April 2024

Client Newsletter

In this edition, discover the essentials of effective tax planning for your business, explore the benefits and challenges of vendor finance, understand why specialising in business triumphs over generalising, and delve into our thoughts on the book "Shoe Dog."

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A small business guide to tax planning

What is it and why is it important?

Now that we are three quarters down for the year it is a great time to look at tax planning. It's crucial for small business owners to revisit their tax planning strategies. Effective tax planning is not just about compliance; it's about optimising your financial landscape to support the growth and sustainability of your business.

Here are some tailored insights and strategies for small businesses looking to navigate the complexities of tax planning:

1. Understand Your Business Structure:

Your business structure (be it sole trader, partnership, company, or trust) significantly influences your tax obligations and planning opportunities. Each structure has its own tax advantages and disadvantages, so ensure your choice aligns with your business goals and growth trajectory.

2. Maximise Deductions:

Stay informed about the range of allowable deductions for your business. From operating expenses, home-based business costs, to depreciating assets and vehicle expenses, understanding what you can claim can substantially reduce your taxable income.

3. Utilise Small Business Tax Concessions:

The Australian Taxation Office (ATO) offers various concessions for small businesses, including lower tax rates, simplified trading stock rules, and immediate deductions for start-up and prepaid expenses. Familiarize yourself with these concessions to leverage their benefits fully.

4. Consider the Instant Asset Write-Off:

Keep an eye on updates regarding the instant asset write-off scheme, which allows small businesses to claim immediate deductions for new or second-hand asset purchases. This can be a significant tax planning tool, especially in years with considerable capital investment.

5. Plan for BAS Payments:

If your business is registered for Goods and Services Tax (GST), ensure you're accurately reporting and claiming credits on your Business Activity Statements (BAS). Timely and accurate BAS submissions can help manage cash flow and prevent tax time surprises.

6. Superannuation Contributions:

Super contributions can be an effective tax planning tool. Contributions made for employees (including yourself, if you're a sole trader) are tax-deductible, reducing your taxable income while fulfilling your super obligations.

7. Cash Flow Management:

Efficient management of debtors and inventory can significantly impact your tax position and cash flow. Implement strategies to improve cash flow, such as prompt invoicing and follow-up, to better manage taxable income.

8. Seek Professional Advice:

Tax laws are complex and ever-changing. Engaging an accountant who understands the nuances of small business taxation can provide tailored advice, ensuring you're not only compliant but also maximizing your tax effectiveness.
In conclusion, strategic tax planning is essential for small businesses. By staying informed, leveraging available concessions, and seeking expert advice, you can position your business for financial efficiency and sustained growth. 

Q&A: Navigating vendor finance in business sales

Each month we will explore questions asked by business owners in the hope it will help others.

Question: “I am in the process of selling my business and have been asked by the purchaser if I would be open to a vendor finance agreement, can you explain what this means?” 

Vendor finance, also known as seller financing, is an alternative lending arrangement where the seller of a business provides a loan to the buyer to cover part or all of the purchase price. This setup allows buyers who might not qualify for traditional bank loans to make a purchase, offering flexibility in repayment terms and interest rates. For sellers, it can make their offering more attractive. However, there are risks:  

For the Seller: 

Default Risk: If the buyer fails to make payments, the seller faces the risk of default, which can lead to financial loss and the complex process of reclaiming the business. 

Opportunity Cost: By providing vendor finance, the seller's capital is tied up in the business, potentially missing out on other investment opportunities. 

Legal and Administrative Costs: In case of default or disputes, the seller may incur significant legal and administrative expenses to enforce the agreement. 

For the Buyer: 

Higher Costs: Interest rates in vendor financing deals may be higher than those of traditional loans, leading to higher overall costs for the buyer. 

Less Protection: Buyers might have less protection under vendor finance agreements compared to traditional mortgage agreements, which are heavily regulated. 

Potential for Unfavorable Terms: Without proper due diligence and negotiation, buyers may agree to unfavorable terms, such as strict penalties for late payments or clauses that make it difficult to refinance or sell the business. 

Legal agreements detail loan terms, repayment schedules, and default consequences, and both parties are advised to seek legal and financial advice before proceeding. 

Book Review: Shoe Dog

Shoe Dog: A Memoir by the Creator of Nike by Phil Knight.


In 1962, fresh out of business school, Phil Knight borrowed $50 from his father and created a company with a simple mission: import high-quality, low-cost athletic shoes from Japan. Selling the shoes from the boot of his Plymouth, Knight grossed $8000 in his first year. Today, Nike's annual sales top $30 billion. In an age of start-ups, Nike is the ne plus ultra of all start-ups, and the swoosh has become a revolutionary, globe-spanning icon, one of the most ubiquitous and recognisable symbols in the world today. 
But Knight, the man behind the swoosh, has always remained a mystery. Now, for the first time, he tells his story. Candid, humble, wry and gutsy, he begins with his crossroads moment when at 24 he decided to start his own business. He details the many risks and daunting setbacks that stood between him and his dream - along with his early triumphs. Above all, he recalls how his first band of partners and employees soon became a tight-knit band of brothers. Together, harnessing the transcendent power of a shared mission, and a deep belief in the spirit of sport, they built a brand that changed everything.  
A memoir rich with insight, humour and hard-won wisdom, this book is also studded with lessons - about building something from scratch, overcoming adversity, and ultimately leaving your mark on the world.  

Client Spotlight: Pongan Legal

Haylen Pong - Principal, Pongan Legal

Listen to Haylen Pong from Pongan Legal as she shares her business journey and the valuable lessons learned along the way.

Unlocking Business Potential

How our advisory services can transform your operations.

In today's rapidly evolving business landscape, staying ahead requires not just hard work but strategic foresight and efficient management. Our mission is to empower you with the tools and insights needed to navigate the complexities of modern business. Here’s how we can support your journey toward sustainable growth and efficiency across four critical areas:

1. Cash Flow Management

Cash flow is the lifeblood of your business. Effective management means ensuring that your business maintains the liquidity needed to cover daily operations while planning for future growth. We assist in identifying the key drivers of cash flow within your business, implementing strategies to optimize collections, manage payables, and ensure efficient use of working capital. Through targeted analysis and customised advice, we can help you enhance your cash position, providing the stability and flexibility your business needs to thrive.

2. Budgeting and Forecasting

A well-structured budget and accurate financial forecasts are your roadmap to financial success. They enable you to set realistic targets, measure performance, and adjust strategies proactively. Our approach involves working closely with you to understand your business's unique dynamics, helping to craft detailed budgets and forward-looking forecasts. This process not only provides clarity and direction but also prepares your business to adapt swiftly to market changes, seize opportunities, and mitigate risks.

3. Virtual CFO Services

For many small to medium-sized enterprises (SMEs), having a full-time Chief Financial Officer (CFO) is not feasible. Our virtual CFO services offer a strategic solution, providing you with high-level financial expertise without the full-time commitment. From strategic planning, financial analysis, to investor relations, we bring the insights and leadership of an experienced CFO to your team. This partnership allows you to make informed strategic decisions, secure funding, and drive profitability, all while keeping overhead costs manageable.

4. Software System Stack Integration

In the digital age, the right technology stack is fundamental to operational efficiency and competitive advantage. We evaluate your current systems and processes, recommending and implementing software solutions that align with your business goals. From accounting software to CRM systems and beyond, we ensure seamless integration and optimization of your tech stack, freeing your team from manual tasks and enabling data-driven decision-making. 

Book a discovery session

Scott Elwin
Senior Partner
Andrew Ridley
Meredith Lindsay

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