PLAN EARLY FOR THOSE LAST MINUTE FINE-TUNING ADJUSTMENTS !!

How many times do you hear the lament “I wish I had realised earlier that I could minimise my tax by ……..” It is amazing how many small to medium sized businesses fail to make adequate forward plans for the year ahead – it seems to be the belief that only larger businesses plan – smaller businesses cannot plan as too many outcomes are unforeseen and impossible to predict. Then in the last week of June each year there is a queue half-way down the street, at the accountants door, looking for that magic solution to reducing the exposure the organization has to tax, how much can the business contribute to superannuation or how can the business afford to meet its obligations to pay GST next month.

START NOW – JULY IS THE BEST MONTH TO MAKE PLANS FOR THE YEAR AHEAD TO AVOID THE INEVITABLE PANIC IN THE MONTH OF JUNE, ELEVEN MONTHS DOWN THE TRACK !!

Most of the small business failures each year – and there are many – are avoidable if only time was taken to do a Business Plan for one, two or three years ahead so that the potential cash shortages or unpredicted future liabilities can in actual fact be predicted and planned for. It is amazing how many profitable businesses and those that are in a growth pattern actually fail and go into administration or liquidation because they are unable to meet the payment requirements of maturing loans, leases expiring or quarterly or annual GST or other statutory liabilities when they fall due because there is insufficient cash available at the time and the bank manager cannot understand your last-minute panic request for short term funding needed. It is not too difficult for any business person who knows their business to put together a simple Business Plan – incorporating a financial plan, cash flow forecast and sales and marketing plan – which will often highlight potential cash shortages or increased cash needed to fund higher debtors balances or extra stock needed to produce goods for the upcoming higher seasonal sales cycle an industry may face. Just because you have high sales and high profits does not mean you have plenty ofcash, as it may be tied up in high stock levels or money owed by customers who are paying slower than expected.

You may be amazed how helpful and understanding that bank manager will be if he is presented with a plan detailing the cash required and predictions of the business performance well in advance of when the extra cash is required.

DON’T WAIT – PLAN FOR 2008/9 NOW !!

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SOME THOUGHTS TO PONDER

“My philosophy of life is that if we make up our mind what we are going to make of our lives, then work hard toward that goal, we never lose – somehow we win out.” - Ronald Reagan

“Do not wait; the time will never be just right. Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along.” – Napoleon Hill

“Organising is what you do before you do something, so that when you do it, it is not all mixed up.”

- A A Milne

“It pays to plan ahead – it was not raining when Noah built the Ark.” – anonymous

“Make no little plans; they have no magic to stir men's blood and probably will themselves not be realised. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will not die.” – Daniel H Burnham

"Would you tell me which way I ought to go from here?" asked Alice.

"That depends a good deal on where you want to get," said the Cat.

"I really don't care where" replied Alice.

"Then it doesn't much matter which way you go," said the Cat.

- Lewis Carroll

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