finances Archives - Weinberg Partners

Protecting You and Your Business: Using Trusts

Have you ever wondered about the best ways to protect you and your business?

In this series, we’ll look at the key ways to use trusts, insurance and risk-management techniques to protect both your personal assets and the future of the company.

In this article, we’ll look at how you can use a trust to shelter your assets.

What is a trust?

Before we go any further, let’s explain exactly what a trust is and how they can be used.

A trust is a legal arrangement where a person (the settlor) transfers ownership of certain assets to another person or entity (the trustee) to hold for the benefit of one or more third parties (the beneficiaries). These assets could be money, property or shares etc.

It’s essentially a separation of legal ownership from beneficial ownership.

These are the three main parties involved in a trust

Settlor: The person who creates the trust and contributes the assets. In this instance, the settlor is likely to be you, the small business owner.

Trustee: The person or entity (this could be an individual or a company) who holds legal title to the assets and manages them according to the trust deed. They have a fiduciary duty to act in the best interests of the beneficiaries. Trustees are likely to be you and your family members, or anyone in the business who you decide to make a trustee.

Beneficiaries: The individuals or entities who are entitled to benefit from the assets held in the trust. This will usually be the family members or other interested parties that you wish to be beneficiaries of the assets held in the trust.

What’s a trust deed?

The rules for how the trust operates are set out in a legal document called a ‘trust deed’.

The trust deed is a legal document that formally establishes a trust. It outlines the trust’s rules, names the settlor, trustees, and beneficiaries and defines the trustees’ powers and duties.

The deed also dictates how assets within the trust are to be managed and distributed to protect personal assets from business liabilities.

How can you use a trust to protect your personal assets?

Running a business comes with a certain amount of inherent risk. There’s potential for the business to go bust, for creditors to come after your assets, or for individuals and organisations to make legal claims against you and the business.

Setting up a family trust to shelter your personal assets allows you to separate your personal financial security from these inherent risks of running a business.

The trust creates a legal barrier between your individual wealth and any financial liabilities or claims arising from the business.

Here are the five key reasons why a trust is worth considering

1. Shield your personal assets from any business liabilities:

If your business faces bankruptcy, lawsuits, or significant debt, your personal assets can become vulnerable. This is especially true for sole traders or partnerships, where you don’t have the protection of limited liability as an incorporated company.

By transferring your assets to a trust, these assets are legally owned by the trustee, not you personally. This makes them inaccessible to the owner’s personal creditors, in most cases.

2. Mitigate the risk of being an entrepreneur:

Being an entrepreneur involves taking on certain risks. Sales can plummet, businesses can fold and unexpected external conditions can scupper your well-laid plans as a business owner.

With your personal assets held in a trust, you can take calculated business risks knowing that your family home, savings and other personal investments are safeguarded. The family trust provides you with a crucial safety net to secure yours and your family’s future.

3. Enhance your estate and succession planning:

Protecting your personal assets is the key function of the trust. But a well-managed family trust can also help with the orderly transfer of your assets to future generations.

Having the family trust set up prevents your hard-earned assets from being tied up in your estate upon death. This is great for estate planning and helps your immediate family achieve a smoother transition and protects these important assets from potential claims against the estate.

4. Balance control vs. ownership:

As the business owner, once your assets are held in a trust you are no longer the legal owner. However, through a trustee or appointor role, you can still maintain a significant degree of control over how the assets in the trust are managed and distributed

Even though you no longer hold legal ownership of these assets, you can still balance a level of control over the assets, while also enjoying the benefits of reduced liability and risk.

5. Benefit from better tax planning, in some instances:

Asset protection is the primary driver of a family trust. But having the trust in place can also make it easier to distribute income among beneficiaries in different tax brackets. As such, there may be an opportunity to enhance the overall tax position of the whole family.

Tax planning within a trust structure is a complex area and should always get professional advice from your tax adviser.

Helping you enjoy the protection of a family trust

Having worked so hard to create a profitable business, it’s vital to take every opportunity to protect your personal assets and the future prosperity of your family and loved ones.

Talk to our team about the key benefits of setting up a family trust, and the potential benefits you could achieve in your own specific business and family situation.

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

5 Ways to Get in Control of Your Business Finances

Having proper control of your business finances is a big advantage.

It helps you make well-informed business decisions and keeps your organization profitable.

With so many digital tools for managing your bookkeeping, accounting and management reporting, it’s never been easier to manage, track and forecast your financial position.

But what are the main tools you need? And how do you set up your financial systems, apps, processes and reporting to put yourself back in the finance driving seat?

1. Bring your bookkeeping into the digital age

Digital bookkeeping apps are a great way to digitize your receipts, records and source documents. This not only saves a lot of time at year-end, it also makes it much easier for you to keep track of your company’s finances and accounting. Keeping your receipts in a box to manually enter at period-end is no longer enough. Take the next step and digitize your receipts at source, so you have up-to-date digital records and copies of source documents.

Optical character recognition (OCR) software, like Dext Prepare or Auto Entry, scans the receipt, converts it into a digital format and stores it in the cloud.

2. Do your accounting in the cloud

Cloud accounting is a software-as-a-service (SaaS) solution that helps you carry out all your main accounting and financial management online, without having to install any software.

Cloud accounting providers, like Xero, QuickBooks, MYOB or Sage, design their accounting platforms to take the pain and hassle of business accounting. You get all the tools and features you need to work on your accounting tasks. And your platform provider will also take care of all the data storage, backups and security of your data.

A good cloud accounting platform does more than just save your hard drive space. It also provides you with tools and dashboards that improve your access to management information, financial reporting, forecasting and projections, performance tracking and more.

3. Use the latest in expense management tools

Expense management can be a time-consuming and tedious job. But it’s also a vital task that helps you ensure you’re spending company money wisely and not overspending. If employees start going over their budget limits, this can be a costly mistake for the company and your cashflow.

Expense management tools, such as Soldo, Weel or Pleo, help you manage staff spending by giving employees virtual cards that are linked to a specific budget, account and code. This helps you track their expenses easily and make sure they’re staying within their budgeted limits. These platforms also give you detailed reporting and analytics, so you can see where money is being spent, and where savings can be made.

4. Make it easy to accept digital payments

The problem of slow payment is one of the most frustrating things for small businesses. If your customers don’t pay on time, this can result in a loss of revenue, poor cashflow and an inability to cover your basic costs and overheads. To resolve this issue, many companies have begun to switch to digital payment platforms that make it simpler, faster and easier to collect payment.

Payment platforms, like PayPal, Square or Stripe offer faster payment times and more control over the customer experience. Some platforms even integrate with your cloud accounting, so you get automatic bank reconciliations.

5. Embrace the latest in digital reporting and forecasting

With digital accounting changing so rapidly in recent years, there’s never been a better time to embrace the benefits of the latest in digital reporting and forecasting.

Economic conditions are hard to predict. So it’s crucial to be able to quickly analyze data, check your performance and make predictions about how your company will fare in the coming months. When you use cloud solutions for financial reporting and key metrics, you’ll be able to monitor trends in real-time while having access to the data anytime, anywhere.

Having this information at your fingertips helps you make informed decisions faster than ever before – and that translates that into more sales, increased business growth and bigger profits.

Talk to us about updating your financial systems

If you’re looking to give your finances a touch of digital magic, please do come and talk to us.

We can walk you through the best cloud platforms, fintech apps and business tools to add to your app stack – so you’re ready to make the most of a digital approach to your finances

Get in touch to supercharge your finances.

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

Making Good Business Decisions

Making good business decisions is easier to do when you have excellent information at your fingertips – and that’s the value of having great reporting at the heart of your startup.

Any cloud accounting software worth its salt will offer you straightforward ways to run your financial reports and track your important metrics. That’s standard in the new digital world. And this level of reporting gives you real, tangible data on which to base your decision-making. But good decision-making isn’t just about the numbers.

As well as having an effective understanding of your finances, you need a sense of what’s good for the business, how decisions will impact on your growth and what your future path looks like.

Here are 5 tips to help you get started:

1. Run management information at least once a month

Modern cloud accounting software makes it easier than ever to run detailed, up-to-date reporting on your financial position. With the click of a button, you can run numerous in-depth reports and statements that show your past and future position. Doing this regularly gives you a wealth of financial information on which to base your decision-making and strategic thinking.

At each stage in your startup’s growth, you’ll have to make important decisions about your next step – so, it’s important to think about the financial implications of any new projects, the amount of cash in the business and the availability of new sources of funding.

2. Use metrics and projections to inform your decision-making

Setting up a custom dashboard to monitor the most important metrics and key performance indicators (KPIs) is definitely a good idea. Most accounting apps will let you tailor your dashboard, so you can pick and choose from KPIs that are most relevant to your startup.

Set clear and democratic targets for all your main KPIs and track them on a weekly basis, so you’re monitoring the financial heartbeat of the business. If cashflow is looking poor, look at freeing up some cash, or borrowing money to fill the gap. If sales revenues are dropping, put some renewed vigor into your sales activity, or get a new marketing campaign underway to raise awareness of your most profitable products and services.

3. Talk to your board and executive team when scenario-planning

You may be the sole founder of your startup, or you may be part of a bigger team of co-founders. But the reality is that no one person can make all the decisions in a busy startup. To get the best overview of a challenge, or to come up with an effective way to grab a potential opportunity, you need to talk to your team – that’s the only way to get an effective consensus.

Talk through the current threats and opportunities and run through as many different potential scenarios as possible. What’s the best-case scenario, and how can you achieve it? What’s the worst-case scenario, and how do you plan for it, if things don’t go according to plan?

4. Work closely with an experienced external adviser

When you’re working in the business 24/7, it’s hard to see the business in an objective way. Your judgement on some issues can be overly emotional and clouded by internal or political factors. Working with an experienced accountant, business adviser or business coach brings a fresh perspective to the business – both financially, strategically and emotionally.

Having a trusted external accountant on the team helps you get your numbers straight. But they can also bring their knowledge and experience to bear on your strategic thinking, your decision-making and the impact of the business on your own mental health and wellbeing.

You can open up to them about your worries, share your aspirations for the business and bounce strategic ideas off them – taking some of the pressure off your shoulders.

5. Track how you’re measuring against your goals

To meet your goals and make good business decisions, it’s helpful to monitor and track your progress against these targets. If you refer to your reporting and KPI metrics, you can easily measure your performance over time – and take action if progress is starting to slip.

Areas to keep an eye can include your:

Cashflow position – to make sure there’s enough cash in the business to keep your project moving forward and heading towards the agreed end goal.
Sales figures and revenue – so you can see how you’re tracking against your sales targets and if the intended revenue from the project is being achieved.
Budgets and expenses – to check that you’re not overspending on your project and that the team is being sensible with costs, expenses and essential overheads.
Gross margin percentage – so you can keep the business profitable and aim to meet your profit targets for the period, or year-end.
Growth against targets – to keep the business performing well and growing at the rate you predicted to meet your growth target for the period.

Making a few bad decisions along the way is all part of the learning process. But by monitoring your performance and talking to the best advisers, it’s easier to keep the business on track.

If you’re at the early stages of planning out your business idea, please do get in touch. We’ll help you set up the best possible management information, to help guide your decision-making.

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

The Value of Getting Customer Feedback

Without your customers, you have no business.

It’s their engagement, loyalty and sales that power your cashflow and drive the business to new heights.

But when was the last time you reviewed your customer service levels?

And how often are you talking to your customers to find out if they’re happy, satisfied and still true advocates for the business?

Let’s dive into the power of great customer service and asking for honest feedback.

Why is customer service so important?

We live in a hybrid world, where customer interactions are as likely to take place online as they are in person. Customers follow you on social media and advertising can help you target specific customer demographics with almost forensic levels of detail.

But people buy from people, and that’s why treating your customers in an open, honest and welcoming way is so vital to the success of your small business.

What do customers want from your business?

Customer needs drive your business strategy (and if they don’t, then it’s time to review your strategy!). But what does the average customer want from your business?

Overall, customers want:

Reliability: Customers want your small business to consistently deliver on its promises, and to deliver your products/service on time, every time, without excuses.
Personalized service: Customers want to feel known and valued as individuals. They like tailored solutions and responsive communication that’s aimed specifically at their needs.
High quality: Customers expect your products and/or services to consistently meet or exceed their expected standards. They want their problem understood and solved, quickly.
Clear communication: Customers like your communication to be clear, transparent and as simple as possible. They want to contact you easily and get prompt responses to all enquiries.
Great value: Customers expect a good balance between price and quality. They want a product that adds value, but at a competitive price that they feel is fair.

Keyways to find out what your customers are thinking

Building relationships, understanding your customers and learning their basic needs sits at the heart of tailoring and updating your business strategy.

So, how do you find out what’s going on in your customers’ minds?

Here are a few ways to gather customer feedback and insights:

1. Post-interaction surveys:

Once you’ve made a sale, send the customer a short, targeted survey. Use this as a chance to ask why they chose your product/service and how they rated the interaction. Keep it short and concise but look for the service pain points and highlight any areas that could be improved.

2. Engage on social media:

Actively monitor and engage with customer comments, mentions, and direct messages on your social media platforms. It’s a good idea to use polls or direct questions to gather opinions and collate more customer data. This shows customers their feedback is valued and acted on.

3. Direct feedback forms/buttons:

Put easy-to-use feedback forms or feedback buttons on your website, app and e-commerce store. This gives customers a convenient, non-intrusive way to share their suggestions or report issues. It’s quick, simple and gives you instant direct feedback from your customer base.

4. Incentivized feedback programs:

Offer small incentives (discount codes, loyalty points) for completing surveys or providing detailed feedback. This boosts your response rates and encourages customers to invest some of their time in offering constructive criticism.

5. Personalized follow-ups:

For more complex services or larger projects, make sure you have post-project meetings or personalized email/phone follow-ups with the customer. This is a great forum for customers to give feedback and get the snags, frustrations, high points and wins off their chest.

You’ll get deeper qualitative insights, and it demonstrates a commitment to open communication. Start talking with your valued customers.

Your customer base is one of the most valuable assets in your business. So, make sure you’re using every channel possible to talk to your customers and meet their expectations.

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

Need to Improve the Cash Flow Position for Your Business?

Keeping on top of the financial management of your business can be hard work.

It’s possible to have a profitable business that is struggling to find the cash flow to pay expenses and fund growth. Likewise, you could have positive cash flow but are not turning a profit, particularly if you are scaling.

Turning a profit is at the heart of running any successful company

But without an even and predictable flow of cash into the company, you can’t cover your overheads, you can’t pay your employees, and you can’t run your day-to-day operations – let alone think about expanding and growing the business.

In the end, you need both. But if you’re going to be in control of your financial destiny, it’s important to get your head around the important process of cash flow management.

Let’s look at 6 key things to understand about your finances:

1. Profit is a by-product of a successful business – as the owner, you want to make profits, but profitability isn’t the only goal. A business can easily be profitable but also be highly unstable in the longer term. What you want is stability and consistent revenues.
2. Cashflow keeps your business alive – good revenues (income) serve to bring cash into the business. Without cash to cover your operating expenses, you have no means to keep the lights on in the business. So cash really is king!
3. Know your cost base and overheads – the flipside of your cash flow position is your costs. In an ideal world, you want more cash inflows than cash outflows, so it’s important to know your expenses and costs and to manage them carefully.
4. Be proactive about spend management and easing expenditure – if you can take action that reduces your spending, that is hugely positive for your cash flow position. Choose cheaper suppliers, negotiate better deals and bring that cost base down.
5. Drive more revenue, through increased sales and marketing activity – if you can increase your revenues, you also boost your cash flow. So, it’s important to be proactive about running targeted sales and marketing campaigns to increase your sales.
6. Keep the cash flowing and the profits take care of themselves – if you achieve the ideal cash flow position, the company sits on solid financial foundations, the cash is there for investment and the business can grow. It’s that simple.

Talk to us about improving your cashflow management

Whether you’re new to running a business, or a seasoned owner who needs some financial support, we can give you the cash flow advice you need.

We’ll review your finances, delve down into your cash flow, and will come up with keyways for you to increase your cash income and reduce your cash expenses. It only takes a few small changes to achieve a far better cash flow position for your business – helping you maintain positive cash flow AND generate profits.

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

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