Have you reviewed the adequacy of your insurance covers? The end of the financial year is a good time to undertake this exercise, comparing the items contained within your business' balance sheet with your insurance schedule.
It is recommended that insurance "should be a permanent item on the agenda for the monthly management meetings". The person responsible should report whether the insurance company/broker has been notified of any new acquisitions or changes for the business' insurance policies.
If you would like us to undertake a review of your Insurance covers please contact us.
Investment Allowance - As A Sales Aid
- Are you selling plant and equipment, motor vehicles etc?
- Are you highlighting the investment allowance benefits to encourage prospective customers to order before the 31 December 2009?
If you have customers who are primarily small businesses, with turnovers under $2M, then they can obtain a 50% Investment Allowance on eligible plant and equipment that is ordered prior to 31 December 2009 and installed before 31 December 2010. For prospective customers, the investment allowance is 10% of the value of the eligible product purchased from your business.
The key requirement is that orders must be placed with you by your customers on or before 31 December 2009 if they wish to obtain the benefits of the Investment Allowance.
Business Plans - Questions to Consider Part 14
- Do you use printed quotation forms?
- Do the printed quotation forms contain the terms and conditions of the quotations and sale of product?
- Have you had the terms and conditions checked by your solicitor?
- Does the presentation of the quotation form comply with your business' desired image?
- Do the forms look professional?
- Are brochures and other sales aids current?
- Do you include customers' testimonials?
- Do you follow-up quotations by telephoning the customer?
To be continued..... There are over 50 questionnaires relating to the preparation of a Business Plan. In the next issue we will cover Costing.
For more information contact us for a copy of the paper “Quotes/Proposals/Orders”.
Many public companies have been raising new capital to replenish their reserves following trading difficulties during the Global Financial Crisis (GFC). Many small/medium enterprises will also be looking to raise additional loan funds or capital to be able to exploit the expected market opportunities when trading conditions improve.
Banks are imposing financial stress testing to any new loan applications, which means SMEs need to carefully prepare loan applications. The expected upturn in business confidence has encouraged some Business Angels to start re-evaluating proposals for capital investments in some small/medium enterprises. If you are trying to raise a substantial loan or capital from Business Angel investors, your business application will be enhanced if the appropriate planning strategies have been implemented so as to professionalise the approach being made to potential investors or lenders.
The company has to be able to exhibit that it has developed a product/service that the market needs. You will need to be able to answer the following questions:-
- What problems are solved by the product/service or technology?
- How is it different from competitors' products/services or technologies?
- What is the stage of development?
- What is the sustainable competitive advantage?
- How will the products succeed in the market?
- What testimonials can be produced from current customers?
- Is the product/service or technology already available in the market place and is there further research to be undertaken?
- Has an independent technical assessment on the product/service or technology been conducted?
- Is it a standalone product/service or technology or will it form part of a product stream?
- How is the intellectual property protected?
- What market research analysis has been undertaken?
- What is the "WOW" factor?
- Who are the members of the management team?
- What is the management team's experience? It is a good idea to attach the management teams' CVs to a funding application.
- Who are the directors of the business? (especially if they are different to the management team)
There are many aspects to consider in completing applications for large loans or capital raising strategies for SMEs. If you would like to discuss this with us, please do not hesitate to contact us.
For more information contact us for a copy of the paper “Preparation for Investment Readiness”.
What's It Mean?
Working Capital... Working Capital is the excess of current assets over current liabilities. Calculated current assets less current liabilities.
Current Assets are those items used by the business which are usually turned into cash within the normal operating cycle of the business (usually 12 months). Examples of current assets are cash, sundry debtors, stock, work in progress, deposits and cash floats.
Current Liabilities are amounts owed by the business which would normally be paid within the operating cycle of the business (usually 12 months). Examples of current liabilities are bank overdrafts, sundry creditors, accruals, provisions for employee benefits due now or within 12 months. Loan repayments due within the next 12 months.
| Current Assets
| Sunday Debtors
|| Bank Overdraft
|| $ 89,000
| Work In Progress
|| $ 95,000
|| $ 7,000
|| $ 5,000
|| Provisions for:
| Cash Floats
|| $ 15,000
|| Employee Benefits
|| $ 35,000
|| Loan Repayment
|| $ 49,000
|| Income Tax
|| $ 84,000
For more information contact us for a copy of the paper “Accounting Terminology”.
|Calculation of Working Capital:
| Current Assets
| Less Current Liabilities
| The business has a working capital of:-
REMINDER: Export Market Development Grant Applications
must be lodged by 30 November 2009.