sullivan dewing business builders - prevent withering on the vine - becoming financially well...

© Sullivan Dewing Pty Ltd

Prevent you and your business

from withering on the vine – become

Financially Well Organised


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


What we’ll be covering:

Tips to become Financially Well Organised

Live example

SMSFs

What to look for in an accountant


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


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


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


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!


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


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.


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


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


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”


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


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.”


Tip #10:

Register your trade mark!


Tip #11:

Delegate!


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


Take The Test!

How Financially Well Organised

Is your business?


SMSFs the perfect vine for growing

personal wealth


You don’t want to be one of the 2/3 of Australians who will retire on pensions of

$253 per week each

SMSFs


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


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 +


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


SMSFs – Can borrow to buy property

Benefits:

Capital gain 10%

No tax on sale if in pension mode


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



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



Thank you

& Questions