Owner To Owner Podcast

@BrucePeterson is the #founder and #owner of @GrandeExperiences and @TheLume . Bruce has built a hugely successful #globalbusiness, leading and pioneering a whole new way for #art and #culture to be viewed around the world. His companies create very large multi-sensory #digital #immersiveexperiences that have now been exhibited in about 190 cities around the world, six continents and 32 languages. At a recent count about 17 million visitors have passed through.  He did this by backing himself and from the position of an 'outsider' to the #traditionalartsindustry. We talk about;the #businessmodel - conceptualising, designing, and then creating a large cultural experiences to license to #museums and #galleries around the worldsynchronizing all the #humansenses together and touching people emotionally in art and culture, perhaps like, they haven't been touched before.owning a museum on #LeonardoDaVinci in #Romethe steps to creating the business;changing direction involvedmaking a bold movepacking up the family and going to live in Italytaking that opportunity to bring the first exhibition of #LeonardodaVinci's #machineinventions from #Italy to #Melbournelearning about the Italian way of doing business#culture and #businessthe story of #Leonardo that really hadn't been toldcreating a #globalcompany with a #higherpurpose - #educating it's audiences#storytelling as a foundation of successstarting out as a #PEteacher and making the transition from teaching to the #pharmaceuticalindustrynot wanting to #workforthemanhis main philosophies;having great people as #employees in the right positions so they can then go and do what they need to doalways look at the down side first, the upside will take care of itself#selfbelief#determinationseeking out advice and not pretending I have the answers to everythingyou don't have to have an original ideahis upbringing in #LatrobeValleybeing #Australian and working with an Italian icon, Leonardo da Vinci, and the question - why is an Australian doing this?being free of the all the internal politics of #curators, #boards, #donors, and #governments, and cutting through all the crap to get to the heart of what's important in my industry#digitaltechnology#greatart #greatartists#culturalevents #naturewww.kerrcapital.com.au www.smallbusinessbanter.com  Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au 

@MikeFinger from @exitoasis has been a #businessowner and #businessbroker. He's had 4 successful business sales of his own and now coaches owners to help them build more sellable businesses. Mike is based in the US and in the discussion we cover;why owners need to 'learn to leave' their business more successfully.the different perspective Mike can bring from being able to sit on all sides of the table i.e he's, sold, and brokered small business sales, and seen the pluses and minuses in each of those chairscreating the freedom for the business owner to make the choice when they're readythe downside for owners in the existing #businessbroking model for selling businesseshow the #businessbroking industry is compensated based on complexity;The reason most small business owners fail to sell is because of something simpleWhy owners really want to sell – because "I've got these 3 problems in the business and I'm just tired of dealing with them."Why you can’t sell unless we solve that problemThe irony that comes when that problem starts to get solved - the owner starts to fall back in love with their business. “Hey, this isn't so bad. I'm actually making some money. Hey, this isn't so bad. I don't have to be there every day.”The key to all = Ownable is Sellable. Create a business that gives the owner of the flexibility to make either choice.How too many owners think that selling their business is their worst-case scenario.They think that's their my fallback, that's my safety net when they're not aware that best stats available show that 80 percent of small businesses will never sell.3 key questions Mike ask’s owners to work out how well progressed they are to selling;Are your results desirable?Can I buy or duplicate your results?And can you document your results?When your retirement plan is based on the sale of your businessHis dislike of the term #exitplanningHis preference for small business owners giving themselves choicesBeing into a business for years and years and then woking up one morning, and I just I don't want to do this anymoreFeeling toasted - looking in the mirror and seeing a piece of toast looking backMike’s most important pieces of advice;Not leaving things too late to get started on getting prepared to sellSet a half an hour a month, make a lunch date with your future self every month, and spend that half an hour learning about selling a business. Learning about what this topic means. If you're lucky enough to do it, it's the single biggest financial transaction you're ever going to have, how about spending half an hour month learning about it?The magic of the space that occurs right after you sell a business. It is magical, what happens there. You've got this massive thing that consumed your life for so long. You get a successful completion of that effort. You get rewarded for that effort and you get this open landscape in front of you of opportunity. I love that space. I'm talking a little bit about the money, but I'm mostly talking about that freedom to clear your brain. I carry ownership pretty heavily, right? It was always on my mind. It was always in my head. So to be set free from that, that's a fabulous thing.www.kerrcapital.com.auwww.ownertoownerpodcast.com.au Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au 

AnnieWoollard from footprintsontheglobe is a TeachSDGs ( United Nations sustainabledevelopmentgoals ) Ambassador. She's a lifelong #educator, and now also a  #globaleducator on the Teach Sustainable Development Goals. Her teaching world changed after discovering the  #SDGs while teaching in a school in Melbourne. From there everything became about #globaleducation. We talk about;the origins and importance of the #SDGs which follow on from the @#Millenniumgoalsthe 17 amazing goals that make up the #unitednations #SDGs - covering #education #lifeunderwater #lifeonlandthe #2030 target date and what the objectives area wonderful campaign at the moment called the www.worldstodolist.org who are asking everyone in small steps or large steps to take them on board to work towards making a better planet, a better and more #sustainableenvironment for everyone, a more equitable worldwhy it's important whether you are an individual, a #school, a #notforprofit, a #smallbusiness, a large corporation to take these on in some small way, and to work togetherhow surprisingly everyone is often already doing something already - they just didn't have it mapped already to a goalhow it all started for Annie by resigning from her teaching job, which she really loved, to launch @FOTG in 2019 to deliver greater #globalimpactbecoming a Teach Sustainable Development Goals Ambassador and promote the global goals wherever she wentthe up's and down's of starting your own business - the leap of faith, when the easy option would have been to stay teaching where she was very happy and just roll in, roll outextending into educating businesses, #NFPs, #NGOs and government organizations about the #SDGswhy young students are the futurewhat makes up contemporary education  - #designthinking, and 21st-century skills of #problemsolving, and #innovation, and #questioning and #reasoning - that's how they're learning at the moment. So they are willing to step up and have a go and try different things, and it's completely different style of educationhow the world of #sustainability and #climatechange and #climateaction is really becoming at the forefront of people's mindswhy people need to work out what they can do to help make our planet a better place for everyoneSDGs' Sustainable Development goals in #smallbusinesshow #businessowners can become a part of this more easily - starting with something they think is interesting and resonatesthe wwwglobalgoals.org  website and the many ideas and resources out there for businesses, for schools, for corporationsthe "start small and build on" approach to avoid being overwhelmedthe major projects Annie is involved with at wwwtake3.org where she is designing and facilitating aa young leaders programs and #ProjectBlue involving a couple of hundred students (10 to 12-year-olds)  on what makes a leader all through the lens of #plasticpollution and #oceanconservation. The students were all engaged to do waste audit and to complete a 14-day challenge that aimed to change their behavior in some way, and then taking it further, by telling people, 3 people,  what you're doing so then they would tell 3 people - the ripple effecthow #covid has told us or taught us is that the world is just truly connected - what happens on one side of the world affects the other side of the world, and we're foolish. If we think we're sitting in our own little silo, and it doesn't affect us, and it does. So we do need to work together to see if we can get these goals achieved by 2030www.footprintsontheglobe.com.auwww.kerrcapital.com.au Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au 

@MikeWilliams is #CEO of @ExitValueAdvisors and we talk about how to #value a #smallbusiness. He's valued thousands in his time! Valuations are only opinions, they are highly contentious and are part art and part science. We try to break the topic down to help #owners better understand when they should get a valuation and how to interpret the result.   Our discussion covers a lot of ground including;Mike's core philosophy - information is power if you know what your business is worth, not just when you're selling but along the waythe typical questions that can spark the need for a valuation;" What's my business worth?"" Someone has offered me this. Should I take it?"the shock owners experience when they realise "Oh, right. Okay, it's not worth what I thought it was. We better do a business plan."why valuations are actually a tool to help people make decisionsthe difference between discretionary non-discretionary valuationshow valuation is one of the few areas in business where you combine the profitability of the business with the balance sheet of the business and some measure of riskwhy Banks rarely look for valuations anymore, they used to - for small, micro-business, they look at the other assetswhat's a #multipleof earnings and why the typical range is between 1 and 5what are the characteristics that determnine your Multiple - size, margins, systems (ie the extent to which the business can run independent of the owner)how do you assess if a business is commercially viable (i.e. does it generate sufficient profit or cash flow to pay the owner of market wage, are all of the other transactions that going on in the business at arm's length and is their rent being paid on an office or a facility at market rates?)the importance of using #marketwages in a valuationwhy really highly valuable businesses can articulate a real key vision and mission, and say why customers or clients buy off themthe value and power of getting that regular perspective through a valuation on your business - it's an external perspective and a prompt tp to say "Okay, I can work on those sorts of things. That's more concrete."why valuations are simply a  well (or not) laid out opinion - they certainly are not gospelhow tax-driven accounting reports need to be adjusted to better reflect the real return or profit or surplus in a business the lack of quality data on past valuations Mike's parting advice is to always get another opinion other than your own Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au 

@amyphillips from www.horizonmg.com.au is a #HumanResources specialist.Amy worked in HR for over a decade before taking over the Horizon Management Group, a #familybusiness her parents had started over 30 years ago, in 2018. At @horizonmg she works with clients to help them manage their people for the benefit of the people and for the business. Our real focus is on giving managers the skills to be able to manage their people well. We talk about;the importance of managing people who are in many cases the most important asset an owner has in their businesswhy people can be the most important asset in a business if they are the right peoplehow to get the right peoplehow do we then #manage, and #measure, and review their #performance and give them #feedbackhow to #motivate and #engage them to deliver on what they need to be doinghow to ensure they enjoy what they're doing, so they keep on coming back and delivering that for your business and get that personal #satisfaction from their role as wellrecognising that  rewarding for performance is not just about monetary things, it's about the need of recognition which every human being requires, whether we want to admit it or notthe costs of getting HR wrong and the benefits of actually investing some time and energy in managing that performance and satisfaction of their staff#productivitywhy HR as a business function often gets de-prioritised by more of those burning day to day issueswhen and how you might #outsource #HRwhy even when you outsource you are still responsible for it and making sure that it fits within what we're trying to achieve as an organizationthe move from #fulltimemployees to #subcontractor or #freelancer versus and the implicationswhy finding good people is currently a real challenge#hybridteamsthe complexities of managing staff with pandemic fuelled,  changing #businessgoals beyond the  basics people want to know where they're going ;what is the vision of the organization is and where that individual fits into achieving itGiving them some clear expectations and guidelines as to how you want somebody to behave. So that can be as simple as a position description and defining some company values or behaviors and they don't have to be over-engineeredthe Gallup research that found only about half of all workers strongly indicate that they know what's expected of them at work Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au 

@HarryKras from the @fbrc is an expert in #familybusiness. He's a self-described ordinary guy who has a passion for working with families in business together and has done now for well over 30 years.He started his professional life as an #accountant but now considers himself a #forwardlooking #reformedaccountant and #facilitator. He's been a long-term user of the @Mindshop (an International Consulting Group) #platform and #methodology.A routine #estateplanning exercise brought him to working exclusively with #familybusinesses, after a realisation that great #technicaladvice wasn't enough because there was so much going on below the surface in most #familybusinesses.  In our discussion we cover;what defines a family business his definition - more than two or three family members working together in a businesswhile no business is simple, combining business with family and family #values makes for a very complex situation#decisionmaking in commercial business, with no family interests, vs family businesses i.e. employing the best possible person for the job or finding something for a son or my daughter to give them a head starthow each family is unique and each family has its own way of doing thingshow family businesses evolve from wanting to create a livelihood to educating and providing opportunities to increase family wealth, and then kind of slowly dragging family members in family members - giving an opportunity to learn or cheap employees? Getting the kids in to do the odd jobs owner's don't want to dothe numbers - 70% of businesses in Australia are family-owned family business as an enormous employer and creator of jobs wealth within the country (common with most western economies, in India and  lots of #asiancountries)#trust #familyties #familyrelationships and how these can change when a business reaches certain points the need to #professionalise and bring in other outside skillsthe #metaphor with cooking the roast - every family has their own way of doing itthe reality that while each family is unique the #issues are fairly commonaccess to #capital and the three F's #families #friends #fools the perils of the #kitchentable or #familybarbecue - there's no break from it#siblingrivalriesthe issues with #succession - animosity with #sons and #daughters overthe reluctance to airing dirty linen in public or making others aware that there's a situation or an issue going on@familybusinessaustraliadiscussing the #undiscussables.creating a safe environment where they can raise issues and avoiding #ww3@kerrcapital.com.au  Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au 

@SamHemphill co-founded @Meeum which builds #techfluency and #digitalempowerment in #businessowners.@Meeum also works with digital professionals who want to #reskill, or build complementary #skills. Sam studied to be a #highschool #educator and while at #university ran a booking agency and a tour management company. He then got heavily involved in the #musicindustry in #Brisbane as both a #performer and a #manager.  A lot of the work he was doing  was #marketing, getting bands known and #ontheroad. As a byproduct, he got really interested in #webaccessibility which remains a big passion.In our discussion we cover; how #COVID caused a lot of #businesses to have to #godigital even though they may not have wanted to, or may not have considered it to be particularly imperative before thatthe really significant crossover between #webaccessibility, #SEO and user experience #uxhow and why they teach people how to #code #websiteswhy #Knowledgeispowerhis favorite #analogy for explaining why #business should invest in some #diy #digitalfluencyhow having that core understanding of #digital #onlinemarketing etc,  even if you're not going to do it yourself, goes a long way to really helping you run your business  more productivelywhy every business needs a #website (well most businesses)  because you can't just rely on having a #Facebookpagethe secrets of good #SEOwhat #SEO means at a basic level - that people can find you for the #searchterms that you want to be found for#customerjourneymappinghis advice to #takeitslowly but not quit too early, and not chase #tworabbits@CasadeCambioConsulting as a great example of business that benefitted from an investment in better #SEOwhat #websiteplatform should we be on and how to decidethe crossover in many things that are good for the user experience and also good for SEO e.g. like speeding up your website. Your customers love it, so does Googlethe power of owning and controlling your #website and your #email because @facebook and other #socialmediaplatforms can change their #algorithm at any time, and have multiple times.  So don't build your castle on somebody else's landthe power of #backlinks and #content and #PR@www.kerrcapital.com.au     Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au 

@MelinaMorrison #CEO @bccmau (Business Council of Cooperatives and Mutuals) has championed, advocated and made the case for #mutuals and #cooperatives for more than 20 years.  She passionately believes in this way of doing business and in this epsiode we get to hear her make a compelling case. She is also currently a member of the @IAG (Industry Advisory Group)  on #FarmCooperatives. Prior to @bccmau she was a founding director of Social Business Australia.In our discussion we get a comprehensive overview into the how's and why's of #mutuals and #cooperatives and cover;the very long history#romantimes was the first idea of #insurance or #poolingriskthe word divvy, dividend or divvying came from #Cooperative#coops date back to the middle of the 18th century when people;got interested in coming together and forming financial services institutions, which became #CreditUnions #buildingsocieties, and now they're called #MutualBanks, andpeople needing to be able to collectively bargain for themselves, collectively buy things just to stay #sustainable and we got the consumer Cooperative movement arising.why #cooperatives and #mutuals are having a resurgencethe #competitiveadvantages are being of a #cooperativea really clear explanation of the practical differences in the #purpose of a #cooperative (as against for traditional #shareholdermodels):owners are the members (so the people that use the business either as a consumer or a producer,  or receive a product or service from the business are also the owners)#cooperatives make money to do something and not the other way aroundit's not so much a business model that's about doing something just to make moneyas a joint owner you have a democratic right to have a joint voice and decision making say in the businesshow all businesses now have to have a #sociallicence to operate - it's the new #Zeitgeist#stakeholdercapitalism#profitwithpurposethe seven internationally agreed principles in a #cooperative #constitution that relate to the purpose of the business;making sure that members are benefiting from the business, but also all of the other stakeholders around the business;caring for the communitybeing interested in and benefiting the #environment or the #community in which you operatebeing open and transparent and accountable making sure that there is joint democratic decision-making and allowing for the democratic and the economic participation of the members.#sharedbenefit and #sharedrisk#cooperatives today as a globally dominant form of running #supermarkets, #retail and marketing operations where they're owned by members and consumers rather than shareholders#disruptivecapitalism#enlightenedcapitalismrailing against #corporate #monoculture so we have an economy that has a rich #ecosystem of different types of businesses#competition between #businessmodels, as well as #competition between #businessesavoiding a concentration of #capital and #power where get more #cartelpricingwhy cooperation is a really powerful form of making a more productive, efficient, and #sustainableeconomywhy as a bottom-up model it's so good for #smallbusiness@marnieroberts @winegrapes@OceanSpray as a classic example of #Global #MarketingBrands under which #Cooperative existthe numbers - 8 to 10 Australians are members of at least one Cooperativeone of Australia's largest #agbiz,  a consortium or a collaboration of around 4,000 family farms is @CBHGroup (a  #WesternAustralian #grainexporter)#CreditUnions #MutualBanks #motoringmutuals - @racv @racq#healthservices #nonprofit #healthfundsthe need for and interest in #CommunityBuyBacks in #RegionalAustralia when people can't get the goods or services, or there's a social and economic need that the market won't deliver#target #Cootamundracooperatively own #pubs and #breweries - @AireysInletpub  @renmarkhotel in #SAminimum commercial infrastructure for viable townsthe @bccm.coop toolkit - a one-stop shop of self-help resourcesjointly community-owned #renewableenergy assets like @HepburnWindlocal renewable energy#FightbackFarmers #iview #abcwww.kerrcapital.com.au Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au 

@JamesGarland is a Director at @DGB. He has a long-standing involvement in #fundraising in the #notforprofit area and #branddevelopment.He's also a #smallbusiness #owner and #investor.Dalton Garland Blanchard a boutique agency that works strictly with #forpurpose organizations and groups, large and small, including #startups that have plans to really transform themselves in the communities that they serve. DGB undertakes  #transformationalprojects. Larger scale, more complex growth projects, that help to build #organisationalcapacity.  DGB help with #fundraising for those projects.In our discussion we talk about;leaving #university and entering the  world of #advertising #marketing #mediasales #agencies #campaigns #promotionsIiving in #london and having a #careerdefining moment from working with a charity involved #childsafety, part of a #UKgovernment program called "Personal, Social, Health Education"#mum asking  "What are you doing? It sounds really interesting. It's very different. It's not what I thought you would do. Is it what you really want to do?"finding a whole lot more #workmeaning in working with organizations and engaging my #passion and my skills in things that are #changingtheworld, or at least #changinglives of people, rather than #sellingwhitegoods or something elsethe #business of #notforprofit#socialenterprise#thirdsector #privatesector #publicsectorconnecting with the passion of the #whyworking at @worldvision @savethechildrenhis sense that everyone is starting to realize that our #socialfabric and the #health of other people who are less fortunate actually impacts everybody, that we are in #onebigworldthe estimated (@deloitte) $100B size of the "third sector"the real #impact of the #thirdsector (not really about #finance or #economics) is on people, the #environment, on animalswhy the #thirdsector should really be the #firstsectorhow #innovations are really big drivers of some of the #coolest not-for-profit movements that are coming outregeneration of environment as a real hotbed for innovation, people talking about #plastics in the #cleanocean #cleanerworldthe need for #socialenterprises to make a profit so it can support either its supply chain, or employeesthe importance of #valuesalignment in #socialenterprise and who starts it, who runs it, who works in it, and who carries it forward #successionwhat happens when social enterprises become so successful - they become brands in their own right, they become really well-known, they become sought-after entities or businesses. The conundrum for #founders when this occursthe key day to day challenges in the #thirddsector;finding employees - really good, highly skilled people who can build relationshipsmatching the private sectorfundingthe pivotal role of the #thirdsector - doing what #government can't - taking risks that government and #privatesector can'twhy sometimes #failing as a natural outcome of trying to alleviate social issues because you can't roll out a #lowrisk private-style business plan to deal with major societal issues#foundations @cathyfreeman has done a huge amount of work for #indigenous #kids and #communities#scaling for #impact#sophisticatedinvestors#sophisticated #philanthropists#goodcorporates quietly funding #multimilliondollar transformational projects, some not heavily publicised at all and done because that organisation believes in something that it's a line with their #mission#worldchange and a #fairersociety is going to have to come at the cost of hard profits at some point - and the #hope that because people that have had success or intergenerational wealth are more attuned to social need than ever before  these #sophisticatedphilanthropists will make the differencewhy #gettinginvolved in #communityactivities is highly rewarding for self, and never more important than now because of the #mentalhealth benefits it can bring #selfless #senseofself@kerrcapitalA full transcript is below.Michael Kerr: Hi. It's Michael Kerr here, presenting Small Business Banter.A healthy micro and small business sector means a successful economy and a more vibrant society. Small Business Banter is about helping regional business owners better prepare for current challenges, but also for the next stage of business success.I'm Michael Kerr, founder of Kerr Capital, advisors to business owners.Each week, I interview a fellow small business owner or an expert, and they share their stories, their lived experiences, the wins and the losses, and their best advice to help you, the listener, get the most you can from your own business.Small Business Banter is brought to you from the studios of 104.7 Gippsland FM and is heard across Australia on the Community Radio Network. Thanks also to Kerr Capital, supporters of the show. Okay. Welcome to another edition of Small Business Banter radio. Today's guest, James Garland. James, the Director at the DGB group, he'll tell you what DGB group does, but he's also had a long-standing involvement in fundraising in the not-for-profit area, brand development. He's also got some personal interest in small businesses and investments. What we're going to chat about today is the business of the not-for-profit social enterprise, third sector. We're really looking forward to this chat, welcoming James. James Garland: Hey, Michael. How are you doing?Michael: Excellent. Thanks for calling in from a car, somewhere in Regional Victoria.James: No problem. I spent a fair bit of time here, so it's often a car call. Michael: Yeah. The sound is coming through really nicely. It's great to have you in. Look, I gave a really tight description. Do you want to expand a little bit more on your professional background, and also today, where you are with DGB group?James: Yeah, of course. I came out of university and went into the world of advertising, marketing, media sales, and working in agencies around State[?] campaigns, promotions, that side of the commercial world. I was over in London, working in an agency, doing live events, merchandising, marketing, and one of my clients was a charity involved in children's safety or child safety. I thought it might be a good thing while I'm away from home and tripping the light, fantastic across Europe, to maybe explore some different things in my career.I took a job that was offered as part of a big roll out by the UK government around what they call "Personal, Social, Health Education" for kids about being safe, and I just fell in love with it. I was young at the time. I was in my mid-20s, and I think a lot of people get into the not-for-profit or for-purpose sector a bit later in life, but it was really early for me. Out of what I thought would be a career in Commerce, I fell into the not-for-profit world really early, and I've been there ever since.Michael: It's a bit of a calling, was it?James: Well, I think I said to my mum, I remember she said, "What are you doing? It sounds really interesting. It's very different. It's not what I thought you would do. Is it what you really want to do?" I said, "Well, I'm finding a whole lot more meaning in working with organizations and engaging my passion and my skills in things that are changing the world, or at least changing the lives of people, rather than selling white goods or something else that, quite frankly, a well-loved[?] fridge." I really connected with the passion of the "Why?" while I was doing the work, and came back to Australia, took a contract at World Vision, Save the Children, worked at Cancer Research, a whole bunch of different not-for-profits on the inside, and loved them all. I went outside to the consulting side, and it's even better. You get to work with a dozen not-for-profits at any one time to, again, try and hopefully make the world a better place.Michael: Yeah. You really acted on something that came to you in your mid-20s which was something that you couldn't turn away. Working today in DGB across with not-for-profits and for-purpose businesses, what exactly does the DGB group do? James: Yeah. DGB is really, for guys who came out of advertising, naming it after the 3 principal directors is not exactly super creative, is it? Dalton Garland Blanchard, we're a really boutique agency. We strictly work with for-purpose organizations, so large and small, summer startups, some of the most exciting stuff in a sector's coming out of not-for-profit startup still. We work with those groups, specifically, that have plans to really transform themselves in the communities that they serve. We talk a lot abouttransformational projects, not so much your traditional tin rattling or, "Can you give us a gift this time at Christmas so that we can keep the lights on?" We work more so on a really larger scale, more complex growth projects, and our role is to help that organization build capacity, help them get ready, and help them carry out the fundraising for those projects.Michael: Okay, and bringing that experience you had in marketing and brand development to this sector, which I think, broadly, is called the "third sector" incorporating not-for-profit social enterprise, for-purpose. How big is the third sector, if that's the right term, at the moment?James: It's big. It's really big, and it's getting bigger off the back of what we've seen in the last few years. Everyone's starting to realize that our social fabric and the health of other people who are less fortunate, perhaps, than others, actually impacts everybody. We're in one, big world, and I don't think anyone could start. There's been a time, perhaps more prevalent than now, that everyone's really realizing that. We don't talk about the third sector much, but you're right. It is the sort of term, the "third sector", "private sector", "public sector", and then this "not-for-profit voluntary sector", but the contribution, economically.I think Deloitte did a study which was talking over $100 billion in Australia alone is the economic contribution of that sector, but I think the difference with that sector is that the impact is not really about finance or economics. It's actually about impact on people and the environment, on the world, on animals, on all sorts of things.It's interesting that we are now turning to needing the world to be a better place, in terms of climate, health, pandemics, and poverty, yet we call this sector the "third sector". Maybe it's the third thing that we've really cared about, but I don't know, maybe it should be the first sector [crosstalk] because if we don't have a planet to live on, private and public sectors doesn't mean much, does it?Michael: It certainly doesn't. It probably is an old term, but I was looking for something to collectively describe what you do, but it sounds like it's at a pretty exciting stage with the energy around startups. Would a lot of those startups call themselves social enterprises? If yes, can you describe what a social enterprise is and how it operates?James: Yeah, for sure. Definitely, social enterprises, it's more than a buzz. Perhaps I'll come back to that because some of these startups are just traditional not-for-profits that someone's got a great idea, or they innovate. Innovations are really big drivers of some of the coolest not-for-profit movements that are coming out.Regeneration of environment is big. In fact, environment's a real hotbed for innovation, people talking about plastics in the ocean and developing technologies that can create cleaner worlds, when obviously, some of that sits in biotech and agritech, and those sorts of industries. A lot of people do also go, "Hey, we've got a great idea. Instead of commercializing it, we're going to make a not-for-profit. We're going to allow everyone to invest in this and own it globally. Environments are great hotbeds for that at the moment.The social enterprise is kind of this next step in not being, a [inaudible] not-for-profit, because really, you want a social enterprise to make a profit. It's there to actually make a profit so it can support either its supply chain of fair trade coffee or the young people that it's giving a job to. It's different because it needs to be profitable, and it should be profitable. It's definitely getting a lot bigger, social enterprise. I think, fundamentally, the public wants all companies to have an element of social impact unconscious[?], and social enterprise is probably the peak of that, I guess, where all prophets, all outcomes, and all impacts go back to that social cause.Michael: Yes, it's a very clear purpose for that organization or that business if you like.James: Yeah.Michael: Yeah. I've certainly had some involvement in advising social enterprises and it's kind of what you said, it has to be a viable or sustainable business model because otherwise, all that energy, all that hope, it can all disappear if you don't have a fundamentally sound financial base. The social enterprise is kind of a blending of business and other objectives, and measures of success.James: Correct, yeah. I think you've got to have a values alignment around who starts it, runs it, works in it, and carries it forward. I think sometimes, social enterprises can be so successful, they become brands in their own right, they become really well-known, they become sought-after entities or businesses. Your values are going to hold true to, say, you could almost turn it into a retail chain, you could commercialize it. It's difficult because really, the function is there for what it is, a social enterprise. The people that are in it want them to be committed for the long term for it to remain that social enterprise piece.Michael: I think it could create a conundrum for the founders of these things because it is so successful, it does have value for other organizations. That's some of the experiences I've had with these founders, and they're unsure about how to take it forward.James: Totally.Michael: With the DGB group and the work you do, what you've acknowledged, it's a very significant sector. Did I have the same set of issues that for-profit businesses have? At the end of the day, are they struggling under finding employees and other day-to-day challenges that business faces?James: Yeah, massively. I'd suggest even more so, in particular, in the area of growth of business. If you're looking to recruit people under an award for community services or disability, generally, there's hardships in recruiting those people also, but certainly on the side of the work that we do around big transformational projects, project management, we're putting a different type of business case together for any one of these organizations, and they need really good, highly skilled people internally, who can build relationships much like some of your work around capital and advisory. You're dealing with sophisticated people that want to invest in social change. You need some pretty savvy people. We see a massive shortage of really good, savvy, articulate, strong relationship builders in the sector. The good ones get snapped up very quickly, and organizations that want to connect with philanthropists, major corporates, big businesses with government, they need really good people to be able to build those relationships, and you got to hold those relationships long term. It's really hard to get good people in the sector who probably do have to take a bit of a pay cut, because most [crosstalk] not-for-profits are pretty tight, [crosstalk] so it's tough.Michael: It reinforces the need, and however transformational the cause is and the energy, it's got to be underpinned by revenue, capital, and profits to be able to survive. [crosstalk]James: A hundred percent.Michael: On today's episode of Small Business Banter, we're talking with James Garland, who's a Director at DGB group and a very experienced operator in the not-for-profit social enterprise sector.Sounds like there's some heavy lifting being done by the sector. Is that what for-profit businesses aren't seeing, what don't want to follow some of these imperatives, and that's the opening for not-for-profit social enterprises to really take on these transformational projects?James: Yeah. That's an awesome question because it is absolutely rooted in one of the greatest things that the third sector or the full purpose organizations can do, and they can do what government can't. They can take risks that government can't. Private companies owned fundamentally by their shareholders, they can't necessarily always take the risks that are needed to generate social change. The third sector, not the largest, in terms of economic impact, is one of those places where you can play and you can fail, and many do. You're trying to alleviate social issues like child trafficking, poverty, and stuff like that. You can't roll out a low-risk private-style business plan to deal with something like that. You're going to need to adapt. You're going to need to find ways to achieve those goals. [crosstalk] It absolutely has this great role.Michael: Yeah. Do you need the founder to be totally absorbed, connected, and driven by that particular cause to really see the business, the social [crosstalk] enterprise?James: Yes. That's an interesting angle, too, because a lot of organizations come from our founders' passion. Over a period of time, what that organization will need will be much more than that founder can give because they're one person. Like in any business, you'll need a multidisciplinary approach to how you're going to tackle the root cause, so they're being great people that have started their own foundations, and people be aware of them are famous athletes, started foundations dedicated to specific issues. Cathy Freeman has done a huge amount of work for indigenous kids and communities, and is super passionate about that. Lots of these organizations start with a small number of founders, but as they gather steam, like any commercial business, they need a really good, strong, well-rounded team to be able to scale for impact.Michael: Yeah, it parallels exactly. You know what happens in startups.James: True.Michael: You need somebody or a team of people to see the opportunity and make it happen. It's got some shortcomings, and then it's a cycle, like a management team or a more broadly experienced team comes in. One of the things that I was exposed to in my work in social enterprise was, there's only so much money to go around from benefactors, foundations, and from government. The imperative was find your own revenue streams, which I think the UK has been pretty innovative in building and fostering the social enterprise sector. It seems like what you do with your client is also taking them to the next level, in terms of raising the money they need to deliver the transformational change.James: Yeah. We talked a lot about a lot of not-for-profits, and we've all been to the Black Tie ball, the luncheon, or have something arrive in the mail box saying, "Hey, we're a new charity, too. Can you support us?" There's a lot of low hanging fruit that a lot of organizations engage in, in order to try and keep those lights on, and it's all really valued. It's already really valuable investment. We probably look at more sophisticated approaches similar to any business, a startup, or organization looking to raise capital. We work with a lot of sophisticated investors, people that are real philanthropists themselves, and look at how they invest their money in not-for-profits. We work with the government, obviously, who have got to mandate across a lot of these issues to either be supportive, or help drive, and of course, big corporates, the big retailers, and others.Michael: That is some absolutely fantastic work.James: As to the banks, probably a lot of the time, we hang it on the banks, big retail, and other groups like that, thinking that they're just in it, making money, but we've seen some of our clients in the last 2 or 3 years, multi-million dollar contributions to not-for-profits from these big corporates, not just pocket change, but absolutely transformational support for different projects. Some of them aren't heavily publicized at all. It's just that organization believing in something that it's a line with their mission, and they invest accordingly. We work on those larger scale projects that really do require multiples of millions, but the impact will be really significant. That takes time, like all good things, you've got to do planning, you need strong budgets, you need to ask yourself all the questions that someone else would ask. It's certainly not as simple as shaking the team in the street, so to speak.Michael: Yeah. It's next level, I suppose, but I think the future for the social enterprise for-purpose sector is pretty bright because there's a lot of problems and challenges, and they're possibly more exposed than ever. It's that energy for people to take something on, is incredible. It's really wonderful to see somebody connect.At the smaller end, I think there are a lot of really, incredibly valuable work being done by small micro social enterprises where someone's attached to a cause, and they've created themselves a job, while also supporting the cause. Yeah, there seems to be a host of problems, the sector outlook pretty strong and bright.James: Yeah. I think that we're going to see slightly new models, too. There's a social enterprise group/organization forming, which I'm a part of, in a voluntary capacity. Traditionally we've seen this move to this, not necessarily be equal[?], but more social enterprise, where people start a cafe and they source all of their products ethically, they employ people with disadvantage, and so every step of their supply chain, they're engaged in social impact. That's great as a standalone business. I think the next evolution of social enterprise will be broadening that, so that social enterprise isn't just hospitality driven, cleaning, or some of those things where there's a logical fit. It will be really great when we have real social enterprise across financial sectors, across potentially, resources, and other services, so that it can be seen as an actual business model for all sectors. It does tend to be a bit pigeon-holed at the moment, but we don't have this, as far as I know, any social enterprise real estate agency chains or car dealerships. There's space for this model to play everywhere, so I think there's still a huge amount of growth in [inaudible].Michael: What's the cap on that, James? Is it just being brave to take on some of those much bigger businesses in bigger industries, or is that capital?James: Yeah, it's a good question. It could be all of the above there. I mean, we have a pure shareholder financial return model traditionally for [crosstalk] any business, directorship, or ownership.Michael: Three monthly reporting and bottom line, bottom line?James: That's right. More of the single bottom line than the triple bottom line, and then versus social impact in a fair society. Now, there's some really great intent out there, but we've all got to want to change the world and have that fairer society. That's going to have to come at the cost of hard profits at some point, but again, there's still a lot of hope, because people that have had success or intergenerational wealth are more attuned to social need than ever before, and we see that. We call these people, they're sophisticated philanthropists, they are looking at opportunities for this change to be made, and they're not necessarily wanting anything in return. Some underwriting some will invest in a social enterprise, some will just gift philanthropically, but there are some absolutely wonderful people out there who are really putting their money out as gifting seed funding contributions to real game-changing projects.I think that's where the magic might happen, Michael, where you get those really savvy people saying, "Listen, I'm fine, financially. I don't want for anything. That's a great idea. I'm just going to back it because." There is a lot of that out there, but again, in order to present those cases and in order to excite those people and align their passion with an area of social cause that floats their boat, it takes time. You got to really tip[?] into that, what we call a "case for support", which is fundamentally a business case for the for-purpose.Michael: Yeah. There's got to be more effort, doesn't it? Anybody that's got a profile and is well-off, I'm sure they get approaches all the time and [crosstalk] for anybody you see, there'd be individuals and companies around, but they are going to have their own processes to use a boring term, but to select who they're going to support and why? [crosstalk] You got any tips for the next generation of business owners, maybe they're in school now, or just out of school, in terms of encouraging them into the sector?James: As I said, I sort of fell into it early on, but there's a lot you learn from a sector, too, at an early age. In this day and age where we're rightly so looking at greater diversity on our boards and in governance, we want youth representation because everyone understands that young people have a different view point on the future, young people like you and I, Michael, and others even younger than us.Michael: Younger at heart.James: Yeah. It's exactly right.Michael: Yeah.James: Getting involved in community activities is highly rewarding for self. We often talk about how you can get involved, what you can do, but it's almost the giving to others is being shown that, especially modern days, and I'll bore you with a bit of MRI, health sciences on philanthropy, but it triggers the brain and lights the brain up when you give, you're involved, you give selflessly, and you're engaged in things above and beyond your own self. I'd encourage people to get engaged with this sector, with the altruistic, if we can call it the giving sector, not just for what you might learn and how you might connect with, on boards or in projects, and obviously, just to do really good stuff in the community, but do it for yourself.The days of mental health, being such a high agenda issue, it's incredible, the goodwill and the feeling that you get. People who are pretty much full-time philanthropists now will say, "The work that I do now is just so much more rewarding than anything I ever did commercially, because it gives me a sense of self."Michael: Yeah. That's excellent advice. That's a great, unfortunately, way to leave our time today, James, but I think that message is, "Get involved in something," and it's almost wide into you that there's lots of ways you're going to benefit and contribute.James Garland from DGB Group, thank you very much for your time today.James: It's a pleasure, Michael. Thanks for having me.Michael: That is all for today's episode of Small Business Banter. I continue to be inspired, bringing you small business experts and other small business owners, and hearing their stories.Do you want to listen to any past episode? Jump onto your podcast platform of choice and search Small Business Banter. There, you will find a diverse and fascinating collection of small business owners and experts openly discussing and sharing their experiences.For any of the links, resources, or information we've talked about on the show today, or to contact me, please head over to smallbusinessbanter.com, or you can find us on Facebook and Instagram.It would be great to have you tune in the same time next week for another episode of Small Business Banter.[END] Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au 

@michaelkent  is a #charteredaccountant and #founder and #ceo of @slateaccounts a bookkeeping and financial advisory firm. His focus is to look beyond the compliance (#BAS #GST and #annualreporting) to really drill in on the numbers, look at how the business is performing and how you can make it perform better. He's all about helping #businessowners and #CFOs get more intelligent, efficient, and reliable with their accounts.After a diverse work career including running a water company in #hanoi  #consulting and starting an #ITcompany, he saw an opportunity  emerging in #coudsoftware and #cloudcomputing. He now has 25 staff (#bookkeepers and #accountants) servicing clients - 10 in #australia and 15 in #jaipur #india In our discussion we cover;servicing businesses remotely and the advantages that brought to him;bringing a broader team, and abroader range of skills to help businesses,his approach to understanding clients' businesses and having #empathy for their workweek, and trying to make finance really pain-freehow he designs and delivers his 2 service offeringsthe critical need for #systems and #processesthe opportunity for #bookkeepers to prompt owners with "how they should be thinking about running their business differently or changing things"the opportunity for business owners who have bookkeepers who they really like and appreciate, and who know their businesses, to invite them to potentially go on that journeythe 2 lenses to think of when looking at your finance numbers.Historical - when doing that, it's really helpful to break down the numbers and understand where for example the income is coming from, then break that down and work out what products or services are profitable. There should be some trend analysis on spending, and definitely some ratio analysis. The big cost for most businesses are wages, rent, and stock, if it's a stock selling business, and if we're really understanding margins.Forward focused -  you definitely need to have an understanding of what's gone in the past, but I think it's best to start with an understanding of the #businessstrategy of the businessWhy the #financefunction should really understand #businessgoals  and what is this business trying to achieve?the importance of the #chartofaccounts as that's where it all startsthe need to focus on #measurable and #achievablethe need for businesses to understand where its big costs are, and focus on those - there is usually only about 3 or 4 (wages to revenue, cost of goods sold to revenue, occupancy costs revenue)#xero #myob #reckonwhy #cloud #accountingsoftware  and getting data from the banks is the #gamechangerthe critical role of #Managementaccountsthe reasons for his success in #outsourcingtook a very hands-on approach.having a view that, "Well, our clients outsource their accounts' work to us, so we're not going to, then, in turn, outsource the work to someone else." We wanted to make sure we were doing the work for our clientsstaying very close to those staff. Just because they're offshore, I think you should have the mindset that they're in the room with you.recognising that they're very much a part of our team meetings that we have, essentially, workshops, off-sites with thewww.kerrcapital.com.au A full transcript is included below.Michael Kerr: Hi, it's Michael Kerr here, presenting Small Business Banter.A healthy micro and small business sector means a successful economy and a more vibrant society. Small Business Banter is about helping regional business owners better prepare for current challenges, but also for the next stage of business success.I'm Michael Kerr, founder of Kerr Capital, advisors to business owners.Each week, I interview a fellow small business owner or an expert, and they share their stories, their lived experiences, the wins and the losses, and their best advice to help you, the listener, get the most you can from your own business.Small Business Banter is brought to you from the studios of 104.7 Gippsland FM and is heard across Australia on the Community Radio Network. Thanks also to Kerr Capital, supporters of the show. Okay. Welcome into another edition of Small Business Banter radio. Really great to have in Michael Kent, who's the CFO and founder of Slate Accounts, bookkeeping and financial advisory firm.Firstly, welcome Michael. Michael Kent: Thanks, Michael. Thanks for having me on the show, it's good to be here.Michael Kerr: Yeah, looking forward to chatting to you about what you do and how you help business owners. You're based in Melbourne, your business has about 20 bookkeepers and accountants servicing clients, and you can talk a little bit more about that.You didn't start as a bookkeeper, you started as a chartered accountant. You founded this business and you're really about helping business owners and CFOs to get more intelligent, efficient, and reliable with their accounts. I'll get you to introduce yourself shortly.In terms of today's discussion, what we're really wanting to do is draw on your current experience in the business you run to help owners think about how they can improve their business performance from bookkeeping and the output, which is management accounts, and so forth, also, I guess, opening the door to bringing in your bookkeeper as one of your really trusted advisors. That's the broad theme, but anyway, welcome, Michael. Give us a couple of minutes on your background, please. Michael Kent: Thanks, Michael. Well, I didn't follow a traditional accounting route. From a young age, I reckon I had a great interest in business, generally. I ended up studying Accounting, but also Law as a general Business degree. Michael Kerr: A lot of people do that. Yeah. Michael Kent: Yeah. It was good, it was interesting. When I left uni, I didn't work for a law firm or accounting firm, I went into more entrepreneurial pursuits. I actually went to Hanoi for a couple years and worked for an advisory practice there and ended up running a water company there, and then came back and tried to get an IT start up going for a few years, then took a real job in corporate land, which was, terrifically, I learned heaps for that period of my career, working in really quite general commercial roles. I ended up in consulting, but always with a view to starting my own business at one point. I suppose, the idea around Slate Accounts, I saw Cloud software coming and changing things. I thought that could be a good opportunity there. It seemed like finance was going to be deshackled[?] from the best in the computer running in my OB[?], and that it would be possible to service businesses remotely. In doing so, you could bring a broader team and a broader range of skills to help businesses, and that was the idea. I think it worked. We now have 25 staff, 10 in Australia, and 15 of those are in an office we have in Jaipur, India, that works really well for us. We can get into it if you're interested [crosstalk].Michael Kerr: Well, we'll certainly talk about your experience of outsourcing later.Michael Kent: Yeah. We've been going since 2012. [crosstalk] We started off general bookkeeping, looking after anyone that came along. These days, we probably don't take on slightly smaller businesses that we may have in the past. With the staff that we have, we find it slightly better at working with slightly bigger businesses, 2 million in turnover, or plus.In terms of how we think of our service, we think of it as 2 service offerings. One is Financial Control Services, where we run the nuts and bolts of a business' accounts function. We pay their staff, pay their bills, send invoices. We have another service offering called Financial Insight Services where we advise clients and really focus on using numbers to help them understand their business, [crosstalk] grow their business, and improve their performance, I suppose.Michael Kerr: Yeah. I think that's the underappreciated or underutilized area of bookkeeping, that ability to look past the compliance that you need to do your best in GST returns and accounts, but also really drilling in on those numbers to look at how your business is performing and how you can make it perform better, potentially.Michael Kent: Yeah. Potentially because of my background, we do compliance really well, but it's never really been a particular focus within our culture. We're really focused on systems and processes to make that work well and to make sure it's accurate, but our interest is really, we talk a lot about having an understanding of our clients' business and having an empathy for their work week, and trying to make finance really pain-free, but also bring value, I suppose.Michael Kerr: Yeah. Do you see that there is maybe an association between bookkeeping and compliance, and not with the next level of driving your business to become more profitable?Michael Kent: There is, but that's changing.Michael Kerr: Right.Michael Kent: I reckon it's possibly because the technology over the last 10 years has taken away most of the data entry, if not all. Ten years ago, there really wasn't a role that was essentially a data entry role, and that's a skill set. People who are good and interested in doing that will have a certain skill set, but that's been removed [crosstalk] with modern technology, so it means people who are really focused on that can now actually provide that service really well and efficiently for probably far more people, and that can be great. They can do it probably cheaper and better, but for a lot of people who may have been doing that work and new businesses that have come in to finance and bookkeeping, we have the space, data, and technology to really add value, so that's become a focus.I find that classic stereotype of the bookkeeper, it is sort of passing. Typically, businesses that come to me are not looking for that. They know that the world's moved on, and even small, freelance bookkeepers out there, and there's thousands of them, are now pretty focused on things beyond data entry [crosstalk] and the classic stereotype.Michael Kerr: Yeah, okay. The opportunity's here, the data gets exported out of your bank account, so it's a matter of shaping it and using it. Is that really up for the business owner to demand that or drive that, or you're just saying that bookkeeping, generally, is becoming more savvy and more of a trusted advisor in taking information to clients and saying, "Look, you should be thinking about running your business differently or changing things"?Michael Kent: I reckon there'll be a full spectrum out there and plenty of businesses will have bookkeepers, who, perhaps, not bringing that mindset and not necessarily thinking to bring that value. In many cases. I think that there's an opportunity for business owners who have bookkeepers who they really like and appreciate, and who know their businesses, to invite them to potentially go on that journey, if they hadn't necessarily thought of it proactively.Michael Kerr: What would be practical examples where there's an opportunity for either the owner or the bookkeeper to say, "Look, this information here is telling me my business is performing at this level, but I want to change it, or I need to change that." What would be examples of information that you could use to spark something different in the business?Michael Kent: Well, there are 2 lenses to think of, looking at your finance numbers. One is looking at them historically. When doing that, it's really helpful to break down the numbers and understand where the income is coming from.Michael Kerr: So, not yet. You often see revenue of $2 million, but it might be one client, it might be 50 clients, it might be 3 products or 3 services, or 50 products and services.Michael Kent: Yup.Michael Kerr: Is that the kind of stuff where you go? [crosstalk] Drill into this. It's not just one top line of revenue of $2 million. That works for compliance, right?Michael Kent: Absolutely. On the base[?] statement. that's all they're interested in, [crosstalk] but it's really helpful to break that down and work out what products or services are profitable. It's really common for businesses to discover with a bit of analysis that, in fact, they're putting a lot of effort into a service or product that's not profitable. In analyzing historical numbers, it should definitely be around focusing on product or service profitability, or for service companies that might be around, for a project profitability. There should be some trend analysis on spending, and definitely some ratio analysis. The big cost for most businesses are wages, rent, and stock, if it's a stock selling business, and if we're really understanding margins.Merely looking at a P&L on a balance sheet won't necessarily bring that out, depending on how they're structured, so encouraging a bookkeeper or a finance advisor to help a business owner pull that apart and understand those things is really valuable.Michael Kerr: Yeah. [crosstalk] The historical piece is just outlined, and you were just about to go on, I think, to the second part of it.Michael Kent: Yeah. Well, beyond that, we think that if you're going to get the most out of your finance function, it should really be forward focused. You definitely need to have an understanding of what's gone in the past, but I think it's best to start with an understanding of the strategy of the business. It doesn't need to be complex. It can be really simple. The finance function should really understand, what are the goals of this business? What's it trying to achieve? In many cases, that initial understanding of historically, what's going on, is the place to start, because that will tell you, "Well, we're doing great, but we do need to improve our margins," or, "We do need to drop our wage costs," or, "This is a sleeping service, but we could probably sell twice as much of this particular service line or product line," and that will inform the strategy. Once it's understood, "Okay, the next 12 months, we're going to try and do these 3 things," then working with the finance function or the bookkeeper to decide, "What could we measure and report on as we go through the year that would inform our progress against those goals?" That's the gold, deciding what we're trying to do, and how we're going to measure progress, and then getting that bookkeeper to go away and work out how they can get that measured and bring to the business owner a concise, succinct, simple report so they can get regular feedback on their progress towards those goals.Michael Kerr: Yeah, okay. I want to come straight back to the quality of your chart of accounts because that's where it all starts.On today's edition of Small Business Banter radio, we're chatting with Michael Kent, who's the founder and CEO of Slate Account. We'll shout out that website at the end, Michael.I love the way you've described that there's the finance function or booklist court[?], bookkeeping, account keeping. You can get a lot more out of the information that's going into the the system, historical analysis of profitability, et cetera, tying it to where you want to go, I think, the next level, because otherwise, you just go along and you don't know whether you're getting to somewhere, you don't know where that somewhere is, in terms of something that's measurable and achievable, but I imagine that when you are working with a client, all of that information rolls up into a set of accounts, and they're typically listed from the expenses from A to Z, accounting fees at the top and wages at the bottom and [crosstalk].I do a lot of work with management accounts and small business, and that layout isn't particularly helpful, so you've got to reformat that information, but also, I wonder how often there's a tendency just to shove expenses into categories, because you want to get your compliance done, but you're missing an opportunity to perhaps, really feed that information in the first place into categories, expenses that are much more relevant for doing this analysis talking about.Michael Kent: Yep. It's very common to have an A to Z chart of accounts, and it really is a massive lost opportunity. It's important for a businesses to understand where its big costs are, and focus on those. Counter-intuitively, we often say when reviewing financial statements, don't look at a statement, actually. Our typical reports will be more chart-based, and in most businesses, the costs that really matter. There's only about 3 or 4, and we prefer to present those in a chart that shows the trend over time and show us a ratio of those things, typically to revenue that that's where the business is thinking, wages to revenue, cost of goods sold to revenue, occupancy costs revenue, if real estate's a big part of the business. We then normally present your classic profit-loss statement that lists the accounts by month, almost as an appendix, because the B items are normally, there's only 4 or 5 of them, and you want to see what's happening as a trend over time.Michael Kerr: Yeah. If you're going to shift the performance of the business, you don't need to focus on 55 different expense accounts if it's 3 or 4, as you say, that always can [crosstalk] steer you to wages, rent, and so forth.Michael Kent: That's right. Someone should have a look at them. A good bookkeeper will take a look and make sure we're not doing something crazy with our phone expenses or our staff entertainment, but it's really not a sensible focus for a management meeting.Michael Kerr: Yeah. You talked about the shift to Cloud accounting. Now, we have zero miled[?], I reckon, into it, I think.Michael Kent: Yup.Michael Kerr: Is it more or less compulsory? Can you get around your compliance obligations just by continuing to use Excel always, or is the value coming out of an online subscription or a subscription to one of those service providers really worth it?Michael Kent: Absolutely. Excel is just so much harder, more time consuming, and more complex. The thing about the new Cloud accounting software is the getting the data from the banks is the game changer. You fill in a form to give the bank permission to send this company the data, and then over time, you can teach the software to recognize things. If it's Telstra, it's a phone. If it's Caltex, it's fuel. If it says Stripe, that's income, and so on. Tallying it all up becomes very quick.These days, running a bass[?], for example, it's all done with a couple of clicks, and now, you can lodge from directly inside the software. I just click a button and push it to the ATO. For smaller businesses, this software costs $25 a month, in some cases, less. [crosstalk]Michael Kerr: Pretty strong, and indeed, it kind of gives you the opportunity and to start to do that analysis that you talked about, which is, "What am I trying to achieve? How am I going towards that?"Look, I just wanted to rant through a couple of things in the last little while. Management accounts, for me, in the work I do, are the most critical piece of information. Now, when you're selling a business, what's happening last month, the last completed set of financial returns are usually 12 months old. What's happening? The quality of the management accounts, if I can call them that broadly, are so vital. I wanted to ask you, in terms of choosing a bookkeeper or assessing how your current bookkeeper's going, what's your thoughts on that?Michael Kent: Thinking first about that financial control function of the bookkeeper, getting the transactions entered, and getting bills paid, I think getting that done well is all about accurate, on time or faster, reducing risk, but also about delighting the customers of those business processes, so making sure your suppliers think you're a great company to sell to, your customers feel really good about your brand, and often, it's that finance person, the bookkeeper, who's representing you to the extent that's finance-related. I would be having conversations with prospective bookkeepers about how they might manage that and do that really well.Michael Kerr: Yeah.Michael Kent: I think the balance sheet is where a lot of bookkeepers might become unstuck. If I was interviewing a bookkeeper and had to choose one, I'd really go through my balance sheet with them and make sure they could explain. The key test here is, how would we check each of these balances, and make sure they're speaking in plain English, in a way that the business owner can really understand. I think that would set up the relationship really well.We find in recruiting our staff, the number one indicator for whether they're going to succeed at Slate Accounts is actually, "Please describe yourself, in 160 words or less, outside of work," because it's a very human task these days. It's not about data entry.The other thing to think about is about resignation proofing the function. It can be a real pain if your finance person or your bookkeeper leaves.Michael Kerr: Yeah.Michael Kent: I'd be having a chat to a bookkeeper about what backup they have and how those risks could be managed. I think that's really important, too.Michael Kerr: Yeah, okay. As a business owner yourself, you've got a significant business. More than half are offshore, and you can offshore a lot of things, bookkeeping being one of them, professional services also. What's your experience that you'd share? You have been doing it for quite a long time. In terms of just generally outsourcing for business owners, what's your thoughts on that?Michael Kent: We did it a little bit differently. I employed my first staff member in India in 2017, but I always took a very hands-on approach. It is possible to get online and find staff offshore, and do it all remotely, but long before we did this, we had the view that, "Well, our clients outsource their accounts' work to us, so we're not going to, then, in turn, outsource the work to someone else." We wanted to make sure we were doing the work for our clients.Michael Kerr: Yeah, and responsible for it.Michael Kent: Sure. Until COVID hit, until November '19, I was going to India 4 times a year, every quarter. I interviewed and recruited the first 5 staff.What's made it work? I mean, there's been a lot of change management. It had to happen across my Australian staff, and their roles have really evolved, and that's been great for them. It's a fun journey for everyone, but there's been a fair bit of work and care put into that. I think the key would be to stay very close to those staff. Just because they're offshore, I think you should have the mindset that they're in the room with you. Unfortunately, you just can't flip work over and expect it to come back. We're on calls and working on Skype and so forth with our staff all day, every day, and it works really well for us.Michael Kerr: Yeah. Whilst it's offshore, they're employees the way you set it up. You want to see that quality delivered that you promised, so you can't just outsource and hope for the best.Michael Kent: Yeah. For us, they're very much a part of our team meetings that we have, essentially, workshops, off-sites with them. That model works for us.Michael Kerr: I've been involved in outsourcing, also. I think it's like any employee relationship. As you said at the very beginning, wages is a biggest cost for just about every business, and managing people is essential to getting the business right?Michael, we're going to have to call it a wrap. I really appreciate your time and insight. I think it's a very progressive approach to bookkeeping and financial management. I think the message, very strongly, for me, that I'm hearing is that there is a role for your bookkeeper, outsourced, internal, as a trusted advisor, and really, to look beyond reducing tax, that annual cycle which has driven a lot of people in the past and a lot of accountants look past the compliance, and really look at it as a critically important part of the business to measure how you're tracking, and comparing that to where you're headed.Thank you so much for your time today. Do you just want to shout out the website, and then we'll call it a wrap, Michael?Michael Kent: Thanks, Michael. Yeah. We're at slateaccounts.com.au.Michael Kerr: All right, excellent. You do, occasionally, write some excellent articles.Michael Kent: Occasionally?Michael Kerr: I mean, you only write them occasionally.Michael Kent: I know. I'm going to work on it a little bit better there.Michael Kerr: All right. Thanks [crosstalk], Michael, for your time today. Really appreciate it.Michael Kent: Thanks, Michael. Good to see you.Michael Kerr: That is all for today's episode of Small Business Banter. I continue to be inspired, bringing you small business experts and other small business owners, and hearing their stories.Do you want to listen to any past episode? Jump onto your podcast platform of choice and search Small Business Banter. There, you will find a diverse and fascinating collection of small business owners and experts openly discussing and sharing their experiences.For any of the links, resources, or information we've talked about on the show today, or to contact me, please head over to smallbusinessbanter.com, or you can find us on Facebook and Instagram. It would be great to have you tune in the same time next week for another episode of Small Business Banter.[END]  Thanks for listening.  Visit the Owner To Owner Podcast website to subscribe, listen back, or check out any resources or information mentioned on the show.Search @ownertoownerpodcast on your favourite podcast player to subscribe and listen to the episodes.Reach out to Michael Kerr via the website if you need personal assistance or advice for your small business.michael.kerr@kerrcapital.com.auwww.ownertoownerpodcast.com.au