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Whether you’re a sole trader or employing a small team, running a business means keeping up with everything from staffing to cash flow and pricing. Getting on top of your finances and business planning can help you stay ahead. The start of a new year and tax time creeping up means now is the perfect opportunity to set your business up for success. These tips for small business owners from MYOB, a Xero expert and a tradie coach will help you get your business, finances and cash flow organised for the year ahead.
This is a good time to reflect on where your small business is at right now and what you aspire to do in the future, says Paul Rogers, head coach and founder of business mentoring company Tradie Coach.
“We often get stuck into the ‘doing’, the technical side of work, when we’re busy,” he says. One of his top tips for small business owners is to refocus and reset before tackling a new work year. “Coming back after some downtime is a great opportunity to think about your goals for the rest of the year. Where do you want the business to go? What does that mean for your team and the type of work you want to be doing?”
Running a small business often means your personal goals are intertwined with those of the business, so it can be helpful to consider how your business decisions today will shape your future lifestyle. “If you want to buy a house, an investment property or a beach shack, what can you do to make sure your business can provide the lifestyle that you want? What needs to happen in the background to make sure that’s a possibility?” Paul asks.
With the cost of supplies and labour increasing, the start of the year is an ideal time to check that you are charging clients and customers enough to cover your outgoings and make a reasonable profit. “Make sure your margins are where you need them to be and that you’re pricing appropriately. You may decide to look at refreshing your pricing model,” Aly Garrett, a Xero Partner Advisory Council (XPAC) member and the founder of accounting firm All In Advisory, says.
Tip: Did you know that Bunnings Trade PowerPass members can get 90 per cent off Xero for six months?
It’s important not to base purchasing decisions solely on the expected tax benefits they could provide. “The priority should always be: does the business need it?” Aly says. There is, however, one smart small business tip to consider before June 30. For eligible businesses, the $20,000 immediate write-off means business purchases under that amount can be written off straight away. If you work outdoors, items like sunglasses and clothing may be claimable.
Cash flow is everything as you ramp your small business back up after the holiday season. “Ensure you’re across your incoming and outgoing costs, as well as any liabilities, such as tax, super and GST,” Kim Owen-Jones, general manager, Customer Acquisition at MYOB, says. She also recommends keeping money aside for outgoings in a separate account.
As for invoicing, do it as soon as a job is complete. “Provide multiple payment methods, so it’s quick and seamless for clients and customers to pay,” she says. Kim also suggests reviewing your licences and any “professional development requirements to ensure they are current and make a note of renewals”.
Tip: Bunnings Trade PowerPass members can pay for the first month of MYOB then get 12 months for free.
Stop using a shoebox for paper receipts! Instead, set up a system that’s accurate, reliable – and digital. This is especially important when it comes to tax time for small businesses.
“Keep records that give you a real-time view of your business performance, so you know your business position and can adjust as and when required,” Kim says. “We love that Bunnings PowerPass integrates seamlessly with MYOB, sending invoices automatically into the platform.”
Hoping to grow your business this year? Start thinking about staffing earlier rather than later, Paul suggests. “Think about the best time of year to bring on apprentices, especially if they’re school-based,” he says. “It’s also helpful to think about doing some work on your values and culture, so you have a clear idea of who you’re looking to hire.”
The information in this article is general in nature. It doesn’t take into account your specific financial position, needs or circumstances. It is not intended to be a substitute for legal or professional advice. You should look at your own financial position, objectives and requirements and seek professional advice before making any financial decisions.
Are you a Bunnings PowerPass member? Here are some tips on how to run your business better thanks to PowerPass.
