Growth solutions for small business
Through the highs, the lows and the ‘no idea what to do next’ fears, a Chartered Accountant can make a world of difference for business owners.
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Need help with business decisions? A Chartered Accountant can make the difference to your business.
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Heading into the close of 2019, Lala Macnab was at the end of her tether.
Her Perth-based wedding stationery business, Lala Design, had become a “monster of a shop with 10 staff and $350,000 worth of stock”, but it wasn’t working. Without proper systems in place, Macnab was staring at an uncomfortable amount of debt and suffering from decision-making fatigue. “I wasn’t finding my way at all,” she says.
Fortunately, her business coach steered her toward Michelle Maynard, a Chartered Accountant. In hindsight, it was excellent timing, with Covid just around the corner. It was a challenge Maynard relished, as she knows how critical good advice can be to rescue a client’s SME dream from the precipice and turn it into a flourishing enterprise.
“A lot of small business owners think that we are for the big end of town,” says Maynard, a partner with the Perth-based Carbon Group.
“That’s by no means true – the majority of my clients are small and medium businesses, a lot of mums and dads who’ve gone out and taken a punt on themselves.”
Looking into Macnab’s operation, she quickly discovered that retail sales were being tracked using the EFTPOS machine and the cash till.
While Macnab excelled at “designing pretty things”, she confesses she’s not that strong at the numbers, so Maynard’s first step was putting in place an accounting system that Macnab could understand. It was a steep learning curve but an important one, and Macnab credits Maynard for ensuring the system was embedded in the business.
“Michelle kept going until she could see I got it. She mentored me through it, and she turned my business around to make it viable again,” Macnab says.
The business is not just viable, it is invigorated.
“Michelle has been so valuable for us that I’ve ended up with multiple businesses,” says Macnab, who now sees Maynard as an integral part of the team. Maynard continues to step in with her firm but gentle advice, recently noticing that as Lala Design has expanded, Macnab had not taken time to look up from operations and get a lay of the land.
“She recently went through all my pricing structures and found I haven’t been including increases from our suppliers,” Macnab says. “Michelle makes me do that, and that will ensure we’re still profitable.”
The difference order and analysis makes
Maynard says issues like Macnab’s are common and in many instances, accounting systems are a weak link for small to medium businesses, who often still record everything on paper. She says tradespeople particularly can fall into that trap.
One of the first things Maynard does is get a digital system in place – Xero, MYOB, QuickBooks and Rounded are popular – as well as a mobile payments machine for tradies.
“They go and do the job and then have to find time to invoice, and chase up those invoices.
With an app they can send the invoice while still standing in the driveway, get paid via the device, and it’s done.
Some small business owners are scared that technology will somehow make them lose time, but it improves their cash flow, they’re paid instantly, it makes it so much easier.”
Systems and on-the-spot payments are the pragmatic and relatively easy fixes that make an instant difference. Maynard’s ability to analyse the financial health of the business and identify treacherous money pits that an owner has been blind to makes her an invaluable adviser for long-term success.
Maynard cites the case of clients of hers who run a landscaping business but who could never seem to get ahead.
“They were a couple, it was their sole source of income, and they were always busy,” says Maynard.
“They couldn’t work out why they didn’t seem to be making money.”
Maynard observed they were paying their staff $25 an hour, and charging them out at $44. By breaking down just that simple staff cost and charge-out, she showed them they were not taking into account superannuation, worker’s compensation insurance, or when they quoted a job for three hours but it took four.
“They’d basically lost their margins,” Maynard says.
By reframing their pricing strategy, “they’re busier and more profitable than ever because they looked at the numbers, understood them and made informed decisions.”
‘The right adviser can take away all of that uncertainty and stress, so you can enjoy business’
Hasten slowly to find your Chartered Accountant
Maynard says SMEs should take their time finding a Chartered Accountant who is a good fit for their individual personality as well as their business.
“There are so many great Chartered Accountants out there – go out and find the right one for you. Take the time to get referrals and talk to us.
“When you have somebody trusted who can educate you on the financial side of your business and empower you to put growth strategies in place, it relieves so much stress for small business owners,” says Maynard.
“Small business owners put in a lot of blood, sweat and tears and if you don‘t get the financial side, it can be a house of cards that can come down in an instant. The right adviser can take away all of that uncertainty and stress, so you can enjoy business and you can see it thriving, not just be in a state of survival mode.”
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Small business owners face decisions every day. How can I increase my cash flow? How can I expand my business? How can I get through tough times? A Chartered Accountant can help you make the right decisions, and that makes all the difference. Reach out to your local Chartered Accountant today.
This content was produced in association with Chartered Accountants ANZ. Read our policy on commercial content here.