It seems to be the year of the start-up business.
When I meet people who are considering self-employment the reasons are such - I want to be my own boss and take control of my destiny and hours, I'd like to not exchange hours for money, I want to do something I enjoy.
The reasons are varied and based on an evaluation of risk, reward and opportunity.
That risk appears to be less in our current environment, interest rates are low, there's work, property values are high and borrowing is available if you have equity and your business is not a completely terrible idea.
But business like any form of investment needs to have a long term plan.
Borrowing to pay for a job is a bad idea but you'd be surprised at how that happens when there's no long term thinking involved.
So what should you be thinking about long term if you're stepping into the self-employed arena? Here are some thoughts and examples.
Getting off the tools - Say if you're a builder the long term plan would be to be building your own houses to plan as opposed to throwing a hammer around subcontracting to someone else's builds.
Any other builder could build a house but a businessperson will need to build a business.
This will take time to do but will generate more income than subbing.
Succession - This is where a chunk of the working on your business will pay off.
Systems, clients, methods and brands are all saleable if they can generate income for someone beyond your years.
Return on Investment - We all know what ROI is, but I'm not sure SMes measure it or discuss it frequently.
A quick way to measure your ROI is to take your profit - deduct what you're worth for your effort then what's left is your ROI. Divide this number by your business assets to get a percentage.
- Jeremy Tauri is an associate at Plus Chartered Accountants
By Jeremy Tauri
Phone: (09) 438 3322
Fax: 438 8455
134 Bank Street, Whangarei
If we had to sum up Brent and the team at Plus CA it would be - humorous, efficient, professional with a real focus on making your money work to its best ability for you...we will continue to deal with them even though we are moving overseas as we know they have our best interests at heart.
Jeremy thank you for your patience, assistance and general chit chat over the years. I would have absolutely no issue in recommending your services to everyone and anyone – in fact, I do.
We recently employed Jeremy Tauri of Plus Chartered Accountants and have been thrilled with the improved service we have received. Jeremy is really approachable and always available to answer queries. At his instigation we have set up quarterly meetings so that we are regularly reviewing our business and avoiding any ‘end of year surprises’.