You don’t need an inner-city address, Caren will help you tackle money matters in the ‘burbs, through a better understanding of all the important issues – investing, superannuation, budgeting, tax, insurance, mortgages, gearing, shares, managed funds, small business, food, home, fashion, travel, and much more.

A fun and entertainingly educational forum, specifically designed for Australian “suburbanites".

Tuesday, October 14, 2014

We have moved!

Some exciting news! The Hendrie Group are now hosting our blog within our website! This means faster and easier access for our readers. 

To read our newest post click here or visit 

Monday, October 13, 2014

What's the deal with housing prices?

For all of you who are sick of the sound of my writing, you're in for a treat today.

Property is always one of the hottest topics for us Australians, and one of my fave economists Dr Shane Oliver (Felix Stephen is still my number one) has written a terrific - and very reader friendly - article about the current state of play for housing.

It's not overly long and there's some pretty pictures.  Just click here for a copy.

And if you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Money" radio segment on 98.1FM Radio Eastern.

Talk soon,

Monday, October 6, 2014

Is your guarantee growing your business?

Most business owners guarantee their work in some form or other.  I'm sure you do.  At the very least, there's legislation in place protecting most consumers and providing a minimum standard of service or product quality.

The problem is most people don't use their guarantees to best advantage.

Most businesses don't tell you about their guarantees at all let alone promote it.  And guess what, a compelling guarantee can be a very powerful marketing tool to increase sales and generate revenue.

But how, I hear you ask?  Well just click here for my easy-to-read "Every Gurantee is a MARKETING Opportunity" fact sheet.

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.

Talk soon,

Monday, September 15, 2014

Are you protecting your family? 5 myths BUSTED!

I'm not very tall.

Ok, that's an understatement, I'm pretty short.

5 foot nothing to be honest (perhaps still being a little dishonest).

Anyway, that may be the reason I have so many soapboxes (short-girl syndrome!!) and you guessed it, I'm about to share one with you right now.

For anyone who's been to one of our Family Finance presentations, you'll have heard me waxing lyrical (ok - ranting) about the fact that with everything we're taught in school, basic household financial management is not part of the curriculum.

Think about it for a moment - who was it that sat you down and taught you step by step how to manage money?  Things like:
  • Budgeting
  • Shopping
  • Credit cards
  • Getting a loan
  • Compound interest
  • Living out of home
  • Earning income
  • Investing
If you were lucky your parents trained you, but in most cases no one did.  And even if it was your parents, in many cases they were winging it themselves!

So we're given no formal training, is it any wonder then that we often find managing money complicated, challenging, frustrating?  And that it's the cause of many family arguments, not to mention tears?

And by the way, if you have young children and you think the arguments you have with your partner about money are bad, wait until you have teenagers...(BTW - affordable boarding school options is another one of my soapboxes tee hee).

Today I want to focus on protecting your family's lifestyle because it's an area that's often neglected and it's really important.

Insurance tends to have a bad rap for the wrong reasons, mostly being that we'd rather not talk about it.  Because let's face it, insurance is something that we're only ever going to get value out of if something pretty bad happens right?  The problem is that by not talking about it, or not doing anything about it, we still can't stop that bad stuff from happening - it just means you could be financially devastated if it does.

Anyway, rather than focus on all the reasons you should have insurance cover, because I think most people know them even if we don't like to talk about them, I thought I'd dispel the top 5 myths instead!

Click here for my top 5 insurance myths - BUSTED.

And if it's reading that whets your appetite for information, then click here for a copy of my article "Is it time to review our dinner time conversation" and/or click here for some VERY interesting facts on critical illnesses...

Of course, if you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Money" radio segment on 98.1FM Radio Eastern.

Talk soon,

Tuesday, September 9, 2014

One word can make a difference - creating great offers

What does it take to create a great offer for your clients or customers?

Remember that advertising slogan "oils ain't oils"?  Well I'd also like to submit that "offers ain't offers". Most businesses make special offers to their customers or clients at some stage, and of course the objective of doing this is to entice them to buy your product or service.  But an offer will only do that successfully if it's constructed properly, and to do that you need to first understand the psychology behind offers.

You may not consciously realise this, but when you make an offer what you're trying to do is overcome human inertia.  You're trying to create a set of circumstances that will motivate your customers or potential customers to take action.

An offer gives people a reason, an incentive, AND an opportunity to try your product, service, or business for themselves.  They no longer have to take your word for it - they can try the product or service or your business as a whole and find out for themselves what it's like to deal with you.

Better yet, it gives them a reason to act NOW rather than later.

Click here to read more, including important factors to understand when creating your offer, and ELEVEN offer types to consider.

And if you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.

Talk soon,

Tuesday, August 19, 2014

It's tax time - now it's a party!!!!

We're well into the personal tax season, which means it's party time at The Hendrie Group, as we keep busy during one of our favourite times of year (Christmas comes a close second of course ha ha).

We're still offering evening appointments through to the end of September, so if you can't come during the day then just call and make a time in the next few weeks.  As you can imagine, evenings book up pretty quickly so the sooner you call us the better.

The ATO's turnaround time for lodged tax returns has been pretty good, with most of them coming back just on two weeks.  However, we recommend allowing three weeks as sometimes they take a little longer.

We appreciate that most people don't find tax time as exciting as we do, but part of our job is to keep you informed, and this year Dean's personal tax newsletter addressed a few issues that you may find of interest including, but not limited to:

  • A guide to 2014 tax return preparation charges;
  • How the tax-man helps you protect your family;
  • New criteria for the net medical expense tax offset;
  • A simple explanation of the Medicare Levy Surcharge;
  • Changes to the private health insurance rebate;
  • The ATO's new stance on claiming travel and overtime meal expenses;
  • Buying an investment property.

Click here if you hadn't had a chance to read this year's Personal Tax Newsletter for a quick and informative look at some of this year's relevant tax issues.

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Money" radio segment on 98.1FM Radio Eastern.

Talk soon,

Tuesday, August 12, 2014

68% of clients or customers leave you for 1 reason

68% of clients or customers leave you for 1 reason

It boils my blood when I hear business coaches claiming that price isn't an issue in business, that's just rubbish!  That said, I completely agree that it's not the only issue.  In fact in most cases it's not even the most important issue.

As a Financial Adviser I like to deal with facts, and there's a survey done on a regular basis by the Technical Assistance Research Program in Washington, which addresses why customers don't buy from you or why they leave you and move to a competitor.

The results are broken into 5 categories:

Convenience 3%:
This means a person would choose not to deal with a business or would leave that business because it's more convenience to buy elsewhere. 

Relationship at a high level 9%
This means that someone close to your customer opened a new business or moved to another company and they want to deal with that person because of the important relationship.  It could be a close friend or a family member. 

Miscellaneous 5%
This is simply those reasons that couldn't be categorised clearly. 

Product/price/time 15%
This actually means potential customers want a certain product or service, at a certain price, whenever they want it - for example, right now, next week, or what have you. 

______________ ? 68%

Click here to find out "The real reason customers stop doing business with you".

Talk soon,

Monday, July 7, 2014

A deliveryman told me I was unhealthy - what's your team telling your customers?

You may recall that last year I posted about the importance of branding for smaller businesses, and I pointed out that the image, qualities and promises projected by your brand should also be reflected in every aspect of your business performance, from the satisfaction your products or services deliver to the manner in which your phones are answered and the way you deal with queries or problems.

But I missed something HUGE.

I forgot to mention that anyone you employ - even on a very casual basis - also represents your brand, and you need to make sure that they're providing the same customer service experience as you do.  Something happened to me recently that really drove this point home.

I do most of my grocery shopping online, and a couple of weeks ago the driver delivering my items pointed to a photo in our entry and asked if that was me.  When I told him it was, he immediately asked "what happened?" Obviously I asked him what he meant, to which he replied, "You look healthy there, now you just look skinny and sick".

I was absolutely mortified.  And it probably wouldn't surprise you to learn I won't be using the services of that business anytime soon.

You see even though the business is incredibly successful and very well-known, they have a staff member who is not representing the values or the customer service of their brand.

Now my example is extreme, but it raises the issue of how important it is to make sure our clients and customers are receiving the same service from our team as they do from us. And I have 4 tips to help you achieve this:

1. Hire the right people:

This is obvious but not easy, and I certainly wouldn't presume to tell you what qualifications or experience you should be looking for when you're recruiting.  But I will point out that you'd expect someone in a job interview to be on their best behaviour.  So if they don't impress you in that first meeting as someone who'll represent your business well, they probably never will.

2. Commitment

Many business owners complain that team members 'don't take responsibility, cost too much, don't do any more than they have to, arrive late, go home early, make mistakes all the time, don't take any responsibility, blame each other or the customers, drag their family problems into work, make personal phone calls all day.  It would be easier to do it myself.'

If your team members are treating their roles as if it's 'just a job', it's time to get them more involved.

The key is for you to take charge and do something.  One strategy that a lot of really successful businesses do that can be incredibly effective is to implement a 'team commitment.'

Call a team meeting - again even if they're casual or contractors, they're part of your team and need to be involved - and explain that you want to get their involvement in more areas of the business.  Tell them that you want to make a commitment to them, have them commit to their roles and, together, make some commitments to customers.

Then print your team commitments and give everyone a copy - it would be great if you could get them to sign it.  This could be a great marketing tool if you frame a large version, including all team members' signatures, and hang it in your reception area or shop.  That way, you, your customers, and your team members have a constant reminder of your commitments.

3. Set expectations

"You don't know what you don't know".

The arch-nemesis of Small business owners is time (or lack thereof) and when we employ people we ideally want them to be able to hit the ground running.  We often don't have the time or resources to spend on intensive and time consuming training.

The problem with this is that no matter how skilful a person is, they can't possibly meet our expectations if we never articulate them!  Think about it, if they knew exactly what to do and how to do it without us, they'd probably be running their own business.

At a bare minimum set written expectations for all team members around:

- Their role and responsibilities in the business;
- The flow and quality of work;
- The relationship between customer and business, and their responsibilities.

4. Systems

And the final step to achieving consistent brand representation from your team is having robust systems in place.

The best and most successful businesses have formal systems to help their team provide a consistent experience to their customers and clients.

These may include (but are not limited to):

- Step by step sales systems
- Scripts for handling enquiries
- Scripts for setting up meetings
- Scripts for generating and/or analysing leads
- Email templates
- Letter and other documentation templates
- A position description so that they can describe your business to potential customers in 30 seconds.

Your business and your business brand is important, so when you relinquish total control of it by hiring staff, you need to make sure you retain control of how it's represented.  Don't hire people who from the outset you feel won't be a positive ambassador for your business, encourage commitment from team members, set clear expectations, and put in place robust systems to help your team provide a consistent and terrific experience to your clients and customers.

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.

Talk soon,

PS. If you or anyone you know of is thinking of buying their first home, click here for details on an upcoming FREE session about what's involved in getting that first home-loan now that banks are getting tough...

Monday, June 16, 2014

Should you be managing your own super?

We recently held an education session on Self Managed Superannuation Funds (SMSF).  The feedback was terrific, and whilst I can't fit two hours worth of information into one blog, I can share a few of the salient points, and also extend an offer that we made on the night - not something we do very often.

A SMSF is quite simply a super fund that is set up by people who want to control their own retirement savings, and has less than 5 members.

What you find is that your standard super funds can be quite limiting in the types of investments that you can choose from.  So for people with reasonably high super balances that can be a real disadvantage, and you find that often those people will prefer the flexibility of a much greater range of investment opportunities, and having complete control over investment decisions.

The Australian Securities and Investment Commission will tell you that you probably need $200,000 - $250,000 to make it worthwhile, and that's because you need to justify the compliance or accounting costs that are involved.

It's important to point out that you still pay accounting and compliance costs in a retail or industry super fund, the difference is that they are often percentage based or a combination of fixed and percentage.  This means that people with small balances don't pay a lot for the accounting, but people with higher balances are actually often subsiding the costs for other people.

From the research we've done over the past few years, we'd agree that at $200-$250K it's definitely worth considering, especially if you're going to be making contributions for a while, but it becomes particularly cost effective for balances of $400,000 plus.  In many circumstances it will be a cheaper option than retail or industry super!

Oh and that doesn't mean $400,000 per member, but combined... Just bear in mind that members of a super fund must be family or in business together.

Perhaps the greatest SMSF misconception is that it is a lot of work for the members, but for the SMSF owner it doesn't need to be any more difficult than being in a standard super fund.  Make your Accountant and Financial Planner (ideally under one roof) do all the hard work!

Our accounting team has a specialisation in this area and we manage about 120 SMSFs and I can tell you right now that very few members want to have involvement in the compliance side of things like preparing the accounts and tax returns, updating trust deeds, writing minutes, arranging actuarial certificates...

When it comes to the rules, well they're pretty much the same as for any standard super fund - the difference is that you (and your Accountant) are responsible for making sure the fund meets it's obligations.

One rule that's changed relates to borrowing within a SMSF.  Previously no SMSF was permitted to borrow, but now you can - within some pretty tight rules.  If you're considering taking advantage of this opportunity you should definitely get advice.

And finally, within your SMSF you can invest in pretty much anything that constitutes a legitimate investment - shares, property, managed funds, artwork, coin collection, wine collection - as long as it meets all the legal guidelines of the "sole purpose" test which means it MUST be solely invested for your retirement.

Ok, so that's the "bare bones" summary.  At our education session we offered everyone who attended a free 45 minute session to chat about whether or not a SMSF would be worth considering.  We don't usually extend these offers to people who didn't attend, but in this case we're making an exception.  Do-it-yourself super is an area that's growing and growing fast (there's currently more than 500,000 funds in Australia!!) so we want to make sure you have all the facts to make an informed decision as to whether it might be a worthwhile strategy for your long-term financial security.

Click here for a copy of the offer - it expires June 30.

And if you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Money" radio segment on 98.1FM Radio Eastern.

Talk soon,

Wednesday, June 11, 2014

Think about it now, not later

I rarely recommend that certain books are a "must" because different people have different taste, and I wouldn't presume to think that just because I like it everyone else will.  But the E-Myth by Michael Gerber is different because it revolutionised the way people think about business.  In my book (ah c'mon, it's been awhile since I threw in a bad pun), it actually is a must for business owners.

The crux of Gerber's E-Myth theory is that very few people are "born" entrepreneurs, instead what he suggests happens is that we have an entrepreneurial seizure.  One day we decide we don't want to work for anyone and we just have to be our own boss.

Naturally, most people that go into business are really good at what they do - so a good technician - but not necessarily good at running a business.

So then it's up to us to develop entrepreneurial skills to GROW our business.  Gerber was the one who coined the phrase that you need to work "ON" your business, not just "IN" it.

Now to truly be an entrepreneur and grow your business, it's critical that you "begin with the end in mind", which is a concept invented by another business brain, Steven Covey.  He said, and I love this, "If your ladder is not leaning against the right wall, every step you take gets you to the wrong place faster."

When we start out in business we expect to be in it for the long-term right?  We have goals.  Some of them loftier than others.  One important goal that's often neglected is how we want it to end.

If you're planning a trip you need to know where you're going before you can plan the route yeah?

In order to achieve any goal you need to set it, visualise it, and plan for it.  This includes ultimately exiting your business.

As business owners we take significant risks on board, in anticipation that we'll be duly rewarded in the future.  For most of us, we expect the prize to come in retirement (with some lifestyle rewards along the way of course), but it doesn't just magically happen.  We plan for it.

Do you want to sell your business for a profit?  Are you hoping to cease the physical work, but remain a shareholder with a regular income?  Will you simply wind down the business?  Do you want a family member or staff member to succeed you?

Starting with the end in mind helps you build not only the type of business you want, but also the business you need to reach your ultimate goals.  And that's what it's all about - achieving goals you've set for yourself and your family.

One of the most important roles of a Business Adviser is to help their clients achieve those goals, and this means regularly measuring how you're tracking towards them.

Note you'll often hear me harping on about how important it is to review your business and I think most business-owners realise this and even agree with it (even if they don't always do it), but not a lot of business owners think about valuing their business to determine how they're tracking towards their goals.  In fact, most business owners don't consider doing this unless they're about to sell.

If you missed Michael Moschetti's article "Why value your business?" in our latest "4 Ways Bulletin" click here because it may give you some interesting food for thought.

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.

Talk soon,

Thursday, May 15, 2014

Your relevant Budget summary: The short, the long or the video version – your choice

Last year I branded the federal budget as boring, I won’t be doing the same this year! It’s a tough budget with all Australians told to bear the burden.

Tony Abbot has dubbed it “pain with a purpose” and according to Federal Treasurer Joe Hockey, “the economy is growing at less than normal speed and the time to fix the budget is now.”

For families, there is a focus on healthcare and education; for high income earners, a new tax just for them; for pensioners – new eligibility rules; and for the rest of us – a little bit of extra super.

For anyone who just wants an absolute bare bones budget breakdown, I’ve prepared a summary of the main points below. At the very least you can pretend to care if one of your friends or family members raises the matter.

And for anyone who would like a more comprehensive look at what this year’s Federal Budget involved, I’ve catered for your taste too by including some links to a much longer report and even a video.

First, the summary.

Personal Taxation
  • A levy of 2% will apply for three years to incomes over $180,000 pa, starting in 2014/15. It will increase the top marginal tax rate to 49%.
  • The levy will increase the Fringe Benefits Tax rate to 49% for three years, starting on 1 April 2015.
  • Tax offsets available for dependent spouses and mature age workers will be abolished on 1 July 2014.
  • Income thresholds determining the Private Health Insurance Rebate and Medicare Levy Surcharge will not increase for three years, starting in 2015/16.
  • Interest on HELP debts will increase, with a maximum rate of 6% pa from 1 June 2016.

  • People who make after-tax (non-concessional) super contributions from 1 July 2013 that exceed the cap will have the option to withdraw the excess amount plus earnings on the excess. Currently these excess contributions are taxed at 46.5%.
  • The timeframe for increasing the Superannuation Guarantee contribution rate to 12% will be amended. The next increase, to 9.5%, will occur on 1 July 2014 where it will remain for four years. From 1 July 2018, the rate will increase by 0.5% pa before reaching 12% on 1 July 2022.

Social Security
  • The age at which people will be eligible to receive the Age Pension will increase to 70 from 1 July 2035.
  • From 1 July 2015, Family Tax Benefit – Part B will only be available to families who earn up to $100,000 pa, down from $150,000 pa. This payment will also be limited to families whose youngest child is under 6.
  • The amount of income earned to be eligible for the Commonwealth Seniors Health Care Card will increase each year in line with inflation from 20 September 2014. However, tax-free payments from superannuation pensions will be included in the income assessment from 1 January 2015 for new applicants.
  • From 20 September 2014, the Seniors Supplement will no longer be payable to holders of the Commonwealth Seniors Health Care Card. However, cardholders will still receive the Clean Energy Supplement.
  • People receiving the Disability Support Pension under age 35 may need to undertake a compulsory workforce participation plan.

It’s important to note that at this stage, the measures announced are proposals only and may or may not be made law. So don’t go acting on them just yet…

If you’d like to hear more of what I have to say on the matter, click here for a recording of my most recent “You & Your Money” radio segment on 98.1FM Radio Eastern and click here for your more detailed Budget report.

And if you’d prefer to watch a 6 minute youtube budget update, click here.

Talk soon,

Monday, May 12, 2014

What if you can't sell your business?

As business owners we take significant risks on board, in anticipation that we'll be duly rewarded in the future.  One of the traps many business owners fall into is ploughing everything into one asset - their business.  But what if something unforeseen happens and your exit strategy doesn't pay off?

Let's consider the worst case scenario whereby you can't sell your business or can only sell it for a significantly reduced price.  Let's face it, that's going to be a fairly devastating situation.  Not just from a financial point of view, but personally as well.

But time and time again this is exactly what happens - business owners are surprised to find themselves being forced to sell their business for a lot less than expected, unable to find a buyer, winding down a business they hoped to sell, or without appropriate succession.  It's a reality we can't afford to ignore.

A serious threat to a lot of industries these days is technology.  Consider how technology has and is impacting the following industries:

Video/DVD rentals

I even read a Michael Pascoe article in The Age recently on how internet-enabled "ride sharing" is threatening the taxi industry.

And it's not just about technology - look at what global competition is doing.  We're watching almost entire industries pack up and head overseas!

Ok, the purpose of today's blog is not actually to scare you, but this is an area where no business owner can afford to be complacent.  We've invested too much to "hope for the best".

So what can you do?  Well you probably can't stop change.  And you absolutely don't want to put your head in the sand about it.  And you most definitely don't want to end up on some current affairs program saying technology changed and now I have to work until I'm 80...

You need to at least manage some of the risk by diversifying!  We all know the cliche - don't put all your eggs in one basket.  Well it's a cliche for a reason - it's true.  This is one of the fundamental risk management tools for any investment, including your business.  You need to have other assets in your portfolio aside from your business - if nothing else it's a plan B.

It's not going to stop the disappointment that I mentioned earlier and you won't necessarily be looking at the same financial position you'd planned for, but it will look a whole lot better than if you'd simply put everything into the business and didn't have assets elsewhere.

So where exactly should you diversify?

This is a question you need to ask us.  Our job is to look at your overall financial position, including your business, and identify any risks and how they might be mitigated.

Some typical diversified assets might include:
  • Property - residential, commercial, business, retail, holiday let etc
  • Shares
  • Managed Funds
  • Cash
  • Term Deposits
Personally, I believe you should have most if not all of these assets in your portfolio so that in the event that your business venture doesn't achieve what's needed to support your personal goals, you have other assets that you can rely upon, not just the business.

And a great way to achieve this diversification is through superannuation.  Super is an absolute monty when it comes to tax savings and I don't know a single business owner that doesn't like to save some tax.

By contributing some of your business income to super, you can mitigate some of that risk and take pressure off your business to provide everything for you in retirement.

Self Managed Superannuation can be particularly attractive to business owners and I have a theory that's because most of us are control freaks, or what I prefer to call management enthusiasts.  So it stands to reason we'd like to be in control of our retirement savings through super as much as we are through our business.

In fact there are 500,000 SMSFs set up in Australia and as far as the money is concerned, we're talking about more than $15 billion.  That's billion folks!

Anyway, if this is an area of interest to you, I'm running a Q&A session with Taxation specialist Michael Moschetti and Investment specialist Michael Crowe, about Self Managed Super.

It will be PACKED with education information, including:
  • Why Australians have invested more than $15 billion via Self Managed Super;
  • How Self Managed Super differs from standard super;
  • What's involved in running a fund;
  • How much it costs to manage a fund;
  • Keeping up with the rules and changes;
  • How to make decisions and where to go for advice.
Click here for more details and to register.  

By the way, I read an article in The Age over the weekend about how people should be wary of seminars because the people running them are looking to stitch you up before you leave.  That absolutely isn't the case at our education sessions and that's probably the reason they're so popular.  Of course we hope you like what we do and will choose us to help you make sensible financial choices, but there is no hard sell, it's an education session open to everyone in the community.

Ok, so the people I deal with in my work as a business adviser and financial adviser are busy and don't have time to waste, so I have to keep my advice simple and practical.  And at the end of the day, it doesn't really get more practical than being prepared - and I didn't even have to go to Scouts to learn that.  If you haven't diversified your assets away from just your business, then it's time to do something about that and frankly you should do it fairly urgently.

Of course, we're here to help!

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.

Talk soon,

PS. Please don't keep me a secret. If you know someone who’d enjoy this or find it useful, pass it on!

Monday, April 14, 2014

What to consider when someone wants to borrow money from you.

It's a topic I have blogged about before, but it's an important one.  A friend of mine was recently burned when a friend of his loaned some money for a business venture that failed and was unable to pay him back.  As you can imagine the friendship has seriously soured.  I wish he'd chatted to me before he'd generously loaned the money rather than afterward.

A number of years ago one of my clients came to me to ask my advice about loaning a significant amount of money to her daughter.  The first question I asked was whether there was any chance that her daughter might not pay her back, to which she replied "oh there is every change she won't pay me back."

I knew her financial position and knew that she couldn't afford that risk so told her to explain to her daughter that she wasn't in a position to help out.

But there are cases where we are in a position to help and at the end of the day, the only person who can decide if you want to loan a friend or family member money is you, but I do have some tips.

Questions to ask yourself:

1. Will you suffer financially if the loan isn't repaid?  If the answer is yes then my recommendation is to walk away.  You don't want to put yourself into financial hardship because of somebody else's money problems.

2. Will your relationship be damaged beyond repair if the loan isn't repaid?  If the answer is yes then, again, I recommend walking away.  You don't want to lose your relationship AND your money.  In the very few times I've loaned money,  I have gone into the arrangement with the attitude that if I never saw the money again, I would live with it.  If I can't feel that way then I just don't do it.

3. How formal do you want the arrangement to be?  If someone asks to borrow money from you, particularly if it's what you consider to be a sizeable amount, then you have the right to expect a formalised written agreement.  The written agreement should state the amount borrowed, any interest that may apply, payment terms (how much and how often), and the date the loan should be finalised.

I'd recommend having the agreement drawn up by a solicitor and I personally believe that the person borrowing the money should foot the cost of the fees.

4. Will you charge interest?  And if so, at what rate?  Often loans between friends or family members are no interest or low interest and this is of course up to you.  You may wish to apply a market rate of interest, particularly if you believe there's a reasonable chance that you might not get your money back.  Perhaps it's unlikely that person will be able to get a loan from a bank or other lending institution and would be more than happy to pay the market rate to obtain the capital.

You do need to be aware that legally you have to declare all interest to the ATO, even if it's a loan between friends or family.

5. If it's not a formal written agreement, what are your terms?  Even if you decide not to formalise the agreement, I do think you need to be clear on the terms.  Your terms might include a structured amount to be credited to your account each month or a lump sum to be paid at the end of a certain period.

6. And once you've decided the terms, what happens if the terms aren't met?  At what point are you going to start jumping up and down or at least give a little nudge?  That's probably something you should also agree upon from the start.  And if the loan is never repaid - what are you going to do?  If an agreement is in place, are you going to take legal action?

Probably the best advice I can offer is to be totally up-front right from the start.  You may feel a little awkward, but if someone has had the courage to ask you for a loan, then setting the terms should definitely be your prerogative and should be expected.  Some ideas for approaching this might include:

"This is a lot of money to me and while I'm happy to loan it to you, I will need it to be repaid in monthly instalments by July.  Is that going to work for you?"

"I won't need the money for the next twelve months, but after that I really do have plans for it.  Will you be able to pay me back by September next year?  And will you do that as a lump sum or regular payments?"

"I'm happy to loan you some money, but I have to be honest, I've seen some relationships turn really sour when money is involved and I would hate that to happen to us.  Would you be agreeable to formalising the arrangement so that we don't have to worry about any of that?"

"If you happen to miss a payment, do you want me to give you a reminder straight away or give you a few days in case it's just slipped your mind?"

At the end of the day it comes down to personal circumstances and your relationship with the person needing a loan.  Just make sure you consider the risks involved and what you need from the arrangement.

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Money" radio segment on 98.1FM Radio Eastern.

Talk soon,

Friday, April 4, 2014

Should business owners exhibit at events? 8 tips...

To exhibit or not to exhibit...

I'm often asked whether exhibiting at an event is a good idea for a business-owner and, as is often the case, the answer is "it depends".  Having a stand at an exhibition can be expensive and, even when it's not, it's a big chunk out of your day or weekend, so you need to make sure it's worthwhile.

Here are my 8 top tips to consider before you commit: 

Before the exhibition: 


1. Be selective. 

Don't just take any opportunity to have a stand at an event.  You need to do your homework and ask the organiser the following questions (at least):
  • Who do they expect the event to appeal to?
  • Who will they be targeting/inviting?
  • How will they be promoting the event - where, when and how often?
  • How many people do they expect to attend?
  • How many exhibitor stands are they offering?
  • What facilities will they have for each stand?
  • Is there an opportunity for you to also present?
Unless you're incredibly lucky, expos are pretty hit and miss.  Even if people seem really interested on the day, it's unlikely you'll hear from most of them again.  So don't waste your valuable time, energy and money on exhibitions that don't specifically cater to your target market and where the organisation of the event isn't top notch.

2. Be prepared.

This may sound obvious but it's surprising how many business owners leave their exhibition planning to the last minute - and not only is it stressful, but it usually shows... You'll have limited space so think about the decoration and props you want to use as part of your display.  Set it up at home or in the office to see how it looks - don't just hope for the best on the day.  Once it's set up the way you like, take a photo so you can easily replicate it on the day.

Write a comprehensive list of all the things you want to take with you on the day and check it off as you pack your car the night before.  Don't forget incidentals like sticky tape, blu-tac, scissors, snacks etc.

Choose the main message about your business that you want to be able to get across to people who visit your stand.  In many cases you will only have a few minutes, maybe even seconds, to engage people so you don't have time to fluff around!  This is where your positioning statement is really important.

Think carefully about what you want to have as a giveaway at your stand.  A gimmicky gift is fun and will often grab attention, but doesn't necessarily make you memorable afterward.  You should also make sure you give away something that the attendees will value.  Something that makes them think about your business afterward and want to learn more about you.  A great idea in this age of information is to actually give away some of your intellectual property.  Given you're only exhibiting to your target market and of course you know all the WIIFMs (what's in it for me) your business offers them, you should be able to come up with an article, fact sheet or video that's content driven and valuable to them.  This positions you as an expert, which is what they're really looking for. 

At the event:  

3. You are your brand.

On the day, remember that you're representing your business brand, so make sure you dress and behave in a way that's consistent with your business message.

4. Ask questions.

One of the biggest mistakes exhibitors make is talking too much about themselves and their business.  This is completely understandable given the financial and time investment you've made for this stand, but is in fact the wrong approach.  Remember it's all about the potential client or customer, so you need to be an "information getter" rather than an "information giver".  Ask lots of questions and take a genuine interest in the people you're talking to and you won't have to bring up your business at all - they'll ask you about it!  And because you've taken a few minutes to get to know them, you'll be able to talk about your business specifically in relation to how it can help them.

Oh, and don't forget to take the time to talk to other exhibitors.  Even if they're not your target market, they're clearly targeting the same market as you are, so there might be some awesome collaboration opportunities you can explore.

5. Get details!!!!

I can't stress this enough - you need to make sure you get the details of as many attendees as possible for your database.  This is the most important purpose of exhibiting at an event.  Opportunities to do business at the actual event are limited and even if you do reasonably well, when offset against the cost of exhibiting (including your time before and during the event) in most cases the result is still fairly minimal.

The value is in your "follow-up" - a critical point most exhibitors completely miss and then wonder why it "didn't work".

A great way to get details is to offer a prize.  Make it something that's valuable to your target market and don't necessarily make it anything related to your product or service.  You may prefer to ask people to join your mailing list, which is fine so long as you let them know exactly what they can expect from this service. 

After the event: 

The advantage of an exhibition is that you get to put yourself and your "wares" in front of a large group of people.  Furthermore, they're often like-minded people.  On the negative side, there's a lot of other "stuff" going on so you usually only get a short time with potential customers or clients.  There are other shiny things to distract them...

6. Keep your promises.

If you've promised to contact someone personally then you must do that and do it quickly.  Most people will give you a grace period of a week, after that they're starting to wonder about your reliability and business efficiency.  Not to mention they've started going cold on your product or service anyway.

7. Get in touch but with respect.

If you collected contact details "in bulk" (ie. business cards, written list) then my strong advice is low gradient contact.  What I mean by that is that you absolutely shouldn't start bombarding people with pushy sales calls, emails or letters.  I recommend a series of increasing gradient steps, letting people progress along at their own pace.  You need to sell philosophy and methodology before you engage a new client or customer.

Take it easy.  If there's mutual benefit and the fit is right, it'll happen.  If you're contacting someone that hasn't specifically asked you to call/email/mail them, you need to respect their boundaries.

8. Don't waste the opportunity.

Many years ago I attended an expo that I spent a lot of time preparing for and then worked hard over two days to meet people and to build our database with their details.  The prize was terrific and expensive - a weekend away at Heritage Golf Course - and I collected hundreds of attendee details.  I was so pleased with myself.  But guess what I did when I got back to the office?  Ummmmmm - nothing!  I never followed up!  After all that hard work and great result, I never added the names to our database and I never got in touch with any of those potential clients.  What a complete waste of time and money.  It was about 15 years ago, but I'm still kicking myself.

Whatever you do, make sure you add the details to your database and make contact within a week.  Don't miss or waste a great opportunity by procrastinating.  And of course, if you're using email (a nice inexpensive option) don't forget to include the unsubscribe option (and don't feel bad when anyone does unsubscribe, it just means your information is not for them and they're cleaning up your database for you).

Hopefully that gives you some direction for when you're next presented with an opportunity to exhibit at an event.  Follow my 8 tips and you'll be able to make sensible decisions about where you choose to exhibit and make it a super success when you do!

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.

Talk soon,

PS. Please don't keep me a secret.  If you know someone who'd enjoy this or find it useful, pass it on!

Monday, March 17, 2014

New Credit Rating rules you need to understand

Any time you apply for a loan, your information is shared by lenders for the purpose of assessing what sort of credit risk you pose.  This obviously helps them determine whether or not they're prepared to loan you money or not.

New Comprehensive Credit Reporting changes the way credit information can be shared by lenders and will have a significant impact on whether or not your application for financial credit will be approved.

Up until recently, you really only received a negative credit score if you defaulted on a loan or didn't pay a bill.  But as of 12 March 2014, loan and credit repayment details are just one of the additional pieces of information that lenders can pass on to credit bureaus as part of a new more comprehensive credit reporting regime.

Under the new rules, there'll be a lot more data sharing and a lot more information available to your financial institution. In fact, every time someone misses paying a bill or loan re-payment of more than $150 by more than five days, their credit file is marked and their credit rating is affected.

On the flipside, under the new regulations, the data provided will also include positive information such as how often repayments have been made on time, so you can actually be rewarded for your years of good behaviour.

The type of information your financial institution will be able to obtain as part the new credit checks include:
  • If repayments have been made on time over a two-year period;
  • If payment of a bill over $150 is more than 60 days late, it will be listed as a default;
  • The limit on credit cards that you have applied for;
  • The date your credit account was opened, type of account, and when it was closed; and
  • If, because of a default, someone has entered into a new varied arrangement for repayments.
For more information on the new regulations, what it will mean for you and other ways you can take control of your credit history, click here.

In the meantime, click here for our brochure on Protecting Your Credit Reputation, which includes more details on the new rules, as well as handy tips for getting yourself a good credit rating, and avoiding a poor rating.

Of course if you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Money" radio segment on 98.1FM Radio Eastern.

Talk soon,

PS. Special thanks to our Senior Financial Adviser Michael Crowe from whom I pinched a lot of this information!

PPS. Please don't keep me a secret!  If you know someone who'd enjoy this or find it useful, pass it on! 

Wednesday, March 12, 2014

Hate bookkeeping? Some handy tips.

Do what you do best, and that's not bookkeeping (unless you are a bookkeeper)!

Read to the end for details on our free education session for local business owners.

I'm always telling business owners they should be spending their time doing what they do best, and frankly - unless you are a bookkeeper - that's NOT bookkeeping.  But it's vital for all businesses to know how they're doing.

You need to know if you're actually making money and whether you are in a position to grow and improve your business.  To do this you need to have accurate financial records.  Not to mention that it's a legal obligation and if you don't get it right it can be very expensive.

A lot of this can depend upon the software you use.  And just because one package is good for one business owner doesn't mean it's the best one for you.  Often the cheapest option is not the best, and while it may save you in the initial outlay it will cost you in time and efficiency.  You need to consider:

Who is doing the bookkeeping?
If you have a spouse or qualified bookkeeper maintaining the records for you then having quality software to work with means there's less likely to be errors.

And if you're the bookkeeper, as well as the business owner, as well as the business manager, as well as the key worker, then your time is precious and you definitely don't want to be wasting valuable chargeable time fighting outdated or inappropriate software.

Don't stick with a particular software just because it's what you've always used - explore your options.  You might be surprised by what's available, and the small amount of training required might be nothing compared to the time you'll free up to do what you do best, not to mention less stress.

One of the options that is worth exploring is cloud based accounting software, especially if you move around a bit in your working day.  Cloud accounting software allows you to work anywhere, anytime, on any device.  Invoice on the spot with your smart phone, and thereby improve your cashflow.  And we all know cashflow is still king.

Software aside, unless you have a specific expertise in bookkeeping then we always recommend getting good advice for your business.  Yes, you will need to pay for it - but perhaps not as much as you think.  And the cost is usually negligible compared to what you save by getting it right the first time.  Perhaps even more importantly, it gives you time to spend building your business rather than the compliance work, which someone else can probably do faster and more accurately than you anyway.

At the very least, you should consider having an expert look at your processes to make sure you're doing everything correctly and as efficiently as possible.  That way even if you do wish to do your own book work, you know you're on the right track.

Last year we published an article by expert Jenny Edwards "5 Bookkeeping Pitfalls for Business Owners" that received lots of great feedback from our business clients.  If you missed it, just click here

And finally, on Tuesday 25 March at 5.45pm, The Hendrie Group is hosting a FREE education session about Xero Cloud Accounting software for all local business owners.

We have no ties with Xero, but as an Accounting firm we want to keep you up-to-date with your options and Xero is a pretty good offering for many business owners.  Most importantly, we feel it can save you time and stress so that you can focus on what you do best.  After all, you probably didn't go into business to be a bookkeeper...

At our own cost, we've engaged an expert to give you a live demonstration of the benefits of Xero cloud software.

We want to help you decide if moving to Xero is appropriate for your business, and if you're already using the software - we want to help you make the most of it.

Drinks and nibbles provided from 5.45pm with the presentation starting at 6pm and running for 60 minutes.

Click here to register online of call us on 9725 2533.

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You &Your Business" radio segment on 98.1 FM Radio Eastern.

Talk soon,

PS. Please don't keep me a secret. If you know someone who’d enjoy this or find it useful, pass it on!