‘Businesses within a business’ – Applying different ‘models’ to the same business
Many businesses are ‘mixes’ of basic revenue models – and in particular, are a mix of ‘retail’ and ‘labour-based’ models. So to analyse it effectively, you might need to think differently about each part of the business, using a different ‘model’ in the process. Here are a few examples to prove the point: [...]
How Do I ‘Benchmark’ a Business? Three Mindsets for Advisors
At different stages during the process of Benchmarking a firm, your mindset needs to change. Here are the key stages that you’ll need work through as you help a client to devise concrete plans for a better, stronger business: 1. At first, your role is essentially a clerical one: converting the financial data about the [...]
The Silent Disruption of the Accounting Industry
As Featured in the Australian Financial Review on 19/6/19. Amidst the protest of taxi drivers against ride-sharing, the headlines of more manufacturing companies closing and uproar over telecommunications jobs moving overseas, the mature accounting industry is quietly undergoing a dramatic innovation transition. And, the $1Billion Australian FinTech Industry is not the only one to blame. [...]
Interest Cover Benchmark Calculation
How it’s Calculated Total Net Profit (before owners’ salaries & remuneration) = _____________________________________ Total Interest expense How it’s Used Higher results show that the business is highly capable of servicing its interest expenses. Interest cost is often not reported on its own – it also includes Bank and Credit Card charges. As a result, [...]
Instant asset write-off for small businesses
In case you didn’t know there’s a $30,000 instant asset write-off for small businesses If businesses are wanting to purchase assets, now may be the time given recent changes to the instant asset write-off (IAWO) thresholds. The IAWO was first introduced in 2015 as a means to help small businesses through a period of economic […]
Growth Capacity Benchmark Calculation
How it’s Calculated Growth Capacity calculation: $ of Net Profit – ($ of Current assets - $ of Current liabilities) = ______________________________________ x 100 Turnover How it’s Used This ratio shows whether [...]
Using Business Benchmarks – Three Points for Advisors
One point that can be made about ‘Business Benchmarks’ is that they are a tool. They are not the ‘complete answer’ to every possible question a client might ask you. It’s not the one tool that will fix absolutely every problem that you are going to run across. But they will enable you as an [...]