2015

Prepare an exit strategy in Perth

Prepare an exit strategy in Perth

Minimise risk by having an exit strategy in mind

Research has repeatedly shown that businesses which are prepared for the owner’s exit are significantly more likely to succeed in the future than those which have not.  These guidelines on how to prepare an exit strategy in Perth can help your business legacy live on and give you a satisfactory result.

1. Preparation delivers the best results

The key message is this:  it pays to prepare an exit strategy in Perth now – don’t wait until it’s nearly time to go.  Life is full of unexpected turns and you may not have the time to do what’s needed to get the best results.

2. The main barrier

The chief impediment to a successful exit strategy is procrastination.  It’s all too easy to convince yourself that you’re too busy at the moment, that you’ll start the process next year or whatever future date you rationalise as being reasonable.

All sorts of issues could underlie this procrastination.  One is the dislike of facing up to the future; another is a reluctance to delegate responsibility to others.  Like many business owners, you may have persuaded yourself that no one can do it as well as you.

3. Develop a succession team

There are advisors out there, such as accountants, who have helped other business owners formulate and help you prepare an exit strategy in Perth.  Find them and tap into their knowledge.  There’s no point in reinventing the wheel on your own.

4. Make the business affordable

If you intend to pass on the business to family, or perhaps to a management team, one major issue can be making your business more affordable.  You may need to make some structural changes such as separating the business into two parts:  one company owning the operating part and a second company owning the assets such as your premises or your equipment.  Retaining the asset owning part and leasing the assets to the operating part could give you a tidy retirement income, but these structural changes can take time to bed down.  So again, don’t delay, start now!

5. Decisions and training

If family or management are your desired successors, you will likely face issues around fairness to everyone while retaining the skills of key staff.  These issues will require careful thought and, again, you will benefit from the experience of your succession team.  Their impartiality can help take the heat out of potential conflicts.

The next step is to start training your successor(s) – again, a process that takes time.  One major hurdle business owners must often clear is learning to delegate.

6. Improve the business

If there’s no one suitable or interested in your family or management team, an outside buyer will be your next target.  This is when your accountant can add value by helping you prepare the business for maximum sale value.  Any recommended changes could range from better business systems with, say, an updated customer database, to tighter money management through key performance indicator monitoring.  You’ll want to show the buyer they are gaining a well run business with efficient systems that will make the transition as painless as possible.  Of course, all this is worth doing at any stage.

If your business is presently based largely around you, you’ll also want to show that it can stand on its own without you.  Making these changes can take time.  Did we mention that it pays to prepare your exit strategy now?

Make sure your business has a positive future.  Speak to us today to discuss a succession plan for your business and its future we can help you prepare an exit strategy in Perth

Business Collaboration in Perth

Minimise business risk with business collaboration in Perth

Many elements are vital to a growing company’s success.  A financially astute leader is one.  A confident and motivated sales team, well versed in the company’s product and service lines is another. But starting up and growing a business requires more than employees with good skills. It requires business collaboration in Perth to be a success… namely, the deployment of employees in a way that allows them to work together to problem solve and act with a shared sense of purpose.

When this occurs, employees combine their strengths to achieve shared objectives vital to the company’s growth.  Also, mutual learning takes place, which increases the probability that each employee’s performance will improve.  In turn, the company’s performance improves as well.

As collaboration occurs, the employees embrace individual differences to produce exceptional outcomes. This sharing creates a positive learning environment in which the employees more readily identify solutions to problems.  As a consequence, the company will become more operationally and financially successful. So working on your business collaboration in Perth will definitely help you and your business succeed.

Five reasons why collaboration is essential to a growing company:

1.      Uses the best available skills

A collaborative environment leads to the efficient use of employees’ skills by allowing multiple individuals to contribute in the completion of a task, making it more likely that the best available skills are utilised.  This will ensure that tasks are completed more efficiently, leaving more time to concentrate on activities that contribute to the company’s growth.

2.      Facilitates problem solving

Collaboration allows a company to utilise the best available skills for problem solving, which may mean a solution is identified more quickly and more cost-effectively than might otherwise be possible.  The end result is that the company functions more efficiently, resulting in improved quality of service and/or products.

In addition, diverse and complementary skills may enhance work processes as each employee becomes a part of a greater whole, which enhances the company’s culture.  It’s the change in culture that contributes to new initiatives being adopted, thus contributing to company growth.

3.      Recognises individual differences

Asking employees with very different skills to collaborate with others to accomplish a task recognises individual knowledge and skills and maximizes their combined potential.  A team succeeds or fails according to the combined capabilities and commitment of the individuals involved.

Deploying a variety of unique strengths and skills advances a team’s understanding of a problem, which can lead to faster problem solving.

4.      Builds company knowledge

A group approach brings different perspectives to a problem at hand when individuals share different points of view and skills, building the team’s knowledge base which can be utilised in various ways across the company.

5.      Creates a learning enterprise

When people work together, it’s inevitable that they will share knowledge which contributes to a culture that supports ongoing learning.  Consequently, collaboration creates a safety net that protects a company from becoming stagnant.

As an individual collaborates with others, his or her knowledge expands as does the reach of that knowledge throughout the organization.

If you are looking to maximize your business success call us today on 08 9204 3733 for an obligation free review. We can help with business collaboration in Perth

Asset Protection in SMSFs

Superannuation in general, and self-managed superannuation funds specifically, are ideal for asset protection from a trustee in bankruptcy, should this adverse financial situation arise!

A person’s entire interest in superannuation in accumulation phase is protected where that interest is held in, for example:

  • a regulated superannuation fund;
  • a retirement savings account.

It should be noted that in some instances contributions to a superannuation fund may be unwound where payments were made in breach of fiduciary duty; clawback provisions may apply if a number of conditions are satisfied, however generally a pattern of regular and sustained contributions would not fall under the clawback provisions.

If we can be of assistance please contact us on 08 9204 3733.

ATO Payments

It is generally accepted the economy is somewhat flat and liquidity is tight, hence it may be that ATO payments such as income tax liabilities and PAYG instalments are proving more difficult to meet than usual.

The ATO has been receptive when approached on behalf of clients in these circumstances and appropriate payment plans have been successfully negotiated without the need for financial statements and other documentation to substantiate the financial incapacity preventing payment in full!

It is important to note that when payment plans are put in place the ATO imposed conditions are: –

  • The payment schedule is strictly maintained according to the expected payment dates
  • All other payments are made by their due date
  • All other tax lodgements (e.g. returns, IAS/BAS) are lodged by their due date

In the event, for example, of late payment, the ATO will default the plan and may seek recovery of the full debt; if the taxpayer is not then able to pay in full, the ATO will seek details of income and assets.

It is essential that we keep the ATO informed of any difficulty which arises to avert any likely default.

If we can be of assistance with ATO payments, please contact us on 08 9204 3733.

Cost of Educating Children

The cost of educating children (such as books, uniforms, excursions and the like) is ever increasing and looking into the future there is no relief in sight, whether you opt for public or private schooling of your children.  Some parents, however, are taking a long term view and implementing plans for specific purpose saving using, for example, investment bonds (also known as “education funds”) which are increasingly popular.

The investment income of an education fund is taxed at a maximum rate of 30 cents in the $1 and, as long as the income accrues within the fund, there is no assessable income to declare for either the investor or the student.

Other options can be to use a discretionary family trust to hold investments earmarked for the cost of educating children; increased repayments of non-deductible debt, for example, the home mortgage can be another option, as could be increased contributions to a superannuation fund for use after preservation age is reached!

Whatever method is utilised, it is important to start sooner rather than later so the benefit of compounding may be obtained over an extended period.