What's New At Credit Matters?

Welcome to our September and final newsletter.

It appears that it is time for Kim to retire from Credit Matters. Whilst I am somewhat sad about this decision, it is actually a good time to retire as it is my decision and allows me to control my destiny, rather than having it forced upon me.

Starting with banking, then debt collection and credit management, I discovered an extremely interesting, fascinating and interconnected set of business environments. To increase my expertise and knowledge in these environments, I sought further knowledge about adult education and fraud.

During my career I met many talented and professional people. I would like to take this opportunity to thank all those fantastic people that have helped and encouraged me over the years. Their good wishes and support have been appreciated.

The Credit Matters website will stay live for a little while longer, perhaps to end of November, especially as I may also write one or two more blogs.

I can still be contacted on this email address if you have any questions or need support. After all, you can take the old man out of the industry, however; you cannot take the industry out of the old man; especially as he is still interested in that world.

This month’s newsletter has all our usual topics with their applicable comments.

Kim will still be available to help with your questions and concerns if you need any assistance, and as always, the first chat is always free of charge or obligation.

Quote Of The Month

“You got to know when to hold 'em, know when to fold 'em, know when to walk away and know when to run.” From Kenny Roger’s song The Gambler.

Monthly Business Observation

The world in which we all operate has changed in recent years, and not all for the better. It is imperative therefore that you understand when to continue your business, or when to close it down. After all, it is all very well to hope for a better future and things will get better. If the world has changed substantially however and you cannot pay your way with your current financial assets, hope alone will not pay the bills.

It is particularly important when considering closing your business, to look at the ramifications in both the short and the long term. It may seem like a relief to just close down and walk away in the short term. If you don’t do it ethically and by the law however, there may be costly and long-term negative ramifications for you emotionally and financially.

Consequently, it is always best to seek professional help and to close your business down properly. To do so will require you to either pay all monies owed to your stakeholders, or negotiate with them to pay off any outstanding debts. As in my case, taking control of your destiny is always better than allowing the world to take over, which rarely provides a better outcome.

Another factor to consider is the current demands of society, the courts, politicians, bureaucracies, unions and do-gooders of society. Many of these parties have never operated a business and/or will buy from your business. It is not surprising then that they are not generally supportive of the requirements to operate a business as businesspeople and entrepreneurs are required to do. It is these demands which are increasing that make the reason to consider closing your business more practical.

It doesn’t mean once the business is closed you cannot restart your business using a different formula. The reality is that it means you need to be smart about how you change your business model to be effective in the current or future business environment.

Furthermore, if you are operating in Australia, the ATO is now aggressively chasing all outstanding tax and other responsibilities owed. The number of Director Notices being sent has increased significantly recently with more than 30,000 notices being sent. What will happen is that if your business’s debt is in excess of $100,000, over 90 days old and you cannot liaise satisfactorily with the ATO, your business will be listed with the credit reporting agencies.

As with any creditor, it is always best to advise the ATO early if you have trouble in paying any outstanding debts to them. You can contact them via their website at www.ato.gov.au for assistance and advice on your situation.

One of the most important and negative aspects of operating a business is that mostly you receive no kudos or thanks for going broke so that others may benefit. Therefore, try not to feel downcast if there are no other realistic options. Be proud that you had a go, did your best and you are closing down because it is the correct option for you, your family and the business’s stakeholders,

This Month's Business Inconvenient Truth

Luke Managan wrote in a recent article in the AFR. “I need to know the bad things, not the good things. I already know the good things.”

As Luke mentions in this article, most in management or the owners of a business, should want to know all about the bad things that are happening. The fact is that most business owners and managers will already know all the good things. They may however not know about the nature and the details of all the bad things, which are costing the business customers, money and reputation.

It is part of being in business, some accidents may just be a one-off accident that will always occur in the life of a business. Generally, there is nothing much more you can do about those types of accidents. The exception is if the same type of accidents is repeated, or missed such as a floor that is not cleaned properly and remains slippery, for example.

There are other factors however which can be attributed to a lack of attention or foresight, or bad customer service, can and should be rectified as soon as they are discovered. Only by highlighting these bad things and fixing them will you start to improve your business. The other problem with these types of accidents is that you may lose a customer or cost you money, either of which will negatively affect your bottom line.