60% Australian small business owners are paid <$50k
During an episode of Q&A this month, Australian Chamber of Commerce and Industry Chief Executive James Pearson said small business owners would benefit from a company tax cut in Australia.
He said it would “help them be profitable”, allowing them to grow their businesses, employ more people and pay those workers more.
Pearson also said, “Almost 60% of small business owners in this country are paid $50,000 or less”.
No wonder this story was getting a lot of press. The Conversation fact-check of the claims made on Q&A found a reasonable level of support from the available data and, even gut feeling from our own work with small business owners, suggests the statistic is about right.
It is not uncommon for business owners to think they are doing better than they would on salary. The upside of owning and/or running your own business is having freedom to do what you want, when you want but with potential remunerative cost to yourself and your family.
Think about why you went into business in the first place
Having clarity around your business numbers goes a long way to demystifying its performance and putting business owners in the driving seat about what they want to achieve by having a business (as opposed to being an employee with a predictable salary).
It’s widely acknowledged that business owners who have a clear understanding of their performance metrics and visibility of opportunities and risks are much more likely to survive and prosper, but how do you acquire that knowledge?
At Omnis Group we believe there are four sensible steps:
1. Get your hands off the tools and get your head in the books to really understand where your business is at.
We believe that having key financial data at your fingertips, in real time, can transform your business. With the ability to give you more control over your finances, getting your head into your business books (even starting with small but regular bursts) supports better decision-making, and pulls together all the strands of your business for a more cohesive top line view. Once you have a grasp on how your business performs, you can seize opportunities as they arise, mitigate any risks or problems and, importantly, quantify your financial and non-financial goals for what you want to achieve.
2. How much do you really think your worth?
Is your business delivering all the benefits you thought it would when you started? Does your business afford you the lifestyle you always dreamed of when you stopped being an employee? How do you know and how do you even measure? Most business owners have an idea in mind but achieving it presents a whole new set of challenges.
3. Has your wealth stagnated since you started to run your own business?
Small business isn’t for the faint-hearted; it’s for the brave, the persistent and the innovative. Whilst you’re being all those things it’s easy to take your eye off the (financial) ball. Remember, being busy is not always a sign that you’re making money and personal reward is usually the first to suffer.
4. Are you frustrated with the financial performance of your business but don’t know what to do about it?
As a business owner, you will face many forks in the road – opportunities or obstacles to consider, plan for and/or mitigate. With your Budget and Cash Flow Forecast locked in, plugging in some scenarios – pricing changes, new revenue streams, margin improvements, operational expenditure controls – is easy and illuminating. With access to such data and, crucially, the ability to project forward so you not only have an early-warning system in place, you can make smart decisions in a timely manner.
Further reading: cash is king, cloud-style
At Omnis Group we help business owners to manage their financial affairs so they may enjoy a life of financial security and choice. We consider your business and personal financial affairs in alignment to deliver outcomes that not only enhance tax efficiencies and build your wealth, but also allow you to set and achieve goals that make your life meaningful. Call us in Perth on 08 9380 3555.
Copyright 2018. @Omnis_Perth