Resonate Business Consulting

5 Tips To Get Your Business Financially Fit

Thu, 29 Sep 2016 01:45:00 GMT

With the spring weather just around the corner (well here’s to hoping…) it’s a good time to not only wipe away the cobwebs from around the house but to also have a look into your business and see how financially fit it is. For some this means going back to see if you’re on track, compared to new financial year goals and plans that you would have set prior to 30 June.

We often set resolutions that quickly fade with the stresses of business life. Here are a few tips to help you move forward, make those goals a reality and end the 2016-17 financial year on a good note!

1. Let’s Talk
Make the time to talk about money. Don’t wait for over spending, overdrafts or a financial crisis. Get clear on your needs and wants. Many small business owners think they can do it all on their own, while you may think you are saving money you can actually hinder your business if finance is not your thing. Talk to your accountant about the information you must keep and the things you need to know.

2. Manage Your Information
Get organised! The quality of your information will determine the success of your business. Look into a good cloud accounting system such as Xero and automate as much as you can. You will be able to capture, store and keep track of invoices and receipts, together with the convenience of accessing anything, anywhere at any time including financial reports you need to manage, in order to determine the health of your business.

3. Create a Budget
Establish your income streams, determine fixed costs and include expenses. You may find the earnings left over after paying basic business expenses are being foolishly spent. Is your income increasing, stagnate or decreasing? The benefit of having a good accounting system like Xero is that you can include a budget and compare to actual monthly and end of year reports. Make sure to set aside time each month to evaluate your progress, adjust and make improvements if required.

4. Pay off Debt
Prioritise the process you pay off your debts. For loans, credit cards and other types of debt, arrange the debts according to the interest rate you are paying on those debts. Plan on making additional payments even a little over the minimum monthly payment, this can make a huge difference in the long term. Then start paying down the loans and debts with the highest interest rate first.

5. Set Your Business Financial Goals
As Benjamin Franklin said “If you fail to plan, you are planning to fail”. Whether your financial goals are small or big it is worth setting them so that they are concrete and you have something to work towards. Some are afraid to set BIG financial goals for fear of failure or because you don’t think you’re capable of achieving them. Start by breaking down those bigger goals into segments so that they appear more achievable and don’t become so intimidating. Build a time frame around your financial goals and know what you need to do. Understand the mechanics behind your financial goals i.e. hours, number of projects etc. then move backward to determine timing.

Most small business owners aren’t particularly good at accounting or finance but to be successful you need to know your critical success factors and key numbers in order to make regular financial evaluation. Don’t be afraid to ask for help! We can help you manage your finances, develop budgets and put in place processes, to help eliminate debt in order to maintain good financial behaviours.

Let’s start getting your business financially fit!

The post 5 Tips To Get Your Business Financially Fit appeared first on Resonate Business Consulting .

Insights How To Build A Business Plan

Mon, 29 Aug 2016 01:40:00 GMT

Whether you’re a startup or you’ve been in the game a while, your business needs a solid plan. Having a clear path for your business will help you to achieve goals and take your business where you want it to go. You’ve got the idea, you’re passionate and you have the willpower to make it all happen. But now it’s time to map it all out.

Unknowingly you’ve probably described your business plan to family, friends and maybe even clients before. It’s a comparison of where you are now and where you want to be in about 3-5 years time. If your goal is for greater assets, profitability, resources and capabilities, then you need to figure out how to turn this vision into reality.

K.I.S.S. Is an old saying; keep it simple stupid. Begin with simple and envision your future where you need to have a 5 year plan. This works for both large and small businesses.

Consulting an Accountant can help you review how your books and accounts look and what areas you should focus on to improve your business outcomes. There are a number of things you need to answer with regards to your business’ growth and development but here are some things to consider to help you get started:
• What products or services do you offer now and what will you offer in the future?
• What market trends will impact and affect your future success?
• Who are your competitors and how will you gain a competitive edge?
• Who are you typical clients and how will you fulfil their needs?
• What are your projected revenues and profits? Do you need to invest in equipment or assets?

Now that you understand why you need a business plan and you’ve spent some time thinking about the important factors, you now need to create one. Get started! Roll up your sleeves and get everything down on paper.

So you’ve done the planning, now it’s time to take ACTION! An action plan is an important part of a business plan. With your goals written down, you now need to link these goals to actions. Give yourself a time frame to help keep you accountable, even if it’s only 1 goal per month.

Lastly make sure your business plan falls in line with your brand. Branding is effectively the face of your business and the means by which you communicate with your clients. It’s essentially how you tell your story. Once you have branding in place make sure everything across your business ties together and be consistent! Being professional and consistent is one of the best ways you can convince your potential clients that you do what you say you do.

If you need help mapping out a plan for your business, WE CAN HELP. Please contact our office via email info@resbc.com.au or phone 08 6298 7320.

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What Is An Innovation Grant?

Mon, 08 Aug 2016 01:43:00 GMT

Small businesses and inventors are being encouraged to create and implement sustainable products and services with the Australian Government’s pledge of 5 billion dollars. They are called innovation grants and are part of the ‘Caring for Our Country’ program.

Startups, inventors and small or large companies used to have to worry about finding funds or investors. This put people off from pursuing their dreams and following through on their ideas. Now through government funding anyone has the ability to develop their ideas. The amount of the grants can vary between a couple of thousand to millions of dollars.

The Australian Government is offering innovative grants for nearly every industry as long as it provides benefits for the environment, community and the technological advancements as a whole. Depending on which state you, as the applicant reside in, as well as the industry will all be key factors in determining your grant eligibility.

Over in the West the WA Government has put aside 20 million dollars for innovations in its state budget, delivered by Mike Nahan in May this year. This will help focus on jobs and growth in small business and innovation.

The package adds to the existing 30 million dollars in funding for innovation and is to be spent across 4 years. Premier Barnett said that extra funding is to help “support the researchers, innovators, and startup businesses which have the greatest potential to strengthen, broaden and build the Western Australian economy.”

StartupWA was excited to hear about the extra funding and said that “the cash will go towards helping entrepreneurs and startups diversify the WA economy and create more jobs”.

This is an exciting time focusing on leveraging WA’s skills and successes in innovation and development and helping our country take advantage of diversifying our economy for the future.

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How To Validate Your Business Idea

Tue, 07 Jun 2016 04:43:00 GMT

Do you have a business idea? Ever jotted those passing thoughts onto sticky notes or in a journal? We’ve all been there! But how do you actually start and make something of your idea….

Ideas stall because the process of getting them off the ground and running or to market can seem overwhelming. From the bar napkin on which it’s scribbled on, the process thereafter actually gets much harder.
Here are 5 steps to consider the next time you have your next big business idea:

1. Research
When you have that next big business idea, do a search for it, check the internet “ GOOGLE THAT”. Before you get too excited find out if it already exists.

If you find it does exist, don’t give up, join the race and think of how you can do it better. This provides great research into what your direct competitors have done badly at and what they have succeeded in. The best way to learn is to become a customer/client of your direct competitor and ask yourself the question in the market being satisfied.

2. Get Feedback
Talk to others about your idea, especially those close to you that you trust. But don’t stop there, reach out to your network and get feedback. Sometimes those close to you may not understand your industry and the work you’re involved in. It may be beneficial to seek feedback from other trusted professionals within your target market. Get in front of your audience, find the pain points and work with ideas to solve them.

3. Test
If your idea has merit then build a prototype and start putting it out there to see if it is something the market actually needs and wants.

Some relatively inexpensive ways to test the waters with your business idea could be things like consignment arrangements, farmers markets, trade shows/expo’s and industry meet and greets as opportunities to meet industry players, network, make contacts and get feedback on your product or service would be greatly beneficial.

4. Build your Brand
If you’re testing goes well and you think that you might survive today’s fast moving and innovating business environment then it’s time to build your identity.

Your brand strategy is how, what, where, when and to whom you plan on communicating and delivering on your brand messages. Your distribution channels are also part of your brand strategy. And what you communicate visually and verbally are part of your brand image too.

5. Develop a Customer Acquisition Plan
Before you get into developing a lengthy business plan ask yourself “how do I get my first paying customer?”. You may have the best business plan in the world, but without customers you just simply have a website.

A great idea to acquire customers is to piggyback off other Companies that already have direct relationships with established businesses in your direct target market. You can then promote yourself to their database with special offers.

You will now either start getting tons of leads in your email, get a few leads or get absolutely nothing. Be sure to contact your leads, find out as much as you can about them and their needs. Just remember it’s much easier to build a business around demand.

Once you have determined you have a viable business idea CONTACT US to make sure you have the right structure going forward.

START SMALL! But just start! Get something out there and you can build out as you go.

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How To Run Your Business From Bali With Cloud Technology

Thu, 10 Mar 2016 03:49:00 GMT

As West Australians we LOVE to travel to Bali, more than 350,000 West Australian’s travel to Bali each year! And why not… with those balmy nights, cheap food and drinks and not to mention the short 3 hour plane flight away.

Now with cloud technology making remote working easier, working from overseas destinations such as Bali is becoming increasingly popular and achievable. Working remotely is one area which is already demonstrating the benefits of cloud computing. For remote workers and owners, cloud computing makes it easier to access company resources, without being bound to a specific location making it possible for Owners, Managers and Employees to telecommute from just about anywhere and collaborate on joint projects.

But before boarding that plane and sipping on that cocktail or Bintang, a couple of things you may want to consider… Do you have a business partner or manager on the ground in Australia that you can trust? You must trust your business partner or manager implicitly. You both need to be on the same page in terms of effort and accountability. Communication is the other key. Have regular meetings via Skype to keep all parties informed of the general running of the business and attend to any urgent queries as they arise.

Now that you’ve arrived at your destination, unpacked, got the Wi-Fi password and ordered that first drink, you should check that you have a high speed internet connection and access to tools such as Office 365, Xero, Dropbox and Skype. This then allows you and your business to collaborate and communicate with access to documents and databases.

XERO
Xero accounting software allows you to work from anywhere and at any time. You can service your clients and provide them with information they need. It also provides hassle free online accounting and bookkeeping with access to your financial data in real time no matter where you are. Xero: Accounting Software & Bookkeeping

DROPBOX
Dropbox is a document storage service (sometimes referred to as an online backup service) that is frequently used for file sharing and collaboration. Users can save documents to folders, add folders and drag and drop documents among folders just as if they were on your local computer. Documents in Dropbox can be accessed from anywhere with an internet connection, you just log into your account, upload, download and share documents. Dropbox: File Storage

OFFICE 365
Office 365 is a subscription plan that includes access to Microsoft Office applications that are enabled over the internet (cloud services). Many Office 365 plans are online and include a desktop version of the latest Office applications which can be installed across multiple computers and devices. Applications include: Outlook, Word, Excel, PowerPoint, OneNote, Publisher and Access. Office 365 For Business

SKYPE
Skype is a telephony service that lets you call other Skype users anywhere in world and talk for free. In addition to standard telephone calls, Skype enables file transfers, texting, video chat and videoconferencing. The service is available for desktop computers, laptops, tablets and mobile phones. You just plug in your headset, click on the icon next to the contact and talk away. Skype: Free Calls via Internet

As cloud computing becomes more prevalent in Australia, it is likely that more workers will be balancing working remotely with being office bound.

So while you think about the few interruptions, the efficiencies and effectiveness of these amazing tools which will allow you to draw fresh inspiration while overlooking a dreamy skyline… WE CAN HELP! Resonate can connect your business with the right tools to enable you to make this dream a reality. Contact Us

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Are Interruptions Costing You?

Tue, 29 Dec 2015 05:12:00 GMT

Often, when delivering solutions around managing low priority interruptions, interruptions that could wait rather than be answered immediately, the participants will offer the following…

• I don’t mind being interrupted
• I’d rather be interrupted
• Interruptions are no problem to me
• If I don’t answer calls or emails straight away I’ll lose the opportunity/clients

What they are not saying is… I want to be free to interrupt others as and when I like to. I’m here to tell you allowing ALL interruptions to interrupt you all day long costs you in time and money. I figure, you know this. But let me show you how much it is costing you…

Let’s say you work in an office of 5 people who earn on average $40 000 a year and who work 40 hours a week.
40 hours a week = $19.23 per hour = .32c per minute

There’s a statistic that says the average person is interrupted
7 times an hour and that each interruption lasts between 2 to 5 minutes.

Let’s be really conservative and say these people are interrupted once an hour and that this interruption lasts 5 minutes.
.32c per minute x 5 minutes x 8 (because we generally paid for an 8 hour day) = $12.80
x 5 people = $64.00
x 5 days a week = $320 a week
x 48 weeks a year (because most companies in Australia give their people 4 weeks off a year) = Ready for it?…. You are going to feel sick…

$15 360 per annum!

What could you do with $15 360! Employ another person Part Time?
Go on a holiday?
Pay down your mortgage?
Invest in an amazing (or several amazing) training courses/workshops?

Now $15 360 is the basic cost… I haven’t factored in:
The 9600 minutes in time… Which translates to 20 days!
The opportunities and tasks you are not getting to when you continue to allow your time to be cannibalized!
All the extra hours that are done after hours and on weekends to try to get core business done;
All the indirect costs incurred to run a business, longer hours;
All the direct and indirect costs incurred when projects are not undertaken in the time they are expected to take;
The unexpected leave and staff attrition that happens because people are working longer hours unnecessarily, are frustrated by their results, and don’t feel they’re getting anywhere fast…
Now I hate to make the obvious, obvious BUT the above figure can only increase IF you have more people and your average income is higher… and you allow more than 1 interruption per hour!
UGLY! – I know!
And if that’s not enough… I have only talked about 1 common time stealing habit in this article!
BUT you say these interruptions need to be dealt with… and my answer to this is YES and NO.
There’s a certain law… let’s call it “Speedy’s law for managing low priority interruptions and empowering your staff” that says if you don’t answer all the interruptions the instant a person wants to interrupt you, some of these interruptions will get resolved all by themselves.
There’s another law… Let’s call this one “Speedy’s law of getting things done faster and with more accuracy” … And it goes like this… when you do the same type of work in one batch, quality of your work improves, you make better decisions, you work faster and with more accuracy.
So, if you are brave enough, do a calculation for your business and ask yourself is this price worth continuing to pay?
Or better yet… “If I was saving this time and money… working more efficiently, what could I do?”
If you like this post, click the like button and share it with your friends and colleagues.
Be sure to join our Facebook page and post your opinions and insights http://www.facebook.com/time.equals.money
It’s your time. Use it wisely and START Now!
Always thanking you for being here, reading and sharing!
Angie “Speedy” Spiteri
Time Equals Money
http://www.timeequalsmoney.net.au/

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Making Christmas Less Taxing

Tue, 08 Dec 2015 05:08:00 GMT

With the Christmas silly season fast approaching most employers will be planning an end-of-year function to celebrate the end of another calendar year. The hangover from celebrations may come back to haunt you if sufficient thought isn’t given to the potential fringe benefits tax consequences. We have given a broad outline of any potential FBT implications for you to consider.

FBT Basics
Fringe Benefits Tax (FBT) is levied on employers when benefits are provided to an employee or their associate (e.g. family members or partner). Food, drink, entertainment and gifts provided to employees or their associates may be taxable.
Expenses that are subject to FBT are deductible for income tax purposes by the employer, and conversely any expenses that are exempt for FBT are not deductible. It should also be noted that the costs associated with entertaining clients are not subject to FBT in any circumstances, however they are also not deductible.

Minor Benefit Exemption
The most common way to minimise potential FBT implications at Christmas time is via the ‘Minor & Infrequent’ exemption. If your meal & entertainment costs are kept below $300 (GST inclusive) per head then the exemption will apply, provided such parties aren’t a common occurrence.
It is worth noting that the $300 per head includes all employees, associates & clients in attendance, so if you have 20 people (regardless of how many attendees are employees, clients or associates) you effectively have up to $6,000 (incl. GST) to qualify for the exemption.
We know that keeping the extravagance to a minimum isn’t always easy. So if you intend to exceed the $300 exemption there will likely be FBT implications. A Subway platter and a carton of beer should keep the masses happy for 10 minutes or so, and keep the budget under $100 in total.

Christmas party at work premises
A Christmas party held at the employer’s business premises on a working day where food and drink, including alcohol, is provided is usually FBT-exempt, which is no different to the occasional Friday drinks at work).
These benefits are only exempt to the extent that they are provided to employees and to the extent that the minor benefit exemption does not apply.

Christmas Functions held off-site
The costs associated with Christmas parties held off-premises (such as food, drink and transport to a restaurant) will give rise to FBT unless the minor benefit applies. FBT will not apply to the extent that the benefit is provided to any client.

Taxi costs and other Transport
Taxi (or limousine) travel provided to an employee will generally attract FBT unless the travel is for a trip which either starts or ends at the employee’s place of work.

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The Horse Has Bolted!

Thu, 29 Oct 2015 05:40:00 GMT

The spring racing carnival is a time for plenty of fun and frivolity, hasty punting and hangovers, and sometimes even some madness! The letter I received from a debt collector recently certainly fell into the latter category.

Apparently they have been instructed to recover overdue fees for late returns on behalf of Video Ezy. Nothing too mad about that, except that the videos I allegedly returned late were hired more than three years ago!

How much chance do they realistically think they have of collecting debts that are three years old? If my memory serves me correctly I actually returned those videos on time, so if push comes to shove that’s the line I’ll be running.

The truth is that the horse has well and truly bolted by now. Debtors represent a huge part of what we refer to as business “lockup,” being that part of a business’ working capital that is “locked up.” The other major component being work-in-progress or inventory.

The most popular KPI for tracking the collection rate of debtors is Debtor Days – being the average number of days it takes to collect debtors. It is calculated using the following formula:

Source: Wikipedia

What should my debtor days be?

Well, as simple as it sounds – the lower the better. For a retail business this will generally be zero, and all sales are COD. Mining services companies are often stretched out to 55-60 days on the back of the clientele those businesses are servicing. Domestic tradespeople should target less than 14 days as a reasonable baseline.

How can I improve my debtor days?

The number one step in the process is to empower one person within the organisation to be responsible for collections. Ringing clients to request payment is a challenging task and not one that people readily volunteer for. Ensure you get the right person in the seat, somebody who can be sympathetic when required but firm and outcome-driven.

In addition, there are some other tools and tricks that can be used, such as:

For a business turning over $9m, with average debtors of $3.3m the debtor days work out around 83 days (which is poor). If the business is working on an EBIT percentage around 9-10% then a reduction in debtor days by 1 day will increase available cash by more than $40,000 . Improve that by 10 days and you will have an extra $400k in the account as working capital.

Whilst 83 days is not great, it sure is a damn sight better than Video Ezy, which is currently sitting at 1,188 days on my late fees.

The question on everyone’s lips – Happy Feet 2 was probably better than the original, Smurfs 3D was a let-down and 50/50 was falsely advertised as a comedy, it was anything but.

And no, I haven’t paid the bill.

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SPECIAL 2015 Budget Edition

Wed, 03 Jun 2015 05:45:00 GMT

Overview
Compared to prior years, the 2015 Federal Budget was comparatively light on in its content. Many of the announcements made on 12 May 2015 had been announced in some detail in the lead up to the Budget, and there really weren’t any hidden surprises with the key categories of change being for small businesses, families and pensioners.

For small businesses, there were a number of tax concessions announced, such as accelerated depreciation, capital gains tax relief, fringe benefits tax exemptions and, perhaps most importantly, a reduction in the corporate tax rate. These changes have been designed to get small businesses moving quickly to help restore confidence and growth to the economy.

For families, the major change has been around the announcement of a new Child Care Subsidy which will replace the existing Child Care Benefit and Child Care Rebate. Many families will be better off under this new Subsidy, but it also comes with the Government’s controversial “no jab no pay” policy which effectively compels child immunisation.

For pensioners, new assets test thresholds and tapers will apply from 1 January 2017. This will lower the upper threshold at which age pension eligibility cuts out, and will result in a reduction in the level of payment for many pensioners.

Virtually all budget measures announced will still need legislation to be introduced, and will have to pass through Parliament, so the final version of the measures may differ to the announcements made in the Budget.

Taxation measures

IMMEDIATE DEDUCTIBILITY FOR NEW BUSINESS FOR CERTAIN START UP COSTS
Effective date: From 1 July 2015

Currently, when a new business is established, some of the costs associated with that business are eligible for deduction over a period of five years. From 1 July 2015, the laws will be amended to allow these businesses to claim an immediate deduction for a range of professional expenses associated with starting a new business. Whilst not fully detailed, the expenses allowed for immediate deduction are expected to cover certain professional, legal and accounting advice.

CAPITAL GAINS TAX RELIEF FOR SMALL BUSINESSES THAT CHANGE ENTITY STRUCTURE Effective date: From 1 July 2016

The Government will amend existing CGT provisions to allow a small business to change legal structure without attracting a CGT liability – ie will provide roll-over relief. This provides an opportunity for those who set up a small business in a way that does not allow them to maximise small business CGT concessions on the future sale of eligible assets from that business, or on sale of the business itself.

SMALL BUSINESS FBT EXEMPTION FOR WORK RELATED ELECTRONIC DEVICES
Effective date: from 1 April 2016

Currently, an exemption from fringe benefits tax is available where an employee packages (or an employer provides) a portable electronic device (eg mobile phone, iPad, laptop etc). This exemption is currently available where an employee packages (or is provided) multiple devices provided that the devices perform substantially different functions. From 1 April 2016, where this device is provided (or packaged) with a small business employer (aggregated annual turnover below $2M), this exemption will be available across all such devices that are primarily used for work purposes. This change recognises that with the evolution of technology, there is an increasing level of similarly in functions that can be undertaken by items such as smart phones, tablets and some laptops.

ACCELERATED DEPRECIATION FOR SMALL BUSINESS TAXPAYERS
Effective date: Immediately (7:30pm AEST on 12 May 2015) until 30 June 2017

Small business taxpayers (those with aggregated annual turnover not exceeding $2million) will have the ability to claim an immediate tax deduction for assets that cost less than $20,000 if purchased and installed ready for use between Budget night and 30 June 2017. Whilst this measure doesn’t reduce the actual amount outlaid for these items, the accelerated depreciation will result in a greater tax benefit up front for these small businesses.

REDUCTION IN TAX FOR SMALL BUSINESSES
Effective date: 1 July 2015

From 1 July 2015, small business taxpayers operating via a corporate structure will have their corporate tax rate cut from the current 30% to 28.5%. This will apply to small business corporates with an annual aggregated turnover of below $2million. If the level of turnover exceeds this amount, the standard 30% corporate tax rate will apply to all of their taxable income (not just the amount in excess). An additional concession is being provided to small businesses operating through an unincorporated business structure (eg through a partnership). Provided that business has aggregated turnover of less than $2million, individuals (eg partners in a partnership) will be eligible for a 5% discount on the tax payable on the business income received. This discount is capped at $1,000 per individual each year and will be provided via a tax offset (rather than a reduction in the level of income assessed).

INCREASE IN THE MEDICARE LEVY LOW INCOME THRESHOLDS FOR FAMILIES
Effective date: 1 July 2014

The Government has announced an increase in the new Medicare levy thresholds that are applicable for the current financial year (ending 30 June 2015). Unlike last year’s Budget, the increase will apply for singles as well as families. The new threshold for singles is $20,896 (previously $20,542). For couples with no children, the new threshold will be $35,261 (previously $34,367). The threshold increases by $3,238 for each dependent child or student (the previous increase was $3,156). For single seniors and pensioners, the threshold will increase from $32,279 to $33,044. Where your total income falls below the relevant threshold, no Medicare levy will be payable.

NEW METHOD FOR CALCULATING WORK-RELATED CAR EXPENSE DEDUCTIONS
Effective date: 1 July 2015

Currently, there are four methods for calculating the amount of tax deduction for eligible work related car expenses. These are:

The 12% of original cost method
The 1/3rd of actual expense method
The cents per kilometre method, and
The log book method.
From 1 July, the first two methods will be abolished as less than 2% of those who claim work related car expenses used these methods. In addition, the current varying rates available (depending on engine size) under the cents per kilometre method will be changed to a single universal rate of 66 cents per kilometre. The log book method will remain unchanged. As a result of this change, there will be some impact for those using the cents per kilometre method. The level of deduction will decrease for those with cars that have an engine size above 1.6 litres. Those whose have an engine size below 1.6 will not be impacted. It is also likely that employers who reimburse for employee travel on a cents per kilometre basis will also change their reimbursement ratios to the same level.

Superannuation measures
RELEASE OF SUPERANNUATION FOR THOSE SUFFERING A TERMINAL ILLNESS
Effective date: 1 July 2015

Currently, where a person has been diagnosed with a terminal illness and has two medical practitioners (including one specialist) certify that they are likely to pass away within 12 months, they are able to immediately access their superannuation savings tax free irrespective of their age. However, where a person has a terminal illness but is expected to live longer than 12 months, they need to wait before being eligible to access their super under this method.

As announced in the lead up to the Budget, the Government will legislate to increase the eligibility timeframe from 12 months to 24 months.

Social Security measures
ALIGNMENT OF AGED CARE MEANS TESTING ARRANGEMENTS
Effective date: 1 January 2016

The Government proposes to include rental income from the home for both Social Security and Aged Care means tests where a person resides in aged care and pays periodic accommodation payments. The new rules will apply only to new entrants. Currently income from renting the home is exempt from both the Social Security and Aged Care means test. There is no change to the treatment of the home under the asset tests. The home remains a Social Security exempt asset for two years after the last member of a couple leaves, whilst under the aged care means test only a part of the value of the home is assessed.

REDUCTION IN ELIGIBILITY PERIOD FOR CERTAIN PENSION RECIPIENTS WHILST OVERSEAS
Effective date: 1 January 2017

From 1 January 2017, certain recipients of the Age Pension, Wife Pension, Widow B Pension and the Disability Support Pensions that are absent from Australia will have their eligible period for full payment reduced from 26 weeks to 6 weeks. After the six week period, those who have lived in Australia for less than 35 years will be paid at a reduced rate. Those who have lived in Australia for more than 35 years (since the age of 16 until Age Pension age), or are otherwise exempt, will not have their payments reduced. Those overseas at the time of commencement will not be affected unless they return to Australia and commence another overseas trip.

CESSATION OF THE LARGE FAMILY SUPPLEMENT OF FAMILY TAX BENEFIT (FTB) PART A Effective date: 1 July 2016

From 1 July 2016, the large family supplement paid to FTB Part A recipients will cease. This supplement is currently valued at $321.20 pa. Recipients will still remain entitled to receive a per child rate of FTB Part A for each eligible child in the family.

CHILD CARE SUBSIDY
Effective date: 1 July 2017

As announced prior to the Budget, a new Child Care Subsidy will come into effect from 1 July 2017, replacing the current Child Care Rebate, Child Care Benefit and the Jobs, Education and Training Child Care Fee Assistance. This new Child Care Subsidy will be means and activity tested, paid directly to the family’s choice of approved service for up to 100 hours per fortnight and based on benchmark prices for a variety of child care services. Any difference between the subsidised amount of the benchmark price and the actual price charged by the service would be met by parents. The subsidy will taper from 85% per child of the actual fee or the benchmark price, whichever is lower for family incomes of up to $60,000 in today’s dollars projected to be $65,000 by 2017, down to 50% of the fee for families earning up to $165,000 or more in today’s dollars which is projected to be approximately $170,000 or more in 2017. A cap on subsidies of $10,000 per child is to apply for families with income of $180,000 and above (projected to be $185,000 by 2017). This is more generous than the cap of $7,500 regardless of income that currently applies under the Child Care Rebate. All child care subsidies and support will remain linked to immunisation requirements which from 1 January 2016 will be strengthened under the Government’s ‘no jab, no pay’ policy. The only exemption to this policy will be on medical grounds.

MORE GENEROUS MEANS TESTING FOR YOUTH PAYMENTS
Effective date: 1 January 2016– Parental Income Test Effective date: 1 January 2017 – Maintenance Income Test

From 1 January 2016, families with dependent children receiving income support payments are to be subject to the Parental Income Test arrangements currently in place for Family Tax Benefit (FTB) Part A and will no longer be subject to the Family Assets Test or Family Actual Means Test. The removal of these two tests will result in a more consistent level of support for families, as younger people move from FTB Part A to an individual income support payment. From 1 January 2017, a Maintenance Income Test will be introduced for dependent children receiving individual income support payment. This test will apply to that child only and not include other child support amounts provided in relation to other children in the family.

PAYMENT OF FAMILY TAX BENEFIT PART A WHILST OVERSEAS
Effective date: 1 January 2016

Currently, when recipients of FTB Part A are overseas, they are eligible to receive payment at their full rate for 6 weeks, and then at a reduced (base) rate for a further 50 weeks. From 1 January 2016, FTB Part A will only be paid for six weeks in a 12 month period whilst the recipient is overseas.

DELAY IN INCREASING THE ELIGIBILITY AGE FOR NEWSTART ALLOWANCE AND SICKNESS ALLOWANCE Effective date: 1 July 2016

The eligibility age for Newstart Allowance and Sickness Allowance will increase to age 25 from 1 July 2016. In the 2014 Federal Budget it had been proposed to increase the eligibility age (from the existing age of 22) to 24 from 1 January 2015. This increase has now been delayed, and the eligibility age increased as a result.

REVISED WAITING PERIOD FOR YOUTH INCOME SUPPORT
Effective date: 1 July 2016

The Government intends to scrap the unlegislated 2014/15 Budget measure requiring a person under age 30 to wait six months before being eligible for Newstart Allowance and instead require young people under age 25 years to actively seek work for a 4 week waiting period before receiving income support payments. Persons with a disability will be exempt.

CESSATION OF LOW INCOME SUPPLEMENT
Effective date: 1 July 2017

From 1 July 2017, the Low Income Supplement will cease to be paid. This supplement is currently valued at $300 per annum. Recipients of most Government payments will continue to receive carbon tax compensation through the Energy Supplement.

“NO JAB NO PAY”
Effective date: 1 January 2016

As announced prior to the Budget, from 1 January 2016, families will no longer be able eligible for subsidised child care or the FTB Part A end of year supplement unless their child is up to date with all childhood immunisations. Some exemptions may be provided on medical grounds.

NOT PROCEEDING WITH CERTAIN SOCIAL SECURITY ANNOUNCEMENTS FROM THE 2014 FEDERAL BUDGET Effective date: Immediately

The Government has decided not to proceed with the elements contained in the 2014-15 Budget measure which relates to the pension income test free area and deeming thresholds. The pension income test free areas and deeming thresholds will continue to be indexed annually by CPI. In addition, the Government has decided not to proceed with the 2014-15 Budget measure to reset the income test deeming rate thresholds from 30 September 2017. Previously, the Government had proposed to reset the deeming thresholds for assessing eligibility for welfare payments to $30,000 for singles and $50,000 for couples.

CHANGES TO ASSETS TEST THRESHOLDS AND TAPER RATES
Effective date: 1 January 2017

As announced prior to the Budget, the Government is proposing significant changes to the assets test for determining pension eligibility from 1 January 2017. The proposed change will restore the existing taper rate of $1.50 pension reduction for every $1,000 above the relevant threshold, to the pre 2007 level of $3.00 for every $1,000 of assets above the threshold.

The measure, if passed will take effect from 1 January 2017 in place of the 2014 Budget measure currently in the Senate to index pensions from 1 January 2017 solely to CPI increases. As such pensions will continue to be indexed by the greater of CPI and the Pensioner and Beneficiary Living Cost Index plus benchmarked to a percentage of Male Total Average Weekly Earnings.

Importantly all people affected by the scaling back of the maximum asset threshold will be guaranteed eligibility for the Commonwealth Seniors Health Card (CSHC) or Health Care Card, which provides the same concessional access to pharmaceuticals as given to those on the pension.

The table below outlines the current and proposed thresholds:

IMPROVING INTEGRITY OF SOCIAL SECURITY INCOME TEST ARRANGEMENTS
Effective date: 1 January 2016

The deductible amount of an income stream payment is not counted as income under social security income tests. Defined benefit income streams are calculated on an employee’s length of service and final salary. Currently under social security income tests the tax free component of a defined benefit income stream is counted as the deductible amount. The Government proposes that the deductible amount of a superannuation defined benefit pension be capped at a maximum of 10 per cent of income. Those receiving DVA pensions and military superannuation fund defined benefit pensions are exempt from this measure. Those receiving defined benefit pensions may have reduced social security entitlements due to increased assessable income attributed to defined benefit income stream. The measure may also impact aged care residents as the defined benefit income is also assessed as income for aged care fees.

REMOVING DOUBLE-DIPPING FROM PARENTAL LEAVE PAY
Effective date: 1 July 2016

The Government will remove the ability for individuals to effectively ‘double-dip’ when applying for the Governments Parental Leave Pay (PLP) scheme. Currently there is nothing preventing an individual from accessing Government assistance from the PLP in addition to any parental leave entitlements offered to them by their employer.

Contact our Consultants if you wish to discuss any of these points further on 08 6298 7320 or info@resbc.com.au

The post SPECIAL 2015 Budget Edition appeared first on Resonate Business Consulting .

How Small Businesses Can Benefit From Year-End Tax Planning

Tue, 12 May 2015 03:26:00 GMT

It’s almost the end of the financial year and now is the time to start thinking about how to minimise your tax liabilities. You’ve worked hard for every dollar of profit and you want to keep the maximum amount you can. Take heed of the following ideas to help pay less tax and keep more of your hard earned profits.

Prepayments are effective if you have the cash – Small Business taxpayers (as defined under Australian tax law) can make prepayments

(up to 12 months) on expenses (e.g. Loan Interest, Rent, subscriptions) BEFORE 30 June 2015 and obtain a full tax deduction in the 2015 financial year.

Put an end to bad debts – If you are looking at claiming a tax deduction for this year, then it’s vital that all bad debts are written off before the end of June. Writing off bad debts should also be undertaken with care and precision as specific rules need to be followed and all the appropriate procedures to collect the debt should be complete.

Stock evaluation – Completing a physical stocktake is recommended and it should be done before the financial year draws to a close. Watch out for obsolete stocks as they can be written off and you can benefit from a tax deduction.

Disposing fixed assets – If scraping assets is high on your agenda and then get moving and complete it before June 30 to claim a deduction.

Delay your income – This is not the time to seal off any business deal, well, not until July! Where practical, defer issuing further invoices and/or receiving cash/debtor payments until after 30 June 2015. Please note that the ATO will generally require you to pay tax on income that you have either received or become entitled to due to the completion of work.

Pay yourself some superannuation – Make superannuation contributions if you are under contributions limits and eligible to claim a deduction. The concessional superannuation cap for 2015 is $30,000 for persons of any age 49 and under & $35,000 age 50 and above. Do not go over this limit or you will pay more tax!

Note that employer super guarantee contributions are included in these caps and in order to claim a tax deduction in the 2015 financial year, the super fund must receive the contribution by 30 June 2015.

Pay your employees superannuation early – To claim a tax deduction in the 2015 financial year, you need to ensure that your employee superannuation payments have cleared your business bank account by 30 June 2015.

Bring forward expenses – Purchase consumable items before 30 June 2015. These include stationery, printing, office and computer supplies. You can also, make payments for repairs and maintenance (business, rental property, employment) before 30 June 2015.

How our Tax Planning Process works

First of all, we request from you details of your expected income and business profits for the 2015 tax year (1 July 2014 to 30 June 2015). This includes all wages / employment income, interest and dividends and rental income received, business profits / losses, and any capital gains / losses you expect to make.

Based on this information, we estimate your taxable income and your tax payable BEFORE any tax planning strategies. For example, we may calculate (based on your information) that you may have a taxable income of $100,000 for 2015. This would result in $26,947 tax and Medicare levy payable.

Secondly, we discuss all of your tax planning options.

Third, we provide you with a report that explains in plain English the tax planning strategies we recommend and exactly how much tax you will save.

And finally, we provide you with an easy-to-follow action plan to ensure that both you and we can do everything that needs to be actioned before 30 June.

Call us now on 08 6298 7320 or email us on info@resbc.com.au if you want to know more and pay less tax!

The post How Small Businesses Can Benefit From Year-End Tax Planning appeared first on Resonate Business Consulting .

Work Life Balance and Making it Work

Thu, 23 Apr 2015 04:23:00 GMT

5 Tips For Better Work Life Balance

Work life balance is one of the most important factors for a candidate looking for a new job nowadays. It is often a deciding factor when benefits such as salary are comparable across roles. You need to start by understanding attitudes in your workplace towards flexibility, what you currently have in place and how it is being demonstrated, also what your current employees and candidates are looking for.

Everyone has different lives that change over time; therefore work life balance can mean different things to different people. Work life balance doesn’t have to be a ‘one size fits all’ policy, you need to find what works for your business and employees. Don’t assume what will work for you will work for all your employees. Get feedback from your employees and involve them in the process of understanding what everyone is looking for and implementing a policy that suits.

Here are 5 ways to bring a little more balance to your day:

When planning your week, you and your employees should schedule personal time with family, friends and activities that help you recharge. If a date night with your spouse/partner or a sports game with friends is in your calendar, you’ll have something to look forward to, which will give your or an employee extra incentive to manage their time well and be productive. Get to know your employees on a personal level not just work, work, work!

Many employees waste their time on activities or people that add no value to their lives i.e. spending time with another work colleague who constantly has a negative attitude and gossiping. Employees should take note of activities that don’t enhance their career or personal life, cut them out entirely or minimise that time spent on them. Employees often get sucked into habits that are making them less efficient i.e. surfing the web, social media, personal phone calls etc. As an employer you should monitor this and provide positive recommendations to your employees to help them enhance their productive time.

Everyone should make time for physical activity! We all have a jam packed schedule but making time to be physically active may help us get more done by increasing our energy and ability to concentrate. Have you thought about group personal training sessions with your employees once or twice a week? Look at a reward program for your employees that involves fitness programs.

Management often look at their own time and if they can outsource any consuming errands or even household chores, but what about those dreaded day to day tasks of your employees. These days you can order anything online and get it delivered. What about having a gardener or house cleaner at home, have you considered hiring a Virtual Assistant for those laborious and tedious activities that take up precious productive time for your employees? If your budget is restricted you may find that the time you’ll save may be worth it. Find tasks that you and your employees enjoy doing and focus on those.

You don’t need to make big changes to bring more balance to your life or the life of employees that surround you. Be realistic and plan activities at least 1 week in advance. Start with scheduling 1 activity in your calendar i.e. date night with spouse/partner once a month, then slowly start adding more activities that are important to you. This could be leaving the office early 1 day per week to collect the kids from school. If you are having ‘one of those days’ try simply taking a 10 minute walk outside or listen to some music to help recharge those batteries. Encouraging your employees to venture down the same track could help create a more harmonious and productive work environment for everyone.

The post Work Life Balance and Making it Work appeared first on Resonate Business Consulting .

Can Restraint of Trade Clauses be Enforced?

Mon, 16 Mar 2015 05:41:00 GMT

The start of a new year can often lead to the departure of employees and the hiring of new employees. With the coming and going of employees, employers need to ensure they protect their business interests and goodwill. A restraint of trade clause (“restraint”) offers such protection. Usually found in employment contracts or enterprise agreements, the main purpose of a restraint is to protect the employer’s legitimate business interests and goodwill. A restraint will also attempt to prevent an employee from using knowledge gained, and contacts and relationships developed during the employment relationship, to their advantage and the business’s disadvantage, once the employment relationship ends.

I’m often asked whether a restraint is really “worth the paper it’s written on”. The answer is yes, but the key is to ensure your restraint is drafted correctly in the first place and that it is a reasonable restraint, and thereby enforceable. Here’s a snap shot of some key points to keep in mind in relation to restraints.

What is considered a reasonable restraint?

The law considers restraints to be inherently unreasonable, on grounds of public policy. The rationale behind that is that it is in the public interest for people to be free to pursue any lawful employment they choose, and therefore, because people need to be free to earn a livelihood, restraints need to be reasonable, so as not to contradict public interest and policy.

The key to a reasonable restraint is to ensure that it affords no more than adequate protection to the employer’s business interests and does not unreasonably restrain the employee from pursuing any lawful trade or employment. Factors which indicate whether a post-employment restraint is reasonable may include;

• the length of time for which the restraint applies;
• the scope of the geographical area to which the restraint applies;
• the range of activities to which the restraint applies; and
• the scope of work available in the specific industry to which the restraint applies.

The 3 general rules when enforcing a restraint of trade clause:

1. Confidential Information

If an employee gains access to your confidential information as part of their employment with you, you can enforce a restraint to prevent them from using that information after they leave your employment. Otherwise, this would give the employee or their new employer an unfair head start in competing in the market place.

2. An employee’s connection with your clients or suppliers

If an employee develops a connection with your clients and/or suppliers as part of their employment, which is inevitable in some roles where there is a high degree of relationship building with the clients and/or suppliers, you can enforce a restraint to prevent the employee from using that connection or influence over customers to solicit those clients or their business away from you. This type of restraint is often referred to as a non-solicitation clause.

3. An employee’s connection with your employees

If an employee develops a connection with your employees in the course of their employment, you can enforce a restraint to prevent them from using that influence to divert the employees away from your business.

How can you improve the enforceability of restraint clauses?

Because restraints are considered to be inherently unreasonable, the Courts are reluctant to enforce them, so where a restraint is considered by the Court to be unreasonable, that restraint will be struck out by the Court, and rendered unenforceable. That is because the Court will not itself substitute restraint provisions that is considers to be reasonable, in the place of those it has just struck down, with the result that the ex-employee will be free to utilise the employer’s confidential information, or contact the employer’s clients or other employees.

The way to improve the enforceability of a restraint, and thereby minimise the risk of it being struck out, is by using a “cascading clause”. A cascading clause is a restraint that provides for a number of different restraints with different scopes, for example:

Restraining an employee for:

a) 3 months after termination of employment;
b) 6 months after termination of employment;
c) 12 months after termination of employment.

One can also restrain the employee for cascading areas:

a) Within certain postal code areas;
b) Within the greater Perth metro area;
c) Within the State of WA.

Effectively there are a number of restraints in the above clause operating simultaneously. If one of the restraints is considered unreasonable or unenforceable by the Court, it can be severed from the other restraints which remain operative and enforceable. The Court is given a number of alternatives and period/area combinations it can deem reasonable, and choose from, whereas if there was only one of each, and one or both were considered to be unreasonable, the restraint would be struck out as unreasonable, and fail altogether. It is therefore strongly recommended that restraints are drafted in this manner to ensure their enforceability and therefore, continued protection for an employer’s business.

To find out more, call Julie Grant from Capital Legal on 08 9364 5444, email Julie@capital-legal.com.au or speak with your Resonate Consultant.

The post Can Restraint of Trade Clauses be Enforced? appeared first on Resonate Business Consulting .

You can now borrow in Super – how does that work?

Tue, 24 Feb 2015 03:01:00 GMT

Changes in SIS act legislation now allow for the SMSF to borrow for purchase of either residential or commercial properties to assist with the long term goals of the fund.

It will be necessary to create a separate bare trust entity to hold the asset whilst the loan facility is in place, and upon full repayment of the loan the asset is then transferred to the original fund.

Lending ratios for these borrowings are capped at 80% for residential and 65% for Commercial property and applicants cannot select both variable and fixed rate options (i.e. it’s a case of one or the other). Loan terms can be up to 30 years on residential and 15 years on commercial.

Establishment costs vary dependent upon security property type, lender and solicitor prepared documentation fees however a typical establishment fee for a $500,000 property is in the vicinity of $5,000 including all legal costs.

Are there any other requirements around owning property within a SMSF?

You can only buy property through your SMSF if you comply with the rules.

The property:

However, your SMSF could potentially purchase your business premises, allowing you to pay rent directly to your SMSF at the market rate.

Reduced or no Capital Gains Tax when you sell – Provided you keep your property investment in your SMSF until you are over 60 and retired, when you convert your SMSF into the pension phase, you will pay no Capital Gains Tax if you decide to sell.

Reduced or no income tax on rental income – You may also save tax on the rental income from the property. Provided you keep the property inside your SMSF, you will pay no tax on rental income in retirement and you will only pay 15% tax on the rental income while you are saving for retirement. That can be a big saving on your marginal tax rate.

From time to time you may be required to obtain a valuation of the property if an event occurred that may have affected the value of the property since it was last valued. This may be due to change in market conditions or a natural disaster. Generally this will be every 2-3 years.

Can I take out Life/TPD insurance in an SMSF?

You can certainly take out Personal Insurance within your SMSF. What this means is the out of pocket cost will be paid from your fund balance. Personal Insurance should always be considered in any circumstance, but with your SMSF is becomes imperative, particularly when considering the funding of property through a SMSF. In fact the government now mandates that you must consider the appropriateness of insurance for all fund members.

Some discussion points unique to insurance in SMSFs to consider include:

How can my SMSF invest? Is there anything that my SMSF cannot own?

Your SMSF can invest in any asset so long as it meets the ‘sole purpose test.’ This could generally include direct equities, managed funds, antiques (incertain, very onerous circumstances), property, precious metals, cash, and term deposits.

Things you cannot invest in:

I’ve heard the penalties for getting it wrong are fairly hefty?

The ATO has recently been handed new powers to compel compliance by self-managed super fundtrustees with their duties and obligations. These are in addition to existing powers and commenced on 1 July 2014.

The ATO now has the power to impose administrative directions and penalties for contraventions relating to SMSFs including giving the ATO the power to give rectification directions and education directions, and imposing administration penalties for certain breaches of the Superannuation Industry (Supervision) Act 1993 (the SIS Act).

A rectification direction will require a person to undertake specified action to resolve the contravention within a specified time frame and provide the ATO with evidence of the person’s compliance with the direction.

Similarly the ATO can issue an education direction which will require a person to undertake an approved course of education within a specified time frame and provide the ATO with evidence of their completion of the course.

If an SMSF trustee contravenes a specified provision of the SIS Act, the ATO now also has the power to impose an administrative penalty, which are outlined in the following table:

How much does it cost to setup a SMSF?

We charge a fixed fee of $3,500 + GST which includes the ASIC registration of a company to act as trustee, the SMSF trust deed, Trustee minutes to establish the fund, Member applications and Trustee consents, Product Disclosure Statement for each Member of the fund, Binding Death Benefit Nomination sample form and explanatory notes for each Member.

We also assist you to complete the paperwork to rollover your existing Superannuation funds to you Self-managed superannuation fund.

What are the ongoing costs?

Our fees for the preparation of the financial statements and Tax returns are typically from $1,800 to $2,500 per year. In addition, the fund is required to be audited each year, which is a service we arrange on your behalf from a third party at a cost of around $650 per year. When comparing this to the management fees in a retail superannuation fund which are typically 1.5 – 2.5% of the fund balance, a typical SMSF with a balance above $100,000 – $150,000 would be paying the same in management fees as their existing fund.

A complex fund with a balance of $600,000 may have annual accounting and audit fees of $3,000 and therefore the effective management fee cost of 0.5%.

The post You can now borrow in Super – how does that work? appeared first on Resonate Business Consulting .

Kick Start Your 2015! 5 Helpful Tips For A Super Charged Year

Mon, 09 Feb 2015 02:26:00 GMT

By now the kids are back at school, holidays have finished and you are getting stuck back into it! Here’s some tips to help you charge through the year and achieve some fantastic results.

GOAL SETTING
The best thing you can do when setting your new year’s resolutions is to start with what you want to achieve by the end of the year. Then adjust any budgets or behaviours accordingly in order to meet those goals.

The more you talk about your goals and resolutions the more likely you are to achieve them. Share your key resolutions or goals with someone you trust and respect and check in with them regularly throughout the year to let them know how you’re going.

DECLUTTER
Life has become so busy that often our last priority is organising our workplace so they inspire us. We spend so much time at our workplace, so it’s important for your work environment to be creative, focused and calm.

Think of all the unnecessary and unused ‘stuff’ that can accumulate as a company grows – practices, processes, systems etc. It’s vital to set up good structures which will underpin every activity in your business. These foundations once put in place will have your business operating with ease. You will feel in control and enjoy your working days

FINANCIAL HEALTH CHECK
Don’t ignore your financial health! Most people check over their health at the start of each year. Do the same over your finances and undergo a financial health check. Review your spending patterns to see where you can save more money.

Economic challenges, job uncertainty, poor investment returns, reduced government services and a variety of other circumstances make this a perfect time to check up on your finances!

LEARN NEW SKILLS
Do you have the skills that your business needs? The secret to success in any venture is to never stop learning, it’s always a good idea to continuously be learning new skills. While a formal education is important for starting a career, new information and research makes it necessary for a person to continuously seek to improve their knowledge.

BRAND EVALUATION
Performing a brand evaluation provides an objective sense of your brand’s value and worth. You need to believe in your brand, but at the same time, you don’t want to let your passion cloud your judgement. An objective evaluation allows you to view your brand as a potential customer would, highlight any problems you may find and fix them!

So what about you! Your personal brand should represent the value you are able to consistently deliver to those whom you are serving. View your personal brand as a trademark, an asset that you must protect while continuously moulding and shaping it. Your personal brand is an asset that must be managed with the intention of helping others benefit from having a relationship with you or being associated with your work.

Resonate has the processes and systems to guide you through these tips. Whether you need to tackle just one or all five, we’re here to help you start kicking goals! Contact Us

The post Kick Start Your 2015! 5 Helpful Tips For A Super Charged Year appeared first on Resonate Business Consulting .

Taking Cover: 5 Types of Business Insurance You Should Consider

Thu, 04 Dec 2014 08:20:00 GMT

So you probably have building and contents, public liability and public indemnity insurance. But what else should you get cover for? What else can you get cover for?

The answer to the first question really depends on the type of business you own. As for what you can get cover for, you may be surprised.

Here are five types of insurance every business should consider.

1. Business Interruption insurance

If there’s a fire at the premises, chances are your building and contents insurance will cover it. But while everything’s being rebuilt/repaired/replaced, you’re not making any money.

Business Interruption can cover you for loss of profit, ongoing staff costs and additional operating costs (e.g. temporarily relocating to another premises).

2. Goods in Transit insurance

You may have the stock you have on the premises insured, but what about the stock that’s in transit? Whether you’re buying it, selling it or just using it, your business could suffer if it’s lost or damaged.

With Goods in Transit insurance, you’re covered whether it’s coming or going by ship, air, post, rail or road.

3. Burglary insurance

While your contents insurance probably covers you against fire, flood, malicious damage and other perils, it may not cover you if your goods are stolen. And if your business involves a property you don’t always have attended, that could be a serious risk.

But with Burglary insurance, your goods are covered if they’re taken from your premises.

4, Product Liability insurance

No-one goes out of their way to sell a product that will harm people or property. But accidents can happen. There may be a glitch in production, or a misprint in the instruction manual, or the customer may have simply used your product the wrong way.

And that accident can result in legal action.

Product Liability insurance covers you against claims of injury, death or damage from goods you sell, supply, deliver, repair or service.

5. Employment Practices Liability insurance

While you’d never purposely upset your employees, there may come a time when they feel unhappy enough about their work situation to take legal action.

Employment Practices Liability insurance covers you for any damages or costs resulting from accusations of discrimination, unfair dismissal, harassment or other situations.

As you can see, when it comes to insuring your business you have a lot of options. A combination of bad luck and not being insured for one of the above scenarios could cost your business dearly.

It pays to sit down with a risk insurance advisor on a regular basis and review which insurances—the obvious and the not so obvious—you should consider. Even if you decide not to take out insurance in these additional areas of risk, an annual insurances review can make sure you’re neither under- nor over-insured.

This might save you money on premiums. It will definitely add to your peace of mind.

Get in touch and we’ll make a time to sit down with you and review your business’ insurance needs.

The post Taking Cover: 5 Types of Business Insurance You Should Consider appeared first on Resonate Business Consulting .

Hope for the Best, Plan for the Worst: Why a Business Succession Plan Is Essential

Mon, 17 Nov 2014 03:06:00 GMT

While everyone wants their businesses to be successful and operate for a long time, you may not necessarily want to remain at the helm.

At some point, you may want to pass the business on to your children, or to someone else in the company. You may want to sell your share to your business partner. Or you may want to sell the business to another person or company, and retire on the proceeds.

Ideally, you will choose the timing and method of your exit from the business. However, the way life unfolds sometimes, business owners do not always have a choice in what happens, or when.

For example, what would happen if you or your business partner suddenly passed away or became incapacitated?

That’s a stressful enough time for everyone as it is, without having the business (and the financial well-being of the families involved) suffer as a consequence.

To ensure the future of your business, and to cater for loved ones, you need to plan for a range of possible exit scenarios. This is what’s known a Business Succession Plan. Every business needs a succession plan, just as every person needs a professionally prepared Will and Estate Plan.

Horror stories happen. Don’t be one of them.

You may not think you need a succession plan. After all, you may have children old enough to take over the reins. Or perhaps you have people in your company who’d love to run the business. But without a business succession plan, anything could happen.

Imagine this scenario…

A business with two partners or shareholders suddenly experiences the loss of one of the partners in a car accident. Without a succession plan in place, the surviving partner automatically goes into business with the deceased partners spouse. They might have had a great relationship on a personal basis, but running a business together and making financial decisions changes the nature of the relationship, instantly. The partners may not agree on the direction of the business, the growth plans for the business, or on how much various people in the business should be paid.

It’s a recipe for conflict. Or perhaps the surviving spouse wants nothing to do with the business and wants to be bought out of the business as soon as possible. But what if the surviving business partner does not have the available funds to buy the remaining share in the business, despite being offered a very reasonable price.

They’re stuck. The business–and their stress levels–will suffer. So, what can you do to avoid such horror stories?

Passing on the baton

So who will be your successor? Will it be someone in your family? A senior employee of your company? Another business owner?

While you may want to “keep it in the family”, it might not be such a good idea with research showing that more than 65% of family businesses fail in the hands of the second generation and another 20% fail when the business passes to the third generation.

Your successor needs two things above anything else: a passion for the business and the skills to run it. And while you can bring them on board early to learn the skills, passion is something you can’t create for them. They either have it or they don’t.

If it turns out someone in your family is passionate about the business, and they have the skills needed to run it (or can learn them), then great. But if that’s not the case, you may be better off handing the baton on to someone else.

Plan early, plan often

So when should you create your business succession plan? According to Craig West, chief executive and president of the Australian chapter of the Exit Planning Institute, you should have started about two years ago.

In an interview with Startup Smart , West says it can take up to two years to get a business ready for sale, and to find the right buyer.
“It takes 18 months to two years to exit successfully. If you do it quicker, you’ll leave money on the table,” he says.
So if you don’t have a succession plan in place for your business, you need to get started now. (If you’re not sure how to get started, get in touch so we can help.)

And like nearly all business documents, a succession plan needs to be kept up-to-date. Families grow and mature, employees come and go, and your plan needs to take all of that into account. There’s no point in planning to appoint a son who’s lost interest in the business, or a senior employee who has since left the business. Review your plan annually.

But first things first.. you need to document your Business Succession Plan.

We can guide you in developing an effective succession plan and also ensure you have insurances in place that, for example, can fund the purchase of a deceased or incapacitated partner’s share in a business.

A well thought out and properly funded (insured) Business Succession Plan will make sure the business can continue to operate as smoothly as possible, and conflicts between surviving business partners and spouses, avoided.

You’ve worked hard to build your business. Don’t let it all fall apart once you move on.

The post Hope for the Best, Plan for the Worst: Why a Business Succession Plan Is Essential appeared first on Resonate Business Consulting .

Where there’s a Will, there’s an Estate Plan. Well, there should be.

Tue, 04 Nov 2014 01:45:00 GMT

Let’s face it: no-one likes to think of death, especially their own. It’s not exactly a great conversation starter, is it? This might explain why so many people end up “dying Intestate” which means they die without a will and, as a consequence, have their assets distributed according to State law.

Sadly, the way State law distributes a deceased person’s assets among family members can often be a lot different to the way a deceased person wanted their assets distributed

So unless you’re living as a hermit with no contact or relationships with others, and you also don’t have a single possession to your name, you need to not only think about preparing a will, but do something about it.

And you need more than just a will. You need an estate plan.

Why having a will is not enough

If you have a will in place, you may not think you even need an estate plan. After all, your will spells out your “Who gets what” instructions regarding your estate, right?
Unfortunately, the estate you’ve specified in your will may not include all of your assets. By law, your will doesn’t include assets such as:

To control what happens to these assets, you need an estate plan.

6 more reasons to have an estate plan
A well-written estate plan can do more than just distribute all of your assets the way you want. It can also help:

Who should help you create your estate plan?

While an estate plan is a legal document, its creation shouldn’t be left solely to your solicitor. You need someone who knows about you, your family and your financial situation.And the person who generally knows the most about that is your accountant or financial planner.

However, while they may know all about your finances, they may not have the legal qualifications needed to create a watertight estate plan. So you actually need your accountant or financial planner and a solicitor. According to One Super Fund partner Gerard Wall:
“The financial planner’s job is to try and identify if the estate plan is funded properly, and if it is funded that the insurance is owned by the right person; the accountant’s job is to make sure that the client’s affairs are structured appropriately from a tax point of view; and the solicitor’s job is to make sure the documentation is all drawn up.”

Avoid leaving a trail of chaos behind you

Whether or not you have an active will in place, without an estate plan there’s no telling who your assets may end up with. Avoid creating stress and conflict for your loved ones, and give yourself the peace of mind in the here-and-now that your affairs are well in order. Get in touch and we can start the ball rolling to get a solid estate plan in place for you and your family.

The post Where there’s a Will, there’s an Estate Plan. Well, there should be. appeared first on Resonate Business Consulting .

Smarts Ways To Ease Yourself Into Retirement, Pay Less Tax and Boost Your Super

Fri, 03 Oct 2014 03:27:00 GMT

Two things first up: (1) If you want to (or have to) work past the age of 55, you need to read this article; or (2) If you know someone else who that applies to, please forward them this article or a link to it. They’ll thank you for it.

There are now ways you can ease into retirement, tap into your super before you fully retire, save tax and potentially boost your super as you do it. Before this legislation came in, people had to fully retire and leave the workforce before they could access their super. These days, the ‘cold turkey’ approach to retirement where all of a sudden one Monday you’re fully retired, is far less common. It makes sense, for many, to instead gradually transition to retirement.

There are various reasons people may want to continue working past the age of 55, including:

So continuing to work at least part-time past the age of 55 makes sense for many people. It also makes sense for our economy. With the ageing population and fewer people in the tradtional working years age bracket, the government has introduced various legislation to encourage people to stay active in the workforce.

One of these measures is called Transition To Retirement (TTR). TTR allows you to wind back your work hours and reduce your income from that source, but then offset that with an income stream from your super.

The purpose of this article is not to give advice as such—as there are a number of variables to consider for each person’s circumstance, so you will need to sit down with your advisor here to discuss TTR further—but rather to make you aware of the main considerations so you can determine if you qualify.

You can use a TTR pension in one of two ways:

Either way, that’s a nice deal. People who are unaware that they can access a TTR pension while they continue to work past age 55 stand to pay many thousands of dollars of tax needlessly .

Here’s how you can avoid that happening to you or your loved ones…

Firstly, some terminology: Your ‘age pension age’ differs from what’s called your ‘super preservation age’. The latter is age after which you’re allowed to access your super. You can use this ASIC Super and pension age calculator to work out your preservation age. Just enter your month and year of birth and then click the Female or Male button.

Do that now, then continue…

Here’s how to determine if you can use a Transition To Retirement pension:

If you can tick all those boxes, you can withdraw 4% to 10% of your super each financial year.

Note that you cannot withdraw money as a lump sum. Also note that not all super funds allow you to do this, and if that’s the case with your fund(s), you might need to change super funds if you want to take advantage of the TTR measures. We can help with that process.

So if all three of those above points apply to you, you should contact us as soon as possible to make a time to go through the specifics of your circumstances, your super fund’s TTR options and a number of other very important details. We’ll make it easy for you and will make the paperwork happen.

There’s more we could share with you here about TTR, but rather than burden you with all those details, we figure that’s what you want us to handle for you!

TTR is one of the smartest retirement strategies available. It makes sense to take advantage of it if you can.

The post Smarts Ways To Ease Yourself Into Retirement, Pay Less Tax and Boost Your Super appeared first on Resonate Business Consulting .

Congratulations! It’s Family Business Day!

Fri, 19 Sep 2014 02:33:00 GMT

Family businesses all around Australia should be celebrating today, for its National Family Business Day!

Family businesses come in many shapes and sizes and account for 70% of all businesses in Australia. The sector employs no less than 50% of our workforce.

Family businesses are the cornerstone that can lead to great entrepreneurial brands and companies like Betts Shoes, the Kailis family businesses, Haigh’s Chocolates and Bundaberg Brewed Drinks, just to name a few. Like all businesses, a family business can have advantages, such as flexibility, and disadvantages, such as family conflicts.

For family businesses, it means turning a profit without tearing the family apart. But what happens when profit and conflict are combined under the one roof? World War III? To help your business run smoothly, here are 8 top tips in making it work:

1. Leave work at work, home life stays at home
2. Have clear roles for each family member and know everybody’s strengths
3. Use outside advisors for unbiased advice
4. Have a good management structure – don’t confuse ownership or inheritance with management
5. Be open with communication, good and bad. Seek out everyone’s input
6. Clearly outline entry and exit conditions for family members involved with the business from the beginning
7. Develop a succession plan and make sure that all parties agree on the transfer of ownership
8. Hold regular meetings and family getaways

Family businesses often have intimate history and complex cultures that are hard for outsiders to comprehend. Family businesses can be successful with focus, planning and paying attention to detail.

What can you do as a family business? By following 5 key steps family businesses can create a viable succession plan, provide for the financial independence of retiring owners and position the business for continued success and growth:

Step 1: Establish Goals and Objectives
Step 2: Establish a Decision-Making Process
Step 3: Establish the Succession Plan
Step 4: Create a Business and Owner Estate Plan
Step 5: Create a Transition Plan

Taking these 5 steps now will save you money and time and will help assure the continued success of your business.

In recognition of National Family Business Day we are offering a free complimentary meeting regarding business succession planning for your family business. All you have to do is email us at info@resbc.com.au and mention this article.

The post Congratulations! It’s Family Business Day! appeared first on Resonate Business Consulting .

Like to know how an Enterprise Bargaining Agreement (EBA) can grow your business and save it money?

Tue, 09 Sep 2014 04:18:00 GMT

If growing your business, successfully tendering for projects, saving money on human capital costs and managing your employee relations effectively sounds desirable, then read on, because your business can benefit from an Enterprise Bargaining Agreement ( EBA ).

An EBA is a legally binding agreement governing how your business will engage, remunerate and manage its employees. An EBA replaces the award conditions that would ordinarily apply to an employee (awards don’t apply when an employer has a registered EBA covering its employees). It allows employers and employees to enter into wage arrangements without the need for Union involvement and establishes binding employment conditions that are tailored to suit the employer’s operations.

An EBA can also save you time and money because you will no longer have to comply with the complexities of multiple awards that apply to employees.

How can an EBA grow your business?

Companies running big projects now expect businesses who wish to supply products or services to their project to have an EBA in place because of the key benefits delivered by an EBA such as:

All of these benefits are attractive for companies when they are procuring suppliers for big projects,so the secret of successful tendering, whether it’s for a government or privately funded project, is to ensure that your business has an EBA in place.

A prime example – how an EBA can open up opportunities for your business

The Australian Government funds many of the large building and construction projects in Australia. Companies must meet the requirements of the Building Code to work on these projects. Meeting the requirements of the Building Code can open up more opportunities for your business to obtain Australian Government funded construction work.

To meet the requirements of the Building Code, employers must comply with the Fair Work (Building Industry) Act 2012 and the Fair Work Act 2009 (FW Act). A registered EBA complies with both of these pieces of legislation ensuring the workplace relations component of your business meets the requirements of the Building Code.

How does an EBA work?

A registered EBA is an agreement reached privately between the employer and its employees on employment conditions. It provides an employer with the freedom to negotiate with its employees on matters such as pay rates, allowances and penalty rates, rather than having to comply with the conditions set out in modern awards.

In order to register an EBA, the EBA must be voted on and approved by the employees. After a successful vote, the EBA is lodged with the Fair Work Commission. To approve an EBA, the Fair Work Commission must be satisfied that it has been genuinely agreed to by the employees covered by the agreement, and that it passes the Better Off Overall Test (BOOT). Once registered with the Fair Work Commission, an EBA can operate for up to 4 years and can apply to current and future employees employed during the 4 year operational period.

Would you like to know more?

At Capital Legal we manage the EBA process from start to finish. This includes drafting of the EBA, bargaining with employees, assisting with the voting process, lodging the EBA with the Fair Work Commissionand everything in between.

BOOK NOW: COMPLIMENTARY Workplace Relations Health Check for Resonate Clients

This is your chance to find out if your business is compliant with current workplace laws and discuss employee issues such as discipline, poor performance and bullying and harassment. For a limited time, Capital Legal is offering complimentary workplace relations health checks for Resonate clients . A health check involves a Workplace Relations lawyer assessing key workplace practices in your business and examining ways to improve workforce structure, reduce the risk of employee claims and increase workplace efficiency and compliance.

To find out more, call Julie Granton 08 9364 5444, email Julie@capital-legal.com.au or contact your Resonate Accountant info@resbc.com.au .

The post Like to know how an Enterprise Bargaining Agreement (EBA) can grow your business and save it money? appeared first on Resonate Business Consulting .

You don’t know what you don’t know!

Mon, 25 Aug 2014 01:37:00 GMT

The view from the window at Resonate HQ on a brisk winter’s morning is sublime. The backdrop of the Perth city skyline as it begins to glimmer with the first rays of sun, and in the foreground a stream of commuters that have disembarked the train and are heading to work to begin the daily grind. However, as if the parking at train stations wasn’t bad enough, the commuters often have to endure a cloud of cigarette smoke as they pass by.

For a little over a year now we’ve been watching the crew across the road (business name withheld!) as they venture outside for a cigarette break during the day. We’ve affectionately named them Dartman 1, 2 and 3. Some close analysis has revealed that Dartman 1 & 2 venture outside on average 7 times per day. Dartman 3 is less frequent, averaging around 4 times per day. More recently the team has been joined by Dartwoman 1 and 2. Dartwoman 1 is only twice per day, Dartwoman 2 is more of a social darter: Friday afternoon with a glass of chardonnay seems to be her prime time.

What are you going on about? You may ask. Well, at Resonate, it always comes back to numbers. We’ve got spreadsheets to track stationery usage. So, we put together some numbers to calculate the lost productivity of the Dart Crew just to see what it was costing Business X to fund dart breaks on company time. We’ve made the assumption that the average hourly charge out rate of the dart crew is around $100 per hour. It could be more, but they aren’t lawyers. The table below calculates the foregone revenue for the dart crew over the course of the year.

For illustrative purposes only, if the dart crew were (cheap) lawyers charging $500 per hour, the foregone revenue amount is an astronomical $178,000 per year!

This example illustrates the critical importance of having quality data and custom KPI’s for your organisation. Drivers of profit vary from one organisation to the next. For example, a retail business places higher importance on the age and value of stock levels. A pub/hotel needs to focus on the ratio of labour to revenue, while a service-based business should reconcile hours billed to clients against labour hours paid, as this provides the most accurate measure of employee productivity.

We can help you identify custom drivers for your business, and implement strategies to improve the quality of your financial information. Don’t hesitate to call on 08 6298 7320 or email info@resbc.com.au for a chat about this anytime.

In aid of Men’s Health week, chemist warehouse have a promotion where you can trade a cigarette for a pack of Nicorette patches. We’re going to drop a flyer to the dart crew later this morning. Visit http://www.chemistwarehouse.com.au/category.asp?id=800&cname=Nicorette for more info.

The post You don’t know what you don’t know! appeared first on Resonate Business Consulting .

Business Owners: Are You Inadvertently Putting Your Family Home At Risk?

Tue, 05 Aug 2014 12:10:00 GMT

As a business owner, there are plenty of things you need to manage, and two of the most important of these are assets and risks.

In other words, building your wealth and protecting your wealth.

There’s no point building a lot of wealth if the way you have things structured behind the scenes means that someone could take your assets away from you.

Sadly, many business owners are in precisely this predicament…
…without knowing it!

Following are some crucial concepts that, if you as a business owner don’t understand them and put protective measures in place, your family home (and all personal assets of you and your family) are at risk of being lost if someone decided to take legal action against your business.

Consider these facts…

• Your business faces unpredictable risks through interaction with employees, customers/clients and creditors.

• This means there is potential to be sued by a variety of parties. Where there are agreements in place, sometimes disagreements later result. This is life. It makes sense to accept that, and plan and protect yourself, rather than hope it never happens.

• Litigation, sadly, is increasing each year, largely driven by lawyers offering ‘no win, no fee’ services.

• This encourages people to ‘have a go at you’ through legal action. They have nothing to lose, after all.

• This means you need to ‘ build a wall’ between your business risks and your personal assets otherwise you risk losing it all.

• This ‘wall’ protects you and your family from losing assets such as your house or personal investments, if your business was to be sued.

• The wall is created by clever use of companies, trusts and also deciding who within a married couple, for example, should and should not be a Director of each company. This is a key point. One seemingly simple mistake in this area can cost a family their house.

• The standard type of will puts your family’s assets at risk, because if the person who dies holds the family’s personal assets in their name, ownership of these assets will revert to the person who through their Directorships in the business, is at a much higher risk of being sued.

This presents significant risk.

So what can you do about it?

If you haven’t looked at your asset protection structure in the past 12 months, you need to make that a priority. Then this should be reviewed annually.

Why?

As your life changes, your asset protection strategies—your ‘wall’—needs to be checked that it is still appropriate. As part of this process we also ensure your wills and estate planning are in order. Remember, the standard type of will can bring down your wall.

In addition to wills, there are other important documents to have in order such as an enduring power of attorney. This is a legal document that can give someone else—the person you choose— * the power to make personal or financial decisions on your behalf. *

You see, it is far more common for someone to become incapacitated through accident or trauma such as stroke, than it is to suddenly die. If this happens to you, you may not be able to communicate your wishes and make decisions when you need to.

The consequences of this are dire and tragic.

Why?

It’s all about choices and about ensuring you protect your family and your assets. Without sound asset protection and effective wills and estate planning in place, the legacy you have been working so hard to build may not end up in the hands of the people you intend.

The potential tragic nature of this type of scenario is why we feel so passionate about asset protection and estate planning … because it’s all about protecting the families we serve.

If you’re anything like our many other clients who have these structures in place, we think you’ll find the costs of ‘building these walls’, so to speak, relatively minor compared to the protection they give you and your family.

Your next step … Call us on 08 6298 7320 or email us on info@resbc.com.au to make a time to meet and discuss your options. We’ll then outline the costs so you know exactly what lies ahead.

The post Business Owners: Are You Inadvertently Putting Your Family Home At Risk? appeared first on Resonate Business Consulting .

Get It Done. Get It Read. Get Ahead.

Tue, 15 Jul 2014 02:10:00 GMT

Success in business requires a number of essential ingredients. A sound strategy. A robust business model. Effective planning. Strong financial control and bookkeeping. A good team. Great systems. Measurement. Focus.

But you know what? Even all those elements are not enough without this skill: Execution .

Call it “Getting Things Done”, making things happen, the action habit, extreme focus… call it what you like, for many entrepreneurs it’s what separates mediocre from magic . It’s the difference between a business that plods along from one year to the next, and one that grows, evolves, impresses, enriches.

Execution is a skill . Sadly, we’re not taught it at school. (Gee, but we all use those good ol’ quadratic equations each day!) The good news is that, as adults, we can go out and find the information and principles of effective execution, then apply them. Daily.

To fast track you on your journey towards becoming brilliant at execution, here are some books that we highly recommend that you not only read, but you study, practice, live by:

Read (or listen) to those books, and your mind will be permanently re-wired . Obstacles and frustrations will become Projects, Tasks, or Wildly Important Goals. And you’ll have a pragmatic framework for achievement and creating the change you want in your business.

And in your life. It’s powerful stuff.

We’d love to hear of your favourite books on this ‘execution’ topic. Please share them in the Comments below, and after you read (or if you have already read) any of the books above, please share with us the key principles and practises that have made the biggest difference to you in terms of “getting things done” and executing your ideas.

The post Get It Done. Get It Read. Get Ahead. appeared first on Resonate Business Consulting .

How To Have A Seasoned ‘CFO’ Help Guide Your Business Decisions

Tue, 01 Jul 2014 05:30:00 GMT

Larger businesses have a Chief Financial Officer (CFO) on staff. But what can small and medium sized businesses do in this regard?

Clearly, larger businesses can afford an in-house CFO. But it goes beyond an affordability issue: Large, successful businesses also understand how crucial the CFO role is to their business performance…

The CFO keeps an eye on the numbers, helps management create sound forecasts, ensures the cash inflows and outflows are managed well, reports on revenues achieved compared with targets, gives solid information on a range of Key Performance Indicators (KPIs) to the business decision makers, and also helps with decision making.

This is management input that all businesses require regardless of their size. But how can small and medium sized business access CFO input and guidance?

The answer: You out-source it. You get a part-time, out-sourced CFO until you can afford one full-time.

That’s where we can play a role.

Our ‘Insight’ service has been developed with input from our clients to make sure it’s the ideal mix of support services and affordability.

As ‘Insight’ we roll our sleeves up and work with you in management meetings throughout the year on:

As business owners we all know we need to measure and monitor Key Performance Indicators (KPIs). That is, the handful of numbers that really matter in running our business.

It is also important that you have a ‘KPI dashboard’ to display your KPI targets compared with your current KPI performance. This helps tremendously in monitoring and managing your business’ performance and ultimately hitting your targets.

As your outsourced CFO, we will bring to each meeting that we conduct with you clear financial reports, easy-to-understand KPI information, as well as our commercial experience to interpret the information, make suggestions and help guide your business decision making.

Items we’ll discuss each meeting include:

By helping with your forward planning for achieving the next period’s targets, and by being a sounding board for you as you strive to meet your targets, our ‘Your CFO’ service and support gives you a crystal clear focus for what needs to be done to achieve the goals of your business.

Your next step … Contact us for a no cost and no obligation meeting to discuss how we can work with you as your outsourced CFO. We’ll outline for you what’s included and what costs are involved so you can see how the service can be comfortably included in your budget.

The post How To Have A Seasoned ‘CFO’ Help Guide Your Business Decisions appeared first on Resonate Business Consulting .

Where Did It Go?: Taking The Mystery (And Pain) Out Of Managing Your Money

Mon, 16 Jun 2014 05:26:00 GMT

Most people will quite literally earn millions of dollars in their lifetime. Yet many people struggle financially and live from paycheque to paycheque.

With the ageing population and many Baby Boomers now continuing to work, at least on a part-time basis, past the traditional retirement age, people are working more years than ever. Even if a person works only 40 years, at average earnings, that’s a lot of money.

It is said, Money talks, but for many, all it ever says is, Good-bye.

Have you ever found that the month lasts longer than the money? Or have you ever got your tax return and looked at all the money you have earned over the past 12 months and then thought, Where has it all gone?

You’re not alone. And the good news is, now there’s a simple solution.

There’s a great quote from Charles Dickens, David Copperfield where the character Mr. Micawber says to Copperfield, Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

So true.
Yet keeping track of what you spend your money on, for many, is too hard, too laborious. The benefits of doing so are obvious to anyone, yet the discipline to keep all your receipts, enter the information into a program like Quicken Personal or MS Money (or just to write it into a paper ledger), and keep that going consistently over time is beyond most of us.

Well … and here’s the good news … what if a piece of software could track and categorise what you spent your money on, but it involved very little effort by you?

Imagine the clarity you’d get if you knew exactly how much you have spent and what percentage of your income is going on the various areas including mortgage/rent, vehicles, groceries, schooling/education, eating out, entertaining, mobile phones and internet, medical and pharmaceutical, and so on.

For most, it would be a real eye opener.

It is said that knowledge equals power.

That is very true when it comes to your personal finances.

Once you can objectively see exactly how your lifestyle and your habits that is, you are spending your money each year, and month-to-month as you go, you then have the power to make decisions on where you can change your spending (and saving!) habits.

In this information age and electronic era, many of us use credit cards, debit cards and EFT when buying things. We have now reached a point for the first time in history where more money is exchanged electronically than through cash transactions.

That’s a lot of transactions. And it’s a lot of data.

What that means, is that this data is available to be analysed, on a societal basis, industry basis, business basis and … a personal basis.

And that’s where a brilliant tool comes into play: Xero Cashbook

Here’s how it works …

Xero Cashbook is online software. It’s the non-GST version of the Xero software used by businesses.

It analyses and categorises all your electronic transactions to give you a snapshot of your complete financial position in an instant. This also organises a view of all your bank accounts and cards in one place. Very handy.

This is precisely what a lot of people have been waiting for.

An easy way to track and control your finances.

Xero Cashbook categorises your spending and saving, so you can tell whether your money is being used for essentials or you’re splashing out on other things.

If you are concerned about security, Xero protects your financial data with 128-bit SSL encryption, the same as online banking. Your data is well protected.

You can also invite people you trust, such as your spouse, accountant or other financial advisor, to access your Xero reports for free. This means that, as your advisors, we can see the true picture of your finances and spending habits, and help you stay on track.

This allows us to help you plan ahead and make the most of your money.

You will never before have felt so in control of your personal finances.

Being web-based, rather than being stuck on one computer like traditional software, you can access Xero from home, work and even on your mobile smartphone such as an iPhone and Android device.

If you’d like us to step you through getting set up with Xero Cashbook, or their Xero equivalent for Business, or both, get in touch and we’ll hand hold you through the process. It’s not difficult, and once your bank accounts are set up, it happens automatically from there.

The way we see it, the more clients we help keep track of their finances in such an easy way, the more clients who will prosper and find financial happiness instead of financial misery, to paraphrase Dickens’ Mr. Micawber.

Your next step … Call us on 08 6298 7320 or email us on info@resbc.com.au to make a time to meet and discuss your options. We’ll then outline the costs so you know exactly what lies ahead.

It’s time to stop saying “good-bye” to so much of your money each year!

The post Where Did It Go?: Taking The Mystery (And Pain) Out Of Managing Your Money appeared first on Resonate Business Consulting .

3 Reasons Your Business Needs A Budget Now

Tue, 03 Jun 2014 05:40:00 GMT

For many, the word ‘budget’ is about as appealing as the word ‘diet’.

It seems to imply what you will go without, rather than what you will achieve.

To a successful business owner, however, the word ‘budget’ has a very different meaning.

It’s more like a map than a diet.  It’s an outline of where you want to take the business, and what you need to achieve to get there.

Running a business without a budget is like a ship’s captain setting off on a voyage without a map. Sounds ridiculous, doesn’t it. Who would do that?!

Yet this is, figuratively speaking, what many business owners do.

Successful business owners, on the other hand, not only set clear targets and budgets each year, they monitor them closely each month, even each week, and adjust them as they go throughout the year.

Here are 3 compelling reasons your business needs a budget, now:

One: If you don’t know where you’re going, how do you know you’re not already there?

If you’re not satisfied with how your business is performing, unless you set clear goals for where you want to take it, it’s probably as good as it is ever going to get. At best, it will just meander along, subject to the whims and vagaries of the economy and general market conditions.

The good news is that your business doesn’t need to meander along.

The first step in charting a clear course for growing and developing your business is objectively measuring ‘where it’s at’ right now.

And the numbers do tell a story.

For some, they act as a wake up call. For others, they just confirm the journey’s starting point.

It’s paradoxical that a large part of the value in a business budget is not in the numbers themselves. It’s in the realisation and acceptance of where you are and where you want to be.

The numbers are just the signposts for the journey.

A factual look at the numbers that describe where your business is right now takes away all the subjectivity, opinions and ‘reasons’ (often excuses, disguised as reasons).

This is the naked truth.

In fact, it is like standing on the scales, naked, looking at yourself in a full length mirror. That may or may not be a pretty sight!

For your business, these factual numbers are the sales, the variable costs, the margins, the overheads, and, lastly, the profit. After all your work, this is the reward you’re left with.

Then comes the first of a series of ‘hard questions’…

• Are you happy with that profit?
• Is it worth it? Or are you dissatisfied? Then …
• What do you want those figures to look like?

Answer those questions, and you’ve just described where you want to be. Congratulations! You have charted your course, which is the first step to maximising your success.

Two: What’s more important to treat? Symptoms or causes?

As you well know, sales just don’t happen. Costs don’t just drop because you want them to. Sales and costs are a result of other underlying factors. Put another way, they are symptoms of causes.

The business budgeting process quantifies the symptoms, and by asking a series of ‘What leads to this number?’ questions, it also identifies the underlying causes.
For example, underlying factors contributing to a sales (revenue) figure could include:

• the number of calls made,
• the number of customers walking through the door,
• the percentage of conversions of enquiries or walk-ins to sales, the dollar value of the average transaction, or simply
• where your marketing is targeted.

These are all called drivers . The sales figures are simply a result of these drivers. Costs are no different.

For example, the rent paid may be a result of the storage you need for your stock levels. Wages costs may be blowing out as a result of overtime paid but underlying that may be inefficient staff. Or a lack of clear processes. Or both.

So in reality what came first was not the sale or the cost, but their underlying drivers. The budgeting process forces you to name and to quantify these underlying drivers.

That’s one of the most valuable aspects of preparing your budget. Not the budget itself, per se, but identifying your business’ drivers.

Why?

Because then you can focus on improving them.

That’s what will produce the improved results in your business. No looking at last quarter’s figures. That’s history.

It’s more fun to create history. And that is, in essence, what you are doing when you are in your own business. You are captain of your own destiny, and you can steer it in any direction you want.

Note that word … direction. A key point is to have one.

You will enjoy how effectively the budgeting and planning process will get you crystal clear on your direction.

Three: Budgeting is not about accounting. It’s about being accountable.

Once you are clear on the handful of drivers that creates your business’ results, the next question is…

What are you going to do about it?

Your budget won’t just give you a monthly sales target, for example, it will help you quantify the drivers that will produce the result.

For example, if next month’s sales target is $120,000, that end-result figure is not your focus. Not on a day-to-day basis. Knowing the underlying drivers, your focus will instead become, for example:

• 25 calls per day (Driver No.1)
• At 80% conversion rate (Driver No.2), with
• Each customer buying an average of $300 worth of products (Driver No. 3).

Now you and your staff have a clear focus and are 100% accountable.

That’s good for them, and good for you and your business.

Tip: People in a business want a clear scoreboard and a ‘game to play’ so they know whether they are winning or not. Research has found that a lack of measurement in a job is demotivating to a staff member. See Patrick Lencioni’s books such as ‘3 Signs of a Miserable Job’ for more information on this topic.

Knowing these drivers, and quantifying a target for each … you can ask questions like:

You can then decide to improve skills, or systems, or attitude, or all three!

As you can see, the power of the budget is in the process of preparing it, and then the budget itself is a tool to hold you accountable to the measurable indicators you’ve chosen.

An added layer of accountability is… us.

We work with a number of clients where, on either a monthly or quarterly basis, we act as a sounding board and independent party to ask you the hard questions about the drivers and the results. This focuses your mind, allows you to form a clear Action Plan to improve results, and then increases your chances of success because you know you need to ‘report in’ to us next time.

It’s a brilliant process, that both we and our clients enjoy because it works wonders!

To take more control of your business and its performance, get in touch to make a time to come in and see us. Depending on the size of your business, we might work out that a quarterly process might work best (and be the most feasible, cost-wise), or your business might be at a point where monthly or even weekly guidance would be ideal.

Either way, we’ll outline your options and your costs so you know precisely what’s involved.

We look forward to helping you chart your course, helping to get a clear direction, and then keeping you and your business on course.

After all, you won’t end up at the ideal destination by drifting …

Your next step … Call us on 08 6298 7320 or email us on info@resbc.com.au to make a time to meet and discuss your options. We’ll then outline the costs so you know exactly what lies ahead.

The post 3 Reasons Your Business Needs A Budget Now appeared first on Resonate Business Consulting .

A Trap That Causes Many Businesses To Go Broke, While They’re Making a Profit

Sun, 04 May 2014 12:20:00 GMT

There’s a saying in business, “You can go broke making a profit.” And another, “Cash is king. Profit is theory.”

As you know only too well, you don’t pay rent, meet payroll or pay your bills with profit.

You pay them with cash.

A business can make a lot of sales, have a book full of orders, have delighted customers and clients, have a great reputation, be growing, and yet still go broke.

Why? Cash flow.

The business might be profitable on paper, but have no money left in the bank. They become insolvent.

A growing business is often hungry for cash … hungry for inputs so it can make the business’ outputs, be they physical products, services or a combination of both.

The tragedy in this is that cash flow crises can often be averted. They can be predicted, planned for, and then contingency measures put in place.

For example, if a business has seasonal effects where some months are busier than others, or if a business knows it has some jumps in expenses or fixed costs approaching—such as moving to a larger premises or hiring more staff to cope with growth—then these expenses can be planned for and compared with the planned income in those months.

Which would you prefer to do?

(A) Call your bank manager and ask for a short-term loan or increase in overdraft when you are urgently in need of the cash (and therefore stressed, and desperate, and not in a great frame of mind to negotiate good terms), or

(B) Call your bank manager 6 months in advance and meet with him or her to explain the coming cash crunch, the reasons behind it, and plan for the funding in a calm, relaxed, totally-in-control manner?

Not only would you get the loan, you’d impress the bank manager and strengthen the relationship for further funding, should it be needed to support your growth.

The bank manager would see you are a professional operator with a planned approach to your business, not a fly-by-the-seat-of-your-pants operator. (They see a lot of those. They don’t like doing business with them.)

Apart from the relationship with your bank, there’s the immediate effect of sleeping better at night.

We all seek a level of certainty to comfort us. Knowing what lies ahead in business and planning your cash flow gives you a peace of mind and confidence in your day-to-day work that will rub off on those around you…
…in your workplace and at home. It’s a good feeling.

This is one of the reasons we are so passionate about helping our clients put together cash flow forecasts, to help them keep their business on track and to avoid any stressful, unpleasant surprises in the coming months.

It doesn’t matter whether a business is a one-person hairdressing or lawn mowing business, or a 10 person, 20 or 200+ person business.

Every business needs a cash flow forecast.

Running your business without a cash flow forecast is like driving a car at night along a dark country road with only your normal headlights on. It’s hard to see what lies ahead. Some wildlife might come right out in front of you, leaving no time for you to react. CRASH!

On the other hand, a cash flow forecast is like driving along that country road with high beam on. You can see so much more. You can drive with much more confidence. Less stress. And avoid the CRASH!

Another thing we often find in helping our clients build realistic cash flow forecasts, is that we can spot problems and make suggestion that help improve the business’ cash cycle. This puts money in your bank account.

For example, a combination of negotiating better terms with suppliers, tightening up or at least clarifying and enforcing your business’ own credit terms, and reducing stock holding and waste can have a powerful positive effect on your cash flow.

So, if a cash flow forecast is so crucial, why do many businesses not have one?
Simple. Business owners get busy. Busy pleasing customers or clients. Busy dealing with staff. Busy paying suppliers. Busy generating sales.

Also, it’s easy to get ‘too close’ to your own business. “You can’t see the forest for the trees,” as the saying goes.

Having an independent and fresh pair of eyes come in and look at your business—especially cash flow which is its life blood—allows opportunities for improvements to be identified. Things that are there, but difficult for the business owner to see amidst the ‘busy-ness’ of it all.

So, what should do about it?
Call us. Take action. A cash flow forecast costs less than you think.

It’s time to turn those high beams on!

* Your next step * … Call us on 08 6298 7320 or email us on info@resbc.com.au to make a time to meet and discuss your options. We’ll then outline the costs so you know exactly what lies ahead.

The post A Trap That Causes Many Businesses To Go Broke, While They’re Making a Profit appeared first on Resonate Business Consulting .

Your 9 Point Checklist for Paying Less Tax This Year  (And Why This Checklist Will Be Useless to You in a Few Weeks’ Time)

Tue, 01 Apr 2014 10:01:00 GMT

Time is running out.

If you want to take a few simple preventative measures to minimise or defer how much tax you will pay for this Financial Year, you need to do two things:

Depending on your situation, this tax planning process could save you many thousands of dollars. That’s cash in your bank account, rather than the Tax Office’s.

After all, why pay one more dollar in tax than you have to?

I’m sure you have better uses for your money, such as investing in your future or just investing in the here and now and rewarding yourself with a little ‘lifestyle indulgence’.

Now … to the checklist. Tick each item you think is relevant to you:

❑ Review debtors

Your income tax is payable on any invoices you’ve issued, even if you haven’t been paid. Don’t pay tax on any invoice you know won’t ever get paid. Review the list of those who owe you money and write off those ‘bad debts’ now.

❑ Review your stock levels
The value of your closing stock directly affects your business profit, the higher your stock value the higher your profit and tax. Review and identify any obsolete or old stock and scrap it or re-value it to its correct value. Individual items of stock can be valued at cost, market value, or replacement value.

❑ Review your business assets
Write off any obsolete asset and claim its remaining book value now. There are also new ways assets can be depreciated, called pooling, that will increase the depreciation expense. This isn’t suitable for all business, but it is worthwhile reviewing.

❑ Defer income — A simple tip that can defer a lot of tax for you
If your cashflow allows, you may consider deferring some of your invoices until July. If the income was not invoiced this financial year, it can’t be taxed this financial year. Before taking this option we recommend having a budget to manage these months income and expenses. We can help you with that.

❑ Review your invoices issued
If you have invoiced someone in advance for services you will provide in the next financial year, then you may not have earned that income in this tax year. That income may belong in the year you provide the service. Again, this is something we can work out with you when we meet for tax planning.

❑ Pay the June quarter superannuation
Superannuation if paid on time is deductible when paid. Since you have to pay the 9% superannuation by 28 July, bring it forward a month and pay it now and claim the deduction now. Why wait a whole year to reduce your tax?

❑ Using all of your superannuation cap
If maximising your superannuation is part of your retirement plan, then don’t forget to contribute as much as you can into your super fund. We can guide you as to how much you can contribute. It’s a missed opportunity not to do this each year.

❑ Employee bonuses
Bonuses to employees are deductible when the business has committed to paying them and it is not subject to any discretion. So finalise and sign off on the bonuses to be paid and reduce this year’s tax.

❑ Capital Gains Tax (CGT)
Minimising your capital gains tax is often about timing. Ensure the asset has been owned for at least 12 months. If you already have a capital gain, are there any investments making a loss you can sell? Do you qualify for any capital gain rollover relief concessions? (Again, we can guide you here.) CGT is a whole topic on its own, and the potential savings are so great, it is definitely an area in which you should seek our guidance.

If you ticked any of the above items, then we need to talk. And soon.

Call us now on 08 6298 7320 or email us on info@resbc.com.au to make a time to meet and discuss your tax planning options.

The post Your 9 Point Checklist for Paying Less Tax This Year  (And Why This Checklist Will Be Useless to You in a Few Weeks’ Time) appeared first on Resonate Business Consulting .

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