What is tax planning? Essentially, tax planning is something you do to put your business into the best possible tax position. After all, nobody... Read more
Throughout my career helping business owners to build better businesses there are consistent themes in the stories I hear when things are not going so well.
Countless times I have heard stories from business owners where they have run out of cash, or their staff turnover is very high, or their team is underperforming, or business costs are running wild, or they are working too hard for not enough financial or lifestyle return.
Initially I didn’t see the pattern in these stories until I discovered the work of Verne Harnish.
Verne is a global authority on business growth (he is known as the Growth Guy) in addition to being a best-selling author of the books, Mastering the Rockafeller Habits and Scaling Up. Through my learnings from Verne I realised that all problems in a business fall into four key categories and once you understand these it is much easier to fix problems within your business.
The four key categories are:
As it turns out, there is a logical flow to these issues in that if you want to solve your immediate problem you have to look at the area immediately preceding it.
If you have a cash flow problem, for example, you can’t pay the ATO on time, or your loan payments, or simply not generating enough cash to meet your lifestyle needs, then you must review the execution of tasks in your business.
For example, your invoicing process may not be functioning or you have inefficient work practices meaning that wages or other costs are excessive.
If you have a problem with execution of business activities, perhaps you are not hitting sales targets or you have excessive rework on certain jobs and tasks, then it is critical to review your people. Do they have sufficient training? Are the job roles correct? Are the right people doing the right thing? Is the culture of the business sound?
If you have a problem with your people, a poor culture, mediocre performance or high staff turnover, then the business strategy must be reviewed. Do you have a vision that the team buy into and do they understand it? Is there a clear strategy for the team to execute?
Finally, strategy. If you are lacking a clear strategy or vision that can be executed then normally it is because there is insufficient cash to invest in developing or clarifying that strategy.
The good news is that each of these areas can be fixed. With a logical and methodical business improvement process, each of these areas can be reviewed and actions implemented to achieve the results that you desire. You just need to understand what the real problem is.
Luke Talbot-Male, Adventures Beyond
Rodney Quinn, Quinn Transport