Octet’s latest guide from the Powering Business series: The Power of Influence is out now. We spoke to the remarkable Brett Kelly to gain his insight into influence and help add to the arsenal of businesses.
Having been in the finance game for over 20 years, Brett is the founder of Kelly+Partners – chartered accountants who specialize in “looking after business owners that want to go somewhere”.
In chatting to him about influence in business, conversation inevitably drifted to finance. He shared a wealth of invaluable insights into the area, many of which couldn’t find a home in our already comprehensive guide. That’s why we’ve put together this article, to share a little more of Brett’s wisdom.
Control is key
“I’ve always run our firm in a way that has allowed me the financial wherewithal to, “Live my ideas,” as I say, with integrity. To be able to say that I’m going to do something and do it.”
According to Brett, being able to “put your money where your mouth is” and follow through on ideas is integral to good leadership. However, this takes healthy cashflow and the capital to seize upon opportunities as they arise. And as well as being able to realise ideas and achieve goals, being adequately funded also allows you to avoid uncomfortable business situations.
Brett explains, “Most people don’t like discomfort. And they certainly don’t like somebody telling them they should do something or they must do something that’s in their financial interest, otherwise, the consequences will be serious.”
A financially secure position means that you’ll never have your back against the proverbial wall, allowing you to make considered decisions for your business. Having grown his business from a single office in Sydney to having 14 locations in Australia, with an office in Hong Kong, Brett’s success is a testament to his advice.
Putting it bluntly, he explains, “We’ve never had an employee or a partner that we couldn’t fire on 10 minutes notice, so that we were never beholden to an employee, to a partner, to a client, so that we never felt like we had to do anything that we weren’t comfortable doing.”
Octet can help you remain on your toes and avoid rocks and hard places. We give businesses access to debtor, trade and supply chain finance options that can help you diversify your funding, leverage invoices and support trade to best suit your situation and objectives.
Knowledge is power
In Brett’s view, any business should maintain “rigorous” control of their finances. “That means, for a start, you need to know what’s going on. You need real-time accounting and you better make sure your accounts are accurate.” he says.
Getting a full overview of your businesses financial standings on an ongoing basis is crucial. Casually demonstrating this, Brett is able to give a detailed rundown of Kelly+Partners, off the top of his head.
“All of our businesses are individually owned. Their 51% owned by the whole company, 49 by the partners. The debt in any business is very moderate and is ring-fenced to any of those individual businesses. The partners are all joint and several, together with me. So we’re in it together.”
By maintaining control and clarity, business leaders can avoid undue financial risks, as well as deal with problems effectively should they arise.
Danger Points
“Four out of five businesses in Australia go broke within the first five years. They go broke because they can’t see clearly what’s going on financially in their business and they don’t have independent advice that can explain this clearly.”
When leaders take a look into their own capital standing, there are a few questions that Brett suggests you ask yourself.
These include:
- What’s your cashflow?
- What are your financial obligations?
- What money is going to financiers?
- What portion is owned by the tax office?
- And lastly – how much can you spend?
Another issue for many Australian businesses is underfunding. In addition, they may receive all their financing from a single, volatile source. Beyond putting the business at risk, this strategy (or lack thereof) is the perfect way to stymie the growth of an otherwise healthy business.
Brett sheds some light on this all too common situation. “Most SMEs in Australia are chronically under-capitalized. They’ve put a little bit of their own money into the business. They can’t often access big bank finance. They don’t know where else to go. They’re not thinking about the future. They don’t put the finance in place when they need it, and so they often spend many years running behind.”
Final words
To sign off, Brett has some final financial advice for businesses, boiling his thinking down to some key points.
“Get your accounts, straight. Get the financing in place that will allow you to hit your growth objectives. And make sure you build a personal relationship with whoever’s providing your finance.”
Like Brett, in terms of business finance, Octet takes a point of departure in our clients’ needs and goals. We pride ourselves on getting to know our clients, helping them gain greater control and set the bar higher.
