Mistakes people make when starting and running a business

In my role as a business adviser, here are some of the common mistakes I see people making when they start or are running a business:

1. Going in partnership with a friend or family. Most people who don't have the capital required to start a business normally approach friends and/or family and ask them to start a business jointly. Most people who have gone down this road soon realize what a big mistake this was. Barely a few months go by and they start having disagreements about the direction of the business, work load and profit sharing. If you want to be in business, go solo!
2. Having family as employees. At the start of business when you want to keep costs low, it may sound like a good idea to ask a friend or family member to be an employee of the business but in the long run it doesn't work out. Even if you have to pay them more, hire unrelated people in your business for their skills not their relationship with you.
3. Setting up the wrong business structure. Setting up a wrong business structure at the start can cost you hundreds of thousand of dollar in extra taxes over the life of the business. There are various business structures available out there from sole traders to partnerships, from trusts to companies and depending on your circumstances any one or combinations of a few would suit you. Don't ask your business friends what structure they have got and replicate it, go to an expert and let them analyse your situation and recommend whats best for you.
4. Trying to do everything by yourself. Don't waste your time in doing things like designing your own website or trying to design your business cards. If you do, you will soon realize that you would be wasting a lot of your time on these activities rather than using time on developing and growing your business.There are professionals out there who specialize in these and other services that you may require to start up and run a business, use them.
5. Wasting your time on monitoring competitors.  Many businesses waste a lot of time trying to monitor what their competitors are doing and try to beat them. If you really want to succeed then you must differentiate yourself from the competitors.The best way to do this is by ignoring what they are doing and running your own business in your own way and not be influenced by the competitors.

BY SURESH RAJANI

Suresh Rajani is the Business Leader at Tax First - an accounting and business advisory firm located in Adelaide, South Australia.

 

 www.taxfirst.com.au

 

 

Stop blaming the banks and start taking some responsibility.

Let me start by clarifying a couple of things right at the start:

1. I have not been paid by any of the banks to write this article and have no investments in any of the banks.
2. I do have a substantial mortgage to pay so I do know how it feels when that monthly repayment goes out of the savings account.

Barely a week goes by without me reading, listening or watching someone who goes on and on about how horrible the banks are. How they should reduce their interest rates when the reserve bank does. How they charge unreasonable bank fees. How they make millions of dollars and should reduce their charges or interest rates to help the customers.

I call this "bank bashing". Is this justified? ABSOLUTELY NOT. And I will tell you why.

Buying a house (and having a mortgage) might be our dream but it is not a necessity of life (we can rent a house for the rest of our lives) and when we bought a house of say $500,000 we knew that we would have to pay the mortgage for a certain number of years and that interest rates keep changing. We knew there are a number of lenders out there and we decided to sign a mortgage contract with a particular lender. So now if we cant earn enough to repay the mortgage, whose fault is it? The banks? Obviously not! Its our fault that we bought something we couldn't afford. The banks never told us to buy a house of a certain value, they just helped us and its about time we all took full responsibility for our actions.

Now to the question of the banks charging all these "unfair" bank fees and making millions of dollars. The banks are a business at the end of the day and they are there to make money. Again having a bank account with a particular bank was your decision, you knew or now know what fees they charge, etc. So if you don't like the fees being charged then move to another bank that has lower fees or if you cant find a bank that offers what you want then keep the money under your mattress, but do take responsibility of the decision you make.

Do not take this article out of context and interpret my meaning of the message that all the people who are struggling out there to repay their loans deserve it and should not be helped. I am NOT saying that, all I am saying is that we all need to take responsibility for our financial situation and stop blaming others for it!

BY SURESH RAJANI

Suresh Rajani is the Business Leader at Tax First - an accounting and business advisory firm located in Wayville, South Australia.

 

 www.taxfirst.com.au