Artificial intelligence (AI) has been a catalyst for a huge amount of change in the small business arena.

AI apps, tools and solutions are everywhere, offering increasingly sophisticated ways to automate your processes and add value for your customers.

On average, over a third (38%) of small businesses in Australia, New Zealand and the UK have used, or are considering using, AI according to new research from the global hiring platform Indeed.

But what does AI do for your small business? And what do all the highly technical pieces of jargon mean?

To help you demystify AI, here’s a glossary of some key AI terms

1. Artificial intelligence (AI)

AI is the simulation of human intelligence in machines. AI allows machines and software algorithms to learn, problem-solve and automate certain tasks. For small businesses, AI can help to streamline your operations and enhance your customer service. It can also provide data-driven insights for better decision-making that drives your growth.

2. Machine learning

Machine learning (ML) is a subset of AI where systems learn from data, without any additional programming. In other words, ML helps an AI solution learn by itself. For small businesses, ML helps your AI tools improve over time, helping to automate your basic tasks, personalize customer experiences, create content and provide predictive analytics.

3. Data source

A data source is any location where information is stored, like customer databases or website analytics. If you’re using AI in your business, these data sources provide the raw material for machine learning. The more expansive your data source, the more targeted and refined your outputs will be, and the more opportunities there will be to add value with AI.

4. Data analytics

Data analytics examines your raw data to draw insightful conclusions. For small businesses using AI, analytics can give you deep insights into customer behavior, market trends and operational efficiency. The reporting you get from proactive data analytics is invaluable, allowing you to make business decisions that are based on solid evidence and data.

5. Algorithm

An algorithm is a set of rules that a computer follows to solve a specific problem. In AI, algorithms allow machines to learn from data, make predictions and automate certain processes. For small businesses, this translates to rules and AI processes that make tasks more efficient, answer customer FAQs or give you deeper data analytics.

6. Generative AI

Generative AI creates new content, like text, images or code. Chat GPT and Google Gemini are two well-known generative AI tools. For small businesses, you can use generative AI to automate your content creation, produce copy for marketing materials, create images and video and even personalize your customer interactions on the phone, or through chatbots.

7. AI prompt

An AI prompt is a text input that instructs an AI model to generate a specific output. You type what you want and the AI tool attempts to create the output you’ve requested. This could mean asking AI to improve the writing of your sales email, or to generate an image for your marketing flyer. It could also be a prompt to analyze a data set to look for a specific trend or pattern.

8. Voice AI and natural language processing

Voice AI uses natural language processing (NLP) to understand and respond to your spoken commands. It’s the technology that powers tools like Siri and Alexa. For small businesses, voice AI allows you to automate your customer service via chatbots, automate the answering of your business phone with voice AI agents or carry out voice-activated searches etc.

9. AI hallucination

AI is a massively useful technology. But it’s not perfect!

AI hallucination is when an AI generates false or nonsensical information, and then presents the output as fact. For small businesses, this can lead to incorrect customer responses, misleading marketing content, or flawed data analysis. Because of this inherent potential for false outputs, you must always review your AI content, especially factual content, to make sure it’s true.

Talk to us about introducing AI into your business

If you’re still an AI newbie, don’t worry. In this series, we’ll run you through the basics of AI, the main terms and the AI tools and agents that can transform your business.

The following content was originally published by BOMA. We have updated some of this article for our readers.

To understand the financial position of a business at a specific point of time, look at the balance sheet.

The balance sheet may also be called the statement of financial position. Together with the Profit and Loss Statement, and possibly other reports such as the Statement of Cash-flow, these reports provide a complete understanding of the financial position and business performance.

So what’s involved? – The balance sheet has three sections: assets, liabilities and equity.

What are Assets?

Assets are things and resources that a company owns. They have current and/or future value and can be measured in currency.

Assets may be subdivided on the balance sheet into bank accounts, current assets, (receivable within one year), fixed assets, inventory, non-current (or long term) assets, intangible assets and prepayments.

These include banks and other financial accounts held, accounts receivable (trade debtors), supplier deposits or bonds, stock on hand, property, equipment, vehicles, investments and intellectual property. All of these can be translated into monetary value.

What are Liabilities?

Liabilities are amounts owed to suppliers and other creditors for goods or services already received. Liabilities may also include amounts received in advance for future services yet to be provided by the business.

Liabilities are generally subdivided into current, (payable within one year), and non-current liabilities.

These include accounts payable (trade creditors), payroll obligations (salaries, taxes, superannuation), interest, customer deposits received, warranties and loans.

What is Equity?

Equity includes owner funds contributed, drawings, retained earnings and stocks. The value of the equity equals assets minus liabilities.

Transactions that affect profit and loss accounts also affect balance sheet accounts. For example, providing a service increases the accounts receivable balance, which therefore increases the equity.

The Balance Sheet Equation

The balance sheet must always balance! Asset value = liabilities + equity.

For example, if you buy a new vehicle for the business at say 50,000, having paid a 10,000 deposit and taking out a 40,000 loan, the value of fixed assets increases by 50k, but the bank asset value decreases by the 10k deposit paid. The value of liabilities increases by 40k loan, thus leaving the balance sheet balanced on both sides of the equation.

The balance sheet equation shows you how much money you would have left over if you paid all your bills and debts and sold all your assets at a given date. This amount is the Owner’s Equity.

Note that the balance sheet equity total is not necessarily how much the business is worth at market value. Assets are listed on the balance sheet at their transaction value, which may be very different from the market value. Some assets may be worth more, and others may depreciate in value. Business value is calculated not just on the balance sheet figures but many other factors.

Need more information?

Talk to us. Get the complete picture of your business performance and financial position, regardless of what stage of business you are at.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Knowing what’s around the corner is hugely valuable as a business leader.

But we’re trading in a world where uncertainty waits around every corner – making it difficult to predict the future business landscape and what your next move should be.

You can’t change the evolving economic, political and business threats in the world. But in this series we’ll show you some key way to thrive and reduce the uncertainty.

Dialing down the uncertainty, to gain a competitive edge

Uncertainty affects your ability to trade. Not knowing if your costs will rise or fall, or if there’s a talent shortage or surplus, makes it difficult to make rock-solid decisions and plans.

Your goal in the current environment is not to remove these external threats. It’s to reduce some of the uncertainty through clear planning and inventive strategic thinking.

Let’s look at 5 key areas, and how they can dial down the uncertainty.

1. Financial forecasting and planning:

Carrying out regular cashflow forecasting and budgeting helps you anticipate any potential financial challenges. Good cashflow forecasting, coupled with scenario planning, helps you make informed decisions about your spending and where you may need additional funding.

2. Performance monitoring and analysis:

Tracking important metrics and having a key performance indicator (KPI) dashboard helps you review your performance against targets and look for the areas of improvement. Monitoring those KPIs keeps you in control, even if external factors and threats are proving to be difficult.

3. Strategic business reviews:

When was the last time you revisited your business plan? Updating your strategy and business plan helps you stay aligned with your goals, even if external factors and changing market conditions are making trading difficult. Remember, no business plan is written in stone!

4. Getting proactive with tax updates:

As the business landscape changes, the government is likely to look for ways to inspire enterprise and boost the economy. Being aware of legislative changes, tax reliefs and allowances, and available government grants, helps you navigate the uncertainty. You can keep compliant, maximise any benefits and see the positive impact on your capital position.

5. Business Diversification & Growth Strategies:

Being able to flex and change your strategic direction gives you a huge competitive edge. Brainstorm ideas for ways you could diversify your offering and explore new opportunities. This could mean new products, new revenue streams and even partnering with other small businesses – both inside and outside your existing sector.

Making the path ahead clearer and easier to navigate

There’s no denying that we’re trading in difficult times. But getting proactive with your planning, forecasting and strategic thinking makes the road ahead clearer.

Come and talk to us about the key areas of uncertainty in your business – and find out how we can guide you through these uncertain times and out the other side.

The following content was originally published by BOMA. We have updated some of this article for our readers.

4 key tips for delivering the income that fuels your chosen lifestyle.

Making your business a success story may be what drives you to get out of bed every morning. But your business also needs to deliver on your personal goals as well.

Profits, dividends and bonuses need to be stable enough to help you maintain your desired lifestyle, whether that’s two holidays a year, or paying the mortgage on a new family home.

In this series, we’ll look at the core ways your business can be structured to deliver on your own personal, family, philanthropic and leisure goals.

Delivering the income that fuels your chosen lifestyle

When you start a business, you make some fairly major decisions about your quality of life. Building a start-up could mean several months, or even years, of reduced income. But, ultimately, you’ll want an income from the business that helps you fund your chosen lifestyle.

Here are four key ways to make sure your business can secure your lifestyle:

1.  Focus on high margins or high volume

Prioritise products/services that offer either high margins or high volumes of sales. Your key focus is to help the business provide stable, predictable revenue and profits. This will help you draw down the necessary income for your desired lifestyle.

2.  Get strategic with your pricing

Adjust your pricing so you’re competitive but making some healthy margins. Value-based pricing and bundling helps to increase the value from each transaction. The more you do to boost the price of an average sale, the easier it will be to supply the income needed for your lifestyle.

3.  Hang on to valued customers

You can quickly improve your customer loyalty stats by offering personalised services and programs. Retaining your existing customers is cheaper than acquiring new ones, so keep these customers sweet and enjoy consistent revenues that power your personal income.

4.  Automate your most costly processes

Labour costs can quickly eat into your profits. Think about automating basic tasks and outsourcing non-core functions, so you’ve got more time for high-value revenue generation. Reducing your overheads can directly influence your own potential income as a director.

Creating a profitable, cash-rich enterprise is the dream. And if you can stabilise your sales, revenue and profitability, you increase your chances of a healthy income from the business.

Come and have a chat about working smarter, not harder.

The following content was originally published by BOMA. We have updated some of this article for our readers.

As your accountant, we won’t just look after the financial side of your business, we can also advise you on the strategic side of your company, including the importance of business development as vital part of your growth plan.

Business development (BD) is what helps your company move from slow, organic growth to fast-paced, hypergrowth. And it’s only by putting the right drive and expertise behind your BD that you can turn your strategic ideas into real success stories.

Here are 5 ways we can help you achieve this:

1.  Talk to you about your strategic goals

The starting point for any kind of BD activity is to pin down your goals and aims as a business. When you know what you want to achieve over the coming months, it’s far easier to define a strategy for success. And that’s easier to do when you talk to an objective adviser, like us.

We can sit in on your board meetings, talk to your executive team and get a real handle on what makes the business tick. And, armed with this knowledge, we’ll work with you to drive the direction of your BD and find the best opportunities for you to focus on.

2.  Help you create a clear BD strategy and plan

Having a defined set of BD goals is a good starting point. But to put this all into action in a productive way, you’re going to need a comprehensive plan for your BD projects.

Our years of experience advising business leaders and their teams really comes into play here. We know the best routes to take, the budgets that will be needed and the right tactics for bringing in more contracts, sales and partnerships. By putting these strategies into a clear plan, and linking this to agreed timescales, you have a BD route map to follow and action.

3.  Introduce you to a broader network of business partners

We work with a wide range of businesses across many different sectors, industries and niches. By introducing you to our network of clients, we welcome you into a supportive community of like-minded business owners. And that’s excellent news when looking for new partnerships.

Whether it’s attending a local conference, an online webinar or one of our in-house client events, you’re going to meet new people, share new ideas and make the right connections. This is a great way to build alliances and work together with other local businesses. And when you’re well-connected, you set the very best foundations for your future BD activity.

4.  Provide better routes to funding and investment

Whatever goals you’ve set for your BD projects, it’s likely that you’re going to need additional funding to finance this activity. Investing in your expansion, or new partnerships, is vital to getting a good return on your BD, so great access to finance is a definite bonus.

We’ll advise you on the most appropriate funding channels and how you can use these facilities to finance your BD plans. And we can also link you up with banks, lenders and business finance specialists – so you get the advice and finance you need to bring your BD to life.

5.  Help you track and measure your BD performance

Meeting your BD targets takes time – and a whole lot of dedication. Measuring your BD performance over time, helps you stay on track and gives you a good indication of how well you’re tracking against your planned progress.

We’ll help you create the reporting and metrics you need, so you have clear data to track your progress over time. You can log your activity in your project management system, or your client relationship management (CRM) software, and keep clear notes on contacts made, relationships built and targets converted etc.

If you want to get more from your BD, please do get in touch. We’ll partner with you to put some real drive, experience and impetus behind your BD strategies.

The following content was originally published by BOMA. We have updated some of this article for our readers.