Four Overlooked Things That Should Matter to SME Owners
It’s fairly easy to compare owning or running a small or medium sized enterprise (SME) with juggling what can feel like dozens of “balls” in the air at any one time. Keeping on top of quotes, managing inventory, staff scheduling, managing emails, and dealing with suppliers – at the same time as providing great service to your clients – can all be part of each day.
This juggling often leads to us having “I’ll get to that when I have time” thoughts.
But while some of these can be put off until later, there are some that should be prioritised.
Cash Flow Matters
There is an old saying in business that ‘revenue is vanity, but profit is sanity’. Those things may well be true, but for SME owners, cash flow is a lifeline. It’s entirely possible to earn a great living from your business but still not have enough to pay the monthly bills.
That’s because SME cash flow is often irregular or “lumpy”, week to week or even month to month. And while collecting revenue from customers might be irregular, you can bank on the fact that your bills will be as regular as clockwork.
You can alleviate cash flow problems using simple tools like a cash flow calculator or wall chart to map your significant and predicted expenses, while quarantining a portion of funds from each job for unpredictable eventualities.
Don’t fall into the trap of many business owners and forget to set aside regular amounts of money for taxation. The Australian Taxation Office (ATO) has a range of payment methods and options to help you to manage your taxation obligations in a way that has the least impact on your business, including quarterly or monthly pay as you go instalments.
Talk to our team here at Scott Partners, or the ATO directly, to get professional advice on managing your tax proactively.
Superannuation is part of a three pillar policy that is designed to help Australians enjoy their retirement.
But, as it is a mandatory employer contribution, if you are self-employed, you need to either have a self-managed super fund or an account with a managed fund (if you don’t have this set up already, ask us for recommendations). Your business will contribute to this fund at the current rate, and will be penalised if those contributions are not made.
The satisfaction of running your own business comes with the uncertainty of what happens if illness or injury stop you from working.
Income protection insurance is a non-negotiable when you are the owner of a SME, as there is no safety net that you can access in the event your business has to shut its doors while you recover. This is perhaps the most obvious “no brainer” on this list, but also the most overlooked – which is amazing when you consider that insurance plans start from just a few dollars a week.
Owning or operating a SME can be incredibly rewarding and busy at the same time, but set time aside in your schedule to consider each of these things, if you haven’t already.
If you would like some professional advice or guidance, please don’t hesitate to get in contact with our friendly team at Scott Partners. We welcome your call today on 1300 640 304 or email us here.