Is Your First Impression Always The Best Impression? Following Up With Your Clients

When should a prospective client of your business feel ready and prepared to sign up for your service or product? Contrary to popular belief, it may not be after the first meeting.

While you may wish it was a case of ‘one and done’, a prospective client may take multiple meetings before they are ready to sign. Whether these are done face-to-face, over the phone, via email or through Zoom, the client is looking for reassurance that your service is the one for them.

Here are some tips to assist with handling client interaction during this period of courtship.

Take Interest

Demonstrate a sincere and personal interest in the prospect. Ideally, you want the prospect to come to see you as a ‘partner’ in his or her business venture rather than as a customer. Try to get the prospect to feel a special connection with you.

Build Relationships

Learn something new about the prospect each time you meet him. A relationship builds up gradually, but it should never feel as if it is standing still. Bring something new to the table each time you meet the prospect. There will be a trust hurdle early in the relationship. Your ability and willingness to impart helpful advice and find a new angle each time will do more than anything else to keep you in their favour.

Improve The Relationship

As you move forward, make sure that the relationship is improving each time. If a relationship is not moving forwards, it is more likely that it is moving backwards. Any hard-earned ground you’ve made in the relationship can disappear with a slip in trust or standards.

Make A Decision

Get the prospect to make a decision – even if it is just a ‘decision to decide’. He needs to take an active part in building the relationship. This is their contribution to the process.

Follow Up

Make a bridge to the next contact with the prospective client/customer. Never leave a meeting without connecting to the next one. A failure to follow up is essentially a failure to secure the client.

Do You Know What Your Business Is Worth?

One of the first and most important steps to take when you consider selling your business is to determine the value of your business and its assets to potential buyers.

It is a sad fact, but less than half of business owners in Australia are aware of how much their business is worth in monetary terms.

There is no quick and easy formula for determining the financial worth of your business. Still, there are a few key factors to consider when making an estimation, as well as a few ways of increasing the value of your business in the eyes of potential buyers; putting in a little bit of extra effort now could yield a greater sale price and more money in your pocket at the end of the day.

To help determine the most appropriate sale price for your business, consider the following factors:

Size 

The size of your business depends not only on the number of employees you have on staff but also on your client base and the reach of your products and/ or services. Remember, while larger business tends to be deemed less risky investments as they are seen to be more stable, smaller business can often be more attractive to potential buyers because of a lower asking price, smaller commitment and greater growth potential.

Growth Potential 

A realistic estimation of your business’s potential for growth will help you determine its future profitability and determine its current value. Consider the rate of growth you have experienced thus far, the financial climate and market trends to ascertain your business’s potential for growth. A high growth rate, proven or potential, will add attractiveness for potential buyers as it would enable them to pay off their investment quickly so that they could focus on making a profit.

Customer Base 

While the size of your customer base is an important factor to consider when valuing your business, the quality of your clients will perhaps add more weight to your bottom line. Think about your key clients, their reputations, their standing in the marketplace, and the amount of business and revenue they generate for you. A reliable base of key clients will be worth more to a potential buyer than a high number of small clients that cannot necessarily be depended upon for future sales.

Cashflow and Financial Management

Prospective buyers will focus much of their attention on your business’s bottom line and current profitability. They will be looking to ensure that your cash flow is steady and reliable, that your balance sheet is properly managed and that your finances are in order. Complete and up-to-date financial documentation and a well-structured financial department will make your business appear more reliable and help increase its value.

Valuing your business accurately is vital when determining your asking price; if you set it too high, you may dissuade prospective buyers or make you appear as though you are not serious about selling. Too low a price will decrease the perceived value of your business and its assets and make buyers less likely to believe in its worth.

For appropriate valuations, consider consulting with a professional (such as a valuation expert).

Collaboration Between Businesses During Times Of Isolation Could Lead To New Ways Forward – But How Do You Start?

Innovation is one of the pinnacles of good business practice. However, sometimes innovation isn’t a process that can be achieved by one person alone. In business, some of the best ideas and practices that your business might achieve could occur through collaboration.

Most businesses will have understood the impact and importance of internal collaboration between team members and already put into place tools to help promote this. However, what exactly does effective business collaboration look like?

Business collaboration is the leveraging of internal and external connections in order to generate ideas, find solutions and achieve common goals for your business. It can be done internally (through collaboration with your team), or externally (through the combined efforts of multiple businesses).

Many businesses are already seeing the benefits of remote collaboration within their teams, especially with regards to the time being saved and the increase in productivity.

Businesses may also find that learning opportunities are presented to their employees and team members through the interaction and collaboration with other businesses that could benefit them, with additional knowledge and skillsets gained throughout the process.

Even with many restrictions remaining in place that limit travel on both domestic and international scales, businesses are able to confer with remote workers and businesses through the assistance of digital technologies, thus enabling collaborative efforts to continue

As restrictions ease and businesses are able to engage with one another once again in face-to-face settings, remote collaboration tools can be used to facilitate inter-business collaboration from the ease of anywhere.

These include:

  • Instant messaging – allows for quick online communication for day-to-day business with the teams involved.
  • Video conferencing – replicating face-to-face contact without the need to travel into the office or to a meeting space.
  • Online workspaces – communicating, collaborating, and sharing ideas in one online space, without the need to be in the same room or even area
  • Cloud sharing – cloud tools offer functionalities for collaborating on files, tasks, projects, and calendars in real-time in one accessible, shared online space.

These tools allow businesses to work uninterrupted with individuals, clients and other businesses, as the distance between is no longer a major inhibiting factor to operations (if operations can be conducted away from the site). It can also potentially promote global interconnectedness for the business, as collaboration does not have to occur at a local or domestic level.

Your business might not collaborate with other businesses in exactly the same way as a business in the same industry. It’s important to know what might be the right form of collaboration for your business to benefit from it – and doing that will depend on what you may want to get out of it, and how long you may want it to last.

Alliance

This is known as the traditional type of business collaboration, usually involving two or three companies temporarily working together. They are able to reach a common goal by combining their resources and knowledge, which can be effective for businesses with knowledge/resource gaps that another business could temporarily fill.

Co-Opetition

Competitors can be great collaborators if used appropriately. Co-opettion involves collaborating with competitors so that businesses can share resources, avoid duplication of their work and generate new customers for all parties involved.

Portfolio

When one large business manages a broad collaboration with multiple smaller, external partners, this is known as portfolio collaboration. The main, central business sets the rules for the collaboration and maintains it, offering many of the benefits of an alliance but in a long-term form that generates more connections between businesses.

Community 

Simply put, community collaboration uses one of the greatest resources that a business may have at its disposal – the community. Essentially, businesses collaborate with individuals or other businesses that are within their community. This can be done via both the business community (e.g local business partnerships) AND the customer community (e.g. social media influencers).

Network

If a business knows of other businesses with similar goals and values that they want to uphold, they may instigate network collaboration. This style of collaboration means that the businesses may not necessarily be in competition with one another but, with shared interests can collaborate on mutually beneficial projects with access to one another’s resources and customer base.

Your business may choose to collaborate with other businesses through:

  • A wiki, which can be used to share knowledge, improve training and contribute towards a strong company culture.
  • Cross-promoting, where the businesses promote one another on various platforms. This could be done through social media, running partnered promotions, or even by getting creative with guest posts on websites or a shared podcast.
  • Running a networking event to find new clients and potential future collaborators, which can be conducted online or in person.
  • Community events can be a great way to connect your business with potential customers and collaborators, and running it with another local business is an effective way to put yourself out there and foster connections that could lead to long-term partnerships.

The rapidly changing and digitally-inclined business world means that businesses that don’t prioritise collaboration – both internally and externally – are likely to fall behind. Making the most of collaboration solutions and tools allows collaborations to be streamlined, which is beneficial to all involved.

If you are looking for advice on how to structure these collaborations or work out the best way to get involved with other businesses, you can plan out your way forward with our help. Start a conversation with us today.

Investigating Your Options For Your Business Before Closing Doors Could Open Different Pathways – Here’s Why A Restructure Should Always Be Considered First

With the demanding conditions that have plagued the retail industry over the past twelve months, business owners need to be aware of all the restructuring options available before it is too late.

COVID-19 has unfortunately resulted in reduced foot traffic, store closures, the accumulation of legacy creditors and significant deteriorations in working capital positions.

Even with the support of JobKeeper and other government initiatives buoying business ventures from early 2021 to now, many family and small businesses are sure to continue to struggle.

The Misconceptions Of Formal Restructures

The idea of restructuring your business or reaching out for external help can appear scary and often seen as something to be avoided at all costs. However, business owners are not on their own when dealing with the difficult conditions facing them in their short-term future.

No one wants to see a business fail.

That’s why there are always options available to businesses. However, the longer a company holds off on making a decision, the more the business and its available options will deteriorate.

If companies and businesses can act early enough, their options include informal arrangements and advice, voluntary administration, and new restructuring reforms for small businesses.

With the availability of these options and the right people involved, there is no reason why a financially distressed small business cannot survive the challenging times and thrive in the future. All companies experience some form of distress from time to time and often at no fault of their own. The ones that survive focus on cash, seek appropriate advice from trusted advisors at the right time and act further on it.

How Might A Business Survive Financial Distress

Using the voluntary administration process as a restructuring tool allowed Tuchuzy (a well-known retailer in Bondi) to successfully deal with legacy creditors, refocus on high margin product lines, and ultimately, the company continued to trade profitably.

The key to Tuchuzy’s restructure was a ‘light touch’ administration to minimise costs and disruption to the business and closely working alongside the director to ensure the proposal submitted to her creditors would be acceptable than an immediate winding up scenario (of which it was).

There is a lot of flexibility and breathing space afforded in the voluntary administration process.

The administrator can quickly reset the cost base by exiting unprofitable stores, reducing the workforce, and focusing on only buying and selling favourable margin products.

Even when a liquidation becomes necessary, the process can be reasonably quick, fair and transparent if run properly.

The secret is to overcome the general stigma accompanying restructures and approach restructuring experts early who will ‘unemotionally’ explain each available option and provide an impartial recommendation that aligns best with the individual circumstances.

What Do The New Small Business Restructuring Reforms Mean For You?

For a business with few creditors and a single location, the process of voluntary administration can be expensive and unnecessary.

Indeed, voluntary administration is often not appropriate for many small businesses due to associated financial costs and the hurdle accompanying a director relinquishing control.

The government has responded to this critique and offered an alternative. This alternative comes at a perfect time as directors are, once again, exposed to personal liability for insolvent trading.

The new small business restructuring (SBR) reforms offer a lower cost and far simplified restructure process, critical for small businesses to continue to trade after government assistance such as JobKeeper ceased in March 2021. The reforms add an essential new path that will assist many retailers.

Though there have been only a handful of SBRs to date, and their effectiveness to save businesses is yet to be appropriately evaluated, it is an option to explore in the right circumstances.

Critical Questions Your Business Should Be Asking

The COVID-19 crisis has put a severe strain on many previously successful businesses. Though the government and many advisors are attempting to ensure that they do not collapse, directors and business owners need to be proactive and engage early for them to work.

Often businesses approach liquidators and advisors at the point where their financial problems have become insurmountable, and a liquidation/shutdown is often the only option left. The timing of coming and asking for help can be the difference between a shutdown and the continuation of trading.

With proper preparation and an effective plan that considers all stakeholders, any business should be able to restructure and continue to trade.

If your answer to any of the below questions is yes, you should seek immediate advice from a trusted restructuring advisor.

  1. Am I currently losing money?
  2. Am I finding it hard to pay bills on time?
  3. Have I got old debts that I am finding hard to pay down?
  4. Do I need some breathing space?
  5. Do I have my ‘head in the sand’?

Rent Relief Rebate For Commercial Tenants & Landlords

Commercial tenants have been some of the hardest hit during the ongoing COVID-19 situation, with many losing out on revenue while businesses have been forced to close or make alternative arrangements across the state/country.

Several states have announced rent relief in the form of rebates and legislation to ensure that commercial tenants can viably remain in place during the ongoing situation facing the country.

Victoria

The Victorian government recently announced the finalised new regulations for the rent relief rebate and broadened the eligibility requirements for the Commerical Tenancy Relief Scheme (known also as “the Scheme”).

For Commercial Tenants

These amendments have been brought in to assist small and medium-sized businesses with some welcome rent relief, a major concern for many businesses within hotspot areas who cannot continue operations in the usual manner during the COVID-19 situation.

This rent relief rebate will be in the form of a proportionate reduction in rent, determined by the decrease in turnover/revenue.

Commercial tenants will now be able to choose three consecutive months between 1 April and 30 September to compare to their turnover in the same three months in 2019, to assist in determining the financial relief amount.

The Scheme is hoped to help the small and medium-sized businesses with an annual turnover of less than $50 million who have experienced a decrease of more than 30% during the pandemic of their revenue.

New businesses will also be eligible for assistance under the Scheme if they have been opened since April 2019. Special arrangements will be in place to calculate the turnover impacts for businesses that were not operating in 2019.

For Landlords

Commercial tenants are not the only beneficiaries of the rent relief amendments, however. Landlords who provide their eligible tenants with rent relief will be provided by the Government with tax relief of up to 25 per cent (in addition to any previous relief), with the support worth up to $100 million.  Additionally, any small landlord who can demonstrate acute hardship will be eligible to apply for payments as a part of a $20 million hardship fund.

In accordance with the Scheme, the Victorian Small Business Commission will support tenants and landlords with the provision of information to assist in negotiating a rent relief agreement. They will also provide access to free and impartial mediation if a fair agreement cannot be brokered, and are also offering help with negotiations and mediation in the event that a tenant isn’t eligible.

Landlords and tenants will require a mandatory reassessment point (as per the Scheme’s provisions) during the period of rent relief to check in on one another, and assess whether the circumstances have changed and rent relief should be adjusted accordingly.

The Scheme will apply retrospectively from 28 July 2021 through to 15 January 2022.

In light of the new rental relief amendments to the Scheme, commercial landlords and tenants should enter into a negotiation with regard to their current commercial leases. Seeking additional advice from legal professionals or the VSBC regarding these negotiations is highly encouraged.

New South Wales

In New South Wales, the government reintroduced the National Cabinet’s Mandatory Code of Conduct for Commercial Leasing, which will mandate the rent relief for eligible tenants who have been hit hard by COVID-19 until at least 13 January 2022.

For Landlords

With the extension of the Retail and Other Commercial Leases Regulation (COVID-19) 2021, landlords will be required to renegotiate with their tenants about rent. Previously, this regulation only required the landlords to attempt mediation before evicting or locking out tenants, but landlords will now be required to offer rent relief in proportion with a tenant’s decline in turnover. At least half of this must be offered as a waiver, and rent negotiations must be entered into prior to moving to evict or lock their tenants out.

The mandated relief will also be accompanied by a new $40 million Hardship Fund, which will be offering monthly grants of up to $3,000 for small commercial or retail landlords who have waived rent of the same value and who rely primarily on that rental income from the commercial properties.

Eligible commercial landowners are able to apply for up to 100 per cent of their land tax liability for 2021. To be eligible, the landowner must have reduced rent for the affected tenant by at least the amount being claimed for any period between July 1 and December 31 this year.

For Tenants

The extended regulation of the Retail and Other Commercial Leases Regulation (COVID-19) 2021 is applicable to those commercial and retail tenants with a turnover of up to $50 million who meet eligibility criteria for either the COVID-19 micro-business grant, COVID-19 Business Grant or JobSaver Payment.

In addition, the NSW government has committed $2 million to the Small Business Commission so that it can handle the surging demand for mediation requests from small businesses.

Queensland

Commercial businesses who have been impacted by the effects of COVID-19, which has resulted in a reduction in turnover during the response period or extension period, may be eligible to negotiate rent relief with their landlord under the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (known also as the Regulation).

The deadline for this was 31 December 2020, but may be subjected to change or amendment depending on the current situation in Queensland (as of August 2021).

The Regulation and the COVID-19 Emergency Response Act 2020 (known as the Act) sets out the arrangements in place for Queensland regarding small and medium-sized enterprise commercial leases affected by the COVID-19 emergency.

For Tenants

Under the Regulation, landlords cannot take prescribed actions against a tenant with an affected lease who fails to pay rent or outgoings or is not open for trade during either the response period or the extension period (including the taking of action after either of those periods). However, this does not mean that a tenant does not have to pay anything, or otherwise comply with their lease.

Commercial tenants must have an affected lease to be eligible for rent relief assistance under the Regulation. It must meet all of the eligibility criteria to be eligible:

  • It is a retail shop lease or prescribed lease
  • It was binding on the tenant on 28 May 2020
  • The tenant is a small and medium enterprise that carried on a business (or non-profit activity) in the financial year and had a turnover of less than $50 million for the 2020-21 financial year and/or turnover that was likely to be less than $50 million for the 2020-21 financial year.
  • The tenant under the lease is eligible for but not necessarily enrolled in the JobKeeper Payment Scheme.

Small businesses can also continue to lodge small business tenancy disputes as needed.

For Landlords

Negotiation must be entered into regarding the lease and prompted by either the landlord or the commercial tenant. Any information shared must be true, accurate and correct, and not misleading, while also being sufficient enough to enable all parties to negotiate in a fair and transparent way.

The landlord must make an offer about rent (and other lease conditions) during the response period and/or the extension period to the tenant within 30 days of sufficient information being received.

During the response period, at least 50% of the rent reduction must be waived as a discount, and the remainder of the reduction must be deferred to be repaid by instalments after 30 September 2020.

Franchising And Business, The Start-Up Without Needing To Start From Scratch

From petrol stations to hotels, to hair salons and fast-food chains and more, franchises are a common sight across almost every industry sector. With varying levels of complexity and market share, creating employment and prosperity for the nation, franchises are a business structure that you may want to consider investigating.

As a sector, Australian franchises make a major contribution to the economy, worth $184 billion dollars per year. Franchises can range from small, family-run businesses to larger businesses, and can provide Australian businesses with the opportunity to branch out into international markets.

Franchising is a business model where one company (the franchisor) owns a brand and offers a license to others (franchisees) so that they can sell the products or services under that brand for a defined period of time. As a business structure, franchising offers would-be business owners the ability to be their own boss with the support and reputation of an established and proven brand.

There are four business models that are generally used in franchising.

Manufacturer-retailer

In this business model, a franchisee enters into an agreement to sell the franchisor’s product directly to the public. It’s most commonly seen in businesses such as new car dealerships.

Manufacturer-wholesaler

In this specific business model, a franchisee is given a license to manufacture and distribute the franchisor’s product. It’s commonly used by soft drink companies for bottling their products.

Wholesaler-Retailer

Through the wholesaler-retailer model, franchisee retailers buy the products from a wholesale franchiser and then sell them under license at retail.

Retailer-retailer

This is the most commonly known and used franchise business model (also known as a ‘business format franchising model’). In this type of franchising agreement, the franchisor markets its products through a network of franchisees. Each franchisee must use a common name and a standard set of systems and processes and are obligated to protect the brand integrity of the franchisor by following the agreement guidelines. This may involve placing constraints on specifics to ensure the quality of the product or service is maintained, such as:

  • Where the franchise can be located
  • The image of the business
  • The quality of the goods and services
  • How the business is operated

Before choosing to buy into a franchise, it is critical that you conduct your own research on the subject. With so many options available, and so many choices to make, it may seem overwhelming. It’s best to ensure that you are choosing the right fit for you and what you’re looking to bring into the business.

Talk To Existing Franchisees

As buying a franchise business is a significant financial investment on your part, you should learn as much as you can about it beforehand. Any professional franchisor will encourage you to speak with their existing franchisees to get a sense of how they are run, and whether or not they may be the right fit for you. It allows you to gain an insight into the inner workings of the business and what it’s really like to own a business with that particular brand.

Research The Location

Some franchise opportunities will work better in particular locations, be it a result of the demographic, the demand or the actual physical location. For example, a franchised petrol station might work better in an area with higher traffic than in a residential area with little traffic. Research the competition in the area to determine whether or not you have a chance of success in your chosen venture, with the current customer base.

Be Aware Of The Workload

A franchise is just as much a start-up as any other. You are going to have to work hard on and in the business to make sure that things are progressing as planned. By putting yourself into the business as an owner-operator, you’ll be able to see what’s happening with your team, apply solutions to problems as they arise and be actively responsive to situations that may come up.

As with any business venture, it’s important to ensure that you, ahead of time, are adequately prepared to begin with the information you need.

You can speak with us for assistance with business planning, development, questions about your financial situation prior to investing and more. Come see us today.

Know What You’re Looking For In A Business Partner? Here’s What We Know Works…

Making decisions as the owner of a business can be a world of difficult choices, but none so much as deciding that your business requires a partner. It’s a critical, strategic decision for the business that you won’t want to get wrong.

Approach your search for the right business partner to suit your business as you would a life partner. As a major legal covenant, a partnership is not unlike a marriage of sorts in the business world. It’s also something that you won’t want to rush into. A good partnership requires:

  • A shared vision and goal
  • Mutual hard work
  • Open communication
  • Mutual respect
  • A balance of power
  • Effective conflict resolution

You might already have an idea of what you are looking for when it comes to a business partner, but it’s still important to identify key aspects of what makes a good one.

Critical Skills & Experience 

A candidate for a business partner should possess skills and experience that can be brought to the table which complement that which you already possess. They may possess strengths that you simply do not, which can make it easier to start, plan, grow and run a business.

For example, you may be a customer relations extraordinaire but struggle with the operational aspect of business development. That might be the skillset you look for in a business partner.

If the candidate for a business partner can also provide you with the resources and credibility for your business on top of sharing your vision, this can be a gamechanger. Those resources could include a secure business network, industry connections, client list or specific credentials and expertise that can add value to your business.

Values, Entrepreneurial Spirit & Business Vision

You will need to be able to communicate effectively with your partner to make decisions, set goals and drive the business forwards. Aligning your values and business vision with your partners will help facilitate your business’s development and growth without hindrance.

Minimise The Personal Intruding On The Professional

If your prospective business partner is facing serious challenges in their life, they may translate over to the business. While giving someone a chance to challenge themselves is an honourable act, running a small business takes focus, time and tremendous energy that they may not be able to afford to give.

Personal & Business Ethics

A partnership should be a mutual and trusting relationship. Someone who values honesty and practices good personal and business ethics should be at the top of your list. You don’t want to be involved with someone whose moral code does not align with yours, or who could get you involved in legal matters that may besmirch you and your business’s reputation.

Also, if you cannot respect your partner or they cannot respect you on a professional level, your ability to work as a team will suffer, and your clients will read into that as a lack of professionalism. Never partner with someone that you do not respect, or who does not respect you.

In the event that you choose or have chosen a business partner that is not right for you, make sure that everything agreed upon for the partnership was set out in writing, as breaking the partnership is no easy matter. With a lot of legal ramifications that you may face in dissolving the agreement at play, having evidence and a plan can save you plenty of grief.

For assistance with drawing up partnership agreements, business planning or simple advice on anything brought up here, you can speak with us.

Exporting Your Business Products? Here’s What You’ll Need To Know

Looking to expand your business into the overseas market, or thinking about ways to increase your revenue? Exporting a good or service to customers or businesses outside of your home country can open your business to new markets, which creates sales potential and increases your business’s competitiveness.

Australian businesses export a variety of products and services from industries across multiple sectors. The benefits of exporting for your business could include:

  • Learning new and innovative ideas and practices to make your business more competitive
  • Diversifying and spreading your risk across multiple markets, rather than in just the one
  • Increasing sales to grow the business steadily and sustainably
  • Gaining new customers and clients for your business’s products and services
  • Potentially better growth and expansion prospects for your business.
  • Taking advantage of opposite seasons to promote goods in other markets during opportune times

If you are looking to pursue exporting, you may want to consider whether the benefits of it outweigh the risks. Those risks could include:

  • Getting paperwork and compliance obligations wrong (including export documentation, meeting importing regulations
  • Forgetting to protect your intellectual property
  • Unscrupulous or unsuitable new business partners
  • Lack of understanding when it comes to the local culture which may impact on your brand reputation
  • Awareness of the hidden costs that may occur when entering a new market
  • Long and complex payment terms
  • Not receiving payment
  • Political and global risks, such as politics and events,  which may affect your business when exporting.

As long as you are abiding by your local, national and international legislation, you can start exporting today if you so choose to do so.

Exporting as a  business will require you to understand and comply with the current rules and regulations that govern both your country and the countries to which you are exporting. This may include additional reporting obligations by which your business may already currently be abiding.

If you’re looking into this avenue, we highly encourage you to speak with us, so that we can advise you on planning out your business’s path and future.

Impacted By The Latest COVID-19 Situation To Hit Businesses? Here’s What You Might Be Able To Receive

With the effects of COVID-19 being felt by millions across the states, businesses and individuals alike are turning to the government for additional support and relief in these financially uncertain times.

Due to the unique situations being faced by different businesses across the states, but with all requiring additional assistance to continue operations, the state governments affected by lockdowns have announced the following measures, programs and relief assistance to be implemented.

NSW

The 2021 Covid-19 business grant is a one-off payment of between $7,500 to $15,000, depending on the percentage of lost revenue. A revenue decline of 30% or more is necessary with an annual turnover of above $75,000. Applications have been open since 18 July.

“Jobsaver” is jointly funded by the NSW government and the Commonwealth government, and is a fortnightly payment of between $1,500 to $10,000 a week for entities with an annual turnover between $75,000 and $50m who can demonstrate a 30% decline in turnover.

To be eligible, entities must maintain their current staffing level as of 13 July 2021. For non-employing businesses such as sole traders, the amount will be set at $1,000 a week. Applications are have been open since 26 July 2021.

A micro-business Covid-19 support grant will also be available if you’re a small business or sole trader with an annual turnover of more than $30,000 and less than $75,000, with a 30% decline in revenue. The $1,500 fortnightly payment begins from 26 July.

The NSW government also recently announced that a business fees and charges rebate of $1,500 would be made available to eligible sole traders, small business owners and not-for-profit organisations for recovering from the impacts of COVID-19.  The claim only needs to be applied once but can be submitted multiple times until the full amount of $1,500 is reached. The rebate will be available until 30 June 2022, and more information about eligibility and conditions of use for the rebate can be found on the Service NSW website here. 

VICTORIA

 

In Victoria, financial assistance is available through Business Victoria. Through the business cost assistance program, an automatic top-up of $2,800 will be made to businesses, increasing the total grant to $4,800.

Micro-businesses not registered for GST will also be eligible for the COVID-19 disaster payment, depending on how many hours were lost.

SOUTH AUSTRALIA

In South Australia, new business support packages will assist an estimated 50,000 eligible businesses. The grants will apply to businesses with a payroll of less than $10m, with an annual turnover of $75,000 or more and whose turnover has been reduced by at least 30% over the seven days from 20 July 2021 as a result of the lockdown.

Small and medium businesses can apply for a $3,000 grant and sole traders can apply for a $1,000 cash grant.

If COVID-19 has negatively impacted your business’s financial situation, you can come speak to us for advice and planning about how to navigate through these uncertain times. We may also be equipped to assist you with applying for relief assistance or can advise you on what you may be eligible to apply for.

The Pros & Cons Of A Partnership As A Business Structure

If you’re looking to go into business with someone, the chances are that you might be looking at using a business structure known as a partnership. A partnership is a type of business structure that is made up of two or more people who distribute income or losses between themselves and is a fairly popular form of structure amongst those looking to develop a business.

It offers ease and flexibility to run your business as individuals, eliminates the need to create a company structure and avoid reporting obligations. You’re also not going into creating a business by yourself, which can be an added bonus for some and reduces some of the initial financial burden and uncertainty of the setup.

Just as there are advantages to choosing to set up a partnership, one must also examine the disadvantages.

A partnership generally exists between two or more parties, so disagreements in management may occur, and decision-making may never be truly equal. It can be difficult to add or remove partners into and out of the partnership, and adding more partners can make the partnership more complex to manage.

Partnerships also generally do not receive access to many government grants (barring special exemptions).

A partnership business structure may be the structure for you to employ as they possess the following key elements:

  • Partnerships are relatively easy and inexpensive to set up
  • Have minimal reporting requirements
  • Require separate tax file numbers
  • Must apply for an ABN and use it for all business dealings
  • Share control and management of the business
  • Don’t pay tax on the income earned, as each partner pays tax on the share of the net partnership income that each receives
  • Do require a partnership tax return to be lodged with the Australian Taxation Office (ATO) each year
  • Require each partner to be responsible for their own superannuation arrangements.

There are three main types of partnerships that you may have come across in your own research. Each one has advantages and disadvantages that you may want to take into account when considering what would be the best suited to your situation.

A general partnership is where all partners are equally responsible for the management of the business. For any debts and obligations that may be incurred by the business, each partner has unlimited liability for them.

A limited partnership is made up of general partners whose liability is limited to the amount of money that they have contributed to the partnership. Those involved in this style of partnership are known as limited partners who are usually passive investors without a role to play in the day-to-day management and running of the business.

An incorporated limited partnership is where the partners involved in this type of partnership can have limited liability, but at least one general partner must have unlimited liability. If the business cannot meet its obligations, that general partner (or partners) become personally liable for the shortfall and debts.

Each state and territory has different legislation and regulations that must be abided by when setting up a partnership. Learn what is legally required from you prior to setting up your partnership, or discuss with us what you may be obligated to do.