September, 2016

Giving to Charity

Why giving to charity is good for your business

If your business hasn’t made it a habit to support a good cause, here’s why you should: giving back does more than making a difference in your community. Participating in charitable activities can have a positive impact on your staff, your customers and your bottom line.

Customers want to support companies that demonstrate a commitment to more than earning a profit.  A 2010 study by Cone Marketing showed that 85% of customers respond positively to companies that give to a charity they care about.

Moreover, collaborating on charitable activities encourages team building among your staff, which can improve morale and even increase productivity.

Including volunteer days in your company’s benefits package can also attract top talent and encourage staff loyalty.  A 2015 study revealed that 62% of millennials would take a pay cut to work for a company that demonstrates a commitment to social responsibility.

Convinced giving back matters?  Here are a few easy ways to become a more socially conscious company.

Implement staff volunteer days

Allowing your staff time to volunteer in the community once or twice a year is a win-win for everyone involved.  Your company’s commitment to community giving can make a meaningful difference to a charitable organization while raising your company’s profile and earning the appreciation of your staff.

Host a community event

Schools, hospitals, libraries, community centres and children’s clubs can always use extra financial support.  Choose which community organization you’d most like to support, keeping your company’s core values in mind, then start a campaign to raise funds for your cause.  A car wash, BBQ, cake sale or fun fair can become an anticipated annual event with the help of your staff and the support of other businesses in your community.

Sponsor a donor matching program

Pledge to match donations up to a certain amount for a cause of your choice.  Donor matching is a great way to inspire people to give more generously, knowing their donations will go further, and your company will be remembered for your collective generosity and goodwill.  Use your company’s social media channels to spread the word about your donor matching program and encourage your followers to give to your cause.

Final tips

You’ll get a more positive response to initiating charitable efforts when you invite your staff to become involved.  Ask them to come up with a list of charitable initiatives that matter to them and that align with your company’s mission and values.  Then take a vote on the top two or three charities you’ll work on together to support that year – perhaps one local community initiative and a campaign to help a larger national charity.

Acknowledge your staff’s participation in your corporate giving projects and reward them for their personal contributions.  Time off, a free t-shirt or a group draw for a gift card can go a long way to increasing participation and making your efforts to give back both rewarding and fun for everyone involved.

Why banks won’t lend to a business

Why banks won’t lend to a business

How to go about obtaining finance is a common concern for new businesses and those preparing to expand.

Getting approval for a business loan or line of credit is more difficult than qualifying for a personal loan.  It’s crucial that business owners are adequately prepared to meet with a lender to present their business in the best possible light to qualify for the money they need.

Here’s what you can do to streamline the loan approval process for your business.

Your business risk profile

One of the most important parts of any business loan application is demonstrating to a lender that your company is able to make regular payments and repay the loan in full.  If your business is profitable, you can show you’re a low risk by presenting cash flow statements, a detailed business plan and, of course, your good credit history.  Some of the most common reasons a bank won’t grant a loan to a business are a lack of security (e.g. no business assets), a poor or non-existent credit history, business inexperience and/or a weak business plan.

Know your credit score

It’s highly recommended that you review your credit score before you apply for finance.  That way you’ll know whether it might be better to wait until you’re in a better position to qualify.  Check that your report is complete or free of any errors that can affect your score.  Your credit report includes your payment history for credit cards, equipment leases, mortgage or office rentals, electricity, phone fees and other business expenses.  A simple omission from your payment history, such as your internet provider (whom you always pay on time), can result in your credit score being lower than it should be, so be sure to correct any errors immediately.

Before you apply for finance

If you suspect a lender will decide your business is too high risk for a loan, or you’ve been denied finance, apply for a business credit card instead.  Your spending limit may be low to begin with, but a credit card will give you that opportunity to build a good credit history.  Pay off your balance or, at the very least, make your minimum payment each month.  Also keep up with your other financial obligations such as any personal loan payments, rent, leased equipment and any income taxes owing.  Wait for six months to a year before applying for a loan and you’ll have a much better chance of approval.

Before you apply, be sure you have all the documentation needed to support your loan application.  Include copies of business banking statements, financial reports, a detailed business plan including projections and a well-researched marketing plan.

You should also be prepared to discuss with a lender why you need to borrow the amount you’re asking for, the length of term and how your business can afford to repay it.  Make a strong case by demonstrating profitability, a good credit history and a solid business plan, and you’ll be in an excellent position to qualify for the finance you need to grow your business.

We can help you achieve more from your business with a robust business plan.  Download our FREE Business Plan Guide. CLICK HERE


How Crowdfunding Can Help Your Business

If you haven’t been in business long, it can be tough to qualify for a loan.  Lenders want to see a detailed business plan, backed by income and cash flow statements, that prove you’re a good risk.  Often strict lending requirements can freeze out new businesses when they need funding the most.

Crowdfunding offers an exciting funding alternative for businesses.  Originally the domain of filmmakers, musicians and artists, crowdfunding is now used by start ups and business owners to raise capital, based on a simple notion:  large amounts of money can be raised in small amounts from numerous donors via the Internet.

Here’s what you need to know about launching a successful crowdfunding campaign, including information on three platforms designed to raise business capital.

How crowdfunding works

Crowdfunding allows businesses the freedom to raise capital from investors, customers, colleagues, peers, family, friends – even strangersLike anyone in search of funding, successful campaigns rely on a solid idea and a detailed business plan – including financial forecasts and cash flow statements – to convince potential donors it’s worthwhile to support a venture.

Typically, an established crowdfunding platform like Kickstarter or peerbackers is used to promote a campaign page, with reward or equity incentives for donors.  A reward might be in the form of a pre-order of a new product or services offered in exchange for funding support.  Equity would be a share of stock offered in exchange for capital.

Tips for launching a campaign

Crowdfunding campaigns don’t tend to go viral; they gain traction because they appeal to the people you already know – your network – as well as investors who are searching for an opportunity.

Successful business crowdfunding campaigns have these things in common:

  • They tell a compelling story and convey passion for an idea, connecting like-minded people who share your vision and enthusiasm;
  • They offer backers high level, time-limited rewards that include the product – and require fewer sales to achieve the fundraising goal;
  • They use every means available to sell a great pitch, including detailed business plans, product images and videos.

Choose the right platform

Here are three options for creating a winning business crowdfunding campaign:

  • Fundable allows rewards-based and equity crowdfunding to attract backers.  It costs $179 to host a campaign, which will put your venture in front of more than 23,000 registered investors.
  • Indiegogo is open to anyone who wants to launch a crowdfunding campaign, small businesses included. It’s free to sign up but the company charges 5 percent platform fees on all funds raised and payment processing fees average between 3-5 percent.
  • Endurance Lending Network is a little bit different than other crowdfunding platforms as its mission is to help small businesses seeking up to $500,000 of debt capital. Businesses benefit from easy access to loans at attractive rates, and investors earn good returns with secured term business loans.

Crowdfunding can be a smart, cost-effective way to get your business off the ground.  It can also offer an incredible, unadvertised side-benefit:  priceless feedback from your backers that can help tweak your idea before you move into production, allowing you to launch an even more successful product.

Small Business Marketing

How to achieve small business marketing on a shoestring budget

Very few small businesses have a huge marketing budget to work with. Fortunately, there are a number of simple, free and low cost ways to get the word out about your company that are also highly effective.

These tips will show you five simple ways to promote your business locally without breaking the bank:

Get free press

Advertising rates for local newspapers and radio stations can be way too costly for small business marketing. Instead, think about how you might generate a story the media will want to share. For instance, a grand opening, anniversary, community fundraiser or special event can be the perfect opportunity for an interview on local TV or radio. Likewise, get in touch with your local newspaper to see if they’d be interested in an article about your latest product launch or move to a new location.

Cross promote

Partnering up with another local business for a product release, new project or service bundle can exponentially increase exposure for your company. Brainstorm non-competing, complementary businesses in your area – then think about how you might work together to attract new customers. Small business marketing in the form of cross promotion creates an opportunity to reach out to each other’s mail lists, add each other’s business name to any mail outs, post information about your partner’s company in-store and team up on an event you can invite all of your customers to.

Support a cause

Start or get involved in a local fundraiser. Giving back will raise your community profile and provide free advertising, while creating goodwill as you help an individual or organization in need. Schools, libraries, hospitals and not-for-profits all benefit from volunteerism and community fundraisers. And if that isn’t reason enough, customers want to support businesses that care. Demonstrate that your company is interested in improving the wellbeing of your community and you’ll instantly gain new fans.

Host a workshop

Contact your local library, Chamber of Commerce or small business bureau to arrange a free educational talk on a topic of interest to your target customers. Providing valuable information is a great way to build credibility, trust and initiate customer relationships. Consider a prize draw for a free product or service – and be sure to have promotional items available to take away, including information on your loyalty program to entice new leads to make a first purchase.

Run a contest

Offering a prize giveaway is a fantastic way to generate buzz online and in your community. It’s also a great way to build a mailing list you can send promotional information to (with permission, of course). You can work together with other local businesses in your area to extend your reach when promoting the contest, with each company donating a prize to the basket. Without much investment, you’ll be able to offer a much more valuable prize this way – and reach many more potential customers with every business doing their part to get the word out.

Final tips

Marketing your business locally needn’t cost a lot of money, but it does require a regular time commitment. Build free promotional activities into your annual business plan and get strategic about timing your marketing.

Retirement Mistakes

Avoid the 5 biggest retirement mistakes

Many people have a goal as to when they would like to retire and what they want to do in their retirement.  To achieve this goal, it is essential that you carefully plan for your retirement to maximise your wealth and financial freedom.

There are some common, yet avoidable, mistakes that prevent many people from retiring ‘on time’.  But with some careful consideration, you can steer clear of the mistakes that could derail your retirement plans.

1: Not understanding how much you need in retirement

By not giving careful consideration as to how much you need in retirement how can you even start to make plans?

If the assumption is too high, the goal of retirement may seem absolutely unattainable and the entire planning process is discouraging.  If the assumption is too low, which is most often the case, the retiree could run into a difficult financial situation later in life and have to make drastic, unwanted changes.

As a general rule of thumb, you will need approximately 80% of your current annual income in retirement.

2: Disregarding Higher Health Care Costs

One of the most overlooked areas of retirement planning is estimating health care costs and including this in the calculation of income needs.  For example, a married couple, both 65, who retired in 2012 will incur an average of $240,000 in health care costs alone in retirement.  By overlooking this large potential outlay, retirees could feel strapped for cash in their most vulnerable years.

Often, people assume Medicare will cover these expenses in retirement but this simply is not true.  Medicare costs to retirees are rising each year, so it’s important to know what to expect.

3: No Long-Term Care Plan

Anyone who has cared for an ageing parent knows first-hand the toll it can take on their loved ones and their savings.  Both the time and money needed to provide quality care can be staggering, so it’s important to know your long-term care options and how you plan to pay for these expenses if you need to.

4: Not Saving Enough Then and Now

Don’t wait to start saving for retirement.  The sooner you get started, the greater your chance of reaching your retirement goal because compound interest can work its magic.  The key is to make saving for retirement a priority and to start saving a regular amount each month.  Remember, payments into your pension are tax deductible so you can minimise your tax bill whilst setting yourself up for retirement.

5: Not Updating Your Retirement Plan

It’s important that you revisit your retirement plan every couple of years to ensure that it takes account of changing market conditions as well as changes in your personal circumstances.

If you would like to discuss your personal financial situation and retirement plans, give us a call today and we will be happy to help.  You may feel that a SMSF will provide you with more control during your retirement.  If so, we can offer you advice in setting one up.