In part of an interview with David Koch written in Issue 13 of the Business View publication we have taken some excerpts for your reflection and thought:
How can business people prep for the new financial year?
"Nobody ever started a business because they loved administration. Generally, we're terrible at organising our businesses for the future. For the end of financial year, make sure your record keeping is up to date. This housekeeping can save you a fair bit of money, so set the time aside from building sales and running the business. Your accountant may've been bugging you all year to focus on it, so now is the time to do it. Write off bad debts, look at stock control and inventory that you may need to write off. Cut your losses if an idea isn't bringing in revenue. Have ideas, plan for them, give them a try, but if they don't meet the trigger points in your business plan, be realistic and let them go".
Tips on updating a business plan?
"Don't keep your business plan in your head - write it down. It should be a living document with input from staff and revisited regularly. I've always run my small business like a big business with monthly board meetings, which include an outside adviser, where we review the business plan and accounts. That adviser could be a local business person you admire in the community - it doesn't have to be anyone flash or high-flying. Somebody who brings an outside view to your view - that's critical. And often, they're more than happy to help. Small business owners love to help other small business owners. Don't be afraid to approach someone - you'll be amazed at how much time people will give you and will share".
Succession plans and exit strategies... many ignore this area, causing relationship tension and tax blowouts when someone leaves the business. Your advice?
"Everyone must be clear with each other from the start on the way forward - especially for a family business. Everyone has got to want to be there, not feel obliged to be there. And the founder must treat everybody as if they're independent employees. Also make the workplace fun - you've got to put effort into motivating staff, particularly in small business. And with different generations, understand what drives them. For my generation, baby boomers, it was all about prestige and title but for Gen Ys, it's all about values, flexibility, community and work environment".
Insights for freeing up cash flow?
"Get customers to agree to credit terms pre-purchase and invoice the day you complete theproduct or service. Don't be afraid to ring up on the day that you don't get the money. And if you get pushback from a customer, that might be a customer that you don't want. You don't need to accept every customer".
Success today is not about how much you own or how many people you hire - it's about producing quality products and services at competitive rates and with a bit of magic that sets you apart from everybody else.