30 August 2016

Bring on the entrepreneurs. There has never been a better time. By Steve Marsten

If there is one thing we love hearing – its success stories, especially if they come from people who have to stick their necks out. Recently I read about an Australian Start up called Atlassian. It was started by two guys in their early 30’s who developed software that was basically a “bug tracking tool”. They called it JIRA. Their company operated on a $10,000 credit card! They have customers ranging from NASA to eBay and the company is now worth $3.3billion dollars. What was interesting is – they had just one base value in their company – “Don’t sh*t on the customer.”

How the story progressed is fairly standard, though saddening as well – they left Australia because most of the customers are in the USA or Europe. They listed on the US stock market and they moved their head office to London because England has more business incentives - both innovation, tax and compliance than Australia.
Economists and policymakers have been adamant that Australia really needs to take a good look at other sectors for future job creation. It needs significant changes. Now CSIRO are set to launch a $200million dollar Innovation Fund. It includes $70m in new government funding as well as private section investment. There is a further $20m set aside to commercialise research outcomes – often the most difficult thing to do with new ideas and concepts.
As a further aside but definitely connected – Australia is one of the few countries to announce an Entrepreneurs Visa whereby they provide visa’s for people with the proven talent and skill to come to Australia. The aim is to attract the best and brightest minds with the view of developing Australia into a Pacific Silicon valley.
What’s more interesting is Malcolm Turnbull’s promise of a $1.1Billion plan to boost innovation in Australia. That is a more serious attempt to commit to supporting the types of innovative start-ups we need in this country.
Now the thing is we have amazing innovative people right here in Gladstone and its time for these people to look around and see what support is available and start considering how to get their idea off the ground. There are plenty of business support groups that can assist. At Sothertons we are ready to guide and support innovative businesses and entrepreneurs bring their plans to fruition. Call us on 4972 1300.

23 August 2016

'Uber Rides into Queensland' by Tina Zawilla

Most of us by now have heard of “Uber” the ridesharing organisation revolutionising the taxi industry overseas and now here in Australia.   Uber Technologies Inc is an American multinational online transportation network company that develops, markets and operates the Uber mobile app, which allows consumers with smartphones to submit a trip request which is then routed to Uber drivers who use their own cars.  

As of August 2016, the service was available in over 66 countries and 507 cities worldwide.  And the Queensland Government recently announced it’s plan to regulate ridesharing in Queensland, in their words, in “recognition of the positive impact ridesharing is having in our State” and “it means more people right across Queensland will now stand to benefit from more choice to safe, reliable and affordable transport.”

While the Queensland Government may have only recently made this announcement, the Australian Taxation Office has been well aware of the “Sharing Economy” for some time, acknowledging a broad range of sharing economy websites and apps operating in Australia.  And of course, noting that people who provide goods or services via the sharing economy should be aware of how GST and income tax applies to their earnings.

In today’s article I am going to focus on providing taxi travel services (ride-sourcing or ridesharing), however, other sharing economy services include; renting a room or a whole house or unit, providing personal services such as graphic design, odd jobs, deliveries and renting out a car parking space.

So what do you need to consider regarding tax before you sign up to be an Uber driver?
  •  If you are ‘carrying on an enterprise’ in Australia you will need an Australian Business Number (ABN).
  • If you are providing ride-sourcing services, under the GST law you must be registered for GST and you need to account for GST on the full amount of every fare regardless of how much you earn.  The GST registration threshold does not apply to ride-sourcing services.
  • You will need to declare your income in your tax return (and claim any associated expenses), so you will need to keep records of your activities to meet your tax obligations.

If you are currently Uber driving or are considering signing up, please make sure you seek professional tax advice as soon as possible to avoid any nasty surprises at tax time.  Call our professional team at Sothertons on 4972 1300.

16 August 2016

"Making your Business Plans work" by Steve Marsten

Recently a client who was preparing a business plan for his new business, as requested by his bank manager, made the statement …”A Business Plan is all good and well but how does it actually deliver?” Now this is the question often least asked or understood. It is a VERY good question.

The most successful Business Plans deliver because the preparers are true believers in their product or service. They have clarity with a number of issues that are part and parcel of a successful plan.
  1.    They know exactly who their client is. Who they are targeting and why.
  2.  They know what problem can be solved by their service or product and how it saves the customer in time and /or money. They know the value of that saving and can articulate it easy enough to all stakeholders.
  3. They pretty much know their Executive Summary off by heart. This is what opens the door to potential investors and their bankers.
  4. They understand and know the numbers. Many business owners or start ups can be excited over the concept but not understand how it actually makes money. Investors and bankers NEED this information. You need to prove that there is a high likelihood of a return on the investment to investors and it generates enough to repay the debts.
  5.  Make sure you and your partners are completely “in” on the idea. You must buy this product first and foremost before trying to sell it to anyone else. That way if you get a couple of knock backs you won’t get too downhearted over the whole thing and can learn from any unsuccessful pitch.
  6.   There needs to be something exciting about the concept, the numbers and the complete plan. It’s important that investors and even your bank, feel that they are going to miss out if they don’t get on board. Make sure time is spent on addressing “what could go wrong.” What are some strategies that minimise the possibility of something going wrong.
  7.  Finally when pitching your plan to investors, keep your message very specific. The pitch has a purpose. Don’t bury your potential investor in the detail. Be ready to understand what a good offer looks like without attaching too many conditions.
At Sothertons we help business owners preparing business plans understand their value. Call us on 4972 1300 for more information.

09 August 2016

Thriving or Surviving? By Tina Zawila

There’s no doubt that Gladstone is going through a transition phase at the moment, and there are some businesses struggling, and even closing down.  However, there are certainly others at the other end of the spectrum – not just surviving, but in fact thriving! 

As a business advisor I love to analyse and dissect businesses to see what works in some, and what doesn’t in others.  One thing that has struck me recently, is that if the reason businesses are doing it tough is due to the economy, or even a problem in an individual industry, then all businesses would be on struggle street.  But that’s simply not the case.

While there is no secret formula for success, my experience has led me to believe there are some things you can do to improve your chances:
  •  Know what your customer wants (preferably before they know they want it!).  I was speaking with some young business owners this week (who are already busy running a successful new business) and they are already looking ahead, researching and developing a new product and distribution method, that they believe their customers will want (and it will give them an alternative income stream!).  

  • Don’t reinvent the wheel.   Whatever it is you are doing (unless you are a serious innovator), there are others who have successfully done it before you (maybe not here, but somewhere).  So identify the successful businesses in your industry and find out what you can about their operations.  How do they reach their target market?  What products do they offer?  How do they deliver them?  And so on.  Then think, how can I do this, but even better?

  • Work ON, not just IN your business.  This is one of our favourite sayings, but it’s not just a cliché.  It vital that you take the time to make sure you are on track with your vision for your business, that you step back and see if what you are doing is working, and put yourself in a position to be creative and innovative.  You can’t do this when you are constantly in the trenches.

So, if’s it’s time you stopped and looked at your businesses (and may
be at what your competition is doing), then call 4972 1300 and make a time to meet with us to make sure your business is set to thrive not just survive.

03 August 2016

"Leadership - Dubai Style" by Steve Marsten

We recently returned from Dubai after attending an annual Financial Advisor conference for as Tina mentioned last week. While in Dubai we toured the City. Now keep in mind that Dubai is a city state within the United Arab Emirates. The state is run by the Maktoum family with the present Sheikh Mohammed bin Rashid Al Maktoum, the lively 67 year old leader.

The interesting thing about the Maktoum family is the Sheikh’s father - Rashid bin Saeed Al Maktoum was responsible for the transformation of Dubai from a small cluster of dusty settlements near the Dubai Creek to a modern port city and commercial hub. He’s famous for saying, "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel " reflected his concern that Dubai's oil, which was discovered in 1966 and which began production in 1969, would run out within a few generations. He therefore worked to develop the economy of Dubai so that it could survive after the end of oil production, and was a driving force behind a number of major infrastructure projects to promote Dubai as a world global trade city and tourist hub. The oil in Dubai has all but run out – yet the city is flourishing. Tunnels are complete; they have the biggest of everything and there is nothing we “couldn’t find to do” including snow skiing!

What incredible vison these guys had to have.  In 1981 their main street – Sheikh Zayed Road truly was a dust bowl with sand on both sides of the street and now it is a modern 12 lane highway protected by massive modern skyscrapers.

I asked myself, why Dubai – why not Australia? And then the reality hit me. They have a benevolent dictator and we have a 3 year window for our leaders to introduce a plan which is scrutinised by the local media to within an inch of its life! You can understand why no politician in this country allows themselves to truly lead and why they really have to have a clear plan in place for the first year of their election because the last 18 months is about protecting their jobs. This constrains growth, prevents leadership and restricts our progress immensely. It does not allow innovation to flourish.

We can learn much from the Dubai Leadership. It has allowed me to have a greater understanding of the need to consider increasing the political terms of government in order to assist them to truly give the country a chance to introduce plans and prosper.

However this would mean both sides of the political divide giving consideration to what truly might be “best for Australia”. Unfortunately I don’t feel this will happen in my lifetime. 

For more on how Dubai Leadership can be utilised in your Business call us at Sothertons on 4972 1300.