The other day I was driving down a dirt road in outback WA, about 250 kms from the last town and still about 100 kms from the next one, when my Tyre Pressure Monitoring System (TPMS) alarm went off. 

It was warning me that the tyre pressure on one of my tyres was dropping below my preset minimum pressure and an indication that I had just experienced a tyre puncture. 

We immediately stopped whilst there was still air in the tyre. 

What the TPMS did was give me early warning that there as a problem with one of my tyres and this warning saved me:

• Damaging the tyre further and just getting the tyre repaired, rather than buying a new tyre, thereby saving money (the repair was 5% of the cost of a new tyre) and time (you could not get a replacement tyre locally so would have to wait for one); and
• Possibly experiencing a tyre blow out and maybe a resultant accident which could have had serious consequences (note no one passed us in either direction whilst we were changing the tyre).

So you now ask why is the TPMS like a financial forecast.  In my mind there are 2 ways.

Firstly, by preparing a financial forecast, it allows you to set the specific alarms for your business around things like revenue, expenses, cash flow and other important metrics.  You now have some visibility around your potential business performance and whether this will achieve your business and personal objectives.

Secondly, when you measure your actual performance against the forecast in a timely manner, you can now see how you are going and whether you are on track.  And more importantly, whether you are triggering any of the alarms you have set.  And just like we did when out TPMS alarm went off, if you can take immediate action to address the issue. 

If you want help with your forecast, or to learn more about my #OutsourcedCFO Services, simply email (wayne@arealcfo.com.au) or call me (0412 227 052).

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

I have been writing these briefing notes for my small and medium business clients for a while now.  And this has to be a new low in Federal budgets for small business.  The 2024-25 Federal Budget Strategy and Outlook (the main budget paper) mentions “small business” just 27 times out of 440 pages.  The 2023-2024 equivalent budget paper at least mentioned “small business” 46 times.

This shows how much the current Federal Government thinks about small business.

And this makes a mockery of Anthony Albanese’s statement at the Council of Small Business Organisations Australia (COSBOA) national small business summit on 4 April 2024, where he said “I’m here because the Government that I lead respects and values every one of Australia’s 2.5 million small businesses – and the more than 5 million Australians employed by them.”

The Labor Government has a funny way of showing respect to small business.

Read below to see the new 2024-25 budget announcements potentially impacting your small or medium business.  And in particular there was nothing nestled I could see in respect of a startup looking for a government cash injection.

Small and medium business instant asset write-off

For small businesses with annual turnover of less than $10m, the instant asset write-off of up to $20,000 per eligible asset has been extended to assets which are first used or installed ready for use on or before 30 June 2025.  Note the legislation for the 2023/2024 year instant asset write off has yet to be passed.

Energy Bill Relief Fund

The Energy Bill Relief Fund will be extended which will deliver up to $325 in electricity bill relief for eligible small businesses from the Federal Government..    You don’t need to do anything to apply for this as it will appear on your bill.

Continued Funding for small business programs

The Federal Government will continue to fund the NewAccess for Small Business Owners

Program; the Small Business Debt Helpline; the Cyber Wardens program; improving payment times;, adoption of einvoicing; Energy Efficiency Grants for Small and Medium Sized Enterprises program.

The “New” Defence Industry Development Grant Program

Depending on which budget paper you read there is up to $183.8m available for small and medium business under the “new” Defence Industry Development Grant Program.  But I expect this just replaces the existing Sovereign Industrial Capability Priority Grant program.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. Wayne may also be able to assist you in preparing any grant application. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

If you read the Women’s Budget Statement released with all the other October 2022-23 budget papers you will find the term “gender pay gap” mentioned 47 times.

With this amount of focus, you would think that the Budget actually had some real, concrete ways to tackle this issue.

But if you read what the Government is proposing you see a large number of motherhood statements that in my view will do little, if anything, to move the needle on this issue.

Funnily enough, the Women’s Budget Statement actually hits on what I consider to be one of the largest contributors to the gender pay gap.  And this is what is called in the Women’s Budget Statement “industrial segregation”. 

This refers to:

• The unequal distribution of women and men in certain   For example the high proportion of women in what I call the caring industries, Health Care (75%) and Education and Training (73%), relative to the low proportion of women in Construction (14%);

and,

• The unequal pay between different industries. According to the ABS the median weekly earnings in August 2021 was $1,057 for health care workers, $1,250 for those in education, but $1,305 in construction (a 23% premium to the median in health care).

You can see this from the image which was copied directly from the Women’s Budget Statement.

My conclusion from this is that we, as a society, seem to pay less for workers in the caring industries than we do for other industries.

So to make meaningful change to the Gender Pay Gap, we need to increase the pay rates of those in the caring industry which will proportionally impact more women than men.

Now we see in the budget, the Government tasking Fair Work to evaluate pay in the Care and Community sector to help close the gender pay gap.   

Sounds like the right thing.  But here is the really annoying part.   Guess who is the biggest employer in the health care and education space?  Governments

And who indirectly funds the bulk of the child and aged care workforce?  Once again various governments.

So the politicians could make meaningful steps to close the Gender Pay Gap just by looking at the pay rates for the people they employ / subsidise.  They don’t need Fair Work to make a determination, they can make the decision on pay rates.  Just like every other employer who decides that they need to pay above award rates to attract and retain staff.

But instead of actually doing something to close the Gender Pay Gap, in my view the politicians keep on deflecting to business owners, with somewhat meaningless motherhood statements. 

Does this mean the politicians mouth platitudes about it, but have no real intention of closing the Gender Pay Gap?

If you want some help, contact me below.

Contact Wayne Wanders for your FREE Business Survival Session

At the end of this session, you will have multiple ideas on how your business can survive and thrive in these uncertain times.

Simply fill in the contact form below or email me at wayne@aRealCFO.com.au or call me on 0412 227 052 to organise one of these obligation free sessions.

Wayne Wanders, A Real CFO

wayne@aRealCFO.com.au

As part of the 2022 Federal Election, the Labor Party promised a “Better deal for small business”.  Sounds great but Labor’s policy document at the time was very light on detail, and in my view this continues in the budget announced last night. 

For example in the Treasurer’s speech the word “business” was mentioned just 3 times.  In the key budget paper, Budget Measures (Budget Paper 2), “Ukraine” is mentioned nearly as many times as “business”.

Here are some of the positive points for small business in the budget announcements:

• $15m to extend the small business mental health and financial counselling programs.
• $62.6 million over 3 years to support small to medium enterprises to fund energy efficient equipment upgrades. The funding will support studies, planning, equipment and facility upgrade projects that will improve energy efficiency, reduce emissions or improve the management of power demand
• Strengthening unfair contract term protections.
• Hopefully more workers through the provision of 480,000 fee-free TAFE and community-based vocational education places and 20,000 university places and the increase the 2022–23 permanent migration program from 160,000 to 195,000 (assuming the increases can actually be filled).
• Exempting eligible electric cars from fringe benefits tax.

On the other side here are some of the negative points for small business in the budget announcements:

• The election promise to help reduce power bills is gone with forecasts for electricity and gas prices to rise sharply over the next 2 years (as much as 30% next year).
• Reductions in spending on external contractors, consultancies, advertising, travel and legal services may adversely impact revenues of selected businesses.
• There was $197.7 million over 4 years taken from Entrepreneurs’ Program which includes Commercialisation grants.
• The Temporary Full expensing provisions (effectively 100% asset write off) that were planned by the previous government to finish on 30 June 2023 have not been extended.
• No money that I can see to help business around cyber security.
• No changes to R&D funding.

In addition to the above there is:

• $15.0 billion allocated over 7 years to establish the National Reconstruction Fund (NRF) to support, diversify and transform Australian industry and the economy through targeted co-investments in 7 priority areas. These priority areas are: resources; agriculture, forestry and fisheries sectors; transport; medical science; renewables and low emission technologies; defence capability; and enabling capabilities.  The co-investments includes loans, guarantees and equity investment.  How much the NRF will apply to small business is still to be determined as appears to be focused on large projects..
• $1.9 billion Powering the Regions Fund. This will provide dedicated support to transition regional industries to net zero.

Overall, from my perspective, a budget that forgot about small business.

If you want some help, contact me below.

Contact Wayne Wanders for your FREE Business Survival Session

At the end of this session, you will have multiple ideas on how your business can survive and thrive in these uncertain times.

Simply fill in the contact form below or email me at wayne@aRealCFO.com.au or call me on 0412 227 052 to organise one of these obligation free sessions.

Wayne Wanders, A Real CFO

wayne@aRealCFO.com.au

The 2022-23 budget was announced last night could be said to be an election budget with cash being given to voters.  But how much of that cash will go to small and medium business owners?  In all honesty not much.  Read below to see the 2022-23 budget announcements potentially impacting your small or medium business

My biggest disappointment in this budget is that it fails to address what I see as one of the major issues facing many small and medium businesses right now.  This is the ability to find and retain good quality staff.  A simple change to the pension rules for income (where currently for every dollar for a single person on the pension earns above $180, or $320 for a couple, you lose 50 cents of your pension), could have freed up many, many, more people willing to step in and help out small and medium business with their staff shortages.

Fuel Excise

Fuel excise will be cut by 22 cents a litre for the next 6 months.  This should reduce pressure on transport costs for your business and your suppliers.

Skills and Training Boost

Businesses with turnover of less than $50 million, will be able to deduct an additional 20 per cent of expenditure incurred on external training courses provided to their Australian based employees. The external training courses will need to delivered by entities registered in Australia.  This applies to money spent from 30 March 2022 till 30 June 2024.

For example, if you spend $100, you get a tax deduction of $120.  So, the after tax cost of that training (at 25% tax rate) is $70, instead of $75.  But when the profits are distributed to the owners, there are fewer franking credits, so the benefit for the individual owner is minimal.   Click here to learn about the Boost Smoke and Mirrors in the 2022–23 budget

Technology investment boost

Businesses with turnover of less than $50 million, will be able to deduct an additional 20 per cent of expenditure on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services. An annual cap of $100,000 will apply.  This applies to money spent from 30 March 2022 till 30 June 2023.

For example, if you spend $100, you get a tax deduction of $120.  So, the after tax cost of that training (at 25% tax rate) is $70, instead of $75.  But when the profits are distributed to the owners, there are fewer franking credits, so the benefit for the individual owner is minimal.  Click here to learn about the Boost Smoke and Mirrors in the 2022–23 budget

Wage subsidies for new apprentices and trainees

The Boosting Apprenticeship Commencements (BAC) and Completing Apprenticeship Commencements (CAC) wage subsidies have been extended to include new employees starting in your business from 1 April to 30 June 2022.  Under this scheme you could get up to $28,000 in wage subsidies and you can get the skills and training boost additional deductions for the training costs you may pay.

The Australian Apprenticeships Incentive System (AAIS), then comes into place from 1 July 2022, replacing the BAC and CAC scheme.  Under the AAIS scheme, employers can get wage subsidies for apprentices training in priority occupations of up to $15,000 for city employers and up to $21,000 for regional employers.  These apprentices can also receive assistance of up to $5,000.

Changes to PAYG

Businesses may get some cash flow relief from changes being made to the pay as you go (PAYG) income tax instalment system.  Firstly the PAYG uplift factor between years has been reduced from 10% to 2% for businesses with less than $50 million annual aggregated turnover.  Secondly, from 1 January 2024, businesses will be able to modify their PAYG instalments based on actual business performance.

Export Market Development Grant EMDG

For those who applied for the 2021-22 EMDG, the grant funding was severely reduced per applicant.  It appears that the government is allocating $80m more to the EMDG scheme, which hopefully results in higher grants for businesses with annual turnover less than $20 million.

Boosting Female Founders Initiative

There will funding for around another 100 applicants through the Boosting Female Founders Initiative program.

Establishment of the Regional Accelerator Program

Establishment of the Regional Accelerator Program to drive transformative economic growth and productivity in regional areas, targeted to local priorities in infrastructure, manufacturing and industry development, skills and training, research and development, and education.

Energy and Emissions Reduction

More funds were announced to support increased private sector investment in low emissions technologies including hydrogen, in affordable and reliable power, and in carbon capture and storage pipeline infrastructure.

Boosting the Modern Manufacturing Strategy

There will be further investment in the Modern Manufacturing Strategy and National Manufacturing Priorities (NMPs) to support businesses in NMP sectors to deliver high-impact projects.

Carry Over from 2021 – 2022 Budget

Also don’t forget some of the announcements in the 2021 – 2022 budget come into effect on 1 July 2022.  These include:

• Staff earning less than $450 per month will be entitled to superannuation.
• The ability to deduct the full cost of eligible new and used depreciable assets of any value, for businesses with turnover less than $50m, has been extended to 30 June 2023 (Temporary Full expensing).
• The ability to “carry-back” tax losses against previously taxed profits extended to the 2022-23 year.

Want some free or subsidised Business Advice?

Reach out to me if you are based in NSW and would like some free or subsidised business advice.

If you want some help, contact me below.

Contact Wayne Wanders for your FREE Business Survival Session

At the end of this session, you will have multiple ideas on how your business can survive and thrive in these uncertain times.

Simply fill in the contact form below or email me at wayne@aRealCFO.com.au or call me on 0412 227 052 to organise one of these obligation free sessions.

Wayne Wanders, A Real CFO

wayne@aRealCFO.com.au

Setting goals, targets and objectives are great.  But do you have a map of how you are going to achieve these.

And that’s where a regularly updated forecast can help you.  This allows you to set out the steps you need to take to achieve your goals, targets and objectives.

Also, if you track against this, you can get early warning signs of where things are not going to plan.  Allowing you to tweak your action plans before it is too late.

If you want help to prepare or update your forecasts, reach out to me below. 

Contact Wayne Wanders for your FREE Business Survival Session

About this time of year many business owners set their annual budget.

But as we are seeing at the moment, business conditions can change from week to week, often making your annual budget out of date in the first month.

And this may not even be covid lockdowns.  For some businesses the issue is staffing.  Either not being able to find staff, or, key staff being poached to go work for someone else.

That’s why business owners need to continually look into their crystal ball and supplement their budget with regularly updated forecasts.

Allowing you to tweak your action plans before it is too late.

If you want help to prepare or update your forecasts, contact me below

Contact Wayne Wanders for your FREE Business Survival Session

To ensure I help your business specifically, the best approach I have found is to have an obligation free session with you.  In this session we will review your current business in a factual and objective manner, to better understand the challenges that you face.  And this session does not need to be face to face.

At the end of this session, you will have multiple ideas on how your business can survive and thrive in these uncertain times.

Simply fill in the contact form below or email me at wayne@aRealCFO.com.au or call me on 0412 227 052 to organise one of these obligation free sessions.

To get help you successfully navigate your way through your financial challenges so your business can survive and thrive in these uncertain times, simply use the contact form on the left to email Wayne or call him on 0412 227 052.

Let Wayne Wanders, a fully qualified and experienced CFO, help you successfully navigate your way through your financial challenges so your business can survive and thrive in these uncertain times.

Wayne Wanders, A Real CFO

wayne@aRealCFO.com.au

The 2021 budget was announced last night spraying a lot of cash around.  But how much of that cash will go to small and medium business owners?

Here are some of the winners:

• Support continues for industries impacted by the Covid shutdowns such as entertainment, arts, tourism, hospitality and aviation.
• If your business employs apprentices and trainees, there are more incentives for you to employ these staff, assuming you can find these people in the current job market.
• If your business supports infrastructure projects, then you may benefit from more work. But conversely you may be adversely impacted by the lack of staff to deliver on these projects.
• If you need to buy capital assets, then the ability to claim a 100% write off has been extended giving you more time to get the capital item installed and ready for use. But, if you don’t have access to funding to do this, your ability to utilise this may be limited.
• If your business is in the digital space such as artificial intelligence and cyber security there are some new programs that may benefit your business.

If your business is outside of these, the direct benefit to your business in this budget is limited.

One positive output from the 2021 budget is that, small to medium businesses (with a turnover of less than $50 million) will still benefit from the reduction in the company tax rate from 26% to 25% applicable from 1 July 2021, announced in previous budgets.  But remember this will adversely impact your franking credits.

My biggest disappointment in this budget is that it fails to address what I see as one of the major issues facing many small and medium businesses right now.  This is the ability to find and retain good quality staff today – not in 6 months when they may have been re-trained.  This issue has the capacity to constrain the growth of the economy in the immediate future.

Here are 2021 budget announcements potentially impacting your small or medium business.

If you want some help, contact me below.

Contact Wayne Wanders for your FREE Business Survival Session

At the end of this session, you will have multiple ideas on how your business can survive and thrive in these uncertain times.

Simply fill in the contact form below or email me at wayne@aRealCFO.com.au or call me on 0412 227 052 to organise one of these obligation free sessions.

Wayne Wanders, A Real CFO

wayne@aRealCFO.com.au

The other day I was sitting on a zoom session and I noticed a lot of business owners were getting confused about budgets and forecasts.

Both are similar in that they attempt to predict the financial future of a business.  But where they differ is in how you use them.

To me a budget is usually done once a year.  In it you attempt to predict the future and set up annual financial and non-financial targets for the business to aim for.

But the reality is very shortly after you have set the budget, in the real world something changes.  Any one or more of the assumptions you used to predict the future are no longer valid.

Unless you adapt to this, and change something, it is highly unlikely you will achieve your budget or your financial and non-financial targets.

And that’s where a forecast comes in.

Into your budget you now roll in the impact of these changes and create a new set of predicted financial and non-financial outcomes.  If these outcomes don’t meet the budgeted targets, then you need to start looking at what other changes you can make to the business to bring you closer to these budgeted targets.

This becomes your forecast.

For example, you may need to delay hiring a person because the planned growth is not as fast as you budgeted.  So even though you budgeted to employ someone in August, it does not mean that you do.  Instead, you wait a bit longer.

Your forecast is helping you make timely business decisions.

And when circumstances change again, you revise your forecast again.  And you revise what you are going to do in your business.

That way, during a financial year, you would have one budget, but you could have many different forecasts prepared at different times.

So even though budgets and forecasts attempt to predict the financial future of a business:

• Think of a budget as a strategic tool setting up where you want to be in a year or two. Don’t do something because it was budgeted, but is no longer viable under current business conditions; and,
• Think of your current forecast as a tactical tool to help you make timely business decisions as you aim for your targets in an ever changing world. That is the real benefit of a forecast and why a regularly updated forecast is much more important than a once a year budget.

Every one of my clients has reforecasts done throughout the year.  Often with multiple different what-if scenarios to give you another perspective.

And here is another real world tip.  In some businesses, conditions have changed so much that comparing actual performance to budget is irrelevant.  2020 was a great example with COVID significantly changing how many businesses operated.  In those businesses, I throw out the budget and start to measure:

• actual performance to the previous forecast.
• full year current forecast to the previous forecast.

This way you can see how current business decisions are working (or not).

Contact Wayne Wanders for your FREE Business Survival Session

To ensure I help your business specifically, the best approach I have found is to have an obligation free session with you.  In this session we will review your current business in a factual and objective manner, to better understand the challenges that you face.  And this session does not need to be face to face.

At the end of this session, you will have multiple ideas on how your business can survive and thrive in these uncertain times.

Simply fill in the contact form below or email me at wayne@aRealCFO.com.au or call me on 0412 227 052 to organise one of these obligation free sessions.

To get help you successfully navigate your way through your financial challenges so your business can survive and thrive in these uncertain times, simply use the contact form on the left to email Wayne or call him on 0412 227 052.

Let Wayne Wanders, a fully qualified and experienced CFO, help you successfully navigate your way through your financial challenges so your business can survive and thrive in these uncertain times.

Wayne Wanders, A Real CFO

wayne@aRealCFO.com.au

I hear so many people complain about the Federal Government and what it does or does not do in its budget. And that’s why I make a personal submission to Treasury and Finance as part of the Government’s Pre Budget Submission. This year I was one of less than 300 published submissions made as part of this process.

In my mind, less than 300 published submissions is not good enough. If you want to make change, you can’t sit back and do nothing.

Maybe you don’t do it because you feel no one will listen!

Well I disagree. Last year a couple of my ideas actually made it into the budget, I can’t say they were solely because of me, but I am sure I helped in some way through my submission.

There is no excuse not to express your opinion directly to the people who make the decisions.

And with the budget due out next week, I thought I would share a summary of the budget submissions I made this year.

My budget submission this year was was focused on what the Federal Government can do towards:

• helping people improve their retirement outcomes;
• providing affordable housing; and,
• ease some of the administrative burden faced by small businesses.

If you want to read the full submission you can find it here https://treasury.gov.au/sites/default/files/2019-03/360985-The-Wealth-Navigator.pdf

In summary they are:

1.      It’s time to remove some of the complexity around the calculation of superannuation guarantee contributions. It would be far simpler that any payment made to the employee which is subject to pay as you go income tax (their gross pay for that pay period) is included in the calculation to determine how much superannuation guarantee contributions are to be made. Irrespective of how the employee earned it. And there is no minimum threshold. 

2.      If you want to increase the stock of affordable rental accommodation, the Government needs to provide an incentive to the landlord. I propose that this incentive is equal to the GST paid on the new property, rebated over 10 years, providing the property is provided for affordable housing in conjunction with approved community housing providers.

3.      In order to reduce the gender superannuation gap, get more engagement in superannuation and better retirement income projections, couples should have the option to place their combined superannuation into a “couples” joint superannuation account.

4.      The Workplace Gender Equality Agency (WGEA), is the federal funded agency tasked with improving gender pay equality, but it as the data shows, it does not appear to be making any significant inroads. Changes need to be made to both The Workplace Gender Equality Act 2012 and the funding of the WGEA, if any progress is to be made.

5.      Currently there is a large incentive for couples to income split to reduce tax. In order to eliminate this, the government should consider developing a tax system that taxes couples as one tax unit.

6.      The pension system in Australia was designed as a safety net for Australians financially disadvantaged in retirement. But I believe this is no longer the case. The pension system in Australia has now evolved to a supplementary benefit for those who have not saved enough to be comfortable in retirement. And this bears no relationship with whether the person was financially disadvantaged during their life.  For example, a high income earner can spend all their money and get the same pension as a low income worker who never had the chance to properly save for their retirement. In my mind this means that the Australian Pension system rewards spending over saving. And this needs to change.

Let’s see if any of these make the budget next week.

And next year, if you want changes made, why do you too make a budget submission as part of the Pre Budget process

If you like this, why not share this with a friend, simply click on one of the icons to the left or below

If you want to see how Wayne can help you successfully navigate your way through your financial challenges to grow your business profitably faster,

Contact Wayne and arrange a free, no obligation Discovery Session.  At the end of this Discovery Session, you will have multiple ideas on how to grow your business profitably faster.

To get Wayne to help you successfully navigate your way through your financial challenges to grow your business profitably faster, simply use the contact form on the left to email Wayne or call him on 0412 227 052.

We promise to keep your email address safe.

Let Wayne Wanders, the Wealth Navigator, a fully qualified and experienced CFO, help you successfully navigate your way through your financial challenges to grow your business profitably faster.

Wayne Wanders, A Real CFO

The Wealth Navigator

wayne@aRealCFO.com.au

If you like this, why not share this with a friend, simply click on one of the icons to the left or below