Life can be complex for the owners of an SME. Not only do you need to manage significant financial, business and legal matters, you also need to address growing your personal prosperity – otherwise, what’s the point?
The fact is, working long and hard will be a bitter pill to swallow if you fail to extract wealth for yourself.
Successful business owners engage highly qualified and experienced professionals to work alongside them to provide tax, accounting and business, financial planning, legal and other advice. All the better if those advisors work as a team and collaborate to eliminate the inefficiencies and missed opportunities that can arise when professional relationships are ‘unconnected’.
In this series of three articles, we outline the importance, and value, of working with ‘connected’ professional advisors who contribute to your achieving personal prosperity through business success.
SME Business Success = Personal Prosperity
#1 How to build a solid business for personal prosperity
The first thing to do is make your business profitable. Why? Because (at the risk of over-simplifying) business profitability forms the first link in a chain that ends in personal prosperity. Here’s how it works…
First, collaborate with your accountant to achieve business profitability and compliance with all state and federal taxation legislation. After that, protecting the assets you are building should include shareholder agreements that are prepared in collaboration with your lawyer. Finally, collaborate with your financial planner to implement wealth extraction strategies.
We have a saying about collaboration… The whole is greater than the sum of its parts. This is true of our approach for achieving the best possible outcomes for clients.
As SME owners working in mining and resources, you often have an obligation to lead in your space, which involves having high quality and transparent support for your financial and corporate management.
As your accountants and business advisors, we provide this support by streamlining data exchange and making the information you need to perform tasks more readily available, regardless of your geographic location, so you may focus on the outcomes that matter: building a solid business for personal prosperity.
Your achievement of these outcomes will depend on your close understanding of three main business pillars – The Numbers, Strategy & Insights and Advisory.
The Numbers –
Numbers engagement is the traditional role of an external compliance accountant. The purpose is to provide accurate and timely financial reporting to meet state and federal taxation legislation. We can help!
Ensuring that the numbers are in order is a crucial cornerstone of business success. When you understand the numbers reported in your quarterly BAS, Profit and Loss Statements and tax commitments that include GST, payroll tax, fringe benefits and income tax, you will have the ability to make strong business decisions that will lead to profitability.
Knowing the numbers means making the most of your accounting system. The key is accuracy and real-time numbers (offered by cloud-based systems) that provide a true indication of your financial position and give you clarity about where you make your money and where you don’t.
In a nutshell, once you know where you stand financially, you can make better decisions.
So, once you have the numbers right, how can you use that knowledge to increase the profitability of your business?
Strategy & Insights –
Working alongside your CFO or as your external-CFO, our purpose is to provide strategic leadership and oversight of your financial, risk management, governance function and frameworks to ensure these are carried out in an efficient and effective manner in support of your shareholder agreement, board charter and its strategic priorities.
While getting the numbers right indicates where your business is now and enables you to develop your vision for the future, it is having good strategy that will bring your vision to life. Among the key tools for gaining the business insights you will need are performance reports, a business budget, cashflow projections and predictive modelling.
These and other tools are used to extract critical data about the business performance, the achievability of financial targets, maintaining a healthy cash position and understanding relationships among business variables that are often overlooked but that can affect business outcomes.
Having a clear destination for your business radically increases the chances of arrival!
For growing mining and resources organisations we often fulfil the role of company secretary. The purpose is to facilitate the company’s corporate governance processes to provide oversight as to appropriate risk protection and entity structure.
Even when you are clear about your strategy and desired outcomes, inevitable complexities and challenges will arise that are simply part and parcel of running a business. When you find yourself in unfamiliar territory, where you may not even know the questions for which you need answers, an experienced business advisor can provide the help you require.
Advisory services address issues that tend to have major implications for the future trajectory of a business, and therefore the personal prosperity of its owners. Issues may include your finance arrangements; governance and obligations towards your shareholders; review of product and service offerings and other matters that relate directly to preparing your business for sale or for growth by merger or acquisition; transaction services and in particular business structuring, asset protection and strategic tax planning and advice.
But there’s more…
We don’t work in a silo. The fact is, in addition to collaborating with you, we also need to collaborate with the other professionals in your business life to ensure that your business affairs integrate with your personal affairs.
We work with experienced lawyers for matters including dispute resolution, wills, trusts and estates, business structures, contracts law and shareholder agreements. We work with financial planners to matters including superannuation and SMSF, estate planning, tax reporting, cash management and wealth creation, including extracting wealth from your business.
Why our commitment to collaboration? The point is, you go into business to create profit and professional satisfaction, but ultimately to provide for yourself and your family by generating wealth.
In our experience, given the overlap between the profitability of a business and the personal prosperity of its owner, close collaboration among your accounting and business advisor, your legal advisor and your financial adviser will help you achieve your goals most efficiently.
In the second article in the series, Ian Hillhouse and Craig Hong will focus on the essential place of shareholder agreements in building a solid business.
Your next step…
To find out more about how our numbers-strategy-advisory approach can help you build a solid SME in mining and resources, please contact Resources Unearthed on +61 (0)7 3007 2000 or firstname.lastname@example.org
Resources Unearthed is a solutions hub that provides integrated financial, legal, property and accounting & business advisory services for executives, professionals and business owners in mining and resources.
The information contained here is general and not intended to serve as advice. Any information supplied is not a substitute for independent professional advice. We do not warrant the accuracy, reliability, completeness or adequacy of the information or material. All information is subject to change without notice.