Horngren’s Cost Accounting A Managerial Emphasis, Canadian 9th edition soluti...
Statewide Insurance Small Business Stories
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2. Small Business Stories Q1 2017
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Contents
HOW TO AUTOMATE YOUR BUSINESS, SO YOU CAN FOCUS ON WHAT YOU DO BEST..................... 4
AUTOMATION AND THE ROLE OF CLOUD-BASED SERVICES..............................................................................5
SOCIAL MEDIA CAN ALSO BE EFFECTIVELY OUTSOURCED..................................................................................5
IT’S NOT JUST BACK-OFFICE FUNCTIONS THAT CAN BE IMPROVED THROUGH AUTOMATION....6
RUNNING A BUSINESS? GRAB A SLICE OF THE SHARING ECONOMY....................................................... 7
SO WHAT IS THE SHARING ECONOMY?...........................................................................................................................7
THE SKY’S THE LIMIT ..................................................................................................................................................................7
TECHNOLOGY IS KEY.................................................................................................................................................................8
REGULATORY CHALLENGES...................................................................................................................................................8
HACK ATTACKS: DON’T BE LULLED INTO A FALSE SENSE OF SECURITY...............................................10
HOW TO PROTECT YOUR BUSINESS ...............................................................................................................................10
WHAT IS CYBERCRIME?...........................................................................................................................................................10
THE EXTENT OF THE HACK....................................................................................................................................................11
BUSINESS OWNERS AT A LOSS............................................................................................................................................11
THERE’S AN INCREASING NEED TO HOLD A SPECIFIC CYBER INSURANCE POLICY...............................12
WHERE TO REPORT...................................................................................................................................................................12
NEED TO TALK ABOUT CYBER INSURANCE?...............................................................................................................12
5 THINGS TO DO WHEN YOUR BUSINESS TAKES OFF .................................................................................13
1. CONTINUE TO INVEST IN YOURSELF ...........................................................................................................................13
2. BUILD YOUR SUPPORT NETWORK ...............................................................................................................................13
3. FOCUS ON YOUR CUSTOMERS.......................................................................................................................................14
4. MAKE TECHNOLOGY WORK FOR YOU.......................................................................................................................14
5. TAKE TIME OUT ......................................................................................................................................................................15
WORKERS’ COMPENSATION IS EVERYONE’S BUSINESS.............................................................................16
INJURY IN THE WORKPLACE................................................................................................................................................16
PROTECT YOUR BUSINESS....................................................................................................................................................16
MANAGING RISKS.......................................................................................................................................................................17
THE STEPS TO PLANNING AHEAD.....................................................................................................................................17
MARINE, PLEASURE CRAFT AND SHIPPING INSURANCE.............................................................................19
COMMERCIAL HULL...................................................................................................................................................................19
MARINE CARGO...........................................................................................................................................................................19
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PLEASURE CRAFT ......................................................................................................................................................................20
MARINE LIABILITY .....................................................................................................................................................................20
HOME CONTENTS IN TRANSIT...........................................................................................................................................20
IT’S WOMEN’S BUSINESS!.....................................................................................................................................21
SET YOUR PRIORITIES EVERY DAY................................................................................................................................... 22
WOMEN IN BUSINESS A GROWING TREND.................................................................................................................. 22
ADORING THE CHALLENGE.................................................................................................................................................. 23
SUPPORT NETWORKS FOR WOMEN IN BUSINESS................................................................................................... 23
YOUR GUIDE TO THE REVOLUTION IN SMALL BUSINESS FUNDING ....................................................... 25
BOOTSTRAPPING......................................................................................................................................................................25
FFF – FAMILY, FRIENDS AND FANS.................................................................................................................................... 25
GOVERNMENT GRANTS.........................................................................................................................................................25
CREDIT CARD/PERSONAL LOAN/OVERDRAFT......................................................................................................... 26
BUSINESS LOAN .........................................................................................................................................................................26
CASH FLOW LENDING.............................................................................................................................................................26
DEBTOR FINANCE......................................................................................................................................................................27
SOCIAL LENDING .......................................................................................................................................................................27
PEER-TO-PEER LENDING.......................................................................................................................................................27
CROWD FUNDING......................................................................................................................................................................27
SEED CAPITAL .............................................................................................................................................................................28
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How to automate your business, so you can focus on
what you do best
ne of the big challenges facing small businesses today is finding the time to
grow revenue while staying on top of the behind-the-scenes work that needs
to be done.
Freeing up extra time through automation means small business owners can focus
on what they do best - taking on more clients, while better servicing their existing
ones.
“If only there were more hours in the day,” might seem an innocuous phrase, but for
small businesses trying to expand, it can mean the difference between success and
failure. Automation could be the key to helping small businesses become big ones.
A recent survey by the Australian Chamber of Commerce and Industry showed
people were spending more time on complying with rules, and less time growing
their businesses and keeping customers happy. In fact, a quarter of respondents in
the annual Red Tape Survey said they spent 11 hours per week on compliance -
mostly relating to GST - putting their annual cost to their business above $10,000.
One answer to many of these people’s problems may be to automate more of their
back office functions, leaving them more time to do what they do best. This rings true
for a range of businesses, from landscape architects to builders and beauty salon
owners. There’s countless tools out there, so it pays to do your homework.
O
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Automation and the role of cloud-based services
“Cloud-based services can enable a business to outsource the back office functions
of their business to third parties in a seamless manner,” says Michael Peters of
accountancy and finance firm Peters & Partners, which provides advice to SMEs about
automation and outsourcing.
“These services can include accounting, taxation
strategy, human resources, information technology
and legal support. The service package available can
also be tailored to the size of the business,
aspirational goals and levels of growth to ensure
appropriate support is provided at each stage of
development for the business,” Peters says.
The types of services increasingly being automated include invoices, accounts, and
cashflow management. There’s even a role for automation in sales and marketing.
There are plenty on the market, such as Salesforce, Infusionsoft and TeamSupport.
“Introducing a Customer Relationship Management system can transform the way
client servicing occurs,” says Peters. “Information flowing from business websites,
electronic direct mail campaigns as well as mobile applications in real-time provides
snapshots on client behaviours and preferences. This in turn means you can
automatically send out things like special offers and updates on new products.”
Social media can also be effectively outsourced
Management tools like Hootsuite can connect businesses with 35 social media sites
and stay in touch with clients. For the likes of a beauty salon owner, this can mean
linking hot looks from celebrities, with new techniques available in-store, through
Facebook, Twitter and Instagram. Even videos of ‘how to’ on YouTube can be
managed through Hootsuite and rivals such as SocialPilot. While builders and
architects are finding they are getting new business and keeping their clients
engaged through sites such as Pinterest.
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It’s not just back-office functions that can be improved through
automation
For a landscape architects, builders and plumbers, there are automatic project cost
estimators available such as the industry recognised Cordell Costing Solutions.
Products like Cordell’s allow tradespeople to input data such as the size of the job,
types of materials and products used into a web-based platform to come up with an
instant estimate, cutting many hours of work. Rawlinsons also provides cost estimates
using a manual based system.
“Properties can be photographed in high-resolution from the air, showing gardens
and layout to their best advantage,” says aviation company Aviassist, which provides
drone training.
Increased automation will give many businesses that often desired, extra time to
grow. The trick will be to find the right systems to suit each individual business’ needs.
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Running a business? Grab a slice of the sharing
economy
The sharing economy is rapidly becoming part of everyday life, especially among
tech-savvy urbanites who are as comfortable booking an Uber on their smartphone
as they are hailing a cab. But you don’t have to be a technology whizz or an inner-city
dweller to succeed in the sharing economy, as many small business owners are
discovering.
Do you run a small cafe or takeaway? Thanks to new services like Deliveroo, Foodora
and UberEATS, your business is no longer confined by four walls. Customers can use
an app on their smartphone to order your delicious food from the comfort of their
couch. A bike courier or Uber driver will deliver to their home for $5.
So what is the sharing economy?
It began as a way to connect people with underused assets or skills with people
willing to pay for them.
In the sharing economy, person to person transactions are facilitated by online
platforms, where buyers and sellers can access via their smartphone, tablet or
computer. The platform-provider will charge a fee to one or both parties to use the
service.
The sky’s the limit
Change has been so rapid it’s hard to believe that accommodation provider, Airbnb,
started out as recently as 2008, when two friends came up with the idea of renting
out their living room to visiting conference delegates. It’s now valued at around US$13
billion with 25 million users in 34,000 cities globally.
According to Roy Morgan Research, 36.6% of Australians aged 25-34 years have heard
of Airbnb, and 13.1% would consider using them for their next holiday.
It’s little wonder then that global success stories such as Airbnb and Uber are inspiring
local entrepreneurs to have a go.
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Sharing platforms allow people to share just about anything, from their car (Car Next
Door, Drive My Car), caravan (Camplify, My Caravan), parking space (Parkhound,
MonkeyParking) and labour (Airtasker, TaskRabbit) to petcare (Pawshake, DogVacay).
And if the platform that would transform your small business doesn’t exist? Why not
hire an app developer and run the idea past some friends to test the market?
Technology is key
Now that broadband services are being rolled out across the nation and close to 90%
of adult Australians have a smartphone, the barriers to connecting with your market
have never been lower.
Luke Bird is a fly-in fly-out worker based outside Brisbane. With three children and a
fourth on the way, he wanted to start his own small business so he could stay closer
to home. He saw the Camplify platform as a way to test the market for a camper hire
business, Adventure Shack.
Early this year he bought two camper trailers and since then has bought another two,
which he hires out to holidaymakers on the Camplify platform. “It allows you to get a
feel for the market without having to go all in”, says Bird.
Camplify provides a ready made community of campers as well as contracts and
insurance. Like most platforms, it also allows users to rate their experience, which
helps people like Bird establish a reputation for good service.
Bird has already moved the business out of his backyard into a commercial
warehouse, and if all goes to plan, he hopes to offer up to 20 camper vans, which
would allow him to give up his day job.
As the sharing economy evolves and transforms the way we do business, the
opportunities to expand into new areas, are only just beginning.
Regulatory challenges
While the sharing economy offers individuals like Bird the opportunity to start a
business, the pace of change has caught regulators and lawmakers off guard. Airbnb
has faced legal challenges over the terms of its leases and noisy guests, while Uber
drivers have had to fight to be covered by insurance.
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There is also some confusion around the issue of tax. The ATO recently released
guidelines on the sharing economy and tax, and insurance companies are also
beginning to respond to the evolving needs of the sharing economy with new
products.
As the sharing economy evolves and transforms the way we do business, the
opportunities for enterprising individuals to kick-start a business, or for existing
businesses to expand into new areas, are only just beginning.
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Hack attacks: Don’t be lulled into a false sense of
security
Businesses of all shapes, sizes and industries are experiencing hack attacks every
single day in Australia. And these situations are on the rise, reports reveal.
Hack attacks can be deliberate attacks, technology issues or simple negligence. The
costs involved can be massive - ranging from notifying your customers,
investigations, credit monitoring, the need for public relations, compliance and even
the potential for compensation and engaging experts.
According to the Australian edition of PwC’s Global Economic Crime Survey,
cybercrime is now the number one economic crime in Australia. The PwC survey
found that 65% of Australian respondents have experienced cybercrime in the last 24
months.
Businesses need to prepare for the unknown that tomorrow holds, too, with almost
six in 10 Australian organisations expecting to experience cybercrime in the next 24
months. And worryingly, 80% identify an increase in their risks of cybercrime (up from
63% in 2012).
How to protect your business
Businesses can protect themselves by looking out for email scams, by being cautious
of emails from unknown senders, by taking care on social media and by only dealing
with reputable institutions when trading online. Other tips to protect your SME include;
• Use different passwords for every account and ensure they are strong
• Back-up your business data regularly
• Store backed up data off-site and check the data restore periodically
• Keep antivirus software up to date, along with software patches and updates
• Be conscious of personal information shared online
• Know where cloud-based data is stored.
What is cybercrime?
Cybercrime is defined as fraud, money laundering and theft – all of which could have
could have a significant impact on a business.
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Small businesses often try to save money by using laptop computers, tablets and
mobile phones for both businesses and personal use, share technology among staff
and don’t set up or maintain firewalls, virus protection and security bugs.
Don’t think that cyber criminals have bigger fish to fry - no one is immune. None of us
will forget the Australian Census website hack this year, in what is a high profile
example of how cybersecurity is a constantly evolving and complex matter.
There are plenty more we don’t hear about, too. During a recent Four Corners report
on ABC television, the Prime Minister’s cyber security adviser, Alastair MacGibbon
revealed that the Australian Government was ‘attacked on a daily basis’, but that not
all these were made public.
The extent of the hack
According to the Australian Cybercrime Online Reporting Network (ACORN), hack
attacks include:
Unauthorised access or hacking – when someone gains access to your computer or
device without permission
Malware – malicious software, such as viruses, Trojans and spyware, which monitor
your online activity and cause damage to the computer
Denial of service attacks – which floods a computer or website with data, causing it
to overload and preventing it from functioning properly. This type of attack is
frequently targeted at businesses rather than individuals.
Business owners at a loss
Meanwhile, business owners are looking for ways to protect their cyber security, with
many realising there’s an increasing need to hold a specific cyber insurance policy.
Sydney cybercrime expert, Andrew Bycroft, says business owners are often at a loss
to know how to protect themselves from cybercrime. He works with businesses to
build a strategy to plan ahead and minimise any damage that cybercrime could
cause.
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There’s an increasing need to hold a specific cyber insurance policy
A common hack is a ransomware email, which is a malicious software designed to
block access to a computer system until a sum of money is paid.
"I often get calls from frantic business owners
staring at a red screen demanding a ransom be paid
for the return of their files. It can be a very scary
experience, but it’s happening every day to business
owners,” Bycroft says.
Small businesses might need to spend a few weeks minimising their risk at a cost of
between $2,000 and $10,000, while larger businesses may need to spend between
$50,000 and $100,000 on cybercrime minimisation strategies, according to Bycroft.
Where to report
Hack attacks can now be reported to ACORN. Be sure to provide as much detail as
possible and keep any relevant information about the incident, such as emails and
screenshots.
Need to Talk about Cyber Insurance?
Contact Us at Statewide Insurance, we’d be only too happy to help.
Policies start at $500 per annum to ensure your peace of mind.
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5 things to do when your business takes off
Your small business is taking off and you can feel justly proud. But rapid growth can
bring new challenges. Chances are you’re so busy working in the business that there
is little time to spend on the business. And that can be fatal.
If you are not prepared, rapid growth can send your small business off course.
Seeking out other small business success stories can be a source of inspiration, and
you don’t have to look far. There were close to 2 million small to medium-sized
businesses in Australia in June 2016 and their numbers have been growing steadily.
Advice and resources for small business are also offered by state and federal
governments. So set some time aside to explore what’s on offer in your state.
Here are 5 habits that successful business owners have adopted, to ensure their
business keeps growing;
1. Continue to invest in yourself
As your business grows, keeping your skills and knowledge current and staying
abreast of industry trends is essential. You can find relevant workshops and events
for your business on everything from research and development grants to social
media fundamentals, mostly free of charge, on this government website.
When you are flat out working, you probably try to spend any spare time with family
or friends, but don’t overlook the value of networking. Even five minutes a day spent
connecting with contacts by phone, email, social networks like LinkedIn or similar can
lead to future business. Attending industry and community events can also offer
valuable new leads.
As your business grows, keeping your skills and knowledge current and staying
abreast of industry trends is essential.
2. Build your support network
There comes a time when you can no longer keep track of your business and its
finances in your head. Make sure you have a good relationship with your accountant,
solicitor, bank manager, insurance broker and any other support people you rely on
to protect your bottom line. A Steadfast insurance broker can assist you to protect
your assets from claims.
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Perrie Croshaw is the founder of award-winning online accommodation provider
South Coast Holidays which started at her kitchen table. Today she and her business
partner employ seven staff in two office locations and manage 140 properties. In the
early days, she says her accountant taught her the importance of avoiding a cost
blowout. “Running a business is like balancing scales – you need a clear idea of your
incomings and outgoings,” she says. Once your business takes off, your accountant
may need to be more involved in its day to day running. You may also be able to
negotiate better finance deals with your bank.
3. Focus on your customers
While constant focus on your bottom line is important, it’s your customers who pay
the wages, not the business. By keeping in contact with customers, inviting and
replying to feedback, you can build loyalty and intervene early to fix problems that
could cost future sales. Croshaw sends regular emails to her property owners to let
them know what’s going on. “They love the regular communication; they feel I’m
working for them,” she says.
While constant focus on your bottom line is important, it’s your customers who pay
the wages, not the business.
4. Make technology work for you
When you are working in the business, it’s easy to get caught up in daily operations -
answering emails, dealing with staff and clients - making it difficult to find time for the
creativity you need to keep growing. “If you are doing a job over and over, there has
got to be a way to automate or template it,” says Croshaw. By adding live chat to their
website, she says time-poor customers can now book a holiday on the go in under 7
minutes, much faster than previously possible using email or text messaging.
The business also uses cloud-based services that allow the partners to operate
remotely. “On days when we are working outside the business we might read
contracts or analyse new software to reduce the time spent on repetitive jobs,” she
says.
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5. Take time out
One of the most important things you can do for yourself once your business takes
off is to look at your calendar at the start of each year and schedule in holidays.
“Things can spiral out of control if you don’t treat yourself to a break,” says Croshaw.
By taking the time to hire the right people who share your vision and the culture of
your business, it will be easier to step away and let them run things while you are
away.
Take the time to work on your business, not just in it, and watch it grow from startup
to small business success story.
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Workers’ compensation is everyone’s business
Business owners are required to navigate the complex world of workplace safety.
Here’s some things you need to know to ensure your business is compliant.
Injury in the workplace
Illness or injury in the workplace is more common than you might think. No matter
what industry you’re in, it’s an area of running a business that can’t be ignored.
The statistics speak for themselves. There were 106,565 serious workers’
compensation claims last year, which equates to 5.9 serious claims per million hours
worked, according to Australian Workers’ Compensation Statistics data from Safe
Work Australia. The economic cost of work-related incidents was $61.8 billion,
statistics show.
The three industries with the highest number of serious claims per million hours
worked were transport, postal and warehousing (9.3%), healthcare and social
assistance (8.7%), and agriculture, forestry and fishing (8.6%).
Most of the injuries during this time were musculoskeletal disorders, which led to 90%
of serious claims - the most common were traumatic joint/ligament and
muscle/tendon injuries (45%). While claims are down on previous years, businesses
still need to be prepared, just in case.
Protect your business
The onus is on Australian business owners to navigate the complex world of
workplace safety, which includes understanding workers’ compensation
requirements. Workers’ compensation insurance is compulsory for business owners
in all states and territories. Workers’ compensation insurance is compulsory for
business owners in all states and territories.
This form of insurance pays employees if they are injured at work or become sick due
to their work. The payment can cover their wages if they’re not fit to work, medication
expenses and rehabilitation.
Employers are responsible for taking reasonable steps to ensure that the workplace
is a safe working environment, which extends to events where employers are
technically off the clock, such as work Christmas parties.
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Uninsured employers may still be able to claim for workers’ compensation benefits
for staff in case of injury or illness, so check with your local authority. There’s lots of
great information on the Safe Work Australia site.
Each state and territory has independent regulators and administrators in place to run
workers’ compensation, so make sure you become familiar with your local authorities.
The rules while similar differ between each state and territory.
Managing risks
Wise employers foster a health and safety culture within the workplace, providing
regular communication around safety and injury management to raise awareness
among staff.
This process includes encouraging staff to identify potential injury or illness threats,
and being sure to address these issues immediately. Rewarding positive contributions
to health and safety in the workplace can also have a significant impact on the cultural
change within an organisation. Taking immediate action after an incident to minimise
effects and make sure people are supported is paramount.
Make sure your workplace has emergency response plans for evacuations and
medical response systems in place. Be sure to conduct an investigation to understand
how the incident occurred and document everything, including taking photos of
where the incident occurred and then take steps to prevent it from happening again.
The steps to planning ahead
Efficiently managing work health and safety risks within a workplace means having a
systematic approach, which involves five key elements. These are:
1. Governance: Ensure your workplace has the organisational framework,
procedures, policies and processes in place
2. Prevention: Develop specific hazard policies and procedures for your
workplace
3. Response: If a safety incident takes place, you must take steps to remove the
hazard that caused it, and implement changes to stop it from happening again
4. Managing hazards: An effective risk and hazard management methodology
will allow you to identify hazards that pose a risk to your workers and resolve
them before they cause injury or illness
5. Recovery: Where a worker has been injured, the employer has responsibilities
to put in place a rehabilitation management system for workplace injury or
illness
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Workers Compensation is an area of business that’s important to take seriously. Even
if you’ve dealt with this area of your business six months ago, it’s important to revisit
safety issues regularly, so make sure you schedule regular audits, and include your
staff in the process.
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Marine, pleasure craft and shipping insurance
Marine insurance can mean a lot of different things, depending on the risks you’re
looking to insure against. As such, “marine insurance” is a bit of a catch-all term that
can usually be subcategorised and then referred to as something a little more
specific.
To help you make sense of the different types of insurances that fall under the
“marine insurance” banner, let’s have a look at what each one is designed to cover.
Bear in mind that different insurers may refer to each of the insurances listed below
differently, but in general, insurers will tailor their policies to cover similar risks.
Marine insurance can mean a lot of different things, depending on the risks you’re
looking to insure against.
Commercial hull
Commercial hull insurance is designed for businesses in which the use of a water
vessel is actually at the centre of your business — for example, if you run charter boats
or barges. Commercial hull insurance typically covers theft, malicious damage,
liability arising from the use of the vessel and accidental damage to the insured
vessels.
Marine cargo
Although we’ve already discussed the idea of “marine insurance” being more of a
collective term for different types of marine insurances, if an insurer sells only the one
product and it’s actually called “marine insurance”, it’s more than likely a policy that
closely resembles marine cargo insurance.
Marine cargo insurance is a policy designed for businesses. More specifically, marine
cargo insurance is a policy type designed for businesses who transport their goods
both domestically and internationally, be it by air, road, rail, sea, courier or post —
that’s right, marine cargo insurance doesn’t just relate to transport via water bodies.
Marine cargo generally provides cover for damage to or loss of goods while they are
in transit.
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Pleasure craft
Pleasure craft insurance is for those people lucky enough to own their own water
vessel — you know, like a nice yacht — for personal use and not for business
purposes. Most pleasure craft insurance policies provide cover against theft and
accidental damage, as well as some worst-case-scenario covers, such as wreck
removal. Third party and personal injury covers are also typically included.
There is also a range of optional covers that will relate specifically to whatever your
pleasure craft is usually used for — for example, you might be quite into sailing, fishing
or water skiing.
Marine liability
Marine liability insurance provides cover for marine service providers — for example,
ship repairers and marina operators. This particular cover insures against various
types of liability, including but not limited to cargo damage, damage to other marine
vessels and property, and third party injuries.
Home contents in transit
This is another marine insurance type whereby cover isn’t just limited to travel via sea.
If you have employed removalists to transport the contents of your home, this type
of insurance provides cover for loss or damage of your property while it is in transit
(be it by road, train, air or sea), as well as while it is in storage (for a limited period of
time).
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It’s Women’s Business!
Melbourne business woman Kate Morris has a celebrated Australian business and
international expansion on the cards. Meet the founder of Adore Beauty.
Kate Morris had high hopes when she launched her online retail business with a
$12,000 loan nearly 17 years ago.
Fast-forward to today, and the Melburnian is the CEO of Australia’s largest online
beauty and skincare retailer, Adore Beauty.
The company is a major player in the top Australian retailer businesses, turning over
$16 million in 2016. Financial forecasts expect the booming business to turn over $20
million in 2017 this calendar year.
While it’s phenomenal, Morris takes it all in her stride. The early days were a hard slog,
with that initial $12,000 loan from her father-in-law her first hurdle.
“Initially, I just focused on paying back the loan. The
plan after that was to make a living out of this
business, which wasn’t easy given that online
shopping was an entirely new concept in Australia
back in 1999 when I launched.”
The online landscape has evolved dramatically since then, fuelling her online store’s
growth. But additional challenges have been added to the mix, such as increasingly
savvy online shoppers wanting a better user experience and online beauty advice.
Morris also made the gutsy decision to offer free shipping on all orders, absorbing the
associated costs.
She went on to re-mortgage her home in 2010 after the banks told her she needed
‘skin in the game’ if she wanted a loan. “Some might find that kind of risk terrifying, but
not going ahead with my big idea was just as terrifying to me.”
Morris went on to re-mortgage her home in 2010 after the banks told her she needed
‘skin in the game’ if she wanted a loan.
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Set your priorities every day
Morris sold a 25% stake of the business to Woolworths for an undisclosed sum last
year, giving her the working capital to invest in additional staff, inventory and bolster
her marketing activity.
The hiring spree boosted staff numbers to nearly 50 across the office, 1,500 sq/m
warehouse and skincare centre in Brunswick.
And while Adore Beauty has had many competitors over the years, the company has
carved out an enviable niche in the online beauty market with its unique user
experience, which includes live chat until 9pm on the site, trial sized products, and a
much appreciated Tim Tam in every order.
The mother of two was named in the Australian Business Women’s Hall of Fame in
2015, and admits it’s a juggle.
“You’ve got to prioritise what’s important to get done right now, while also being
flexible and handling issues as they arise. My priority is being home for dinner with my
family every night, and not having the children spend more time with their Nanny than
they do with their parents,” Morris says.
“Of course, one of the perks of having your own
business is being in control of your own destiny.”
Women in business a growing trend
Statistics reveal that Morris isn’t alone. There has been a 46% increase in the number
of women business owners over the past two decades in Australia, according to a
2016 report prepared by the Australian Bureau of Statistics for the Office of Women.
Today, just over a third (34%) of Australian businesses are operated by women, with
numbers steadily been rising over the last 20 years.
Australia’s experience is similar to that of the United Kingdom, where in recent years
the number of women in self-employment has been increasing at a faster rate than
the number of men (though men in both countries still dominate the self-employment
sector).
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The Office of Women report also reveals that women business operators had high
levels of life satisfaction (57%), who were pleased or delighted with the quality of their
lives.
Adoring the challenge
International expansion is on the agenda for Morris. A recent trial in China remains in
the experimental stages, which has presented Morris and her growing team with
countless new business learnings.
“The only way I can manage with two young children is to equally share the
household duties and care of our children with my partner, James. That doesn’t mean
I’m ‘lucky’ – I would expect that from my relationship, but nonetheless I recognise that
a lot of women don’t have that level of support” she says.
Morris recommends letting go of things you don’t have time for (such as hiring a house
cleaner to help around the house), and taking short breaks, which renews her energy
levels.
“People often look at my life and tell me that they
think it looks stressful. The truth is that I love it – I
love the challenge and wouldn’t have it any other
way. I hope I never have a job again!”
Support networks for women in business
Head Over Heels - Founded in 2010 by five women involved in early-stage investment
and support, launched Head Over Heels to enable CEOs to pitch their businesses to
business and community leaders. The network helps level the playing field for
women entrepreneurs and aspirational role models for both women and men.
Her Business - Is a community that offers female business owners access to
connections, promotion, mentorship and the ability to learn new skills.
Women’s Networking Australia - Has been helping women in business network for
the last 25 years. This member-based organisation educates, guides and supports
women in their pursuit of success.
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Business Chicks - Brings women together and inspires women, believing that when
women stop competing and start lending a hand, great stuff happens.
Meet Up - It’s always checking out this great platform, which publishes Meet Ups in
cities all over the country and overseas to bring together people who do that they do
in life. They help people talk, mentor and support each other - all in pursuit of moving
their lives forward.
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Your Guide to the Revolution in Small Business
Funding
So you’ve got that great business idea – now you're looking for funding. The good
news is that there have never been as many options available to help you finance
your start-up.
Here are some alternative and smart ways to fund your idea to help you on your way
to business success.
Bootstrapping
Bootstrapping is self-reliant funding that comes either from your personal savings or
from the operating revenue of the new company and is the ideal funding for a start-
up. The obvious benefit of bootstrapping is that you don’t have to surrender any
equity to an outside investor or pay back any loans, and you get larger profit margins.
But the logical pitfall is that, if you’re intending to fund the company through revenue,
you have to be selling your good or service.
FFF – family, friends and fans
Many small private companies get their funding in the first place from friends, family
and fans of the business – people that know the business or are familiar with the
product or service. These are people who genuinely want your business to succeed.
It’s fairest to everyone if you use a written loan agreement to make it clear this money
is a loan and not a gift, nor equity in the business. Be clear about when the money
should be repaid and with how much interest.
Government grants
According to grants information collator GrantGuru, Australia’s three levels of
government – plus companies, non-government organisations (NGOs) and industry
bodies – make a staggering $51.3 billion worth of grants and assistance programs
available for small businesses every year. The crazy thing is that sometimes these
grants go begging because no-one applies for them. Your business could qualify for
a federal, state, or council grant – make sure you investigate this source.
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Credit card/Personal loan/Overdraft
These are the easiest ways to borrow money from a bank to fund a business because
you don’t have to sit down with the bank and go through your business plan and the
security you’ll be putting up for the loan. The downside is that the most you’ll be able
to borrow is about $10,000 (credit card) and $20,000–$30,000 (personal
loan/overdraft). But if you can pay every bill on your credit card within the interest-
free period, you may be able to increase your limit over time to more than these
amounts.
Business loan
Banks do lend to small businesses, even start-ups. However, in reality, getting a loan
when you’re starting out in business can be very difficult. You will need to have a
sound business plan and a proven track record of selling your goods or service. The
bank is then likely to want property as security (as this is the easiest and simplest form
of security to be offered: other assets, such as cars and equipment, may be enough
to secure a loan). And of course, you need the cash flow in the business that enables
you to service the debt. Talk to your bank to see what it can do.
Cash flow lending
Increasingly, banks will look at security other than property as security for a loan: in
some circumstances they are prepared to lend against cash flow to an established
business. However, such loans will probably have covenants that cannot be broken,
or the bank can demand immediate repayment. These can include maintaining
certain levels of profitability and turnover and not having too many outstanding debts.
Talk to your bank first, but keep in mind that “fintech” disruptors have stepped into
this area: cash flow lenders such as Moula, PayPal, Kikka Capital, Valiant Finance and
Prospa (which has a strategic partnership with Westpac under which Westpac refers
customers to Prospa’s loan application site), mortgage aggregator AFG and
accounting software provider Reckon. These disruptions are based on data: Prospa
says the cash flow data from Reckon’s accounting software is the best measure of
business fundamentals, helping to determine the business’s ability to repay and
manage risk during the life of a loan.
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Debtor finance
An alternative form of funding such as debtor finance can be appropriate – but again,
you must be making sales. The business can sell unpaid invoices to specialist debtor
finance (or “factoring” firms) for a cash advance of 75% – 90% of the amounts owed.
The business then repays the money when the outstanding invoice is paid. The good
thing about this is method is that finance advances are usually made within 48 hours,
giving the business access to quick cash. The downside is that it costs more than other
forms of funding. Digital operator FundX has recently launched in this space.
Similar to debtor finance is trade credit insurance, which protects against bad debts
in Australia and overseas by insuring your debts against insolvency, protracted
default or political events.
Social lending
Online business lending marketplace, Marketlend, acts as a conduit between
investors and small businesses looking for finance. Not a peer-to-peer lender,
Marketlend is an online social lending platform that facilitates loans. Small businesses
list their desired loans on the platform and investors bid, auction-style, to invest.
Investors can bid any amount larger than $99. Marketlend founder and chief
executive, Leo Tyndall, calls it the “eBay of business finance.”
Peer-to-peer lending
Peer-to-peer (P2P) lending platforms like Ratesetter and SocietyOne connect
investors with creditworthy borrowers. Ratesetter offers business loans from $35,000
up to $150,000. Other P2P platforms include MoneyPlace, DirectMoney, ThinCats
Australia, OnDeck and Harmoney.
Crowd funding
Crowd-sourced equity funding is a form of online fundraising that allows investors to
make small equity investments in a company. Platforms in Australia include Equitise,
VentureCrowd, OzCrowd and Pozible, while overseas platforms accessible from
Australia include Kickstarter, Indiegogo, RocketHub and OneVest.
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Seed capital
A company with an idea, a business plan, and possibly some initial product
development or prototype can receive initial funding from venture capital firms or
“angel” investors (high-net-worth individuals) who specialise in very early-stage
investing. The ‘seed’ funding usually enables the company to test or prepare its
product or service to the point where it can start the business. Investments at this
stage are typically up to $200,000 in size. Both kinds of investor may also bring
experience, mentoring and industry contacts that can help a start-up rapidly grow its
business.
But these kinds of investors will want to see a very detailed business plan, and will
want to know exactly how the funds will be used: you will need to demonstrate that
the funds will be used in a way that will increase the value of the business. This kind
of investor will ask detailed questions about whether the funding will be used to
finance growth activities, including product development, recruiting key staff,
launching sales and marketing activity. They will need to be satisfied that the business
can be scaled upward and do not typically like to see funding earmarked for the
founders to pay themselves salaries.
Remember with any form of equity funding that you are giving up a portion of
ownership.
Remember with any form of equity funding that you are giving up a portion of
ownership. This can be a problem for many business owners; however, if the funding
helps the valuation of the company to rise, the portion the founders retain, even if it
falls into the single-digits, can ultimately end up being worth much more than the
100% they owned before they brought in equity investors.