A 5-minute health-check for your business

In the last 20 years we have assisted many businesses in financial trouble, as debt negotiators we observe everyday business struggling with their finances and overtime have observed a clear pattern of behaviour habits that kill or make businesses.

The following is a short list of the most common mistakes businesses make along with good habits that keep the doors opening and business thriving.

 

DO: Identify Your Clients

This is a basic marketing foundation of any business. By characterising/identifying your ideal client, you can then work out where they are, and how to engineer a bespoke marketing campaign towards them. Passive marketing like Yellow Pages or a website is, in itself, not enough. A targeted, cross platform approach is an excellent way to get more bang for your marketing buck.

DON’T: Jack of all Trades, Master of None

There’s an old business cliché; “Do what you do best and get someone else to do the rest.” Refusing to outsource tasks or insisting on providing a service to clients that is not within your skillset can be bad for business. In trying to do something that is not your forte, you risk the results being mediocre or worse; the risk is that the client will perceive your whole service the same way and nobody wants to be perceived as sub-par. By refusing to outsource and not advising your client of other, more appropriate services, the perception is that you don’t care about your client’s outcomes.

Finding individuals and companies that are experts in their field and researching their background will help ensure they are a good reputable company to deal with. Setting up alliances with them will have an additional impact in that they may access your skill set for their clients – and that’s good for business and reputation.

DO: Keep up to Date with Industry Events

All industries should have an active industry body that is involved in lobbying governments, influencing legislation changes, presence in the media, providing training and developing skills in your respected role. Industries like Accounting, Financial Planning and Mortgage Broking are dynamic and are constantly evolving –you MUST evolve with it if you wish to stay at the head of the pack. In the digital world of information, consumers are becoming much savvier. You must stay in tune with changes otherwise your advice and services will become outdated.

Want more information on how we can reduce your bank debts by ½ or more within 3 weeks? Talk to us on 1300 490 030 or visit creditmediation.com.au

DON’T: Don’t Wait for the Phone to Ring

This is a big one. It’s easy to assume that everyone knows you and how awesome you are at your job. I am here to tell you, they don’t AND YOU HAVE TO TELL THEM! For small businesses it has never been easier to network. Social media, industry events, BNI and other network functions are some of the many platforms you can utilise for your business development. Like the concept of business development itself –it’s not automatic, it needs developing and with tenacity.

DO: Every Client is Different; Every Deal is Different

Everyone is unique, with each of them having their own reasons for using your service. Each client will have different motivations, different ways they focus on their own lives and businesses which brings different strengths and weaknesses to the table when seeking out your service. Your work must reflect their different needs and, if you’re going to deal with clients the same way every time, then you’re just like everyone else offering the same service, you’re not going to be stand out. Celebrate diversity and let everyone know what makes you the right fit for them.

DON’T: Employ a Relative That Needs a Job

Need I say more? Well, the best of us have made this mistake and paid the price, so I suppose I do need to say more. Effectively, you may end up with an employee that has an extra clause in their employment contract titled, “family union benefits”. That is to say, if you treat them like any other employee, you may find yourself off the whole families Christmas card list. This is not to say it cannot work, it can and often does, but it‘s fraught with risk. There are all kinds of emotional triggers and blocks with family, chief of which, they’ll be treated differently in your business. If you do take the risk there must be very clear boundaries when employing a relative. Remember to express clearly what your expectations are if you decide to take this road.

DO: Make Sure Your Qualifications are up to Date

Running a compliancy obligated business without being compliant, will in time, attract ASIC’s attention and expose you to potential fines, suspension of trade and even jail terms may follow in the most serious of cases. It really doesn’t matter if you had good intentions, or you just didn’t have time to get up to date, it’s simply not worth the risk. While we’re on this topic, stick to what you are qualified to do, as soon as you venture outside your role, you may risk a heavy handed response from ASIC or your client.

DON’T: Be Disorganised

How much time do you waste looking for missing documents? Both your computer and filing system need to be maintained and regularly cleaned up. Documents on your desk and bookshelves quickly build up to skyscrapers of obsolete information. Recently I observed a desk with industry articles from 2012, electricity bills from 2010 and a bus ticket from 1998. Scan important documents onto a backup system and only keep physical documents required by your industries’ standards & legislation, shred the rest. Being organised will help your business become efficient, present professionally and keep your mind focused on the job ahead.

DO: Watertight Employment Agreement

Forget the GFC, employing badly is the fastest way to bankruptcy. When you hire an employee or contractor, you have every good intention for that employee, however they may not have the work ethic they boasted about in the interview. Without proper interview processes, fact checking, seeking two or three referees, performance appraisal reviews and a watertight employment agreement, you will be exposing yourself and your business to all kinds of dangers or at the very least, unnecessary disputes. There are plenty of online templates you can use and adjust the wording for your business. If you have one, send the document to your lawyer for further scrutiny and editing. You’ll find you will tailor these documents and processes for all new employees.

 

DO: Do What You Say, Say What You Do

Sometimes I hear on business people’s voicemail, the promise they will return my message within two hours and, it’s impressive when they actually do this. You don’t expect all your messages to be returned within 2 hours, the point is, when a professional does what they say they’ll do, you’re more likely to trust them on their word. If you don’t follow through, the customer will lose confidence in your words and also in your service. When a difficult question is asked, I always respect the person who says, “I don’t know, let me get back to you”.

DO: Your Financial Affairs

The bank is your best friend when you’re making money but be warned, the bank is a fickle friend. If or when your business or industry is on the downturn, albeit temporary, the bank may call in your debt with only a ’30 days’ notice’. Consider your debt levels and debt serviceability before investing in business growth. Many profitable small businesses are now insolvent because they either used debt or ignored existing debt to pursue business growth. Regularly review your expenditure and always seek out ways to save money. Our office was spending $800 per month buying coffees for staff and clients so we decided to buy a coffee machine for $1,500 which paid for itself in 2 months. Sometimes the best solutions are often simple ones.

Also, always remember the golden rule: Keep your BAS up to date and pay your taxes!

 

About the author

Laurence Hugo is the director of Credit Mediation Service P/L, he is a highly experienced negotiator with three decades of banking, debt management and marketing experience, Credit Mediation has successfully waived over $83 Million for their clients.

 

This article should not be considered legal or financial advice, but as a general guide only. If you are facing legal recovery action, please consult a legal attorney to assist you. For further information on how to have your debts cut by half or more through a specialist negotiator, reach out to us on [email protected] or contact us on 1300 490 030.