The Senate passed the Corporations Amendment (Crowd Sourced Funding for Proprietary Companies) Bill 2017 on 12th September 2018. The legislation will be operational 28 days after Royal Assent. This means the legislation will be operational from approximately 15th October 2018.
The legislation withdraws the requirements in the original legislation that a private company had to convert to an unlisted public company to be able to raise capital from the public.
The main features of the legislation are:
If you would like to have a discussion with us relative to the new legislation for Crowd Sourced Funding Equity Raising for private companies, please do not hesitate to contact us.
If you want your company to be successful, directors have to embrace the development of a “positive culture”.
A director’s first priority is the appointment of a Chief Executive Officer (CEO) – the second priority is to ensure that a “positive culture” has been implemented within the company/business.
Where to start on the implementation of a “positive culture”?
Companies need to appoint a CEO who will then appoint a strong management team.
Company directors need to ensure that appropriate systems have been implemented so that management will be receiving information that they can use to manage the business. Directors will be able to review the systems to ensure that everything is functioning satisfactorily in the company.
The systems the company should be considering implementing include:
How is the company performing against the strategy that has been set?
Directors should be satisfied that the structure of meetings within the company will contribute to the “company organisation culture”.
Directors should enquire as to what has happened relative to skills development of the total team within the company.
Core Value Statement
Key components of a “Core Value Statement” include:
• commitment to teamwork within the company
• integrity within the company
• pursuit of a high level of excellence
• a high level of professionalism in the company
• commitment to innovation within the company
Many commentators believe it is vital that the management team develop a “story” around each of these “core value items” and that these “core values” are communicated to all team members and openly discussed in team interviews, induction of new team members and performance appraisals.
Many successful companies have indicated that implementing these strategies and the identification of various processes all contributed to the creation of a “positive culture” within the company.
If you would like to talk to us about the implementation of a “positive culture” within your company, please do not hesitate to contact the accountant with whom you normally deal within our organisation.
If you are considering starting a small business, you have to be honest with yourself and understand your strengths and weaknesses. Unfortunately, well over 60% of businesses do not survive for more than 2 years.
In various surveys the following reasons for failure have been identified:
You need to consider these items as well as the following:
When you have considered these items, we suggest that you prepare a SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) on yourself as a business operator.
When you have completed this self-evaluation, if you still want to proceed with a business opportunity, we suggest that you make an appointment to have a discussion with us, so we can give you an overview of the types of services that we believe you will require for you to operate a very successful business.
Businesses need to ensure that there is ongoing education of the team on the “lifetime value of a customer”.
Customers should represent “repeat business”. Repeat business equals profit. Businesses need to install appropriate systems, so every customer becomes a valued lifetime customer.
Many businesses find that, with good service, a customer will stay with them the seven to ten years. If you assume that the lifetime value of a customer is seven years on average, to determine the “lifetime value of the customer” you would multiply the average sale by the number of times you expect to see the customer each year and then multiplied the projected annual sales by the number of years expectancy for “lifetime value”. This will give you an idea of what the customer’s potential worth is to your business and give you an indication of the ongoing investment that your business might make with the customer.
For example, if an average sale to a customer was $100 and you anticipated visits from that customer once a month, this would mean that the annual sales were expected to be $1,200 and, if the life expectancy is seven years, the lifetime value of the customer is estimated at $8,400. This is a significantly higher figure than what a salesperson might have considered in the first instance, when they might have looked at sales of $100 or perhaps the forecast annual sales of $1,200.
One of the most effective ways of marketing your business is to increase the number of visits your long-term customers make to your business. This will add to the lifetime value of your customer.
To develop lifetime value of customers, you should consider the implementation of a referral system, where current customers are encouraged to refer new people to your business, with an appropriate incentive being given to the referees. This could be a “lucky weekly price” or a discount on a product in your business.
How do you develop lifetime customers?
The Export Market Development Grant aims to assist the development of exports by Australian firms. The grant provides financial incentives in the form of taxable grants, based on eligible expenditure, to promote exports. An applicant’s maximum turnover worldwide has to be under $50 million. The grant focuses on direct promotional activities and does not assist the general establishment of a business or product development. The Export Market Development Grant is administered by Austrade. The Export Market Development Grant reimburses up to 50% of eligible export promotional expenditure, provided that the total expenses are, at least, $15,000 in the year.
Eligible expenditure which can be claimed (subject to some category limits and an overall maximum grant of $150,000 per annum) include:
This category is capped at $45,000 per application, subject to a sub-limit of $7,500 for bringing an individual person to Australia. If you require any assistance on determining your business’ eligibility for an Export Market Development Grant, please do not hesitate to contact us.
The closing date for the lodgement of Export Market Development Grant applications, in respect of the year ended 30th June 2018, is 30th November 2018.
If you would like to discuss with us the preparation of an Export Market Development Grant application for your business for 2017/18, could you please contact us at your earliest convenience.
Changes coming to the Director Penalty Notice regime.
The most dreaded weapon in the arsenal of the Australian Taxation Office (ATO) is the “Director Penalty Notice” (DPN) and its powers are being broadened and expanded to increase the liabilities for all directors.
A DPN is a notice that the ATO can send to a director or directors which will make that director(s) personally liable for the unpaid PAYG Withholding and the Superannuation Guarantee Charge (SGC) liabilities. A company director becomes liable to a penalty at the end of the day the company is due to meet its obligation, at this time the penalty is created automatically, however, the ATO cannot commence any recovery for these liabilities until 21 days after a penalty notice is issued to a director.
There are two types of DPNs:
Lodgements Should be Made on Time
All companies need to ensure all their lodgements occur on time. The use of a tax agent allows for an additional period of time of four weeks, for these lodgements, which gives business owners an extra reason to pay for a tax agent’s help with lodgements. The simple fact is, the DPN regime punishes those who are unorganised and do not meet lodgement requirements.
Further Changes Proposed
The changes announced in the 2018/19 Federal Budget included that the government is proposing to include the GST as an additional liability that directors will incur in the DPN regime. This is not law as yet but will change in the future.
In “The Sales Factor” Trevor Marchant – Marchant Dallas Pty Ltd makes the following comments relative to the sales process:
Marchant’s suggested approach is:
Shifting your focus from getting to giving is not only a positive way to live your life and conduct business, it’s also very profitable.”
Want to learn more on “The Sales Factor” click on to www.esssmallbusiness.com.au/the sales factor