FIVE TOP FINANCIAL MANAGEMENT HACKS FOR REGIONAL BUSINESS OWNERS

By Michael Nuciforo –Thriday

Small business owners in regional Australia, particularly those in the agriculture and farming industry, face unique financial challenges. However, there are several financial hacks that can help business owners to manage their finances more effectively and, ultimately, become more successful. We chat with the CEO and co-founder of Thriday, Michael Nuciforo, about his top tips for achieving financial bliss.

According to the most recent research from the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), 2.3 million small businesses are operating in Australia, out of which around 31% are located in regional areas of the country.

Running a small business in regional Australia is unique in several ways. Firstly, most businesses gravitate to operating in farming, agriculture and mining. These domains are heavily dependent on weather conditions and natural resources, making it challenging to plan for and manage financial risks. Farming businesses in particular, have long lead times between planting and harvesting, which can create cash flow challenges.

Mr Nuciforo, whose company Thriday has partnered with Regional Australia Bank to offer new financial services solutions to regional businesses, highlighted that these industries also rely heavily on a seasonal workforce, which is an added challenge to manage. ‘Finding, retaining and motivating employees who know they will only be employed temporarily can take a lot of work. Additionally, farming and mining equipment costs can be very high, and the need to constantly update and maintain equipment can strain finances.’

When running a business in regional Australia, it is particularly important to learn different financial management hacks, as the economy is vastly different to running a business in a metropolitan area. The cost of living may be lower, but access to resources, talent and customers is limited. Some popular hacks that regional businesses can take advantage of include government grants, tax deductions, cash flow management, budgeting, and negotiating good terms with suppliers and lenders. Let's dive into each one to find out more.

HACK 1: GOVERNMENT GRANTS

The government offers a variety of grants and loans for small business owners in regional Australia, particularly those in the agriculture and farming industry. These can include grants for research and development, equipment purchases, and marketing initiatives. It is essential to thoroughly research the available options and apply for any that may apply to your business. Grants can provide a significant cash injection to help fund your business, but they can also provide valuation networks and relationships to support your business.

Mr Nuciforo commented that grants were one of his favourite strategies, ‘State and Federal Governments want to support small business. If your business is successful, it's good for the economy and great for jobs. Many businesses are unaware of the grants available, so do some research online and put your best foot forward.’

Some popular grants to apply for are:

• Regional Business Development Fund

• Export Market Development Grant

• Research and Development Tax Incentive

For a complete list of available grants, check out the Business.gov.au grants finder.

HACK 2: TAX DEDUCTIONS

There are several tax deductions that small business owners in regional Australia, particularly those in the agriculture and farming industry, can take advantage of. Claiming any applicable tax deductions will reduce the amount of taxable income, thus lowering your overall tax liability. This can result in a higher tax refund or a lower tax payment.

Common deductions for regional businesses include:

• Home office expenses.

• Vehicle expenses.

• Equipment and supplies.

• Professional fees such as accounting and legal

• Rent or lease payments for business premises.

• Advertising expenses.

It's essential to keep accurate records and receipts to support these claims, as the Australian Taxation Office may review them.

Mr Nuciforo said many businesses were shooting themselves in the foot regarding tax deductions, ‘I have seen many business owners completely miss the mark on their tax claims. Keep accurate records and receipts so you can claim the maximum deduction.’

HACK 3: CASHFLOW MANAGEMENT

Managing cash flow is crucial for any small business, but it can be incredibly challenging for those in regional Australia. To manage cash flow effectively, it is important to track all income and expenses, establish a budget and forecast cash flow for the next few months.

Farmers and their accountants have historically used accounting software like Xero and MYOB to track cash flow by linking to bank feeds. New services like Thriday automatically monitor cash flow and accurately predict the business's future cash flow. This can be helpful when planning ahead as you can see any situations where you could be low on cash and need to conserve spending to stay above water.

HACK 4: BUDGETING

There are various budgeting and forecasting tools available to small business owners that can help them manage their finances more effectively. These tools can help business owners to track expenses, forecast cash flow, and create budgets that align with their financial goals. Tools like Agworld and AgriWebb can help farmers to manage their crops, equipment, and labour via an online dashboard.

Agtuary is another new tool with a focus on financial management. Designed specifically for farmers, it provides a comprehensive view of financial performance, allowing farmers to make data-driven decisions about their operations. The tool offers crop and livestock tracking, budgeting and forecasting, and financial reporting.

Mr Nuciforo was a big fan of Agtuary, ‘I have seen this company go from strength to strength. The tool can help farmers identify areas where they can improve efficiency and profitability and use their resources better. It takes the guesswork out of budgeting.’

Michal Nuciforo –Thirday

HACK 5: SUPPLIER NEGOTIATION

Small business owners in regional Australia, particularly those in the agriculture and farming industry, can negotiate with suppliers and lenders to secure better terms and rates. This can include negotiating payment terms, interest rates, and other terms and conditions.

Mr Nuciforo highlighted that research was paramount, ‘If you do proper due diligence, you can identify suppliers and lenders that specialise in regional businesses, and they will be willing to structure their terms better to suit the ebbs and flows of your business.’

By implementing these financial hacks and using the right software tools, small business owners in regional Australia, particularly those in the farming, agriculture and mining industries, can better manage their finances and, ultimately, become more successful. Best of luck!

Michael is the CEO and co-founder of Thriday. Thriday is an all-in-one financial management platform for small businesses. Thriday uses AI to eliminate time wasted on financial admin by automating banking, accounting and tax.