Strategic Business Mentoring

The feedback that I received that I thought you might be interested in included the following:

• Government Grants – “great idea, don’t know much about grants, who is supposed to keep us informed?” was one of the questions. “Our accountants never seem to tell us anything about grants!” They were particularly interested in the Business Improvement Grant. A couple of the directors also had some interest in the Accelerating Commercialisation Grant, which is a grant of up to $1M on a 50/50 basis for companies with turnovers up to $20M that have developed new products, processes or services.
• Financial Accounts – Well this created some debate when I asked the directors to indicate how they would rate the financial accounts that their external accountants prepare for them relative to the type of information that is conveyed to them. The response was “fair”. It’s worth thinking about. “Fair”. One main complaint was – “we run a number of divisions or departments and yet the Profit & Loss Account we receive back from our accountants is in one Profit & Loss Account”. “Surely we can get departmentalised accounts?” was a question asked by a number of the directors.
• Job Costing – the other big question related to job costing. A number of these businesses had operations that suited job costing, yet the directors indicated to me that a conversation about job costing had not been raised by their accountants. I would have thought it was one of the obvious areas for accountants to be looking at.
• Benchmarking – we talked about benchmarking. I was surprised that no one seemed to know anything about the role that benchmarking.com.au play and no one indicated that they were receiving a benchmarking report. Some of the directors liked the idea of developing a benchmarking group within similar types of businesses in different parts of the country, but surely this is a service that accountants should be providing to your clients. It’s quite easy to do so using the benchmarking.com.au information.
• Key Performance Indicators were discussed, but I got the feeling that not many people were confident that they had selected the correct KPIs or that their management team fully understood their use.
• Portfolio Allocations – another big discussion point was when I asked them about portfolio allocations. We produced a list of 45 portfolios, everything ranging from who is in charge of legal matters, insurance, registration of motor vehicles, sales, marketing, shareholder relationships and so on. Most of the directors indicated they looked after all of these things themselves!

• Mentoring and Coaching – most of the directors indicated that they felt very lonely in undertaking the role as a company director. A number of them indicated that this is a very lonely job. It is and directors do need support. When I asked them if they had a board of advice, no one indicated that they did and only one had an external director involved and the board only had a meeting about once a year!
• Business Plans – about half of the directors admitted that they had business plans, but the plans were four or five years old. The directors admitted that the business plans were hopelessly out of date. The others indicated that nothing was written down, it was all in their heads.
• Research and Development – some of the directors were undertaking research and development and doing it very well. Others indicated they weren’t quite sure what they could claim and what they couldn’t claim so they’d never worried about it. Those people also indicated that their accountants didn’t seem to have too much interest in research and development so they hadn’t pursued it. Those directors definitely had no research and development system; they had no idea of the forms they needed to keep to substantiate the research and development work that they’d undertaken.
• Succession & Exit Planning – most thought it was a great idea. Most hadn’t done anything about it. A couple were talking about merging their businesses. Some had vague ideas of what they might like to achieve in the next five years, but there was a significant lack of planning in this area.
• Vision – we then discussed the five year vision and all of the directors thought that this was a great idea, but then they all indicated they needed assistance from various people to make this come to fruition. The directors named the people they would like to assist them:
• their accountant – they’d like to have their accountant more involved in the development of a five year vision
• but also some other people – some mentors in the community that they like and trust.
• People and Fair work Australia issues – I asked them whether they had any type of external advisers; whether it’s their accountants, lawyers or a specialised human resources organisation. Three of the directors did; they were using a people organisation who are quite expert in dealing with Fair Work Australia issues, but the others had nothing and in this day and age I think for growing companies, that’s probably dangerous.
• We also discussed Fair Work Australia in detail and how people deal with Fair Work Australia. It was then very obvious that companies and directors need advice from people who understand how that organisation works.
• Workplace Health & Safety was another issue where only a few of the directors had a formal approach and had an external organisation that was monitoring what they were doing and was conducting audits on, at least, an annual basis and was writing reports to the directors and senior management on the results of those audits so that the directors could then ensure that appropriate policies were implemented.