Maximising your working capital – What, How, Why…

One benefit of both reviewing your historical cash flow patterns, as well as creating a cash flow forecast, is being able to make changes that will maximise your working capital.

Working capital is the money you have available to operate your business from day to day. In the building industry, working capital is made up of three key components:

• Payment to suppliers (creditors)
• Work in progress
• Collection from customers (debtors)

How much working capital you have at any one time is dependent on the length of time between you using your cash to purchase materials and pay your labour, and receiving payment for completing a job.

Clearly, there will always be a delay between these two steps. Problems arise when you are unable to meet your financial obligations because you are still waiting for payment.

When you are working on a project that is larger than usual, and you know there will be a substantial delay before you finally get paid, you will need to plan for that by ensuring you have a larger amount of working capital on hand to tide you over. By contrast, for smaller jobs where turnaround time is quite short, your working capital requirements will be minimal and your cash position will be relatively unaffected.

The real issues occur when delays are unexpected. For example, you may be doing a small renovation for a client and, while you have quoted the job and know how long it will take to complete, there is no way to be sure that the client will pay for it on time. Depending on the size of that job, you may wish to demand an upfront payment to cover the materials you need to pay for before commencing the job.

The key to successful cash management is carefully watching all the steps in the process and planning accordingly. The quicker you can make the cycle turn, the faster you can convert your trading operations back into cash, which means you will have increased liquidity in your business and will be less reliant on cash or extended trading terms from your suppliers.

Fortunately, you can manage your payments to suppliers, your work in progress and your debtors to improve your cash flow.

If you need some assistance, please contact us as we’d be more than happy to help.

Tax Minimisation – The “Structure” of your Business

When it comes to structuring your business to minimise tax, there are two areas to consider – your business’s taxable income and any potential for Capital Gains Tax (CGT).

If your business derives a taxable income, then minimising income tax will be an important factor when choosing your business structure.

You want to ensure that any profit generated by your business is taxed at the lowest possible rate. This can be done by ensuring that individual tax rates and tax-free thresholds are taken advantage of, and that any additional income is taxed at a corporate rate.

At the time of writing, income tax rates in Australia are as follows:

Taxable income Tax on this income [1]
$0–$18,200 Nil
$18,201–$37,000 19c for each $1 over $18,200
$37,00 –$87,000 $3,572 plus 32.5c for each $1 over $37,000
$87,001–$180,000 $19,822 plus 37c for each $1 over $87,000
$180,001 and over $54,232 plus 45c for every $1 over $180,000


Different structures have different treatments of tax. If you are a sole trader, all profit earned by the business will be counted towards your personal income and taxed at the rates above. The same goes for partnerships, though the profit would be divided between the partners.

Profits generated by companies, on the other hand, are taxed at a rate of either 27.5 per cent or 30 per cent, depending on their aggregated turnover.

Using the figures above, the percentage of income tax you pay increases as your income does, reaching a total of 30 per cent at $180,000 in income (total tax paid of $54,232 ÷ total income of $180,000 = 30%). After this, the percentage increases with every additional dollar earned. This means businesses making over $180,000 in profit can pay a lower percentage of tax than they would have otherwise if they use a company structure. You can also gain tax benefits if your income is less than $180,000 where you could pay yourself $87,000 as a salary or wage and leave $93,000 of income in the company to pay tax at the corporate rate. In this example, you would save either nine or 10.5 per cent tax.

When it comes to trusts, the income is distributed to beneficiaries and is then recorded as a part of their taxable income. As you can choose how much income goes to each beneficiary, you can maximise your tax benefit by paying more income to beneficiaries who are in lower income brackets, and benefit from lower tax rates.

Finally, SMSFs pay a flat tax rate of 15 per cent on the net earnings, including concessional contributions. This structure is the most tax efficient, however, it is also the structure with the most restrictions in regard to operating a business, as stated earlier.

Note that the government is continually putting in place measures to reduce the tax benefits of certain structures depending on the type of business you run and how you run that business. For example, contractors in the building industry are now facing the likelihood that the ATO will not grant them an individual ABN if the ATO believes that they are effectively operating as an employee contracting to one employer for only their labour services. Instead, a business operation in the eyes of the ATO is one where you contract to two or more employers and when you supply your own plant and equipment and/or materials.

The second area to consider when it comes to tax minimisation is Capital Gains Tax (CGT).

If your business derives income that is considered capital, then planning to minimise CGT is important.

Income that would be considered capital is the profit made when you sell an asset. Under that simple definition, property development would be considered capital. Unfortunately, it is not that simple, as the ATO has introduced significant legislation in this area. For example, if you undergo a property development and your intention is to make a profit by selling the developed properties at completion, the ATO now considers such an activity as income, not capital.

So, what might they consider capital? If we take the example above but change the intention from selling the developed properties at completion to renting the developed properties for a period of time before, then selling them at some time in the future, this scenario would be considered capital at the time of sale of the rental properties.

The ATO provides a tax incentive for you to hold on to assets for a period of at least 12 months, where they will give you a 50 per cent CGT discount on the profit on the sale of the properties.

The other main activity that would be considered capital, and one that is generally not even considered when setting up a structure, is the sale of your business. If your intention is to build value in your business and sell it for a significant profit at some point in the future, then CGT should be a major consideration.

Structuring your business so that you can get access to both the CGT 50 per cent discount and various small business concessions is important if you plan to generate income that is considered capital.

So which structure should you choose? The only structure which is not entitled to the 50 per cent CGT discount is a company. Therefore, all of the other structures are valid options for accessing the CGT discount along with other small business concessions.

However, while a company cannot access the CGT discount, there is a loophole. If you operate your business in a company structure you can benefit from the CGT discount if you sell your shares in the company, rather than selling the business and retaining the company. The shareholder then becomes the seller and if the shareholder is you (individual) or a trust you are connected with, then you can access the CGT discount. You need to be aware, though, that a purchaser may not wish to acquire the shares in your company as it may not suit their requirements.

You may also minimise CGT by conducting your business through an existing entity with available capital losses. For example, if you have an existing trust that has capital losses from a previous investment that was sold at a loss, this can be offset against a future capital gain, thus reducing the total profit and the tax you’ll need to pay as a result.

It is important to also consider the other taxes that affect your business, including payroll tax, stamp duty and land tax. Other costs include workers’ compensation, superannuation guarantee contributions and leave entitlements.

[1] Note that these rates do not include the two per cent Medicare levy, or the Temporary Budget Repair Levy – payable at a rate of two per cent for incomes over $180,000.

It can be a bit of a minefield but that does not change the fact that you need to be aware of the tax implications of the structure of your business. We’re here to help.

Defining your mission statement

The first step in choosing your destination is defining your mission statement.

A business mission statement defines your goals, ethics, culture and behaviour. A complete mission statement defines what the business does, not only for its owners, but also for customers, employees and the community as a whole.

A personal mission statement, on the other hand, is what you want to focus on, accomplish and become in your personal life. It is what guides your actions, behaviours and decisions towards what is most important to you.

As the owner of your business, the two will most likely be closely aligned.

Some examples of mission statements within the building industry include:

  • Bunnings: Our ambition is to provide our customers with the widest range of home improvement products at the lowest prices every day, backed with the best service. Our team members are the heart and soul of our business.
  • Lend lease: To create the best places. We work closely with clients, investors and communities in Australia, Asia, Europe and the Americas to create unique places. Places that leave a positive legacy and inspire and enrich the lives of people around the world.  We do this through putting safety first and delivering innovative and efficient solutions which provide long term sustainable outcomes for a range of stakeholders.
  • Metricon: We’re all about building homes where you’ll truly love to live.


The benefits of having a mission statement which defines who you are, what you do and the values that guide you are:

  • Marketing your business to potential clients – differentiating yourself from your competition by specialising in a certain field or product or target client. Becoming the best at what you do.
  • Assist you in your business planning – as it sets the scene as to why you do what you do. It can help your business attract finance, investment and/or business partners.
  • Gives you purpose and motivation – far beyond just making a profit. It will help guide you to determine the types of products and services you will provide.
  • Helps you with your decision-making – providing you the framework within which you will operate. It’s your compass, your map, your steering wheel.
  • Provides direction to help you through the challenges that business will throw your way – by keeping you focused on what you want to achieve. Sometimes, the easy decision will create a short-term fix. Your mission will help you make the long-term beneficial decision to ultimately get to where you want to go.


If you don’t have a mission statement, on the other hand, you will find yourself having to spend time and resources rectifying poor communication and unwanted cultural behaviour whether that be with clients, employees or other stakeholders. Communication is extremely important in business and it is incumbent upon the owners of the business to clearly communicate to internal (employees and contractors) and external (clients, suppliers, banks and so on) parties their desires for their business. If all parties do not know what the owner wants to achieve, the business will likely not get there, despite the owner’s efforts. Poor communication will lead to poor decisions and ultimately, poor results – whether that is labour-centric (processes) or material-centric (supplies/suppliers). Both can have significant adverse effects if not managed well and the key to that is communication.

So how do you define your mission? Start by answering the following questions:

  • Why did you decide to go into business for yourself? What were the drivers which led you to make that decision? Was it centred around your own personal desires or that of family, or did friends influence you?
  • Who is your ideal customer? Who do you want to provide your services to? Is it private clients or other businesses? Is it residential or commercial? How will your service make a difference in their lives?
  • What do you want your business to be known for? How do you want your customers and the general public to view your business? How will you influence that view?
  • What are the essential products and services you will provide? How will they be different to your competitors? How will you position yourself in the market? Will it be based on price (low-end) or quality (high-end) or a mix of both?
  • How will your level of service differ from that of your competitors? What will you do differently? How will you be better? Do you know their strengths and weaknesses? How will you take advantage of that?
  • What type of business owner will you be? Will you lead by example? Will you delegate responsibility and authority? Will you empower your employees? Will you mentor your employees?
  • How will you interact with your suppliers? What type of relationship will you have with them? Will you want to have a close relationship with few or a distant relationship with many? How can they help? How can you help them?
  • Will you use technology to your advantage? How will this work? How will it benefit you? Will your processes be more efficient?

Answering the above questions will confirm to you why you are in business and what it is exactly that you really do.

Once you have an idea of why you do what you do and what your business stands for, it’s time to put it into a single statement – a mission statement.

A mission statement will require your time and effort, however, it will be well worth it.

After working through the questions above, I recommend you speak with all the people connected to your business, not matter how big or small your business is. You will gain some great insight into what it is you do well and, if the conversations are honest, some things you might need to work on. They are just as important to you in your business. You should take advantage of the things you do well and work hard to improve on those things that you do not do so well, because they are important to the success of your business. That is where you will derive the most benefit and see an upward spike in your business.

Take the time to do this thoroughly and completely. While a mission statement is generally rather short (that is, only up to a few sentences), it is important for you get the right words together to truly define your mission. Use words wisely to best describe your mission. Less is more, but only if it tells your story.

Once your mission statement is complete, it should be a part of all your marketing and advertising. It should be what drives your business and excites your customers.

Working with a virtual CFO versus doing it yourself

When should you work with a virtual CFO, rather than doing everything yourself?

If you are an ambitious business owner who wants to truly grow your business in the most efficient way possible, then the simple answer is always.

However, the commercially realistic answer is that it’s time to engage a virtual CFO when you are spending so much time on the financial management of your business that it is taking you away from profit-generating activities, or the sales and operations of your business.

In the early stages of your business, you will have the time to manage the basic financial aspects because you may not be fully occupied every day with actually performing jobs. As your business grows, it might become difficult for you to continue to handle the financial management as you look to grow your business to the next phase. One of the first signs that it is time to consider a virtual CFO is when your attention moves away from financial management. If you have taken on all the bookkeeping for your business, paying employees, contractors and suppliers, receipting payments and managing your cash flow, those responsibilities can fall to the wayside when you get a project or job that seems more important and requires your full attention.

At this point, you know that your business needs to take the next step towards growth, and a virtual CFO is required to help you plan for this growth.

You will also need your virtual CFO for your financing requirements, particularly as your business grows. They will help decide if financing is appropriate and, if so, what type of finance will best suit your business and then prepare you sufficiently for the finance application process to provide the best possible chance for approval.

Even if you have systems in place for your financial accounts, your virtual CFO is able to work with your bookkeeper and finance officer to identify and measure exactly what is driving your business performance and where you should be focusing. Conversely, they will identify what it is that could be causing you problems.

If you have issues with your cash flow, you will generally know that, however, you may not know exactly why or how to resolve those issues. There are many reasons for cash flow problems and some of those you may not even be considering, such as sudden growth or winning a large new client or contract. These things are great, but only if they are managed well financially because they could turn very bad, very quickly. Worse case, you could lose that new client or contract because you cannot manage it well and provide the level of service required.

If your financial reports are not making sense or you do not believe they are correct, you may need some help from an experienced financial adviser. Your virtual CFO will make sure the financial reports are accurate and they will then make sure you understand them and what they mean to your business. Together you will work through them to monitor your business performance and put in place the measures to improve those areas that need attention.

You will know when you are not managing the financial part of your business efficiently enough to help you with your business. All you need to do is be honest with yourself and make the decision to look for that support.

To discuss how a virtual CFO can benefit you and your business, please get in touch and we will guide you through the process.

Creating a cash flow forecast – a must!

It’s essential that you take the time to sit down and map out a plan to get control of your money.

That means knowing where, when, how and why it is coming in and going out.

The cash flow forecast is a detailed report that shows the predicted movement of your cash position. To create this, you need to understand not only what level of sales and expenditure you are likely to generate, but also the timing of it. This timing determines your cash position at any point in time.

Creating a cash flow forecast is critical for you to be able to manage your cash flow and make sure your business meets all its financial obligations (and, most importantly, leaves you with some cash in your pocket). After all, as an ambitious business owner you are in business to make some money for yourself and improve your own lifestyle, not everyone else’s.

To create your cash flow forecast, start with your fixed expenditure. These are those expenses that must be paid on a weekly, monthly, quarterly or yearly basis. These can go directly into your forecast without too much thought.

The next area to consider is your sales/income. Unfortunately, these areas are not fixed, and neither are the direct variable expenses attached to them. You might not know the exact number of projects you’ll be working on over the next 12 months, or the scope of those projects, which makes it difficult to predict your income and expenses like the materials and labour required for those jobs. This is no reason not to prepare a forecast with your best estimates based on what you know and what you believe is achievable.

A secondary complication is timing – not only do you not know when these projects might take place (and when the direct variable expenses have to be paid), you also can’t guarantee that the client will pay you exactly when you want.

Forecasting the timing and dollar value of your sales will depend on both historical and future factors. Some historical factors include how long you have been in business, how stable or predictable it has been, whether your business is growing or shrinking, the size of your operation and what’s been happening in the building and property market. Some future factors are whether the recent trend will continue (up or down), whether you are planning to do anything in particular to generate more business or win some large contracts (which would likely give you a fairly predictable outlook), whether you are planning to employ more workers or branch out into other areas.

You can see that there are a number of things that you need to consider and, the more you do, the better you will understand what is happening in your business and the market. The more you know your market needs, the more you can focus on providing exactly that.

Once you have put your projections in place, the next step is analysing what the cash flow forecast is telling you (you may be surprised).

Whether that is the amount and timing of sales or the amount and timing of certain expenses, your forecast will give you a clear picture of what the next 12 months will look like and will likely highlight the areas you need to start focusing on immediately. You will be forced to start thinking about which actions you will take, such as trying to cut down on certain expenses or increasing certain types of revenue streams. You may even decide that you require a capital injection, be it short-term or otherwise. Regardless of what you decide, the benefit of creating a cash flow forecast is that you will be able to make educated decisions because you will have the right information in front of you.

Without this forecast, you just might be guessing. That can be a very dangerous thing because one wrong decision can mean the difference between a healthy profit, completing a project at cost or, worse still, a loss.

It is far more effective to be able to make decisions earlier in the business process and before any potential problems arise. Being proactive, rather than reactive, will substantially increase your likelihood of success.

For a free copy of my Cash Flow template, go to

If you are disciplined, you will definitely improve your cash flow from where you are today.

Don’t wait for the start of a calendar year or financial year, start TODAY and get more money back into your bank account instead of others accounts.

Contractor vs Employee – Do you know the difference?

You may believe it is simple or straightforward, hiring contractors versus hiring employees. You may think you know the difference, but do you really?

To be considered a contractor, certain criteria need to be met:

  • They need to have a certain level of control over the work they are performing on a day-to-day basis.
  • They are engaged to produce a specific result.
  • They have the right to delegate work.
  • They bear the commercial risk and responsibility for their work or injury.
  • They provide their own tools, equipment and, in some cases, materials.
  • They work for you on an as-needs basis, rather than being an integral part of your business.

They may have an ABN, but that in itself is not enough.

They may work for you only 80 per cent of their time, but that is also not enough.

They may only work for you for a short period of time, such as two months, but that is still not enough to consider them to be considered a contractor.

Why should you care?

The answer is because it could cost your business a great deal of money that you did not plan for.

Superannuation implications:

When you employ people on your payroll, it is relatively straightforward to understand your requirement to pay superannuation. What sometimes gets lost or forgotten is the requirement to pay the same 9.5 per cent of gross payments to your subcontractors. Not all your subcontractors would attract this requirement, but those who just supply labour as individuals/sole traders and those who work predominately for you would.

Why? The answer is that the ATO sees those contractors as employees, particularly if they are not employed to produce a specific result on a specific job or project and they are employed as part of a larger work group to work together to complete that project. In other words, they are no different to the employees on your payroll.

There is no obligation to pay those subcontractors who are employed to perform a specific job, such as roofing contractors, electrical contractors and plumbers. If the transaction is considered to be a business-to-business relationship with another company that supplies labour and materials, then the obligation for superannuation does not exist.

Understanding the difference between the two will ensure you comply accordingly. More importantly, with this knowledge, you may seek to employ subcontractors on a different basis moving forward so as to not impose additional obligations on your business.

Workers’ compensation implications:

Workers’ compensation applies in a similar manner to superannuation. If the labour, be it under an employee relationship or as a permanent or semi-permanent subcontractor, is considered to be an employee relationship in the eyes of the industrial relations and tax law regime, then workers’ compensation is required to be paid.

Just like with superannuation, determining how you engage the services of subcontractors will have an impact on your workers’ compensation payments.

While there is a financial impact of deciding whether your labour force will be employees or external contractors, the issue of control may be just as important, if not more so. As explained earlier, you have total control and direction over employees in terms of what they do, how they do it and when they do it. When it comes to external contractors, they control how and when they perform the work, and even who performs the work, within the specific requirements of the job. They can delegate to their employees or subcontractors, and their methods could well differ to your own. While you may lose some control, you do benefit from not having to direct and manage the work, given you have confidence in the contractor you have employed to perform the work.

In summary, there are many statutory compliance obligations placed upon you in your building and property development business. Being aware of these is the first step. Being set up to account for these is the second. Knowledge is power but management is success.

Are your assets protected in your business structure?

The first consideration when choosing your business structure is how you can best protect your personal assets, like your home, your car and so on.

Running a business can make your personal assets vulnerable in a number of ways – should you ever get sued by a client, partner or supplier; when you need to borrow money from a bank or other trading partners; and should something happen to you as the owner.

When it comes to liability, there are a range of reasons why you might get sued. Knowingly or unknowingly, you might not complete work in the manner a client was expecting, you might violate employment laws, you might violate terms of a partnership agreement and more. If a court finds you guilty, you will likely need to pay a financial sum to the other party involved in the case.

Where does the money come from?

This is where your business structure comes in. First, it’s important to adequately insure against the possibility of being sued. However, if that is not possible, or if the sum you have insured yourself for is less than the payment you need to make, your personal assets could be vulnerable.

Instances where insurance protection may not be possible are when you, the business owner and/or your employees, are found to be in fault for specific wrong-doing. As a business owner, you would not likely be performing any deliberate act which would cause damage to another party. If, for some reason, this occurs, insurance will not protect you. Similarly, should your employees cause such damage, you will likely be liable. You need to vigilant to ensure as best you can that these occurrences do not eventuate.

Dealing with unscrupulous individuals is also likely to limit your protection, as are conflicts of interest. In these scenarios, physical damage does not have to result for you to possibly find yourself in hot water. Ensure that you and your company’s ethics are always above reproach.

Acts of nature can also limit your protection so, where possible, you should incorporate into your contracts relevant clauses which do not hold your company, your employees and yourself liable for such acts.

All in all, this area can become a legal minefield, so I strongly recommend you have in place all relevant insurances for you and your business.

If you run your business as a sole trader, you and the business are considered to be a single entity. This means that, if the business is sued, your personal assets are fair game. In order to pay the mandated sum, you might be forced to sell your home, and any other assets you have.

By contrast, if your business structure was a company or a trust, that is considered to be a separate entity. As a result, your house is not likely to be at risk.

Similarly, if your business is likely to borrow money, whether it is from a bank or other trading partners, it is important that it has enough assets to satisfy these creditors should you be unable to pay a loan.

Again, if you and your business are a single entity, you might be required to sell your personal assets to pay back your creditors. By contrast, if your business is in a separate structure, assets owned by the business may need to be sold off to pay any debts, but your personal assets will be protected.

Keep in mind that, depending upon your actions and also the bank’s conditions of lending, complete asset protection may not be able to be achieved. The government and the banking industry are continually putting measures in place to try and limit your ability to be shielded by separate business structures.

The third area to consider when it comes to asset protection is how you can protect your assets should something happen to you. What will happen if you get sick or injured? What will happen if you pass away? What will happen if you divorce and your spouse makes a claim, or if adult children want control of the business?

Other than having all your personal health and life insurances in place, the type of entity you operate your business in could impact what happens to your business.

If you can no longer operate the business, for example, the type of entity will determine how ownership and/or control of the business can be passed to other family members without triggering tax or incurring excess costs. A trust may provide the ease of transfer without triggering tax and costs, whereas a transfer of the assets in a company will incur capital gains tax if there is an increase in value in the business.

In the case of divorce, you may wish to protect your business interests from your estranged spouse. If you operate your business in a company and you and/or spouse hold shares in that company, then protection may not be possible. Should you hold this business in trust and there are a number of beneficiaries, none of whom are presently entitled, then protection would be more likely.

Finally, just as you want to protect your personal assets from your business, you should also try and protect the assets of your business from your own personal assets.

For example, if you are starting a property development and you also own and operate a painting business, you will want to make sure you protect the assets of the property development from claims of the creditors of the painting business.

Your options for structuring the new property development business include running it as a sole trader, in partnership, as a company or as a trust.

As an individual, because you are also the sole director and shareholder of your painting business, your property development would be totally exposed and therefore vulnerable to the creditors of your painting business. This option would not be ideal.

In a partnership, your vulnerability will depend on the partner and whether your partner has ownership of any significant assets. For instance, if you form a partnership with your spouse and the family home is in your spouse’s name (because you wanted to protect that against the painting business), you would still be exposed and vulnerable to the creditors of the painting business for your share of the property. In addition, your spouse is now also exposed. Again, this option would not be ideal.

Let’s consider a company using the same set of assumptions. You would need to determine who the director/s and shareholder/s would be. If it was you, you would be potentially exposed via director’s personal guarantees. If it was your spouse, the family home would be exposed. So, unless you can make someone else the director, this option also would not be ideal.

The final option is a trust. When considering the same set of circumstances, a trust is definitely an option. Earlier in this chapter, in the section ‘What are your options’, I explained briefly what a trust is and the benefit of a discretionary trust. To elaborate further, the trustee of the trust is charged with the responsibility of administering and managing the assets of the trust. If the trustee was an individual, then that individual trustee’s personal assets could be exposed. If, however, that trustee was a company, then the company would be exposed. The benefit of the company is that it will not own any assets and be limited to its shares, for example $10. That is the extent of its exposure. Therefore, a discretionary trust structure (with a corporate trustee) will provide the best form of protection against your painting business and also against your personal home. In addition to the above benefit, the trust does not have any individual beneficiary who is presently entitled to the assets of the trust and therefore no creditor has access to the assets of the trust. The trustee controls the trust and as such no beneficiary has a fixed entitlement. This is definitely the best option in this example.

As you can see, asset protection can be a very sensitive issue and is one that needs your utmost attention.

Introduction – Build It and The Money Will Come


‘The secret of getting ahead is getting started.’ – Mark Twain

You are an ambitious business owner who wants to make a mark on the world.

You want to achieve your personal goals, whatever they may be.

In business, you want to achieve financial stability and take control over your business and your life.

You want to live a lifestyle that enables you to have more money in your pocket and more time to use it, in any way you choose.

But how do you do it?

Business is tougher than ever in today’s competitive world with more than sixty per cent of small businesses failing within the first three years, and seventy-five per cent failing within five years, according to the Australian Bureau of Statistics.

As a result, you need to be as strong as the concrete slab you lay when building. Just like when you’re constructing a building, your business needs to have a strong foundation. You need to have the right people working for you and with you to build your business and your lifestyle.

You face many challenges in your business and they all have an impact on your ability to earn the money to give you the lifestyle you want.

But this is easier said than done. How can you retain your rightful share of the money you earn? How can you effectively manage the cash flow requirements of your business so you can access money when required for development or investment? How can you access financial information in real-time to make informed business decisions? And how do you get your head around the difference between cash and profit; tax, GST, CGT; and ensure your business generates a return on your investment?

You need to understand and accept these challenges. You need to embrace them and face them head on. You can’t afford to bury your head in the sand. You also can’t afford to take shortcuts, and you can’t afford not to get the right people in to help.

Meeting these challenges is the key to the financial management of your business.

Money can be a beautiful thing and at the same time it can be a nightmare. With it, you can do so much. Without it, you feel helpless.

You need money in your building and property development business to invest in land and property. To acquire equipment and machinery. To pay for labour and resources. You also need to fund the project through to completion. Then, at the end of the project, you would definitely like to have some left over – the more, the better.

Without money, the project, no matter how big or small, will suffer. In the worst-case scenario, it won’t even get off the ground.

Your money needs to be managed correctly, right from the beginning. If your business is not structured right so it suits your particular situation, then you are destined to lose money from day one. The wrong structure will mean that, even after all your hard work building and developing, you will give up to half of your profits to the government. I don’t think you want that to happen. Do you?

Worse still, without the right structure and foundation for your business, all your personal assets will be at risk should something go wrong. Many unforeseen circumstances arise and you could be exposed and potentially lose it all.

Build it and the money will come

In this book I will teach you how you can better financially manage your business so that you have more money in your pocket to fund the lifestyle you want.

You can achieve this by following five simple steps:

  1. Strategy: The first step in any journey is deciding where you want to go. In the first step of my framework, you’ll create a strategic plan by assessing where you are now, deciding where you want to go, and charting the most efficient course between the two.


  1. Structure: The right structure can save time, money and heartache. The wrong structure, on the other hand, can make your business far more expensive and complicated than it needs to be. Structure is an essential piece of achieving your strategic goals, so in this step I’ll outline what you need to consider when it comes to choosing the right structure for you.


  1. Statutory: Are you aware (and on top of) all of the obligations you have to the Australian Taxation Office (ATO), Australian Securities and Investment Commission (ASIC), State Revenue Office (SRO), Land Titles Office, WorkCover Authority, your superannuation provider and your bank? This is a major stumbling block where businesses in building and property development can unwittingly subject themselves to fines and liability. In this chapter I’ll cover the main obligations you need to be aware of as an ambitious business owner.


  1. Systems: If you are trying to manage everything by yourself on an ad hoc basis, not only is this inefficient, but you run the risk of not meeting your statutory obligations. In this step I’ll share the main money management systems your business will need to stay on top of your obligations, while moving towards your strategic goals.


  1. Support: As an ambitious business owner, you probably try to do it all. After all, it’s your business – you want to make sure everything’s running as it should be. The problem is that this isn’t sustainable – you can’t be all things to all people, and you can’t do everything at the high standards you’d like. This is why support is essential. In this chapter I’ll teach you how to find the right support team to help you implement the first four steps of the framework, while pushing your business on to bigger and better things.

In these five steps, you will find all the tools you need to grow a financially rewarding, tax-efficient, lifestyle business.


Who am I?

My name is Tony. I am a Certified Practising Accountant (CPA) and have successfully run my accounting practice, AD Partners, for over fifteen years. We are based in Melbourne; however, we have worked with many businesses across Australia.

As an ambitious business owner myself, I very clearly understand the challenges you face as I have experienced some of them myself. I know how it feels when payroll’s due, but you’re still waiting for a big payment to come in. I’ve had the difficult conversations with staff members about not delivering work on time, or to the standards we need. And I get what it’s like to feel like you’re on your own, and like you have to do it all yourself. The pressure you put yourself under by thinking that way is enormous. It doesn’t have to be that way, In fact, it most definitely should not be that way. By putting in place the right systems, you can relieve yourself of all that pressure because the right systems will deliver the right results.   I will give you the tools to achieve this later in the book.

I have the financial qualifications and experience having worked with over a thousand business owners across a wide range of industries, including building and construction, property development, hospitality, retail, manufacturing, automotive, IT, health, finance and transport, just to name a few. While there are differences between those industries, there are also many similarities that the business owners within those industries experience.

In short, I am best known for offering my ambitious business owners a complete financial solution. After working with me, my clients feel comfortable, assured and positive about the future.

My vision is for every business owner to achieve financial freedom – the ability to have the money they desire and the time to use it any way they choose.

This book will help you achieve that vision.


Keep it simple, stupid

It can be easy to overcomplicate things, especially when it comes to the financial and regulatory aspects of business.

I find that, in most circumstances, the KISS (Keep It Simple, Stupid) philosophy is the best strategy. Consequently, Build it and the money will come aims to keep things simple, so you can get a bird’s eye view of your business to figure out what’s working, what isn’t, and how you can improve to achieve even greater levels of success.

While more complex thinking and strategy may be required at times, the more I can simplify matters for you, the better you’ll understand and the better placed you will be to move forward and grow.


Contact us if you would like to meet the Author for a free 30 minute consultation and a signed copy of the book.

3 important questions to ask your accountant

There are many questions that you might like to ask your accountant and you should be encouraged to do so.

There are 3 important questions to ask so as to determine that you have the right accountant to suit your requirements.

They are as follows:

  1. How well do you understand my industry?

As a builder and/or property developer, you operate in a complex world of regulation, taxation and evolving business models. Your accountant needs to be on top of regulatory and other changes to ensure you’re meeting your obligations, taking advantage of all appropriate deductions and protecting your assets as you build your wealth. A specialist can also assess your business in the context of the broader industry to identify any areas that would benefit from extra attention.

  1. Do you charge a fixed fee?

Transparency and regular contact underpin a strong relationship with your accountant but, if you’re charged for every call, you might think twice about picking up the phone. A flat fee can help to keep all lines of communication open and, and as long as the extent of the cover is clearly set out, there’s no risk of unpleasant surprises or time-wasting disagreements.

  1. Are you proactive?

Builders and property developers are notoriously busy people with little time to think about either their business or their financial future. A good accountant will look ahead, think strategically and make suggestions to help you operate in the most tax-effective and efficient way and take advantage of opportunities as they arise.

The right accountant will make a significant difference to your business.

Managing your cashflow is critical

One of the most important aspects of running a business is to ensure you have adequate cash flow to meet all of your financial obligations. Cash is the lifeblood of your business and ensures you stay afloat. Once you are securely afloat, you can then sail towards your destination. (Maybe with a nice refreshment in hand and the people you care about sitting beside you.) Read more