Are you getting the most from the information you have?

James Law’s - Etesian Group

You can find the Etesian Group at www.etesiangroup.com.au

Contact James Law on 0409 199 547

I can also be found on Twitter and Linkedin

Location – Perth Western Australia

Client base includes Western Australia, South Australia and Northern Territory.

“ to spoil the ship for a ha'penny worth of tar ...” ( cont)

Fair weather managers……….

Does your company employ one or more bookkeepers? How many accountants? Any financial controllers? Who set up the chart of accounts? How and why? What do your financial reports tell you? Who is overseeing the accountants? Are your results timely and meaningful? What strategic advice do you get from your accountants? Are your accountants more focused on compliance and tax? Do you rely on your external tax accountant? How are you controlling your cash flow? Are you in breach of any of your borrowing covenants? What are GAAP?

I could go on………! The reality is that the vast majority of businesses can’t and don’t use there financial information. Furthermore the majority of those that try to aren’t getting the right information, and rather dangerously for them don’t even know it. Most businesses financial information is designed solely for the taxman and the banker.

Good financial information is forward looking and allows management to make informed decisions regarding the businesses future. Has your business got:

• Effective cash flow management tools?
• Well constructed management reports?
• Effective budgets?
• The appropriate business plans?
• Cost effective processes?
• Financial analysis and strategy formulation?
• Proper internal controls?
• Management of tax issues?
• Good banking relationships?
• Good governance and risk analysis?
• Management of debt and equity funding?
• An appropriate level of profit for the investment, turnover and risk employed?

Really? How do you know?

Maybe its time you applied a bit more tar???????

Don’t wait until it’s too late, call me now for a free business health check, 0409 199 547.

 “the commoner type of success in every walk of life and in every species of effort is that which comes to the man who differs from his fellows not by the kind of quality which he possesses but by the degree of development which he has given that quality. This kind of success is open to a large number of persons, if only they seriously determine to achieve it. It is the kind of success which is open to the average man of sound body and fair mind, who has no remarkable mental or physical attributes, but who gets just as much as possible in the way of work out of the aptitudes that he does possess. It is the only kind of success that is open to most of us.” – Theodore Roosevelt

Cheers

James Law

0409 199 547

Prosper during adversity - Knowledge is power

James Law’s - Etesian Group

You can find the Etesian Group at www.etesiangroup.com.au

Contact James Law on 0409 199 547

I can also be found on Twitter and Linkedin

Location – Perth Western Australia

Client base includes Western Australia, South Australia and Northern Territory.

“gōng kuī yī kuì”  -  “ to spoil the ship for a ha'penny worth of tar ...”

If someone spoils the ship for a halfpenny of tar, they spoil something completely by trying to make a small economy. This is a British idiom. Tar was used to calk ships in the days of wooden ships. Therefore if the shipwright or ships owner didn’t use the right amount of tar, basically they risked sinking the ship. This is therefore a very apt idiom because it refers to the oft times disastrous outcomes that result from inappropriate financial savings.

The adjoining Chinese phrase is an equivalent and translates as - “To ruin the enterprise for the sake of one basketful”.

If you’re like most small – medium business owners, you don’t have enough hours in the day to manage the existing business and grow it as well. The typical day is consumed by unforeseen fires demanding your attention. Running to client meetings whilst chasing staff to ensure other urgent matters (and sales) are attended to. All the while the immediate and long term financial health and strategy of your business takes a back seat. The consequences of this are seen in companies with cash flow issues, lack of profitability, lack of access to capital to grow the business and much more. These issues are amplified during hard economic times as we’ve all seen recently. Matters then further compound themselves because managers try and save money inappropriately and rather than recognizing the problem, getting organized and seeking the appropriate advice and strategies, ostrich like management buries its head in the sand and tries to get through.

Warren Buffet famously said….”Accounting is the language of business”

Downturns can be a good. Many businesses succeed and prosper during hard times. If you are organized and understand your business fundamentals counter cyclical strategies can work very well. The way to do it is to have a long term financial strategy in place, capable financial advisers, strong cash flow control, and a good understanding of your businesses financial fundamentals. These and other strategies and controls are the basis for success. The catch of course is that most businesses do not have the in house ability to execute the necessary disciplines.

How can your business secure its financial health without crippling itself with additional costs?

Hire an outsourced, part time CFO! Knowledge is power. Greater knowledge is greater power. Your task as the business manager is to maximise profit. You cannot possibly achieve this without the appropriate information on which to base informed decisions. Furthermore most of us benefit from an experienced partner with whom we can discuss the issues affecting our business.

For most businesses the “tar” which if applied too frugally can (and often does) sink the proverbial ship is (the right business) advice.

In the next blog we will look at what advice you may consider.

Don’t wait until it’s too late, call me now for a free business health check, 0409 199 547.

“Don’t agonize. Organise.” -  Florence Kennedy, 20^th century American activist.

Cheers

James Law

0409 199 547