Monday, May 30, 2011

Turn Your Business Into a Franchise

Turn your business into a franchise.
According to Wikipedia, a small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorship. However, any small business need not stop at this level. There could be a chance that this will work out for another person or group in the form of a franchised agreement.

Franchising, on the other hand, is practicing another company’s or firm’s business model based on terms and conditions or an agreement.

So here are 10 questions that must be asked to know if a business is good for franchising.

1. Is your business really successful-and different?

It has to be proven that your business has been successful throughout the years and has a good track record. It also has to be made sure that there are is solid evidence supporting this claim.

A business also has to be different and unique in order to catch a wide market base.

2. Could that success be replicated?

A franchisee should not need to acquire new specialized skills but rather be able to apply the systems and methods provided to reproduce the successful operation of the business.

3. Do you have a standout brand?

This is important because franchisees would want a company that already has an established name and a high-level recognition in the market.

4. Do you have detailed, tested business systems?

A franchisee would want to know if all the elements or components of the business are already in place. They should not want have to work things out for themselves.

5. Can your business continue to adapt, evolve, and grow?

Handling a business also means being able to constantly adapt to the changes and challenges around. Competition and new market conditions can destroy even successful companies if they do not adapt.

6. Have you got the necessary skills and attitudes?

Famous business franchises
Being in a business is a tough job to do. When you attempt to extend running your business to running a franchise groups additional skills have to be developed. For example communication skills will be required to train the franchisees.

7. Can you create a realistic market plan?

It is important for the business owner to hire professionals to help in the marketing plan. Since the company is looking for possible franchisees, it is important to be ready with the marketing plan that will help convince possible franchisees. This may include having to promote the franchise brand, help franchisees market their individual businesses and market the company’s franchise offer to possible franchisees.

8. As a franchiser, can you keep adding value to the businesses?

Being a franchiser does not mean staying confident, complacent and relaxed the whole time expecting the money to keep rolling in. Remember that competition always has changing trends and the franchiser has to develop and refine their business model to stay ahead.

9. Will you have adequate financial reserves?

Make sure the company has financial reserves in place to support franchisees in the initial stages.

10. Do you have access to specialist franchising expertise?

The franchiser has to make sure that the company has access to specialist franchising expertise. Franchising involves complex legalities which may be difficult to handle for the business owner themselves. Expert advice is the best option to yield the best results.

Franchising is not a simple thing. It involves larger management coverage and should therefore be well thought through before being undertaken.

Thursday, May 26, 2011

Australian Business Burdens Set To Be Made Easier

The Productivity Commission has been tasked by the Australian Federal government to undertake a study that aims to make businesses easier to operate.

The study will address regulatory reform opportunities and evaluate reform outcomes.

This study will replace the commission’s fifth annual review of regulatory burdens on businesses, seek public submissions and in six months will have to report back to the government.

According to Nick Sherry, the minister assisting on deregulation, a key driver of productivity growth is the ongoing regulatory reform which is being recognized by the Gillard government.

“That is why we have embedded regulatory reform as a core government activity, with a comprehensive agenda aimed at reducing red tape for businesses of all sizes,” said Sherry.

“We are driving this reform process both at a national level through COAG (the Council of Australian Governments) and at a commonwealth level through better regulation ministerial partnerships,” he added.

Identifying regulatory reform opportunities and priorities, as well as evaluating regulation reform outcomes will be targeted by the study. Furthermore, lessons gathered from Australia and overseas will also be examined.

These lessons will be the basis for analyzing possible frameworks in order to identify those areas performing poorly.

“Good regulatory reform relies on effectively identifying reform opportunities in order to prioritize the allocation of resources to areas of the highest likely benefit,” said Sherry.

According to the Organization for Economic Cooperation and Development, Australia was one of the front-running countries in February 2010 in terms of its regulatory reform practices.

“The Gillard government is determined to build on this impressive record, by maintaining the momentum of regulatory reform and making it easier for Australian businesses to operate,” said Sherry.

News Source: Sydney Morning Herald »

Tuesday, May 24, 2011

New Small Business Tribunal Created To Resolve Disputes

In an effort to speed up resolutions to small business disputes and to minimize costs incurred by small businesses involved, a new national small business tribunal has been created by the Australian government.

Nick Sherry, Federal Minister for Small Business, was the one who proposed this tribunal option in an options paper that was released.

The following key ideas are contained in the paper:

1. A National Information and Referral Service - this includes a website and a telephone line that directs small businesses to other services in their area.

2. A National Dispute Resolution Service - will provide referrals and information and offer low-cost mediation.

3. A National Small Business Tribunal - will deal with small business disputes backed by Commonwealth legislation.

4. A Small Business Advocate - would independently represent the interests of small businesses to the Australian government.

According to Sherry, the small business tribunal will serve as a “one-stop shop” for disputes and will be backed up by commonwealth legislation.

It has been found out that one in five small businesses, or about 20 per cent of Australia’s 2 million small businesses, had been involved in a dispute with another small business in the past five years according to the survey conducted by the Department of Innovation, Industry, Science and Research (DIISR). Around 2/3 of these cases were payment-related while around 9 per cent were serious.

It was also further found out that many small businesses did not know where to go with the disputes. However, if they knew, they also hesitated due to financial concerns.

"My aim is to bring about a national business-to-business disputes resolution process that is accessible, prompt and as low cost as possible for small businesses," Sherry said.

He added that the aim of the tribunal is to keep disputes out of court especially those small business disputes that only require low-cost and speedy services.

News sources: Smart Company | Sydney Morning Herald | Herald Sun | Queensland Business Review

Monday, May 23, 2011

ACCI says Small Business Confidence Stays Weak

A business lobby group says that the confidence in small businesses has remained weak. This is primarily because of the high Australian dollar and the likelihood that interest rates will be raised.

The index for business conditions was 43.8 points in the March quarter which is only higher by 0.1 compared to the previous period. This was revealed in the small business survey by the Australian Chamber of Commerce and Industry or ACCI. Figures below 50 indicate a contraction in the economic conditions of small businesses.

They had expected a better performance of 49.3 index points.

"Over the March quarter, most small business growth indicators and confidence have continued their declining trend amid the strong Australian dollar, the prospect of rising interest rates and taxes and continued global uncertainties," said Greg Evans in a statement on Tuesday. Evans is the ACCI Director of Economics and Industry Policy.

Furthermore, he said that "The survey also highlights that small business performance continued to fall significantly behind its larger counterparts."

Only wage growth and non-wage labor costs rated above 50 points while 6 of ten components in the survey fell during the quarter.

According to Mr. Evans, the federal budget did not alleviate the costs of doing business in the near term and that disappointed the sector.

"Instead, some measures in the budget will negatively affect their sales and increase taxes payable in certain circumstances. The possibility of further increases in interest rates over the next few months, impending higher energy costs and the possibility of across the board minimum wage increases will further impact on small business profitability and viability," he said.

Most indicators of the survey indicate conditions will be better in the June quarter.

News Source: Sydney Morning Herald »

Wednesday, May 18, 2011

Survey Indicates Good Times Ahead for Businesses

Tough weather and economic conditions may have hit Queensland earlier this year, but a recent survey says Queensland’s businesses remain upbeat.

Although Queensland was found to be below the national average in terms of “happiness”, its outlook is positive. This was according to Westpac’s Local Business Sentiment Survey.

“What we found interesting was that even though Queensland is doing it especially tough it registered a happiness score of 58, just under the national average,” said Westpac General Manager SME Segment Sian Lewis. “This shows a particular resilience in the Queensland business community – I would have expected them to be a little more off the pace,” he added.

Queensland, Tasmania, and the Northern Territory all ranked under the national level but small businesses in Victoria, Western Australia, and the ACT ranked more than 60 in the “happiness index” of businesses in Australia.

Another result from the survey was that 2 out of 3 Australian businesses indicated that “business is good” and that 57 per cent of those surveyed say that a stronger performance may be expected in the next six months.

While the biggest headaches of small businesses are managing business costs, driving sales, and employee performance, the positive factors included positive customer relationships, meeting personal goals, and strong operational performance.

Local business forecasts remain positive even with the recent financial and natural disasters that hit Australia.

Profit targets are expected to be met by more than half of all small businesses in Australia and 25 per cent thought their businesses were likely to do better than expected.

There were 2500 answers from respondents coming from Westpac’s business customers that were collated for the survey.

News Source: Queensland Business Review »

Monday, May 16, 2011

$5000 Tax Write-off For Australian Small Businesses

Realizing that small business operators are going through tough times with this current economy, the Australian government is giving an instant tax write-off of the first $5000 of any motor vehicle purchased from 2012 to 2013. This offer is intended for small business operators. This is because small businesses comprise 96 per cent of Australian businesses and are the backbone of the Australian economy as stated by Treasurer Wayne Swan.

Of Australia’s 2.7 million small businesses, it is the motor vehicle that is the main capital item. This offer will certainly improve cash flow and help business owners expand and reinvest.

This measure is seen as a part of the government’s tax reform programs that are to be introduced in 2012 to 2013 that will provide a write off on all assets that are valued at below $5000. The measure is estimated to cost $1.7 billion over the forward estimates.

Currently there are two depreciation pools with different depreciation rates. There is also planned a reduction in company tax rate to 29 per cent for small businesses.

These tax reforms will be available to all types of small businesses including sole traders. Businesses operating through trusts, partnerships, and companies are also eligible.

This new measure replaces the Entrepreneurs Tax Offset. It was recommended to be abolished by Australia’s Future Tax System Review (AFTSR) due to its high compliance cost and poor targeting. It concluded that the ETO is a disincentive for small businesses.

Since the ETO was only available to small business with turnover of less than $75000, there are 2.3 million small businesses that were not able to utilize the of benefit.

News and Image from: International Business Times »

Monday, May 9, 2011

Response for SME Accounting Standards Beyond Expectation

Roger Marshall
According to Roger Marshall, Accounting Standards Board Chairman, there are more than 200 responses received for the consultation on International Accounting Standards for SMEs. He noted that “this is more than expected, although not much more.”

Marshall added that there were “no huge surprises” because of the level of consultation that was held during the past few months. He continued to say that it will also take some time to digest all the contributions.

The respondents were concerned mainly on the efforts to simplify the FRSME. This can be done by removing some of the options available under the full IFRS. Revaluation and development cost capitalization are included in the options. These are of particular concern to small groups and housing organizations.

According to Marshall, another point of contention involves the distinction between the users of FRSME and the users of the full IFRS. Pension funds, among others, are questioning why they are forced to use the more complex standards. They insist on sticking to the simpler rulebook.

As the ASB shall be working on responses, updates will be posted online. According to Marshall, it may take until autumn to examine all the themes but a full report will be available in late 2011.

News and Image Source: Accountancy Age »

Thursday, May 5, 2011

SME Confidence Now Back Despite Worsening Conditions

The National Australia Bank’s SME Quarterly Survey for the March Quarter has shown that the confidence of Small to Medium-sized enterprises is back after the floods that occurred last December and January.

Demand was the only constraint to SME’s that had a significant rise. Borrowing costs, staffing, global economic uncertainty, and cash flow were considered less significant constraints on long-term decision making in the March quarter.

There are signs of optimism that are seen but it is still a challenging time for SME’s. This is according to NAB Business Australia Executive General Manager, Daryl Johnson.

“During the March quarter, SME confidence levels were up from five to eight (index) points, with all SME industries returning to positive territory,” Mr. Johnson added.

He said that “this suggests they are more optimistic about future conditions and are looking forward to the post-flood recovery period. Despite this optimism, SME business conditions have remained on a gradual decline from the post-GFC peak in December 2009, pushed down again by the recent floods that are estimated to have reduced national business revenues by 5 per cent in January.”

Western Australia and Victoria recorded the highest levels of confidence for the second consecutive quarter. Confidence levels are positive across each state. However, business conditions deteriorated in all major states except for South Australia. Queensland, on the other hand, has the largest deterioration while Victoria has the strongest.

“Fifty eight per cent of SMEs report that sales and orders are a more constraining factor on output than finding suitable labour (45 per cent). Regarding profitability, 40 per cent of SMEs surveyed believe demand remains the most significant profitability constraint in the next 12 months, while availability of suitable labour (13), wage costs (11) and interest rates (8) were less significant,” Mr. Johnson said.

The survey revealed that industry-wise, the strongest was business services and finance whilst the weakest was construction and retail.

News and Image from: International Business Times »

Tuesday, May 3, 2011

Accounting Software: Essential For Every Business

Accounting Software plays a vital role in business owner’s ability to stay on top of their companies finances.

The Planning Shop President, Rhonda Abrams, shared with USA Today that managing money should be viewed by entrepreneurs as just as important as making profits. She emphasized that the use of accounting software will assist greatly in achieving this. Accounting systems keep track of accounting records far better and much easier than manual methods.

Accounting software also allows businesses to examine trends and make projections. Abrams also advised the importance that bills and invoices are dealt with on time, to keep a reserve of money from major deals and to limit the credit offered to individual clients.

Ms Abrams added that, “A few simple steps and you'll be on your way to an excellent credit rating, a great relationship with a bank and a good night's sleep.”

It can also be noted that last month, accountancy expert and author, Karla Dennis, told Entrepreneur Magazine that accounting software helps eliminate avoidable tax errors.

News and Image Source: »

Monday, May 2, 2011

Why You Should Learn Accounting

Every business is started with money, time, and effort. Therefore, like a flower, it needs to be nurtured, cared for, and showered with attention. Everything has to be done in order to ensure that it grows and matures and eventually, bloom and bear fruit. If the opposite is done, the business will go down the drain.

That is why it is very important for a business owner to take matters seriously and understand the reasons why one has to be familiar of the business. Here are a few tips of what the business owner must do in order to ensure the life of the business.

First thing is that the owner should really learn the basics of accounting. Terms such as accounts receivable and accounts payable, accrual and cash basis, and others have to be familiar to the business owner.

Another thing to remember is that the owner should deal with the situation of the business at face value. Issues and problems should not be set aside or just assigned to any employee. By not doing so, the owner will not only see the problems but also the advantages and potentials for growth of the business. The fear of not being able to comprehend the figures is only going to last the first few days. When you’ve gotten the feel of the business, everything will fall into place.

Money matters should not just be put on the shoulders of the company’s accountant. If there is one who should know everything, it should be the owner. Letting the accountant have the key to everything could promote or encourage conspiracy and put your business in jeopardy. That is the reason why there are celebrities and professionals who end up crying in public because their accountants have fled with their money. Also, when there are discrepancies in the taxes paid to the government, it is the business owner who is chased and not the accountant.

CBA: Business Credit Not Yet Seen To Go Up

This year is not the time for business credit to surge. This has been seen especially with the country’s biggest lender stating that the “engine drivers” of economic growth are not borrowing cash but are holding on to it.

The major banks’ prediction of a sizeable rebound in lending to small and medium sized enterprises, and the pickup of the number of loans given to companies in the 2 million or less category in September 2010 gave the industry hope of a sustained recovery especially with the increased demand from small businesses. However, these hopes have been stalled by a subdued retail sector and the natural disasters in Queensland, New South Wales, and Victoria.

Business lending in February, according to APRA, increased by 0.6 per cent which worked out at an annual growth rate of 7.2 per cent. This was considered by Deutsche Bank analyst, James Freeman, as a significant rebound.

National Australia Bank leads the charge followed by ANZ and CommBank. Behind them is Westpac. In the regional sector, Bendigo takes the lead. BoQ declared that its lending to the SME sector for the six months up to the 28th of February increased slightly from $100 million to $5.3 billion.

While Deutsche Bank suggests on not dwelling too much on February lending figures, CommBank also said that there had been a slow start to business lending in the first three months of the year 2011.

The bank said that “while there has been some pick-up in activity, we don't expect a boom. This is largely due to the number of businesses sitting on more cash. Instead, we expect growth levels to be steady over the remainder of the year.”

News Source: Sydney Morning Herald »
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