Like everyone else, the Balanix Solutions Team are navigating the effects of the Coronavirus particularly in relation to impact on our clients and friends. As you would all know by now, this pandemic is moving at a very fast pace with the lay of the land changing constantly.

Here at Balanix, we are taking a calm and measured approach. We are keeping abreast of all information being communicated as best we can. Like many organisations, we are having to assess our activities against the advice and information of those more in the know and then make decisions.

Having said this, we would like to re-assure our clients and friends that Balanix Solutions is open for business and capable of, as well as, utilizing innovative strategies if needs be to continue to provide our services to our clients, even in the event of isolation.

If you have an appointment, or need to make an appointment, and are uncertain about attending the office, please rest assured we can arrange for communication and discussion to take place by telephone, Zoom or Skype. We can also continue to work with you via email, fax or through the internet where appropriate.

All of the Balanix Team will have the ability to work remotely, and because of this remote ability we will be able to receive all communications as well as communicate amongst ourselves and with you to ensure you receive the best client care we can in these difficult circumstances.

We ask for your assistance and patience and to assist us to safeguard the health of everyone. To this end we would appreciate that if you:

• have recently travelled overseas; or
• have come into contact with someone who has recently travelled overseas; or
• are currently ill or exhibiting any symptoms of illness;

you kindly telephone our office to reschedule your appointment or to arrange a telephone/Zoom/Skype appointment. 

The Balanix Team will continue to update you on specific information relating to the Coronavirus and its impact on business, as well as how we are travelling in terms of servicing clients. Important information will be emailed directly to you however, in the main we will be posting updates on our Facebook and Linkedin pages, as well as our website. Links to these are as follows to please make sure you have liked/followed our social media pages to be kept informed:

www.facebook.com/balanix

www.linkedin.com/company/balanix-solutions

www.balanixsolutions.com.au

Stay safe and we wish you well. The Balanix Team

The Federal government today announced a number of strategies to deal with the economic impact of the Coronavirus.  The package consisted of support for business investment, cash flow assistance for businesses, stimulus payments to households to support growth and assistance for severely affected regions.

Business Investment

The two business investment measures in this package are designed to assist Australian businesses and economic growth in the short-term, and encourage a stronger economic recovery following the Coronavirus outbreak. Increasing the instant write-off threshold from $30,000 to $150,000 for all businesses with aggregated turnover of less than $500 million (previously $50 million) until June 30 2020.  Refer to fact sheet for more detail  https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Support_for_business_investment.pdf

Cash flow

This assistance will support businesses to manage cash flow challenges and help businesses retain their employees. To be eligible the business must have aggregated annual turnover of less than $50 million and employ staff.  The payment will be tax free.  The payments will be delivered as a credit in the activity statement system. 

Also, the Federal Government will support small business to retain their apprentices and trainees.  Employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020.  The subsidy will be up to $21,000.  Refer to fact sheet for more detail. 

Refer to the following fact sheet for more detail.  https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_businesses.pdf

Household support

One-off payments of $750 will be paid to lower-income Australians, including pensioners, other social security and veteran income support recipients and eligible concession card holders. The one-off payment will be paid from 31 March 2020.

Refer to the following fact sheet for more detail  https://treasury.gov.au/coronavirus/households

Severely affected regions

$1 billion has been set aside to support regions disproportionately affected.  Refer to fact sheet for more detail  https://treasury.gov.au/coronavirus/sectors-and-regions

Over the past few months, I have spoken to a number of people who were either wanting to start a business or buying an existing business. Following are some of the things you need to consider when starting a business or buying an existing business that can make a significant impact on the likely success of the business.

1. Have you appropriate experience in the industry you are wanting to enter?
2. Are you aware of what barriers to entry exist to entering the industry? Generally, the easier it is to enter the more likely that you will face considerable competition;
3. Do you have sufficient funds to cover any shortfall of cash in the first three years;
4. Are you likely to need a family member to go guarantee for a loan to get the business started? If the answer is yes then you need to think very seriously about the potential consequences.  Remember organisations ask for guarantees because they have some serious concerns about your ability to meet payments.  Do you really want to risk destroying family relationships in the event that something goes wrong?
5. Do you have a clear business plan as to what the you are wanting to achieve through the business including your exit strategy?  Your exit strategy, as well as the appropriate business structure, can vary depending on what your proposed strategies are.  Various business structures also have different capital gains tax issues and can make the passing of the business to others either easy or hard.
6. Have you done a budget setting out what revenue you expect to generate and what costs you are likely to incur – allow unexpected costs and shortfall in revenue, things rarely go to plan.
7. Have you a strategy if the business takes off beyond your expectations?
8. Have you a very clear idea of how you are going to price your products or services and exactly what products or services you are going to sell?  To put it another way, do you fully understand what clients are seeking?
9. If you are buying an existing business all the above apply but in addition you will want
   • A three year set of financials and tax returns for the business;
   • A very clear understanding of what exactly it is that you are buying e.g. are you simply buying the business or the structure as well;
   • To undertake appropriate due diligence having regard to the amount you are paying for the business;
   • Will you be taking over an existing lease for premises and how long has the lease got before the need to renew and is there in fact an option to renew;
   • What will happen with existing staff if any?
   • You may wish to impose some form of restraint of trade on the seller to stop them from setting up a new business in opposition down the road;
   • Is there any GST associated with the purchase?
   • Have any loan approvals in place prior to signing any contract of purchase or at the very least an appropriate subject to finance clause.
   • Seek appropriate professional advice e.g. accountant, solicitor, mortgage broker and financial planner.

This is not meant to be an exhaustive list but as a general guide to things that will help you succeed.  Please speak to our staff at Balanix for specific advice relevant to your situation = 07 3264 4783

In business, how well do you know your competition? 

When you look at some of the big players, eg Bunnings and Dan Murphy’s, they actively promote that if you can better their price on the same product they will match or better your price.

This means that they are actively measuring the price of competitors and at the same time getting customers to check the prices as well.

What are you doing in your business?  One of the biggest things I am being continually told by clients is they cannot increase price because they would not be competitive.  But when you question the client closer, quite often they really do not know what their competitors charge but rather assume that an increase in price will lead to a loss of business.

Unless you are actively checking your competitors pricing and strategies on a regular basis then you may well miss opportunities to increase your revenue. 

It is not only what price your competitors charge but how they charge.  Do they charge on an hourly basis or set fee; do they discount for different types of payment (cash v card); are there any additional things they do as part of their customer service at no cost to the customer.

Also check how easy does the competition make it to pay for the service/product they are offering.  The number of times I have not bought something that costs less than $5.00 because the store only accepts cash for sales under $5.00.  As today’s world rapidly becomes a cashless society, how feasible is it to have such a policy particularly if there is a shop nearby selling the same product and happy to accept card?

I often see a can or bottle of Coke on sale at significantly different prices at food shops within the same shopping centre.  Check it out next time you are in a shopping centre.  Are you likely to walk away from one shop because of the price of a coke particularly if you are buying food as well! 

So, before dismissing a price increase or a change to your customer service, do a bit of research on your competitors and on other business’s best practice to see if you can apply new strategies to your business to make it grow. Balanix Solutions works with many clients in many industries so if you would like some help in  growing your business please call us on 07 3264 4783.

Many businesses operate through a Company structure or through a Trust with a Corporate Trustee (ie a Company). What some don’t know is that there are obligations and requirements of Company Directors and Shareholders. Here’s 5 things to know about Companies.

• A Company is a legal entity.  This means it, as an entity, has legal standing in the eyes of law. A legal entity has legal capacity to enter into agreements or contracts, assume obligations, incur and pay debts, sue and be sued in its own right, and to be held responsible for its actions.

• A Company is not the Directors and Shareholders by another name. Although Companies have Shareholder/s and Director/s the Corporations Act 2001 governs how a Company is to operate; its obligations and requirements. It is not at the whim of the Shareholder/s and Director/s how it should be governed.

• A Company’s money is not your money. Being a legal entity, if a business is run through a Company then the receivables and payables is the legal obligation of the Company. Money coming in and going out needs to be properly recorded for the Company as per its operations. Shareholders and Directors need to think about a Company at arm’s length. Unless the Company owns for example a car or mobile phone, then expenses associated with these are not the responsibility of the Company unless used for work purposes. Learn more about this by clicking here.

• Director/s and Shareholder/s must comply with the Australian Securities and Investment Corporation (ASIC) requirements. Being a Company Director or Shareholder is not just about running the business. ASIC is the primary administrator of Companies’ legal obligations and as Director/s and Shareholder/s there is a responsibility to understand the legal obligations and to comply with them. For example, there is an annual review requirement of ASIC to continue the registration of the Company, to ensure Company details are correct and for the Director/s to declare that the Company is trading solvent. A further example is if a Director or Shareholder changes residential address, there is a requirement to advise ASIC to update the Company information. Penalties apply for failing to comply with Company obligations. These are only two examples to highlight that there are obligations to having a Company structure not just a set-up and forget situation.

• A Corporate Trustee has the same obligations and requirements. As mentioned previously, sometimes businesses are run through Trusts with a Company as the Trustee (ie Corporate Trustee). This Company, although it may not have money coming in and going out (as this is done through the Trust), Company obligations under the Corporations Act 2001 still apply.

These are by no means an exhaustive list and explanations about Companies. Many businesses utilise their Accountant as their Registered Agent and Registered Office for their Company to facilitate ensuring that all Company obligations are met. Please note, at the end of the day Company Director/s and Shareholder/s are ultimately responsible for the Company. If you need assistance or more information about your Company please contact Balanix Solutions 07 32644783.