We hear the term small business a lot these days, and October is small business month here in Australia, but the question is are you running a small business or are you running a micro business?

The Australian Bureau of Statistics says you are only classified as a small business if you employ between 5 and 19 people. If you employ 20 plus people you just entered the medium category and if there are four or less of you then you just became a micro business.

The problem is that this is only one way that your company’s status as a small business can be measured. The Australian Tax Office has a completely different system in place that is based on revenue. If you bring in less than $2,000,000 a year in revenue, they call you a micro business. If your revenue figures are between $2,000,000 and $10,000,000 then you get to call yourself a small business.

As you can see it can get a little confusing and these two organisations are not the only ones to define this category of business differently. If you spend a little time online, you will find many more ways to define the size of your business both from Australian and from international sources.

So, the question is why has no one come up with a universal definition of a small business? I think the answer is that there really is no such thing as a small business or a micro business. To the people involved in the running of a business it is never small, it is their world. To the loyal customers of a business, the way its size is classified is not something they tend to consider. If you have happy customers and a passion for what you do, then putting a label on your business size is the last thing you should be doing. If we think small, we stay small so remember that your business is as big as you think it is.

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Most of us begin our working life as an employee, there are regular paydays, paid leave, sick leave and many other perks. When we go out and work for ourselves it is all a bit different.

The first major difference is that the money coming in isn’t quite as regular, even if we have regular work. Invoices are a tricky part of running a business and getting others to honour your payment terms can be the difference between the success and failure of your business. So here are some tips on how to get paid on time:

  1. Be very clear about your payment terms to make sure your clients know what they are
  2. Ask your clients to match your payment terms, and if they won’t make sure you account for this when planning your budget
  3. Include a due by date on all invoices (platforms like Xero won’t even let you generate an invoice without a due date)
  4. If you have long payment terms don’t be afraid to send a reminder, people do genuinely forget, especially if they got the invoice a while ago. Also don’t shy away from chasing overdue payments, you did the work, you deserve to get paid
  5. Do unto others as you have them do unto you. This is more of a lifestyle decision than a tip but if you want people to pay you on time, make sure you are paying others on time. If nothing else, at least you will know you have the moral high ground when you are chasing up late payments from others

Not getting paid on time is one of the biggest issues facing businesses today and there is no easy answer to how to always get paid on time. The key is to be proud of your work and know you have delivered value to your clients. It is much easier to ask for payment when you feel truly justified in doing so.

Want to hear more about how we can help your business? Contact us today.