Brains of BusinessA collaborative business newsletter, focussing on practical and useful

information that benefits you and your business.

Issue 9 September 2008 ISSN 1834-2728

In this issue our contributors look at KIDS.

Whilst your KIDS might know a thing or two about HOW to manipulate their I.T., it still requires parental diligence to supervise the CONTENT....................Page 8Joe Ciancio, Maxsum Solutions

You CAN make your business work for you, AND the family, with good planning, prioritisation and a little flexibility.John Brewin, Workforce Extensions ...................................................................... Page 6

Henry Ford based his business philosophy on valuing and encouraging his employees - are you following his example?Paul Henshall, ActionCOACH Business Coaching .................................................... Page 2

Are you structured so that your KIDS can share in your business success and contribute to it? Here’s what you need to know about Family Trusts and the Tax Rules. Dean Murphy, Valentini & Murphy.............................................................. Page 7

If there is an opportunity for your KIDS to get into their own business, encourage it! Here are a few simple ways to get started…and it’s never too early.Julie Misson, Simply Access ............................................................................... Page 3

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Fitting everything into your day starts with understanding what exactly the BIG ROCKS are (the high priorities)and then keeping the most important things, the most important thing! Clare Fountain, Sorted Business Administration Services ......... Page 4

Your Key Indicators in your business are those numbers that indicate its status at a glance. Take your eyes off them at your own peril.Jennifer Blainey, First Class Accounts, Bendigo........................................................Page 5

Special Event - Breyk-throo For Life..........................................................Page 9

Ensure you have an Adult/Adult relationship with your teamIt is impossible to develop any business without the cooperation and motivation of its employees…the heart and soul of every business. This means that the most essential system in any business with more than one team member is a human resources system that must include:

1. The maintenance of teamwork interaction.

2. An incentive program that goes beyond simple economic remuneration.

3. A relationship based on adult-to-adult level rather than adult-to-child.

When we talk about motivation as a productivity and development tool in any business, we are talking about all factors, small and large, that provide any employee with the capability to focus their efforts on contributing towards the success of the business. The main trigger for the positive ambition and self-esteem that is a product of motivation is the adequate presence of incentives. Consequently, it is very important that business owners be aware of the value of implementing and keeping a real and significant ‘Incentive and Motivation Program’ that generates successful team dynamics at all levels. The absence of this program ignores the role that

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Address: 473 Hargreaves Street Phone: 0418 302 057

Bendigo 3550 Email: paulhenshall@actioncoach.com

ActionCOACH

employees play in the growth and development of the business and limit its future potential. Even if every business has an owner and/or shareholders trying to reach success, it is only thanks to motivated employees with well-planned objectives that the task of growing the business becomes easy and transforms any organisation into a winning team.

Only the business owner can decide the success or failure of their

company through the cooperation of their employees. Consequently, motivation, ambition, and teamwork integration, among others things, are indispensable

elements in reaching the goals and solving the challenges of every business.

Henry Ford based his business philosophy on valuing and encouraging his personnel. This philosophy ensured his company was a leader of American industry during the depression, not only by keeping his personnel from dismissal, but also by offering them additional incentives. This is a classic example of results by leadership. In more recent times one of the best examples of ‘success through employee focus’ comes from the Virgin Group, headed by Richard Branson. In this case, the ‘X’ factor is the focus of employee motivation and well-being, reflected in their level of service to their customers.

Top TipTreat your team as ADULTS and they

will act like them.

Kids in businessIt will help them to:

• Mature.

• Gain self-confidence.

• Learn about responsibility.

• Improve their Match skills.

• Improve their communication skills.

• Learn the value of the dollar.

OK, your child is keen, but has no idea what they want to do. Ask them:

• What they enjoy.

• What they are good at (not necessarily the same as what they enjoy).

• What skills they have (also not necessarily what they enjoy).

• What time they have available.

• What people are willing to pay for.

• What you as a parent tolerate.

Here are some examples that they and you may like to consider:

• Car washing

• Baking

• Cleaning

• Babysitting

• E-bay trading

WHAT WE OFFER:

• Individual database development

• Microsoft Access problem solving

• Data management

• Client management systems

• Microsoft Access training

Simply Access For more information contact Julie Misson

URL Address: www.simply-access.com Phone: 0400 906 942

Email: info@simply-access.com

• Tutoring

• Pet care

• Mowing lawns

The best thing you can do, if your child decides they would like to have a business of their own, is encourage them. You can do this by helping them develop a small business plan. Do not make this complicated, no more than a

page, and include:

What they are aiming for, e.g. ‘To be the car washing guru for your street’ and how they will achieve this:

• Research the best products to wash cars.

• Go and visit someone who already washes cars.

• Always do a good job.

Determine the price of your service:

• What does it cost to wash one car?

• How long does it take to wash one car?

• How much does the child want to earn per hour for their work?

Top TipShould we encourage our kids to have a go at a business? In my

opinion, YES. Why?

Kids, organised? The two words ‘Kids’ and ‘Organised’ are opposites in my experience.

For many parents, having their lives dictated by their ‘bundle of joy’ is a challenge. Being responsible for only you seems like a walk in the park after having kids.

The path to sanity with kids is creating a routine – like old people they love them! Apply the following 6 principles to planning your time:

Set time available: one day.

Order priorities:

1. To feed the baby.

2. To feed yourself.

3. To rest when the baby rests.

4. To enjoy being a parent and play with the baby.

5. Personal hygiene – have a shower.

6. Spend time with family/friends.

7. Clean and tidy the house.

Review tasks: to prepare to feed the baby and yourself.

To do or defer - what needs doing now or can wait until later – washing can wait – resting can’t.

Embrace and action.

Distraction and procrastination busting.

Before kids came along, top priorities might be having a clean and tidy house

WHAT WE OFFER:

• More time for you & profit for your business!

• Individually designed productivity systems that work!

• No fuss “How To“ Manuals

• Practical workshops

• Free 30 minute telephone consultation for “Brains” readers

Sorted Business Administration Services For more information contact Clare Fountain

Address: PO box 105 Phone: 1300 667 554

North Bendigo 3550 Email: clare@sorted4business.com.au

Website: www.sorted4business.com.au

Sorted Business Administration Services

and car. I invite you to consider how you would like to be remembered – for having the cleanest kitchen cupboard fronts or being there for your kids when they needed you?

My own personal experience with having an unwell baby forced me to take up offers of help. “Is there anything I can do?” questioners received a list – a meal on Monday night, help with washing, sitting with our daughter in the hospital

whilst we took a break. It was a valuable lesson in setting priorities and sticking to them.

Steven Covey, in the 7 Habits of Highly Effective People, talks about high priorities

as ‘Big Rocks’ and lower priorities as ‘Small Rocks’. If a glass jar equals time available, the most efficient way to fit your rocks into the jar is to put the big ones in first and let the smaller ones fall into place around them. I invite you to focus on the things that really matter in your life like quality time with your family and friends. Organise your schedule around those ‘big rock’ priorities and the smaller ‘rocks’ will fall into place.

Try following the SORTED principles and enjoy your kids and family!

Top TipCreate a SORTED routine for you and your family that focuses on your high

priorities.

Kids & tax planningKids are a great thing – they bring us such joy and happiness (and just occasionally a little stress). But who would have thought that we could use them for a little bit of TAX PLANNING.

Special rules apply for the amount of Tax a minor (under 18 years of age) will be levied at. They will be taxed at normal rates for any employment or business income, but higher rates apply for investment income. As a general rule a minor can earn $1667 of investment income – dividends, interest, family trust distributions, etc.

This certainly doesn’t just mean that you can put the earnings from your investments in your kid’s returns and not pay tax on it. The Tax Office has clear guidelines to follow on the matter that prohibit us from splitting our income with kids. If a person, other than the account holder (child): has provided the funds for the child’s account, and spends or uses the funds in the account as if they belonged to that person then that person needs to declare the interest from that account in their own tax return. However, if the funds in the account are made up of money received as birthday or Christmas presents, pocket money, or savings from part-time earnings such as newspaper rounds, and these funds are not used by any person other than

WHAT WE OFFER:

• Business Taxation Returns

• Ensuring you understand the financial position of your business

• Strategic Review of business structures & systems

• Budgeting & business planning

• Review & feasibility of new business acquisitions & start-ups

Valentini & Murphy For more information contact Dean Murphy

Address: 425 Hargreaves Street Phone: (03) 5443 0800

Bendigo 3550 Email: dmurphy@vandm.com.au

Valentini & Murphy

the child, then the interest earned is the child’s income.

If we have a Family Trust in place, then we can certainly use the kids to distribute some income. There a number of issues to be mindful of if you do this. The main one being that by distributing income to a child, that child becomes legally entitled to the money. So we cannot just get them to declare the income on their Tax Return without at some point having

to physically hand the money over.

There are also benefits available if you can legitimately employ your kids in your business. It may be as the office cleaner for example, which would

be a good way to pay them some pocket money and get a tax deduction for it. You will need to be mindful of the implications on any Centrelink or Family Tax Benefits that are being received.

If you have the correct structures in place and do your homework to ensure compliance with the Tax Office, your kids may in actual fact be able to save you money. Now wouldn’t that be a nice change!

Top Tip Use your kids to save you money –

now that’s a novel idea!

KidsWho amongst us hasn’t struggled to perform a seemingly basic task on our computer only to later see our kids happily uploading their own photos, surfing the net, and emailing their friends like pros? That’s right; kids these days are more computer and internet savvy that any other generation before them. And whilst this is great, there are some things that we hapless parents need to keep a check on.

For example, security for monitoring and restricting what your kid’s access on the Internet is very important. It is all too easy for kids to accidentally come across inappropriate content at the click of a button. Also, given the recent rise in cyber-bullying, much of which seems to go unnoticed by parents, there is obviously room for parents to be more actively involved in monitoring their family’s computer and internet use. You can achieve this in a number of ways.

Firstly, keep computers in public areas of the home so that you can ‘monitor’ what your kids are doing and how much time they are spending doing homework, surfing the net, social networking, etc.

Secondly, implement a robust firewall to the Internet. This will not only stop people ‘hacking’ into your computer, but may also allow you to block/manage what is accessed by your child on the Internet.

WHAT WE OFFER:

• I.T. Consulting

• Voice Over IP phone systems

• Computer system administration

• Computer networking

• Document management systems

Maxsum Solutions For more information contact Joe Ciancio

Address: 130 Mollison Street Phone: (03) 5442 7785

Bendigo 3550 Email: info@maxsum.com

Maxsum Solutions

Also consider implementing website monitoring software. This can both report on sites that your child accesses, as well as block particular (pre-determined) sites.

There are also a few other measures in addition to security that parents might look to look into, like discouraging or blocking the use of peer-peer file-sharing applications (such as Bittorents). The sharing of music and movies is not only

illegal, but can also inadvertently lead to your computer being infected by unknown malware.

Also, install and keep up-to-date anti-virus software to prevent infections caused by

malicious software. Your kids might not be as cautious as you are when asked to download software on the net.

On a final note, always remember to ensure that you or your kids backup important schoolwork onto (multiple) removable storage media (e.g. CD, DVD, or USB) on a regular basis -- lost homework at the last minute is never a good thing!

Top Tip The best Internet security for your

kids is parental supervision!

KIDS - Key Indicators Drive Success To know where your business is heading you need to understand the KIDS principle – Key Indicators Drive Success. This will allow you to improve and grow your business.

What are some Key Indicators?

1. Turnover – this is your total sales figure for a period and should be regularly compared to one or more of the following: your budget or forecast for the current year; last year’s amount for the same period; and possibly industry benchmarks.

2. Gross Margin – this is your gross profit as a percentage of sales, after taking into account the variable expenses of the business. Typically variable expenses are things like stock purchases and any expense that varies in relation to sales, i.e. when sales go up you have to buy more stock to sell, and vice versa if sales go down.

3. Break-even point – this is the minimum amount of sales you need to cover your fixed costs and the variable costs for that level of sales. This is an important calculation not so much for success, but certainly for survival.

How do Key Indicators Drive Success?

The above Key Indicators are summary numbers that may be readily compared to a budget or forecast, the same

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Address: 473 Hargreaves Street Phone: 03 5441 6261

Bendigo 3550 Email: bendigo@firstclassaccounts.com

First Class Accounts Bendigo

period last year, or industry benchmark comparisons. This means that you do not need to start by wading through many individual income and expense items that certainly will have their ups and downs over time. For example, if you run a transport business fuel is a variable expense. If there is a significant increase in fuel prices and you do not increase your charge rate to customers you will see your gross margin percentage

getting lower. If your sales rates remain static, you may not have enough to cover your fixed costs such as truck registration and insurance. In the above example just one variable factor was changed, but

often there may be multiple factors at work in your business. This is where a ratio will quickly identify to what extent your business is affected.

On the positive side, by setting goals for your Key Indicators you have an easy single number to calculate and assess your progress, giving you a quick overview. You can then drill down to the specifics to find where success is being achieved or where improvements need to be made. Ask your bookkeeper or accountant to provide these numbers for you on a regular basis.

Top TipKey Indicators are a valuable tool that should be used regularly to ‘Drive your business Success’.

Adapt your business to manage work and familyWhen your kids are at school, you’ll have more time for your business, right? How do you and your business cope with the constant changes of your family?

As a parent of 4 children and having owned a hospitality business with my wife for a number of years, we would often look forward to more freedom when our children went to school. But with the introduction of school comes a myriad of extra responsibilities.

The endless list of demands begins in kindergarten with homework (that requires as much of your time as it does of theirs), reading groups, canteen, sports days and concerts. As they move through the years you can add to that weekend sport with a weekly training session, band practice, dance group and choir.

Here are some ways to adapt your business to manage work and family.

Re-arrange your work hours. Most solo business owners aren’t constrained by traditional working hours and rearranging your time is eminently feasible.

Events are always noted in advance so you can book the time out in your calendar as an appointment. The advanced warning should allow you to still meet your deadlines just as you can with any other appointments.

WHAT WE OFFER:

• Short-term or long-term labour hire

• Permanent Recruitment

• Contract Recruitment

• Complete payroll/Human Resource service for your business

• Industry training through JobSkills training

Workforce Extensions Central Victoria For more information contact John Brewin

Address: 29A Miller Street Phone: (03) 5443 7200

Bendigo 3550 Email: bendigo@workforcexs.com.au

Make sure that the change to your working hours fits in with the family schedule and that everyone knows when you’re supposed to be working.

Pool your resources. After-school activities often pose problems for the solo business owner. Getting together with other parents and working out a schedule is a great way to extend your working hours. If you can all set aside some time to pitch in and work to a

regular timetable, everyone knows what to expect and you can fall into a comfortable routine. This can be a wonderful resource for the ever-increasing number of people without family support.

Limit what you take on. While it’s great to be involved in the school community and be there for your children, remember that you don’t have to take on everything that is asked of you. It’s easy to feel pressured into taking on more than you should when other parents are at the school, seemingly 24/7.

Talk to your children and work out what you can fit into your schedule. In general, if you can make it to what they consider to be the important events, they’ll be happy, especially if you come armed with a camera.

In the end we all love our kids and want to provide the best we can for them, all they want from us is our love and the way our kids spell love is T I M E.

Top Tip

Work out as a family what activities you can fit into all your schedules.

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