SPECULATE TO ACCUMULATE – Three investments to take your small business to the next level
By Fiona Hamann, Founder and Principal of Hamann Communication and a Commtractor. This article was originally published on Flying Solo on October 25th 2018 and Fiona’s website blog can be found here.
Like many of you, I started my business on a wing and a prayer. Sick of long city commutes and time away from the family, I chucked in the office job and felt a bit like a trapeze artist without a safety net.
I had no redundancy to fall back on, so I spent the first year trying to achieve a successful business on a shoestring budget. A cheap, chunky laptop at the kitchen table, an Excel spreadsheet to manage my invoices, and Google to help me track media articles and source contact details for my PR business.
In short, I had little in the way of any strategy except to work hard and hope for the best.
Each day I would clear up my work mess and serve dinner in my ‘office’. A habit that resulted in lost papers and documents and a stilted workflow the next day, as I struggled to re-set up the previous day’s to-do lists.
It wasn’t productive, and after a year of fiddling and faffing and generally being very bad-tempered about the inconvenience of it all, I decided I needed to get more professional.
I was terrified of some of the investments I needed to make to improve my business until a close friend told me that I need to back myself. If I don’t believe in my company, how could I possibly hope that my clients would?
But there were some pretty expensive changes I needed to make. In hindsight, I am pleased I took the plunge because my business has grown five-fold in three years, and my productivity levels are through the roof.
Dedicated office space Perhaps the most significant, and non-tax deductible expense was creating an office for myself.
Luckily, we had a huge rumpus room downstairs, and I could section off the end with a partition wall, and add a window and power points. It cost a pretty penny, but I now have a dedicated office space.
I shut the door at the end of the day and can switch off from work, and my documents are all exactly where I left them when I return in the morning. The added bonus is my house now has a ‘study’ which has added to its value.
I spent money on furnishing my office properly and lashed out on a new iMac, which was faster and much better than the clunky laptop. Thankfully all these items could be written off immediately with the ATO’s $20,000 instant asset write-off.
If you don’t have the luxury of an oversized rumpus room to convert, or are renting, it is still worth ensuring you have a space that is yours alone for business. You can save a lot of time when you don’t need to set up your workspace like a crazy hot-desker each day.
Get your finances in order This was definitely something I should have done sooner! I spent two years trying to manage my finances on a spreadsheet. For someone who was barely competent to study Maths in Society at school, and is not proficient at Excel, I really don’t know what I was thinking.
I think my accountant also hated me intensely at tax time when she saw me walk through the door. Nothing added up or was allocated to the right columns, and my receipts were still stored haphazardly in the obligatory shoebox.
I trialled all the big brands, but baulked at the cost and the complexity, until a friend recommended a company called Rounded, which is designed for sole traders.
I can honestly say, I have never looked back. It offers everything I need at just over $200 for the whole year (and like my office furniture, it’s also tax deductible.)
I can invoice (and track payments) and add expenses, pus screenshot receipts and upload from my phone. It calculates my BAS and estimates my income tax. But perhaps my favourite feature is the ability to set goals and see my business grow on a colourful dashboard.
It has literally saved me hours, saved my sanity and stopped me from getting anywhere near a financial spreadsheet since I got it!
My accountant will be happy this year, as she can now access my data with her own password, and I won’t have to see her tutting about my lousy record keeping (cos it’s not!)
In reality, I know that accounting software isn’t responsible for my business growing, but it really motivated me, and the dashboard pushed me to achieve my income goals.
The time I used to spend on Excel can now be used on my core business or marketing to new customers.
Don’t skimp on the software you need for your business What good is running a PR consultancy when it takes half a day to source media contacts through Google, and the same again to track stories? But media monitoring and databases are stupidly expensive.
This was a big decision for me as it was way, way more expensive than my accounting app, and I would be locked into a 12-month contract. But I bit the bullet and signed up with Meltwater.
Thankfully I held out signing up until the final deadline. With a salesperson eager to earn their commission, I was able to negotiate the price down, and also arrange a quarterly subscription model, which gave me three months to stump up the cash.
I am now able to offer media monitoring and a media database to my clients, as well as system generated analytics, which gives me an advantage over other smaller sole traders, who generally don’t offer it.
I am on excellent terms with many of my local competitors (there’s enough pie out there for everyone to have a slice), and so I sell them media lists and monitoring when they need it, as well as charging my clients a monthly subscription, which is a value-add for them. My big investment virtually pays for itself now, which is a huge relief.
The media monitoring has given me back so much time and is far more efficient than the Google monitoring I was doing. Best of all, I don’t have to record media lists on Excel (as you may have guessed, my most hated program)
While it is tempting to try and run your business on a shoestring, and invent homemade solutions like McGyver, once you back yourself, believe in your ability and invest in the tools you need for your business, you can take it to the next level – both in terms of productivity and profitability.