17 June 2015

"Thriving in Uncertainty" Article by Tina Zawila

Last week I had the pleasure of presenting to 25 business owners in Rockhampton on behalf of the Department of State Development.  The title of the workshop was “Thriving in Uncertainty”, and the underlying objective was to improve the financial literacy of business owners to help them make better business decisions.   Our focus was on understanding the past to make better decisions in the future.

We started with mindset and leadership and we all took a moment to reflect on what is working in our businesses and what isn’t, and to accept that our businesses are a direct reflection of us.  We had to face the fact that our businesses will never outperform our leadership.  So if we want different results, we need to do things differently. 
It amazing how often business owners base their plans for the future on the past, and wonder why they seem to keep getting the same results!  We need to create our future from our future.  In other words, get clear on what it is you want, and then work towards that!  There is a reason why the windscreen is bigger than the rear view mirror – yes it’s important to check what is behind us, but it’s more important to look at what is ahead of us!
We talked about developing our Profit Plan, our Growth Plan and our People Plan to achieve our goals.  In particular, I reminded business owners that Profit is not something to add on to the end, it’s something to plan for in the beginning!  That’s why at Sothertons Gladstone, we promote the “Bottom-up Budgeting” approach – start with your desired profit figure and work your way up.
Now is the time to lock in your plans for the new financial year.  If you need help with your planning and if you want to budget for a profit in 2015/16, call the professional team at Sothertons Gladstone today on 497 1300.

02 June 2015

“What value do you place on your team?” Article by Steve Marsten

We were recently involved in a sale of a business. Often this is a stressful decision because in many cases owners who work in the business have developed a second family. That’s their staff! So when they sell, who they sell to, can be as important as the price.

The business we were dealing with was a long standing business and had become more profitable each year mainly due to the improvements in systems and investments made by the owners in technology. They also had a team who embraced the improvements. However when it came to the business valuation, we felt that it was undervalued. It’s quite easy to value a business based on the dollars and cents and many think that it is fairly straight forward. The issue is that there can be more subjective value which can be considerably harder to place a figure on. 

You see, it’s not the technology or the product or service that makes a company great, it’s the people. Companies who see their good employees as “replaceable” have things out of whack. Good employees are not replaceable. Let me clarify what I mean by “replaceable”. Can a company hire someone to fill a position to replace someone else? Of course they can. In today’s market, the world is ripe with candidates who are eager and willing to take the job. But sitting someone in a seat doesn’t replace a great employee. It simply puts a new behind in a seat.

Often it’s not just the one employee that makes a great business– it’s the team of employees. Teams that want to work with the owners of the business; enjoy working with the owners of the business and share in the ups and downs of that business - are a valuable resource. When we sell the business it can be a big culture shock both to the owners and the team. If the team are by and large staying on, then the buyers should give consideration to that value.

At Sothertons we can assist in realising the complete value of your business by making sure the subjective value is not forgotten. Call us on 07 4972 1300 or visit our website.