Beginning in Business series: Small Business Overview. Accompanying PDF is paper 01.01.

1. Small Business Overview
Alan Lewis
Accountants

2.  "A business in which all the critical
management decisions are made by one or
two people, without the aid of internal
specialists"
www.lewistaxation.com.au

3.  95% of businesses
are small
www.lewistaxation.com.au

4.  Self motivated
 Seek business independence
 Very little knowledge of:
◦ general management
◦ bookkeeping skills
◦ management reports
 Do not understand the "business of
business"
 Neglect can erode the business base
www.lewistaxation.com.au

5.  75% failure rate within three
years
www.lewistaxation.com.au

6.  Inadequate planning
 Lack of professional
advice
 Insufficient capital
 Management skills
 Bookkeeping systems
 Accounting systems
www.lewistaxation.com.au

7.  Cashflow - especially payment of GST and
PAYG tax
 Lack of cash for growth
 Debt financing
 Cash management
 Taking too much money out
 Meaning of profit
 Poor debtor, stock, work in progress
control
www.lewistaxation.com.au

8.  Bank relationship
 Location
 Pricing
 Partner
 Delegation
 Big outside
organisations
 Disinterest by owners
www.lewistaxation.com.au

9.  People management skills
 Equity finance
 Succession
 Thinking through problems
 Mixing personal life and
business
 Staff relationships
 Major customers
www.lewistaxation.com.au

10.  What business are you in?
 Not understanding the market
 Relations
 Business Plan
 Budget and Cashflow Forecasts
 Lack of outside advice
 No strategic planning
 Empathy with customers
www.lewistaxation.com.au

11.  In focusing on the problems of small
business
www.lewistaxation.com.au

12.  Cost of labour
 Charge out rates
 Documentation of estimates
 Control of business overhead
costs
 Break-even level
 Cashflow control - especially
related to GST and PAYG
www.lewistaxation.com.au

13.  Control of work in progress
 Progress claims
 Changing economic conditions
 Review of Government decisions
 Taxation Office requirements
 Taxation Office power to fine
www.lewistaxation.com.au

14.  Subcontractor control
 Non recording of important matters on paper
 Funding of debtors, stock and work in
progress
 Submissions to banks and financial institutions
 Regular periodic financial reports
 Budgets, Cashflow Forecasts and other
estimates
www.lewistaxation.com.au

15.  Relationship with bank manager
 Business Plan
 Board of Directors/Board of
Advice
 Customer Advisory Committee
 "Think Big" in small business!
 Quality control
 Keeping records in a shoe box
www.lewistaxation.com.au

16.  Get advice before starting
 Business Plan
 Budget and Cashflow Forecast
 Accounting records
 Regular financial reports
 Review Budgets and Cashflow
Forecasts
 Conduct market surveys
www.lewistaxation.com.au

17.  Contact with customers
 Business location
 Update your product and technology
knowledge
 Review quality control procedures
 Hire and keep good staff
 Use financial data for managing the business
 Know your customer
www.lewistaxation.com.au

18.  Use an accounting firm
 Some accountancy practices offer
a wide range of services
 Use professional advisors as a
team
 Appreciate that you will need
outside advice
www.lewistaxation.com.au