BETTER BUSINESS
Issue Twelve, September 2006
In this months issue:
Mid Year Review Time
Low Cost Marketing Tips
Computer Security
MID YEAR REVIEW TIME
With the mid point in the financial year approaching, now is a good time for SME owners to step back and review their progress. If you don’t already have financial management tools in place (budgets and cash flow projections) then ensure that these are implemented for the last six months of the tax year. Trading blindly is dangerous as it may be too late to rectify any issues when preparing the end of year tax returns. Every business should have the following: -
An operating budget:
It is helpful to know what lies ahead in your business. Your actual results should also be tracked against this document to help you identify problems as they arise
A capital expenditure budget:
This helps a business plan for any capital purchases during the year. Plant and equipment wears out over time and any business expansion may necessitate additional capital expenditure.
A cash flow budget:
This document should be constructed based on information contained in your operating and capital expenditure budgets. It forecasts the timing of income and expenditure throughout the year also allowing for tax (GST, provisional income tax) and loan payments. Being able to identify any potential cash bumps well in advance can help you arrange finance or prepare savings.
Your Key Performance Indicators (KPIs) for the year:
These are measurements (not necessarily financial ones either) that can help you gauge whether your business is on track. Each business may have different measures of success but some items could include the number of customer phone call enquiries per week, staff turnover etc.
LOW COST MARKETING TIPS
Effective marketing may not necessarily mean having to spend large amounts of money. HWI recommends the following tips to help stretch your advertising budget: -
- Make your business stand out. Send greetings and gifts at odd holidays, e.g. chinese new year or halloween, instead of Christmas and other mainstream dates.
- Create a memorable business title for yourself. The business cards of one husband-and-wife team refer to them as “Dad” and “Mum” because their furniture store is named after their children.
- Write educational articles for trade publications or newspapers that reach your audience. They’ll get your name out to the public and add to your credibility.
- Don’t underestimate the market value of your name. By using your name over and over to promote your talents, small businesses can get turned into enormous enterprises.
- Finally, make sure the name of your company is legible. Some logos use such fancy lettering that the company name is unreadable.
COMPUTER SECURITY
You would be hard pressed to find businesses that do not rely on computers for their daily operations. Computers in particular need to be safeguarde,d from theft, failure and virii. Computers should be stored in secure, preferably monitored premises with any laptops being stored in a locked cabinet when not in use. All important computer data should be backed up at least daily with any backups stored safely off-site (but not in your car!). All computers, not only those with internet access, should run anti-virus software which is regularly updated. Finally, ensure your business has a computer security policy which is understood and followed. It should include such things as procedures for receiving unknown email attachments, virus scanning all incoming data disks and changing user passwords regularly.
If you require any further information on this area then please call Raewyn on 307 8502.
What's new at HWI...
HWI is pleased to advise that there are new office services being offered including: bookkeeping, payroll, temporary accounting assistance, review of office procedure, end of year collating of financial accounts and accounting software consultancy & training. Should you be interested in learning more about our new services please contact us at info@technologytailors.co.nz or phone 307 8502.
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.
