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Archive for February, 2010

Are you at risk of you becoming another business failure statistic?

24.02.2010
by Mark
Gwilliam

Every person who has ever tried to establish their own company knows it’s a difficult challenge to carry out.  I’m in no doubt you know that more than 50% of small business ventures fail in the first 12 months & 95 out of every 100 fail within the first 5 years.  But, that statistic doesn’t alter much from year to year.  Why not? 

Many small business owners start their business ventures with nothing more than a “good” concept or product.  But business ventures remain viable because those who have the dream also know how to implement it and have solid industry background, or they engage experts who have extensive background and will endeavour to make them successful. 

The worry is that several businesses fail because the industry owners don’t have the industry and management experience to propel their dream to the next stage, and completely implement all of the components necessary to stay in business.

Numerous entrepreneurs are overly optimistic and overestimate estimated earnings and undervalue what needs to be undertaken in order to be successful.  One common oversight that new industry owners make is to never “let go” of several jobs that they are simply not competent in carrying out and believe they will save funds by refusing to ask for assist.

Don’t think you can do it all.  There will be tasks that you can’t or should not do by yourself and it’s alright to inquire about 3rd party help.

Part of doing business means allocating time to a large range of government driven paperwork and tasks, excise forms, and proper accounting, including goods and services dues and tax returns. 

Naturally, all you want to do is focus on why you began your business in the 1st place – carrying out what you like to do and being paid for it? 

I’m confident you’d choose to ignore  the bureaucracy and piles of paperwork .  However the reality is that it has to be done at some stage. 

You have 2 choices: Knuckle down and do it yourself; or get some help by outsourcing some tasks to people who will do it better than you.  When you do, you’ll have more time to focus on what you do best. 

As a newbie, you’ll need to ensure you meet the obligations imposed on you by government tax departments, health and safety, customer service and much more. 

Select a reputable partner that you can trust to make sure you lay a good foundation for your industry to build upon as it grows.

As you start to consider the workings of your own business, you’ll probably notice new things concerning your business.  Shifting your mindset and how you think about your company might shed new light and repeatedly present you the improvements you have been looking for.

You have at least set the ball in motion and began on the pathway to a completely new approach of undertaking business.  Don’t end now!

I challenge you to look carefully at your company and put into practice the changes you need to be successful.  Extend the limits of your imagination and do not be afraid to try something new.

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A few straightforward tax planning tips for the small business owner

22.02.2010
by Mark
Gwilliam

For many, tax is a sizeable “expense” of doing business.

Business owners have always had opportunities to lessen their tax bill, legally. The focus has always been on the small business owner to “find” an accountant who is prepared to help them. Until they did, they were repeatedly oblivious of what “clever” business owners have already been claiming all of these years.

Every month, I notice entrepreneurs who fritter enormous time, effort and funds setting up and growing their business ventures but facing contant pressure with poor cash flow. When they do ultimately earn a return and have capital to spare, the prize for the success is a tax demand!

Like you, I regard my time as being valuable and I don’t enjoy the thought of working more than I have to, only to pay the tax office. Simply envision how many days you toil for each year solely to settle your tax bill! Simply imagine how many “bonusr” days you would have if you didn’t shell out so much tax.

Time and time again, I have seen too many people pay too much tax due to a lack of know-how, information, and terror from the tax department. How often do you squabble over whose round it is at the pub; or that you have been overcharged 50 cents at the check-out?

Yet extraordinarily, countless entrepreneurs aren’t ready to scheule any time to understand how they can lessen their income tax bill. As a chartered certified accountant who has worked in the UK, Europe and now New Zealand, I have been honored to become involved with many small business owners.

However, many of them have never had the faith to pose demanding questions to their accountants and have never challenged the “status quo”. That’s a shame as so many have taken risks, worked incredibly hard and made countless sacrifices along the way with little remuneration.

Just imagine what you would buy with an extra few thousand dollars if you did not pay as much to the government!

Recently, I had a conversation with a very upset ex-small business owner (who was not one of our clients) who informed me she’d recently gone out of business. As we talked about her business in more detail, it became noticeable that she hadn’t deducted anywhere near all of the expenses that she could have done over the years.

As tax laws changes regularly, every small business owner should engage a competent accountant. Whilst several small business owners try to organise their own tax affairs and think that they could save expert accounting and tax consultants’ bills, a skillful tax accountant ought to be able to save you cash. Tax planning is often broken down into two types:

The 1st one involves identifying the effects of accounting for either one separate business transaction or a group of similar transactions; the 2nd one relates to looking at the overall business structure, either when it’s being set up or at a later stage.

Although, the same tax law applies in both cases, tax planning steps for each will possibly be distinct.

The effect of tax planning is more often than not to either reduce or remove (legally) any tax liability and 2 important steps to do are by allocating income to a taxpayer who may attract a smaller tax consequence; and increasing the amount of taxable deductions you get. So, as the 2009/2010 income tax year draws to a close, take some time to ask your accountant the “tough questions”.

Remember: You may be paying more tax than you need to!

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