Flying Solo

How to use debt to your advantage

2013-06-19T07:30:00+10:00

Not all debt is bad. In fact, ‘good’ debt is often the key to allowing your business to grow and thrive. Here’s how to make debt work for you.

Debt gets a bad rap because of the financial trouble it can cause. But if it's managed well, it's a tool that allows you to make major purchases you otherwise couldn't afford. Most of us would never buy a house if we couldn't borrow money to do it.

It's also useful for investment planning. You can borrow money in order to buy income-producing growth assets such as property or shares to boost your long-term wealth, or borrow to start a business. In these cases, the interest you pay is often tax deductible.

Why debt can be bad

Debt trouble arises when we borrow money for basic living costs or for purchasing depreciating assets such as cars, boats or even a holiday. This is made worse by high interest rates. When interest rates rise, most people focus on their mortgage, forgetting completely that credit card interest rates rise as well. When credit card interest rates sneak up, your minimum monthly payment may only be taking care of interest and not the principle. Many credit cards are currently charging over 20 per cent per annum.

Another problem that compounds the situation is lack of planning. Whenever you borrow money, you should always have a debt reduction program in place to get it paid off.

For business owners, debt often arises for equipment finance, partially for cars. The banks are only too happy to loan as much as you are happy to borrow. While these loans can assist with short-term cash flow, there is potential for business owners spend more than they usually would. This creates an opportunity cost with the burden of high monthly repayments on a quickly deprecating asset; the flow-on effect is reduced cash flow for debt reduction or other wealth creation strategies.

Getting out of debt

If you're struggling with debt and you feel that you're in over your head, you need to think carefully about your financial direction. Here’s a simple plan that will get your debt under control:

Consolidate your debts into the one with the lowest interest rate. This could be your home loan where interest rates are the lowest. When it comes to credit cards, keep just one with the lower credit limit and destroy the rest.
Now, there is no point in completing Step 1 without creating a budget to ensure that you're living within your means (where your income is higher than your expenses).
Seek professional help with a financial adviser who can help you clarify your financial goals and work out a plan that suits your finances and lifestyle.
Don't borrow more unless it's for a productive purpose such as investing or building future profits. Before borrowing, make sure you have a realistic plan for paying the money back.
Don't worry about 'keeping up with the Joneses’. This is a deadly mindset that often leads us to borrow what we can't pay back.
For businesses, managing debtors can make or break a business. Be prompt when invoicing; if you are slack getting invoices out,customers will assume you are not in a hurry for payment. A great example for mechanics would be to leave your invoice on the passenger seat straight after the work has been completed.

Don’t waste debt
In my role as a financial adviser I see many decisions where debt is wasted on depreciating assets. These decisions have often resulted in missed opportunities for more important asset purchases such a home or income-producing investments.

Many successful businesses that have created significant wealth for their owners started off with debt, which enabled them to purchase or build their businesses. Here are a couple of steps you should think about prior to signing any debt-related contracts.

Will the asset purchased be worth more in five years time?

Does the asset provide income to assist in the payment of its loan?

Will the asset increase productivity and therefore income in your business?

If the answer is no to these, then you should question how important the purchase really is.

If you borrow money only when you need to and have a solid plan for paying it back, you can use debt as a tool. You can control your debt rather than your debt controlling you.

What are your tips for using debt to your advantage?

Celebrating the ‘I’ in team

2013-06-18T07:30:00+10:00

As I was reminded recently, it’s a myth that successful teams don’t accommodate the individual. Focus on the soloist and you’ll create the strongest team imaginable.

Recently I came across a fascinating story where sports scientists and designers worked alongside young Olympians to explore how tiny changes could make a difference to performance outcomes. What I learnt translates well into the competitive world of business and hopefully rids us of that annoying “there’s no ‘I’ in team” cliché.

The purpose of the collaboration was to see whether even the minutest tweaks to training regimes, equipment and clothing could influence race times and the all-important medal-count.

It undeniably looks intimidating when a team of rowers sit in their craft, dressed precisely the same, using the same oars and perched on identical little fibreglass seats.

An impressive team? Definitely. Winners? Maybe.

While Olympic regulations demand a high degree of uniformity, the designers realised was there was some leeway when it came to precise manufacture of each oar, and indeed each seat.

By studying the movement of the individual athlete and observing their natural posture, the designers manufactured bespoke equipment.

The impact for each rower was miniscule, but the outcome for the team had the ability to change bronze to gold.

Next they looked at training regimes and diet. Historically teams do much the same training at the same times and pretty well consume the same food and supplements.

The scientists did away with all that and gave each person far greater input into what felt right. Some trained later in the day, some earlier. A few ate less, some more. And yes, you can guess the result.

As business owners – whether flying solo or as part of a small team – we do ourselves no favours if we diminish the role of the individual by doing what’s expected or what everyone else is doing.

We are agile enough to design our own ideal working conditions and business, and the reward is gold.

What little change have you made recently that has noticeably impacted an outcome? Tell all and you can run round the stadium while we all applaud.

Podcast: How to enter a crowded market place

2013-06-16T07:30:00+10:00

Hear how Daniel Flynn, founder of Melbourned-based Thankyou Water, successfully enter the already crowded bottled water market.

Four years ago, Daniel Flynn had a big idea. Some would say an epiphany. Appalled to read that 900 million people had no access to safe water and equally angered by the idiocy of bottled water in a country where the tap is safe to drink from, the 19-year-old university student wanted to do something.

He decided to start his own bottled water company (as if that market place wasn’t already over-crowded!) that would channel all its surplus revenues into funding water projects rather than making a profit. Thankyou Water was born.

Listen in this Small Business Big Marketing podcast as social entrepreneur Daniel Flynn, founder of Thankyou Water, takes on the big boys in the crowded bottled water market.

Melbourne-based Thankyou Water is social enterprise that competes at the low end of the mainstream bottled water market. Daniel says this form of business – a social enterprise – appeals to the army of Gen Y consumers who will spend money but are concerned about where profits go.

The company that started as a 19-year-old’s idea now has 12 employees, comprising full and part-time staff, and is another inspiring story of starting a business and doing the world of good!

About these podcasts: The Small Business, Big Marketing podcasts are characterised by plenty of chit chat from Tim who'll typically kick off with nuggets of advice and tell shaggy dog stories before diving in to the episode's topic. Sit back, relax and enjoy!

Duration: 53:50 minutes

Links to resources mentioned in the show: http://smallbusinessbigmarketing.com/daniel-flynn-thank-you-water/

To subscribe to this show in iTunes, please head here.

Why being definitive boosts publicity

2013-06-15T07:30:00+10:00

The media likes to tell strong, definitive stories, but that doesn’t equate to ‘simple’. Here’s how to make your business more definitive and in doing so – more attractive to the media.

Last week I overheard someone say publicity and media coverage were to be feared by the intelligent business owner, because media tend to simplify you. Their portrayal of you needs to be two-dimensional to get a point across quickly and clearly.

I mostly work with managing directors who are anything but two-dimensional. They’re often unique consultants. And if, like them, you’ve spent valuable time and significant intellectual effort becoming the person you are and forming the business you have, I can see why simplification would be an alarming prospect.

Why on earth would you risk dumbing yourself down in order to become better known?

Thing is, though: quality publicity and media don’t like simplification. They want to see you rich with story possibilities and ready with opinions. They want to hear about your layers and your back-story. In fact, this is what makes you an attractive and credible person for them.

What they do need you to be is definitive. But that’s not the same as simple.

To be definitive, you need to step strongly and authoritatively into your niche. You need to know a fair bit about yourself and where your business is going. Once you’ve found that definitive position you will be in a better position to pitch your story to the media, and the media will find your story more enticing.

Being definitive is about building a strong and rich foundation. It’s one thing to be the Yellow Guy. But the Yellow Guy will build a stronger public profile if he shows he’s the Yellow Guy made with green and blue. Your primary colours will lay the strongest foundation for gaining publicity and building your public profile.

This foundation consists of the layers of who you are and how you got here, and will form the basis of all your subsequent publicity campaigns.

Carve your niche with your definitive story, and your business will more likely be appreciated, understood and respected by the media.

Do you feel your business is definitive?

Six steps to small business success

2013-06-14T07:30:00+10:00

When starting or reviewing your business, use the following six steps to steer it in the right direction and maximise your potential for success.

1. Know where your vision lies.

Define your values and beliefs, align these with your vision, and keep this front of mind in every decision you make. If you are pushing your business in a direction that goes against what you value you will never be happy.

2. Check the existing position of the business,

the industry it operates in and the niche it fills. Is your business achieving all it can in its niche, or is there an additional niche that could be explored? Is there any potential for organic or acquisitive growth?

3. Surround yourself with your champions

Have a look at your business’s structure, the existing people you have, and the skills and experience they possess. If they are not benefitting your business, either train them up, or ship them out. It’s also worth considering whether you should keep those bad vendors or customers. Could it be time to cut ties? Finally, have a look at your own motivation, positivity and organisational skills. Are you being your own champion, or could something be done to improve your outlook?

4. Check your own required level of financial comfort.

There are many personal values that business owners need to take into account when considering this – the desire for affluence, propensity for risk, attitude toward debt and personal budgeting. Once you have identified your own beliefs and needs, look at the financial position of the business, and whether it needs to be maintained as is, improved, or even downgraded.

5. Examine all potential marketing avenues

to see whether changing, increasing or decreasing marketing might have a beneficial effect on the business. Many businesses (especially micro ones) get by without a comprehensive marketing plan; however, even if there is only going to be a small marketing effort, it should still be well considered and effectively executed.

6. Is the business as efficient and effective as it can be

in areas such as cost management, quality of product or service, speed, steadiness and flexibility? Again, many of these matters relate back to your own values and beliefs – so those must be taken into account when looking at operations.

Again, many of these matters relate back to your own values and beliefs – so those must be taken into account when looking at operations.

What other key steps would you suggest that help lead to small business success?

FREE WEBINAR Wed Jul 3: How to bullet-proof your business

2013-06-13T08:53:00+10:00

Join Robert Gerrish and Andrew Griffiths, Australia's #1 small business author, in this practical webinar to discover why some entrepreneurs simply create a job, while others find freedom. Supported by AAMI Business Insurance.

If you're spending all your time in your business and are too busy to relax or plan ahead, this FREE webinar holds the key. You'll learn how to mitigate common risks that limit business growth, work more productively

Join Robert Gerrish and Andrew Griffiths, Australia's #1 small business author, in this practical webinar and discover why some entrepreneurs simply create a job, while others find freedom. Supported by AAMI Business Insurance.

The entrepreneur’s biological clock

2013-06-12T07:30:00+10:00

Is there a certain age at which entrepreneurs are past their prime? I don’t think so. Here’s why.

In backpacker circles, when you turn 30, people ask “what’s wrong with this guy?” What you can get away with in your twenties, you can’t get away with once you’ve passed the big “three-oh”. It’s not dissimilar to the “biological clock” many women in their thirties confront as they perceive their days of easily having children are coming to an end.

A similar phenomenon exists in the business world, both for employees and business owners, that there are age limits on what someone can easily do. Like the backpackers, it’s more a perception than a reality.

Once upon a time you were past it at 50 years old. Through the 1980s, ’90s and the early part of this century that “past it” age contracted, along with the deskilling of the workforce, to 45, then 40, then 35.

In the eyes of many in the corporate world today, should you not have an established corporate career path by your mid-thirties then you are well “past it” and destined for a middling career and income.

With entrepreneurs, a similar quandary exists: once over 40, there’s a feeling that the aspiring business owner should just stick to buying the local doughnut or lawn-mowing franchise. Start-up land is no country for old men.

The underlying cause of this view is the belief every successful business founder is rich beyond their dreams by age 30 – Bill Gates and Mark Zuckerberg come to mind. This is clearly silly, given most businesses never come close to the successes of Microsoft or Facebook, but it’s a persistent belief nevertheless.

When the entrepreneur turns 30, things begin to get tricky; sleeping on a friend’s sofa, working 18-hour days and living on instant noodles isn’t an option when you have kids, partners and mortgages. At the same time, family, friends and potential employers start to ask, “If this guy’s so good, how come he isn’t a millionaire?”

To make things more difficult, risk-adverse peers start bragging about how their safe, well paid job is allowing them to buy second homes or go on holidays most business owners can’t even contemplate.

Probably the hardest thing, though, is that the doors of the corporate world start slamming shut; for a 40-year-old entrepreneur who has been running their own businesses for 15 years, it’s difficult to get a job in the business world, and any position available won’t recognise the skills developed in running your own enterprise.

Similarly, the warning to anyone with a decent corporate career who chooses to leave their safe office job to run their own business is usually: “How can you risk throwing all of this away?”

Risk is the difference between the ages; once you’re over 40, with there being little prospect of a plan B involving returning to a nice corporate position, then the cost of failure is a lot higher.

In some ways this can be better; an individual staring down the prospect of a long, poverty-stricken retirement has a very good incentive to get their business right and doesn’t have time to waste on speculative or “me too” projects.

The idea there’s an age limit to launching new, innovative businesses and products is silly, but it’s a persistent one nevertheless. The great thing about being your own boss is you don’t have to pay attention to other people’s dumb ideas, and this one is a dumb as it gets.

Do you think entrepreneurs have a biological clock?

Tips for managing overdue accounts

2013-06-12T07:30:00+10:00

Chasing unpaid invoices doesn't have to be a stressful process. These tips will help you get your overdue accounts under control and prevent them from happening again.

Following up overdue accounts is perhaps one of the least enjoyable tasks in business. After all, who enjoys asking for money repeatedly, the strain it takes on your cash flow and the potential confrontation that comes when someone refuses to pay, even if only for a while?

The following tips will help take the stress out of chasing slow-paying clients.

1. Be polite and understanding

We don't always know what is happening in the lives and businesses of our customers. They might be delayed due to sickness or a death in the family, have overdue accounts themselves that are reducing their cash flow, they may have forgotten or they could just be having a bad week or month.

Imagine if you were the one who was late with a payment. How would you want to be followed up? With a forceful, humiliating reminder or a gentle, tactful one? A little care in these situations can go a long way, especially when it comes to maintaining a relationship with the customer in question.

2. Have a separate accounts email

Setting up a different email address for accounts will not only make you seem bigger than you are, it will separate you personally from following up overdue accounts. This is particularly helpful if following up accounts makes you uncomfortable and you still want to appear the "good guy" to your customers.

3. Send regular reminders

When you have overdue accounts it's important to follow up regularly. It often pays to send a reminder the day the payment is due, then another when it is seven days overdue, then 10 days and so on.

If the payment is over 10 days late, you may want to call and send a letter as well as email to cover all bases. Once payments go beyond 30/60/90 days late (depending on your preference), you may need to take a firmer approach, using a legal letter of demand or hiring a collections agency.

4. Add in a late fee for overdue payments

Adding in a late fee for payments over 14 days late (or another specified time frame) can be a good incentive for customers to pay on time. The late fee amount is up to you, though 10–15 per cent of the bill seems to be quite common, with an increase after every 30 days payments remain late.

5. Reward customers for paying early

Try offering a reward or discount for upfront (non-payment plans) and early payments. The extra saving can often be enough incentive for customers to pay on time.

6. Get payment upfront

If you find you have customers who continually pay late, introduce different payment terms. Consider charging upfront or at least a large deposit so you have immediate compensation for the work you're doing and maintain your cash flow.

Do you have any tips for getting overdue accounts under control?

For more debt collection strategies, click here.

Take charge… like a boss!

2013-06-11T07:30:00+10:00

Many Flying Solo members say the best and worst thing about being a soloist is being in charge. Why the lack of confidence? Here are my tips for taking charge like a boss.*

Make decisions like a boss

As a soloist, you make the decisions that affect the future of your business – a role at once liberating and terrifying. No longer can you double-check with your manager – the buck stops with you, and it’s your own money on the line.

I tend to wade through pools of pros and cons until the best decision seems to be no decision at all. But treading water gets you nowhere.

To help I put a deadline on making decisions, contextualise them (“Given the circumstances, I think it’s best to…”) and visualise how I’d still survive if I slipped up. This approach helps give me confidence to make choices faster, with less fear and without regret.

Accept responsibility like a boss

As the King Pin of your business, there’s nowhere to hide if things go wrong. You can’t blame accounts for not paying an invoice, or operations for not delivering on time. The promises you make are yours to keep.

Some people manage their fear of failure by never taking risks, or by being perfectionists. Others might make mistakes and then make excuses for them. The ‘boss’ way to handle mishaps is to embrace them, learn from them, and be honest – to yourself and your clients.

Give feedback like a boss

One downside of being in charge is there’s no one above you to tell you when you’re doing a good job. Receiving feedback and praise has a profound effect on your motivation, so it’s essential you get some. If you receive kind words from a client, bottle them (I’ve created a feedback folder in my inbox, however a testimonials page on your website is another great idea). But don’t wait for praise to arrive. Celebrate your own successes and review your performance regularly.

Build your confidence in these areas and you’ll soon remember why being in charge really is the best thing about being a soloist. Not the worst.

*The ‘like a boss’ catchphrase was coined in a Saturday Night Live skit and evolved into a genre of internet memes depicting someone or something performing an action with unflinching confidence and authority. Bonus tip: whenever tackling something you’re unsure about, picture yourself doing it “like a boss”, and it seriously helps boost your self-belief. Don’t knock it till you try it!

How do you take charge like a boss?

Image source: Flickr, under a Creative Commons License

Podcast: How to market a professional services business

2013-06-09T07:30:00+10:00

Heather Smith and Tim Reid share their views on branding, message creation, social media, referral marketing and that all important content marketing.

Ever wondered how to market a professional services business? I mean like really market one – in a clever, effective way that doesn’t cost a fortune? In a way that avoids spending large sums on advertising or direct marketing? Excellent … then you’re going to love this interview with small business author Heather Smith – who has recently launched the wonderful book titled Learn Small Business Start-Up in 7-Days.

In this Small Business Big Marketing podcast, Heather and Tim share their views on branding, message creation, social media, referral marketing and that all important content marketing.

Duration: 49:08 minutes

Links to resources mentioned in the show: http://smallbusinessbigmarketing.com/how-to-market-a-professional-services-business/

To subscribe to this show in iTunes, please head here.

20 questions to ask your web developer

2013-06-08T07:30:00+10:00

Whether you’re looking to upgrade your website or have one built from scratch, ask your web developer these questions to ensure your money is well spent.

Getting your business website developed is an exciting time, but all too often I hear of new business owners getting short changed by web developers who don’t deliver a quality product, or who charge too much. Much of the problem is due to the fact business owners don’t know the right questions to ask or what to look for when having a website developed.

Here is my list of must-ask questions that will help you judge a good quote or web vendor from a really bad one.

Is it a site that you can easily update yourself? This is called a CMS or content management system. Ask if you can have a demonstration of how the back end of the site works so you can gauge how easy it is to upload an image, link and text. If you can’t edit the site yourself you might end up paying through the nose every time you need a change. Also, check if you can edit text using a word processing interface (which is easier), or if it only allows for html.
Is the site a template or custom built? This is important depending on the design and the complexity of your site navigation. A template-driven site is fine for most small businesses, but some need a special layout and navigation to work best
What sites have they done recently for similar businesses? This will give you an idea as to whether they know the sort of thing you need, and whether they’re au fait with best practices.
Who will host the website? And are there one-off fees, monthly charges or maintenance fees?
Will the host be here or overseas? This will affect the speed and security of your site. US servers I have found to be less reliable and slower to forward email enquiries than local servers.
Is the site backed up? It’s essential that your site is backed up on a server every week so you don’t lose critical data if a problem occurs(e.g. if it’s hacked into).
What are the support and training costs? Are these within your budget?
Will they be responsible for the artwork and creative or is that something you have to take care of? Will they upload the foundation text and images?
How long will it take for the site to go live? Most developers will say six to eight weeks from when they gather all the materials.
Can they provide a timetable of milestones for each stage of development? This will help you keep track of their progress.
What is the cost of initial search engine optimisation (SEO) and for ongoing SEO?
Can they build email capability into the site and provide analytics for the database? This will assist in capturing and evaluating data.
Will Google Analytics be running on the site and will stats be available on the website’s dashboard? Google Analytics show web traffic and conversion statistics, so you can gauge how well your site is doing.
Will there be an extra cost to add pages down the track?
Can they add social media icons to the site? This is essential to allow visitors to share your content.
Can they add custom forms for capturing information and does this feed into the database on the site?
Which areas are changeable and which are static? Are you happy with not being able to change the static areas?
How will images be managed in the back end? Is there a gallery? Make sure you know how to use it.
Do you want your home page to include web banners? These might be occupied by your own ads, Google Ads, or other advertisements.
Can they integrate a blog or news feed (RSS)? These are central to any content marketing strategy.

With these questions, you’ll more likely get a website that not only meets your needs, but stays within your budget.

What other questions would you ask a web developer before hiring them to build your site?

Finding the right business consultant

2013-06-07T07:30:00+10:00

Without the benefit of a trusted referral, engaging a business consultant requires very careful consideration. Here are some essential things to think about before making your choice.

When evaluating a potential consultant, you need to put them through a comprehensive selection process – just as you would an employee or business partner.

Expertise is important, but it needs to be coupled with a compatible personality – someone who is concerned with improving your business, not just their bank balance.

Consider the criteria below before engaging a consultant to ensure you find the right person.

Experience

Any potential consultant ideally should have worked for a number of different organisations. Look for a mix of experience in:

Business size: If the consultant has worked with small business they will be more likely to understand your business and be able to work creatively with fewer resources. Large organisations, although bureaucratic, tend to have more money to spend, so if your consultant has worked with big companies they may have had exposure to some great ideas that they could implement for you.

Type of work: Business consultants might have a variety of experience in everything from sales and marketing to financing and business growth, or they might specialise in a specific area. Make sure their experience matches up with your business’s needs. In addition, the nature of their previous work will also shed light on their ability to make certain changes in your business.

For example, there is a huge difference between having used a system or process and having implemented, improved or managed it. If you require your consultant to implement a business system make sure they have had experience implementing previously. Experience in both is ideal.

Customised service

There are some consultants who have a ‘one size fits all’ approach. They will try and tell you it has to be done a certain way, not because it has to be but because it’s what they have always done, or because it fits in with their templates. A good consultant will listen to your requirements, consider your business circumstances and customise their service to best suit your needs.

Equally a good consultant will guide you appropriately and if they don’t agree with your approach. They will explain why and list the consequences of proceeding in your original direction, propose alternate suggestions and possibly even provide you with examples or other resources for you to make up your own mind.

Working relationship

Within minutes of meeting your consultant you’ll get a sense of their consulting persona, and whether you’re compatible. Do you really want a consultant who talks about themselves excessively? More likely you’ll want a consultant who is genuinely interested in your business, asks what you want from the process, and gives you examples of similar work they have done previously.

Remember that this person will be working with you (and others in your business), so if they give you the impression that they are doing you a huge favour by taking you on – then run! If you think you would have trouble working with the consultant, are you really going to get the maximum benefit of their expertise?

Other happy clients

Most consultants will have a number of testimonials on their websites. Why not ask the consultant if you can speak to someone they have done similar work for? A consultant who has genuinely satisfied clients should be happy to provide you with a contact. One other tip: beware of recommendations on LinkedIn. Do you know how well the referrer actually knows the consultant?

Ongoing support

When a new process is implemented there is a concerted effort by the business and consultant to make it run well. This may require diverting resources from other areas of the business. This usually isn’t sustainable long term. During implementation, ask your consultant for advice on ongoing management.

Take the time to carefully choose your consultant and you will be rewarded with a more beneficial experience for your business.

Other than word of mouth, what are your tips for selecting a good consultant?

Up & Away: Marc Wittenberg, perfume bottle designer

2013-06-06T07:30:00+10:00

Marc Wittenberg’s line of work is about as niche as it gets. He shares his insights on why being unique is so important in business, and how to do it.

Marc Wittenberg is a packaging designer specialising in fragrance bottles. Originally from Germany, Marc runs his solo business, Iconomy, from his home in Bondi and has done so for the last 11 years. At its peak, Iconomy turned over $1.2 million annually, with around 80 per cent of that as pure profit. It’s the kind of success that has set him up in a way that he can afford to “be a bit lazy" now.

So how did he do it? He tells Jodie McLeod.

JODIE MCLEOD: How did you get into designing perfume bottles?

MARC WITTENBERG: It started when I was working in England for a packaging design company. I was asked by my former boss in Germany to come back to run all the international accounts. They had a lot of cosmetic and perfume clients like Joop, Jil Sander, Gucci and Dunhill.

I was only there for under two years and because of personal reasons I decided to go to Australia and leave it all behind – a massive salary included.

I never approached any of my former clients, but they suddenly contacted me out in Australia and said, “We would like continue working with you.” Initially, I ran the first job through the company I was working for out here, but after they came back again, I thought, this looks silly, they really just want me. Why don’t I go out by myself?

JM: Why did those clients want you?

MW: I got their attention because a lot of my jobs were achieving massive success. Me and my business partner at the time, Vanessa, were looking after the cheaper range of fragrances for Procter & Gamble, such as Christina Aguilera, Avril Lavigne and Anna Sui. They are not as prestigious as, say, Dolce&Gabbana, but in terms of design – probably much more fun. And ironically, these designs were making the money.

JM: Would you say you carved or fell into this niche?

MW: It is a combination of – it found me and I was probably right at the right place at the right time. And I’ve got certain talents in drawing and in expressing things and then visualising things. And it’s probably also a lot of luck involved. A lot of hard work and a lot of luck.

JM: How important has finding this niche been to your success?

MW: I’ve been lucky that I am in an industry which has got very few players.

Success [like this] happens because, firstly – you are one of very few. You are unique, which means you can charge a little bit more. Secondly, you are only as good as the last job you’ve done, so Iconomy had to work very hard to produce consistently good designs.

And then there’s something, especially in the creative industries, which you can’t really gauge. Because who is able to measure beauty? Who is able to measure what is fashionable? Who is able to know what is wanted at any given time by a 22-year-old Japanese consumer, for example?

I can’t even explain it. But somehow, somewhere, I seem to be good enough, and again and again, I was able to do the right thing.

JM: How important is packaging in making people want to buy a product?

MW: When I was working for biscuits and detergents and other things, if you wanted to increase sales, you would not change the product at all. You would not advertise more. The formula stays the same. The only thing that you change is the wrapper. Maybe a different picture, different branding – you modernise it. And on occasions, we would have sales increases of 50 per cent without any other additional support.

This sounds completely nonsensical because people are buying the product – the muesli or the chocolate. Why are they suddenly rushing to buy it when you’ve only changed less than a millimetre of surface thickness of the wrapper? And no one can explain it, but that’s the way it is.

JM: So what makes a product stand out on a shelf?

Embodiment of the brand ...
Iconomy's design for Christina Aguilera's signature fragrance

MW: We named our business Iconomy because the idea was to create icons. For example the Coca-Cola bottle is an icon. An Absolut Vodka bottle is an icon. People recognise the silhouette without it having any colour on it or liquid inside. In the perfume world, Jean Paul Gaultier [‘Le Male’ bottle shaped like a torso] is an example of this.

Jean Paul Gaultier probably has launched another dozen fragrances but that bottle is the one everybody remembers. So this is the aim – to create something which is not run-of-the-mill. Something very different, but which is also the embodiment of the brand.

JM: What’s next for Iconomy?

MW: I’m happy to go with the flow. If my recent clients start asking for more, then I’m happy to explore those avenues. But if it discontinues, then that’s fine.

Years ago I started to get more into yoga and the philosophy of yoga. There are so many facets to it but one of the centre points is – you sort of go with the natural flow. You don’t fight or you don’t work against what is happening.

I used to have this glamour life but Yoga also taught me not to be attached to any of it. A person is not defined by their work. There is more to me and if this stops then something else will happen. I’ll be turning 50 soon, but I don’t plan on retiring. I would like to work until I fall over.

JM: What’s your advice to other business owners on how to find their own niche?

MW: I read an article recently in which the person being interviewed said: don’t try to be like someone else. If you try to be someone else, there is a high chance that that person does it better. I agree that you need to be yourself. Do what you think is right. Trust your instinct. Have your own ideas and work things out. Yes, pick up on good stuff you find in someone else. Learn from other things. But essentially, be real. Don’t be a copy. Don’t be a cheat. Don’t pretend. Be honest to yourself and create something true and valid and valuable – and then I think you are unbeatable.

JM: What’s the best thing about flying solo?

MW: Wow. Gazillions of things. If you work in any business, you have to deal often with, to put it kindly, silliness sometimes. So when someone tells you what to do and you know it could probably be done better but you still have to do it. You have to do this sometimes for clients too, but the main difference is if you work for yourself. If you work for a company you also have to struggle within the company you work for.

Has Marc’s experience made you think differently about finding a niche, or about the importance of product packaging? Please share your thoughts.

Content marketing in an hour a week

2013-06-05T07:30:00+10:00

Creating content for your website has many benefits for business, but it can also be time consuming. Focusing on one key activity – blogging – and refining your process can make it more time efficient.

Content marketing has gained traction in the last few years and rightly so. It is an incredibly powerful marketing tool for your business – especially if you don’t have a big marketing budget.

Content marketing can help your businesses by attracting more traffic and customers to your site, positioning you as an authority, building trust with your audience and influencing people to buy from you.

As with anything new, it can be difficult to know where to start with content marketing. Looking online will probably leave you feeling overwhelmed that there are a 100 things you have to do as part of content marketing. Not true.

My suggestion is to focus on one key form of content marketing first rather than trying to master everything at once. Writing a blog is the most effective and achievable way to engage your audience with your brand using content. The following four steps will get you started with blogging and help you maintain your efforts in a time efficient way.

Step 1 – Set up a blog

Speak to whoever built your website and ask them to add a blog.

Ideally it should live within your site as that is where traffic will be heading and visitors will want to browse for more information. So it’s best if this happens in one environment.

Step 2 – Create a topic list

> 15 minutes per week

People buy products or services from you because they solve a problem or make their life easier. In the process of buying, customers ask questions and these are a great source of content topics. ‘How to’ articles are great examples of blog posts that answer common customer questions.

Write down as many customer questions you can think of and browse your ‘contact us’ emails for others. Online forums and LinkedIn discussion groups are also a great way to find out what problems and questions people have relating to your product or service.

You can even get on the front foot and solicit them in your processes. If people sign up to your site/newsletter then this is an excellent opportunity to include a ‘What’s your biggest challenge?’ type question.

Going forward, you should be vigilant during conversations and record the questions people are asking you. There is nothing worse than sitting down to a blank screen with no ideas!

Step 3 – Blog at least once a week

> 30 minutes per week

Your blogs don’t have to be long. Between 300 and 500 words is plenty. To minimise time spent writing, aim for 300 words. Writing in your own conversational voice will also help the words come easier. Blog at least once a week, every week. It’s important to set time aside and be disciplined, as posting regular content encourages readers (i.e. potential customers) to return to your site.

Once you have finished writing a post, check that it answers a customer’s question or addresses a problem. If so, you are on the money.

Step 4 – Re-publish content

> 15 minutes per week

A blog doesn’t have any value if no one knows about it. You have to get it out there and promote it. Here are some simple ways to spread the word about your content.

Post it to your Facebook and/or Google+ page
Tweet the link
Post it on your LinkedIn profile and in relevant groups
Include the title and a link in your email signature
Email it to your database
Approach industry relevant sites to re-published your post

So, in just one hour per week you can create regular, valuable content that helps attract more customers to your business. And now that you’ve mastered your blog you can go back and do the other 99 things on the content-marketing list!

How do you make content marketing more time efficient?

Cheer squad practice

2013-06-04T07:30:00+10:00

Everyone needs encouragement, but there’s not enough of it around. Here are some ideas for how to be more of an inspiration to others.

Say thanks and well done

When you’ve enjoyed great customer service, an amazing meal, a provocative blog post or have otherwise been impressed, let the people responsible know. Everyone is grateful when their efforts are appreciated.

Say ‘keep going’

If you can see someone is having a hard time and you’ve been in their position, offer up your insights. Your support could be just what they need to help them renew their drive.

What if they were on the verge of giving up and your words gave them staying power?

We do this naturally with those close to us. After I had several particularly restless nights with my newborn my friend said, “Back when Louis was a baby you told me ‘you will enjoy a good night’s sleep again’ and you were right.” I was pleasantly surprised to be on the receiving end of my own echoed encouragement. Dubious, of course, but pleased nonetheless.

My experience is soloists are very supportive of one another and those not long in their business are particularly appreciative of encouragement, so go forth and give!

A thoughtful present

If you see something and think ‘my client/partner/friend would like that’ then buy it for them. If budget doesn’t permit, tell them about it. I find buying gifts based on a gut reaction more effective than buying because a birthday or anniversary is coming up. Panic buying is no one’s friend.

Move and shake

My friend has a new hifi installation business and needed a website. Another friend, an absolute music nut, has a web design business. Admittedly I don’t always get this right but this time, after I put them in touch, the pair entered an exciting and engaging project.

Relevant connections are always welcome, even if they don’t always come off, so if you’ve been thinking of introducing two businesses that need one another, my advice is just do it.

I believe if it’s said with heart and good intentions, encouragement is always welcome. Do you agree?

Has a kind word, needed gift or an awesome idea given you a shot in the arm lately? I encourage you to share your experience in the comments.

Meantime I’m holding out for that good night’s sleep.

Podcast: Comfort zones, spell-checks and marketing tips

2013-06-02T07:30:00+10:00

Funny Business with Tim Reid and Andrew Griffiths plus three marketing lessons from the city of Saigon!

Tim Reid is just back from giving a marketing keynote in Vietnam and shares three marketing lessons from the city of Saigon. In this Small Business Big Marketing podcast:

Timbo shares a recent happening with a Scoopon experience.
Timbo and AG discuss those embarrassing moments when spell check lets you down.
Timbo and AG share some ideas about how to maximise business from an existing client.
AG suggests the comfort zone is a dangerous place to be for small business owners.

Duration: 42:03 minutes

Links to resources mentioned in the show: http://smallbusinessbigmarketing.com/funny-business-6-tim-reid-andrew-griffiths/

To subscribe to this show in iTunes, please head here.

Cash vs. accrual accounting for small businesses

2013-06-01T07:30:00+10:00

Many small business owners record their transactions using cash-basis accounting, but could the accruals method be more appropriate? Learn the difference so you can make better accounting decisions for your business.

Cash vs. accruals accounting often confuses clients, as either method can be used for different purposes, such as tax, GST or overall accounting. Business owners need to understand the difference and be aware of the implications of each method to decide which approach is best for their business.

Difference between cash and accrual accounting

Cash accounting is recognising the income and expenses in your business when they are physically paid rather than on receipt or issue of an invoice. Many business owners when starting out often use a simple, basic cash system, because it helps to keep track of cash flow.

An accrual accounting system recognises both income and expenses on receipt of an invoice or bill although not yet due for payment. This system will create debtors and creditors in your accounting software, showing what you owe and when, as well as funds owed to the business from your customers. In today’s tough business environment it is more important than ever to monitor your debtors closely and have a good system in place to reduce the number of days awaiting payment or, worse still, avoid it becoming a bad debt that has to be written off.

The benefits of accrual accounting

I believe there are greater benefits for small business owners of using the accrual accounting method. Not only does it help them understand their business better by highlighting their true financial position, but, more importantly, it highlights the cash-flow effects of collecting debtors and paying creditors.

To see these benefits it helps to compare your business situation to a personal one.

Consider this: When it comes to your household utilities, when do you recognise your debt? Is it when you receive the electricity or telephone bill; is it on receipt of the invoice, or is it when you pay bill?

In the context of your personal accounts, it makes sense to recognise the debt when the bill arrives to help you keep track of money that you have and don’t have, no matter the account figures. The same goes for your business accounts.

Implications of accruals for GST

Small businesses whose annual turnover is less than $2 million and greater than $75,000 are able to choose to register for GST on either a cash or non-cash (accrual) basis. Businesses with a turnover greater than the threshold must account for GST on a non-cash (accrual) basis while businesses with a turnover less than $75,000 are not required to register for GST but may choose to do so.

How you choose to register for GST may greatly affect the cash flow of your business, as GST is payable on sales for which payment has not yet been received, This could leave you out of pocket for a time. However, GST can also be claimed on unpaid expenses if you hold a tax invoice.

Whether you’ve registered for GST on a cash or accrual basis will also affect your financing of large purchases for your business. With accruals, GST is claimable upfront, so it might be of benefit to your business to use this method.

Taxation

This is probably the touchiest topic as no one wants to pay the taxman more than they have to. Again, many businesses may report for taxation purposes on a cash basis even if they process their accounting as accruals. According to the ATO Taxation Ruling TR 98/1, the accounting method adopted for income tax purposes should be the most appropriate for the business. The receipts or cash method is likely to be more appropriate for businesses providing a skill or service, whereas the earnings or accruals method may be more appropriate for trading or manufacturing businesses.

Discuss with your tax accountant which is more appropriate and beneficial for your business.

Which method do you use for accounting, tax and GST in your business, and why?

Do you need a bookkeeper or an accountant?

2013-05-31T07:30:00+10:00

When it comes to outsourcing your business finances, it can be confusing as to whether you should hire a bookkeeper, an accountant or a combination of both. Understanding what these number-crunchers actually do will help you decide.

Some finance professionals provide services for all aspects of business finance, while others specialise in certain areas. These specialisations might include choosing accounting software and setting up your accounting system, entering data, preparing BAS, developing performance indicators, producing management reports and finalising company tax returns.

What exactly do these specialist finance professionals do; when do you need them, and what do you need to consider when hiring them?

Bookkeeper

A bookkeeper processes receipts and bills, prepares invoices, processes payroll and chases outstanding debtors. They should have an understanding of how accounting software works; however, they wouldn’t be expected to process complicated transactions. Alternatively, online solutions like receipt scanning (Receipt Bank, Invitbox, and Shoeboxed) or debtor tracking (Debtor Daddy, xocashflow and Bilbus) can replace much of the mundane duties of a bookkeeper.

BAS agent/professional bookkeeper

In Australia there is a concept known as BAS (Business Activity Statements), and anyone who handles these statements for a fee or reward must be a registered BAS agent. In addition to bookkeeper tasks, the duties of a BAS agent include setting up the accounting system, coding transactions, dealing with complicated GST issues, and preparing payment summaries. They can submit BAS online via their own ATO portal and may assist in sorting business accounts in preparation for the tax accountant at the end of financial year. The frequency you engage with a BAS agent typically aligns with how often you report to the ATO. A registered BAS agent meets stringent educational and experience criteria prescribed by the Tax Practitioners Board (TPB). It’s important to be aware if someone charges for BAS-related duties they need to be a registered BAS agent. A list of registered BAS agent associations can be found on the TPB website here.

Software implementation specialist

An accounting software implementation specialist can assist with selecting accounting software, setting up your accounting system, training in how to use the software, and ongoing support. It seems every man and his dog is an accounting software expert so it’s worth knowing the major accounting software providers have their own partner programs, and list accredited partners on their websites. Here is a list of Xero Certified Advisors and MYOB Certified Consultants.

Tax accountant

A tax accountant assists the business in setting up its business structure, minimising tax, preparing financial statements and meeting compliance obligations. Typically you speak with a tax accountant as you start your business, and the old-school method is to touch base with them as issues arise, or at the end of the financial year. As with a BAS agent, a tax agent has to be registered with the Tax Practitioners Board. A list of registered tax agent associations can be found on the TPB website here.

Management accountant

A management accountant assists with strategic planning, business growth, cash flow and budgeting. This in turn assists you in making informed business decisions. A management accountant can also perform a regular review of your financials to ensure you are heading in the desired strategic direction.

With so many number crunchers available, no wonder it’s confusing to try and decide who’s who in the numbers zoo! To further complicate things, businesses offering these services don’t usually fall neatly into the defined baskets, and it’s likely your needs will evolve over time. The ideal scenario is to build a trusted team to support the business, who communicate with one another, understand what is required of each other, what tasks you want them to undertake, and can be called upon when necessary. A single business may offer this complete solution, but don’t be afraid to work with independents who offer you the specialist services, or engage or train staff internally to complete your number-crunching team.

What finance professionals help your business run smoothly?

How to create your own publicity

2013-05-30T07:30:00+10:00

Not every business can afford a PR firm, but it is possible to get publicity for your business on your own. A story is a story, whether it comes from a PR consultant, or you.

Editorial copy is worth three times the equivalent in paid advertising. Why is this the case, apart from the fact that it’s free? Basically, it’s to do with credibility. Everyone knows an ad lauding a product or service has been paid for by the owner.

In the case of editorial, however, we are seeing ‘news’, as determined by a journalist, who is paid to be ‘objective’. Sure, there are exceptions, but it is this credibility that makes publicity so valuable.

Research also shows that editorial is more likely to be remembered long after the memory of most paid advertising has vaporised in the cerebral cortex.

Here are six tips to help you create your own publicity:

1. Determine how your market gets their information

There’s really not a lot of point getting a story about your plumbing business in Business Review Weekly. If you have a very specific market, it should be fairly obvious what media they use. For instance, most young people use social media, while business people are more likely to readBRW, the Australian Financial Review or online news sites etc.

If you don’t already know, you can always ask clients directly, through a survey form. It could be a magazine, it could be blogs, or it could be Facebook. Once you identify which media to target, you can then start formulating your story.

2. Find a news angle

Here are some ideas to get your brain juices percolating:

Human interest – Have you’ve overcome certain obstacles to get where you are? It may not seem like a story to you, but to your local community, your story could be really interesting.
Has your business/product won any awards?
Can you involve a local identity or event?
Can you genuinely help disadvantaged people/animals/children in some way with your business? This can provide awonderful human-interest angle.
Tap into seasonal events or hot news topics that have some relevance to your business by offering some specialist advice, such as romantic ideas for Valentine’s Day, or budget tips for a recession.

3. Devise a fantastic photo opportunity

Great visual opportunities can be a huge draw card for the media. Going to a small amount of effort to organise props or set up at an interesting location could be just the thing to get you noticed by a journalist and photographer.

I once brought in some husky dogs when promoting an expedition to the South Pole. We got lots of TV and print coverage with those gorgeous canines – and the dogs didn’t even need to set paw on any actual ice – the expedition was using kite sleds! (That was part of the story).

Of course, you do need a story, but if you can make it easier for the media by providing lovely visual options, so much the better!

4. Make it easy for the media

Prepare a simple one-page media release that you can email to your target outlet. You only need three or four paragraphs that summarise your story – and you don’t have to be a Pulitzer Prize-winning writer. Include your contact details and try to prepare a short, catchy heading.

WARNING: Don’t make claims that are not true. You will be found out and your credibility will be gone forever.

5. Be creative

You’re the one who knows your business best. Why not try to think of some creative ways of developing a profile for yourself that promotes your expertise and the “brand” of your business? You could approach a paper about setting up a weekly advice column, or a talk-show spot.

6. Be persistent

If a journalist is not interested, try another media organisation, another journalist or another story idea. One thing PRs are not known for is a thin skin!

Try and think of new angles every few months to build up your profile. You could target new types of media or go back to the same journalist and work on building a relationship with them and – before you know it – you too could be managing your own bubbling PR campaign!

What are your tips for creating your own publicity?

Five questions to ask before selling your business

2013-05-29T07:30:00+10:00

Whether you’ve always had an exit strategy in place or it’s something you have only just started thinking about, here are five essential questions to ask yourself before selling up.

Is selling a good idea?

We’ve all had those days – whether it’s a change in personal circumstances or a run of less-than-ideal business dealings, there are times when selling your business seems like a great idea.

It’s really important not to let these external and possibly temporary influences make such an important decision for you. If presented with any of these common reasons why people consider selling, make sure you analyse the pros and cons.

Your personal circumstances have changed: Perhaps you’re nearing retirement, you’re relocating or your family situation has altered. Start researching your options if you don’t have an exit strategy already in place but don’t make any sudden moves.

Your business isn’t doing so well: It may be tempting to sell when your business isn’t living up to expectations, but you are not going to get the best price if it’s not in good shape. If you really want to sell, spend some time getting your business organised before you look for a buyer.

You’ve been approached by a potential buyer: Good for you! Make sure that selling your business fits with your overall goals, personally as well as professionally.

Is my house in order?

Clean and clear documentation gives the buyer confidence that they are purchasing a stable and robust business, which in turn means a better price.

Potential buyers will look at the following:

Financial records – usually around three years’ worth of historical information.
Financial forecasts/plans – a good business practice in any case but critical if you want to sell your business.
Your corporate structure – is it set up in a way that is simple to transfer to another party? If not, make those changes now but bear in mind there may be tax implications.
Key contracts – both suppliers and customers.

Do I have the right professional support?

Legal and financial advice are essential to protect you during and after the sale. Some points to consider are:

Ensure potential buyers sign a non-disclosure agreement (NDA) before you give them access to your information.
What are you selling? Selling shares vs. the business vs. specific assets all have different legal and tax implications.
Limitations on liability after you have sold your business. Some buyers may insist on unlimited liability for aspects you disclose during the sale process. As a seller you want to limit this as much as possible.
Ensure your books and records are up to date and complete.
Seek advice on adjusting your records to strip out any unusual or non-recurring activity (aka normalising adjustments).

How much time am I willing to invest in selling my business?

Selling a business is a time-consuming process. You may need to take on additional support in administration, finance or sales so your business does not suffer. If you are not successful in selling you don’t want to return to a broken business.

How much is my business worth?

There are a number of ways to value a business, including:

Discounted cash flow: This method starts with the financial projections of the business over a number of years and calculates how much those future cash flows are worth today. This works on the principle that $100 today is worth more than $100 in a year’s time.
Revenue or profit multiples: Your current year revenue or profit is multiplied by a factor common to similar businesses in your industry.
Cost to create: How much would it cost a potential buyer to build the business themselves? The theory is that they would pay this much plus a convenience premium to buy a ready-made business.

Essentially a business is only worth what a buyer is prepared to pay for it, but getting a clear idea up front of what is a reasonable value allows you to assess offers more confidently.

Have you considered selling your business? What other questions helped you decide it was the right or wrong time to sell?