Bookkeeping is a drudgery for many business owners in Robina, but do you realise the importance of bookkeeping in YOUR Robina business?
Recently the e-e-e-e-asy electrical store Clive peters collapsed following a $20million accounting scandal, but the demise of the company was of little surprise to many in the retail sector.
There’s some lessons that evry small business owner in Robina, Mudgeeraba, or Varsity Lakes, can learn from this episode:
Discounting
Many business owners believe that discounting their products or services is a healthy business strategy. However, whilst you may be able to survive for a short time, eventually your margins and profits become so small. Then all it takes is for a competitor to run a short campaign undercutting you and taking your clients way
How come some of the airlines manage to price cut? Well, they don’t offer everybody the cheap seats, it’s a first-come first served basis. You can be sitting beside someone who’s paid three or four times, or even ten times as much for the same flight!
Find Your Niche
Crazy as it sounds, the tighter your niche, the stronger your position, unless you’re a huge organization. Have a look at restaurants. They could most likely cook any dish that you asked them, so why do some only serve Italian, others Greek, Indian, etc? They focus on their niche and get very good at it
Debt – The Killer
Rapid expansion based on debt is very dangerous. Clive Peeters expanded their empire when times were good. Cash was freely available, and they gambled that their sales were going to continue to grow. Even when the global financial crisis hit, and our then Prime Minister, Kevin Rudd, gave everybody a handout to go and buy widescreen TVs, the writing was on the wall
Bookkeeping – watching your cashflow
How many businesses would not notice a few million dollars missing from their accounts? You’ll read about bookkeepers and accountants that manage to siphon off funds from right under the noses of business owners, and that’s just one why it’s important to have a handle on your finances.
The numbers are the lifeblood of your business. Without an efficient bookkeeping system in place, how can you know where your business stands? How can you make informed decisions about buying new equipment, running marketing campaigns, employing more staff and the like?
Your bookkeeper is a critical cog in the wheel of your small business, so you should ensure that they are well suited for the position, competent, and experienced to give you the necessary information regarding the financial status of your business. Contact us RIGHT NOW for more information
