Post on 30-Jun-2015
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© Sullivan Dewing Pty Ltd
Prevent you and your business
from withering on the vine – become
Financially Well Organised
© Sullivan Dewing Pty Ltd
Definition of “withering on the vine”:
if something withers on the vine, it is destroyed very gradually, usually because no one does anything to
help or support it
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What we’ll be covering:
Tips to become Financially Well Organised
Live example
SMSFs
What to look for in an accountant
© Sullivan Dewing Pty Ltd
Asset protection
Company Trust with Corporate Trustees
Move business assets into another entity
Don’t buy commercial property in the company
Tip #1: Business Structure – Get it Right
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Tip #2: Put a Success Plan in place Have a clear vision & share it!
Surround yourself with a Champion team
Organisation chart & Positions descriptions
Profit Plan – to achieve the best profit you can
Prepare a profit plan bottom up
Integrate strategies, e.g.; dividend & super payments
Marketing plan & calendar of activities
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Tip #3: Know Your Numbers
Set Key Performance Indicators (KPIs)
Financial = monitor monthly against budget, gross profit & net profit
Non-financial = monitor new customers, where they come from, quote conversion rates, complaints
Measure key financial drivers such as, Debtors Days, Creditors Days & Stock Turns
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Tip #4: Be Selfish - Pay Yourself
Build payments into your Profit Plan
Schedule your payments weekly or monthly
Wages
Dividends
Super
So that they happen IRRESPECTIVE!
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Tip #5: Structure Your Salary
Reducing your salary saves ‘on-costs’ such as Payroll
Tax & Workers Compensation
Pay a dividend
Beware work cover audits
Understand the Tax Rate Play Off
Don’t forget to pay SGC each quarter – you have 28
days to pay
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Understand the Tax Rate Play Off
Tax Calculations - 2013 Income range Rate Payable Average
Up to $18,200 0.0% $0 0.0%
$18,200 $37,000 19.0% $3,572 9.7%
$37,000 $80,000 32.5% $17,547 21.9%
$80,000 $180,000 37% $54,547 30.3%
$180,000 45%
Plus 1.5% Medicare Levy
Effective Tax Free for 2013 $20,542
The difference between marginal tax & average tax.
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Tip #6: Know Where Your Cash Is
Cash is King
Improve your cash position by:
Creating a water tight system for collecting debtors
Managing your expenses & creditor payments
Improving stock turns
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Tip #7: Structure your Debt Tax Effectively
Principals are:
Reduce non-deductible debt first
Non-deductible loans should be Principal &
Interest
Deductible loans should be Interest Only
until all non-deductible debt is repaid
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Tip #8: Keys to Business Survival
For business survival you need to make more money than you spend:
Profit
Cash Flow
Return on Investment
“Revenue is for dreamers – Profit is for keeps”
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Tip #9: Build a Championship Team
Create a healthy, team oriented culture
Provide a business structure that
encourages teamwork
Understand your role as a leader
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A team of champions will never beat a champion team
"Teamwork is the ability of individuals to work together toward a common goal. The ability to direct individual accomplishments
toward a common objective.”
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Tip #10:
Register your trade mark!
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Tip #11:
Delegate!
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Live Example – 10 Years in Business
Financially Well
Organised
Financially Disorganised
Turnover 10,000,000 14,000,000
Gross Profit % 18% 17%
Net Profit % 10% 3%
Business Value 4,000,000 1,680,000
Wage & Dividend Package 500,000 150,000
Super Value 600,000 40,000
Personal Wealth - ex Business 3,500,000 1,000,000
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Take The Test!
How Financially Well Organised
Is your business?
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SMSFs the perfect vine for growing
personal wealth
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You don’t want to be one of the 2/3 of Australians who will retire on pensions of
$253 per week each
SMSFs
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Did you know:
A Self Managed Superannuation Fund (SMSF) can now negatively gear or borrow to buy property
SMSFs are very tax effective way to build wealth that is protected from creditors
To retire comfortably at age 65, you need approximately 15 times your final salary in superannuation
SMSFs are the fastest growing sector of the Super Industry (approximately 470,000 funds with average of $900k)
SMSFs
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SMSFs - Contribution Limits Concessional (Tax Deductible)
Member age < 50 years : $25,000 p.a
Member age 50+ years : $50,000 p.a –Last Chance
Reduces to $25,000 on 1 July 2012
Non-Concessional (Non Tax Deductible)
$150,000 p.a + 2 years B/Fwd
Rules 65 years +
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SMSFs - Phases of Super Funds
1. Accumulation
Contributions taxed @ 15%
Income taxed @ 15%
Capitals Gains Tax @ 10%
2. Pension
Contributions taxed @ 15%
Income @ NIL
Capital Gains Tax @ NIL
Benefits Paid – NIL if member > 60years
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SMSFs – Can borrow to buy property
Benefits:
Capital gain 10%
No tax on sale if in pension mode
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Someone who will:
Best tax result possible – minimise your tax legally!
Help build your profit & personal wealth
Work with you to become financially well organised
Tax Returns done right & lodged on time
What to look for in an accountant
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Someone who will:
Phone calls returned as a matter of priority
You spend time with your them more than once a year
Someone who genuinely cares about you & your
business
What to look for in an accountant
© Sullivan Dewing Pty Ltd
Thank you
& Questions