Survival In Business Predicting the economic future and making sure your economic future has a chance08.10.2018
There is always editorials in papers, commentators in the media and occasionally an intelligent conversation over social media as to where we are going economically (big picture stuff) that usually comes down to, who is paying the taxes and who is getting the taxes. (I love starting these arguments).
I read last week that a majority of Australians receive more from the government than they pay in taxes. Those who are in business or have a reasonable income will be paying the taxes. I also read another interesting quote on the financial future –
“The world is exhausted by crushing taxes, the financial ruin of large segments of the population, and dangerous decline in moral”.
It could be argued that this is our situation, but it was written by Ammianus Marcellinus in the 4th century AD about 20 years before the Goths sacked Rome. It appears that financial ruin is part of most state downfalls with the rise of something more extreme.
These things are really for the “Oh great ones” in Canberra and other capitals. We at Your Business Angels are more concerned with the survival and prospected of our clients.
Ammianus Marcellinus also wrote “Anyone who is prosperous may by the turn of fortune’s wheel become most wretched before evening”.
For a business person failure and prosperity need to be seen as close.
There are the important rules of survival that need to be implemented every day to have a chance at survival. Then prosperity can follow.
Here are some really simple rules of business survival
- Pay your taxes. After proper tax planning of course. Over more than 23 years of Your Business Angels we can comfortably say that pressure of a tax debt is more distracting than anything. While the ATO is disorganised and may be slow to chase, when it does it has a huge amount of statured authority to chase you – and the stress will mean you won’t have focus.
- Don’t be an idiot with money – money doesn’t like idiots and it will soon leave. This can happen on a large and small scale. In looking at our clients, many buy their lunch every day. That adds up to $75k which essentially means every 5 years – a house deposit. Then there are those grandiose expenses that your income really can’t afford.
- Get paid. Make sure you are all “legal-ed up” when you give credit to get paid. Especially if you are in the building and construction business. Not getting paid is your fault when it gets down to your creditor chasing you. Also remember that golden rule – never give a consumer credit.
- Do everything for a profit, and never on the promise of more work in the future. That means that you need to understand your overheads and what the real cost of your business is.
It’s important that you develop routines in your finances. These routines are about surviving and then being prosperous. Know your money, know your accounts and practice good “housekeeping” in your business.