INDEX
Meetings – Waste of Time or Productive!
Businesses need team members to communicate. One of the key ways to communicate is through meetings, either in person or by utilising technology such as Zoom. This means that careful planning should be undertaken to ensure that all meetings, whether in person or electronic, are productive.
In the first instance, if the meeting is going to be held utilising technology such as Zoom, it is essential that the organiser of the meeting understands how the system operates and the protocols that apply relative to holding meetings, especially confidential meetings.
The general recommendations, relating to the conduct of productive meetings, are basically the same whether the meetings are held on an in person basis, via Zoom or some other similar system.
Some of the ingredients for productive meetings include:
- Setting an Agenda which has been authorised by the Chairperson.
- Appointing a Chairperson.
- Appointing a Minutes’ Secretary.
- The Minutes’ Secretary preparing minutes of the meeting and submitting them to the Chair for approval and then distributing the minutes to all persons who were in attendance at the meeting and to those who did not attend the meeting but normally would have done so, unless for some reason the Chair has ruled that the minutes are not to be forwarded to non-attenders at the meeting.
- For each meeting it is desirable that an “action plan” is prepared and accompanies each set of the minutes when they are distributed to attendees. The action plan should identify each item in the minutes that required further work to be undertaken so that a report can be submitted to the next meeting. It is a good idea to reference the minutes of the meeting to the action plan so that, if someone wants to understand the concept that an action plan item was identified, they should be able to obtain this by reading the minutes. The action plan should indicate the date by which the “action” is required to be completed.
- The meeting should commence on time, irrespective of who is not there.
- Meetings should conclude at the earliest opportunity, especially once the Agenda has been completed.
- Everyone present at the meeting should have a clear reason for being there and a role to play in the meeting.
- It’s preferable to have a small number of people attend a meeting – those who are vitally interested in the matters to be discussed and have something to contribute, rather than a large number of people attending who only have a marginal interest and could be just “filling in time”.
- Sometimes, it is educational to calculate the cost for the business for the persons to be attending the meeting and to then determine whether the subject under consideration is worthy of that cost allocation, or is there some people in attendance who did not need to be there?
If you would like us to review the meeting structure being utilised within your business, please do not hesitate to contact the person in our organisation with whom you normally deal.
A “5S” System Can Improve Efficiency
A common strategy in manufacturing businesses is to establish procedures and practices with a view to reducing wastage in workshops by initialising the “5S” System.
The “5S” System is:
A structured systematic approach to housekeeping and a cornerstone of any world-class manufacturing operation which can assist a wide range of businesses.
“5S” involves creating an organised workplace using the following steps:
- Sort – sorting and removing unnecessary items.
- Set in Order – a place for everything and everything in its place.
- Shine – cleaning the work area.
- Standards – establishing the rules and standards for the business.
- Sustain – maintaining the standards in a disciplined way.
At various times there are government programs which assist businesses to introduce this type of system.
The Business Planning “Thought Process” Is Very Important
In the daily rush of business it is very difficult for the leadership team to have some quiet time to think about the future of the business and to plan for that future.
We are now 2¼ months into the new financial year. If you have not yet prepared your Business Plan for this financial year it’s not too late.
The preparation of a Business Plan should be treated as a “high priority” item which preferably should be undertaken as a “quality time project” – no interruptions, with the leadership team members offering input on a range of matters relating to the business.
Many businesses also organise a special team meeting to get input on various strategies for the business to implement.
In most cases, some of the items will require further research by an individual or a small group.
The key requirement is to develop strategies on a wide range of activities related to the business’ vision.
The basic items to be included in a Business Plan could include:
- Product/Services
- Suppliers
- Protection of Intellectual Property
- Customers
- Markets
- Competitor Analysis
- Marketing
- Team
- Leadership Team
- Research and Development
- Predictive Accounting Reports – Budgets – Cashflow Forecast – Projected Balance Sheets
- Cashflow Management
- Succession
- Strategies to Implement “Scaling Up” – so that the business can grow in an orderly manner
- Business Funding – will you have enough funds to implement the vision?
If you require our assistance in the development of your Business Plan, please do not hesitate to contact the person in our organisation with whom you normally deal.
“Scaling Up” Requires Planning
Thousands of businesses around the world have adopted the “scaling up” concept to be able to grow the business according to strategies that have been created from team meetings. The “scaling up process” comprises:
- Leadership team development
- Team members trained and motivated
- Development of strategies with input from all of the key players
- Implementation of those strategies – this is the most difficult task confronting the leadership team
- Adequate funds to finance the business growth – as businesses grow, they require funds to finance:
- research and development
- new facilities
- investment in debtors, stock
- intellectual property registration
If you would like to talk to us about the development of a “scaling up process” for your business, please do not hesitate to have a discussion with the accountant in our organisation with whom you normally deal.
If you would like to have a discussion relative to directors’ duties and responsibilities please talk to us.
Getting A Business Ready For Sale
***Continued from the last edition of Business Plus+.
Action to Consider
As part of getting the business’ “house in order” to maximise the sales value, a review of the following items is advisable:
- The systems operating in the business – could improvements be made?
- Are steps being taken to eliminate unnecessary expenses and wastage?
- Are all sales being appropriately recorded in the business’ books of account?
- Does the database of customers show names, addresses, contact details and a record of previous purchases?
- Are the business’ intellectual property records current?
- Have team members signed intellectual property agreements? Are these filed correctly?
- Do the business premises present a pleasing aspect to a potential buyer?
- Do the team members require additional training so the potential buyer may be favourably impressed?
- Have you reviewed your business’ key performance indicators against industry’s best practice?
If you are contemplating selling your business, our suggestion is that you have a conversation with the person in our organisation with whom you normally deal to review a range of issues that could contribute to a satisfactory sales process.
Virtual Chief Financial Officers Being Utilised By Some SMEs
As more SMEs set their sights on “scaling up” their business operations on the basis of increasing turnover, profitability and the value of their business, there is an increasing awareness of the benefits that the engagement of an accounting firm to supply a virtual Chief Financial Officer services can bring to a SME that has developed a vision and have a commitment to growing the business.
The virtual Chief Financial Officer concept enables an accounting firm to supply a small team which perform a role, similar to what a fulltime Chief Financial Officer would perform in a larger corporation. One of the key roles is to be available for discussions with the CEO and other members of the leadership team to discuss key aspects of the business’ operation.
In a larger business the Chief Financial Officer is involved in all aspects of the business at the “coalface” and thus gains an in-depth knowledge of a whole range of matters ranging from:
- suppliers
- documentation with suppliers, especially if the supplier is based overseas
- raw material inventory
- labour manning for manufacturing and construction operations
- establishment of chart of accounts to suit a particular business operation
- developing a range of key performance indicators for each segment of the business
- conducting team training sessions in the use of the key performance indicators so that they become a key management tool
- monitoring of debtors to ensure that debtors’ days outstanding is as low as possible
- implementation of business health check records to supply comparison documentation relative to key performance indicators
- monitoring of charge out rates established to ensure that all costs have been factored into the calculations and that a realistic profit target has been included in the charge out rate calculation
- assistance in the determination of selling strategies based on the various types of products that the business purchases and the variable markup percentages, overheads and wages so that the business will achieve its targeted profit
Similar work allocations can apply to an SME business engaging the services of a virtual CFO to assist the business on its journey towards fulfilling its vision.
If you would like to have discussions about the concept of a virtual CFO Service, please contact the accountant in our organisation with whom you normally deal.
Self-Rating For Business Startup
If you’re contemplating commencing a small business or acquiring a small business, you have to be honest with yourself and understand your strengths and weaknesses and implement strategies to overcome your perceived weaknesses.
A very important fact is that, at least, 60% of businesses do not survive for more than 2 years.
Whilst there will be some significant opportunities as we hopefully near the end of the COVID-19 lockdowns, there is still going to be many challenges for thousands of businesses over the next few years.
Part of the strategies for embarking on a small business career is to undertake serious self-assessment before you make the move into operating your own small business.
In various surveys the following reasons for failure have been identified:
- No knowledge of the industry in which you will be operating.
- No Business Plan
- Not receiving professional advice (from accountant and lawyer) before making the final decision to start a business or signing a contract.
- Insufficient capital or inadequate access to borrowings, primarily caused through inaccurate Budget and Cashflow Forecast.
- Inexperienced management.
- Poor marketing.
- Insufficient understanding of how “social media” can be utilised to promote business activities.
- Not developing and then maintaining an interesting website.
- Too much expansion – too quickly!
- Not enough time devoted to managing the financial records of the business.
- Not being able to understand financial accounts or key performance indicators which are vital for business operators/managers to utilise.
- Not assembling a competent “virtual advisory team” comprising accountant, lawyer, marketing experts and any other persons with skills or knowledge, who you can discuss issues with on an ongoing basis throughout the year.
You need to consider these items as well:
- How do you get on with other people? Because in business you’ll be dealing with all types of personalities – can you handle that?
- You might need to improve on your communication skills – business people need to be able to communicate in a range of activities – newsletters, videos, social media posts, media interviews, telephone, Zoom meetings, public speaking. If you have problems with any of these, you should undertake training as part of your preparation for commencing or acquiring a small business.
- Can you handle failure? – because you’ll be very unique if in business you do not encounter a significant number of “failures”.
- Can you set clear goals and then work towards achieving them?
- Can you “sell products/services” – these will be your products or services – you have to be able to “talk the talk”. If not, before commencing a business it might be advisable to undertake a “selling course”.
- Do you have drive and energy? Are you prepared to work the extra hours that most businesses will require you to undertake, if the business is going to be successful?
- Do you have self-confidence and are you a self-starter?
- Have you researched who the suppliers to your business will be – have you made contact with them to determine the conditions that they will impose on you – can you operate within those conditions? It is better to find out now then later on when you have made a commitment to commencing or acquiring a business. Of particular concern is the terms of trade that a supplier will grant you.
- Where are the potential suppliers located? During COVID-19 there have been problems with suppliers in some overseas’ countries being unable to fulfil supply contracts to Australian businesses. You need to consider your fall-back position if your preferred supplier is unable to supply products to you. Have you identified alternative suppliers?
- Have you identified the type of people who would be the “customers” for your business? Are you confident that you can communicate and work with this group of people based on their socio-economic conditions, location, education, aspirations in life?
- Will you be able to motivate, lead and train your team members?
- Do you have self-confidence?
- Are you prepared to continue to learn? Businesses change every day, the marketplace can change every day whether you want it to or not. To operate a business, you have to be flexible and you definitely require a commitment to participate in an ongoing learning process, whether it’s technology, marketing, digital marketing, social media, selling tactics, understanding new products, processes and software products and ensuring that this new knowledge and skills are communicated to your team members as well.
- And lastly a very important question. Will the commitment that you have to make, the working hours, the financial commitment, the potential for spasmodic financial rewards from the business and the pressure be acceptable within your family environment?
When you have considered these items, our suggestion is that you prepare a personal SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) on yourself as a potential business person. When you have completed this self-examination and if you’re still committed to proceeding with the commencement or acquisition of a business, we suggest that you make an appointment with an accountant in our business for a discussion on the strategies for the development of a successful business journey for you.
