Sounds straightforward right? However, as any business owner will tell you running a business is a full time job and more! That means things can get pushed to the side and sometimes it is just easier to continue on rather than review what’s been happening, or what opportunities might exist.
The story below highlights how one business couple did decide to act, and to work with the team at Sullivan Dewing, and we think the results speak for themselves.
After a period of sustained and significant business growth Nick and Debbie joined Sullivan Dewing as clients about three years ago. They had been operating a successful operation with business partners in the manufacturing sector. The business was structured through a trust, and after a period of growth, they made the decision to buy out their business partners.
By reviewing their buyout options, business structure and future plans, we were able to determine that the trust structure was not right for them. Rather than paying tax as individuals on the top tax rate, it was better for them to run their business through a company, where the tax rate is 27.5%.
Other than making regular cash contributions to their self-managed super fund (SMSF), they had not really focused on setting themselves up so they could retire comfortably. The Sullivan Dewing team reviewed their super set-up and suggested that they could diversify their SMSF across property and cash. We recommended the need to maximise super contributions, claim deductions and to reduce tax. Once their SMSF was set up correctly, they were able to purchase their business premises through their SMSF, and use their contributions to pay off the loan…..an awesome strategy!
Expenses are also something that can slip through the cracks for many businesses. When we reviewed Nick and Debbie’s expenses we could see they were paying a massive amount on insurance premiums that just weren’t necessary. They were subsequently able to adjust this amount saving a significant amount of money, whilst still protecting themselves.
The team at Sullivan Dewing have been meeting with Nick and Debbie once a month to keep their business on track. Monthly meetings have provided the perfect forum for sounding out business proposals, reviewing KPIs and ensuring that they take the time to work on their business. This planning has helped them diversify their marketing efforts to avoid a drop in gross profit, increase pricing in a way that was comfortable for them, as well as reviewing their payroll tax arrangements.
Over the past three years the Sullivan Dewing team has supported their success. They have built profit, saved tax and created wealth outside of their business. We look forward to working with them over the coming years.