Following our guide to starting and growing your business, we’ve teamed up with Bankwest,Smart Investor’s Business Bank of the Year, to explore some further tips, tools and ideas to help keep your business in great shape once it’s up and running.
1. Manage Your Cash Flow
Cash flow is the pulse of your business, so of course you’ll be monitoring it closely and actively looking for ways to improve it.
• This cash flow forecaster will help identify running costs and how much money you’ll need to stay in business all year. Factor in seasonality, look for weaknesses in cash flow and pay invoices on time.
• Boost your cash flow by reviewing your business’ key cash flow measures like your marginal cash flow (i.e. cash flow from each additional dollar of sales) and cash flow cycle (i.e. time to receive cash from sales). To calculate these for your business and determine what you can do to improve these, try Bankwest’s cash flow improvement calculator.
2. Analyse How Your Business Is Performing
Build yourself a business dashboard. Strategic operation requires quick and up-to-date access to vital business stats like sales, profits, cash flow and more. You may be able to get by with the built-in tools in your CRM or ERP platform or even an Excel spreadsheet. You could also tailor a dashboard to your specific needs using advanced tools like NetSuite.
• Make sure you know your break even point. This handy break even calculator will help you determine the level of business activity required to achieve your desired financial return.
3. Keep On Top Of Tax
Good record keeping is important in every business — as is knowing the tax you need to pay for your employees and understanding what deductions or concessions you may be able to claim.
• Step 1: Register your business and set up good accounting habits. Bankwest provides free daily bank feeds for customers with eligible accounts, so it’s easy to automatically reconcile business transactions with online accounting services like Xero and MYOB.
• Step 2: Consult a tax professional, who can help you determine what hard copy and electronic business records you’ll need to keep on file and for how long (generally five years).
• Step 3: Be sure to ask your accountant – and the ATO — about potential tax deductions (for related expenses incurred running your business) and tax concessions. Eligibility for concessions could apply to your income tax, capital gains tax, GST and fringe benefits. Visit ‘How To Keep On Top Of Tax‘ at Bankwest for more helpful info.
4. Manage Your Risk
Put a risk management plan in place and you’ll spend less time worrying about your business and more time building it. Make sure you have adequate insurance for the tools and equipment you need to stay up and running. Have a business continuity plan. Diversify and widen your customer base. Monitor your reputation. Bankwest has a detailed run-through of each of these points.
5. Promote Your Business
Marketing your business can be quite creatively rewarding. You might use physical signs and banners to email newsletters or Facebook — and everything in between.
Invest time to really get to know and understand your customers and how you can give them more of what they want. Supporting your community and fostering word of mouth should never be underrated, but neither should direct marketing methods like emails and texts (subject to meeting all privacy obligations) — especially if you’re providing exclusive offers. Consider loyalty programs. And never forget the up-sell.
Bankwest provides personal and business banking solutions for more than 1.3 million retail and business customers across Australia. Bankwest customers enjoy access to an extensive network of stores and business centres, direct and third party distribution channels, agencies and electronic banking facilities, as well as 24-hour telephone and internet banking. In 2013 & 2014 Bankwest was named Business Bank of the Year in the AFR Smart Investor Blue Ribbon Awards. Bankwest is a division of the Commonwealth Bank of Australia.