Best wishes to you, your family and colleagues for a very successful 2019!
The Crowd Sourced Funding Equity Raising Scorecard indicates that $18.3 million has already been raised by 22 Australian companies. The following is a summary identifying the companies with a brief description on their business activities and the amount of capital that they have raised to date. Completed capital raisings that details have been extracted from some of the intermediary’s websites:
These companies represent a fairly wide cross-section of Australian businesses. If you are interested in understanding more about crowd sourced funding equity raising as it applies to small proprietary companies and small unlisted public companies please do not hesitate to contact us. Some of the company’s currently attempting to raise capital include:
What this list of companies illustrates is that any type of business operating in Australia, which has a good business case, has a reasonable chance of being able to raise capital, thus avoiding loans together with the associated security requirements, personal guarantees and monthly principal and interest repayments.
If you would like to have a discussion with us relative to the assistance that we can give your company to get you started on the capital raising journey, please do not hesitate to contact us.
To assist you to self-assess as to whether your company might be eligible to raise capital as a Crowd Sourced Funding Company we are attaching a self-assessment checklist. If you are interested in understanding your company’s potential eligibility for Crowd Sourced Funding Equity Raising we invite you to complete the self-assessment form and, if it indicates that you are potentially eligible, please contact us for a discussion. (Click here and complete - Crowd Sourced Funding Eligibility Matrix Form - BAS5004).
The best time to finalise an agreement which relates to disputes, sale of the business, major capital expenditure, policy on the treatment of profits, decision-making, restraint of trade and many other issues is when the business is being formed, not months or years later when the same level of enthusiasm and friendship, that was there at the beginning of the business, may not be as evident.
Going into business with someone else is a big event, so the key reasons to have a co-ownership agreement is to have set the “rules” before you start playing the business game in which your business entity envisages being involved. It’s important to consider setting the clear expectations of everyone involved as a partner, unitholder or shareholder right from the beginning.
Items to consider include:
Whilst it is preferable that a co-ownership agreement is negotiated at the beginning of an entity’s life there is no reason that a co-ownership agreement cannot be agreed to at any time during an entity’s existence.
If you would like to have a discussion with us relative to the creation of a co-ownership agreement or a shareholder's agreement for your business entity, please do not hesitate to contact us.
There has to be a Federal Election for the House of Representatives and a half Senate Election during 2019. This will certainly dominate the news media and will add a degree of uncertainty to business operations.
Notwithstanding the election debate, the Australian economy is expected to continue to grow by more than 3% during 2019 with a continuation of the recent improvements in the unemployment rate. There is an expectation that interest rates will slightly increase during 2019. Foreign-exchange conversions are expected to see a slight improvement in the relationship of the Australian dollar to the US dollar (around $0.76) whilst the UK pound is likely to fall because of the ongoing drama of the BREXIT negotiations.
Most commentators seem to expect the Federal Election to be held in May, although one well-known journalist is urging the government to delay the House of Representative's Election until later in the year. (The Senate Election has to be held in May, but the House of Representatives Election doesn’t have to be held until November). On the basis that the Federal Election will be held in May, there is an expectation that the government will hand down its Budget on Tuesday 2nd April 2019. The Liberal/National Party government will undoubtedly be keen to promote the prospective return to budget surplus in the near future.
There is an expectation that banks will be difficult to deal with as part of the aftermath of the Banking Royal Commission. For this reason, it will probably be beneficial to prepare your Budget Forecast for the 2019 calendar year and to have a discussion with your banker at the earliest opportunity relative to the support that you require during 2019.
If you would like to discuss with us your business expectations and your Budget and Cashflow Forecast for 2019, please do not hesitate to contact us.
The following grants are all targeted at small/medium enterprise businesses:
Employers Support Payment Scheme
Provides financial assistance to eligible employers of reservists and self-employed reservists when the reservist is absent from their workplace on eligible periods of defence service. Payments for full-time employees is $1,567.90 per week – pro-rata payments may be made for a part-time employee. Employers must have an Australian Business Number and can include partnerships, companies, trusts and trustees of trusts.
Small Business Export Loan
A loan to meet the specific needs of small business exporters who need finance to support their export transactions and their bank is unable to help – the Export Finance Insurance Corporation (EFIC) may be able to provide the company with the necessary funds to satisfy their cashflow needs. Loans are available from $20,000 to $350,000 secured by directors' guarantees. Interest rates are approximately 13% per annum. In the first instance the business must apply to their bank for financial assistance and they are only eligible for the small business export loan if the company’s bank is unable to assist. The company’s turnover must be between $250,000 and $10 million in the previous financial year and have been established for at least 2 years.
Assistance for SMEs Accepting Work in the Defence Industry
The Centre for Defence Industry Capability’s administers a program providing advisory and facilitation services to defence sector small to medium enterprises to improve business management, skills development, innovation and access to export initiatives and international and domestic supply chains.
The program also provides grants to defence sector SMEs to implement recommendations from advisory and facilitation services.
Eligible applicants must be a company or an incorporated trustee on behalf of the trust. Businesses are not eligible to apply if they are an individual, partnership or trust (however an incorporated trustee may apply on behalf of a trust).
If an applicant is successful they will be assigned a business advisor or facilitator who will work with the applicant to complete the advisory or facilitation service and produce a report with recommendations. Funding of $5,000 to $250,000 is available for successful applicants to implement the recommendations that have been made in the advisory or facilitation process.
If you are interested in having a discussion about any of these grants or for that matter any Australian, State or Territory grants, please do not hesitate to contact us.
The sales process is not easy and many people believe it can be enhanced by telling a “story” rather than just talking about a product or service. Potential customers like to know who they are dealing with, the salesperson’s experience, knowledge and background, together with information about the business and the “success stories” that have emerged from customers who have utilised the products or services referred to by the salesperson. To implement a “story” process requires the salesperson to start with themselves – briefly who are they, what is their experience in the industry, show that there is empathy for the customer’s problems.
The next stage in the “story” is to comment on the other members of the team who will be responding to a customer’s questions or requests for assistance such as the person responsible for delivery and installation of a product or service, the training person, the accounts person who is going to be following up for payments, the service department person to whom any concerns about the product should be directed and anyone else in the supplier’s team who is going to interact with the customer. Customers normally have some interest in the history of the business that is supplying them with a product or service. This is the opportunity to introduce some comments on key products or services that your business has produced, awards won, key intellectual property developed by the business.
Successful salespeople normally undertake some research on the customer or the customer's industry and have developed an understanding as to how the products or services that are being recommended to a potential customer can be utilised to improve efficiencies, reduce costs, improve the work experience of the customer's team members – these are the types of items that can be blended into the “story”.
The “story” is a great opportunity to mention customers who have been very successful in utilising the business' products or services to great effect within the customer’s business. The utilisation of a “story” can open up further dialogue with the prospect and enables the prospective customer to gain a significant insight as to how your business operates and therefore gives a strong indication to the prospective customer as to how they will be treated by your business, once the initial sale is completed.
That’s great – but there are a few issues that you should think about before starting a business or purchasing a business. Unfortunately, there is a high failure rate in the first 3 years of a business’ life. An accountant’s role is to advise you on systems and processes that will contribute to your business being successful. Some of the problems which confront new business operators include:
To be continued next month…..
If you are contemplating starting or purchasing a business, we strongly recommend that you contact us prior to finalising your decisions and signing any contracts, for a discussion.
It’s the start of another calendar year. What resolutions have you made relating to your business in 2019? If you made any resolutions you probably made them around 6 weeks ago. How have you gone on the all-important implementation tasks?
If your business is established and it is operating fairly well but you want to grow the business to be a big business, the following are some suggestions on what strategies you might introduce:
To be continued next month…..
If you would like to have a discussion with us on any aspect of growing your business in 2019, please do not hesitate to contact us.