Update 21 December 2022

With the end of the year now fast approaching, we wanted to take this opportunity to warmly thank you for your support this year.

We value and appreciate your patience and understanding during our refurbishment which we shall see finalised in the New Year.

Despite all of the year's challenges, our team remain positive and ready for an exciting year ahead.

Wishing you and your families a very safe, happy and peaceful new year.

The WD Nicholls Team

As business specialists we often see missed opportunities. Without a plan in place businesses come under financial stress. This can be avoided with the right preparation and expert advice.

With that in mind, here are 20 tips that will improve the value of your small business. Start with the easy ones first and then circle back to the more challenging ones. If you need to, please contact our professional team. It will be worth it!

1. Secure lease terms – If your business is reliant on its location, make sure it has secure lease terms as far into the future as possible before selling.

2. Sort out your books – A business that requires excessive adjustment to its financials in order to reflect its ‘real’ profit is seen as a riskier investment. Sort out the balance sheet and profit and loss to show the real business that lies beneath the surface.

3. Systems and processes –Make sure that you develop systems and processes for who does what, when, and how. Create a manual for running the entire business so that anyone could step into the business tomorrow and keep it operating just as it was.

4. Understand your drivers – Get a guideline valuation so you know what the value drivers in the business are and exactly what levers need to be pulled to achieve the desired outcomes. Then… pull those levers!

5. Monthly reporting – By creating a routine of analysing both your financial performance (against budget, ideally) and nonfinancial performance and the various factors that influenced them – the sales pipelines, marketing initiatives, staff performance, and the other measurable data you collect – your chances of success increase exponentially.

6. Forecasts – Consider the plans for the business and adopt reasonable assumptions, put together an estimate of the cash coming into and leaving the business bank accounts.

7. Marketing – It sets the tone of the business in the marketplace. Perception is extraordinarily important. You brand needs to be strong and consistent.

8. Technology – Most businesses can be improved through the careful use of technology, whether it is for inventory management or automating entire processes. The aim is to make the business better and less risky.

9. Empower management – Give the team autonomy and the responsibility to succeed. Give them the tools and training they need and nurture a culture of collaboration rather than individual performance.

10. Consistency – Much of this is just turning up and doing what has to be done so that every customer gets the same great experience. Harkening back to earlier tips about documenting systems and processes, consistency means turning those processes and business success into the daily routine.

11. Culture – Having a good team is about a business selecting people for their skills and the employee selecting the employer because that’s where they want to be. An employer needs to create conditions that encourage their employees to give their best.

12. Budgets – Often, cash flow forecasts and budgets go hand-in-hand. The CFF is the map, while the budget is the directions. Budgets help with planning and control of the business finances. If there is no control over spending, planning is futile and if there is no planning there is likely no success. No budget = no direction, but flexibility is critical.

13. Pricing – If your pricing is set correctly prior to the time of sale, the price will reflect the uplift in income expected, and when your profit is higher, the value is higher. But you need to do it early enough for it to be reflected in the financial results.

14. Employees – Strive to keep your staff motivated within a positive work environment.

15. Accountabilities – It’s important everyone knows what they have to do, what they are responsible for, and how it is being measured so they can direct their efforts accordingly.

16. Training – From the moment a new hire comes on board they should be trained in a consistent manner and their tasks should be documented and systematised.

17. Advice – If you don’t have the requisite skillset to assist a client, don’t be afraid to recommend specialist advice. For example, Chartered Accountants, marketing specialists, CFO or general management service providers, business valuers, etc.

18. Diversity –As the saying goes, don't put all your eggs in one basket. Try to have a diverse customer base, as it reduces your market concentration risk, and diversify your product offering as it reduces your risk of a particular product falling out of favour.

19. Plan your exit – Knowing how you will likely get out lets you prepare the business for that eventuality. Is your best chance of selling to an existing employee, or a large multinational? Should you sell the business or the shares in your company? What is your capital gains tax position after the sale? Are there any concessions or issues you should know about before you sign on the dotted line? Are you retiring or moving on to the next thing? The real key is this – A business that is prepared to exit at any time is worth the most. A business owner who is prepared for a sale is in the best possible position to maximise their benefit.

20. Strategic plan – Tie it all together with a strategic plan. Document where the business is today and design and implement a plan that maximises the value of the business. Develop short-term goals: monthly, quarterly, or annual, and create a plan that will help you reach those goals. Make sure the plan considers the resources you will need: money, people, equipment, inventory, and additional operating costs, and make sure the end result will be a service or product that customers are looking for. Make sure these things can be included in your cash flow forecasts and budgets. Set the metrics you will use to monitor your progress towards achieving each goal; adjust your plans based on your performance if you need to. A business plan or strategic plan is not a static document; it should be capable of being adjusted, reimagined, and relaunched.

Source and credit: Mybusiness.com.au

Do you know if your new worker is an employee or a contractor? When you employ a worker, it's important to correctly classify them because it affects:

• tax, super and other obligations, such as workers' compensation insurance

• workers' entitlements.

Correctly working out whether a worker is an employee or contractor helps to build a more level playing field for all Australian businesses.

To help small businesses make this decision, the ATO are drafting a new public ruling and practical compliance guideline.

These documents replace previous advice products, which have been affected by recent High Court decisions.

The new guide about classifying workers is Practical Compliance Guideline PCG 2022/D5 Classifying workers as employees or independent contractors – ATO compliance approach.

The ATO also has a Draft Taxation Ruling TR 2022/D3 Income tax: pay as you go withholding – who is an employee.

These documents are open for consultation until 17 February 2023. You can find out more and give the ATO your feedback here.

Source and credit: ATO.gov.au

Our office will be closed for Christmas from;

5.00 pm Wednesday 21st December 2022 and reopening 8.30 am Tuesday 3rd January 2023

If you wish to arrange a telephone appointment or zoom meeting with one of our team please contact our office either by telephone or email.

• 21 December 2022 November monthly BAS due