What happens when a business has no business plan?


A business plan is essential for the success of any business.  An effective business plan gets to the heart and soul of your business, it provides direction, keeps you on track and is a set of guidelines created to reach a specific business goal. Strategies can range from annual budgets to individual marketing strategies for the release of new products. Without a coherent overall strategy, a small business has no road map to follow when pursuing opportunities and running daily operations. The consequences of not having a comprehensive business strategy can be severe.

Lack of Objectives

Without a coherent strategy, your company does not have identifiable business objectives. Your company lacks the focus needed to achieve corporate goals and develop plans that will move the company forward. A lack of objectives means that your company does not have a clear vision for the future. If you don’t know the goals and objectives you’re reaching for, how do you know when you’ve accomplished them? Objectives are used to develop long-term growth and productivity plans that are essential for the sustained success of your organization. 

Business plan introduction session only $99 read more here………

Resources not properly allocated

Business plans and strategies are used to allocate corporate resources into projects and operations that need them. When there is a lack of planning, or planning is not coherent, it’s difficult to create budgets for special projects and understand the personnel and funding resources necessary to launch new products and grow the company. Instead, leaders disperse funds “on the fly,” as managers request them, without a budget to compare against. Dispersing funds this way, a company can then find itself short of funds for critical activities such as payroll and paying vendor invoices. The adage, “failing to plan is planning to fail” – often attributed to Ben Franklin – certainly applies here.

Unclear Organisational Structure

Part of business planning is identifying the people in charge. Some businesses prefer having a highly structured hierarchy, while others are more loosely organized. Whichever method you prefer, make it clear to everyone. This establishes responsibility for the success of each department and helps staff know who to report to for clarification of job duties or questions. Without a coherent business strategy, the company structure is not defined and there is no focused effort for employee and corporate development.

 Communication Flow Not Coherent

The efficient processing and distribution of information is essential for the success and growth of your small business. A business strategy establishes lines of communication and allows employees to understand information priority, the flow of information in and out of the company and how information is distributed internally. Without a strategy, there is no formal structure for communication and important information can get lost. Each employee will naturally focus on what he believes is important, which may or may not align with yours.

Take Action: Identify Your Purpose

You know the purpose of your business. It’s the reason you started the company. Don’t assume, however, that employees and even managers know the purpose. Perhaps you think they certainly should know it because you’ve discussed it many times. Still, it needs to be a clearly written explanation so that everyone can understand it. Some companies create their mission statement as their purpose. It’s the company’s reason for existing.

Develop a Fluid Plan

Through strategic planning, you can map out how your company will achieve its mission or purpose. Be wary, however, of going into too much detail in your plan. The business climate is a fluid one, changing due to many factors, including industry advances and the state of the economy. If your strategic plan is too detailed it will be difficult to adjust course even slightly when you need to. Your plan should indicate to everyone the direction the company is headed towards its mission, but be flexible enough to change course as needed.


Are you starting this financial year blindfolded_ If you don't have a business plan then that is exactly what you are doing.

Single Touch Payroll for small employers


If as an employer you are not ready for Single Touch Payroll (STP) don’t panic!   Although 1 July has rolled around, smaller employers (those with less than 19 employees) have three months from this date (until 1 October 2019) to be STP-compliant. Furthermore, no penalties will be imposed during the initial 12 months of STP, therefore there is no need to be worried.

While for many employers, their STP solution will be to adopt STP-compliant software or outsource their payroll to their registered Accountant or Bookkeeper, many very small employers may be eligible for the micro-employer concessions including:

  • Reporting quarterly through their registered accountant or bookkeeper for two-years until 30 June 2021 (instead of reporting each time you pay your employees).
  • Adopting a free or low-cost, simplified STP solution (as opposed to payroll software).

Micro employers are those with less than five employees at the time of application. Virtually all employees are counted (including casuals, those on leave, and employees working overseas), however closely-held payees are excluded – namely, family members of a family business, directors or shareholders of a company, and beneficiaries of a trust.

In the event that a business is currently a micro employer but later no longer qualifies as it puts on extra staff, the ATO adopts a different approach in respect continued eligibility for the above concessions. While eligibility for quarterly reporting will be unaffected by an increase in staff above four, the ATO expects employers to cease using the simplified, low cost STP reporting solutions if they later cease to qualify as a micro employer. This would then generally mean adopting STP-compliant software, or lodging via your registered accountant or bookkeeper.

Single Touch Payroll compliance made simple seminar 

In respect of the low-cost, simplified STP solutions, an updated list of products now available and currently in development is maintained on the ATO website. There are a wide range of products available including free solutions such as apps to install on your phone that allow employers to simply key in employee payroll information (gross amounts per pay, and tax withheld etc.) and send it to the ATO (and thereby maintain your manual payroll systems if you so choose).

Of course, micro employers can opt to disregard these free or low-cost solutions and instead adopt STP-compliant software and, in doing so, enjoy the advantages of computerizing your payroll processes.

Single Touch Payroll compliance made easy

CommSec: Australia is poised for more economic growth


Despite the toughest budget in years CommSec believes that the Australian economy is relatively strong with a predicted economic growth rate between 2.75 and 3.0 percent.

Key Figures

2014 Year End 2015 Mid Year
Predicted Cash Rate 2.5% – 2.75% 2.75% – 3.25%
Share Market 5,700 points 6,100 points
Inflation 2.5% – 3.0% 2.5% – 3.0%
Unemployment 5.5% – 6.0% 5.5% – 6.0%
Australian Dollar 0.97 USD 0.95 USD

Investment Outlook

CommSec believes that despite strong gains on the share market (18% for the 2014/14 financial year) there is still a disproportionate amount of assets in cash. This means that the stock market is tipped for continued growth.

CommSec has stated that “Research by Investment Trends showed SMSF trustees still hold 25 per cent of SMSF assets in cash which equates to $143 billion,”

“SMSF investors indicate that around 31 per cent or $45 million of these holdings are ‘excess cash’, or cash that would ordinarily be invested in active assets if it weren’t for the current investor sentiment.”

If you would like to enquire about investing through your SMSF, please contact our office on (03) 9744 7144.

Proposed FBT Changes

Last week, the Federal Government announced it’s intention to change the method of calculating the Fringe Benefits Tax (FBT) on cars.  The proposed changes will abolish the Statutory Formula for all new motor vehicle contracts entered into from 16 July, 2013.  As a result, employers will use the operating costs method (logbook method) to calculate FBT.

The operating cost method is more arduous and is based on the actual business use of the car as recorded in a log book.  Tax is payable on the portion of operating costs attributable to private use. It is important that sufficient detail is recorded in relation to each work related trip, otherwise the employer risks the logbook being deemed by the Australian Tax Office as invalid and it is therefore assumed that the total running costs of the vehicle be subjected to FBT.

The proposed changes will also affect employees, with those with salary package cars expected to be most affected.  The tax saving from packaging cars has traditionally come through the use of the statutory formula method.

It should be noted that this proposal has not yet been passed through Parliament.  Should the legislation be passed by Parliament, the change from Statutory Method to Operating Cost Method will apply to all contracts entered into- or materially varied-after the announcement on July 16, 2013, with effect from 1 April, 2014.  All existing contracts prior to the announcement will not be affected by the change.



5 Ways the 2013 Budget impacts individual taxpayers

On 14 May 2013, Treasurer Wayne Swan delivered his sixth annual budget.
Below, we cover 5 of the outcomes that are most likely to impact on individual tax payers:

1. Income Tax Rates
Income tax rates will remain unchanged. Importantly though, plans to increase the tax free threshold from the current $18,200 to $19,400 in 2015 have been scrapped.
At this stage, the rates for 2013/14 are set to stay in place until at least 2017/18.

Tax Rates for Non Residents:
From next year (2013/14), non-Australian residents will pay a flat tax rate of 32.5% of their taxable income up to $80,000. From there the tax rates will be same as resident Australians.

2. Medicare Levy
From 1 July 2014 the compulsory Medicare Levy will be increased from 1.5% to 2% to help fund the introduction of the National Disability Insurance Scheme.

3. Net Medical Expenses Tax Offset
The net medical expenses tax offset will be phased out starting from 1 July 2013.
During the phase out period, it will also become more difficult to claim the offset. Only if you claim the offset in your 2012/13 tax return, can you then claim it again in 2013/14. Taxpayers who then claim it in 2013/14 can claim it again in 2014/15.
So, if you are not eligible or choose not to claim the offset in 2012-2013, you will not be able to claim the offset in future years.

4. Work Related Self-Education Expenses
From 1 July 2014 the amount of self education expenses you can claim under item D4 in your tax return will be limited to a maximum deduction of $2,000. Previously there has been no limit in place on these deductions.

5. Baby Bonus
The current $5,000 baby bonus will be abolished from 1 March 2014. Instead – families who are eligible for Family Tax Benefit A will receive $2000 following the birth of their first child and $1000 for each subsequent child.

New ATO upfront deductions for motor Vehicles and Plant & Equipment

With the intention of driving more business investment during these difficult times, the Federal Government has announced new deductions for most plant and equipment, motor vehicle and other business assets either ordered or acquired from 1 July 2012 for eligible small businesses with a turnover of less than $2 million.

The new measures mean small businesses can instantly write off most assets (including Motor Vehicles) purchased after 1 July 2012 and costing less than $6,500 as a once off tax deduction.

Also available is an immediate one off deduction of $5,000 for new or used motor vehicles purchased from 1 July 2012 and costing more than $6,500 with the balance of the cost depreciated as per the normal depreciation rules.

Make sure you talk to us about this fantastic opportunity to generate a big tax break for your business for the 2013 tax year and beyond.

New Private Health Insurance Means Test

Singles earning more than $129,001 and families earning more than $258,001 will lose access to their private health insurance rebate from the 2012-2013 financial year onwards, under a means test that recently secured passage through the House of Representatives and which will be effective on July 1, 2012.

The measures- which still have to pass the Senate, expected to be a formality- also mean the Medicare surcharge for the groups above will increase from 1% to 1.5% if they do not take out private health insurance.  That translates into $1,935 p/a for high earning singles and $3,870 pa for high earning families.

At present, almost anyone aged less than 65 years old, regardless of how much they earn, can get a 30% refund from the Federal Government for the cost of their private health insurance.  Those aged between 65 and 69 years old can receive a 35% refund and those aged over 70 years old can get 40% back.

The income test is based on the total sum of the taxable income, reportable fringe benefits, reportable super contributions and total net investment losses, less other taxed elements depending on a person’s age and circumstances.

Private Health Insurance Tiers for 2012-2013.

Tier Levy

Schoolkids Bonus

The beginning of February marks a significant yet costly time for families with children, as parents busy themselves with the purchasing of school textbooks, stationary and uniforms amongst numerous other items.

If school expenses are weighing you down, the Schoolkids Bonus can help lighten the load. It replaces the old Education Tax Refund and it is simple: there’s no need to collect receipts or claim it through your tax, this is one of the significant benefits of the Schoolkids Bonus.

Each year, eligible families and students will receive:

  • $410 a year for each primary student ($205 paid in January and $205 paid in July)
  • $820 a year for each secondary student ($410 paid in January and $410 paid in July).

To get the Schoolkids Bonus you need to be receiving an eligible payment from Centrelink or a Department of Veterans’ Affairs Education Allowance  either for yourself or on behalf of your child on the 1 January and/or 30 June test dates and you or your child must be undertaking primary or secondary studies and under 20 years of age. If you receive an eligible payment from Centrelink, you just need to let them know:

  • when you or your child starts primary school to start receiving the payment
  • when you or your child changes from primary to secondary school to start receiving the secondary school payment and
  • when you or your child complete secondary school to receive the final secondary school payment.

I have more than one child. Will I receive the Schoolkids Bonus for each child?

Yes, if you have more than one child in primary and/or secondary study and meet the eligibility requirements, you will receive the Schoolkids Bonus for each child in primary and/or secondary study. For example, if you have a child in primary school and a child in secondary school in January you will receive $205 for your child in primary school and $410 for your child in secondary school. That’s a total of $615 to help with back-to-school costs for your children’s education.

When will I receive it?

Payments are made in January and July every year unless you claim your Family Tax Benefit Part A as a lump sum. You must be receiving one of the eligible payments on 1 January to receive the January payment. Similarly, you must be receiving one of the eligible payments on 30 June to receive the July payment. If you have deferred your Family Tax Benefit Part A, you will still receive the Schoolkids Bonus.

The above information has been obtained from the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs.  For further information please visit http://www.fahcsia.gov.au/our-responsibilities/families-and-children/benefits-payments/schoolkids-bonus