In a world that is constantly evolving, business owners need to be across consumer trends, product innovation, competitors and staffing matters. But how many owners keep check of their business structure, its relevance and effectiveness, as time marches on?
Has the structure (if any) that was originally established been reviewed to make sure it represents the current business strategy; while simultaneously protecting the owners’ wealth, minimising tax, maximising cash flow and the sale value of the business?
Changes in taxation law, employment law, finance policies of lending institutions and industry changes can lead to a business structure becoming obsolete, redundant or inefficient and also lead to unforseen costs and difficulties when exiting a business.
Here are three common scenarios to consider:
- The ability of SMEs to access the small business CGT concessions can lead to a meaningful difference in the level of retirement income – does your current business structure allow for these concessions?
- The changes in how trusts can distribute income between beneficiaries, and the resultant impact on business cash flow, is another example of how legislation can disrupt the efficiencies of an operating structure
- The separation of passive assets from operating assets is also important in the current business environment. Balance sheets can become lazy and exposed as owners are occupied with other tasks
This is where the business advisor becomes important in making sure that such issues are raised and actioned, so that all the hard work in this competitive environment is not wasted by an unintended consequence.
For more information or a review of your individual situation please contact Archer Gowland on 07 3002 2699. We appreciate you sending this article to fellow business owners who could also benefit from such assistance.