Terry Dewing............................... 10 Tips to ensure your Business is Financially Well Organised in 2014.........
Why is it that some business owners seem really successful? Then there are the business owners that struggle every
single year. The key is to become Financially Well Organised.
Here are 10 fundamental priorities you need to achieve to ensure your business is successful into and beyond 2014.
Tip #1 – Use the right business structure: Choosing the right business structure gives you asset protection, flexible
profit distribution and allows you to pay the correct tax. Is your current business structure offering all this?
Tip #2 – Structure your salary the correct way: Doing so stops money leakage, such as payroll tax, workers
compensation and superannuation. Simply by changing the way you receive your pay could save your business money,
as well as receiving more cash in your pocket each week!
Tip #3 – Achieve the best profit that you can: Set a profit plan for your business, using a bottom-up approach, where
you set your desired level of profit and then add in your overheads and direct costs. The balance is what you need to
sell for the year to make the profit you want.
Tip # 4 – Measure the key numbers: This is really simple! How did your actual sales for the month go versus budget?
How did your gross profit and net profit go versus budget? Also look at the key non-financial numbers in your
business. Know where you want to go and then track against it each month. Only when you start tracking will your
numbers improve!
Tip # 5 – Know where your cash is: Cash is king! You know the pressure your business is under when cash is tight. The
critical “cash lock up” areas of your business are; debtors, creditors and stock turn. Review these areas and make
improvements.
Tip # 6 – Pay yourself first: Schedule your payments weekly – wages, dividends and super, so that they happen
irrespective of business distractions. For whatever reason, when the money comes directly out of your bank you don’t
seem to miss it.
Tip #7 – Structure Your Debt Correctly: The principles are simply: 1) Reduce non-deductible debt first like your home
loan, 2) Non-deductible loans should be principal and interest to get rid of them as fast as possible and 3) Deductible
loans should be interest only until all non-deductible debt is repaid like your business loan, investment property or
share loan.
Tip #8 – Consciously Support Your Superannuation: Consciously know how much you will need to retire on and have a
plan to make sure you’re working towards this amount. Have you considered a self-managed super fund? This works
well if you like to control your own investments, or want to invest in property by using your superannuation. Super is
the first step in your wealth creation plan.
Tip #9 – Get Yourself Covered: Get the right levels of insurance in place. Have you considered income protection, life
insurance or key man insurances? What would happen to your business and to your family if something happened to
you or your business partner? Make sure you are covered properly. Do you know how long your business can survive
without you?
Tip #10 – A Planned Retirement: Plan for your retirement. Use a combination of superannuation and other
investments. Make sure you are accumulating smartly, so that you’re not “leaking” your hard-earned super in fees or
taxes. Tax effective structures are available and used well, they make a huge difference to the amount you have to
fund your retirement. It’s never too early to start planning for your retirement.
These are 10 things you can do in your business to make it Financially Well Organized and be the best business it can
be.
Terry Dewing, Chartered Accountant, Chartered Tax Advisor, Self-Managed Superannuation
Funds Specialist, Auditor, Managing Director of Sullivan Dewing Chartered Accountants &
Business Builders and Director of various business and community entities. Based in Southern
Sydney, his firm have has over 30 years of results in helping people create personal wealth and
save tax. +612 9526 1211 [email protected] | http://www.sullivandewing.com.au