Posts Categorized: Business improvement & efficiency

Small businesses protection against unfair contract laws

Unfair contract laws to protect small businesses were introduced in 2016.  We are pleased to report that as of Thursday 9th November, they have substantially tightened.

One of the main changes is that fines can now be imposed against those enforcing unfair contract terms on small businesses.  Those fines are up to $2,500,000 for individuals and $50,000,000 for corporations.  Previously there were no fines.  Now these laws have some teeth!

Furthermore, a person who breaches the new rules can be disqualified from being a director for up to 6 years.

Following are some examples of unfair contract laws (where it gives one party but not the other):-

  • Vary the terms of a contract.
  • Terminate a contract.
  • Renew or not renew a contract.
  • Apply penalties to the other party for a breach of contract.
  • Vary the price payable without the other party having the right to terminate the contract.
  • Vary the characteristics of the contracted goods or services.
  • Restrict one party’s right to the sue the other party.
  • Another important change is the definition of a small business has been increased from 20 to 100 full and part time employees.

The somewhat recent small business protection now really has some teeth.  Moreover, it will act as a deterrent against those who have unfairly acted against small businesses in the past.

Please contact us if you would like a referral for a unfair contract matter to a qualified lawyer.

You can also read more at posts by ACCC and ASIC

Upcoming interest rate rises

It seems all the pundits are now predicting not only a rate rise next Tuesday of 0.25% but another 3 such rises during the year.  For many newish homeowners, this means the base rate of 4.1% is well above the 2.5% interest stress test under which they gained their loan.

So what does this mean to your personally and/or your business?

One number I have heard is that there are 110,000 households in Melbourne suffering mortgage stress.  And that is no surprise when you consider that the repayments on a $750,000 loan have already increased by $1,300 per month.  And if they increase by another 1%, then those repayments will increase by a further $480 per month.  It s scary to contemplate what that current number of 110,000 will grow to.

You can find out more and be given actions you can implement in our webinar tonight at 5:30.  We will also explore 4 other key areas to plan and protect against in 2023.

You can book your place at https://tinyurl.com/bdvxtvmn

5 key actions in 2023

There are always challenges but we seem to currently have our fair share.  We currently see 5 key actions required to navigate 2023.

The question is what are you going to do about them?  Are you going to let them control you?  Or are you going to protect yourself from them to ensure your business or yourself personally doesn’t suffer?

We see 5 risk areas to navigate in 2023:-

  1. Cyber crime & computer safety.
  2. Inflation.
  3. Interest rates (and cash flow).
  4. Technology.
  5. Protect personal wealth that is otherwise exposed.

The degree to which these 5 risks affect you may be different to others and may be one or two don’t affect you.  But doing nothing is rarely the best option.  We therefore encourage you to attend our upcoming webinar on Tuesday 31st January at 5:30 during which we explore these risks – and more importantly, the 5 keys actions you can implement in face of them.

You can reserve your place by clicking here.

And as we are passionate about helping small businesses, we welcome your extending this invitation to family, friends and business colleagues.

 

Why is planning so important?

Why is planning so important?  No doubt you had numerous ideas over the summer break on ways you can improve your business in 2022.  Don’t let that impetus and initiative slip away!  The medium by which to bring those thoughts together and generate results is to bring everything together in a business plan.

And new year planning could not be more important given how covid affects us all.

Planning requires thought, analysis and decisions to be made in context of other factors and considerations (and not in isolation).  Planning requires clear thinking, rather than knee-jerk reaction, and forces you to take a breath.  It is no coincidence that those businesses that plan tend to be more successful.  It is that focus that also ensures that key people work on the key tasks and aren’t consumed by dealing with what were really unimportant but neglected matters that have become urgent.

In preparing for battle I have always found that plans are useless but planning is indispensable.
Dwight D Eisenhower
(And he should know as he was in charge of D-Day)

Some think it requires you to lock yourself away for days on end.  It doesn’t.  It will however take time as will the on-going reviews of performance.  Planning gives you a roadmap and series of goals to measure yourself against.  It also gives not clarity but also focus to your employees.  Don’t lose those ideas you had!  Set aside time to properly formulate a plan and put it into writing.

We have all the tools and experience to guide you through this process.

We also have the systems to both measure your success and hold you accountable in reaching your goals.

And what better way to identify key areas of focus for 2022 by attending our upcoming webinar – 7 key things to implement in 2022.  You can register your place by clicking here.

A good plan is like a road map.
It shows the final destination and
usually the best way to get there.
H J Judd

Worried about your cash flow?

Worried about your cash flow?  It’s the number 1 concern at this time of year.  And understandably so as cash flow is the oxygen that keeps any business running.

Cash flow concerns this year are a bit different.

Whilst some business have sold their socks off over the last 18 months, others have got by whilst others have struggled.  Now that many businesses have been able to fully trade again, a Christmas holiday slowdown hasn’t exactly come at the right time for many.

It also appears as the ATO, who haven’t been chasing unpaid debts, now seemingly appears to be actively be chasing unpaid tax debts.  And for those with tax debts unreported and unpaid for more than three months, there is particular concern as it has been said by liquidators that the ATO will use the Director Penalty Regime to assign and collect business tax debts from directors.

Not being able to pay wages and other expense sin January and February is what keeps small business owners awake at this time of year.  And the problem is publicly available accounting software reports on the past.  Some may now market cash flow forecasting but that is very short term and incomplete.

So what do you need to understand and control your cash flow?

  • We can provide you with a number of tips gained form any years working with and advising a vast array of industries.
  • We have a specialised cash flow tool that provides full 4 way forecasts.

So what should you do?

We invite you to a free 30 minute meeting in which we can again understanding of your situation and concerns and then explain ways in which we can help.  You have nothing to lose and may end up sleeping better and enjoy Christmas.

Should you change business structure?

Trust, company, partnership or sole trader?  Choosing the right structure to run your business is not an easy task.

You have to take into account such things as:-

  • Asset protection
  • Family succession
  • Tax
  • Admitting or removing unrelated business partners.

Each structure has their own advantages and disadvantages depending on your personal circumstances.

But even with the right choice made at day one, personal circumstance often change over time to the extent that the original entity that once served its purpose no longer does.  Or becomes a hindrance.

There are two main obstacles to changing structure:-

  • Cost – both monetary and time (as in notifying customers etc as well as getting insurance and telecommunication contracts re-set in your new entity)
  • Transaction costs – in particular Capital Gains Tax, but also there can also be considerations such as Stamp Duty

But there are forms of relief under the Tax Act which either defer, reduce or eliminate and capital gain.

Too many accountants are focused on processing the past, whether that be a Tax Return or a BAS.  At MRS, we are focused on our clients’ long term success and security.  We are currently re-structing two clients structure – one to allow the admission of business partners and the other to obtain greater protection, greater tax efficiency and eventual exit of the business founder at a much reduced capital gain.

Are you concerned that you are not in the best structure?  Or may this is not something your accountant has not discussed with you.  Either way, we welcome a free 45 minute exploratory discussion.

The 5 key things to implement in 2022

Hard to be believe this year is almost over!  It has been a tough year for many.  But that said, the economy has performed surprisingly well, we have high vaccination rates and statements from our leaders that we are not going back into lockdown.

It seems as though we can relax over the Christmas break with a degree of calm.

The Christmas break is a great time to take a breath and re-asses your work and personal life.

But having started work on the back of the 1983 recession and worked through the ealry’90’s recession, not to mention the GFC, the 1997 Asian crisis and other such events, the effects of covid will play out for a couple of years yet.  We are not out of the woods yet.

In light of the uncertain times that lie ahead, on Wednesday 12th January we will explore 5 key things to address and implement in 2022

  1. Re-evaluate how covid has changed your business and moreover how your business needs to adapt. In particular we will explore who is now your customer target base and how to find them.
  2. Amend your STP payroll reporting to not fall foul of Fair Work Australia obligations.
  3. Making a profit is the goal but the oxygen to a business is its cash flow. We will explore how to better manage and improve your cash flow.
  4. With a federal election looming, take up any advantage under existing tax laws.
  5. Being in business carries the risk of getting sued. We will examine key asset protection strategies to protect the wealth you have worked hard to generate and/or inherited.

You can reserve your place at this 45 minute webinar by clicking here

And as we are passionate about helping small business owners through these difficult times, we welcome your passing on this invitation to family, friend and business associates.

Extended rental assistance for small businesses

During the week, the Victorian state government announced extended rent relief for small businesses.

Businesses can now choose any three consecutive months between 1st April to 30th September 2021 and compare that to the same period in 2019.

So should there be a fall in turnover of more than 30% then the rent is to be reduced accordingly.  This means say where there is a 60% fall in turnover, a small business owner can request the landlord to reduce the rent to 40%.  In other words, you as a small business owner won’t ever pay 30% of the rent with the other 30% deferred.

The scheme applies retrospectively from 28th July 2021 to 15th January 2022.

The sooner you make the request of your landlord, the more you stand to benefit.

We welcome the opportunity to discuss this with you even if just to work out whether you qualify.

Small Business Adaption Program extended

Good news in that Victorian Government’s Small Business Adaption Program has been extended.

The Small Business Adaption Program is a reimbursement scheme – you spend the money then get refunded $1,200 for 12 months access. 

Software providers haven’t exactly jumped at this scheme as only 14 have registered. 

But that said, there are key players on the list including:-

  • Service M8 (for tradies)

  • Shopify

  • Square

  • Squarespace

  • And accounting programs MYOB, QuickBooks Online, Reckon & Xero.

Key requirements are:-

  • Business must have been operating by 13th September 2019.

  • Your business doesn’t already use the program.

Sounds good?  If so get cracking as applications are taken until 5th December (or earlier if the allocated program funds are exhausted).

Want to know more –  click here.

Lockdown #6 – extended business covid support

In response to the snap lockdown announced on Thursday afternoon, the state government announced on Friday further covid support to businesses.

In short, those who have qualified for support in recent rounds will receive a further payment. 

There has however been slightly more detail released in respect of the Small Business Covid Hardship Fund (you will remember from our email during the week that in response to our enquiry to the government support line was that they had no idea and were waiting on further details themselves).  Business who do not qualify under other support grants (which are largely industry based) can receive $8,000 if their turnover has fallen by 70% or more.  We will post a further blog when sufficient details are to hand.

You will remember from our earlier posts and emails that the federal government is distributing a Covid-19 Disaster Payment.  An employee will now qualify to receive $750 if their hours of work have fallen by more than 20 hours per week; $450 if less than that.

We will post further blogs when sufficient details become available.