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The
BUSINESS
A C C E L E R A T O R
MAGAZINE
September 2021
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
THE KEY INGREDIENTS FOR
BUSINESS SUCCESS
At some stage in life, most
people entertain the idea
of starting a business. The
attraction of being your own
boss that offers more freedom
and potentially a higher income
is almost irresistible. While
there’s no magic potion or
secret formula that guarantees
business success, highly
successful businesses have
some common characteristics
that we will explore across a
series of articles.
Are You Suited to
Entrepreneurship?
Before we explore the
common denominators of
successful businesses, let’s
look at whether you have the
right DNA to run a business.
People go into business for
a multitude of reasons, but
some people almost fall into
business by accident. While
entrepreneurship sounds
attractive, it isn’t for everyone could be a symptom of bad pandemic highlighted the in the rush, they bypass some
and the traits of successful financial management, a importance of timing, and all important steps and check
business owners often include lack of demand, low quality markets go through the four points. Some businesses are
being disciplined, organised, products, poor marketing, the phases of the life cycle – start- borne out of simple ideas
passionate, skilled and wrong location or bad business up, growth, maturity and finally but quickly enter a world of
creative. If you want to go management. Having the decline. Where is the market legal complexity with industry
into business you need to be wrong team, supplier or pricing for your business right now? and government regulations.
prepared to make sacrifices model can suffocate your Ideally, you want to join the Failing to tie up the legal loose
including working longer hours business and burnout could be market in the growth phase legal ends can prove fatal,
plus self-employment comes the signal to get out. rather than the decline stage so
with added pressure, stress and the truth is, enthusiasm,
you need to do your homework
and risk. The survival rate in the While there’s no simple formula money, hard work, talent
because an industry or product
first five years isn’t encouraging that guarantees business and a great idea are usually
can move to the next stage
with around 50% of Australian success, we can learn from ‘must haves’ but they don’t
very quickly. For example, is
small businesses disappearing the mistakes of others. It can guarantee success. Being a
there new technology on the
be a fine line between success good technician is not enough
in that timeframe. horizon that could disrupt the
and failure and starting or anymore, you need to be
industry and potentially make
The reasons for the relatively buying a business necessitates able to manage the business
your idea or product obsolete
low survival rate are many research, risk, passion and compliance and management
or redundant?
and varied but it comes as courage. To succeed you need aspects particularly if you plan
no surprise to find that the to make the right opening A lot of budding entrepreneurs
to grow and employ staff.
big business killer is a lack moves so planning and timing get swept up in the excitement
of finance is. Of course, this are important. The COVID-19 of starting their business and - Continued over page
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
THE KEY INGREDIENTS FOR
BUSINESS SUCCESS
- Continued from over page this together but remember, nobody
While the business start-up phase can understands your business idea better
be a whirlwind of ideas it can also be a than you.
management minefield. The excitement The start-up phase is hectic and it’s easy
of entrepreneurship can blur your to get caught up in in issues like product
decision making and start-ups need to development or burying your head in
make key decisions about the business researching your customer’s habits
or tax structure, accounting software and your competitor’s marketing. Too
and insurances. There are business often we find start-ups overestimate
registrations to complete, and you need demand for their products and
to consider the best way to finance plant underestimate their costs. That often
and equipment. If you’re looking to employ translates to a cash flow shortage
staff from the outset there are human in the early stages which can prove
resource issues to consider including disastrous. Your budget and financial
employment agreements, payroll software, plan are key documents particularly
workers compensation insurance plus if you need to secure finance from
superannuation guarantee obligations. For a bank or third party. There’s a lot
an entrepreneur fuelled by excitement and at stake and hitting the start button Should you lease rather than buy plant
adrenalin, this endless list of ‘to do’ items without financial proof that your business and equipment?
can be frustrating but rushing the process is viable could mean you burn a lot of
cash and possibly burn yourself out in the Could you offer additional related
can mean you miss one key issue that
process. Your business plan must prove to services to increase your revenue?
can trip you up with catastrophic financial
consequences. investors and financiers that your business Are there new markets you could try
concept works and make sure you seek without overextending your resources
Over the years we have mentored hundreds professional advice to verify your figures. If or finances?
of entrepreneurs through the start-up the numbers don’t stack up, you need to
phase of their business and along the Is there a different niche target market
make a big decision. Look to cut costs, not
way we have developed a range of tools, you have overlooked?
corners and if you can’t prove the viability
templates and checklists to help you get of the business you will struggle to raise 2. Point of Difference
your business off to a flying start. We have finance which is a big red flag. Revisit your
consolidated these resources into our If your business doesn’t have a clear point
business plan and see if you can make of difference compared to your competitors,
32-page publication, ‘The New Business strategic changes to increase the revenue it’s unlikely you’ll win a big slice of the
Starter Kit’ that you can download from our or reduce costs: market. In many industry sectors there is
website. You’ll find that endless list of ‘to
Put your five largest expenses under a ‘sea of sameness’ so you need to find
do’ items has been summarised into an
the microscope to see if they can be something thing that clearly distinguishes
82-point checklist.
pruned. your business from the pack. Starting and
What Are the Characteristics Review your prices - will the market
competing in a congested market without a
serious point of difference is going to prove
of Successful Businesses? tolerate a 10% increase in price and
an uphill battle.
what impact will that that have on your
Every business is different but in this series Entering a mature market means you are up
bottom line?
of articles we will explore the common traits against established businesses who have a
of highly successful businesses. Can you source cheaper inputs from
head start on you. They probably already
suppliers without compromising the
1. Planning have a large customer database, proven
quality of your products?
products and systems, a website and a
In business, failing to plan is planning to Could you operate from smaller or social media footprint. If your business
fail. Building a business is a bit like building cheaper premises in the short term? doesn’t offer something new or innovative
a house, you need to have a plan and
Do you need all the staff you have then you must have another distinguishing
build on solid foundations. Your business
budgeted on in the first 6 to 12 feature. The less innovative the business
plan should include a marketing plan and
months? idea, the more compelling your point of
a cash flow forecast for the first 12-months
difference needs to be.
of operation. With no trading history you’ll What can you do to get a better result
need to make lots of assumptions to piece from your online marketing activities? - Continued over page
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
THE KEY INGREDIENTS FOR BUSINESS SUCCESS
- Continued from over page 3. Know Your Numbers quality of your products. While competitors and where
If you run a pizza shop, Successful business owners discounting has its place, there you might need to improve
hairdressing salon or coffee know their numbers. This needs to be a purpose behind operations. For a start-up
shop you’ve probably got lots includes: the price drop. It could be to business these benchmarks
of local competitors. It might clear old or obsolete stock; you can be invaluable because you
The cost of goods they sell. might need to generate some have no financial track record
be very difficult to differentiate
The gross profit margin on cash flow, or it could be a ‘loss and there is a lot of estimates
your product or service but
every product they sell. leader’ to win a new customer. and guess work when preparing
that’s where you need to
think outside the box and How many sales they need If you need help with setting your budget.
your marketing might need to make each day or week your prices talk to us today. Summary
to be your differentiator. Your to break even. We will make sure your price
Entrepreneurship isn’t for
point of difference doesn’t calculations include all costs
The key performance everyone. No amount of blood,
need to be unique, but it does and still allow you to make a
indicators (KPIs) in the sweat or tears can guarantee
need to be of value to your sustainable profit. We can do
business. the financial success of your
customers, clients or patients. some financial modelling based
The key profit drivers in the on different price points and business and businesses
Solve a problem, promise fail for a number of reasons.
faster, cheaper or better quality business. input costs to help you prepare
forecasts for various scenarios Successful businesses have a
products or services. Bundle a Weekly/Monthly Payroll and plan, develop a clear point of
unique combination of products fixed costs. including best case, worst case
and the mid-point. You can difference and know their key
or services together and make Probably the most important numbers. Timing is important
them practical, impressive and also access free templates
number is your price. While you for a business plan, cash and sometimes luck can be the
convincing. Finally, don’t forget might have the newest, most difference between surviving
to heavily promote your point(s) flow budget and profit & loss
exciting product or service in statement from the resources and thriving. Of course, when it
of difference! your industry, can you bring it comes to luck, the harder you
section of our website.
As a guide, your differentiators to market at a price consumers work, the luckier you get.
must tick these three boxes: will accept and still make a Businesses don’t succeed
by accident and yours won’t Super successful businesses
sustainable profit? No matter have great teams and their
Truthful – you can’t just either. Running a business is
how special you think the
make it up and you must a work in progress and you management also make good
goods or services are, there’s
deliver on your promise. have to constantly review business decisions. As you’ll
always an upper limit as to what
what is working, what isn’t read in other articles in this
Provable – You must be people are prepared to pay.
working and what needs series, they also have a lead
able to prove it’s real Remember, your competitors
working on. The numbers tell generation website and are
to a sceptical potential have alternative products and
a story, and they can alert marketing savvy. They systemise
customer probably at different price
you to emerging issues. For their business processes and
Relevant – it has to mean points.
example, if your weekly or do their homework on their
something to a potential Your competitor’s prices or the monthly sales fall below break- competitors.
customer. industry benchmarks can give even point you need to read If you’re looking to build and
Of course, markets evolve, you some idea on the price the warning signs. If sales for grow a successful business,
and you might catch your range you should target but be this week or month compared we invite you to
competitors off guard if they very careful about discounting. to the same period last year contact us today.
fail to adapt to changes That strategy might get you a have dropped dramatically it
in consumer demand or toe hold in the market, but low should trigger some response.
technology. Look at the history margins can bring a business Industry benchmarks can help
to its knees. It might drive you get an understanding
of former market leaders like
sales in the short term, but it of the performance of your
Kodak and Borders. They
can create an issue with future
failed to adapt to changes in
price expectations and also
consumer behaviour and paid
create a perception that the
a high price. As a new player in
quality of your goods is below
the market, this could be your
your competitors. This can
point of difference and edge by
also reflect poorly on
having the latest technology or
your brand, particularly
systems that deliver a better,
when you’re hanging
faster or simpler customer
your hat on the
experience.
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
ARE COVID-19 GRANTS
& SUBSIDIES TAXABLE?
The State and Federal received $90 less each week the States and Territories tax- payments were previously
Governments have provided based on an annualised free but only from September classified as taxable. Due to its
business owners with a range $39,000 income of $750 13, 2020, and only if they retrospective application back
of grants and subsidies through each week. For employers who request the Commonwealth to June 3, 2021 (when Victoria
the pandemic including the received JobKeeper payments, Government to make it tax entered its fourth lockdown),
Cashflow Boost, COVID-19 these amounts will need to be free. It’s somewhat confusing some individuals will now
Disaster Payments and included as income. because there are a range need to lodge an amendment
JobKeeper. While you might of different tax treatments to their 2020/21 tax return if
think all government support is On a Federal level, the Prime depending on what support they have already lodged it
tax free, this is not the case. Minister has announced you receive and from what and included the payment as
that the COVID-19 Disaster source. To date, only a series
To make a government grant assessable income.
Payments will be tax free. of Victorian business grants
or subsidy tax-free, legislation Previously, disaster recovery We understand that Services
are tax-free. The recent
must be passed to classify grant payments to primary Australia will now reach out to
business grants in New South
it as exempt income or non- producers and small impacted individuals through a
Wales, Queensland and South
assessable income. As a businesses in relation to myGov message and SMS.
Australia have not as yet been
guide, any income received floods between February 19, declared tax free (but we If you’re not sure about the
will be assessable unless the 2021 and March 31, 2021 expect that this will change). tax treatment of any grants or
Government has legislated for were also made tax-free.
it to be tax-free. For example, A new law was passed on subsidies you have received
Other payments however, such
JobKeeper is not tax free, and Monday August 9 to ensure from the Government, we
as Pandemic Leave Disaster
recipients must include it in COVID-19 Disaster Payments suggest you contact us before
Payment, are taxable.
their income tax returns. The dating back to its introduction you finalise your bookkeeping
original JobKeeper payments The Treasurer has also been on June 3 will now be or submit your tax return for
were $750 a week but were granted the power to make treated as non-assessable the year ended 30th June
taxed, meaning recipients COVID-19 relief provided by non-exempt income. Such 2021.
The greatest compliment we receive from our clients is the referral of their friends, family
and business colleagues. Thank you for your support and trust.
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
ATO’s Data-Matching Programme Continues to Focus on
LIFESTYLE ASSET PURCHASES
The Tax Office has now lifestyle assets. Taxpayers who the ATO said it will apply taxpayers are meeting their
extended its lifestyle assets dispose of assets and do not “appropriate treatment tax and superannuation
data-matching program for declare the revenue or capital recommendations” but obligations. The ATO will
the 2020/21 financial year gains on disposal of those noted that it will not result in continue to collect records
through to 2022/23. They assets will also be identified. the “automated generation from eight state and territory
will acquire insurance policy Data collected by the ATO will of compliance activities”. motor vehicle registries for
information from 25 insurance be retained for five years. “Where a taxpayer is correctly the 2019/20, 2020/21 and
providers for certain classes of meeting their obligations, the 2021/22 financial years.
According to the ATO, it will also use of the data will reduce Registry records for around
asset including motor vehicles help identify taxpayers who are
with values of $65,000 and the likelihood of contact from 1.5 million individuals are
purchasing assets for personal us,” said the ATO. “In cases expected to be collected each
above, marine vessels above use through their business or
$100,000, thoroughbred where taxpayers fail to comply year for any newly registered
related entities and claiming with these obligations even or transferred vehicles with a
horses over $65,000, fine art GST credits they are not entitled after being prompted and purchase price or market value
over $100,000 per item and to plus people who are using reminded of them, escalation of $10,000 or more.
aircrafts over $150,000. those assets for the personal for prosecution action may be
enjoyment of an associate or initiated.” According to the ATO, the
The ATO are expecting to
employee which may give rise records will help it “identify
identify around 300,000 The extension of the lifestyle higher-risk taxpayers with
individuals each year with to a fringe benefits tax liability.
The program will also be used assets data-matching outstanding lodgements and
their data-matching program program comes as the those with undeclared income
to identify SMSFs that may be
that has been in operation ATO increasingly relies on whose asset holdings may
acquiring assets but applying
since 2016. It is designed to similar programs including not be proportionate to their
them for the benefit of the
give the ATO an insight into its work on motor vehicles declared financial position”.
fund’s trustee or beneficiaries.
individuals who may have been and cryptocurrency to ensure
declaring insufficient income Where an individual has been
in their tax returns to support identified for not complying
the purchase of these luxury or with their tax obligations,
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
RENT RELIEF FOR VICTORIAN (& NSW)
COMMERCIAL TENANTS
The Victorian Government have announced rent or has an existing agreement with the a decline in turnover of 50% must be
the reintroduction of the Commercial landlord arising from the first rent relief offered rent relief of at least 50% for the
Tenancy Relief Scheme that means scheme, the existing deferred rent will be relevant rent relief period. At least half of
landlords are obliged to provide rent relief frozen until 15 January 2022, at which any rent relief must be in the form of a
to eligible commercial tenants. Small time the amount outstanding will be added waiver, with the remainder being deferred.
and medium businesses with an annual to the amount deferred under the new rent Any rent deferred will be payable in equal
turnover of less than $50 million and who relief scheme. instalments commencing from 16 January
have experienced a decline in turnover of 2022 until the end of the lease term or over
30% or more due to the pandemic will be How do tenants apply for a period of two years, whichever is greater.
eligible as well as most ACNC registered rent relief?
Applications (including supporting
charities that have experienced a decline Eligible tenants must make a written evidence) made by 30 September 2021
in turnover of 15% or more. request to their landlord for relief, which will be eligible for rent relief backdated
The new Commercial Tenancy Relief must be accompanied by a statement that to apply from July 28, 2021 to January
Scheme will be retrospective and operate they are an eligible tenant and satisfy the 15, 2022. The rent relief period for
from July 28, 2021 to January 15, 2022 decline in turnover test. Within 14 days of applications made on or after 1 October
and affords protection to eligible leases making a request, the tenant must provide 2021 will run from the date the application
that were in effect on 28 July 2021. a statutory declaration confirming that is made until January 15, 2022. Landlords
they are an eligible tenant and that the are also required to offer an extension to
To satisfy the decline in turnover test, information provided is true to the best of the existing lease term equal to the period
tenants will need to compare their turnover their knowledge. The statutory declaration for which the rent is deferred.
for a consecutive 3-month period between must be accompanied by at least one of
1 April 2021 and 30 September 2021 the following to evidence their decline in Where an agreement is not reached
with the corresponding comparison period turnover: within 14 days of an offer being made, a
in 2019. Like JobKeeper, alternative tests tenant will be deemed to have accepted a
are available to entities where there is (1) accounting records landlord’s offer of relief if:
not an appropriate comparison period in (2) Business Activity Statements The landlord’s offer meets the
2019. For the purposes of the scheme, requirements set out above; and
(3) bank statements, or
turnover is based on the GST concept of
current GST turnover, as defined in the GST (4) a statement prepared by a practising The tenant has not referred the matter
Act but varied to include supplies between accountant. to the Small Business Commissioner.
group members and any state government Reassessment
COVID-19 support grants received by the What are the landlord’s
obligations? Although eligibility for rent relief is
tenant. There are also special rules for
determined by a one-time test, the
deductible gift recipients and other ACNC- Landlords are mandated to provide a regulations provide for a mandatory
registered charities. written offer for rent relief within 14 days of reassessment of rent relief as at October
receiving a request from an eligible tenant 31, 2021 for businesses that commenced
How does this scheme relate to and at a minimum, the rent relief offered
any previous rent relief? trading prior to 1 April 2021 and which
must be proportional to a tenant’s decline made a request for rent relief on or before
If the tenant is already repaying deferred in turnover. For example, a business with 30 September 2021. The re-assessment
is based on the tenant’s turnover for the
quarter ended 30 September 2021.
If the re-assessment results in a change in
turnover, which is any difference between
the decline in turnover percentage used for
the initial request for relief and the decline
in turnover percentage based on the
quarter ended 30 September, the amount
of rent relief provided to the tenant must
be adjusted from 31 October onwards.
- continued over page
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
RENT RELIEF FOR VICTORIAN (& NSW)
COMMERCIAL TENANTS
- continued from over page What if you cannot relation to the eligibility criteria rent with their tenants in step
reach an agreement? and application process for the with the national cabinet’s
A failure to submit evidence
new round of land tax relief. mandatory Code of Conduct.
of the re-assessment may The Small Business
result in the rent waiver being Commissioner will once again What are the next The same regulation previously
removed. However, there will have the power to conduct only required the state’s
steps?
be no impact on deferrals. mediations and issue binding commercial landlords to
orders in the event landlords If you need assistance with attempt mediation before
Protections under the and tenants cannot agree to the decline in turnover rules evicting or locking out
scheme new leasing arrangements. or any other aspect of the new tenants. Now, however,
Commercial Tenancy Relief landlords will be required to
An eligible tenant cannot be Support for landlords Scheme please contact us.
evicted without the landlord offer rent relief in proportion
Support is being provided with a tenant’s decline in
obtaining a direction from the
to assist small landlords NSW Extends turnover, at least half of which
Small Business Commissioner.
An eligible tenant will be who provide rent relief to Commercial must be offered as a waiver
their tenants and who can plus enter rent renegotiations
afforded protection if:
demonstrate ‘acute hardship’
Tenancy Relief before moving to evict or lock
They have made a request as a result of giving rent relief. Commercial landlords in New their tenants out.
for rent relief and continue While the details are yet to be South Wales will now be
to pay rent in proportion to released, the previous scheme required to offer rental relief Minister for Finance and Small
their decline in turnover; was limited, providing grants of to tenants with an annual Business Damien Tudehope
up to $3,000 for landlords with turnover less than $50 million said the extended support will
A rent relief agreement has under an extended state offer much-needed protection
been reached; or less than $3m in taxable land
holdings. support scheme. to small businesses like cafés,
They are unable to trade restaurants, hair salons and
The government has also The NSW government have gyms for another six months as
due to sickness, injury or
announced that landlords reintroduced national cabinet’s lockdown restrictions persist.
natural disaster.
who provide rent relief to their Mandatory Code of Conduct for Mr Tudehope said, “We have
A restriction on rent increases tenants under the new scheme Commercial Leasing, which will always encouraged landlords
will remain in place until will be eligible for land tax relief mandate rent relief for eligible and tenants to come to the
January 15, 2022 regardless of of up to 25% in respect of the tenants hit hard by COVID-19 table and negotiate, but now
whether or not the tenant has relevant land holdings. This until at least January 13, 2022. we are going one step further
requested rent relief. Further, land tax relief will be in addition Under the extension of the by mandating the minimum
if an eligible lease called for to any previous land tax relief Retail and Other Commercial relief that landlords need
a review of rent during the provided to the landlord. We Leases Regulation (COVID-19)
to provide impacted tenants”.
protection period that would are currently awaiting further 2021, which was due to expire
result in an increase in rent, details to be published by on August 20, landlords will be The extended regulation will
the review is deemed void. the State Revenue Office in required by law to renegotiate apply to commercial and retail
tenants with a turnover of
up to $50 million who meet
eligibility criteria for either the
COVID-19 micro-business
grant, COVID-19 Business
Grant or JobSaver Payment.
The mandated rent relief will
also be accompanied by a new
$40 million Hardship Fund,
which will offer monthly grants
of up to $3,000 for small
commercial or retail landlords
who have waived rent of at
least the same value, along
with any land tax relief they’re
eligible for.
The
BUSINESS
A C C E L E R A T O R
MAGAZINE
CANTERBURY OFFICE ALEXANDRA OFFICE
Suite 15 / 333 Canterbury Road, Canterbury, VIC, 3126 3 Bakers Lane, Alexandra, VIC, 3714
Postal: PO Box 411, Canterbury, VIC, 3126 Postal: PO Box 195, Alexandra,VIC, 3714
Phone: + 61 3 9878 5444 Mobile: +61 0413 009 805 Phone: (03) 5772 1008
Email: jim@jtu.com.au Email: info@jtu.com.au
IMPORTANT DISCLAIMER: This newsletter is issued as a guide to clients and for their private information. This newsletter does not constitute advice. Clients
should not act solely on the basis of the material contained in this newsletter. Items herein are general comments only and do not convey advice per se. Also
changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of these areas. The information
provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001.You can also read
