Sullivan Dewing Business Builders - Prevent Withering on the Vine - Becoming Financially Well Organised

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

What we’ll be covering:

Tips to become Financially Well Organised

Live example

SMSFs

What to look for in an accountant


Tip #1: Business Structure – Get it Right

Asset protection

Company Trust with Corporate Trustees

Move business assets into another entity

Don’t buy commercial property in the company


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 Financially
Organised 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


SMSFs

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 - 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


Sullivan Dewing Business Builders - Prevent Withering on the Vine - Becoming Financially Well Organised

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