Startups and Micro Businesses

We know how businesses tend to get started; a couple of friends, a garage or a shared office… When developing products and/or services and focusing on sales, many new entrepreneurs neglect to consider their structuring options and other fundamentals. Getting this decision wrong can expose the business and the individuals behind it to unnecessary risk. It can create inefficiencies and tax issues that mean the business is held back from achieving its full potential. In order to have the best of both worlds, it’s essential to seek out professional advice from those who have been there, done that hundreds of times. You can continue to focus on what you know best and what you’re interested in, while we do the same. Though we take care of a lot behind the scenes, we always ensure our clients understand the process and are learning about important business concepts to ensure their continued growth and success.

Successful early-stage businesses quickly learn how to drive every dollar further. It pays for them to consider all of the ways in which they can benefit from the taxation system in Australia. There are usually opportunities to legally minimise or defer tax liabilities, including the recent $20,000 instant asset write-off measure, which can greatly assist ventures that are strapped for cash. Other opportunities include the R&D Tax Incentive, Export Market Development Grants and many more. In addition to providing expert tax strategy, we help our clients ensure that they are benefiting as much as possible from the various concessions and assistance programs that are available at state and federal levels. Within the bounds of the law, we can help you preserve your all-important cash flow.

Most early-stage ventures underestimate or simply aren’t aware of the importance of bookkeeping from both compliance and management perspectives. Without complete records, things can unravel very quickly in a new business - an unexpected tax, debt or payroll obligation alone can cause significant stress. Of course, there’s also a host of legal requirements by which any employer must abide. Common examples of this include the timely submission of Business Activity Statements and Income Tax Returns. Strong new ventures understand that having visibility over their payables, receivables and cash position at all times actually puts them in the best possible position to make decisions, invest effectively and grow the businesses. They don’t approach this from a compliance mindset alone, i.e. because they “have to”, they do it because it’s the best way to ensure the continued success of a fast-growing new business.

The old adage, “if you fail to plan, you plan to fail,” might be a little dramatic, but there’s certainly truth in it. Very slow growth and very fast growth both present major challenges for an emerging business. Without a plan on how to reinvest revenues and stay on top of cash flow, the future of the business becomes increasingly tenuous. The ability to look ahead, develop budgets and plan for multiple scenarios is something that separates strong from lucky (or failing) businesses. Then tracking progress against the plan, reporting to relevant stakeholders and making any desired corrections requires significant business experience and acumen. Doing any of this effectively requires more time than new business owners have. With the benefit of our support, as well as the help of cloud-based tools such as Xero, your business can start deliberately working towards a more successful future.

Most new business owners are too engrossed in business operations to ever sit down and write their operations manual. A systematic approach to building a business means faster, more predictable growth. Being process-driven means quality and efficiency are emphasised from the outset, creating a more stable and productive work environment. Especially in fast-growing teams, it’s important to ensure everyone remains on the same page and works to consistent standards. Most business owners neglect to document their preferred approach to each specific task within the business - it’s not something that many business owners are well-equipped to do, as they are generally focused on day-to-day operations and revenue growth. The benefit of seeking experienced support in this area means fast-tracking your education as a business owner, accessing lessons from the past and operating according to best practice approaches.

In the early days of a startup or micro venture, the financing of establishment costs like technology development, inventory and/or equipment is usually a primary concern for founders. From there, continuing operations and all-important growth can also require external funding to maintain. At a stage when it can be difficult to start a conversation with a bank, alternatives are usually considered, including investments from friends, family and angel investors. In any case, we can assist you in successfully navigating any investor negotiation or due diligence process by getting your fundamentals in order. This may include: preparing or reviewing your financial statements, preparing or reviewing your financial forecast over the next 1-3 years and assisting with a fair valuation of your business (see Valuation services below).

In certain circumstances it becomes important to know just how far you have progressed as a business. For example, if seeking to raise equity finance or onboard a new partner, it’s essential to know what the business is worth in order to value the portion that is on offer to prospective investors or partners respectively. If seeking to reward your early employees with shares or options rather than salaries or bonuses, which can be useful to help ensure loyalty and align your interests at a critical time in the business’ growth, you may be interested in implementing an Employee Share Scheme. In that scenario, regular valuations become advisable to be able to communicate the value of their interests to your various team members.