Xero CEO Rod Drury on small business in 2014…my thoughts

Xero CEO Rod Drury cuts to the chase and notes that you run a business to make money so that you can go on holidays and buy beach houses and basically have a great lifestyle. This echoes my comments from my piece on running a smarter business using technology to help you quite simply “make more money”.

His advice on how to do this? Run your business like it is a real business. Set goals and everyday when working in and on your business only do those things that will help you directly or indirectly achieve those goals which will make you more money and give you that financial freedom you want. Its all about the opportunity cost of doing one thing versus another and so to limit the impacts of opportunity cost decisions he recommends you find what you are good at and be the best at it. Specialise and don’t try to be everything to everyone (this I know is Xero’s mantra and how they decide on what features to build and release)

Pretty simple advice, but highly effective. !

http://www.youtube.com/watch?v=P8cQXwPfUoI&feature=youtu.be#!

Man City 80% purchase of Melb Heart another sign that Australia is making its mark on the world game

The recent announcement on Thursday by FFA that it has approved the acquisition of the Melbourne Heart’s A-League license by Manchester City in my opinion is a fantastic event for Australian football.

As a life long player of the game to see a team that is part of the most exclusive domestic competition in the world buy a team from our domestic competition is proof that the world is watching what is happening with football down under.

We need investment like this to help drive our game. At the moment it is unfortunate that it is a bottom – up system in terms of fees structures unlike the other major codes where it is top – down. Not sure what I mean ? In NRL and AFL there is a large amount of investment in the junior and amateur competitions because they quite simply have more money than the FFA. In football in Australia a fair proportion of players fees go to State Associations and the FFA to fund the “development” of the game across the nation.

I remember when my brothers starting playing rugby league for the North Ryde Hawks in the late nineties that their fees were $50 and each year they got a new jersey, shirts and socks (and sometimes tracksuits) supplied by the Balmain JRL, but conversely I was paying $150 to play for the mighty Redbacks in the U21s, plus shorts, socks and we got a loan shirt. !

That is ok though. The current domestic competition has only been around for 10 years following the old NSL as opposed to the VFL/AFL and NSWRL/ARL/NRL which have been around for much longer. So it will take longer to build the coffers 🙂

Whilst the foxtel deal is great for the FFA, the lack of free to air TV games does make it hard for the public to get behind it, even though there are good supporter basis. I don’t have foxtel so crave the current friday night game but wish there was more. To get greater general public awareness of the game there has to be at least 2-3 free to air games a week plus all the finals.

And so it is things like the purchase of Melbourne Heart by Manchester City that will drive funding into the game generally, into the A-League, into youth development and into grassroots football. All of this helps to build the supporter base and player base and hopefully allows the FFA to reduce its need for the exclusive deals to operate.

In reading the comments of the Manchester City executive they are not here to muck around…

Ferran Soriano, CEO of Manchester City, said: “We are excited about the opportunity to make Melbourne Heart one of the most successful football clubs in Australia and throughout the region. We believe the strong sports culture of Melbourne combined with the football and commercial expertise within our consortium will make for a powerful combination both on and off the pitch”.

It is great to read that and I hope that what they are promising comes to fruition. Well done FFA.

Submitting Expenses via Receipt Bank….Child’s Play

I just came across this via my monthly Addon Success newsletter care of Wayne Schmidt and just had to share it !

Receipt Bank is a great Xero Add-On that we at EFS Strategic recommend and implement into our client’s businesses. (Receipt Bank were the 2013 Australian Xero Add0n Partner of the Year)

And now, it looks like businesses owners with young children have absolutely no excuse not to get their paperwork and receipts in order !

If you want to discuss implementing Receipt Bank into your business, get in touch

http://vimeo.com/83485872

Data stored in the cloud…how secure is it…?

Prior to Christmas EFS posted a video to YouTube which featured yours truly talking about the benefits of utilising cloud solutions to run our business with a particular focus on Microsoft Office365.

We shared it throughout our Social Media network including LinkedIn.

Rightfully so, another LinkedIn member challenged me on the content of the video as it didn’t talk about the risks associated with moving to the cloud in terms of ongoing security of our own data and our clients data. This he said was key information SME owners needed to know and I totally agree.

Yesterday I was able to find the time to reply. You can follow the thread by clicking on the link below. I’m sure there will be some more comments on the topic.

@EFSAU Director @JamesSolomonsCA talking about small business using cloud technology to run a smarter business http://ow.ly/rPu9s | LinkedIn.

At EFS we take the security of our data very seriously. There is quite a bit of personal information held by our office which our clients expect us to safeguard. Under our ICAA professional standards we have to adhere to quality assurance standards regarding the security of the data we hold onsite and in the cloud.

As noted in my reply, I firmly believe that data stored in the cloud is much safer than data stored on our server, individual PCs and laptops.

This quote from the CIO of the Commonwealth Bank, which at a recent event he encouraged the audience to quote only backs up our beliefs..

“Commercially sensitive information is protected FAR better than you or we could do on premises”

We have also investigated our cloud providers own security policies (the main providers being Microsoft and Xero). Microsoft have a great clear and succinct Security in Office 365 Whitepaper. It is here for people’s reading pleasure 🙂 . Xero have published their overarching principles for security (but keep much of the actual practices private) which can be found here. Nonetheless I have had conversation with Xero employees regarding these practices and am confident that Xero has it all under control.

As a commitment to understanding better the risks of the cloud and how to mitigate them as well as how to enhance the quality of IT service management in EFS and for the benefit of the accounting industry at large, upon the recommendation of HubOne CEO Nick Beaugeard I am going to be complete the ITIL Foundations course. (http://en.wikipedia.org/wiki/Information_Technology_Infrastructure_Library).

As with all decisions we make it is always a cost v benefit approach regarding what solutions we implement. We investigated the costs of things like “private clouds” and their security for our data and client’s data versus the cost and security of using Microsoft and applications like Xero. We assessed the benefits obtained from all and weighed this up versus keeping everything on-premise. It became an easy decision to move to a true cloud solution once we had performed this analysis.

As noted, we take security very seriously at EFS and will continue to assess and implement best practice where possible and seek advice from experts like HubOne to ensure everything is safe and secure.

Using technology to run a smarter business

This article first appeared on the Eagle Waves Radio website following my guest appearance on their Eagle Business Show. The article was also featured in another blog by Clayton Moulynox who has coined the term #Accloudants to describe “Cloud Accountants” ! 

Every day of the week many of us use technology in our personal routines to make our lives easier. Smart phones, Smart TVs, internet banking, Facebook, GPS and parking sensors in our cars…the list goes on and on. So why should the way we run our businesses be any different?

It shouldn’t, but having been advising businesses now for almost 15 years I still see owners of SMEs going about their daily affairs using technology and/or manual systems that are either costly to run, hard to use or simply don’t do what they were intended to do.

And why? There are many reasons but I find the overriding factors to be firstly a lack of knowledge of the new business technology available and secondly the fear of change.

A recent study commissioned by PayPal Australia found that “Three in five SMEs claim that they could run their business more efficiently if they knew more about the digital tools and technology innovation available”. So 60% of SME owners ‘get’ that technology will help them but often don’t know where to go to find this information. If you are one of these SME owners, this blog will tell you what you need to know!

Part of what I find exciting about this new era of technology available for SMEs is that you don’t have to be an IT expert to understand them. They have been built to be user friendly at all levels and to integrate with other programs easily and seamlessly. But don’t be fooled, just because these programs are simple to use doesn’t mean their functionality is lacking. These tools are best of breed in many circumstances and put traditional programs to shame.

Where do you find most, if not all of this technology? Quite simply, in a web browser. Or as has come to be the catchphrase, in “The Cloud”.  Accounting programs (my favourite is Xero), POS, Inventory, CRM, Job Management, E-Commerce, Payroll, Budgeting, Reporting, all talking to one another via the web because they are built using an open API (Application Programming Interface).

And the beauty of this cloud architecture is as you grow these applications are scalable and will grow with you in terms of their functionality and cost.

So how will using this technology help you to run a ‘smarter business’? What does a ‘smarter business’ look like?

Having transitioned my own business to use web based applications I can say with complete confidence that a smarter business is one which:-

  • Connects with its clients and customers easily and efficiently
  • Allows its owners and team members to focus on delivering its goods and/or services efficiently and in a valued way
  • Has streamlined processes, much of which are automated or require very little thinking to carry out and their cost to administer is minimised
  • Has a better allocation of the business’ resources
  • Captures valuable data automatically
  • Its owners use this real time information to make effective business decisions

And when you run a ‘smarter business’ what does this all translate into? Quite simply, more profit for less effort. And more profit means (usually) more money in the bank. More money in the bank and less effort means SME owners will enjoy a higher standard of living AND/OR they will reinvest this time and money back into their business to grow it further which benefits not only themselves in the long run but also benefits the economy J It’s a win/win for all of society !

But what is the cost of not embracing this technology in your business? Whilst you may save some money initially, think about this scenario:-

  • You employ just half a staff member more than required to carry out purely back end admin work at a cost of say $25,000 per annum (because you have them still doing manual bank reconciliations and data entry)
  • Combine this with under pricing your best selling widget (of which you sell 10,000 units each year) by 10% with a sale price of $40 as opposed $44 because your operating system doesn’t easily record the costs relating to the provision of this widget nor does it record accurately that it’s your best seller.

Result? You have thrown away $65,000 in one year alone.

Scary isn’t it.

Even scarier when you consider that modern accountants like me and my team at EFS Strategic are advising your competitors on a daily basis on how to implement this technology and run their business smarter. Then advising them on how to invest this saved $65,000 back into their business to be able to sell the same widget you sell with a greater profit margin. And then because they are smart business operators they use some of this $65,000 saving on advertising to promote this widget better to your customers so maybe you won’t even sell 10,000 widgets next year.

Now that I have painted the grim reality of remaining complacent, let me say that the fear of change is easily overcome when business owners see not only how easy it is to operate these systems, but also how easy it is to transition to them. For a relatively small investment compared to what you may spend on implementing a “bells and whistles” enterprise grade solution you get a full service implementation and training process, coupled with a real time support system, which is delivered in most cases by an adviser that already uses this same technology in their own business and understands the importance of making the transition as smooth as possible.

Could you go it alone and implement it yourself? Yes, you probably could but is this running a smarter business? No its not given that for an investment which is guaranteed to pay itself back in year one you can literally be up and running with a new cutting edge system in less than a week and it will work the way it is designed to first time.

Finally, what we see today is just the tip of the iceberg. The next wave of technology that is coming makes today’s offerings look like a Sony Walkman compared to an iPod. Why does all of this get me excited? The core purpose of my business is to make my client’s lives easier. All of this technology that is available allows me to deliver on this purpose and ensure my clients run their businesses smarter.