Tag Archive | Doing business

Setting up business

A great analogy for a new business

San Francisco Small Business

Bean SproutWhile out for an early morning walk, I glanced upon a popular San Francisco community garden.

It was tranquil, peaceful — and surprisingly well-organized.

It was small so many of the gardeners found ways to maximize their space, using careful planning, creativity (and a little muscle.)

Your businesses can benefit by being equally ingenuous. Develop your own small business “green thumb” and get “more for less” by using creative, economical ways to attract, convert, and retain your prospects and customers.

Cultivating Your Business Idea into a “Sales Generating Garden”

1. Choosing the right kind of plants for you  (Your “Aha” Moment): Okay, so you’ve got an idea. But is it enough to support a viable business or product — able to solve the problems faced by your potential customers? Your ability to sell (and ultimately, make money) is based on your idea’s attractiveness to potential customers.

2. Planting…

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That’ll be €1500. Can I pay in cash? Sorry sir, no.

Cash

Cash (Photo credit: BlatantWorld.com)

During the summer, I was on holiday in Sud Tirol (it’s Italy, but the culture is more Austrian). We were led to our room, shown around and then asked how will we pay when we leave. The reason for the question was that a law introduced as part of Italy’s austerity measured prevents cash payments in excess of €1,000. Now, I never carry much cash, but I was thinking what an odd law. Is it to stop tax evasion? Apparently so. I read around a bit and found that Spain also has a similar law. And apparently the Italian’s actually wanted to implement the law with a lower amount.

Now, as an accountant I completely understand the issue of tax evasion, cash deals and the black economy. But where is this headed? When I done Business Studies in secondary school, I remember being thought the concept of legal tender. Pre the Euro, the Irish Punt notes were legal tender for settlement of any amount and apparently this may be still so (see here re Euro legal tender). If cash cannot be used at all,  what happens when the banking systems fail? Don’t anybody tell me they can’t/won’t; see my post soon on Ulster Banks’ systems failures this summer. And if I were to get a bit political, are we perhaps in the future to trust the very banks that brought the world a financial crisis to manage all transactions. Yeah, I’m being a bit over the top perhaps, but I completely disagree with strict cash controls. There must be other ways to make businesses more tax compliant e.g. focused audits, serious penalties.

Know your costs = know your business operations

When I teach management accounting to students, I am always looking for examples to relate what I say to a real life example.  So, a while back I was trying to think of an example which might convey the fact that management accountants are not (or should not be)  just bean-counters. The role of a management accountant/business analyst/business partner is much more than just accounting. My experience tells me that a good management accountant (and manager too) get’s their hand dirty i.e. knows a good deal about the business in terms of how things are made/delivered. If you don’t know the business, then how for example can you actually undertake a cost-saving exercise. So now for the example. I read a blog post on The Economist website a while back. The title caught my eye actually “Reducing the barnacle bill”. The article post mentions how barnacles attached to a ships hull below the waterline can increase drag so much that fuel costs increase 40%.  The post then mentions several chemical solutions currently available and some being worked on. The point from this example is that should a management accountant at a shipping company know such detail of operations. I’d like to suggest, yes they should.  Only such detailed knowledge of the operations would highlight the need to control the “barnacle cost”. I’m sure there are many more similar examples out there.

Doing business is getting easier?

As many entrepreneurs know, there seems to be endless reams of regulations and rules a business needs to follow. This makes doing business all the harder. In some countries the amount of regulations for small business are often off-putting. However, according to a recent World Bank report (see here), about 85% of the world economies have need doing business easier in the last five years. The annual “Doing Business” report by the World Bank (see www.doingbusiness.org) is one of those quite useful – but perhaps not well known ways – of comparing the relative ease of doing business in other countries.  The report measures key business “topics” to help business on the way: starting a business, construction permits, property registration, getting credit, investor protection, paying taxes, enforcing contracts and so on. Us Irish don’t do too bad in the ranking, as 8th easiest in the world.  Typically, doing business in the OECD countries is easiest, with sub-Saharan Africa at the bottom of the league.  While glancing through the full report, I thought it would be a fairly useful resource for any small business you might be considering extending export markets. The associated website is packed with information too!

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