40 Tips 65040 Business Tips for
Every Small & Medium Enterprise

Keeping your business in tip-top condition

If there’s a universal principle to remember when getting into business, that one rule might be ‘know what you want to achieve in business.’ Business can be a complex (and at times frustrating) affair, but having clear commercial objectives can be the difference between success and failure. We have 40 tips to keep your business in tip-top condition.

Planning for success
1 Return of Investment: Before undertaking any commercial activity, consider how you will see the return of your investment.
2 Business plan: State in your written plan how your investment will work for you. Set a time frame and review your progress against your plan at regular intervals. Every six months, review where you are against where you want to be in your plan
3 Budgets: No matter where your capital investment will be coming from, plan on where and how much of your investment you will need to spend to make your business plan work.
4 Capital raising: Your options to raise finance for your business are your own resources, from borrowings, by seeking investment from private investors or by looking for investment from the public.
5 Know your trading entity: Individuals and companies are legal persons. Partnerships, joint ventures and trusts are (sometimes complex) legal relationships.
6 Governance: The root of good governance is the responsible management of other people’s investment.
7 Reputation: Consider the ‘down side’ of any business decision. Ask yourself, “Would this damage my reputation or business if it went viral on social media, was printed on the front page of the newspaper or put before a judge?”
8 Build good systems: True businesses are systems of routine or repeat processes.
9 SaaS: There’s an abundance of Software-as-a-Service (SaaS) providers that may have an app helpful to your business. Find it, get it and use it.


10 Website: Integrate a website into your overall business strategy. As well as being your virtual shop front, the website analytics can provide you with valuable data about your site visitors.
11 Online sales: Give the paying public reasons to visit your website – as they would your traditional bricks-and-mortar premises.
12 Ask for work: Don’t be shy to Find business, provided you also have the capacity to Mind and then Grind that work.
Business fundamentals
13 Financial performance: Know your financial ratios in order to understand the drivers of your financial performance.
14 Financial reporting: Report profit/loss, balance sheetand cash flow (at least) monthly. Good accounting software should compile and produce these reports for you.
15 Cash flow: Cash flow starts with getting paid and ends when you do not.
16 Solvency: This is your ability to meet your debts as and when they fall due. A test is to divide current assets by current liabilities (in your balance sheet). That ratio should be greater than one.
Running a profitable business
17 Stock-in-trade: Your stock-in-trade is either inventory or work-in-progress. Get customer orders first, then fulfil those orders.
18 Terms of trade: Have a standard (and up-to-date) terms of trade and send it with each estimate or quote. Summarise the payment conditions from your terms of trade on your invoices.
19 Invoicing: Invoice your customers as soon as practical after completing the work (or at each stage) when the value of your good work will be remembered.
20 Payment options: Have several payment options to make it easy for your client to pay your invoice – online or credit card are best.
21 Debtor control: Taking on a customer with a reputation for poor or non-payment of invoices can be more damaging to your cash flow than not taking on the work to begin with.
22 Debt collection: Remind debtors of overdue accounts at 30 days, final warnings at 60 days, start debt collection at 90 days – with reasonable variances permitted.
23 Know your tax liabilities: The IRD should always be the first to be paid. Know your tax liabilities, how they are calculated and pay on time.
24 Pay your taxes: You should never go broke paying tax. If you receive funds from your customers, then you have also the tax to pay the IRD.
25 Credit control: Some creditors are more equal than others but any creditor can (potentially) put you out of business.
26 Foster good rapport with your secured creditors:Secured creditors are likely to have a long-term interest in your commercial survival. They may have securities registered over your business (and personal) assets to protect their investment.
Financial know-how
27 Know the levels of stock-in-trade: Calculate stock-intrade days by dividing inventory (in your balance sheet) by the cost of stock-in-trade sold x 365 days.
28 Know how long it takes to get paid: Calculate the day’s receivables by dividing account receivables (in your balance sheet) by credit sales (in your income statement) x 365 days.
29 Know how long it takes to pay your creditors:Calculate days payable by dividing cost of stock-in-trade sold (in your income statement) by accounts payable (in your balance sheet) x 365 days.
30 Know how leveraged you are: Calculate interest bearing debt to equity ratio by dividing non-current interest bearing debt (in your balance sheet) by equity (in your equity statement).
31 Employees: Create a culture/business environment that makes employees want to work for you.
32 Have employment agreements: Having an employment agreement for each employee is a legal requirement for business. Think about incentives that can spur productivity.
33 Know the entitlements for your employees:Underpaying employment entitlements can have devastating effects on a business, particularly if the underpayments have extended over time.
34 Outsource: You don’t have to be an expert at every aspect of business. Buying-in expertise to your business is a good way of adding-value.
Other issues to consider
35 Insurance: Obtain insurance for your business. As your business grows (hopefully) so will your income. So review the adequacy of your insurance benefit at each renewal.
36 Keep an eye on contract expiry dates: These could be your lease, licenses, insurance policies, contracts with major suppliers and so on. Diarise key dates and act in good time.
37 Personal property security interests: Your creditors may like to charge all your business assets as security for their trading accounts. This may not always be necessary so review the creditor’s terms of trade carefully.
38 Release old personal property security interests: Arrange for out of date and irrelevant PPSA security interests to be released and removed from the PPSR when you no longer deal with those creditors.
39 Expert advice: You have enough to deal with running your business. So ask for help from experts such as us as your lawyers and your accountant, banker and insurance broker.
40 Succession planning: If you don’t intend to maintain or build your business using the tips above, then you’ll need to think succession plan – succession plan – succession plan.

The success of a business rests with the business owner. Plan well, have good systems, believe in yourself and your product or service, and have a clear goal. Above all else, make sure you’re profit-driven.

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