But, believe it or not, this is exactly what has happened to my clients in the last month. It gets worse. Because, in addition, for no additional fee they get to cry a lot. The stress is free too. But the whisky and vodka they drink to drown their sorrows have to be paid for and so far the local bottle bank is overflowing. This needs to be added to the $80,000. Obviously.

So what happened and how do you ensure you don’t end up paying $80,000 in legal fees in a month and end up at the local Alcohol Anonymous club?

Well, two years ago, my clients decided to set up a medical practice and came to me for advice on the best way to set up the practice. The idea was to open more practices. I got the impression that they were good medical technicians but not great as business owners. One of them would concentrate on operations and the other as a GP.

My advice was they should spend time getting their systems and procedures right. More importantly, my advice was that they should see a lawyer and get a proper shareholders agreement in place. The shareholders agreement would determine each partners pay and, should they decide to separate and go their own way in the future, how the medical practices would be valued.

The cost of the shareholders agreement was $5,000. My clients decided it was not worth spending this and did without.

Unfortunately, six months ago one of the partners found out the other appeared to be taking more money out than expected. A whopping $190,000 more than expected in fact. These are still allegations and the other partner believes that as he was working more and as the business had expanded he was entitled to it.

It has become extremely messy and complicated. Both partners are throwing accusations at each other and trust has disappeared. They communicate via lawyers and are arguing about how the businesses should be valued. The business has suffered too with income decreasing. In the last four weeks alone the legal bills are estimated at $80,000. And my fees have not been included yet. There does not appear to be an end in sight so I expect a lot more in legal bills in the future. At some stage one side will run out of money. Or Energy. Or Whisky. Or maybe Vodka.

But here’s the thing. This will not be the first case and it will not be the last one. Out of every ten businesses I advise in getting a shareholders agreement prepared only one will follow through. So if you have a partner in your business and you do not have one, don’t be surprised if you find yourself sitting in front of a man in a suit who calls himself a lawyer and be prepared give him your salary. Stock up on some whisky and vodka too. You are going to need it. Or you can pay $5,000 now and have a good night’s sleep knowing should something go wrong, you won’t have to sell your house fighting for what might be rightfully yours in the first place. Oh, and the weekly trip to Alcohol Anonymous won’t be necessary either.

If you would like to know more about how our bookkeeping Brisbane can save you time and money, please contact us.

But whilst watching it a thought ran through my mind. Is organising, running and fighting a war any different from being in business? And I came to the conclusion is may not be that much different.

There is no doubt that the German army was technically more advance, they had amazing organisation skills and their ability to organise logistics was simply amazing. There is no also doubt that Hitler in the 1930’s was an amazing leader and if a number of catastrophic decisions had not been made we may all be speaking German right now. So what went wrong and is there anything we can take away for our business?

1. Don’t be too confident and over stretch yourself

Two years into the war, the German army was running rings around its enemies. Wherever they went they were triumphant. Then Hitler become too confident and invaded Russia without any due diligence or research and his forces were suddenly split into two.

In business, when things are going great we think we are invincible and jump straight in thinking we can do no wrong. Sometimes this is at the most critical part of the business cycle.  Sometimes we need to finish what we started before we go on the next course of action.

We sometimes need to take a step back and analyse where we are, what we need to do and if we are going to jump down a different road make sure we know what it means if it does not work out the way we think it will. Just because it has worked once, do not assume it will work again. Do your due diligence and research. Then jump with all weapons blazing.

2. Listen to the people on the ground

The people on the ground know best. When I have an issue at ground level I always ask my team to give their opinions. Because they are doing the work the chances are they understand the problem a lot better than me. I may be the boss, but I really do not know how the software works to put a set of accounts together. But my team does. It’s easy for me to say do it this way, but in the end my team have to do it and my way may be inefficient or plain crap. And when I take their advice, they feel happy and involved.

Hitler had the habit of ignoring what the people on the ground were telling him and then issuing orders that did not make sense at ground level. This demoralised the team leaders and eventually many of them just ignored him or stopped giving him information and advice. So listen to your team or you may find they start deserting you.

3. Don’t get sentimental

Hitler had sentimental links to land conquered. He would insist German troops remain in areas knowing it was futile. Near the end of the war when troops were needed in Berlin and reinforcements were required, Hitler refused to use troops from other conquered towns as he would lose these towns. Reality was holding on to these towns did not make sense if Berlin fell.

I see it often in business where the business owner gets so sentimental about their business that they are unwilling to cut off an arm to save the body.

Let’s be honest. If I were in hospital and a surgeon told me that I would have to lose my hand in order to save myself I would have to take that course of action, no matter how sentimental I am to my hand. It is no different in business.

Your business is there to provide you money so that you can live the life you want. If it is doing that then all is good. If one part of your business is not working despite everything you have done, then it may mean you have to chop it off. Being sentimental has the ability to bring the whole business down. Don’t let that happen to you.

4. Delegate to your Managers

There is a reason why we have a hierarchy in place in our businesses. We are really unable to do everything ourselves. I am great as a business growth strategist and I know how to run my three businesses. But ask me to do this as well as accounts production, taxation advice, bookkeeping and marketing and very soon I will start killing people. That is why we delegate and start giving responsibilities to other people and our job is make sure they follow through.

And that means we have to trust our managers to do the right thing and judge them on the results based on their decisions and what they control. If we override them and then things don’t work out we can’t blame them. We just end up losing the war.

Give your managers the freedom to make decisions. Listen to what they say and resist the temptation to override them. If you do, you might end up like Hitler, who refused to listen to his generals, constantly overriding them and eventually losing the eastern and western front.

5. Deal with your Competitors Wisely

Be careful who you take on. Some competitors have the might, skill and resources to take you on and put you out of business. Think about who you ask to enter into the boxing arena.

I have seen many small business try to take on larger, more established businesses without a real business model apart from price. Larger businesses might be able to rough it out, take you on and then wipe you off the map. If you are going to take on an established business or industry, make sure you have a plan, make sure what you are offering is different and make sure you have the willpower to follow it through.

When Japan attacked Pearl Habour, Germany quickly announced it was at war with the US, when the US had no interest in the war. The US had manpower, equipment and unlimited resources and when joined with the Allies became a formidable force. Germany eventually ran out of manpower and equipment.

Don’t think being in business means you are in a war and need to win on all fronts. But you can take lessons learnt and maybe, just maybe, you get to where you want to be.

If you would like to know more about how our bookkeeping Brisbane can save you time and money, please contact us.

Anyway, you have probably worked out, there are a few Star Wars nuts in my household. Having seen the films several times there is so much for businesses to take away, it is astonishing.

So how can you use Star Wars to make your billions?

1. Don’t let the Dark Side Entice You

The film clearly shows that being on the wrong side of the Force means negative emotions will cloud our judgements.

If, as business people, we remove fear and anger and live life without either of these two negative emotions in our lives we would be much happier. It’s not just Yoda that says this either.

Science tells us that negative emotions have all kinds of effects on the human body. Stress usually makes us horrible to be around and will undoubtedly lead you to an early grave.

Employees and team members hate it when bosses shout at them or when they see their boss destroy their offices for no apparent reason. At the opposite end positive emotions make us feel happier, better and loved. So next time you decide to destroy the office just remember the problem will still be there when you have finished. And it will ultimately lead to suffering.

2. Just Do it!

Before the line was taken by Nike it was originally said by Yoda.

There is a scene between Yoda and Luke Skywalker when Luke reluctantly says he will try. Yoda replies ‘No. Try not. Do or do not. There is no try.’ 

Business is no different. Successful businesses and business leaders are littered with conviction. Can you imagine Thomas Edison saying we was going to ‘try’ again to make the light bulb? I have never met a success business person that does not have absolute trust in themselves and what they are doing.

In the films, even the very young Luke Skywalker (as a child) was able to build and race a pod. He even manages to fly a rebel fighter into space. He believed and then just got on with the job of doing it.

Back yourself. Trust yourself. And do it without fear. You may be amazed at what you achieve.

3. Trust your Gut Feel

If you want use the term intuition. I have been lucky that over the years and I have learnt to trust my gut feel. Have I got in wrong? More times than you can imagine. But over the years, it has served me well.

In the film, Jedi are always talking about what they ‘feel’ and what they can ‘sense’. This is effectively their intuition kicking in and it serves them well.

Learn to trust your feelings and your gut. Close your eyes, relax and consider it all. The answers you are looking for may not be that far away.

4. Choose Your Path…. And Be Rebellious

We all have our paths to follow. Anakin was a slave, became a Jedi and then moved to the Dark Side. He chose to follow his own path and sometimes that also meant he had to question things and be rebellious. He often made Obi Wan Kenobi’s life difficult by being unpredictable, made mistakes, learnt from them and moved on.

It was only when he moved over to the Dark Side all that stopped and it resulted in a new person being born in Darth Vader. Darth Vader was extremely powerful but ultimately under the control of the Emperor. He had no path to follow.

His son Luke Skywalker refused to follow him to the Dark Side despite his father’s pleadings creating his own path to glory.

In business we have to be rebellious, constantly questioning everything because we live in a world that is constantly changing. And that means being disruptive. It means being different.

5. Help Comes From the Most Unlikely Sources

The good guys always received help from the most unlikely of people. Initially, it was Hans Solo and the ‘walking carpet’ Chewbacca. Then we had the Ewok, who looked like cuddly bears. Finally, in latest version we had Finn, a Stormtrooper, helping Ray.

There is a saying you can count the people you really trust in one hand. These are the people we are prepared to tell our innermost secrets. No matter how many Facebook friends you have we really have only about 5 we really trust. And the chances are you worked out who these people were, when you needed help the most. And they sometimes come from the people you least expect. Work out who these people are and ask them for help when you need it. They will give to you unconditionally.

If you would like to know more about how our bookkeeping Brisbane can save you time and money, please contact us.

Anyway, that resolution lasted exactly 48 hours. And an hour after that a couple of bottles of red wine decided they needed to be emptied down my throat.

But here’s the thing. When I make rational decisions about my business in the New Year I tend to follow them through. So if you want your resolutions to work this year I have the perfect answer for you.

Screw trying to detox yourself. You don’t want to do and it never works anyway. Instead, detox your business and make it leaner and fitter. It could save your thousands of dollars.

So what should you be doing this year?

1. It’s Actually About Those Around You! 

If you read my blog last week, you will remember that sometimes we don’t realise that actually everything we really want to be happy is around us. We just fail to see it. I have spent 15 years advising business owners and I have always found that a happy home usually results in a happy business. And vice versa.

So if you want this year to be a happy and fulfilling one concentrate on your personal life. Block time out right now in your diary for the ones around you. Plan your personal life next year and then organise your business life around it. Usually your business comes first so what I am asking you to do is do the opposite. Be brave and do something different. Put yourself first and put your business second. You might be astonished with the end result.    

2. What Does Your Personal Branding Say?

Try something. Google yourself and see what comes up. I do this regularly on myself because it actually tells the world what my brand is.

In today’s world of immediate publically available information it will influence how people perceive you. This means it is not only the business and professional part of you that is available, but also your private life too. A picture on Facebook can potentially say a thousand words and you might not have even put it up.

The best way to manage or even shift your personal branding is the use of social media and your websites. Make sure the internet only shows what you want everyone to see.

3. What’s on Your Bucket List?

Your business exists to support your lifestyle. You do not live so that you can work, but this is what seems to be happening. How do get around the problem?

Most business owners are so consumed by their business that they forget the reason why they started the business in the first place. We start a business to make money, but the real reason was so that we can have the freedom to do what we want.

Make a list of things you want to do this year. Look at it daily and somehow you will find that at the end of the year you have done more than you expected. Your brain is an amazing machine. It will work out a way as long as you ask it the right questions. 

4. Get Involved Outside Business – Yes Network – But Only If It Works 

Review all your networking functions and work out what is working and what is not. Stop attending the ones that do not work for you. Some people attend the same functions and a small community builds up. This can easily become a social club where you feel you are networking with people you know, but in reality little work is being generated. We are creatures of comfort so we like attending networking functions where we know each other.

Always remember networking functions are where you go to sell yourself or your business. I have never met a business owner who goes to a networking function so that they can buy something. Yes, you may obtain contacts, but ultimately you are there to sell.

It, therefore, makes sense to analyse which networking functions are working and cut out the rest. Believe it or not surveys have shown most networking functions are inefficient when you consider the time involved to generate sales. This actually makes sense. Sometimes it is better to concentrate on direct sales.

Just think about all the hours you spent last year networking and then calculate how much money you generated from it. Now divide the amount generated by the number of hours. The answer tells you how much you have earned from your hard work on an hourly basis. You might find that your success rate might be the same as trying to sell Xmas decorations in February. It’s a lot of hard work for the income generated.

I find I obtain new business when I am not attending work functions. Attending P&C meetings at your children’s school. Being involved in a charity or events where you give back in some way. You will find you meet more interesting and diverse people as well as potential customers and contacts. And they know you are not there to specifically sell to them.

Always try to listen, be interested and talk to all the people you meet. And do it in that order. Not only is it good manners, but you will find you meet different and fascinating people and create more interesting conversations.

Networking is not just something you do when you go to a work event. It is something you should integrate into daily life. 

5. Stop Ignoring the Numbers! 

I have never met a consistently successful business which ignores their figures. I look at mine weekly, but you should really look at your figures at least monthly.

If you do nothing else, please do this. It will make a massive difference to your income as your brain will start working out how to make more money.

Some business people just do not get figures. So if you happen to dislike figures what should you look at? Look at your profit and loss and always your cashflow. If you can afford it, discuss your figures with a good business growth strategist. You will make much more money that you will pay them.

Remember a business can survive making losses over a period of time. But run out of cashflow and it is over very soon. Look at it this way. Losses is like cancer – it takes a while to spread before it becomes a real problem. Running out of cash is like having a major heart attack. You could be out in an instant.

6. Free Up Time and Concentrate on the Business

It is amazing the amount of time we spend on things we are no good at. I once thought I could repair a leaking tap and two hours later, my office had more water in it than the local council swimming pool. Even my desk was floating. Another time I was in the attic and we had to call a man to replaster the entire ceiling because I had somehow managed to demolish it. We are all crap at something. So I have decided now that I only do what I am good it. My team is a lot happier knowing that the wall next to them is safe and sound.

Sit down and start analysing what you spend your time on. Anything of an administrative nature has to go. This includes, believe or not your bookkeeping. You were never taught how to do bookkeeping and you probably do not enjoy it. And you have absolutely no chance of knowing the entire tax code and this you need to know because the ATO will assume you do know it. Get it wrong and the ATO might start asking for a bit a money. Or a lot depending on how they feel.

Fixing a tap is actually not that hard. I know how to do it, but because I do not do it day in day out, the chances are I will get it wrong occasionally and this becomes a bit of a disaster. And I then have to spend more money getting it fixed.

This is what can happen when you do your bookkeeping. And also the chance that if you get it badly wrong you could end up in front of a judge and treated like a criminal. This then means you end up behind bars. It’s not worth the risk.

So outsource it as well as anything else that does not directly generate business. Then decide that the time you now have free from hideous bookkeeping and administration you will spend on getting new business. I almost guarantee you will make more money even after paying for an administration person or bookkeeper.

Finally, have a great 2016! And best of luck!

If you would like to know more about how our bookkeeping Brisbane can save you time and money, please contact us.

I know what you are thinking. How can a film made in 1946 be relevant to your personal or business life? This is, after all, the age of Facebook, Apps, Uber, Google and You Tube. Well, believe it or not, it actually has be ability to show you the riches you desire.

But here’s the thing. George Bailey in 1946 is just like you and me in 2016.

Just before Christmas last year my family and I were in Southbank, Brisbane. Along with the fireworks, swimming and lots of fun there was an outside cinema showing “It’s a Wonderful Life.” There was just one difference. Instead of being in black and white some cleaver dude, who probably looked like a geek with spectacular spectacles, had converted it into colour.

My 9 year old recognised it immediately having watch or heard it every Xmas for the last 9 years. To my wife watching anything in black and white is like asking her to mow the lawn. The thought enters her mind for one millionth of a second and then there is no chance.

Anyway, I have pleaded for 18 years for her to watch the film. My son asks her once and all of a sudden she was all in. She had to wait until Boxing Day to watch it as on Christmas Day we had a competition on who could empty bottles of wine the quickest. By the time we finished this game we were on the floor drooling like vegetables and had no idea how to use the TV remote.

Anyway, George Bailey, the lead character in the film has become as much a part of Christmas as carols, snow, mistletoe, Big Mr C, cold turkey, hot turkey, bad presents and lots of alcohol. I know no one who has not seen the film. Except my wife. Obviously.

We watch his life from school to adulthood. He wants to travel the world and create things, but his life takes on a different tangent from everything to the death of his father, the dreams of his bother and the good folks around him. It gets worse. He’s seems to hate his business. It’s a good thing Facebook and Twitter were not around in 1946 because he would also be told by his friends (falsely) what a wonderful life they are having and living out the adventures he desires for himself.

Sound familiar? He knows his business helps people. He knows he is a decent good man, that he has a lovely wife, fantastic children and lives in a community of well-meaning friends and family. But that’s not enough for him. That sound like you too? Does that sound like someone you know?

Reality is we are all like George Bailey. Sometimes our dreams are destined to be unrealised. We are stressed by daily life. We don’t fully appreciate what we have, or by what we’ve managed to accomplish despite our obstacles. We are too often focused on the wrong things. And we also know around the corner there is a chance there could be a massive, catastrophic meltdown of financial calamity resulting in the loss of our homes and all the toys we own.

For those like my wife, a bit about the film. Before his angel came on the scene, George is unhappy with his small-town life. Then there’s the tricky issue of a missing $8,000 from his business, the threat of bankruptcy and public disgrace. He decides it’s better he no longer lives. He is then visited by a guardian angel to show him that his life has so much meaning. And that is when George Bailey realised what he actually wants, he already has.

So what does the film tell us and what messages should you take away from it?

• Go to the Dance – It’s Worth the Risk

George’s brother, Harry, invites his older brother to his high school dance, but initially George refuses only to change his mind. At the dance he meets Mary, the woman he marries. The woman whose idea it is to use their honeymoon cash to save his business. And she then rallies the community after his meltdown. So, given the chance, take a risk. Go to the dance.

• It’s All About Mindset

Even in 1946 they knew it was all about mindset. And that was before anyone had heard of Tony Robbins. It’s all about perspective. What is different about George Bailey’s life after he’s shown by his guardian angel what life would have been like without him?

Actually, nothing really. His business has still lost $8,000, he is still facing bankruptcy and about to be arrested. And the local rag wants his bad man picture on the front page of the newspaper too.

So, why after his angel takes him on his journey, is George a changed man? A much happier man? Because the angel has taught him that what’s important is the people around us. And it is the same people that rally around and save him. It’s not about the travel, it’s not about money and it’s not about the toys we want. It’s something much closer to home. It also explains why some very rich people are unhappy. They have the toys, the travel and anything they want. But without the right people around them, they are as miserable as Tinman without a heart in ‘Wizard of Oz’

• It Only Takes One Thing to Flip Over to the ‘Dark Side’

Although it was brewing in the background, Anakin Skywalker converted to Darth Vader and moved to the Dark Side in an instant in Star Wars.

It was the same with George Bailey. When times are hard, everything is wrong. His children become annoying. He was rude to his child’s teacher. His loving home that he rebuilt with his wife has all of a sudden become frosty cold and, finally, reconsider the scene when the knob on the stairs comes off. When on the ‘Dark Side’, George was prepared to demolish the stairs, but when happy he loved that his home was not perfect. Nothing changed except his mindset, but in the end this horrible version of George changed nothing. He still had money problems and possible criminal conviction did not go away either.

Don’t despair when times get tough. Desperate times, often lead to amazing solutions because we are forced to face them. And don’t be afraid to ask for help. You work out quickly who your real friends are.

• You Will be Bribed and Asked to Put Your Values Aside

In the firm the hideous Mr Potter tries to bribe George Bailey in giving up his business in exchange for employment with an astronomical pay check. He almost takes it, but realises that if he did so it would let people down, but more importantly he would be betraying his values.

In life we are always asked to compromise our values. Stick by your values and the world will always respect you and when the time comes when you need help they will come crashing through your door with a smile. If it can happen to George Bailey it can happen to you and me.

The film might have been made in 1946, but it as relevant today as it ever was. Look around you because the chances are what you want, you probably already have but just don’t realise it.

If you would like to know more about how our bookkeeping Brisbane can save you time and money, please contact us.

Mothers and chefs around the world are running around like headless chickens working out ways of making sure the turkey does not become dry and the stuffing remains as moist as possible. Supermarket trolleys are being filled to the extent that it would appear there will be no food available to buy for the next month. And I have enough alcohol to last a decade, but still think I need a couple more bottles of something which has the equivalent potency of ethanol.

At the other end business owners are burning the midnight oil trying to get all their work out the door before Santa’s sleigh leaves the North Pole.

But if you think that your life is hectic or you are having a tough time, spare a thought for Santa. His situation is far worse. Let me explain.

You may think that he is a lucky man having to work only one day a year, but on the day he works all hell breaks loose. The reality is big Mr C is quite incredible, amazing and, well, epic.

Now being a numbers man I thought I would put some figures to show you how hard his life really is.

Let’s assume he only visits Christian homes, although I know he does more than that because he hasn’t missed my chimney in the last 9 years and last time I checked I had no photos of Jesus in my house. But I digress.

That’s an impressive 800,0000,000 Christian Children he visits in one night. He has to travel an incredible 341,000,000 km, give or take a few hundred thousand kilometres in 32 hours (travelling east-to-west with the Sun gives him an extra, much needed, 8 hours) stopping at 266,666.666 households (assuming 3 children to a home). That’s about 3,000 km per second, which is a little bit faster than my Aston Martin. And he also has a strong bladder too, because I assume he has no time for any toilet breaks and I doubt he has time to check Facebook or Twitter either.

Now everyone knows that big Mr C is a bit round and big around the gut area. There is a reason for this. Every household, he visits will leave him a mince pie and glass of alcohol. This means his calorie intake from the mince pies is, well, a bit big. Assuming 150 calories a pie that’s about 40 billion calories in fact. No wonder he can’t work for the next 364 days.

But that’s not all. I am more concerned about his drinking and flying. His consumption of 266,666,667 units of alcohol makes me think that this might be a bit above Australia’s drinking and flying limit. Now if he can drink this much and still fly, then that is impressive, but I suspect his license to fly might be at risk should he get caught. Something also tells me he might have a bit of a hangover too. I would hate to think what his insurance premium is.

There’s more. His bank manager can’t be too impressed either because all the kids want a Lego Star Wars Millennium Falcon this year and this cost $250 each which means he will need to apply for a $200bn overdraft facility. I know we think that Santa’s little helpers make all the toys, but I don’t think that is possible because Lego might sue Mr C’s pants off him. Or worse, his sleigh.

The Millenium Falcon also weighs about 500g which means Santa’s sleigh has to be strong enough to handle 400,000 tons of presents which then requires about 4 million reindeer to pull it. And remember this is all happening at 3,000 km a second. Now that is what I call stressful.

So calm down. Take it easy. It will all work out for you in the end as it does for Santa!

If this article has brought a small smile to your face then I know I am on the right track. This is my last article of the year and I wish you all a Merry Christmas and a fantastic New Year. If things don’t quite work out on the day, don’t worry have a laugh and enjoy it with the ones you love around you.

Let’s go back to the day you wanted to set up in business. You would have written down or had many thoughts go through your head about the pros and cons of getting into business. I will almost guarantee you that in the list of pros it did not say ‘employ people’ or ‘employ people, pay them lots of money and hope they become my friend’.

You employ your admin team or person so that they free up time so your sales team or you can sell your products or services. You employ your sales team so they make money for you.

But here’s the thing. When our team or the person is not performing was well as we expect we just accept it and turn a blind eye. By doing this we are throwing away thousands of dollars.

This blog will be in two parts. The first one is about how to keep your employee costs under control and the second blog will be on how to create a team which fires on all cylinders.

Everyone knows that Australia has one the highest wage rates in the world. And it’s complex. There is superannuation on top, over 2,000 awards and then we have what I call the theft tax. Payroll tax, which as far as I can see, is designed to punish business for actually employing people and keeping them off welfare. How that works for the country is beyond me. Then you have the people whose job it is to regulate the compliance and the rules. I am convinced they wake up each morning and take great joy knowing they will make the lives of others extremely distressing and stressful. Let’s remember you need to read all the pages of a modern award, which, let’s be honest is not fun. Sometimes I am convinced it is written in Latin. But get it a bit wrong and all of a sudden you have to sell your house and hope you get a good price for your spotty teenage children.

When I have to work on anything relating to employee compliance, such as payroll tax or read 90 pages of modern award I sometimes just want to go berserk. At best I want to migrate back to the UK.

So let’s start will employee costs. What are your options?

1. Outsource or Offshore

You have one of two thoughts now. The first thought is this makes sense. The second is that I am proposing the work of the devil. I am suggesting we take jobs away from Australia and if we continue all our children will be without jobs and the country will become so poor that we will have to sell all our assets. And our children.

But here’s the thing. Your job as a business owner is to make money and enjoy your life. If you don’t then you are not doing yourself justice.

It is the job of our government to create an environment which makes it easier for business to employee people. At this moment in time they are failing. Spectacularly.

If you do not make your business efficient by keeping your costs low your competitors will and this means before you know it your business is gone. And that means you will not have a business and you have to sell all your assets. And trust me when you have no money and appeal to your government for welfare and plead you were being patriotic they will react as if they have no idea what the word means.

Outsourcing comes with its own issues, but it removes almost all compliance issues in one go and has the potential to reduce your wage bill by at least 50%. My entire administration function is offshore and I am very happy that I do not ever have to read other award relating to clerical staff, pay superannuation or worry about following HR legal procedures which only a legal person in a suit can decipher.

Some jobs you cannot outsource. If you run a plumbing business, it’s not much use having a qualified plumber in Uzbekistan when Mrs. Williams in Sydney has a small issue with her leaking tap. The same is true for the retail trade. However, every business has a back end and if you organise it right most of this can be done offshore.

2. Review your rostering

There are savings to be made by looking at when your team actually works. Rostering high cost employees at times where no or low penalties apply and vice versa can make a significant difference.

Read a modern award and there are sometimes a few gems for you. For example, on Saturdays casual employees are paid the same rate as permanent employees in the hair and beauty industry, which actually means you should really employ casuals on Saturday.

Most awards and agreements include overtime penalties rates that apply after 38 hours a week or after a certain number of hours in a day. Keep an eye on them and they could save you thousands of dollars.

3. Engage more staff to perform less hours

This means more administration and having to attend boring interviews, but has the potential to lower your overall wage bill. If it works for you, use it, but sometimes it won’t. It works very well in the retail trade, but it’s not so good if you need a PA. Working with three PA don’t work unless you are the Prime Minister.

4. Review penalty rates

A review of penalty rates may show that some employees are excluded from the penalty or that casuals are not entitled to overtime payments. Use it wisely and there are saving to be had here.

5. Pay Salaries above Award Rates

If your salaried employees are paid well in excess of an award rate you may be able to get them to work more hours. Remember, they cannot be worse off, but if worked out correctly, you could save some money here.

6. Look at your Mix

Having the right mix of employees from their age to type (permanent or casual) will help reduce costs. Casual employees offer you flexibility, but at a higher hourly rate. Traineeship and apprentices can keep costs low, especially if you can get a grant for them.

So here are a few questions for you

1. Do you know what leakages you have in your business?
2. Do you know exactly in dollar value what that is costing you?
3. And if you do what the heck are you going to do about it?

A couple of weeks ago I visited a friend of mine who runs a sizeable business with his very extended family. Over the years I have provided free ad hoc advice (as friends do) as and when required. This would normally happen over a few whiskies. Or in our case quite a lot of whiskies. Once we drank so much that MasterCard cancelled my card thinking it had been stolen. But I digress.

Now my mate is a very good intelligent businessman whose family has been in the retail trade for over 30 years. Over the years they have done very well and the business has grown considerably. And over the years I have advised him that various parts of his business are actually leaking money.  He would then ignore my advice, laugh it off and have a few more whiskies. This was very annoying.

The business was running well, but the systems and procedures were outdated and it was just too hard to get all members of the family to agree to change.

One area I was convinced something was not right was the system of employees and in particular the number of employees and the how they were paid. In fact, I have been telling them about this for 15 years.

Eventually someone in the family woke up one morning and did something about it. What they found almost gave them a heart attack. An immediate re-organisation was undertaken and long standing shop managers were moved to other stores. It was only then that the business found out that they had been paying wages to employees who had left or paid for hours not worked. It got worse. Some employees simply did not exist, but had been paid for a few years.

I then fired up Mr Iphone and my rudimentary calculations worked out that they had probably overpaid over $600,000 in wages the last 10 years alone. In other words the equivalent of a Ferrari or a four bedroom sized home had leaked out of the back door. Now I found this very funny, but as you can imagine I did not get the same reaction back. A few more whiskies later we discussed what it felt like to lose a house or a Ferrari. The mood was not good. So we just decided to drink a bit more.

Therein lies the problem. They did not bother to look into it or fix it. I do not believe that if they had performed some dollar amount calculations ten years ago that they would have left matters as they were.

There’s more. Over the years I have also found that inefficiencies in any business will leak money like you would never believe.

That is why every week in my business, we have a weekly meeting and one of the agenda items is inefficiencies noticed in the last week. If we find one, we kill it. Instantly.

Inefficiencies have the potential to put you out of business. At best it means less money your pocket and last time I checked most business people are in it for the money.

So here is a small checklist on how to stop leakages.

1. Foster an environment where your team members are encouraged to discuss inefficiencies and then take action on them. Employees hate it if you just ignore their recommendations. Besides, they are doing you a favour.
2. If you are using the same systems and procedures when your Grandpa started the business you can bet your bottom dollar there are a lot of inefficiencies and leakages. Some procedures and practices have to be only a year old to be outdated. Review your practices to see if they are right for your current business environment.
3. Try to cost the inefficiency. Sometimes it is easy. For example, we made a decision that all mail unless absolutely necessary will be send electronically. This saves cost in stamps, and time going to the post office. It can be costed. Sometimes you just have to guess.
4. Do something about it! Sometimes we know about the first three, but because it is too hard, we just shrug our shoulders and ignore it. Do this at your peril.

Finally, once I had sobered up from the whiskey I was sent my mate a Ferrari brochure and told him to leave this on his desk permanently. Nasty I know, but it should ensure that another Ferrari doesn’t leave the building.

There are some days (very few) in my life when I hate what I do. It does not happen very often, but when it does I have a heavy heart. Normally I write my blogs with a bit of humour, but this week I am going to be a bit more serious, but read on and the advice you will get will guarantee to keep you out of jail.

We hear all kinds of horror stories about how strict the ATO is and how unreasonable they are. Some of this is true. Over the last 12 months or so I have seen a hardening of ATO attitudes.

But let’s not forget that the ATO has the right to ensure that every business pays its tax liabilities.

About a month ago, I received a call from a business owner who was being investigated by the ATO. They had not been honest on their BAS returns and their bookkeeping records was, to put it mildly a mess. This was because their advisor had never actually sat down with them and told them how to keep and maintain records. So they did the best they could.

The ATO began the audit of the business for the previous two years. Before the meeting I asked for the records covering a six month period and found that the BASs was totally wrong. BAS refunds were claimed when in fact payments should have been made.

Armed with this information I advised my new client that they should come clean. Which they were happy to do and did in the ATO meeting.

There was one problem. Unknown to me they had been in communication with the ATO and provided documents that were not entirely kosher. Unfortunately for them the ATO knew this. And this totally blew away any credibility they had.

Now I would never justify false declarations, but when the BASs were completed, my client was under extreme cashflow pressures. He basically used the ATO to help his business survive and put food on his table. He was basically stealing from Joe Hockey to pay Mr Orgin to ensure he had some electricity.

The ATO may have some sympathy with this, but as far as they were concerned a false statement on many BAS returns together with paperwork that was not quite correct are leading them to prosecute my client which could lead to jail time for my client. Not nice, really.

Yes, my client was wrong, yes, he lied and yes, he made a false declarations. A moment of absolute madness and absolute stupidness has got him in an aweful lot of bother. But now that I have got to know him should he be sent to jail? I am not sure about this. But my thoughts are irrelevant on this matter.

Being an expert in tax I deal with the ATO and investigations routinely and every time I get involved in I come to the same conclusion. The nuts and bolts of this episode has left me without doubt that a business owner who completes their own BAS will get it wrong somewhere along the line. And the reason I say this is because there is no way a business owner can know the Australian GST and employee tax code. But it actually gets worse because the ATO assumes and the law says you do know or should know the rules.

Let me tell you a secret. I don’t advise on certain GST matters such as property GST because I don’t know enough about the matter. And I am a tax agent! So how a business owner who has never been educated beyond 10 minutes with their accountant know how the entire GST tax code works is beyond me.

So what should you do? Honestly? Get someone else to do your bookkeeping. Now I know what you are thinking. I am scaring you. I probably am. But when I mow my lawn it never looks as good as when my gardener does it. That’s because he is an expert. I am not. It is no different for your books. Also, if I do my mowing I won’t go to jail. There are just some things you do not do.

A good bookkeeper will tell you when you are doing something wrong. Get a tax agent as your bookkeeper the ATO will find it almost impossible to send you to jail unless they can prove you acted dishonestly.

Yes, it costs more. But you know what? Each year you take out Business Contents Insurance knowing that there is a probably a very small chance you will make a claim. I have paid for 15 years now and have never claimed. So if you had to pay to get your bookkeeping done knowing it will give you a good a night’s sleep and keep you out of jail what is that really worth to you? My client has not slept for a week now and his thoughts are constantly about his impending prosecution. This is something I would not want my worst enemy to endure.

So here are a few questions to ask to see if your chances of an audit are high

• Have I lodged all my returns on time?
• Do I owe the ATO money?
• Has my bookkeeper or accountant checked my figures with the ATO benchmarks?
• Am I operating in what the ATO would classify as a high risk industry?
• Is the income declared on my tax return consistently low?
• Am I operating in a cash business?

If you do not know the answers to any of the above, speak to your bookkeeper or accountant. If they cannot answer the questions move to someone who can. So please friends get yourself a good bookkeeper, sleep well and stay out of jail.

With that over with let’s start. Last week I advised that if you want your business’s pants (or dress) to be on fire and achieve much greatness you really need a business advisor, mentor or coach as you will not achieve as much on your own. People think these are all the same. They are not and it makes sense to understand each.

A business advisor sits with you and helps you find the gaps in your business and organise a strategic plan for your business to grow. They can make life uncomfortable and ask serious questions based on their knowledge, experience and qualifications. It’s uncomfortable because they are going to ask questions you don’t want to answer and they have a tendency to tell it to you as it is, even if you don’t want to hear it. And sticking your fingers in your ears won’t help much. They just tend to ignore this.

There will come a point in time when you will hate your advisor for a while. I am convinced I have a few clients who have spent days planning on how they are going to torture me and one has admitted that they researched how they could inflict craters on my face. This terrifies me and I have nightmares about what my new Linkedin photo would look like. But here’s the thing.  As a business owner you are accountable and you will have full respect for the business advisor. Always. Which is why I have never been tortured. And it’s also why I don’t have any craters on my face.

A mentor is someone you bounce ideas off and gives you ideas. They don’t actually get involved in the nitty gritty of getting the job done. Their job is simply being a sounding board and pointing you in the right direction. There is no accountability.

A coach is someone who identifies blocks and hindrances that stop you progressing and helps you eliminate them. Again there is no accountability unless you have expressly agreed this beforehand.

I often ask business owners who their mentors are. It is not unusual for the answer to be a high profile highly successful business person. Think Richard Branson and you get the picture. There are, however, one or two problems with this. Firstly, I don’t know anyone who actually has Sir Richard’s phone number which means unless you have a telepathic connection with him it is a bit difficult to bounce ideas off him. Secondly anything you read about his business may sound great, interesting and fun but if your business is not set up like his it’s not really going to work. It’s a bit like invitingsome  vegetarians for dinner and instead of giving them a few carrots you present them with chicken. The result could be catastrophic.

So work out what you need. Ideally you want all three. I often go into all three roles and my client will not realise I have. The lines are not clear cut.

What else should you look for?

Well, you want someone who actually has business experience. And I don’t mean ‘ we have been in business for 3 billion years’ type experience.  Find someone who has actually worked with businesses and helped those businesses grow. They have track record and your chances of success has just increased tenfold.

Generally, avoid anyone who has not been in business themselves or newly qualified students. Don’t get me wrong, I am sure there are some very good coaches who may have the theoretical knowledge, but there is no substitute for actual experience. They cannot understand the emotions and complexities that go with running a business and all the hats you have to wear. For them sacking an employee is easy, but for you it could be a traumatic experience. They just won’t get it unless they have experienced it.

Do not be afraid to tell your advisor what growth you expect them to achieve with you. If you want $200,000 extra sales make sure they know and if they are not confident on how they are going to do it, look elsewhere. Aim high – if you are taking on an advisor you really want them to show you strategies that are going to grow your business by at least 6 figures – yes that’s right a minimum of $100,000 if you are a small business.

Also avoid ‘one strategy fits all’ type of advisor. This is very common with franchise business advisors. They use one style strategy for all businesses.  I have been doing this for 15 years and one thing I have learnt is that one strategy for all does not work for everyone. Every business owner is different which means the best strategy for you might be very different from someone else. You want your advisors to work out a specific strategy for you and not working off a preprinted checklist.

Sometimes the value of what your advisor does can be priceless. If your advisor reduces the amount of time you spend in the business (my specialty) so you can see your child play soccer or read at school what is that worth? One of my clients recently told me that my involvement in their business has actually saved their marriage. For them this is priceless. For me it brings tears to my eyes and reminds me why I got into this business in the first place – to make a difference.

Finally, if you really want someone with a big boot to kick your butt to the moon please expect to pay for it. Good people cost money. It’s easy to say ‘I cannot afford it.’ So make sure you ask yourself the right question. ‘If I spend $30,000 on this advisor and he grows my business by $150,000 is it worth it?’ Don’t concentrate on the $30,000 – focus on what can be achieved. And then make sure you both achieve it.

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