Accounting Expertise, Chartered Accountants, Auckland, New Zealand, HWI

BETTER BUSINESS
Issue Nine, June 2006

In this months issue:

Budgeting Tips
Business Image Overhauls
Business Signage

BUDGETING TIPS

A budget is an itemised listing, usually prepared annually, of anticipated revenue and projected expenses. It is a useful tool which will help you set goals and measure your progress but often it can be difficult to know where to start. HWI recommends the following: -

1. Begin by devising a sales/revenue target. Make it your best estimate but keep it realistic. Look at past records but consider the current and future economic climate and any other factors outside of your control when planning ahead. If it is your first year in business, be conservative and engage the advice of your accountant and colleagues who are in business also.

2. Based on past experience, estimate your cost of goods sold (e.g., 60 percent of sales) and subtract this from your revenue to come up with your estimated gross margin.

3. Forecast variable expenses (items such as commissions etc that vary according to the level of sales) and fixed expenses (items like rates and rent that stay the same, regardless of sales). Subtract these expenses from your gross margin to arrive at your estimated net income (before tax).

Break your annual budget into quarters and monitor your progress on a timely basis (perhaps every three months) to detect problems and make corrections.

BUSINESS IMAGE OVERHAULS

Many small business owners don't have an in-house staff of marketing specialists and do not give consideration to their business image, however, this is more important to your bottom line than you think. Corporate reputation is critical to a business achieving their strategic business objectives and smart branding can put your business on the public radar. If you feel your business image is a little “tired” then consider the following action plan: -

Identify who your customers and other interested parties are and what they want from you. Conduct interviews or issue questionnaires if required to help evaluate your image.
Identify the positive and negative points of your current image. What misconceptions or negative perceptions need to be corrected?
Devise a strategy, e.g. changing your company’s name and logo, changing your product mix, or even dropping some customers and targeting others.
Get expert help. Image makeovers usually call for professionals who can help you devise and implement a new concept. Consider using a smaller firm, or a talented free lancer and ask them to explain the business rationale behind the work that they've done for others.
Follow up to make sure the makeover is doing its job. Are sales up? Are you attracting the customers you want? This can be done in conjunction with a properly prepared budget.

BUSINESS SIGNAGE

A business sign is a form of communication and it needs to be effective enough to get your message across. Be sure it is large enough to read - consider the speed of local traffic (foot or vehicular) and the time that it takes to read. Keep your messages short and simple and provide ample lighting so that it can be read at night. Finally, change it from time to time to renew potential customers' interest. Often the best signs are designed to keep customers coming back to look at updates (e.g. Tui beer signage).

Up coming events at HWI...

FREE seminar: Our next seminar is going to be held on Wednesday 12th July, 9am.
The seminar calendar for the rest of the year is currently being finalised so check our website for details or
email Mark at maldridge@hwi.co.nz for details or book online at www.hwi.co.nz

Disclaimer: Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or rely on it without first seeking professional advice.

	BETTER BUSINESS Issue Nine, June 2006 In this months issue: Budgeting Tips Business Image Overhauls Business Signage BUDGETING TIPS A budget is an itemised listing, usually prepared annually, of anticipated revenue and projected expenses. It is a useful tool which will help you set goals and measure your progress but often it can be difficult to know where to start. HWI recommends the following: - 1. Begin by devising a sales/revenue target. Make it your best estimate but keep it realistic. Look at past records but consider the current and future economic climate and any other factors outside of your control when planning ahead. If it is your first year in business, be conservative and engage the advice of your accountant and colleagues who are in business also. 2. Based on past experience, estimate your cost of goods sold (e.g., 60 percent of sales) and subtract this from your revenue to come up with your estimated gross margin. 3. Forecast variable expenses (items such as commissions etc that vary according to the level of sales) and fixed expenses (items like rates and rent that stay the same, regardless of sales). Subtract these expenses from your gross margin to arrive at your estimated net income (before tax). Break your annual budget into quarters and monitor your progress on a timely basis (perhaps every three months) to detect problems and make corrections. BUSINESS IMAGE OVERHAULS Many small business owners don't have an in-house staff of marketing specialists and do not give consideration to their business image, however, this is more important to your bottom line than you think. Corporate reputation is critical to a business achieving their strategic business objectives and smart branding can put your business on the public radar. If you feel your business image is a little “tired” then consider the following action plan: - Identify who your customers and other interested parties are and what they want from you. Conduct interviews or issue questionnaires if required to help evaluate your image. Identify the positive and negative points of your current image. What misconceptions or negative perceptions need to be corrected? Devise a strategy, e.g. changing your company’s name and logo, changing your product mix, or even dropping some customers and targeting others. Get expert help. Image makeovers usually call for professionals who can help you devise and implement a new concept. Consider using a smaller firm, or a talented free lancer and ask them to explain the business rationale behind the work that they've done for others. Follow up to make sure the makeover is doing its job. Are sales up? Are you attracting the customers you want? This can be done in conjunction with a properly prepared budget. BUSINESS SIGNAGE A business sign is a form of communication and it needs to be effective enough to get your message across. Be sure it is large enough to read - consider the speed of local traffic (foot or vehicular) and the time that it takes to read. Keep your messages short and simple and provide ample lighting so that it can be read at night. Finally, change it from time to time to renew potential customers' interest. Often the best signs are designed to keep customers coming back to look at updates (e.g. Tui beer signage). Up coming events at HWI... FREE seminar: Our next seminar is going to be held on Wednesday 12th July, 9am. The seminar calendar for the rest of the year is currently being finalised so check our website for details or email Mark at maldridge@hwi.co.nz for details or book online at www.hwi.co.nz Disclaimer: Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or rely on it without first seeking professional advice.
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