need a string of qualifications and / or an MBA before making a move. It’s not the case. Examples abound and if necessary you can hire to cover the gaps. Rather, try to emphasise product, ideas and team.

Which book learning are we skipping over here? What are some of the nice to have’s you might defer?

In the initial stages of a business there are marketing skills – be content with seeing the original gap and creating a product to fit. Then finance skills – skip high finance and stick to the basic organisation of personal and business finance to cover risks, and finally time management skills where the essentials can be mastered quickly.

Later in the development phase we have operations – leadership, management, IT, property, culture/psychology, teamwork, loyalty, communications and regulations – the list goes on.

While it may seem heresy to some, the fact is there are many successes in business who started young with no management training and this is one of those perennial truths.

Beware Franchising

Starting out under the protection of a franchise is a seductive option. Beware! While it may be a way to start-up with less risk, pay particular attention to:

· The franchise sale

Franchise operators are very good marketers – of their franchises. Be wary that you are not sucked in too much by the promises and pictures. Seriously, it’s their job to sell you, just make sure they have a viable plan and you can sell their product.

· Your independence

The bottom line is that you have decided to become an entrepreneur, for reasons which quite likely include working for yourself, and by signing up with a franchise you have immediately given that independence away.

Will you be happy working for a head office? How much input to the business do you really have? Have you just bought yourself a job?

Take a real close look at your marketing plan

How are you going to find and reach customers? Your first job is to run like mad just to find them:

First, are you in an active sector and do you have a ready path to market? Where are you sourcing your leads – today?

Watch out for your own psychology. When starting out you may want to just go with the first half decent opportunity you come across. Relax; try to look at things objectively.

Beware of the “1% of the market is huge” syndrome. Yours may be a billion dollar market, but how do you get any of it? What do you think the competition is doing right now?

Any idea of the cost of acquisition of a new customer? Will your model develop repeat customers? If not you will be forever selling, and this is not a good place to be.

Most forms of marketing except word of mouth are very expensive. When starting out there is no doubt the best marketing model is word of mouth.

Branding. Despite the hype it’s nothing new. Don’t even think about mega-brand style exposure. A start-up is about a reputation, person to person sales and keeping a handful of customers happy.

What is the shelf life of your idea? How are you going to protect it in the internet age?

How smart is the business model?

A business model is the way we do things – how we find and reach customers, differentiate the business from the pack, price, sell and deliver our product.

But there is more. Other desirables include a residual structure, one that compounds growth, and which is leveraged either in time (employees) or money (loans).

Is it going to be a dynamic business or a dead end job?

Realistically – are your finances strong enough for the first year or two?

Being an entrepreneur is a gamble and you must be prepared for the worst if it happens. How do you view losing money? Perhaps try investing on small bets in the stock market and see how it feels before investing in your own ideas.

Don’t get into debt you cannot handle. We should be bold but not take risks. Avoid betting your lifestyle, limit the investment to what you can “afford to lose”, then do everything to make sure that does not happen.

Entrepreneurs should always have backup plans. Not everything will work by any stretch of imagination.

How many hours are you working?

Have you really planned your diary? How will you fit everything in? Not all of us can survive on 4 hours sleep per night.

Remember the rule – work hard and smart.

And if you do work all hours, what is your effective hourly rate? Planning any time off?

Do you have a good business partner?

If you aspire to anything other than a micro business, you will have to think “team”. The synergy gained outweighs potential downsides. While a committee of one gets things done, eventually you need others in your corner.

Are you ahead of trends?

No business can ignore trends. Try to have an eye on the picture three to five years ahead.

Filed Under: Uncategorized

How to set up New Customer Agreements

August 4, 2019 by keitht

Expert Author Keith M

One thing small business owners do not want is more paperwork, but another is disputes over payments. When you give credit you are effectively becoming a banker, financing your customer’s business. Here is your new situation as credit provider:

  • Your debtors are customers and all customers are valuable. You don’t want any misunderstandings
  • They owe an amount of money in the future under terms of an agreed contract on which you have delivered
  • You have agreed to defer payment on the sale
  • Your customer has agreed to your credit policy
  • You are in business and in business it is usually good business to write everything down
  • Accuracy can save you thousands if it becomes a legal matter, it is important to get the words right
  • You must protect your cashflow

So if you do offer credit, why not take steps to avoid conflict, go the extra mile and craft clearly worded customer agreements?

It is just good sense to document agreements in black and white, because, like them or loathe them, lawyers are necessary to grease the wheels of commerce and they love agreements in writing.

On the positive side, if you take the time to set up your agreements with precision and clarity, everybody wins – your customer / supplier will know exactly where you stand and any disagreements can be settled in less time, with less cost, and hopefully limited damage to relationships.

1. Setting up a new credit customer – due diligence

Take the time to examine the potential customer’s credit worthiness before credit terms are offered.

Have a standard new customer form. Document credit checks and customer details and amendments, and check tax status. Consider the credit checking agencies, company registry checks, and director’s credit records.

2. Wording of the credit agreement

Check the internet for free sample agreements and ensure you cover the obvious such as:

· the terms of the policy – how much credit will be offered, when, to whom, and for how long

· a procedure to track the timing and collection of payments

· a procedure to deal with disputes

· payment methods acceptable to you

Where possible stipulate terms in contracts for all your customers.

3. Take a risk management approach

A bank will not expose itself unduly to any one customer – neither should your business. Diversification is the name of the game, and if your customer list allows it, spread risk as widely as you can.

4. Clarify pricing

Detail any special deals and set out interest rates on overdue amounts, if they become necessary.

5. Credit limits

By setting a maximum risk on all accounts, you have set limits on any one “bet” going bad. Set at the right level and enforced, one disaster will not derail your business.

Don’t hesitate to stop supplies when limits are reached, and be tough – don’t accept new orders till old bills are paid. It is just good business! Customers will understand and respect you for it!

6. Guarantees

Consider getting a directors guarantee from companies and trusts – despite the controversy around their usefulness.

7. Legal costs

Specify who pays legal fees in the event of dispute.

8. Ownership

Make it clear any physical goods remain yours till payment is made.

9. Credit cards

Consider the costs of using merchant services and specify who pays the extra charges.

10. Setting expectations

Clarity is healthy for both you and your customer – you both know where you stand and there are no surprises.

11. Ensure invoices are raised and accepted

Specify procedures to raise invoices, and where practical get signed customer orders.

Include the obtaining of evidence of delivery, and acceptance. A signed invoice is a powerful indication of an enforceable contractual debt in the courts. And well documented invoices are easier to use as the basis for finance using invoice discounting or factoring.

12. Working capital management

Use your accounting package to review debtor balances on a regular basis and minimise the total investment. Have collection letters drafted and be ready to use collection agencies or solicitors if necessary.

13. Exceptions

No exceptions! Think hard before bending your rules for anyone.

Filed Under: Uncategorized

Simplify your life

August 3, 2019 by keitht

This is a time of extraordinary change. Change is always with us, but this is spectacular. Among the highlights, China is in the ascendant, and the USA in decline. There is exponential growth in world population, which is aging fast. There are environmental battles, public finances out of control, dysfunctional governments. There are computers everywhere you turn and the information age overshadows everything we do. Islam is on the move again.

Change makes for complexity, and we, the pawns, are in the middle of it all.

There is social /lifestyle upheaval. Old values are changing. And like it or not, none of us can go back.

These must be exceptional times.

Coping with all this without a sense of control is stressful, if we can’t get our bearings straight.

New Villains on the block

Continuous change has always been with us. That said things have moved on and entirely new villains have appeared on stage in the last 25 years – there is a raft of new”stuff” on the agenda for most of us.

Topping the list is the information explosion. After 2 million years our race is swamped by the Information age, including a daily tsunami of details to surf through, sign off or ignore, creating a “lifestyle” that takes us away from our biological origin. Our memory becomes flooded with stuff – mostly useless.

Solutions

To deal with all this there is a need for a code to live by, values which mean something, and a way to manage time effectively.

Unfortunately life never came with an instruction book. In most cases the family can’t help, nor can religion. Here are a few suggestions.

Develop your philosophy

For a start by try reading Ecclesiastes, Buddha, Aurelius and other sages and what they have to say about the simple life.

· Not for you?! Seriously, getting a perspective is important! Try researching practical systems, not religious dogma

· And then bring things up to date with the advances in the last 300 years. Because if there is one thing for sure, we do now know a heck of a lot more than these “gurus” ever did about the real world, everything in it, and outside it. Face it – the old beliefs were all guesswork when it comes to medicine, astronomy, etc, we have immeasurably more knowledge now.

We suggest finding out what works for you. Start “Finding Your Own Light”.

Nine tenths of wisdom consists of being wise in time (Theodore Roosevelt)

Philosophy is well and good, even vital, but time is what we have to manage in daily life.

Managing our time is so much easier said than done, but few would doubt that it is one of modern life’s biggest challenges in the “advanced” countries. Simplifying and improving the way we spend time will be one of the most important skills needed to navigate through the 2020’s
· Observe your perception of time passing because time plays tricks on your mind

· Balance time and goals. Focus is the key – we all have the same number of hours per day, even the president of the USA. It’s a matter of developing skills in prioritising our efforts, combined with a sense of what really matters

· Use the time. “If you can make the unforgiving minute count… ” Kipling was right. But the problem is that we are not computers, not machines. Part of the trick is to allocate block times and objectives within; then stand back a little in order to achieve a kind of “relaxed intensity”. Set up a series of small goals and get that feeling of success as you knock them off

· Time and stress. Meaningless deadlines, meaningless data and information, meaningless peer pressure, it’s enough to make you run for a cave and meditate. Pushback is a good concept. Try applying it to the workplace first.

· Time wasters. There are so many it’s difficult to know where to start the list, or end. Prime culprits though do include commercial timewasting products, governnment bureaucracy and technology – emails, updates to this and that, unwanted calls.  A liberal use of a psychological “delete” button is perhaps a good start, though it comes at a price. Perhaps a better start is to cut the noise off at source – eliminate all unwanted newsletters, mailing lists and whatnot out from your life and put polite ends to go-nowhere email trails.

Conclusion

Here are six pointers to achieving balance, wealth, and health without crumpling:

1. Put your philosophy on steroids – understand the world and our place in it

2. Dont sweat the small stuff – and it’s all small stuff

3. Strengthen your body

4. Put relationships in their place

5. Study business and particularly marketing. Get yourself a residual cash flow

Filed Under: Uncategorized

How does Single Touch Payroll affect small business

August 2, 2019 by keitht

Why the change

The ATO has tightened reporting of payrolls with electronic lodgement every time someone is paid, rather than annually.
Bluntly, more reporting equals more cross checking and catching up with irregularities.

Effective Date

The legislation is in force now – small business has untill September 30 2019 to comply.

Scope

Large business is already using STP. Small business is defined as less than 19 staff, and micro business as less than 4 staff. Micro-businesses can report quarterly under STP.

Payroll calculations

Tax and super rates are not affected by the new requirements.

Payroll Reporting and Activity statements

The payroll data on activity statements is a summary only – STP gathers payroll details on an individual basis.

Software

Businesses will have to use STP compliant software as the information is sent straight to the ATO business portals. This is a practical issue when setting up – getting the necessary identity clearances has proved time consuming.

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How Useful Are Small business Valuation Reports

August 1, 2019 by keitht

Expert Author Keith M

No-one could see this coming

As events in the Australian stock market in July 2013 showed, external macro events can and do have wild impacts on the market “valuation” of an enterprise. For one particular company the political outlook changed and overnight the business lost 40% of its “value”.

How are we supposed to deal with such left field risks in valuations? For the most part it’s not possible but the story underlines how important it is to look ever more closely at assumptions used when valuations are produced and ask what we really know about our target risk profile before going ahead with a decision. In this way we can at least reduce the impact of unlikely events.

Here is some food for thought when it comes to planning your investigation.

Due diligence on steroids

Basic valuation methods are good as they are going to get, but a final valuation number on a report is only a number and prospective purchasers should weigh as much background as possible before writing out a cheque.

Only personal due diligence provides the real stuff for decision-making – an evaluation which supports why you think your hot deal is so attractive in the first place.

What is a business?

Bluntly, a business is just a calculated gamble, a bunch or managed risks. The more risks, the lower the value. We suggest that as insurance against the chance of overlooking some items altogether, doing a lot of homework is the only option. One caution though – avoid analysis paralysis!

1 Start with the basics – use one or more standard valuation method(s) for micro and small businesses

There are four:

· Rule of thumb – the initial ball park estimate based on industry averages

· Net assets – how are the assets valued, are all liabilities included

· Income – evaluate the bottom line prospects and “quality” of earnings

· Market comparison – a detailed comparison with similar business’ values

Aim to reconcile results from chosen methods to produce a final result.

2 Focus on cash-flows

While each of the four options may be more applicable in one circumstance than another, always give heavy weighting to the income method and cashflow statements. The other methods are not irrelevant, far from it, but it’s the future cash projections that really count, and the assumptions underlying them. Cash-flow is king.

3 Now think again. What do you actually get when you buy a business?

A business can be divided into various profiles which can provide new insights into its value:

· The business model (don’t skip this!)

· People related

· Physical (assets, other resources)

· Legal (bank accounts, loans and contracts of all kinds)

· General risk

· The external market

4 Where is the value? What to look for?

A common sense way to value a business is to evaluate its ability to generate and distribute cash dividends in excess of an acceptable return on investment. Any sustainable way of contributing to this goal should form part of the valuation.

The business model – does this business have the makings of something big? Or is it simply a small business. A model determines what the product is, how customers are sourced and reached, how product is distributed. In addition to the basics, consider:

· Does the model allow for a residual structure?

· Is compounding income possible?

· Are operations leveraged by time (employees) or money (external finance)?

· If the model has advantages over the competition allowing superior profitability, are they sustainable? For how long? What’s next?

People – the intangible value of an effective culture. A growing business will involve more than just the owner and there will be employee “goodwill”. Also as part of a community there will be customer goodwill, supplier goodwill and “community” goodwill.

· Will the new owner fit in?

· What happens if a key employee does leave? How much value walks with him/her?

· Is absentee management an option?

· Can the cultural strengths and weaknesses be identified?

· Is it a good company to work with? What are its values?

Physical – what is the realizable value of net assets? Physically a business comprises people and the hardware they use including physical assets, buildings, office equipment, other resources and materials. Assets can be valued on numerous bases, and the value in the books is not necessarily a good estimate of actual realizable cash:

· If the assets include land, what is going on next door? Have development proposals been lodged which will affect value?

· How much cash flow is required for asset replacement?

· What is the physical condition and security of assets used in the business?

· Is there a market for the assets? Sold separately or as part of a business?

· Processes might be considered assets. Are processes well-defined and transferrable?

Legal – what are the paper assets worth. A business is partly a paper structure, comprising financial records and accounts, important legal agreements with customers, suppliers, key employee agreements, outstanding litigation, financial assets and liabilities, credit history, intellectual assets such as trademarks and other paper assets.

· What are the “onerous clauses” and obligations the business is bound to fulfil?

· Are agreements in place to cover known risks?

· What is the quality of accounting books and reports?

· Is the insurance program sensible?

· Are agreements enforceable at reasonable cost?

Pay more than lip service to risks. Events in the stock market highlight how businesses face a situation where remote risks really can eventuate. We suspect lip service is usually paid in this area. Risks should at least be identified and updated regularly. Diversification is always a sensible strategy, where one adverse outcome should not be able to sink the ship.

· What are the major risks facing the company in finance, marketing and operations?

· How are they mitigated?

· Are risks quantifiable?

· How often is the plan updated?

The more risks are reduced the higher the comfort level associated with the business proposition.

Marketing – perceptions are reality. The entity interfaces the world through its product quality, shelf life and succession, comparison with competitor products and organisations, organisational status (“bragging rights”), sustainable competitive advantages (an economic “moat”), favourable trends, the look and feel of operations and more. We suggest that in the 2010’s the marketing plan is the differentiator between businesses. There are so many products and services competing for a customer dollar that no matter how good any one is, if the marketing is not up to speed, the business cannot thrive. Hi growth equates to high valuation. Have a particularly close look the customer acquisition plan:

· Are new customers accessible? How?

· Are they accessible at a profit?

· Are prices stable or predictable?

· Does the business model develop repeat customers?

· Market share – what are the trends?

· Government and regulatory environment – is the industry subject to changing regulations and policies? Will changes affect business?

S.W.O.T. Summary

Finally, bring it all together. What are the strengths, weaknesses, opportunities and threats across finance sources, the management team, and the business’ outlook and forecast?

Are you able to look at the situation objectively?

Filed Under: Uncategorized

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