Scolari Comerford Blog

Business Valuations 101 - Crucial Info Business Valuers Request & Why

Posted by Peter Scolari on Jun 21, 2017 3:01:44 PM

INTRODUCTION:

There will usually be a number of reasons you are considering getting a business valuer to perform a business valuation. These include:

  • potential purchase or sale of a business/share;
  • partner/shareholder dispute;
  • taxation (capital gains for non-arms-length transactions);
  • compulsory acquisitions by governments (extinguishment or loss of profits & relocation);
  • family law business valuations.

If you require such an analysis, business valuers will usually ask for the following so you should have these on hand wherever possible.

Figure 1: Giving a business valuer the right information will increase your chances of a higher sale.

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Topics: Business Valuation

How To Get The Gov't To Put In 50% Of An Artwork's Value Via Tax!

Posted by Peter Scolari on Jun 13, 2017 4:38:56 PM

INTRODUCTION:

If you buy an asset by 30 June 2017 and it costs less than $20,000 (GST Exclusive), if you qualify as a small business and use the asset for your business (or part thereof), you can claim a deduction for the business portion of each asset you buy without having to write them off over several years. Now if you have an office for work and adorn it with art, be aware of the immediate tax deduction you should be getting. The 2017 Budget has extended this concession to 30 June 2018 but this has not yet been passed in Parliament. If you are thinking of buying an asset (including art) less than $20,000 and you satisfy the criteria, you might be best to do it before 30 June 2017 to make sure you get the deduction now while you can.

Does this mean you can buy art then effectively at 51% of its price after tax (if you are paying tax at 49%)? Well, technically yes.

What then are some of the key points & eligibility criteria?

Figure 1: Even the Beatles invested in art even though they might just have failed the turnover test! Photo courtesy of Lara Scolari Gallery Balmain

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Topics: Small Business, best accountant sydney

Fill A Bucket Company & Get The 50% CGT Discount? = Major Tax $aving$!

Posted by Peter Scolari on Jun 7, 2017 5:07:22 PM

INTRODUCTION:

It's tax planning time so small business accountants everywhere should be drafting trustee distribution resolutions ensuring the minimum amount of tax is being paid.

Figure 1: Is this your current scenario?

One such strategy is to distribute monies to a corporate beneficiary or a 'bucket company' as it is sometimes known to limit tax to 30% instead of to an individual beneficiary whereas as much 49% can be paid. There are however, a few 'hurdles' with this strategy namely:

  • The trust eventually needs to put the monies physically into the company (cash flow can be an issue - you should consult your small business accountant and work through it via a three way budget/cash flow forecast);
  • Whilst the tax is limited to 30% in the company, when an individual wants to get their hands on the money in the company, depending on their taxable income prior to the dividend, they may end up paying 45% plus Medicare and Budget Repair Levy so even after franking credits how much have they really saved anyway in tax in the long run?;and
  • If the monies invested in the company make a capital gain, if the assets have been held for at least 12 months, the company does not get the 50% discount as an individual generally does so again when the net gain is accessed out of the company, more tax is payable than if the asset had been held by the individual.

What to do then? Is it possible to have your cake and eat it too?

Figure 1: Capture more tax savings in that bucket when using a corporate beneficiary with your discretionary family trust! Scolari Comerford Chartered Accountants Sydney & Dubbo

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Topics: business advisors, tax, capital gains tax

This Old House - Tax Changes That Will Cause Shakin Stevens To Shudder

Posted by Peter Scolari on Jun 2, 2017 12:37:28 PM

INTRODUCTION:

If you are a property investor, no doubt you will be nervous about some of the Government's proposed changes limiting tax deductions for rental properties.

What are some of these changes and what do they mean when it comes to saving or paying more tax?

Figure 1: Some of these tax changes for property investors will have even Shakin' Stevens up in arms.

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Topics: best accountant sydney, tax

Xenophon Or Zorro? Tax Planning To Slash Taxes For Small Business

Posted by Peter Scolari on May 31, 2017 12:03:43 PM

INTRODUCTION:

The 2016/17 Federal Budget announced plans to increase the turnover threshold for small business entities (SBE's) from $2,000,000 to $10,000,000. Whilst the Bill has not yet passed through Parliament (mainly the proposed corporate tax reductions being a sticking point), we understand a deal has been done with Senator Nick Xenophon. Business owners and their small business accountants should check that the following changes do in fact take place and then apply them where appropriate.

Many of the proposed changes will see SBE's pay less tax.

So what are the main changes? 

Figure 1: Many of the proposed changes will see SBE's pay less tax. Scolari Comerford Small Business Accountants Sydney & Dubbo

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Topics: Small Business, business advisors, tax, small business accountant dubbo, small business accountant sydney

5 Business Valuations Characteristics That Won't Help You Sell!

Posted by Peter Scolari on May 25, 2017 3:31:50 PM

INTRODUCTION:

Most people want to sell their business for the maximum price. For some, sale of their business will form a large part of their retirement plans. Therefore as accountants and business advisors it is critical that we continually assess whether a business valuation is likely to be on the way up or if it's on the way down, what needs to be done to address the impairment.

In the past I've talked about what a business valuation should have to increase its value so here are the 5 top things you need to try and avoid to get a similar result.

Figure 1: Not even Batman can save a spiraling business when it comes to higher saleable business valuations. Scolari Comerford Chartered Accountants Sydney & Dubbo

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Topics: Business Valuation

Get Back In Black! Does Your Small Business Need A Chiropractor?

Posted by Peter Scolari on May 23, 2017 11:42:08 AM

INTRODUCTION:

Recently when I was sitting at my chiropractor's getting my back seen to, the poster on the wall below got my attention. You see, if you look at this picture it is quite possible that you could also replace the word 'chiropractic' with 'business'. Businesses that have pain points will generally need some sort of help just like a person with a sore back needs help from a chiro.

Let's have a look at how the relationship you have with your back can also be applied to your business.

(Photo courtesy of Simon Gilsenan Moss Vale Chiropractic Centre & Bondi Junction)

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Topics: Small Business, Business Valuations

12345 - Senses Working Overtime - Why Great Accountants Use The Cloud

Posted by Peter Scolari on May 19, 2017 10:09:24 AM

INTRODUCTION:

Like everything in today's fast moving world, information has never been more easy to communicate with someone and quickly.

Small business owners are busy! Margins are getting tighter and situations of 'too busy doing' instead of overseeing are getting more and more common. Small business accountants are also seeing this change and are recognising the way their clients are needing their services. Yes everybody wants to minimise tax but the thirst for clients wanting assistance through business advisory services has never been greater.

If you're not on the cloud yet that's ok. However I would ask if your accountant is proactive or reactive? Giving them permission to securely access your numbers has really upped the ante when it comes to having a conversation about how things are going with your business.

How can a small business accountant use the cloud then to really get you on the right path?

Figure 1: Knowing how you are travelling and heading off problems early will save you time and money and provide you moments with ecstasy 

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Topics: Small Business, Business Valuation, business advisors, best accountant sydney, Business Coaching

Money for Nothing? (That Ain't Workin') Low Value Imported Goods & GST

Posted by Peter Scolari on May 17, 2017 4:03:29 PM

INTRODUCTION:

Earlier this year the Government introduced law to Parliament that could see changes to the Goods & Services Tax on low value imports by consumers.

The move was a result of pressure being applied by local retailers who are not able to avoid the impost where their turnover is over $75,000 for the year meaning that consumers are charged the 10% which is collected and then sent to the ATO in the retailers' Business Activity Statement. Consumers in Australia have been able to avoid the GST by buying low value goods usually online from overseas.

Nothing in the law will change for goods that are imported and have a value above $1,000.

So what are the main reforms?

 

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Topics: Small Business, Doing Business In Australia

WhatsApp -$19BillIon? Why Subscription SkyRockets Business Valuations!

Posted by Peter Scolari on Apr 6, 2017 10:57:51 AM

INTRODUCTION:

We perform business valuations regularly for clients and look for ways that they can provide a subscription based offering for either part or all of their business. Why?

Well it's no secret that people will pay much more for a business with recurring revenue than one than doesn't. John Warrillow in his book "The Automatic Customer" talks about why a subscriber based business gets a much higher sale prices and how to go about it.

A good example of this is the WhatsApp founders who decided to provide a messaging platform that used the internet instead of expensive mobile carrier networks. They didn't want users getting bombarded with annoying ads when they decided to charge only a $1 per annum subscription fee. This may seem too cheap but because they only do messaging, only 55 employees were required to handle 450,000,000 users.

This led Facebook to acquire the company for $19 billion!

What are some of the attractions of a subscription business then?

Figure 1: Even Bert can't believe the price paid for a business that has subscribers!

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Topics: Business Valuations, best accountant sydney