Aaron Powdrell, Business Banking Specialist at Commonwealth Bank
As the Business Banking Specialist, Aaron looks after small business clients and provides educated suggestions to help them achieve their goals. We spent five minutes chatting to him about the latest tips and tricks in the banking and small business space.
What are the biggest challenges for people in the 18-35 age bracket when it comes to money, loans and finances?
Many small businesses fail due to insufficient planning and funding. So a comprehensive financial plan is a must and creating one is easy. We suggest following simple five steps of calculating set-up costs, doing a profit and loss forecast, having a cash flow forecast and a balance sheet forecast plus a break-even analysis. Visit commbank.com.au to download our financial plan template which outlines all of these steps.
Apart from a financial plan, what are your tips for setting up a business up for success?
- Figure out who’s going to buy your product or service
It’s a common mistake to assume that everyone will be interested in what you offer, so you need to know who your target market is and how you will reach them.
- Spell out your unique selling point
You’re unlikely to be the only business offering a particular product or service. So why should customers pick your business instead of your competitors? Knowing what sets you apart will help you create a competitive edge.
- Write a business plan
A solid business plan is a key part of any start-up business – this is different to a financial plan as outlined above. Set out what you want to achieve and how you’re planning to achieve it. Writing your business plan will help ensure you’ve thought every step out to identify any potential weak points. Once it’s time to launch, a business plan with financial projections can help you get funding from a lender or investor. It will also give you a framework to run your business by outlining what’s important.
- Sort out the admin
An accounting system is a must for almost every small business, and a little extra effort at the start can save you some headaches come tax time. Another key step to take is opening a specific business bank account – it’s important to separate your business income and expenses from your personal banking for:
– Better cash flow management
– Reconciling your BAS and tax returns
– Presenting your business as more professional.
- Remember that zero to hero doesn’t work
Don’t try to grow faster than you can handle. Most owners who’ve spent years in the game agree focusing on growth you can sustain over the long-term is the best way to build your business. As you expand, you’ll face all sorts of challenges and you can burn yourself out trying to move in too many directions. While it’s easier said than done, try to factor in regular time off. In the long run, this should help you to maintain your energy and enthusiasm, keep a clear head and generally give yourself your best shot at success.
If a new business start-up under 35 wants to take out a business loan, what can they expect and what do they need to show?
I have a general list that I supply to my clients, this is a starting point and there may be additional information requested based on the type of finance and the income streams of the client. A client with multiple companies or trusts may be required to supply financials for each entity. The list below contains the base documents required for formal commercial lending. We have other small lending products requiring less – the type of lending can be determined at the time of enquiry.
– Any trust deeds and full company/business name details.
– All individuals need to be identified by supplying their primary form of ID (drivers licence or passport).
– Applicable privacy and consent forms (supplied at time of enquiry).
For Both Companies and Trust:
– 2015 Financials (P&L, Balance Sheet and Tax Return).
– 2016 Financials.
– Details of why you require the sought Increase in Overdraft Limit.
– Copy any Trust Variations that may have occurred since your last application.
For All Directors/Shareholders/Trustees of the Business:
– 2015 Individual Tax Returns.
– 2016 Individual Tax Returns.
– A Personal Balance Sheet which includes all Personal commitments (attached).
The last three months Statements of ALL non-CBA:
– Credit Cards.
– Transactions Accounts.
Any other tips and trends to watch out for in 2017?
CommBank’s Business insights tools include reports and insights to help clients understand business and market trends. You can find them here.
CommBank also has a business YouTube channel which contains case studies, business insights and tips on innovation >> https://www.youtube.com/user/commbankbusiness
For more information, you can contact Aaron Powdrell, Business Banking Specialist at Commonwealth Bank at:
Business Banking Specialist
58 Scarborough Street
M: 0417 620 098