clients in strife - innovative ways to

“Clients in financial strife

– innovative ways of helping them help themselves”

An introduction to a new way of thinking

In today’s presentation we will cover

An introduction to a new way of thinking

Tips on getting into a small business owners world

An introduction to a new way of thinkingTips on getting into a small business owners world

1. Think Simple

2. Think Visual

1. Think Simple2. Think Visual

3. Think Story

Let me ask you three questions on numbers

1. Why is it some people just don’t ‘get it’when it comes to the numbers of a business?

2. Why is it that the finance people seem to have a different way of looking at things?

3. Why is it that finance people make some things seem very complicated?

Most small business owners feel like they’re chasing the money ALL THE TIME

They have no financial context

from which to make their decisions

As a result they have no way to make clear cut decisions nor measure how they’re really going

They understand words and can use them quite forcefully

But for many, numbers look like ants walking up a page

Many small business owners walk around in a fog financially

So how can accountants help them?

We have to jump into their world rather than expecting them to jump into ours

Most small business owners hate numbers and will do anything to try and forget them

They normally trust their accountant but often have no idea what the numbers really say

This is a golden opportunity to put that trust into effect and get them to help themselves

However most small business owners see accounting as a cost and not a benefit so they’re always looking to minimize the accounting cost

So they appreciate advice about helping themselvesParticularly because they often have no training in being a business owner

They often ‘fall into a business’ with little knowledge on being a business owner

Or have great technical skills

BUT does that make them a good business owner?

They may be excellent at their trade

They may know the operational side of their business well BUT this is not enough to succeed as a business owner

Business owners need a broader range of skills

One of those broader skills is:

FINANCE

Three tips on how to help small business owners with finance

1. Think simple

2. Think visual

3. Think story

1. Think simple

One of the most famous advertisements

What was the tag line?

Keep numbers really simple because …..

Small business owners usually only focus on a few numbers

The single biggest reason why small business owners fail is NOT because they fail to do a business plan

It is because the business model which the plan is based on is completely flawed

So helping business owners to understand the financial part of their business model

makes helping themselves possible

There are many ways to think of business model but the simplest and best we’ve

found is to think of three parts

Customer Value

Does the business earn enough margin after including a market wage for

the business owner

Transaction Flow

Is there enough sales volume flowing through a business

Money Flow

Is the working capital (inventory, accounts receivable

and accounts payable) the right size for the volume of the business

Presenting these in a simple way will help small business owners because they can SEE what’s going on in their business

Easy simple dials that can be understood intuitively

There is a FREE tool available to do this at

www.oneminutebusinesscheckup.com

2. Think visual

Remember .. most small business owners see numbers as ants walking up a page

Pictures , graphs and analogies help them understand what the numbers mean

Presenting lots of graphs does not show the

WHOLE business

One way of doing this is using a tool called

It presents a profit and loss account, balance sheet and cash flow in the analogy of a fence

This tool helps small business owners understand why they can be making great PROFIT but have no CASH to pay their TAX

Traditional Reporting

OPENING

FOR THE PERIOD

CLOSING

EQUITY

COSTOF INTERACTION

NETPROFIT

MOVEMENTIN WORKING

CAPITAL

CONTRIBUTIONMARGIN

INFRASTRUCTUREEXPENSES

OPERATING CASH FLOW

MOVEMENTIN FIXEDCAPITAL

NET PROFIT

NET CASHFLOW

BALANCE SHEET“AS AT”

PROFIT & LOSS ACCOUNT“FOR THE PERIOD”

CASH FLOW STATEMENT“FOR THE PERIOD”

THE FINANCIAL FENCE ®

FIXED CAPITAL

WORKING CAPITAL

BALANCE SHEET“AS AT”

EQUITY

FIXED CAPITAL

WORKING CAPITAL

A online version is available at www.onesherpa.com with FREE bronze membership

3. Think story

The numbers of a business always tell a story

Getting a business owner to understand the story gets far more benefit for them than

being ANAL about the exact numbers

Filing a TAX return on behalf of a client is completely different to telling a story about what’s happening in their business

Business owners are most likely not worried about the last cent EXCEPT in relation to the accountants bill

They want to know what’s going on so they can be more successful

More successful in their eyes is often just more sales

Tell them the story about their business model

Put it in the three easy pieces

Customer Value

Money Flow

Transaction Flow

Then they can help themselves by knowing WHERE to focus

Remember you’re succeeding when they ask you questions

not the other way round

The best measure of whether they’re helping themselves is the quality of questions they ask you when you are talking to them

We have to jump into their world rather than expecting them to jump into ours

1. Think simple

2. Think visual

3. Think story

www.onesherpa.com/presentations

To access a copy of this presentation go to

This presentation has been brought to you by:

An online global resource centre and membership community dedicated to helping small business owners

succeed and prosper

www.onesherpa.com

clients in strife - innovative ways to

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