Got to love a short week... or four!

By Tina Zawila

How are you enjoying these short, working weeks?  I’m sure most of us could get used to a 4-day working week! 

However, as much as we all enjoy a little less time at work, business owners should be a little nervous about three short weeks falling in one month.  Followed by another short week in May!  If you are in retail and your doors aren’t open, you can’t generate income.  If you keep your doors open but your wages bill is significantly higher, what impact does that have on your profitability?  

Have you made an informed decision on what is best for you and your business?  

If your business normally trades Monday to Friday, having three public holidays in one month means that you have lost 15% of your working month.  If this equates to 15% of your revenue how does that impact on your bottom line?  What about any additional annual leave taken this month by your income-earning team members? 

Have you planned for this opportunity cost?  

How will you manage your cashflow if revenue is lower than usual?  If you invoice clients, you may not feel the impact of this in April because you are still collecting cash for work done in March.  However in May you may feel the pinch when your debtor collections are lower than usual.   Have you planned for this?  Do you have the funds available or access to short-term funding if absolutely necessary?

As business advisors we encourage our clients to look ahead and prepare financial projections in advance to identify any shortfalls.  Then we assist them to have strategies in place to soften the blow of difficult periods in business.   If you need support from your bank during these times, they are more likely to assist you if you have planned in advance for a potential shortfall rather than having to make that desperate phone call to extend an overdraft to pay wages.

If you need help managing the ups and downs of business, please call our professional team at Sothertons Gladstone on 4972 1300 and we will help you enjoy your long weekends too.

The Biggest Asset in your Business is Trust

By Steve Marsten

I was discussing the need for a business to develop trust this week when I came across an amazing saying. It said “The most expensive thing in business is Trust. It can take years to earn and only a matter of seconds to lose!” This is so true and in our world of business, trust is more important than ever. This is especially so when dealing with clients, customers, employees and directors in your company.

Trust is one of the most critical issues in every relationship. This is due to the fact that a relationship that lacks trust is simply no relationship at all. Business success is dependant on a connection or network of positive relationships and invariably the critical mortar that enhances those relationships is trust. The moment you lose the trust of an individual or team, their chances of success or ongoing business diminish dramatically.

One of the major challenges of business today is the building of trust internally among your employees. Without this trust it is difficult to create a healthy and productive work environment. Many employees also fail to recognise the importance of trust and how it adds to their value. A trusted employee will often get the nod over a productive employee when it comes to hard decisions.

Research shows that trust is the bedrock for creating healthy work environments and effective communications and productivity.

Working relationships built on trust provide a sustainable competitive advantage to an employer that is not only valuable but often rare. Businesses that have good performing, long standing staff are often the businesses where trust prevails. It also highlights the level of ability, honesty and integrity built by the leaders within the business and hence the longevity of the business.

The question that needs to be addressed is how many levels of trust have we established with our staff, our customers and the key stakeholders within our business?

For more information about developing strategies for building trust in your business, give us a call at Sothertons on 4972 1300.

How does the weather affect your business?

By Tina Zawila

Last week Mother Nature decided to show us what she can do!  On Thursday it was Gladstone’s turn to feel her force and it certainly was an intense 24 hours.  Then on Friday morning we all woke up to blue skies, very little wind and a cool change.  The perfect example of how fast things can change in a single day.

So how were you and your business affected by the weather last week? 

The CBD was a ghost town with many businesses deciding not to open.   I know this decision was not reached lightly for many of the small businesses.  For those that rely on customers walking in the door, there certainly wasn’t going to be many of those around.  So the decision was logical, but it came at a cost – rent must still be paid, overhead expenses for the month will still be much the same, and if they had to pay their staff anyway, then the owners were left out of pocket, thanks to Cyclone Debbie. 

There were also businesses that had flood waters inundate their premises.  The cost of cleaning up is certainly an unexpected expense, not to mention any further lost trade during the clean up efforts. 

Some of these costs may be covered by insurance, but often the opportunity cost of lost trade is not covered, or not sufficiently covered, so these business owners will feel the financial affects of this unusual weather event.

On the flip side, some businesses will see a spike in sales as a flow-on from Cyclone Debbie.  Clean up operations and repairs all require labour, tools and additional supplies.  Residents will need to maintain their yards more often due to the beautiful green grass that’s growing faster than usual.

As a business owner have you considered how your business has, or will be, impacted by the weather?  How can you minimise the cost and maximise any opportunities?  Are you confident that you can make good business decisions when faced with unexpected circumstances?  Do you know how much it costs you to operate your business even when the doors aren’t open?

The professional business advisors at Sothertons are here to help you answer these important questions, and make better business decisions.  Call us today on 4972 1300.