MPA hears from MGI Adelaide director Des Caulfield on top tips for business owners collected from over 40 years experience in accounting.
MPA hears from MGI Adelaide director Des Caulfield on top tips for business owners collected from over 40 years experience in accounting. Over his career, he has extensive knowledge and understanding of the issues faced by businesses across a diverse array of industries and sectors.
MPA: As a business consultant, what are the most common problems you have found catch out business owners? And mortgage brokers in particular?
Undoubtedly poor financial planning and management. A business should have a budget of expenses, including having an allowance for unexpected unknowns. There should also be an included allowance for expected income tax payments as these can be significant. Whilst income can be far more difficult to predict a reasoned estimate of expected revenues should be made for inclusion in the budget. The budget should be used to predict both cash flow and profits. Results should be compared to budgets regularly: at least once per month.
MPA: How can struggling SMEs and family-owned businesses regain their footing?
There can be many reasons why struggling SME’s and family-owned businesses are having difficulties. The most common cause is poor management. A common problem of trading entities is slow collection of receivables and holding too much inventory (stock). These use significant amounts of cash and any reduction in either or both will substantially improve cash flow.
Another issue is being reluctant and slow to react to adverse trading conditions. Be prepared to be ruthless in cutting costs and refusing credit to slow paying customers.
MPA: Do you have a stand-out scenario of helping a broker in their business?
There is much competition out there. You need to distinguish your business from the rest. Whilst price can be an important factor in determining who a customer might choose to deal with that alone is not what they are looking for. In today’s busy world people generally are time poor. If you provide exceptional service, including being able to easily and clearly explain the financial product being offered, the price that you charge will be less of an issue. People want service and are generally prepared to pay for it.
MPA: What are common elements among the most successful businesses that brokers should be aware of?
• Quality and speed of service
• Being able to package up a deal so that you become a one stop shop. People borrowing for property generally need insurance. Either have that an additional service or have an alliance with an insurance broker. Borrowers may also be interested in financial planning advice. Be in a position to make this available by the alliances that you form. Cross referral between professionals is usually a useful source of new business.
• Ability to succinctly and clearly explain the different product options to clients so that they feel that they are making the correct decision.
• No hidden fees – be upfront with everything.
MPA: As a business consultant, what are the most common problems you have found catch out business owners? And mortgage brokers in particular?
Undoubtedly poor financial planning and management. A business should have a budget of expenses, including having an allowance for unexpected unknowns. There should also be an included allowance for expected income tax payments as these can be significant. Whilst income can be far more difficult to predict a reasoned estimate of expected revenues should be made for inclusion in the budget. The budget should be used to predict both cash flow and profits. Results should be compared to budgets regularly: at least once per month.
MPA: How can struggling SMEs and family-owned businesses regain their footing?
There can be many reasons why struggling SME’s and family-owned businesses are having difficulties. The most common cause is poor management. A common problem of trading entities is slow collection of receivables and holding too much inventory (stock). These use significant amounts of cash and any reduction in either or both will substantially improve cash flow.
Another issue is being reluctant and slow to react to adverse trading conditions. Be prepared to be ruthless in cutting costs and refusing credit to slow paying customers.
MPA: Do you have a stand-out scenario of helping a broker in their business?
There is much competition out there. You need to distinguish your business from the rest. Whilst price can be an important factor in determining who a customer might choose to deal with that alone is not what they are looking for. In today’s busy world people generally are time poor. If you provide exceptional service, including being able to easily and clearly explain the financial product being offered, the price that you charge will be less of an issue. People want service and are generally prepared to pay for it.
MPA: What are common elements among the most successful businesses that brokers should be aware of?
• Quality and speed of service
• Being able to package up a deal so that you become a one stop shop. People borrowing for property generally need insurance. Either have that an additional service or have an alliance with an insurance broker. Borrowers may also be interested in financial planning advice. Be in a position to make this available by the alliances that you form. Cross referral between professionals is usually a useful source of new business.
• Ability to succinctly and clearly explain the different product options to clients so that they feel that they are making the correct decision.
• No hidden fees – be upfront with everything.
