S & H Tax Accountants

Author: Bizink

Business Update – 6 July 2022

Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

How to keep your tax bill low

With tax time upon us, here are 8 simple ways you can maximise your refund or keep your bill as small as possible.

It’s a good time to catch up on your taxes

It’s required to lodge your tax return every year, and most of us do. Those who don’t, however, could face up to $9000 in penalties or even jail time.

Interest rates rose again this week

The Reserve Bank of Australia triggered another interest rate rise this week lifting the official cash rate to 1.35% in a bid to deal with inflation.

Ingredient cost comparison at the big 3 supermarkets

The humble stir fry is one of the easiest, cheapest meals you can put on the table – or at least it was. With the price of fresh produce skyrocketing, many Australians now find the cost to whip up a stir fry ‘depressing.’

Reserve Bank pushes for more frequent inflation data after being laughed at

At a financial forum this month in Switzerland, world bankers laughed at Governor Phillip Lowe when the RBA chief lamented the fact his team doesn‘t receive monthly statistics like central banks in Europe and the US.

Many Aussies received pay rises last week

Millions of workers received a pay bump on Friday when the Fair Work Commission’s annual wage review came into effect.

Thousands of Millennials are back to living back at home

The latest census data reveals that the number of Millennials living at home has soared by thousands amid the pandemic, insecure work and an increasingly unaffordable rental market.

Analyst predicts Australian economy is months from ‘bottoming out’

Australian analyst Aryan Norozi of Barrenjoey predicts retailers are in the early stages of a years-long decline. He stressed that no two economic cycles are exactly alike, however.

House prices fall for the second month in a row

Rising interest rates are taking their toll, as house prices continued to decline this month. Falls are expected to accelerate in the coming months.

Hot chip prices to skyrocket

WA Chip, the last remaining commercial chip manufacturer and supplier to many of WA’s shops, warned customers that prices will be going up after their gas bill increased to a whopping $1,000,000 last year.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.

06/07/2022
4 Reasons to Switch to Cloud-based Accounting

If you’ve been considering making the move to a cloud-based accounting system, you’re not alone. Cloud technology has impacted many business functions, including making managing financial aspects of your business easier and more efficient.

Cloud-based accounting moves your accounting from being hosted on your computer’s hard drive to an online platform. Cloud-based platforms like QuickBooks and Xero offer important features that save you time and money, freeing you up to focus on other important business activities.

Here are 4 reasons to switch to a cloud-based accounting system.

1. Efficient invoicing

If your business relies heavily on invoicing, an online accounting system like QuickBooks or Xero makes invoicing incredibly efficient. You can email invoices to clients directly through your software and track how long it’s been since the invoice went out.

Clients pay you through a link attached to the invoice, making the payment process easier for them, which increases the likelihood they’ll pay you sooner. If they pay through the system, your platform will mark the invoice as paid automatically. If their payment is late, the system alerts you.

Further, you can set up your software to send automatic reminders about late payments. Taxes are automatically calculated for you and you can set up recurring invoices and retainers to further automate your invoicing.

2. Paperless accounting

Managing your accounting through a cloud-based system enables you to move away from paper accounting. You don’t have to worry about where or how to store years of paperwork and files because everything is securely stored in the cloud. Likewise, you don’t have to go through boxes of files to find a receipt from two years ago, you can simply access the information through your computer.

It’s easy for you to share your records with your accountant, bookkeeper or anyone else who may need to collaborate on your finances. You don’t have to mail them physical copies of your financial transactions and statements, you can email them the information or give them access to your software.

3. Accessibility

With a cloud-based accounting system like QuickBooks or Xero, you don’t have to be in the office in front of your computer to access your financial information. You can see your ledgers and reports from anywhere, on any device. If you want to work from home one day, you can log in to your software from your smartphone if you want, to send invoices, check your reports, or manage expenses.

4. Accurate reporting

An important component of running your own business is reporting. Accurate reporting enables you to better manage your finances and understand your profitability. It’s vital for making informed decisions about your business.

Cloud accounting provides you with accurate reporting at the click of a button. Using systems like QuickBooks or Xero you can easily access profitability reports, income and expense reports and year-end reports.

The information is available to you automatically–you don’t have to spend hours in front of a calculator going through every invoice to see your numbers. Simply by keeping your records in a cloud-based system, you can easily generate accurate reports.

Final thoughts

If you’re hosting your accounting information on your computer hard drive, it’s worth looking into cloud-based accounting to see if you can benefit from the switch. Given the ease of invoicing and accurate record keeping, combined with the accessibility of a paperless system, you may find cloud-based accounting software is the right system for you.

S & H Tax Accountants pride themselves in being efficient when it comes to our administrative skills or our accounting skills. However, we understand that not everyone is able to use these types of software, therefore S & H Tax Accountants are here to assist you. As well as all taxation services, we also provide bookkeeping services. Book in a consultation today with one of our accountants, email us at info@sahtax.com.au or you can call us at 03 8759 5532.

02/07/2022
8 ways to run more effective meetings

Meetings are often a source of contention in the workplace. Have too few meetings and people feel disconnected. Have too many meetings and people feel that their work is being interrupted. Meetings that are too short might not accomplish enough, while those that are too long lose people’s attention. With some planning and preparation, you can easily turn your meetings into a productive, pleasant experience. Your attendees will come away feeling good and looking forward to the next one.

Define the goal

Meetings take time out of everyone’s day so make sure everyone knows the point of getting together. That way, they aren’t left wondering what the purpose of the meeting is, and they’ll feel more prepared when everyone gets together. Defining the goal can also help you stay on track, meaning you’ll be more efficient at getting things done.

Choose participants with diverse perspectives

The purpose of a meeting is to get everyone on the same page. But it’s also an effective way for you to quickly learn things that you may not have considered about the project. Have a good mix of different voices at the table to get the most out of everyone’s time.

Before inviting a person to the meeting, ask if it’s absolutely necessary they attend. This isn’t to exclude people, it’s to protect their time. If their expertise or role doesn’t match the topics being discussed, don’t invite them. They’ll value meetings much more if they’re only included in sessions that their insights would be useful for.

Create an agenda and send calendar invites

This may seem basic, but it can’t be stressed enough. Lay out the timeline for your meeting, break down how long you’ll spend on each topic – and then stick to it! Keep people on track by allotting a certain amount of time for discussion and stepping in if the talk gets unfocused.

Send out the agenda to your attendees in a calendar invite. This lets everyone know how the meeting will go, and gives you a chance to see who will be there. It also gives them the opportunity to decline to attend if they see that their presence isn’t necessary based on the agenda.

Define roles and leaders

One of the quickest ways you can lose attention is if someone doesn’t understand why they’re there. Make sure that everyone knows why they’re part of the meeting, and what their role is on the team.

Create a safe collaboration space

This looks different across businesses, but everyone has to feel comfortable enough to contribute. Start the meeting with some ground rules. This helps everyone understand how and when to jump in, and ensures that you won’t have a few attendees dominating the conversation.

Never use a meeting to publicly blame or shame. Use positive reinforcement to showcase achievements. Don’t use the opportunity to highlight shortcomings.

Additionally, make sure the room is physically comfortable. Good lighting and airflow, as well as refreshments, go a long way to put people at ease.

Finally, ask for feedback. This shows your group that the meeting is a two-way street. Your goal is collaboration and team improvement.

Only have meetings that are necessary

We’ve all seen the memes. The last thing you want to hear as your attendees leave the meeting are whispers of “could’ve been an email” as they roll their eyes. If the purpose of your meeting is to download information, save everyone the trouble – just send an email!

A meeting is an opportunity to exchange ideas and information quickly among a group. It’s about the perspectives you’re bringing together and the importance of those perspectives being shared with everyone at the same time. If something could be shared in another manner, use that. Save meetings for topics and issues that are important.

Engage equally to ensure participation

With hybrid work here to stay, many attendees will be joining virtually. It’s a tricky balance, but make sure you’re engaging with both groups.

Additionally, don’t assume that because someone is quiet they have nothing to share. They might be hesitant to speak up or not want to interrupt anyone. Before you move on from a topic, address participants individually and ask if they have any thoughts they’d like to share or questions to ask.

End with clear actions, owners, and timelines

Don’t let anybody leave questioning the point of the meeting or what they’re supposed to do next. Give everyone a sense of purpose and direction, and clear due dates for their tasks.

Final Thoughts

There’s a lot to consider when planning and running a meeting, but with a bit of preparation you can make it a worthwhile exercise that attendees truly value. It’s nice to get together face-to-face, especially if everyone feels included and like it was a good use of time. A chance for a coffee and a chat with colleagues doesn’t hurt either.

01/07/2022
Efficient business systems really pay off
Too many businesses fall over because the owner has not established efficient business systems. This typically happens because the business owner is so caught up in the day-to day running of the business that the fundamentals of good business management get forgotten. Often too it must be said that the owner simply doesn’t like bookkeeping or other administrative tasks, so these get put on the back burner.

The symptoms are familiar, and their results disastrous:
- Poor or non-existent record-keeping.
- Tax obligations are not met.
- Invoices go out late and debts remain uncollected.
- There is one cashflow crisis after another.
- Goods and services are incorrectly costed and priced.
Any of these factors can lead the business down the slippery path to failure, but all are avoidable. The whole point about putting in good systems is that they free you to spend more time working ON your business, not in it. Here are some tips on good business housekeeping.

Be business-like

To be in business and to remain in business, become a business person! In order to run a business, you must be business-like. It’s not sufficient just to be very good at what you do. Lots of people who are ‘very good at what they do’ have failed. The common cry: “I’m far too busy for that” is also no excuse. Are you ‘too busy’ to be a competent businessperson? If so, your business won’t last long. You must continue to develop your business skills.

To be a businessperson you have to make the effort to become something of an ‘all rounder’, not just a specialist player. You can offer outstanding goods or services, but if you don’t develop good business systems then you are not a fully rounded businessperson and your business will be in danger of failing.

Remember that other stakeholders in your business, such as the building material suppliers who give you credit and the bankers who extend loans and financing terms, are always assessing your business skills. If you consistently pay people late or can’t meet the terms of your debt agreements they will draw the obvious conclusions about your business skills.

How good business systems will help you

Good business systems will make your business stronger, more efficient and easier to run. They will also make your business far more attractive to future buyers because if you have developed clear operating and procedures manuals the business will be seen as an independently viable unit and less dependent on you.

Think for instance of what makes franchises so successful: it’s because they are designed so that people can buy a proven system and operate it after minimal training. They can do this because the business procedures are captured in simple, clear operating manuals.

Here are five steps to a better business:
1. Good record-keeping and bookkeeping will help you keep on-side with the Inland Revenue Department. If you’re able to meet your tax obligations through sensible planning you’ll sleep better at night. You won’t fear a tax audit and you’ll know how your business is doing. You won’t be caught by a ‘sudden tax demand out of the blue’ because no such thing exists for a well-run business. You should always know which taxes are due, and when. You’ll suffer less stress.
1. Good business planning will help you set goals for your business, with specific steps on how to achieve these goals. Without goals, where do you think you’re going? Running a business without goals is like turning up at an airport and saying, “I’d really like to go somewhere.” The person at the ticket desk would think you’re clueless, to say the least!
1. Good cashflow forecasting will enable you to anticipate a possible cashflow problem (something all growing businesses experience from time to time) and take steps before the problem becomes a crisis. Banks will respect you if you anticipate problems and make plans in advance. Banks will not respect you—and will indeed categorise you as incompetent—if you tell them you’ve been ‘caught out’ by a crisis. Banks don’t like crises. They like you to go to them well in advance of any possible crisis with a plan in hand. This shows them you’re in charge of your business.
1. Good creditor and debtor control will improve your cash flow. Invoicing promptly and collecting debts on time gives you the cash to pay suppliers on time and get more favourable credit terms from them. It is a virtuous circle. Sloppiness in this department is one of the most common (and unnecessary) causes of business owners experiencing stress and anxiety. So pay your creditors on time and don’t let your debtors use you as a free banking service.
1. Realistic pricing and costing will ensure that you run your business in a competitive but profitable way. Poor skills in this regard could mean that you’re operating at unrealistic levels—even at a loss. For example, if you let costs get out of hand (such as overhead costs) your profits will erode. There is no point in increasing sales if you’re not increasing your profits.
In business you don’t have to be an expert at everything. For example, you might hate bookkeeping. Fine—but do get someone else to do it for you, don’t rely on a shoebox for your accounts! And you should at least understand the processes and the overall accounting picture even if you don’t want to do the ‘drudge work’ yourself.

Having poor systems is the road to stress and burnout. On the other hand good business systems will enable you to work smarter, not harder. They free you to work on your business rather than in it. That way, you’re more likely to avoid burnout and you’ll be able to take time off work because you can train others to follow your clearly documented systems and procedures. Systems are the way to build a better business and liberate yourself from it.

To help you with this, Our small firm S & H Accounting offers business services as well. We offer from starting up businesses, to bookkeeping, to all tax services related to business, etc. Our accountants are very well-qualified, vastly experienced and extremely professional. We aim to always meet all of our customers need, as we aim to provide the highest level of service possible, as we always satisfy the needs of our client, so that they reach the desired outcome. Book an appointment today, call us at 03 8759 5532 or you can email us at info@sahtax.com.au
01/07/2022
Business Update – 29 June 2022

Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

Lack of Chinese investment worrying

A new report shows that Chinese investment in the Australian economy fell a staggering 69 per cent in the last financial year, reaching 2007 levels. The shift signals a change in the international financial landscape.

ATO cracks down on family trust fraud, worrying tax advisors

Tax professionals worry that the ATO could now scrutinise past family trust behaviours, resulting in scenarios where people must repay enormous sums.

The pay rise ‘anchor’ explained

With inflation set to hit 7% by year’s end, critics say that the Reserve Bank of Australia’s 3.5% figure on what most people should get for a pay rise won’t cut it. The Guardian has created an explainer on how it will keep the economy moving.

Used car prices reach never-before-seen heights

New statistics from financial intelligence group Moody Analytics show that used cars are costing a staggering 65 per cent more than pre-Covid levels.

Sydney and Melbourne property prices set to fall

Analysts predict that Sydney and Melbourne are at the beginning of a housing market downturn that will go on for at least another 12 months.

RBA warns of future interest rate hikes

Reserve Bank governor Philip Lowe says interest rates are still very modest for an economy with low unemployment and high inflation, and that further rises should be expected by year’s end.

What expenses can be claimed if you work from home?

Though pandemic lockdowns have eased, the way people work has shifted. Brush up on what the ATO says you can claim on your tax return here. Ask us if you have any questions.

Government excludes crypto from foreign currency tax arrangements

The Australian Government has confirmed crypto currencies will continue to be excluded from foreign currency tax arrangements. The decision comes after El Salvador moved to allow Bitcoin as legal tender.

Russia defaults on foreign debt for first time since 1918

Strict international sanctions have made it impossible for Russia to pay its billions in debt back to international investors through American banks.

Lettuce seed sales skyrocket

Frustrated Aussies have started taking matters into their own hands as the cost of fresh produce reaches new heights. With supply chain issues sending prices through the roof, some consumers have reported prices of $12 for a single head of lettuce.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.

29/06/2022
5 signs you have cash flow issues

Whether it’s for personal use or for your business, cash flow is important. The movement of money in and out keeps everything running smoothly, and you have to know where you stand. But what if it seems that your cash flow isn’t really, well, flowing? If it seems that you’ve tightened your belt in every area and still coming up short, you might have cash flow issues.

Here are some telltale signs that your cash flow is actually at a standstill.

1.You’re using your credit card every month

Lots of people use their credit card for all purchases these days, and that’s okay – as long as you’re also paying it off. There are definite advantages to using your card, like points or rewards, but these perks are irrelevant if you’re spending money that you don’t actually have. If you can’t pay what you’re spending on your card with cash every month, it’s time to reevaluate how you’re using that card. Think of the real dollars you’re spending every time you tap at the till, and if you don’t have real money to pay off your purchase, reconsider it.

2.You can’t cover your bills

This is a major red flag, and a sign that your budget doesn’t add up. All of your bills need to be accounted for every month, and that includes setting money aside for large future expenses, like taxes. Bills should really be accounted for first, right up there with money for food and shelter. If you find that it’s a challenge to pay all of your bills, it’s likely that you don’t have enough cash coming in; or you’re spending it on things that shouldn’t be as high on the priority list.

3.You’re running out of money at the beginning of the month

If all of your payments come out and you find that you’re already tapped at the start of the month, you’re likely not bringing in enough money. When we add up our living expenses and plan for all of our payments to come out, it’s important to have some wiggle room to carry you through to the next month. Unexpected expenses can pop up, and nothing is as stressful as finding out you don’t have enough money. Make sure you’re earning enough to carry you through the entire month, and not just the typically bill-heavy first week.

4.There are no other costs to cut

So you’ve gone through your subscriptions, pared down your grocery bill, cut back on your nights out, and you’re still not bridging the gap. If you’re planning for your business, maybe you’re just barely scraping by with no profits, or you aren’t left with enough money to pay yourself. When every penny you make is going toward only the necessities, you definitely have cash flow issues. If you’ve cut back in every imaginable area and are still struggling, you need to find a way to bring in more money. It’s as simple as that.

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5.You don’t have an emergency fund or cash chest for difficult times

This sign goes largely ignored by many people these days, with the cost of living being so high. It’s very difficult to save any money under these circumstances, and the reality is that most people just don’t. But don’t ignore this telltale sign that your cash flow isn’t healthy. It’s crucial to have something saved for a rainy day, and putting some money in your savings each month must be done, just like any other bill. Otherwise, you’re likely to lean on credit when these surprise expenses inevitably occur.

Final thoughts

It’s easy to ignore cash flow issues when we have the safety net of credit and if we’re managing to scrape by. But, managing your cash flow is a critical practice that alleviates stress and prepares you for the future. Pay it the attention it deserves and reap the rewards down the road.

25/06/2022
Should you lease or buy equipment?
Many small business people wonder whether it’s better for them to buy or lease capital equipment for their businesses. Your options regarding leasing or buying depend upon the nature of your particular business, but there are nevertheless a few guidelines you can follow to help you decide what you should do.

If you have the money available, and the item is really necessary to your business, then it will usually benefit you to buy the item outright. If there is no way you can find the finance (i.e., you have no money) then you will have to finance the purchase out of cashflow, which means leasing it.

A caution

A special note here: Don’t buy an item at the risk of not being able to meet your bills in the next month. Only use surplus cash—and then only if it really is ‘surplus’, not just temporarily in the bank account. You should work all this out in terms of your cashflow forecast and your forthcoming liabilities.

If the options are not so clear cut, then you have some thinking to do. Ask these questions:
- How often will you use the item?
If the item is only going to be used every now and then, there is no real point in buying one. It will lie around for most of the year unused and is therefore a waste of your resources. So lease or hire the equipment when you require it.
- What else could you do with the money?
Could you earn a better rate of return on the capital required for the item if you invested it in your business? Your business might be at the stage where a few thousand ploughed back in as working capital will give you a far better rate of return than tying up the money in equipment. For example, would the money be better spent on marketing? In this case, it might pay you to lease.

The effect on net profit

The bottom line is always: how will your decision to buy or lease affect net profit?

Let’s take a simple example, and calculate the net profit results for both options. Suppose you decide the business needs a machine worth $2,000 (we’ll ignore GST). You can either buy the machine outright or lease it (rent).
- Option One
If you rent, the machine will cost you around $100 per month, or $1,200 for the year. This can be added to your business expenses.
- Option Two
If you buy the machine, the total cost of $2,000 cannot be deducted from the net profit, as it will now be regarded as an asset. Suppose you can depreciate the machine at 33% a year. This means you can claim $660 as an expense for the year ($2,000 x 33%).

Comparative costs
- Option One
You’ve spent $1,200 in cash, and can claim this $1,200 as a business expense. By having $1,200 as expenses, you’ll pay less tax (as opposed to not having the machine at all) of $288 (assuming a tax rate of 24%). So you could say that you’ve spent $1,200 and ‘saved’ $288, giving a net cash out for the business of $912 for that tax year.
- Option Two
You spend $2,000 in cash, and claim $660 as a depreciation expense, which gives you a tax ‘saving’ of $158 (24% of $660). So your net cash out is $1,842. Therefore, in the first year, it would have been better for the business, as far as cashflow is concerned, to have rented the machine. But what about year two? In Option One you’d still have to pay $1,200 in rent for that second year, and the net cash out is still $912.

But in Option Two, you have no further cash to pay, and can still claim depreciation of $442 (33% of the asset’s now depreciated book value of $1340), which gives you a ‘saving’ of $106.

This comparison shows, therefore, that whilst you might have gained a slightly better cashflow situation in year one, the lease option becomes far less attractive in subsequent years.

So as a rule of thumb, if you lease equipment you will make a cash saving in the first year or two, and this is a viable alternative if you do not have the cash (especially for equipment that may cost thousands of dollars, or items you do not use regularly). However, long term, it’s much better to buy equipment outright, provided you can safely ride out the initial heavy cash commitment.

High-tech equipment

One additional factor is worth considering, though. When it comes to equipment that is strongly technology based (such as computers or even photocopiers) then people often choose to lease, with terms in their lease that allow them to update to new technology as it becomes available.

In this way you avoid being stuck with outdated equipment that has little resale value or no longer serves your needs. This is often very much a judgement call that you can only make after speaking to the salesperson concerned.
24/06/2022
How to choose the best investments for you

The world of investing is daunting for many people. There’s so much to learn and a lot of terminology that isn’t part of the everyday lexicon. Dividends, EPS, historical returns… and what exactly is an NFT?

But once you’ve mastered the basics and the language of investing, there’s another question at play: how do you choose the right investments for you?

Of course, the goal of investing is to grow your money. That’s the most important thing. But there are some other things to consider. Read on to discover 6 tips to help you choose the right investments for you.

1. Determine your level of risk

All investments come with a degree of risk. Some long-term financial goals call for taking a bit more risk than you usually would, with the hope that you’ll eventually make a large gain. Stocks and bonds would fall into this category. If you’re not comfortable with risk, perhaps cash equivalents would be more your speed. No matter what your investing goals are, you must ask yourself just how much you’re comfortable with losing, and choose accordingly.

2. Know your timeline

By the same token, you must consider your timeline. While it’s possible to make a great deal of money in a short amount of time, it’s far from likely. Investments are better able to weather the ups and downs of the market over time, and it’s important to consider the time your investment will need to appreciate to make true gains.

3. Consider your values

Sure, there’s lots of money to be made in oil (as well as plenty to be lost) but if you’re a passionate environmentalist, chances are you’re not going to feel good about investing in fossil fuels. Keep it simple and choose investments that will help you sleep well at night. Whatever it is that you care about, don’t go ahead and invest in something that goes against those values. The emotional strife it causes, even if you make large gains, isn’t worth it.

4. Diversify

A blended approach truly does work best. This is true not just to make gains, it also helps you manage risk. Having your assets divided into a mix of investments allows you to weather any storm, especially if your investments are long-term. A loss in one area is easily countered by a gain in another when you have successfully diversified your portfolio.

5. Do your research

So you heard your cousin’s colleague’s brother-in-law made a fortune by investing in crypto, and there’s rumblings that now is a great time to get in. Everyone loves an easy payday, but before you go running to buy 10,000 of the latest meme-inspired digital coin, make sure you understand exactly what you’re buying. And if you decide to go for something that’s a little out there, make sure you’re comfortable losing your entire investment.

6. Get some guidance

Investing is a smart move, and there are many benefits to be had. However, if you’re feeling like it’s just way over your head get help from a professional. There are plenty of options these days for those who would like a bit of assistance in setting up their investment portfolio.

Final thoughts

There is plenty to consider when investing. Start by evaluating your own needs, wants, and interests, and use those to set up your goals. And don’t forget to get help if it seems like too much.

24/06/2022
Business Update – 22 June 2022

Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

What an American recession means for Australia

What exactly does it mean for Australia if the United States is headed for a recession? Sky News breaks it down here.

ASX continues to drop

Most of Australia’s biggest companies continued to see major slides in the stock market last week, with a 2.5 per cent value drop overall.

Number of people involved in fake GST claim scam continues to balloon

A dozen arrest warrants have been issued for a viral tax scam that has allowed Australians to swindle over $1 billion in fake GST refunds. The ATO has put 70,000 people on notice for the scam, which spread via Facebook and TikTok.

We’ve all lost $3500 on average

As interest rates rise, Australians have lost a significant amount of money in reduced super and property values and, to a lesser extent, crypto.

July 1 legal changes for businesses you need to know

A roundup of the changes coming for the new financial year can be found here.

Homes standing vacant amid severe housing shortage

Over 87,000 properties in Queensland are likely empty, new figures from the Australian Bureau of Statistics show. The shocking number comes amid the worst housing crisis ever, with shelters packed and many renters forced out of their homes.

Ministers to meet this week to address power crisis

Federal and state energy ministers will consider financial support for small businesses facing massive gas price spikes. The power crisis has hit small and medium businesses especially hard.

Government promises more help coming after minimum wage increase

Prime Minister Anthony Albanese is promising the 5.2 per cent minimum wage increase is “just the beginning.” The Fair Work Commission handed down the inflation-beating increase earlier this week.

Shared equity scheme means more people will be able to buy a home

A new NSW government scheme makes homeownership more attainable for some. Single parents and older singles, as well as frontline workers like teachers, nurses and police, will be able to buy their home with just a two per cent deposit.

Some people angered over light show amid electricity crisis

The Vivid Sydney light show has been allowed to continue as-scheduled, even after politicians and regulators urged Sydney residents to conserve their electricity and switch off appliances or risk blackouts.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.

22/06/2022
5 steps to test your business idea
When you’re in business for long enough, you’ll likely come up with new ideas you want to try. Innovation is important for your company to grow, diversify its income, and attract new customers. An important step between having an idea and jumping into it is testing the idea.

Here are some important ways to test your idea, so you can launch it with confidence.

1. Talk to people

One of the best ways to test your idea is to share it with people, internal and external to your company.

You’ll need to talk to people internally to find out if your company and team have the necessary skills, capacity, and equipment to carry out your vision. Your people may also have additional insight or ideas for things that could work, and suggestions for avoiding possible pitfalls.

Talk to your customers or clients as well, to get their feedback. Ask some important questions:
- Is your new product or service something they could or would use?
- Is it something they would pay for?
- Does it solve a pain point for them?
2. Set your budget

Have a budget to develop your new product or service and make sure part of that budget is set aside for testing. You may have to set aside a few weeks for testing, but it’s worth it in the long run before you dive into an unproven idea. Showing yourself your idea is profitable gives you increased confidence moving forward.

3. Determine what resources you need

If you’re trying something new, chances are you’ll have to expand your resources in some way. If you’re building a new product, you may need to purchase new equipment or materials. If you’re adding a new service or location, you may have to hire new staff with additional qualifications.

Conduct a needs assessment to determine what resources you’ll need to be successful in the venture. Then conduct a gap analysis to determine which resources are already accessible to you and which you’ll need to source.

4. Build a prototype or test service

Choose 50 potential target clients to test your product or service and ask them to be really critical of it. You want all their thoughts on your idea, not just positive ones. The people testing it should feel free to express any issues they noticed, so you can build the best possible solution for them.

5. Embrace failure

Being comfortable with failure allows you to take risks and try new things. Embrace the idea that your new product or service won’t be perfect immediately, but with some constructive feedback and testing, you can tweak it so that it works.

Rather than focusing on the possibility of failure, focus on the idea of experimenting to make things work better. As a result, you’ll be more open to new ideas and pursue innovation.

Final thoughts

Successful businesses are built on innovative ideas, and it’s important to embrace great ideas. That said, with careful planning and testing you can increase your chances of success in the long run. If you have an idea for your business, these five tips will help you refine it so you can move forward.

If you’re wondering about the financial feasibility of your business idea, speak to us about your circumstances. We can help you take control of your business’s finances.
18/06/2022
6 Benefits of long-term investing

When it comes to an investment strategy, there are an almost endless number of paths you can take. Depending on your overall priorities, needs, and values you can follow an established formula or set your own path.

One path that has numerous benefits is long-term investing. In long-term investing you put your money in an investment with the goal of leaving it there for a long time. You’re not buying and selling your stocks quickly based on the whim of the market or trying to take advantage of opportunities. Instead, your money sits in the investment and grows over a long period.

Here are 6 benefits of long-term investing.

1. It’s less emotional

It’s easy to get worked up about every high and low in the stock market and worry that you should be moving your money around to take advantage of each trend. When you invest long-term, you don’t have to think about those things. You don’t worry if stock prices drop a small amount in the short term because you’re focused on the future. With a long-term investment, you’re more concerned with the viability of a company’s business model or its overall growth strategy, rather than whether a bump in an overseas market causes a one-day drop in value.

2. Your portfolio will almost certainly gain value

Over the long term, portfolios tend to grow in value. If you buy and sell based on dips in the market, you could bet right that the stock will or won’t increase in value again, but you could also be wrong. If you stick with your stocks that tend to increase in value and hold onto them even over small drops, chances are they’ll readjust and continue to increase in value.

3. Lower tax liability

Short-term traders, who have their investments for 365 days or fewer, pay higher taxes. Long-term capital gains taxes tend to be lower. If you invest long-term, you’ll likely be paying less in taxes than active traders. That’s more money in your pocket, or at least in your account.

4. You’ll pay less in commissions

Active trading can quickly allow commission fees to add up, especially if you’re a day trader. As a result, you could pay thousands of dollars in commissions each year. If you invest long-term, you may pay a small commission fee a few times a year, but your gains will more than likely cancel out those costs very quickly.

5. You can compound your earnings

Long-term investments enable you to compound or reinvest your profits over time, which can give you even higher returns on your investment.

6. Anyone can do it

When you invest short-term you have to take advantage of econ

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omic conditions and make–or sell–the right investments at the right time. That takes knowledge and in-depth planning.

When you invest long-term, you can invest in a few companies and carry on with your life. You don’t need to be constantly checking the stock market to figure out what you need to buy or sell on a daily basis, and you don’t have to understand a lot about the market or have extraordinary insights. All you need is patience.

Final thoughts

There are countless strategies out there that you can use to invest your money, but the one that provides you with the least stress and requires the lowest amount of expertise is long-term investing.

Talk to us to learn more about how investing can help you build your wealth.

17/06/2022
Business Update – 15 June 2022

Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

Changes to aged care payment system

Services Australia is updating the aged care payment system. Residential aged care services events won’t be able to be submitted between 14 to 22 July. Read the details here.

Food tech company NotCo expanding into Australia

The company produces plant-based milk, beef, and chicken alternative products and plans to open a plant in Australia in 2023.

BNPL schemes face new rules

The new government declared that buy now, pay later providers will be subject to major changes in rules governing the sector under traditional credit laws.

New report leads to calls for government support to bolster female economic security

A new joint report from EY and the Australian Fashion Council found that fashion employs more Australians than mining, export revenue exceeds beer and wine. It also employs the highest percentage of female workers.

Another budget coming in October

Federal Treasurer will deliver a second budget so as to put the Albanese government’s election promises in play and start the cutting back of wasteful expenditure.

ATO warns of yet another tax scam

The Australian Taxation Office has advised taxpayers to be aware of fraudulent emails which use fake 2022 tax return details to skim login information from unsuspecting victims.

World’s most expensive cities list

The annual list of the world’s most expensive cities to live in for 2022 has been released. It can be found here.

What is stagflation?

As interest rates rise and growth stagnates, the term stagflation is being thrown around. But what exactly does it mean? Find out here.

Inflation is high, but it will get higher

A leading economist warns that, although Australia’s level of inflation is still lower than the vast majority of OECD nations, change and the worst is yet to come.

Faster rail services between Sydney and Central Coast coming

The NSW government has pledged $500m for faster rail services between Sydney and Central Coast. The project is a partnership between the state and federal governments.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.

15/06/2022
How to manage payroll effectively

Payroll is one of those things that starts out simply enough. You start your business, hire a few employees, and things tick along pretty well. It’s straightforward enough to keep everything in line at first, but what happens to most companies is… they grow!

This is a great thing, but it also means that payroll becomes more complicated. As such an important aspect of your business, it’s important that payroll runs smoothly. Getting paid is, after all, the primary reason that most people come to work.

Here are some tips to manage payroll effectively:

1. Simplify

Payroll is one of those things that can be overly complex, and the importance of simplifying it can’t be overstated. Many companies, especially small and medium-sized ones, have their own quirks about how they manage their payroll. This can make it difficult for somebody else to step in, or for someone new to be trained.

Keep things as simple as possible wherever you can. One way to do this is by switching to direct deposit. This will drastically reduce the amount of work put into issuing and tracking payments.

2. Schedule

At least once per year, and preferably more, it’s important that your payroll professional take some time to create a payroll calendar. This will allow them to highlight any dates that may cause a lag in your employees getting paid.

It will also allow you to plan for any potential shortcomings or other issues that may arise from holiday closures or oddities in the calendar. Making a payroll mistake is a surefire way to lower employee morale, so it’s important to be aware of these dates ahead of time.

Once compiled, distribute the calendar to your managers so that they can communicate the information to their employees. This will keep everyone apprised of any potential delays in getting paid that may come up.

3. Automate

The computer can be your best friend. Finding the right software to help with payroll can automatically take care of simplifying and scheduling, freeing up valuable time for your payroll specialist.

It also eliminates the potential for human error in payroll processing and creates a crystal clear picture of your finances. There are many options available these days that are easy to learn and straightforward to maintain.

4. Brush up

Payroll rules and regulations can change frequently and for any number of reasons. It’s important to stay informed on any changes in your region and proactively plan for them.

A lot of time can go into correcting a payroll error, so know what’s happening ahead of time to avoid this. With more and more employees being hired remotely, it’s also important to be aware of any regulations that may pertain to those that are geographically located in a different area from your business.

5. Get help

There comes a point for all growing businesses where they have to outsource their payroll processing. If this is you, congratulations! It is truly a milestone.

There are many options out there as far as hiring a payroll specialist is concerned, and many of them are available online. Choose the one best suited for you without leaving your desk. This takes the pressure off of you to know all of the nitty-gritty details about payroll processing. By hiring an outside professional, you can be sure that your employees will be paid correctly and on time.

Final thoughts

Payroll is most effectively managed when it’s simple, straightforward, and coordinated. When it starts getting tough to keep it that way, it’s likely a sign that your company has grown and you’re ready for more robust support.

15/06/2022
How to finance your child’s education
As a parent, you may worry about how to ensure your child can receive a post-secondary education. Costs are constantly rising, and you may face high tuition fees as well as the cost of living expenses if your child has to live away from home.

Here are some steps you can take to save for your child’s education.

Be clear about what you can and cannot afford to pay

Being clear about what you can afford to pay for your child’s education is critical. First, think about what kind of lifestyle you want for yourself when you retire. How much will you need to save for your retirement? The type of lifestyle you want will impact how much money will be available, so it’s important to be realistic.

If you feel it’s reasonable that you’ll cover a few years of tuition, but not the full cost, or you can help out with tuition and on-campus residence, be honest about that and let your child know they’ll be responsible for some costs, too.

Get your kids started on a bank account

Getting your children into the habit of saving early can help them out in the future. Open a savings account for them and put some money in as a gift or just to help them get started. They will see that they need to save money if they want to buy something big like a new computer or an electric guitar. If you talk about saving for things with your kids, it can also make them more responsible with their own money when they have it later on in life.

Use the bank account to track how close they are to paying for their education and celebrate when they achieve milestones, such as saving enough money for a course.

Look into grants, scholarships, and bursaries

There are many opportunities out there for your child to earn money that doesn’t have to be paid back. Governments, schools, private companies, and individuals often offer to fund students planning on attending post-secondary schooling. These can be awarded based on high grades, volunteer work, area of study, hobbies, or need.

Look into all the options available to your child and encourage them to apply for any financial help they’re eligible for.

Choose a school wisely and limit borrowing

You’ll want to choose a school wisely and limit borrowing. Before you investigate loans, think carefully about the school your child is considering. Encourage your child to research schools and ask questions like:
- What’s the cost of attendance?
- What scholarships are available?
- Are there similar education programs nearby or will they have to move away?
- Can they do a couple of years at a less expensive school closer to home and then transfer schools?
- How much debt do students typically graduate with?
- Will they be able to repay their loans given their projected income based on what fields they tend to pursue?
- Are their alumni succeed in their chosen field(s)?
These are just some of the variables to consider when deciding on a school.

Final thoughts

While you may want to pay for everything your child will do in their post-secondary education, remember that every little bit helps. So even if you can’t afford to pay for their full tuition, being able to help out with part of the tuition will help set them up for success. It may also be more meaningful for them if they are required to contribute financially to their education. What’s important is that you factor in the cost of future education into your overall budget, and remember that you also have your retirement and other expenses to cover as well.

If you’re looking for information about setting up a sustainable savings plan for your child’s education, contact us to learn more about how we can help you.
09/06/2022
Business Update – 8 June 2022

Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

ATO reminds Australians about changes this tax season

The Australian Tax Office anticipates that many will continue to be impacted by COVID-19, and is offering support to get your taxes right the first time. A summary can be found here.

Cash rate expected to rise this week

The official rate is expected to reach 0.6% or 0.75% – another rise in variable interest rates for homeowners and businesses

Labor calls for wage increase

The submission was made to the Fair Work Commission on Friday, with an aim to assist minimum wage workers, who the party views as “heroes of the pandemic.”

Biden brushes off Musk’s comments

The American President touted the country’s strong jobs report, and wished the Tesla CEO “lots of luck on his trip to the moon,” when questioned about Musk’s recent comments about having a “super bad feeling” about the economy.

Iceberg lettuce $12 a head in Queensland

Floods, the pandemic and fertiliser shortages put increasing pressure on suppliers, with no immediate relief in sight.

Crypto is complicated at tax time

Cryptocurrency owners have been warned to start working out what they owe in anticipation of the upcoming tax season. Lessons come from the US, where their recent tax season saw some people owing more than what they earned after the recent crypto crash.

Food producers warn gas prices will be passed to consumer

Jason Fritsch, the chief executive of Kagome, stated that with gas prices out of control and raw materials prices on the rise, it’s only a matter of time before consumers see even higher prices at the grocery store.

Australians are staying home with more colds and flu this season

As winter approaches, workplace absences due to colds and flu were up 50% for the first two weeks of May. The drastic increase is due to a “perfect storm” of circulating winter illnesses and a lack of immunity due to the population not being exposed to the flu in recent years.

Job vacancies grow nearly 25% in regional Australia

The latest data from the Regional Australia Institute shows that there were 84,600 regional job vacancies in April 2022. The numbers reveal the optimism that is driving growth outside capital cities, though a lack of services and housing constrain opportunities.

ATO issues reminder to small business owners about changes to superannuation

Starting July 1, there are changes to who is eligible for superannuation, as well as how much super businesses will need to pay staff.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.

08/06/2022
7 tips for combatting employee burnout

The working environment of the past 2 years has brought the concept of burnout to the forefront. Unexpected work-from-home situations, juggling the new normal, and mental fatigue have all contributed to the issue. Recognizing employee burnout and having a plan to address it will ensure you retain employees and keep your company healthy.

1. Ensure everyone takes their time off

In an attempt to appear as though they can handle it all, many people try to do too much. They neglect to take time off because they believe it will make them appear reliable and committed. The problem is, that everyone needs time to recharge. Not taking it can actually affect productivity negatively. Set a reminder to check twice yearly to make sure that everyone has taken the time off that they’re entitled to. If they haven’t, give them a gentle reminder to do so.

2. Be generous with your policies

All workplaces have rules. Be on time, work a certain amount of hours, be reasonable with breaks. These rules keep things running smoothly, and they’re important. But don’t get uptight if someone is a few minutes late once in a while, or expresses an interest in working from home from time to time. Allowances like these often make little difference to the company as a whole, but they can make a colossal difference to an employee who just needs a little bit of grace now and then.

3. Offer extended benefits

Extended benefits plans for your employees are such great incentives to draw people to your company. They allow your employees to rest and recuperate in ways that they may not otherwise. Anything that can be done to contribute to the overall health of your people is a terrific bonus, and one all employers should provide.

4. Encourage work-life balance

The Internet has made it so that we are always available, which is very convenient. It’s also terribly demanding. Since many of us are now working from home at least sometimes, it’s increasingly difficult to leave work at work. Make sure your employees are crystal clear about taking time away from their job. Ignoring this divide and having your employees feel like they have to be “on” 24/7 is a very efficient way to ensure they reach burnout quickly.

5. Make use of performance metrics

Every role in your organization should have a clear set of expectations, and they should be defined so that it’s clear how your employees can meet or exceed them. Not knowing how they’re doing, or being unpleasantly surprised at a performance review, is a fast track to burnout. Make the job easier by outlining expectations and rewarding those who exceed them, and watch morale rise.

6. Allow side tasks

Yes, we were all hired to do a specific job, but there are different things that make each employee tick. Allowing side tasks that your employees find enjoyable and rewarding allows them to mix it up a bit and show off their passions and talents. It’s a great way for people to flex muscles they wouldn’t otherwise, and workers tend to bring extra drive and creativity to activities that interest them. It brings more joy to work, which adds to the overall health of the company.

7. Remember we’re all human

Nobody likes to feel like a cog in the machine. There are, of course, expectations to meet in every job. However, employers would do well to remember that every single person working for them has an entire life outside of the company. Anything could be going on behind closed doors. A company that understands, supports and shows compassion to its employees is more likely to keep the good ones from burning out.

Final thoughts

Happy, well-rested employees are more productive and loyal. It’s in your best interests to do what you can to combat employee burnout.

07/06/2022
How to keep your finances on track

When it comes to your finances, it’s a good idea to check in on your progress periodically, to see if any adjustments to your budget or changes in your habits are necessary. Even if you’ve set your budget for the year, you may learn a new strategy or have a priority come up suddenly that causes you to shift your thinking.

Here are ways to take stock of your finances, and ensure they’re still on track.

1. Review your budget quarterly

Now that you’re a few months into the year, take the time to review whether you’ve kept your budget on track for the year. What’s worked well and what hasn’t? Are there adjustments you need to make? Are you spending more than you intended? Have you had any unexpected expenses that require a shift in your strategy?

Double-check your goals to see how you’re progressing toward them. Do you have as much money in your emergency savings as you want? Is enough money going towards your retirement savings accounts as needed?

2. Identify and remove any unnecessary expenses

With so many options for subscription services, chances are you’re paying for things you no longer use. Look at your bank and credit card statements to identify regular charges for items that aren’t necessary. Maybe you signed up for a streaming service you never watch, or a digital publication you don’t read.

Be honest with yourself about these subscriptions. If you’ve had a gym membership for years and only go once or twice a month, it probably isn’t worth a monthly fee. If you make regular use of it, however, then it might be more worthwhile.

Keep only recurring expenses you actually use, no matter how little they cost. While individually they may seem like small amounts, those regular expenses add up over time.

3. Set up a separate account for extra spending

If you have one account that your regular expenses and your extra expenses come out of, it can be easy to lose track of how much money is in that account. Keep separate accounts, one for your regular expenses and one for those that are discretionary.

If you like, you can have more bank accounts to further keep track of your expenses, but at the very least have two separate accounts for your spending.

4. Use reminders to keep track of due dates

Technology has made it much easier to keep track of looming payment deadlines. Make a list of your bills and their payment dates. Set up a way to keep track of and alert you to upcoming deadlines. This can be a calendar notification, a smartphone app, an agenda, or even a wall calendar. Take a look at the app every so often so you can see how your payments are spaced out, and determine if you need to shift any payment due dates.

5. Clean up your paperwork

You don’t need to hold onto all your receipts for decades. Some you can get rid of right away, while those that are claimed on your taxes have to be held onto for a certain time period. Once that period has passed, shred them and get rid of them. Where possible, sign up for online billing and receipts, so you don’t have to worry about paper cluttering up your office.

Final thoughts

It’s a great idea to spring clean your finances, to ensure you’re on track for your budget and aren’t unnecessarily spending money. If you have questions about your finances, we have answers. Reach out today to find out more about how we can help you.

06/06/2022
Is technology making you less efficient?

“For a list of all the ways technology has failed to improve the quality of life, please press three.”

Alice Kahn

If you feel overwhelmed by the sheer volume of technological gadgets out there, never mind apps and other digital “solutions”, you’re not alone. Technology sprawl and the rabbit hole of more and more information, available all the time, is making productivity—and healthy downtime—a real challenge for many of us.

Although we may be quicker at completing redundant tasks, more time is wasted managing all our different apps and technologies—and more of us live in a near constant state of distraction.

An epidemic of distracted workers

Maintaining focus on the job is increasingly difficult in the era of social media, chat apps, games, and the ability to search anything at any time—whether related to the task at hand or not.

Recent research shows that on average office workers switch between tasks roughly every three minutes. Half of those “task switches” were not because the phone rang or someone stopped by with a question—they were self-interruptions.

The same study showed that when an interruption is related to the primary task, it isn’t a problem for the worker to maintain focus when the interruption ends. But when people have to “shift their cognitive resources” to a new task, it takes longer to remember where they were, refocus, and regain momentum.

Online multitasking

Another source of distraction that costs workers time and energy is task switching on their computers. A University of California, Irvine study found that people who work at their computers switch between applications about 400 times per day.

If your team isn’t working across the same devices, platforms, and apps, imagine the increased inefficiency as workers waste more time dealing with incompatibility issues. For anyone moving between a number of decentralized apps during the work day the cost is mental exhaustion—which can lead to increased lack of focus and even less productivity.

Tools and tips for increasing efficiency

The fact is, no matter how much we’d like to improve our productivity, multitasking is a myth; most humans can only perform one task well at a time.

If you must use a computer at work, to help minimize the temptation to check Facebook or random search, give ShotClock, a monotasking app a try—or Freedom, an app that blocks all digital distractions so you can focus on just what’s in front of you.

Another tip is to batch email rather than reading and responding to messages continually. Sending email twice a day—once in the morning and again in the afternoon—will train people not to expect to hear from you instantly, creating more reasonable (and sane) expectations. For our own personal and collective wellbeing, no one can or should be available to work around the clock.

Perhaps most important of all, be sure to unplug and rest your mind each day. And be good to yourself by taking a health break each year. A week or two of time off, away from work email and other stress-inducing distractions, will do more to increase your productivity than any app.

03/06/2022
Business Update – 1 June 2022

Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.

ASX carries momentum into a new week

The local sharemarket started the week at a three-week high, coming off a rally from last week. Tech and payment firms were among the industries leading the charge.

Bubs jumps 80% as deal struck to aid US

Baby formula manufacturer Bubs Australia soared in value after an agreement was reached on the weekend to send 1.25 million tins of baby formula to the United States. A bacterial infection forced the country to close a major formula manufacturing plant, leading to widespread shortages.

AGL demerger fails, top brass resigning

AGL Energy, Australia’s biggest polluter, has abandoned its plans to split the company’s assets, which would have allowed them to continue burning coal for 20+ years. Mounting opposition from shareholders forced the decision.

Analysts disagree over how rising interest rates will affect inflation

Up until the pandemic, short-range predictions among analysts typically did not diverge very much. However, there is now a broad range of guesses as to what measures are needed to bring inflation under control as interest rates continue to rise.

Power bills set to surge 18%

Anthony Albanese is set to face his first major hurdle as Prime Minister as petrol prices are about to soar. Meat, fruit, and vegetable prices could all follow suit in the coming months.

NAB enters buy now, pay later space

National Bank of Australia announced that it is launching a new buy now pay later service, in an attempt to take a bite out of competitors such as Afterpay and Zip Co. Unlike those services, NAB is advertising no late fees, no account fees, and no interest.

Social housing at crisis point as demand far outstrips supply

A new study has found that low-income households are facing decade-long wait times for social housing, and the worst is likely still to come.

Crypto donations subject to tax regulations

The ATO has published a list of guidelines for those wishing to donate crypto assets. An overview can be found here.

Passport applications face huge delays

Australians are experiencing waits of up to 3 months to receive passports. Many people are reporting that they cannot get through to the APO to check the status of their applications.

Retailers seek seniors to address labour shortages

The Australian Retailers Association (ARA) is calling on the government to make retail work exempt from Age Pension income test, as the industry faces its biggest employee shortage in half a century due to a lower inflow of international students and working holiday makers.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.

01/06/2022
4 ways to make your business easier to sell
Perhaps you’d always planned to build a thriving business to eventually sell for a tidy sum – or maybe for unexpected personal reasons, it’s best to let your company go sooner rather than later.

No matter what the reason for selling your business, experts agree: it’s best to be prepared well in advance as it can take years to complete a successful sale.

These four tips will help you get a head start on making your business attractive to buyers for the day you’re ready to sell.
1. Get a business valuation
Even if a business sale isn’t imminent for the next five years, it isn’t too early to meet with an appraiser. A valuation will give you a realistic picture of what your business is worth right now, and invaluable information on what you can do to improve its value.

When you’re ready to sell, having already had an appraisal can be a real plus for potential buyers. Sharing the details of your valuation shows transparency, creating trust and building credibility—while saving a buyer the expense of getting one done themselves.

Remember that timing is often everything with a business sale. Once you know what your business is worth, you can decide whether it’s best to move forward—or wait for a growth phase or improved economic conditions.
1. Make a succession plan
Every business, large or small, needs a succession plan. And when you’re ready to sell, having an exit strategy in place will put a buyer’s mind at ease because you’ll have already ironed out a smooth transition for you and the new owner.

A succession plan should include both the human resources aspect (e.g. a training plan for the new owner and any employees that stay on when ownership is transferred), as well as the management of any financial, legal, or tax issues.

Once you’ve made all the hard decisions about how the business will run without you, be sure to review it once a year to make sure it’s always up to date.
1. Tidy up your financials
The biggest red flag for anyone considering a business deal has to be disorganized or incomplete financial records.

A potential buyer will want to see your yearly tax returns for the last three to five years, as well as balance sheets and your profit and loss statements. You may also be asked to share accurate sales and marketing data, the value of your assets, and any outstanding liabilities – as well as your plans to resolve them.
1. Hire a business broker
Hiring a business broker with a proven track record can really simplify the sales process—especially if you’re too busy to look for an interested buyer or need professional expertise to get your business in order to sell on your preferred timeline.

You’ll want to meet with a few brokers to make sure you find the right fit. Look for someone with experience selling businesses in your industry, a large database of interested buyers, and an impressive closing ratio.

When you interview a broker ask for testimonials and info on the strategies they’ll use to market and sell your business. Reach out to your network for referrals—as with any professional service, when it comes to business brokers an honest recommendation can help you find a winner.

Final tips

Ask your broker about the best way to structure your business sale for the best return. If you’ve built up some solid equity it may be wise to offer a buyer a gradual sale or lease. In addition to a continued income stream for you, this type of arrangement can help make the deal attractive by reducing the new owner’s financial burden.
26/05/2022