Stories in Numbers
If you’re an SME-owner understanding your numbers is critical to financial management and business success.
Our CEO Ken Matthews has more than 25 years’ deciphering the stories in clients’ numbers and in April he, and Matthews Steer manager Charith Mandadige, shared some of that expertise and insight with students of Swinburne University’s Finance for Entrepreneurs course.
The education session threw the spotlight on the common challenges start-ups – and all businesses - face: lack of confidence to grow, poor banker confidence, inability to translate business success into personal wealth, uncertainty around corporate structure, asset protection and risk management and the overriding desire for peace of mind.
We now know that complexity is the greatest killer of profits in a business.
Ken focused in on the small changes SME owners can make to their businesses and finances that can have a huge influence on success, profitability and banker confidence.
Ken took the students through Matthews Steer’s Catalyst process that provides a business x-ray that identifies threats and opportunities to individual businesses and ultimately provides simple strategies for making small changes to finances and structure that generate significant improvements in results. Using a fictional case study, Ken exemplified how Catalyst has the potential to turn around a small business, increasing revenue by 2%, reducing fixed expenses by 3% and increasing the owner’s drawings from $60k to $110k.
Charith focused on the importance of sound corporate structure to business success, outlining a three-step approach to asset protection that involves understanding potential business risk, identifying what needs to be protected and choosing a suitable structure that meets those needs.
Linking corporate structure back to asset protection is vital to any business owner who’s seeking peace of mind that their personal assets are protected from any business risk, and who wants to ensure they’re structured correctly for asset protection, for growth, and to secure the future of their business.
Charith spoke about common risks faced by directors and businesses in the SME market and what people should be trying to protect, namely personal assets including the family home, business assets and retained profits.
There is no one-size fits all approach when it comes to structuring your business
Charith highlighted the multiple factors to consider when selecting a business structure including:
- Nature of the business
- Income tax, CGT & indirect tax implications
- Business ownership (who will own the business ?)
- Asset protection
- Ability to raise capital
- Succession planning
- Entitlement to Government grants & R & D concessions
- Other legislative requirements
- Set up cost and on going fees
Charith presented a matrix that outlined the pros and cons of various business structures and also looked at ways start-ups can structure – and existing businesses can restructure – in the most tax effective manner under the various structures.
Matthews Steer will continue to support participants in Swinburne’s Finance for Entrepreneurs course who attended the presentation with the offer of free hour-long consultation sessions to discuss their individual business situations.