I
T'S
A NEW YEAR- A GOOD TIME TO PLAN AHEAD FOR YOUR BUSINESS
Reasons for
Preparing a Business Plan
- It
is a valuable tool for the
development, expansion and ongoing operation of a
business, whatever the sector the business may be in
- It
helps the business to work smarter, not harder
- It
will be necessary when you are selling the business to investors and
lenders
- It
specifies the objectives of the business and how these are to be
performed
- It
enables you to think through your ideas and exposes possible
shortcomings (such as lack of sufficient market research) that you need
to address.
- It
forecasts the assets that
will be required by the business to achieve these objectives (plant,
vehicles, buildings, staff, cash)
- It
enables the businessman to establish what commitment he is prepared to
make to the business.
- It
helps build commitment because you have publicly named your objectives.
- It
gives your business a sense of direction and action timelines to reach
desired targets.
- Acts
as a measure against which actual results can be measured and
appropriate steps taken for variances
.
- It
allows you and your staff to measure progress towards targets, which
leads to a shared sense of achievement (and makes recruiting more good
staff easier)
-
It builds credibility and convinces others (including lenders) that you
know what your doing and where the business is heading.
- Planning
significantly increases chances of success. It enables you
to perform better than you would without a plan. Research
shows that businesses that undertake regular business planning have
higher profit margins than those that do not.
Main
Components of a Business Plan
Cover Sheet
- Identifying
information e.g. business name, address, principals
Executive Summary
- Outlines
the business plan, its major objectives, how these objectives will be
accomplished and the expected results
- It
is just a summary so should be reasonably short
Table of Contents
- Gives
headings and page numbers for contents of the plan
History
of Business
People
- Information
about the principals- their positions, experience, skills,
qualifications
- Numbers
to be employed and in which job functions
Location
- Location
- Premises
- Will
premises be sufficient for business plan
- Details
of lease agreement if applicable
Product
- Listing
of its products and services.
- Any
trade marks, patents held
- Past
and future development of the product or service.
- Major
suppliers of raw materials
Marketing
- Target
trading area and customers.
- Promotion
strategy
- Distribution
strategy
- Price
strategy
- Competitors-
who they are, their strengths and weaknesses
Financial
- Indicate
the expected cash flow, profit and loss and balance sheets, financial
ratios
- Project
asset purchase requirements, funding required
- Should
show prospective investors and lenders why they should provide funds,
when they can expect a return, and what the expected rate of return on
their money is.
Appendixes
- Organisational
charts
- Resumes
of the key staff and directors
- News
items
- Letters
of recommendation.
7
STEPS TO PERSONAL FINANCIAL FAILURE
Want to face endless financial
difficulties during your lifetime? There are a few simple things you can do.
For all of you who are sick of hearing all the talk about ways to improve
your financial position, you are not alone, judging by the popularity of
these
7 easy steps to financial failure.
1. Pay no
attention whatsoever to where your money goes
Keeping a budget, tracking spending and knowing how much is in your bank
account could all potentially make you realise that you are frittering away
your hard earned money on unnecessary expenses. This might lead you to feel
that you need to cut down on these areas, so try to avoid any knowledge of
your financial affairs.
2. Use
credit cards for anything and everything
Of course, you want to be
sure that you never pay the card off in full, and of course rather than shop
around for a card that suits your spending, make sure that you choose one
with high interest and fees and no rewards. This way you can be sure to pay
interest close to 20% on everything that you buy, while getting nothing in
return.
3. Don’t
save anything
If you can possibly spend
everything you earn, then do. The last thing you want is to have money lying
around tempting you to invest it – that would only achieve financial
security.
4.
Invest in last year’s winner
If, despite all your
efforts above, you do wind up with leftover money (we can hardly call it
savings if it is purely by accident that you have it at all) then try to
invest in whatever performed best last year. Since financial and investment
markets move in cycles, the odds are against you doing well with this
strategy.
5. Ignore
asset allocation
Pay no attention whatsoever to asset allocation principles, or the level of
risk you can tolerate. Five years to retirement? High volatility is the name
of the game if you want to lose the lot. If you are still young, go
ultra-conservative to make sure your investments don’t keep up with
inflation and lose spending power over time. Ideally, keep it all in a bank
account that pays 0% interest.
6. Put all
your eggs in one basket
Diversification would only reduce the risk of you making a poor decision on
one investment, or increase the chance you’ll pick something of high
quality.
7. Never
seek professional advice
A professional should make sure you avoid steps 1-6, and they’ll probably
find other ways for you to save more, invest wisely and be financially
secure both now and in the future.
Of course, if the idea of sleepless nights, paying endless amounts of
interest, and living out your retirement solely on superannuation doesn’t
appeal, then maybe financial failure is not for you – in which case you
would want to ensure that you avoid the suggestions in steps 1-7 above.
S
ECONDHAND
GOODS AND GST
For GST, secondhand goods are goods previously used and paid for by
someone else. It doesn't include:
- new goods
- primary produce (unless previously used)
- goods supplied under a lease or rental agreement
- livestock
- secondhand goods consisting of any fine metal of any degree of purity.
Land is considered to be secondhand goods.
The same rules for GST and tax invoices apply to secondhand goods as for
all other goods liable for GST.
Secondhand goods if seller is not GST-registered
If the seller is not registered for GST or the goods are private
(exempt), there will be no tax invoice or GST charged. However, if the
purchaser is GST registered they can claim a credit for GST purposes.
Regardless of the accounting basis you use, you must make a payment
before you can claim the credit for the purchase.
In these cases the purchaser must record:
- the name and address of the supplier
- the date of the purchase
- a description of the goods
- the quantity of the goods
- the price paid.
Note
You'll also need to keep details of the transaction if you are going
to make a claim for income tax purposes.