17 BUSINESS TIPS 5 mistakes business owners need to fix…now! 3. Failing to understand the difference between profit and cash flow This is still one of the biggest misunderstandings for business owners – “Troy I have made profit, but where is it?” Profit is not cash, and cash is not profit. Profit (or loss!) is the difference between income and expenses and it ‘finds it way’ onto the Balance Sheet in the form of cash, debtors, stock, reduced liabilities, dividends etc Cashflow is ‘like the oil’ in your car – it keeps things running and is a function of your day to day operations. You have to get inside the timings of cost – rent, wages, debtors etc – to project how it affects you. 4. Cutting costs rather than driving revenue When considering how to improve profitability, many business owners resort to tackling costs. That’s all good, but there is a finite limit to which expenses can be cut – zero. On the other hand, the opportunities to grow revenue, assuming you manage your growth within the constraints of your cash flow, are limitless. It comes down to understanding the drivers of revenue, which in most businesses are: 1. Number of customers 2. Number of times those customers buy from you 3. The average sale you make each time a customer buys Once you understand the drivers, you can put in place strategies to increase each of those critical measures. In today’s environment where costs are going up, ask yourself, when was the last time I considered how much value I create for my customers/clients? 5. Running your business from a spreadsheet In this era of cloud accounting solutions it’s so easy to get accurate financial information especially with integrated bank feeds connecting your accounting software with your banks. Failing to take advantage of such information is like running the business by the seat of your pants. Talk with your accountant today if you feel that your accounting records are inaccurate, unhelpful or obsolete. But more importantly, build it so that you can make decisions, get access to capital, pay your taxes on time and forecast when the ‘speed bumps’ are ahead. troy.m@adviceco.com.au CONTINUED FROM PAGE 16 Workplace violence and sexual harassment By Warwick Ryan, Partner, Hicksons Lawyers HAVING POLICIES AND procedures in place isn’t enough and employers can be met with heavy penalties for getting it wrong WHS has historically been all about physical injuries and risks in factories and construction sites, but a recent decision of the NSW District Court (the Court) broadened that traditional view. SafeWork and the Court have put employers on alert that violence and sexual harassment in the workplace are never acceptable and that an employer’s failure to swiftly and proactively address reports of incidences will result in harsh penalties. It is critical to have relevant and effective policies and procedures in place to address risk of such incidents. That’s not enough. They have to be actioned! What Were The Charges? In a recent case, SafeWork NSW (SafeWork) brought court proceedings against Marist Youth Care (MYC), a not-for-profit NGO that provides residential care for young people, for failing to comply with their WHS duties under the Work Health and Safety Act 2011 (NSW). Those charges included WHS issues with a psychological impact – often referred to as psychosocial hazards. While MYC had implemented a range of reporting measures for Workplace Health and Safety (WHS) and related issues, a significant issue in the case was what the employer did with the information after it had been collected. In this case, the Court decided that the employer’s response was inadequate, and fined MYC a confronting $300,000.00 for not providing a safe workplace. What Happened? The Court heard that, from January to September of 2019, workers made numerous reports that residents were using sexual, aggressive and threatening language toward them; were making inappropriate comments, frequently of a sexual nature; were making racial remarks; were cornering workers and making them fear for their safety; and were damaging and destroying property. Despite numerous reports of inappropriate resident behaviour during this period, female workers were also occasionally left on their own for several hours with residents that MYC knew had a history of assault and aggression towards women. Marist Youth Care had a system in place to log these incidents but through poor training and management disinterest this did not translate into action. During the period, two separate incidents of assault were reported by two female workers. Both workers suffered ongoing psychological injuries as a result of these incidents, as well as significant impacts on their personal lives, relationships, and ability to work. One incident related to sexual touching which led to police charging a 16 year old resident. The resident was ultimately convicted and sentenced. The Court noted that “those incidents were recorded as required by the relevant procedures, but there were multiple failures at management levels to respond to those incidents. In particular, the Area Manager’s response was seriously inadequate.”. The Court acknowledged that MYC had “a substantial quantity of appropriate procedures in place and it had trained the workers on them”. However, this was not enough. The issue was what the business did in response to the information provided by the workers. The Court also stated that “the community is entitled to expect that both small and large businesses will comply with safety requirements.”. This is a clear indication that all businesses should pay attention to this case, and consider how they respond to issues that arise. What does this mean for employers? This decision makes clear that all employers, whether large or small, in addition to having appropriate workplace procedures and trained staff must have a proactive and responsive management system and complete an adequate risk assessment of their workplace. That risk assessment must account for worker safety, as well as recent patterns of behaviour of residents/clients/ customers, and recent incident reports, amongst other relevant factors, with attention paid to psychosocial hazards. The Takeaway Businesses must be responsive and take action to deal with issues appropriately as they arise. This requires good business oversight, and knowledge of the underlying risks and how to address them. Our experienced Hicksons Workplace Relations lawyers can assist you to plan for and address these critical business issues. CENTRAL COAST BUSINESS REVIEW JUNE 2024
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