Business Review & Advisory

Business Acquisition or Commencement 

It is vital to get a new business off to a good start and have it set up properly. Quite often people acquiring or commencing a business are "technicians" with an employment background and limited experience in operating a business. There is a steep learning curve and a lot of things that need to be gotten right. 

We can assist in the following ways:  

• Choice of and establishment of the most appropriate operating structure. 
• Assistance with due diligence and assessment of feasibility. 
• Consideration and facilitation of relevant business registrations. 
• Review of potential government resources, assistance and tax concessions relevant to the business. 
• Facilitation of governance framework and administration systems including bookkeeping and document management.

Business Structuring 

Careful consideration of the operating structure of a business at the start, or when circumstances change, can prevent a lot of problems or lost opportunities down the track. There is no absolutely perfect structure that covers all possible outcomes. The chosen structure needs to be crafted to suit the most likely set of scenarios with some flexibility if all does not go to plan. Important determinants of the best structure include:

• The desired level of asset protection required. 
• The types of owners and future owners the business may have. 
• The succession plan/exit strategy for the business.
• The governance requirements for the business. 
• How participants will access profits and losses of the business. 
• Eligibility for government assistance or tax concessions. 
• Federal Government taxation policy.   
• Applicable State and Territory taxes and charges. 

Budgeting & Forecasting 

A good budget is a necessity in a good business plan. It is one of the best business tools you can have, enabling you to set financial targets, measure your performance, and compare alternative strategy scenarios. 

In addition to goal-setting value, a demonstrated budgeting and forecasting process will often improve your chances of acquiring funding. Financiers often require budgets as a prerequisite for funding approval. These days submitting a spreadsheet to tick a box won't cut it. Financiers worth dealing with need to see substance.   

Cloud based reporting and forecasting products are advancing at a very rapid pace. These simplify set up and data extraction. A functional three-way forecast (P&L, Balance Sheet, & Cash Flow) incorporating actuals is now within the reach of smaller businesses which would previously never have had the resources to do that. The pricing of these products is also becoming more user friendly. AI is becoming increasingly integrated within these tools and will further revolutionise available options. As always, garbage in, garbage out, so the design and set up is key. 

Benchmarking & KPIs 

Business owners and manages understand the importance of measuring the inputs, outputs, efficiency, and viability of their businesses. These days there is a vast array of tools and data readily available to enable this. Benchmarking and dashboards can easily be built into periodic reporting and forecasting using modern software. Depending on the industry or profession there is an ever-increasing availability of industry data from surveys or bulk data capture. Crude benchmarks are even available from the ATO. 

Businesses should also benchmark against themselves using KPIs common in their industry, or by developing their own. 

We can assist you to identify relevant benchmarks and KPIs, and assist in integrating these into your reporting. 

Annual Tax & Strategy Debriefing 

Our family and business group clients typically benefit from our comprehensive client reporting available upon completion of annual tax and compliance work. Our increased contact with clients and exposure to their finances during our annual engagement gives us the ability to add value by identifying issues and opportunities that become evident and which may warrant further action. Such insight is highly valuable to clients whilst being easily achievable by leveraging a moderate amount of extra effort at the completion of this work. In our experience, this type of value add to clients is a rarity in our industry given its preoccupation with commoditising and outsourcing work, along with scope limitation imposed by the trend toward fixed pricing. 

Our annual compliance workflows include very comprehensive checklists covering a wide range of issues ordinarily outside of the scope of what is legally required. These include: 

• Outlining known future tax inflows and outflows. 
• Potential danger areas under our very complicated tax system. 
• Opportunities to take advantage of tax concessions and deductions. 
• Basic business performance metrics. 
• Comparison to ATO benchmarking used for triggering tax audits. 
• Optimisation of recording, storage and transfer of financial data. 
• Opportunities to simplify and create efficiencies with software. 
• Adequacy of substantiation for tax deductions. 
• Adequacy and quality of documentation of structures and relationships. 
• Adequacy of internal controls and data security. 
• Availability of government assistance and concessions.
• Identifying issues and opportunities in relation to: 
• Asset protection. 
• Succession planning. 
• Restructuring business and investment entities. 
• Financing. 
• Government assistance and concessions. 

Valuations 

There are valuations of businesses and investment portfolios, and there are valuations of holding structures such as the shares or units in a private company or trust. 

Valuation of businesses is now a highly specialised field. Whilst we can assist with a rough valuation for a business we will generally recommend and can facilitate use of a specialist valuer. The same applies in relation to property and some other types of unlisted investments.   

We are equipped to provide valuations of structures such as companies and trusts where the value of underlying assets and liabilities is readily ascertainable. 

Advisory Board / Periodic Reviews 

Business owners and managers know their business best. Often, they can be greatly assisted with the additional structure and facilitation inherent in an advisory board or regular review arrangement. 

Whilst being no substitute for specialist business knowledge or experience in a particular field, business operators often find value from an external perspective, and sounding board, as well as the discipline of working to a structured recurring meeting agenda. 

Aside from the structured component there are substantial benefits in having regular contact with your accountant or other adviser, whether formal or informal. Through this contact your adviser becomes more knowledgeable about the business, the personal circumstances of the participants, and is more able to proactively advise. 

We must point out that in our experience the success of this type of involvement is highly dependent on commitment from all participants. An advisory board is a facilitation process. It will not work if the expectation of business operators is to sit back and be told how their business is going and how to run it.   

Business Succession Planning 

Many small businesses do not have a succession plan or exit strategy. Often these issues are considered all too late resulting in the estate plan, transfer value, equity between siblings, and or taxation outcomes not being optimised.   

Australia currently has some very generous Capital Gains Tax concessions. These recognise the value of small businesses to the economy and the fact that owners’ retirement savings are tied up in these businesses. As with most things in our tax system, anything but the simplest set of circumstances, creates a lot of complexity in applying these valuable concessions.     

Business Cessation or Sale 

The sale, merger, or cessation of a business involves careful planning and due diligence. Business owners typically benefit from assistance in the following areas: 

• Clarification of what is being sold – shares or business assets. 
• Assessing the potential value to a buyer. 
• Guidance on structuring the sale and legal processes. 
• Documentation for buyer due diligence. 
• Optimising taxation outcomes. 
• Facilitating wind down of remaining operating structures. 

Considering these issues well in advance will maximise the chance of success and an optimal outcome.