Winging it works, sometimes. But setting intentions and creating a definite focus can deliver the exact results you are craving. And that would be pretty cool, right?

So how do you create the focus that delivers the results you want? Have you set an annual revenue target that you want to achieve this year? Have you broken that target down so you know how much it is for each month, week or day? What about setting a profit target; if you know your business and your numbers you should be able to develop a profit target from your revenue targets as well.

The fabulous thing about focusing on both revenue and profit targets means you are also focusing on keeping costs to a minimum. Focusing on these targets can help to develop a “financial performance” mindset. Having this mindset means you are focused on improving the financial performance of your business.

Once you have developed a financial performance mindset your decision making becomes so much easier. From then on, every time you make a decision you will ask yourself, “what affect does this have on my revenue and profit targets?” I’m not suggesting you start madly cost cutting or getting rid of employees, because expenses are a necessary part of generating revenue. However changing your mindset means you will start cutting unnecessary expenses and finding more opportunities to increase revenue to help you achieve your targets.

In the same way we often need a goal to work towards to keep us motivated when exercising, the same applies to business. Existing in “just surviving” mode is the quickest way to your demise, but a planned intention outlining what will be achieved each week, month and year is the track to success. Athletes set incremental targets to ensure they get to the Olympics, and so too do successful business owners to ensure they grow their business each year. I know, because I have witnessed business owners tapping into a “financial performance” mindset and reaping the rewards. Once they set the intention, their business grows on purpose.

Try it out. Set annual revenue and profit targets for your business. Break them down to monthly and weekly targets. Measure your results weekly and monthly to keep yourself accountable. You may be surprised at how much you learn to love you numbers by improving your financial mindset.

What targets will you set?

1. Review your wages or salary package

Even though you’re the business owner, you should still review your salary yearly. If cashflow permits, you should be looking after yourself in the form of remuneration and should also be paying an increased amount into your superannuation.

2.  Superannuation

As a business owner, why wouldn’t you want your own Self-Managed Super Fund? This gives you the opportunity to use your super monies to buy your office or factory building and start paying rent to yourself. By doing so, you’re increasing your wealth while building an asset you can sell and pay no tax on. Get the right advice on this area and start looking after your future.

3.  Insurance

Very few of us ever insure our biggest asset – ourselves. We can’t put a value on our life and very few of us stop to think about what might happen to our family after we are gone. Who’ll cover the mortgage payments? Will there be enough money to educate the kids? The best part about life insurance is that it can be paid for from a Superfund. So the excuse that you can’t afford it isn’t relevant, as your 9 percent contributions are covering your family.

Another insurance you might not have considered is income protection. If you’re a one income family, how can you afford not to have income protection? If you’re sick or injured and can’t work, how will the mortgage, food and other bills be paid? Simple – get income protection that will pay you up to 75 percent of your income.

4.  Credit card debt

Credit cards with 55 interest free days are great, but they’re not the way to run your business. The compounding interest means paying the minimum monthly payment isn’t enough to cover the total interest debt. If you have a credit card debt, use a balance transfer with 0 percent for 6 months and pay it off within the 6 months. If you aren’t disciplined enough for this you need to consolidate or refinance.

5.   Consolidate funds

By doing something as simple as putting all your loans into one at a single interest rate, you can save thousands over the year.

6.  Refinance of loan(s)

With interest rates in free fall and increased bank competiveness there has never been a better time to refinance or shop around for a better deal. This costs you nothing and can also save you thousands over the term of the loan.

For small businesses that have the good fortune of taking a well earned rest over the Christmas/New Year period, the break is a great opportunity to reflect on the previous twelve months. For some it will be a time for recovery from a difficult year, whilst others will take the time to celebrate their successes.

No matter what camp you are in, the break from running your business should always see some time spent reflecting on lessons learnt and development of a plan for the year ahead. This need not be a complex process of self-analysis, simply a re-evaluation of where you had planned to be and where you ended up.

From a small business accounting viewpoint, the following areas should be foremost in your thoughts as you develop a plan for the year ahead.

1. Cashflow is King

Evaluate all of your outstanding debtors and do whatever is necessary to ensure that you are paid on time and in full. Make a new resolution to be wary of any new business you take on. Don’t just look at the potential income and profit from a particular customer. If you know that they are going to struggle to pay you for your product or services then any profits can be washed away in the opportunity cost of that revenue. Similarly, have an ongoing plan for debtor recovery, and assign time each week/month to minimising your outstanding debtors.

2. Assess Inventory Requirements

Following on from point one, it is better to only have in stock what you genuinely require in the short term. Any stock that is sitting around waiting for a potential sale is wasted in my opinion. The Japanese have a saying for this, Just In Time, or “Kanban”. By only ordering in what you know is about to be sold or produced you limit the amount of working capital that is tied up in stock. Also, review and eliminate slow selling product lines and offload any obsolete stock that you know is just wasting space.

3. Staffing Requirements

Often this is one of the hardest aspects of managing a small business, as emotional attachments and friendships with your employees can cloud your judgement. In difficult economic times, each employee must be evaluated for what they bring to your business. Each individual has their own strengths and weaknesses but must be productive in the workplace. Depending on your industry, it may be better to use sub-contractors rather than have idle staff members sitting around waiting for something to do and eating up your hard won cash flow.

Part of a fluid business plan must allow for an ongoing evaluation of all staff, why you employed them and what they bring to your business. If your business plan changes or work volumes vary, then your workforce must be flexible and adapt, otherwise opportunities will be lost. If you don’t have this flexibility in your work force, then now is the time to formulate a winning strategy.

Getting value from your fleet can be complex and costly without the right support. Managing vehicle depreciation, residual and maintenance risk, and keeping the whole-of-life cost and management of the vehicle under control can syphon valuable time and money away from your core business.

What can a fleet management expert deliver?

1. Maintenance management: Continual maintenance of your company vehicles is essential to avoid large costs further down the track. Understanding your maintenance and repair expenses can be a headache. Good fleet management programs will take control of your vehicle maintenance and repairs from preventative maintenance scheduling to emergency roadside assistance. This means lower costs and greater convenience for your business.
2. Corporate level discounts: Fleet management companies can aggregate the needs of numerous clients to deliver greater buying power on fuel, labour, and parts.  These discounted rates are then passed on to clients.
3. Reduce your administration time: Fleet management offers flexible service options to handle your fleet administration and support needs, saving your business valuable time and money.
4. Save money through better efficiency: Fleet managers provide customized vehicle selection, advanced technology and expert analysis to help your lower fuel consumption, reduce your costs and reduce your CO₂ emissions.

The maintenance of your fleet is crucial, but so is its efficiency. As the country strides towards a greener economy, and as climate change is taken into account in the management of assets, reducing fuel consumption and maximizing the efficiency of your vehicle fleet becomes a more prominent factor in the business management mix.

In this context, the old mantra rings true that the most dynamic businesses adapt in anticipation of a change, rather than as an afterthought. The first step is examining your current operations; the second, the introduction of change.

While the Federal Government’s carbon tax scheme excludes transport fuels for light vehicles, a string of policy incentives to reduce vehicle emissions offer the perfect catalyst to reduce your fleet’s carbon footprint, but again, the right advice essential. On 10 May this year, the Treasurer announced as part of the Federal Budget, changes to the calculation of fringe benefits tax (FBT) for car fringe benefits to remove adverse environmental incentives for people to drive more and further to increase their tax concessions. The new FBT scheme applies a single tax rate of 20 percent, regardless of the kilometres travelled during that FBT year.

Initiatives like these targeted at the fleet industry are not surprising in light of recent Government figures highlighting that the transport industry contributes 15 percent of the country’s CO2 emissions, and light vehicles including passenger/sport utility vehicles and commercial vehicles account for 64 percent of transport emissions.

Business success in a carbon-constrained economy will be underpinned by how well businesses can adapt to more environmentally efficient operations. Good fleet managers can offer valuable guidance and products to help analyze business information to find out how to best run an energy efficient fleet. By becoming energy efficient, companies can simultaneously save money and reduce their impact on the environment.

Four simple steps to fleet energy efficiency

1. Measure: First, a business needs to set a baseline for current fuel costs and carbon emissions. Without knowing where to begin, progress will not be effectively measured.
2. Analyse: Determine where improvements should be made. Comparing the efficiency of different vehicles, retraining drivers and tracking routes to reduce fuel use are good first steps.
3. Implement: Create cost and emissions-reducing strategies for the company. The faster new strategies are implemented, the faster savings will start.
4. Track: Monitor the fuel-efficient performance. Highlight the areas where costs are going down and improve where they are not. Continue to refine goals to become more efficient.

The Minister for Infrastructure and Transport, the Hon Anthony Albanese, recently released a discussion paper that examines how to implement carbon dioxide emissions standards for new light vehicles from 2015. Cars and other light vehicles contribute around 55 million tonnes of carbon emissions to the atmosphere each year, so the light vehicle sector is an important area for action for achieving the national five percent target for carbon reduction by 2025.

According to the Federal Chamber of Automotive Industries, smaller vehicle adoption is already catching on in Australia, making up 36 percent of all vehicle purchases for 2011. However, the Australian automotive industry is on the cusp of a more profound change; elective vehicle (EV) adoption.  Key players in the Australian automotive market for cleaner and more efficient energy generation have thrown their weight behind efforts to make EVs more feasible in Australia, significantly improving accessibility for business customers.

Recent strategic commitments by Better Place, GE and Renault Australia will help to build comprehensive infrastructure for EVs delivering convenience and affordability to customers that is equal to or better than petrol driving.  GE recently made a commitment to add 1,000 EVs to its Australian fleet as part of a global pledge to buy 25,000 EVs by 2015.

While electric powered fleets might be a few years away for the majority of businesses, there are definitely benefits to putting a focus on fleet efficiency – both from an operational and financing perspective. A cooler economic outlook is breeding a more cost conscious approach among Australian businesses and according to a recent MYOB research report, more than half of SMEs believe an economic recovery is more than 12 months away. Businesses are also thinking more about how to extract maximum value and to manage their balance sheet effectively.

From financing through to remarketing, operational metrics to environmental performance indicators, re-evaluating your fleet management approach can help save time and money and turn your business vehicles into strategic assets.

–      Neil McKay is General Manager, Custom Fleet, GE Capital.

“In the lead-up to Christmas, it is important owners and managers review their fundamental business practices to improve their company’s prospects for growth and continuing profits in the New Year,” suggested Greg Charlwood, managing director of Bibby Financial Services.

With that in mind, here are Charlwood’s 12 business tips for SMEs preparing for 2012.

1. Look for a partridge in a pear tree
The common wisdom is that a ‘bird in the hand’ is better. Certainly when you’re just starting out or wanting to develop your business further, it is wise to be realistic about what you can achieve and know your strengths. At the same time, always challenge certainty, especially your own. Ask what is missing and search for improvement. Challenge your comfort zone and go for those ‘birds in the bush’.

2. Don’t be a turtle (dove)
Don’t hide in your shell. Instead take a fresh look at your business offering and operating area. Even a slight change may dramatically boost your bottom line. Don’t shrink from enlisting professional advice to look into your business.

3. Watch out for those French (and Greek and Italian) hens
The current Eurozone debt crisis highlights the need for credit checks of customers. Credit checking will help you avoid nasty surprises further down the line, and ensures a smoother business relationship overall. Keep an eye on customers’ payment trends and spot potential problems before they become major issues.

4. Calling all birds
Ensure you make frequent customer contact, delivering great service and rewarding loyalty a priority. Regular communication, strong service and rewards are all-year-round gifts, which your customers will return in kind.

5. Golden rings rule—cash is king
Cashflow is the lifeblood of a business and often the first casualty in difficult times. SMEs should develop realistic cashflow budgets and ensure they get paid in a timely manner. Effective accounts receivable collection frees up cash and can reduce reliance on credit. Consider cashflow finance options to manage fluctuations in working capital.

6. Make sure your geese are laying
All businesses need a nest egg. From a larger than expected tax bill to a quiet patch, it’s important to ensure you have the funds available for the unexpected. Key to this is a regular review of your financial arrangements to ensure they are in tune with ongoing needs. Knowing where you stand by keeping timely financial information and accounts records is crucial, as well as maintaining critical documents and making sure they are delivered on a set date every month.

7. Take time to go swimming with your swans
It’s essential to take time out from work if only to tackle any pressing issues with a clearer perspective. As well as enjoying time with family and friends, many owners and managers have their best ideas when they are out of the office. And when in the office they should continually invest in efficient systems, software and products to work smarter, not harder.

8. Milk your maids
Review your suppliers and ensure you are getting the best deals from them. Shop around—take advantage of any special deals on offer and negotiate longer credit terms. But also keep in mind the importance of strong and enduring supplier relationships.

9. Form great relationships with your dancing ladies
Strong relationships with mentors, financiers, bankers, suppliers, clients and partners significantly help a business. These relationships will endure and assist a business in good times and in bad.

10. Be a leaping lord
Successful owners and managers inspire. They are optimistic and enthusiastic and ensure employees are just as inspired to succeed in their roles. As a business grows it’s important to include your employees in your vision to build a loyal and motivated team behind you, keeping your business focused and strong.

11. Be the piper piping
Owners and managers should take full responsibility for their decisions. Right or wrong, the buck stops with the leader. Prepare for the post-Christmas cashflow slow down and get as much of your receivables collected before Christmas so you are ready when sales become slower and debt turn lengthens after the Christmas period.

12. Bang your own drum
Don’t be shy to tell the market what you do best and remain visible. Communicate your company’s point of difference (cheaper, greater choice, locally-based, innovative, etc). Remind existing customers why they work with you and let potential customers know about your business and how you can help them.

The following are the five most important questions for an SMEs to ask its accountant.

1. Can I have management reports, please?
I can’t stress how important it is to have regular financial reports for your business. These should be full accrual reports that can be presented each month at your board meeting. An additional extra is a simple cashflow forecast that can be updated at each meeting.

Aside from sales KPIs every month, you should also ask to see a profit and loss, balance sheet, cashflow summary and a revised cashflow forecast for the next six months. You need these reports by the 10th day of every month. Don’t settle for anything less.

2. How can I improve my cashflow?
Cashflow is the life blood of your business, dictating the speed at which your business operates, its growth potential and how competitive it is. If your cashflow is healthy, you have room to sharpen the pencil on price when needed.

You need to know what affects your cashflow and what you can do to improve it. Sometimes it’s really simple things, like following up your debtors. Ask your accountant where they think the problem areas are and what they recommend you focus on to improve cashflow.

3. What am I worth?
If you’re running a business, you should be acting in a way that creates value. So when making decisions, you should consider how these will make your business more valuable.

Your accountant knows how business valuations work, so will be able to help with improvements you can make. This could be anything from hiring a great salesperson, winning an international contract, or investing in your value chain to own another piece of the puzzle. Aside from day-to-day activity, you need to know how to build the value in your business. One day you might just want to sell it.

4. Can I minimise my tax in a sensible and legal way?
A lot of this is about using smart structures and ensuring you are claiming all the tax deductible expenses you can. If you’re not being proactive with your taxes you can find yourself paying hidden tax costs such as penalties and interest.

Ask for a tax forecast annually before the end of the financial year and make tax minimisation an annual review point for your board meetings. Tax should always be updated in your cashflow forecast model on a regular basis—you need to know what tax is coming up and make sure you have the cash to pay it.

5. Can I move to a monthly fee?
A monthly fee means your business is frequently top-of-mind for your accountant rather than once a year or every six months. It also helps you to budget and avoid those big surprise bills.

A monthly fee should cover the following things:

• Quarterly management reports
• Simple cashflow forecast, updated with management reports
• Annual tax review and forecast, before the financial year end
• Regular meetings to look at the numbers, at least quarterly
• GST returns, annual report and tax returns

Accountants can really make a difference so make sure you involve yours as much as possible to help your business run successfully.

The exclusion from the National Credit Act means there are no caps on interest rates or fees for small businesses and it also means that the lending contracts govern the relationship, so these documents need careful scrutiny before you sign away.

Small and medium business owners usually need a few different banking products to help them establish and run a successful business. How much you pay depends on many factors, however, recently, banks have moved towards securing banking lines with personal property and real estate.

Bearing in mind you are not protected by the National Credit Act, it is worth weighing up the various products and the benefit of offering personal securities before you jump in and put your home on the line to get a better banking deal. This will ensure you’re getting the best value, matched with the most appropriate security, given your personal circumstances. When you’ve weighed up this situation before you walk into a bank, you’ll be in a much better position to negotiate with your bank for a better deal and get a product that suits you best.

It doesn’t matter whether you’re a shoe supplier or a coffee shop, you’re going to have a need for a bank account and possibly a loan, credit card or overdraft at some stage. The most common types of banking products SMEs use for funding are:

• Business Loans;
• Overdrafts;
• Bank Guarantees;
• Leasing lines; and
• Credit Cards.

In the past, banks have been quite document-focused when an SME applied for any type of loan or credit product. They’ve wanted to see thorough documentation for your business performance, both past and present, supported by BAS and tax returns, as well as business plans and signed agreements.

In an age of ‘low doc’ convenience, meaning low documentation, many banks have moved towards taking your family home as security against money you borrow, but the financial benefit versus the risk doesn’t always add up.

To put your home on the line, you would want to be getting a fantastic interest rate with heavily reduced fees and charges and unfortunately, that’s not the case with some current secured loans for business owners. You might be wondering why business owners would agree to that kind of deal, but remember, most business owners are so busy in the daily operations of their own business that they often look for the easiest option, so it really pays to do your research and have the right documentation so you can negotiate the best deal.

Business performance is always the key to the price the financial institutions want to charge you. The better the performance, the lower the risk to the bank and consequently the better the price should be for you, with a lower interest rate and comparatively lower fees and charges. Make the effort to collect and provide thorough business performance documentation and use it as leverage to secure a better rate or deal.

When assessing the cost of a line of credit it is also important to count the full cost you are being charged. Don’t ignore the fees and charges as they often add up to a substantial sum. Most banks now list fees and charges on their websites so you can easily compare different products between different lenders and the investment of your time might just save you a few hundred dollars each year, which could have you paying off the loan years earlier.

One of the easier options if you don’t want to get stuck into the nitty gritty but you do want the best deal, is to call upon an experienced consultant, agent or broker, who will do the research and find a suitable product or matrix of products for your business. They will put on their game face and handle the negotiating for you, which is great if you’re not confident of negotiating or asking for a better deal.

This can be a great strategy for startups and for businesses whose direction or size has evolved so their banking circumstances no longer suit the business operations. It’s at this stage that businesses often need more support and more access to credit, yet the daily operations of the business have picked up so much so that there is little time to undertake due diligence research – and that’s when business owners get lulled into the false security of offering their house as security. It’s ok when business is booming but if the business slows down or takes a step backwards, it can have huge personal financial ramifications.

As with most business transactions you should never underestimate the importance of the relationship with your banker. Regular honest communication is always the best, even if the news isn’t good. The better your banker understands your business and the circumstances in which it operates, the better equipped they will be to assist and support you.

You might not consider yourself a financial whizz, after all it’s probably not your core business, but if you can take the time to do the research and compare a selection of three or four banks before you sign any documents or outsource your negotiation needs, you will be in a much stronger financial position to focus on the growth of your business.

–Greg Heaney is Director, Itas Consulting.

It is also important to remember that managing cashflow does not just apply to those industries linked to consumer spending. Regardless of the sector, cashflow will be affected either directly or indirectly during the holiday season given many businesses trading hours are irregular and suppliers take a break.

In light of this, there are some basic steps businesses can take now to ensure their cashflow is managed efficiently during busy periods to allow their business to grow.

Avoid debt problems and learn how to collect debt more efficiently by employing these five tips:

1. Accurate record-keeping
Central to any success is a robust profit and loss and cashflow analysis to reveal your business’ true position at month end. This will help you understand your current debt position and associated obligations and determine the current profitability of your business.

2. Develop and implement solid collection plans
Develop an action plan for overdue invoices. Try to understand your customer’s situation and carefully balance the need to receive payment with your relationship with your customer.

3. Train staff to collect payments on time
Train and reward your staff for boosting sales and collecting payments on time. Sales and collections need to work together with clarity over responsibilities.

4. Understand and negotiate invoice terms now, prior to the holiday season
Explore options such as offering a discount to your suppliers for early payments. Making the same offer to customers who owe you payments may also help you receive your funds quicker.

5. Offer easy payment options for customers
Give your customers a variety of simple payment methods to make it easy for them to pay on time. Offering a choice of payment options—whether EFTPOS, BPAY, over the telephone or the ability for your customers to make payments to you online—may help you collect funds faster.

These are all good ways of ensuring your customers pay their invoices on time, and your cashflow is properly managed. The golden rule is: the quicker you manage your debtors, the more likely it is that you will receive prompt payment.

Each additional day it takes a business to receive payment has a measurable financial impact. Australian businesses recently recorded one of its worst ever figures when it comes to paying their debts on time, according to Dun & Bradstreet’s Trade Payment Analysis for the September 2011 quarter.

Business owners who need extra help to get them through those debtor days should speak to their business banker about invoice financing options, which provide them with an agreed percentage of the value of an invoice immediately.

The most important thing to remember is that the more disciplined a business is in collecting debts, the more likely they are to be paid on time, helping to lower your costs and maximising cashflow.

According to a nationwide poll conducted by Crossman Communications, those holidaying are very mindful of the purse strings, cutting back on the length of their trip and holiday expenses – which isn’t good news for businesses that rely on tourism-related spending.

Almost half (42 percent) of vacationers plan on spending less than $1000 for everyone on their trip, including travel, accommodation, food and spending money. While one fifth will spend $500 or less on the entire family getaway.

Figures from the latest round of survey series, Crossman Insights, show that nearly half (42 percent) listed their accommodation as staying with family and friends.

While 55 percent of the 1200 people polled are staying grounded, those keen on a holiday will mostly be travelling inside Australia, typically choosing spots close to home.

A third of consumers have domestic holiday plans, which is triple the number of those heading overseas. Despite the lure of the strong dollar and plentiful travel deals on offer, this year only 1 in 10 Australians is planning on venturing overseas.

Of those heading off, just over half (54 percent) are going for up to a week’s time while a fifth (19 percent) are going for three nights or less.

The current unstable financial climate is creating greater competition between the banks,with many now offering discounts, switching offers and cash incentives to bring in new customers.

According to Refunds Direct chairman Robert Graham, banks are most interested in securing lending accounts with their customers. For business customers this means it’s now cheaper and easier to switch banks and get the loan terms they’re after.

Here are Refunds Direct’s tips for getting a better banking deal:

1. Understand your current terms
Know the costs, fees and charges and interest rates of your loan contract to determine if it is right for you.

2. Think about what you want or need from your bank
Make a priority list of business needs you require from a loan. Research conditions such as features, rates and access to funds.

3. Research and shop around
Do your own research or get help from a mortgage broker or referrer.

4. Get multiple bank offers in writing
Get ‘conditional offers’ from various banks so you can compare with lenders.

5. Compare the offers to your priority list
Make sure the loan offer gives you what you need to benefit your business.

6. Ask for even further discounts
Go back to banks and tell them what it will take to secure your business with them. If you don’t ask you don’t get.

7. Select then switch or stay
Make a decision between switching or negotiating a new deal with your existing lender. Check your loan terms every few years.