Why do businesses fail – ego or ignorance?
The start of the new calendar year has brought with it a never-ending number of corporate collapses with the likes of Dick Smith, Laura Ashley and Australian Renewable Fuels all being reported in recent weeks. I was recently asked why this was the case. Was it the time of year? Was it that businesses are […]
Are you getting the right financial advice to run a prosperous business?
There can only be three reasons why these businesses find themselves going into administration. Either they are getting poor financial advice, are getting good advice and not implementing it, or are not seeking the appropriate advice in the first place. Most of my experience has been with the latter. It’s not rocket science. Invariably, the […]
How to add thousands to your bottom line
Just like in our own household, waste costs the average family business tens if not hundreds of thousands of dollars every year. However, the business owner doesn’t just incur the yearly cost, but the multiple of that cost when a business is sold. Let’s assume that through a waste audit we can identify $100,000 in […]
Use your customers to fund your business growth: debtor financing explained
One of the reasons businesses run out of cash – and generally go broke – is that they grow too fast. What a paradox – the business is growing too quickly and is therefore too successful for its own good! Not surprisingly, in situations like these you also find that the largest “creditor” of the […]
Funding options available for innovative businesses
The Federal Government has indicated that they are very keen to support innovative businesses. There are a number of funding options available by way of government grants for businesses that can meet the Government qualification requirements. If your company has been “experimenting” to try and solve a problem in your business for which there was […]
My magnificent seven tips to improve Return on Capital Employed (ROCE)
So often we read or hear in the media about the latest fast-growing business. Everyone seems to focus on the growth of the business but what is the real measure of business success? When I review the financial performance of a business, the primary measure I look at is Return on Capital Employed (ROCE). Generally, […]
Cash: can a business have too much?
I was recently asked by a client whether they were holding too much cash in the business. My answer was – it depends. It depends on a number of things as well as the reasons for the cash build up. There are economic, commercial, financial and structural issues to be considered. As a general rule, […]
Three key ratios for business success
I’m often asked by business clients whether a certain dollar profit is good. My answer is always the same – it depends. The fact is, no one can tell you whether a specific dollar profit figure in isolation is a good result or not. It’s just like asking someone whether the $1,000 in interest you received […]
Key lessons for business owners from the Dick Smith saga
The recent collapse of the Dick Smith chain highlights the fact that no business is immune from potential catastrophe. But it begs the obvious question – how can a company as big as this and turning over $1.3 billion – a listed company – fail? No doubt we’ll hear more in the months ahead as […]
Three reasons businesses don’t have cash
There’s an old saying – profit is opinion, cash is fact. That’s because despite making a profit, some businesses still don’t have enough cash to pay the bills. At the end of the day, a lack of cash will kill a business. Since the GFC, banks have been paying increased attention to the cash flow […]
