Business Advice

We have updated our information to make it easier for franchisors and franchisees, including prospective franchisors and franchisees, to access information and support. Are you interested in buying a franchise? Or maybe you’re a current franchisee looking for more information on your legal obligations or help resolving a dispute?     Following the Parliamentary Joint Committee on Corporations and Financial Services ‘Fairness in Franchising’ report, we have expanded our online support and resources to help you understand the risks and benefits of franchising and help you meet your legal obligations. The report found that people lack pre-education and access to advice before getting into franchising. Many prospective franchisees have not undertaken research or sought legal, accounting or business advice before signing into franchise agreements. We know that franchisees who participated in pre-entry training tend to have better relationships with their franchisor and be more successful in business. How will the updated information help you? The updated information will help you to: understand risks and rewards to decide if franchising is right for you get all the facts and ask the right questions before signing the franchising agreement access government support available for franchisees, including support for managing disputes, government websites that provide information about running a business and how to exit a business find resources and training including free online Pre-Entry Franchise Education course know your rights and obligations as an employer keep up-to-date with new changes for the franchising sector The updated information is part of the government’s commitment to increase need for transparency and accountability, protection and education and awareness to make franchising fairer. We have designed the information with franchising stakeholders to streamline access to education and support. We will be adding more information once franchising code amendments have been made and come into effect later this year.    For more information visit www.business.gov.au  

“If you're looking to sell your business, one of the things that might pop in your mind, if you've got a lease on your premises is what do I do if my lease is running out. Okay so that gets tackled a couple of different ways so I guess if you're in a situation where your lease is critical to the operation of your business, well really what you want to do is you want to make sure that for a new owner that they've got some tenure so the lease for years going to really have an impact on them wanting to buy it, but mainly on them actually getting financed to be able to buy the business because generally the bank will only fund a loan for them over the over the risk period of how long that lease is. So that's something that's important now you don't necessarily need to go and renew the lease yourself and extend that out but what you do want to do is maybe have an understanding with the landlord that when somebody else comes along that might say you've got a year left or something that the landlord's happy to then give them a further extension and you might look at that and ask them to maybe try to get at the moment on your lease, you might try to get it further option to renew. Or for yourself depending on the situation if you don't want to commit to that extra lease from you or yourself you might ask a landlord if you go on a month by month for a while so there's a couple of ways you can look at it you've just got to really wipe out the risk because if you go month by month that's landlord month by month too, they can you win a month and you can you can boot them in a month, so that's the sort of stuff that you need to take into account if your businesses if your business is critical to that location month by month can be risky because if they get a better offer…you're out, then you've got nothing to sell so these are sort of things you've got to work.” Transcribed from Steve Finnhttps://youtu.be/d-mHWoNWeAk    

We have developed a guide help you recognise common scams and share tips on how to protect your business and customers. Scammers target small business owners as they recognise they are busy and usually have limited resources to keep their systems safe. Scam risks have increased as a result of the COVID-19 pandemic. The latest COVID-19 scams are designed to take advantage of the changes to our daily life including: loss of jobs and financial vulnerability fear of infection the shortage of particular goods and services   Download the Be COVID Fraud Aware guide The Be COVID Fraud Aware guide will help you: know the common scams to look out for protect your business from scams protect your customers information know where to get further assistance and report a scam Download here

A franchise can seem like a safe way to buy your own business. However, in reality, it comes with specific risks and challenges that you should understand and investigate before signing a contract.  There are no guarantees you’ll make an income from franchising If you want the flexibility of being your own boss, franchising may not be the right choice for you Just because a franchise is for sale doesn’t mean it’s a profitable business The law won’t always protect you if something goes wrong Franchise agreements are not forever Buying a franchise? What are your questions?   There are no guarantees you’ll make an income from franchising   Starting any business can be expensive. In franchising, on top of regular operating costs, you also have franchise fees, marketing fees, and possibly expensive supplier agreements. You will need to pay all of these before you can pay yourself a wage.   Some franchise systems offer an 'income guarantee'. These often come with conditions that may make it hard to earn the promised income. You should be very wary of any guarantees or promises about income.   In franchising, if you can’t pay your expenses, the franchisor may be able to end the agreement early (termination).    Smart steps Talk to current and former franchisees. Select these yourself – don’t be pressured by the franchisor to only speak to the best performing franchisees. Ask how long it took them to earn an income from the business. Also make sure you ask former franchisees why they left the business. Do a business course before you sign up. Franchising, like any business, requires business skills to be successful. You’ll need to understand costs, turnover, profit, cash flow and all the financial aspects of running a business.  Use these skills to do your own business plan and test things for yourself. Get advice from an accountant or business advisor. This needs to be someone who specialises in franchising, not your regular accountant. Franchisee case study “I’d always wanted to work for myself, but I couldn’t take the leap without knowing I could still support my family financially.   I saw the franchisor’s ad on an employment website, with an income ‘guarantee’. It seemed perfect because it had a safety net.   But here’s what I didn’t realise at the time - the income guarantee could be cancelled. It said this in the franchise agreement that I signed, but I didn’t realise.   The income guarantee was cancelled because I did not meet all of its conditions. After costs, my actual profits in the first twelve months of operating were next to nothing. I couldn’t pay myself much with what was left over.   I had to work in the franchise full-time, seven days a week for a whole year without drawing any real wages. My family ended up supporting me - it was supposed to be the other way around.”     If you want the flexibility of being your own boss, franchising may not be the right choice for you Franchise agreements give more power to the franchisor than the franchisee, and this can have a big impact on your business.   Normally you will have restrictions on suppliers, where you can operate, and what you can sell. The franchisor can usually make you pay for important supplies at higher prices that you might find elsewhere. The franchisor may also be able to make changes to the way you run your business without your approval.   Smart steps Talk to current franchisees. They can give you practical examples of when they are their own boss and when they are not. They can also tell you if any changes have been made by the franchisor and how the changes impacted their business. Get legal advice. Hire a franchising lawyer to go over your franchise agreement and disclosure document. Know what restrictions are placed on your business and what changes the franchisor can make without your approval. This may seem expensive but could save you a lot of money later on. Franchisee case study “I thought that by buying a franchise, I would be my own boss. I wasn’t afraid to put in the hard work to be successful. But I didn’t realise that I would have very little say in how the business was run - the franchisor controlled almost every aspect of the business.   I was unhappy when the franchisor decided to run “specials” and “promotions” to get more customers, forcing franchisees to sell our most popular products at a much lower price. Participating in these promotions killed my profit margins, but I couldn’t opt out.   The franchisor justified it by saying they had done market research and that it will pay off - but I just can’t afford it! Unfortunately, I have no choice but to go along with it because the franchisor always has the final say on the important decisions – that’s the reality of being a franchisee.”     Just because a franchise is for sale doesn’t mean it’s a profitable business In many franchise systems, ongoing fees are calculated based on money paid to you by customers (turnover], not profit. So if you buy a franchise that doesn’t make a profit, you still have to pay fees, even if you are losing money. Owning an unprofitable franchise mainly impacts you, not the franchisor, because the franchisor still collects their regular fees.   If your franchise keeps being unprofitable and ultimately fails, the franchisor may still be able to make money by reselling your business to a new franchisee after your agreement ends.   When selecting a franchise, it’s important to choose one where the franchisor has a financial interest in you being successful.   Smart steps Request financial history and information about the franchise and franchise system you are buying. Take this to an independent accountant or business advisor. If the seller or franchisor won’t give you up to date and accurate financial information - walk away. Understand what’s in your franchise agreement. Read the agreement and get advice from an independent lawyer on what fees and payments you must pay. Talk to current and former franchisees. Ask them about franchise profitability and their franchise’s financial performance over time. Franchisee case study \"When I bought my franchise a few years ago, I thought I was buying a solid business. The franchise network had been around for a while and was well-known. It was a popular brand, with lots of stores, and good quality products for sale.   It wasn’t until after a few months that I realised the franchise system had serious problems. I learned that many franchisees had been operating on paper-thin profit margins for a long time and quite a few were fighting with the franchisor. The franchisor seemed to just ignore the problems and kept opening new stores, or reselling the ones that failed.    I am still running the franchise, but it hasn’t been smooth sailing. I regret not doing more research and looking for a better franchise.\"     The law won’t always protect you if something goes wrong   The ACCC receives reports from franchisees about poor business outcomes and difficult relationships with franchisors. You may be surprised to know that this can happen without any laws being broken. The laws in Australia don’t stop bad business deals from being made – including when someone buys a franchise. Franchisors do have an obligation to act in good faith, but this doesn’t mean that the franchisor can’t act in their own commercial interest. If you sign a franchise agreement, even if it ends up being a bad deal for you, you might still have to do what the agreement says.   Smart steps Seek expert legal advice. Ask a franchising lawyer to explain the conditions of the contract, the Franchising Code of Conduct and your rights under Australian law before you sign a franchising contract. Talk to current and former franchisees. Ask them about their experiences owning a franchise, what happened when there was a dispute with the franchisor, and what they would do differently. Franchisee case study “I had always thought of franchising as a safe bet, at least compared to running an ordinary small business. I’d heard about the Franchising Code and I felt the laws in Australia were fair compared to my home country. After operating for a year, my franchise wasn’t doing so well. My wife had been sick, so I couldn’t spend much time chasing new clients. But when the franchisor terminated my agreement only twelve months into my five year term, I was completely shocked, because it seemed so unfair.   I was devastated when I found out nothing could be done about it. In my case, or so I was told, the franchisor was within their rights to terminate me. They hadn’t broken any laws or breached the agreement and had just acted in their own commercial interests, so the Franchising Code couldn’t help me, and the government people couldn’t help me.   I ended up leaving the business, with nothing but debt.”     Franchise agreements are not forever   Franchise agreements are for a specific time period, usually a limited number of years (fixed term). Even after years of operating a franchise, some franchisees still have business debts or loans to pay off when the franchise term ends.   Being able to operate the franchise for longer than the fixed term depends on getting an extension or renewal of your agreement. The franchisor usually has the power to decide this. You may not get an extension or renewal, even if you want one.   If the franchisor doesn’t renew, you might be left with debts to pay. Or if you are able to renew, you may need to pay renewal fees and additional investment costs to continue with the business.   Smart steps Get specialised legal advice to understand what happens when your term ends, or if your franchise is terminated. Can you renew the agreement if you want? What will it cost you? Can you sell the business to anyone? Will you get any money back if you’ve paid for an upgrade to the premises but get terminated a month later? Are there limits on where you can work after the franchise ends? Get accounting or business advice to understand if you can break even before the end of the first term. Breaking even means you make enough money to pay back the money you paid to start the business and daily operating costs. If you don’t think you’ll break even, talk to your accountant or business advisor about whether or not you should buy the franchise. Franchisee case study “I used my savings and also borrowed from family to buy my franchise. I knew I wasn’t going to make a return on my investment in the first year or two, but I wasn’t too worried. I had a really good relationship with my franchisor and was confident about where the business was headed. I knew I would grow the profits over time.   I was stunned when the franchisor didn’t renew my franchise agreement. Apparently the franchisor had decided to “go in a different direction”. I told them that I needed a few more years to earn a return on the money I had invested in the business, but they didn’t seem to care – they said they were allowed to act in their own commercial interests. My lawyer told me the same thing.   The worst part was telling my family I wouldn’t be able to pay back what I had borrowed.”     Buying a franchise? What are your questions?   The ACCC would like to hear from people who are thinking about buying a franchise to find out what questions they have or what information they need.   Please complete our short survey to help us keep improving our education and information. Note: Franchisee case studies are based on one or more reports to ACCC. The resources and information on this page are not a complete guide. You should also get your own independent legal, accounting and business advice before you buy a franchise.         ACCC - © Commonwealth of Australia.

After reporting a recovery in revenues in the December 2020 quarter, franchise business networks are far more positive about 2021, according to the latest Australian Franchise Sector “Pulse Check”. This is backed by today’s release of the Australian Bureau of Statistics December quarter figures showing economic growth increased by 3.1%. The Pulse Check survey (including responses from 68 Australian franchise systems covering 14,596 outlets) showed that a third of respondents (33%) reported December 2020 quarterly revenue increases exceeding 10% compared to the December 2019 quarter, reflecting the agility and performance of franchises in resilient industries. Positive trading was concentrated across the quick service restaurant, maintenance, health, courier and freight industries. Sit-down restaurants and cafes, fitness clubs and accommodation businesses proved less resilient with state border issues remaining significant. While 53% reported some level of loss making within their franchise system, 47% of respondents indicated that none of their franchisees would record a trading loss in the December quarter (up from 24% in the September quarter). A total of 157 new units were opened across 35 brands, predominantly in the categories of retail stores, pet services and home maintenance services. A total of 62 franchised units were permanently closed across 18 systems, predominantly cafés. There was positive sentiment for the March 2021 quarter, with 51% of respondents anticipating a moderate (37%) or significant (14%) increase in revenue. 75% of respondents indicated they were optimistic about business conditions in the next six months and 15% indicated they were neutral. The percentage of respondents pessimistic about business conditions for the next six months halved from 20% to 10% in the December quarter. The greatest concerns or challenges reported by Australian franchise systems were: Financial performance of franchisees 38% Landlord and commercial leasing issues 35% Franchisee recruitment 32% Wellness of franchisees and support staff 25% Engagement and satisfaction of franchisees 25%     Editor’s notes: The “Pulse Check” survey is undertaken for the Franchise Council of Australia by FRANData to provide insights on the status and experiences of the Australian franchise sector during each quarter. FRANdata provides Brand Ratings, Finance Access Reports and Benchmarking services on participating Australian franchise systems. FRANdata also operates The Australian Franchise Registry™ which holds information on more than 200 brands covering 30% of the Australian franchise sector. The report of findings from the December Quarter 2020 Australian Franchise Sector “Pulse Check” survey is attached.  For further information, please contact Darryn McAuliffe on 0412 789 027 or [email protected]    

\"I want to give you some tips today if you're looking at selling your business and you've still got a loan on that business, you might have some equipment finance or something like that, so here's what help actually works, here some tips around some of the different scenarios that might actually affect you so when you sell the business you've got the chunk that you owe the bank basically hopefully you sell the business for more than that, when the buyer pays you that goes to your solicitor or your settlement agents trust account held and dispersed funds and part of that will be the bold then give you know, that chunk of money to your bank to pay them out and then whatever is left then goes to you. That's how that works sometimes you might be in a situation where you actually owe more on the business than what you sell business for so if that's the case look it's a real challenge because when you sell the business it's generally and sell for what it's worth for in the open market, unfortunately there are cases where people may have bought a business and they're now the business when they sell it's not going to sell for the same amount or it's going to sell for less than what they want to pay for it or what it costs them to set it up. So in those cases basically what you've got to do is if you've decided that you are going to sell, what you've got to do is you've just got to say okay, well it is what it is and whatever we get so $500,000 on the business, if you're going to get $300,000, you get that $300K you pay it off you're left with the balance of $200K and you've really just got to move on to the next venture and then just sort of sale took one or two steps back will now got a move forward and try to catch that up if we can that's just really how it is. If you're in a situation where you've got some equipment finance, for example in your business generally what will happen is for some parts of that finance it might be worth actually just paying it out and the new owner will take over and they'll refinance at equipment themselves however they want to but in some cases you might be on like say a rental lease or something of some equipment and the payout might be revived or they're just going to finance the same way anyway, so in that case what'll happen is normally it'll just it can be like an assignment they still need to do their own loan application, you'll end your loan with that provider, but basically what the provider will do is effectively they'll shift the loan that's there the weekly or monthly financial cost of the buyer person is buying business so it’ll pretty much sort of help out work, so if you owe some money on the business, you'll get selling it's fine it's all part of what's normal probably most of people would deal with do have a loan on their business it's just a matter of how you then decide to deal with it.\" Transcribed from Steve Finnhttps://youtu.be/ZiqxZK5LN9E    

We know what it looks like to reap the rewards of hard work because it’s easy to picture. It probably looks like a thriving business with balanced accounting books, happy clients, and satisfied staff. What do the seeds look like that grow into these successes? What actions will lay the foundations for these results?  Here are 12 tips for 12 months of business wellness. 1. January: Set KPIs for staff performance reviews  Performance reviews are important for the well-being of your company from the inside. They can also help your employees to stay on track and focused on the goals of their role. KPIs are not bout policing employees but rather about ensuring that the company is moving forward towards its goals and that each person has their eye on the target. Figuring out how to set and implement these KPIs, as well as knowing how to have difficult conversations with team members, might call for external assistance from HR professionals. 2. February: Set actionable goals for each quarter  February is the month of LOVE. Love your business. Love your staff. Love your customers. Host a get-together (COVID-permitting, depending on the area you’re in) for your clients and your teams. A casual barbecue with drinks, a dinner, or a charity event to let those that make the lifeblood of your business know you love and appreciate them.  3. March: Measure your marketing efforts and seek out your weak points  How is your first quarter going? Now is the time to evaluate the strategy you created in January. Meet with your accountant and actively look for ways to improve your cash flow management. Also, evaluate your sales-funnels to understand where your leads are failing to convert into closed business. This month is all about facing reality head-on. Get a team of professionals on your side to guide you.  4. April: Meet with a marketing whizz and fortify your weak points  Since you got up close and honest with reality in March, now is the time to build an action plan around your findings. The more weak points you discovered in your business, the room you have for improvement. Bring in an external marketing professional to go through your sales process starting from your marketing campaigns through to signing on clients and retaining leads to strengthen that pipeline. If you can master this, you’ll improve your revenue-generation without additional marketing spend.  5 May: Make a change in your workspace  Change is as good as a holiday. Introduce some plants to your workspace or undertake other subtle redecorating efforts to give you the feeling of a fresh start. You will also want to handle some of the labour-intensive tasks now and save some of the easier tasks for next month.  6. June: Take a mid-year breather (it’s part of your productivity protocol)  It’s not unusual to start feeling the effects of the year’s hard work around June. Permit yourself to take a break if you’re tired. This might mean making yourself unavailable for a long weekend or reducing your time in the office for a week or two. It’s a great time to withdraw and regroup before the second half of the year commences.  7. July: Investment in employees D&I education through collaborative workshops The EOFY leaves many businesses with a little bit of budget and investing in your team’s D&I efforts through workshops can have long-term positive benefits for the company as a whole and for the team. It’s a great way to get employees having conversations with each other that they never would’ve, and they will learn a tremendous amount through it and hopefully, it will embed in your team culture.  8. August: Find ways to build a marketing campaign around your D&I initiative  Start by introducing an internal team event like “culture-Friday”. Have a roster and invite your staff to put their name down. On their Friday, a staff member may bring a dish to share or a culturally significant item to show to the rest of the team. In this way, inclusion is encouraged while everyone gets to learn about different cultures. If the person sharing is comfortable, create a social media post about your day and what the team has experienced. This is super authentic and your audience will revel in the opportunity to learn about your diverse team. Plus, it really makes you look great to your customers.  9. September: Have a special team-building event for your staff  It doesn’t have to be big. It doesn’t have to be expensive. It has to be authentic, fun, informal, and down-to-earth. A bring and share dinner or a casual boardgames evening (BYOB) with snacks will bring the team together. Avoid those team-building exercises that involve raft-building. Stick with casual and fun. It’s cheaper and it’s more enjoyable. The last thing colleagues really want is more instructions and directions and rules.  10. October: Pick a charity that your team resonates with  Community is the heart of everything. If you want to have a prosperous year, start by helping others. Work with your team to find a charity or a cause to immerse yourselves in. It’s important that you find a charity your team feels compelled to want to support. You may volunteer, collect donations, or help out by spreading the word. Don’t do it for the recognition, do it because it feels good.  11. November: Run a campaign to monetise the impending festive season  The idea is to start monetising in December now so that you can increase your revenue-generation before the festive season starts, enabling you to shut down. Obviously, you need to plan for this a few months in advance but this is the time to implement it. Your trade dictates what you can do. If you’re pressed for ideas and your team also can’t come up with a few inspirations, bring in a professional marketing strategy builder.  12. December: Focus on the family: Appreciate your team You showed your team love in February.  You showed them love in September. The end of the year is here and it’s time to show some love again. Only around 12% of employees report leaving a job because they’re underpaid. In fact, leaving a job has more to do with job satisfaction: “9 out of 10 said they were willing to earn less money if it meant the work was more meaningful.” Source. Run a charity team-building event: Organise a beach clean up day followed by a barbecue. Or, find an organisation and help feed hungry children. Choose something that enables easy social distancing and mask-wearing if necessary.  About the author: Katriina Tahka  (CEO at A Human Agency - AHA: www.a-ha.com.au). Katrina is an HR guru with a special interest in business’ success through empowering teams. CEO + Founder of A-HA, Katriina is passionate about building inclusive workplaces where all people thrive and realise their full potential. Healthy teams with engaged people deliver both business and community success.

Whether you use a registered tax agent or lodge your own tax return, it’s helpful to have information you can refer to when you want to get ready for tax time. The Tax Time 2020 toolkit is now available, and it includes a directory of links as well as several updated, and new, fact sheets for small business. The fact sheets can help you get an overview of what you need to know if you're: claiming deductions for the costs of using your home as your main place of business claiming a deduction for motor vehicle expenses for your business claiming a deduction for expenses you incur when travelling for your business a director or shareholder of a company that operates a small business, and you take money out of your company or use its assets. We also have information to help if you’ve had to pause or permanently close your business due to COVID-19. Ask for help if you need it, it’s never too late to speak with us or a registered tax professional. For more information visit www.ato.gov.au  

Are you looking to sell your business yourself or are you going to appoint a business broker? Selling a business can be confusing and very time-consuming. To help make sense of it all, here is 6 ways to get your business ready for sale. 1. Evaluate your business and why you want to sell It is important to evaluate your business, assess why you want to sell and what makes a buyer consider purchasing your business. Ask yourself the following questions: • Why do you want to sell? • Is it the right time to sell? • What are the business potentials for growth? • Who are your customers? • Can my business succeed without me or without a key customer? Evaluating your business and why you want to sell will force you to confront any weaknesses as well as underline the strengths and growth potential of the business.  2. Get your paperwork in order Getting your books in order is extremely important when you considering selling your business.  Prospective buyers will want to examine the financials prior to making any offer. Having your books in order will ensure that the interested buyers are comfortable in buying your business 3. Prepare an Information Memorandum An Information Memorandum also known as an IM is a sales document provided to interested buyers by the seller or business broker which gives them a detailed overview of the business that is being offered for sale. When selling a business, this sales document is one of the most important item that should be prepared prior to selling.  The main purpose of the Information Memorandum is to provide valuable information that allow buyers to get a better understanding of the business & its operations.  Based on the Information Memorandum, buyers can decide if the business will suit their needs.  You can write this document yourself, hire a writer or you can appoint a business broker who will most likely prepare this for you.  4. Write a compelling advertisement A business for sale advertisement that is appealing and professionally written is extremely important if you want buyers to notice your advert and enquire. Spending the extra time writing a well written advertisement for your business will help generate more interest and hopefully secure a buyer.  5. Prepare a Non-Disclosure Agreement for Your Business A Non-Disclosure Agreement (NDA) is a legal agreement between both parties that outlines confidential material, knowledge, or information that the parties wish to share with one another. It is a contract through which prospective buyers agree not to disclose any information covered by the agreement. An NDA creates a confidential relationship between both parties, to protect the confidential and proprietary information of the business.  Having a non-disclosure agreement ready for prospective buyers to sign, can also help speed up the selling process.  Get your lawyer to draw up a non-disclosure agreement (NDA) or to provide you with any additional information about this document.  6. Speak to your landlord When you sell a business that relies on a leased premise, you need to be aware that your landlord has a say in whether the sale withstands or not. In most commercial leases, your landlord must agree to the assignment before the settlement can take effect. If the business lease has several years remaining, the conversation with the landlord should focus on getting consent to an assignment.  However, if the lease has only a year or two remaining, the business may need a new lease for the new buyer, and that is the issue to be discussed with the landlord. For more information contact Richard Bristoe at Business Sale Writer.  

When you're running a business, there’s a lot to think about. Don't forget to protect your personal and financial information. Scammers often try to ‘phish’ for information by impersonating government agencies such as the ATO. If you hand over your information, scammers might use it to: drain your bank account establish fake businesses in your name gain access to your online government services scam your clients and employees. Scammers have many opportunities to trick you into giving away your valuable information. There are some things your business can do to help stay safe: use complex passwords and change them regularly remove system access for people who no longer work for you log out of systems and lock computers when you're not using them maintain up-to-date security and anti-virus software on computers and other devices. There are also some things you can do to stay safe when you're dealing with government services online: don't access services via a hyperlink in an email or SMS access services through an independent online search if you're ever in doubt, look up the service's phone number separately and call them to check. Next step:  Visit the Scamwatch website for more helpful tips and resources. See also: How to protect your business Top cyber security tips for business

Make sure you complete the Cyber Safety Checklist to help improve your cyber security and protect your identity Australian businesses are being targeted with COVID-19 scams, fraud attempts and deceptive email and SMS schemes. It’s important to protect your business, especially during tax time. The Australian Taxation Office (ATO) and Australian Cyber Security Centre (ACSC) are sharing tips and resources to help you improve your cyber security and protect your identity. Cyber Safety Checklist During this time of heightened scam activity, businesses are encouraged to: Use multi-factor authentication where possible and don’t share your password with anyone. Run the latest software updates to ensure operating systems security is current. Secure your private Wi-Fi network with passwords (not the default password) and do not make financial transactions when using public Wi-Fi networks. Exercise caution when clicking on links and providing personal identifying information. Only access online government services via an independent search – not via emails or SMS. Call us on an independently sourced number to verify an interaction if in doubt. Educate your staff on cyber safety and scams.   Find out how to report a data breach or scam.Australian Taxation Office Learn more about COVID-19 malicious cyber activity.Australian Taxation Office Watch the short video on Stay secure online and protect yourself from scams.Australian Taxation Office Watch the short video on how to keep your digital identity safe by protecting personal information.Australian Taxation Office

Practice owners who are looking to sell often adopt a wait-and-see approach, which can be risky. Making a sale is not as easy as it appears, of course, but practice owners who avoid waiting too long to sell their practice may enjoy a more successful outcome. Waiting too long to sell, or not planning ahead, can cause practice owners to miss a valuable window of opportunity. Because it takes an average of 6 to12 months to sell a practice, long-term planning is necessary for any successful sale. Never Wait Until You Have to Sell One of the keys to a successful practice sale is selling when you don't absolutely have to. If a buyer sees that you've been planning this move for quite some time and that it's not a desperate “I've had enough” step, you can dictate a much higher price. Proper planning means careful financial records, a detailed practice history and an extensive sales portfolio. Many practice owners make the mistake of waiting until their practice is on the decline to sell, which is exactly the opposite of what you should do. The best time to sell is when your practice is at its peak, at the top of its game. The Right Conditions for a Sale In an ideal situation, a clinic sale would be completed when two conditions are met: when demand in the industry is strong, and buyers with deep pockets are available. It's a smart idea before selling to take a look at market conditions for your industry in order to achieve the best return. Working with practice brokers can be beneficial in this case, as they often closely monitor market conditions and can advise you on when conditions are favourable for your industry. What Can Harm Your Practice's Value When You're Trying to Sell? Many factors can affect the asking price of a practice, including industry competition, current market conditions and the overall economic climate. Events such as a recession or a practice downturn can affect your practice's value and lower the asking price. This is why it's beneficial to sell when the economy is healthy. Of course, even in the healthiest economic climate, having too high an asking price can lead to a dead-end street. Deciding on the right price for selling your practice is important, and it's one that practice brokers can help you determine. They take a careful look at your overall profits, the state of your industry, similar practices and the marketplace when choosing an asking price. Pricing is crucial to selling your practice. The right price draws in buyers, but the wrong price turns them away. Many owners make the mistake of overpricing their practice. An unjustified value can make buyers walk away — for good. And if buyers walk away, your practice is sitting on the market for longer, quite possibly losing even more value. Take the time to get the price right, and you’ll find it much easier to sell your practice. You Can’t Sell on Potential The first thing to understand is that a buyer is not interested in what your practice might be able to do. They’re interested in what the practice is doing. The truth is, every practice has potential. Converting that potential to dollars is going to require the new owner to invest time, money and skills, and the potential may not even be realised. Valuing based on potential means the new owner is paying you in advance for the improvements they make. If you claim your practice is full of potential, a buyer will also question why you haven’t exploited it yourself. Your broker can help you talk about potential in ways that make your practice attractive to buyers, but you can’t rely on potential to raise the value of your practice. Maintainable Earnings Many practice owners get caught up in the value of their assets and weigh them heavily in their valuation. Assets can help increase the value of your company, but buyers are interested in how those assets translate to cash flow. It’s no use being asset-rich if you don’t have enough money coming in to maintain those assets and any loans associated with them. Buyers also look at whether earnings can be maintained. If your profits have held steady or risen in the past few years, this will be reflected in offer prices. In the same way, if your profits have been decreasing, you will have to lower your valuation. Keep in mind, your buyer will also look at industry trends when deciding on an offer. Changing demographics, government policies or environmental concerns can affect the value of your practice. Technology can have a particularly large effect on value. If the potential buyer is aware of technological advances in the industry, they may think your earnings aren’t maintainable. Outside Valuation It’s very rare for owners to value their practices accurately. In fact, some experts believe that as few as  10 percent of practice owners have a realistic view of the value of their practice. Owners have usually spent countless hours, effort, sleepless nights and plenty of stress on building their practices. As a practice owner, you want to include all that sweat equity in your appraisal, but potential buyers aren’t interested in that. They’re only interested in whether they’ll continue to make a profit from their purchase. The other issue you have as an owner is that you know what you need to make from the practice. Owners often want to retire, travel or invest in a new enterprise so they reverse-engineer an appraisal, naming a price that matches their wants rather than on fair market value. Because objectivity is difficult in the appraisal process, going to a broker is the best way for you to get an accurate idea of your practice valuation. Brokers understand the different ways to value practices, the standard in your industry and current market trends, which all contribute to a fair price. In the end, your practice is worth what someone is willing to pay for it. If you have a realistic view of the value of your practice, you’ll be able to find the right buyer. Here’s some ideas on how to add value to your practice by making it less dependent upon you as the clinic owner: 1. Ask Questions: What will your business look like when it’s ready to be sold? Will all your patient offerings remain the same, or will you pare them down to the most profitable products and services? How essential are you to these products and services? Asking these questions allows you to get clear on how to make your practice as attractive as possible. 2. Decide on the Critical Functions: What are the things that must happen to ensure your clinic continues to make money? These are the critical functions and should not be limited to providing your service. Are you critical to any business management processes and how can you ensure someone else can handle the task? 3. Document the Processes - A large part of the sale of your clinic relies on being able to transfer knowledge to new owners. If this knowledge is trapped in the current owner’s head, it means a long handover period, or the information is lost when you depart. Well-documented processes are essential to making yourself redundant when selling your business. A business with everything written down looks a lot less risky to prospective buyers.  4. Build a Strong Team: Once you have the procedures documented, it’s time to hire a strong team to handle critical functions. Having an established team reassures a prospective buyer that the business will continue to run as the ownership transitions. Ensure your team understands every aspect of the business. If you’re the one that normally undertakes anything other than clinic duties, make sure you have a new staff member who can take over these jobs. Spend time training the new staff and creating your dream business. 5. Take a Step Back and Let Your Team Work: It’s time to get out of your business’ way. Take a break. Fly overseas, renovate your bathroom or visit your in-laws. Don’t check your emails. The purpose of this step is to ensure that your business can run without you. You’ve created it, helped it grow stronger and now it’s independent and you can leave it to run on its own. This is an essential step. When you go back to the clinic after a break, your team will be able to point to holes in the process and places where you are still needed. Or, hopefully, you’ll come back to everything running smoothly and a continued profit. This will tell you what you need to fix for prospective buyers or if you’re ready to get your practice on the market. Owner dependence is one of the most important factors in the valuation of a business. Buyers know that in an owner-dependent business, much of the value can be destroyed as soon as the owner departs. Taking steps to make your business independent will help you get the best price when you’re ready to sell your practice. So….when you have decided it is the right time to sell…and the practice is ready to sell, it important to consider how to position the clinic for sale. All buyers will be looking for the following in their search for a good business:  Quality Information – the more transparent the business information, the more trustworthy it is. Buyers won’t make decisions if the quality of information is poor. Realistic Price Expectations – Most sellers have unrealistic expectations of their business’s value and believe it’s worth more than the market is prepared to pay. Well Presented Sales Collateral – A complete business information memorandum with comprehensive details about the business, the industry, its resources and its future opportunity for growth or expansion. This document needs to make an impression so you can ‘sell the sizzle’.  Owners Who are Prepared to Stay Involved After the Sale – Expect buyers to want to retain owners for a period of time to ensure a smooth transition and to download all of their IP to the new owner. Depending on how your deal is structured, your final payment from the purchaser may be determined or incentivised by future business performance which you’ll want to ensure is optimised. Do Your Own Due Diligence  Most business owners review their financial performance on an annual basis and judge the ongoing performance through their business bank account. Compliance, contract and employment documentation is often poor or non-existent, and the value in documenting business processes and operating systems is never even considered. When the time comes to sell, there is no documentation to demonstrate the value of the business aside from annual accounts which have often been prepared to minimise tax rather than demonstrate financial value. A failure to identify business weaknesses in advance can often lead to the withdrawal of an offer or be cause for a price reduction when uncovered. Prospective buyers typically review every detail of the business in a process called due diligence. As a seller, you’ll need to anticipate the buyer’s questions and scrutiny and prepare your answers and arguments in advance. In order to do this, the owner needs to be their own biggest critic. This is usually the first time since starting the business that such a detailed review has been performed. After completing this process, many owners have a much more comprehensive understanding of their business – some even identifying that had they known what they learned through the process, they might have been more successful. If you want to sell your business to create retirement funds in the future, take the time now to create an appropriate business exit strategy. Identify your critical assets and your potential buyers. Carefully structure your plan so you understand what liquidity should be there for you. Make it an objective to run your business in a manner that if you received an irresistible offer today, you would be confident that the buyer’s due diligence wouldn’t uncover anything that would cause them to withdraw their offer. Once or twice a year look at your business as though you were interested in buying it. For more information contact Sally StuartBusiness Sales Specialist - Health sector P. +61 2 9899 1999 M. +61 437 082 045www.linkbusiness.com.au