accountants
Knowing the right time to exit your business is more important than the decision to start one up. When you start a business it's often with an idea, a limited amount of capital, and a load of enthusiasm. By the time the business has grown and developed, it is likely to be worth far more than at the start. But, a lot of business owners get the exit decision wrong and pay the price for it.
Standards and Poors has downgraded America's AAA credit rating, local and international markets are volatile and easily spooked, picking changes in interest rates is more akin to crystal ball gazing, the carbon tax is coming, consumer sentiment remains tight and no one is feeling particularly confident. Welcome to the 2011/2012 financial year.
Most small business owners are pretty close to their business. For many it is a major part of their life and the distinction between personal and business is easily blurred. This can also cross over to their financial affairs with business and personal finances being interlinked.
A lot of family businesses use discretionary trust structures. These have been popular because they provide both a level of risk management, separating the business from your personal assets and are also quite tax efficient. A discretionary trust allows the trustee to appoint the income of the trust (this is typically the profit of the business) to any of its beneficiaries in the proportions that it determines from year to year. The entitlement of the beneficiary is not fixed, rather it is a decision of the trustee each year. Normally the trustee is either the key person in the business or a company controlled by this person. In a typical family situation, Mum and Dad may be the trustees or directors of the trustee company. Using this structure business owners have the flexibility to distribute income in the most tax efficient way. None of this has changed.
Dear Saige Adviser, The costs of running my business have gone up (despite what they keep telling me on the news) but I have held off increasing my prices. It just doesn't seem right when the economy is in a slump to pump up prices. I don't want any existing sales to dry up. What's the best approach to keep customers on my side during the economic downtimes? Should I be doing more and adding a bit of a discount to keep people happy? Yours, Fiscally Anxious