Prosperity Wealth’s Gary Dean recognised as ‘Most Trusted Adviser’, securing Adviser of the Year Award from Hillross Financial Services

Gary Dean - blog

“To me this is the most important aspect of a financial adviser – someone who can take all the stress of managing the money on my behalf and at the same time be able to convey to me the knowledge and confidence to rest easy about the decisions I make.” Client, 2016

Prosperity Wealth Advisers is delighted to confirm that Gary Dean, Associate Director, has secured the prestigious Hillross Financial Services award for Adviser of the Year. Highly sought after, this award recognises not only the expertise which Gary brings to his dealings with clients and the industry, but the depth and meaning with which his clients view their relationship with Gary.

Allan McKeown, CEO and Founder of Prosperity Advisers Group says, “In helping our clients to create stronger financial futures, Gary has secured a position with his clients which is based on trust, mutual respect, genuine care, and of course, excellence. We are very proud to have Gary Dean as part of the Prosperity Wealth family and are delighted that his hard work, knowledge, abilities and passion for his clients has been publicly recognised.”

Independent client research through the Beddoes Institute was instrumental in deciding the award winner as was demonstrating a commitment to ongoing excellence in providing personal financial advice, robust and high quality advice processes and a clear and demonstrable passion for clients.

At the ceremony Prosperity Wealth Advisers was also recognised for a further year as a leading advice practice securing its status as member of the Elite Strategist Group among Hillross licensed financial advice firms.

Speaking about the award Gary Dean says, “To me it’s simple, I get to know my clients as individuals. Providing financial advice is personal and that’s the approach I take. Working with my clients gives me incredible satisfaction, I highly value my interaction with them and the trust they place in me and Prosperity. I am very grateful and humbled that my clients provided such great feedback which contributed to winning this award.”

For more information, please contact: Anne Adams (02) 8262 8718

7 business strategies for 2017!

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(First published in Kochie’s Business Builders)

What can you do this year to ensure 2017 is their best year in small business yet? Here are 7 important strategies to help put you on the road to success.

# 1. Rest and read
As we know the whirlwind of being a business owner operator can provide a tremendous sense of achievement, however it can also take its toll mentally and physically if you don’t take time out regularly to recharge the batteries. Waiting for a time when things are quiet will mean the break may never come. A good friend of mine got me into the habit of booking a few breaks at the beginning of the year before the pendulum starts swinging. That way you will find it much easier to step out of the furnace.

Make sure you take a good book with you as well to improve your business skills. As business growth guru, Verne Harnish likes to say those who don’t read, barely have an advantage over those who can’t read. Exponential Organisations, the best seller by Salim Ismail was my choice over the holiday break and should be on your list.

# 2. Understand disruption
The book Exponential Organisations by Salmi Ismal is a good start to get an understanding of what all the talk about disruption is actually about. Moores Law – the doubling of computer processing power each year doesn’t just mean cooler iPhones. Coupled with some smart thinking, advances in technology are changing business models and all of our businesses will be profoundly affected over the next five years. It’s not all bad news though as your small business can benefit from better technology, higher efficiency and lower costs together with the fresh opportunities that change can bring.You need to start thinking now about:

  • What industry is my business really in?
  • What industry will my disruption come from?
  • How can I future proof my business and take advantage of these rapid changes

# 3. Embrace innovation
Innovation is not just about creating a new revolutionary app, it’s about ways of doing the same things better. Technology enables all of us to take advantage of these innovations to run our businesses better, faster and cheaper. The challenge for you as an owner operator is to commit the time to understand what’s available, what will help you serve your customers better and make your team members more productive. Don’t be distracted chasing every ‘bright shiny thing’ but there will be two or three systems or processes you can implement to radically transform your business.

# 4. Minimise your largest expense
Most small business owners don’t think about it this way but taxation is usually your largest expense. While we don’t advocate tax avoidance in any way there are many opportunities to legally reduce your tax. As the late Kerry Packer famously said “if anybody in this country doesn’t minimise their tax they want their head read because as a Government I can tell you you’re not spending it that well that we should be donating extra.

”You will need good advice though and if you don’t think you are getting it, there are plenty of good accountants that would be happy to review your position.Some very substantial changes to the Superannuation system have recently been passed with an effective date of 1 July 2017. While this sounds like a long way off, but depending upon your age and the amount of assets you have inside (or outside) of super, some planning opportunities may be available.

# 5. Plan to succeed
A recent Research report from BStar revealed that 72% of SMEs don’t have a formal business plan with only 34% allocating any time at all to strategic planning. Economic growth and opportunities are not evenly spread throughout Australia. Labour markets, population trends, business and consumer confidence are all influenced by local factors and we also have the impact of innovation and business model disruption. Business planning approaches have evolved to see the wasteful 20-page document become a thing of the past replaced by concise one page versions that can help you and your team understand the critical success factors for your business and stay focussed on implementing the necessary actions to achieve your goals.

# 6. Get great advice
Not even the great sports people can achieve success on their own. Business owners have clear needs for advice and assistance. You need an experienced sounding board, someone you can trust to discuss your plans and issues with and ideally keep you accountable to achieving your goals. There are many names for this role – mentor, guide, coach or adviser. It may be a friend, colleague, accountant or lawyer with some larger businesses forming a proper ‘board of advice’.Find the right person or structure that suits you, take some time out to think about where you want your business to go, get to work on your strategic plan taking advantage of some smart technology and you will be well placed to avoid the perils of disruption while you build your superannuation nest egg.

# 7. Have fun!
Don’t forget to take some time out to enjoy the ride.

SMEs: Who are the winners this year?

(First published in Business First Magazine – December 16)

Christmas is almost upon us and business owners will be shifting their focus to planning for 2017.  Let’s take a look at the highlights for 2016 and how they lead into key themes for 2017.

The budget of uncertainty

The Turnbull government’s May 2016 budget was widely flagged as a step in the right direction for small business. However, the proceeding lag time in policy implementation and uncertainty around superannuation policy has seen many SMEs simply “tune out” to how these changes affect them or their business.

Business owners should keep these in mind:

  • Reduction to the small business company tax rate down to 27.5% from 1 July 2016 – applicable to business with up to $10M turnover.
  • Other tax benefits opened to many businesses within the $2 and $10 million turnover band including simplified depreciation and trading stock rules
  • Tax offset of up to $1,000 for individuals carrying on business via a trust, partnership or sole trading.
  • No change to eligibility threshold for small business CGT concessions.
  • Small business restructure tax concessions made available to family groups

The bad news for SMEs was to be at the personal retirement level with super flagged for retrospective policy, restricted thresholds and months of uncertainty in policy.  While a backflip on the $500,000 retrospective lifetime non-concessional cap was announced in September the main superannuation policy announcements from the budget look set to become law from 1 July 2017, these include:

  • $1.6 million transfer balance for super pensions
  • Removal of the transition to retirement pension tax exemption
  • Reduction in the concessional cap to $25,000 annually and non-concessional to $100,000 annually
  • Lowering of the threshold for the additional 15% super contribution tax from $300,000 to $250,000

Business highlights as of November

The key 2016 highlights we hear from business owners on a day to day basis come from outside the tax sphere.

Low Interest Funding

Access to low interest business goodwill and asset funding has clearly been a key winner for business in 2016 –especially businesses that were able to capitalise on the low rates. We have seen many cases where the major banks have shown high degrees of flexibility on rates in order to retain and win new business – while this was not always on the first approach, it pays to be persistent.

New tools to monitor your business

We have also seen a shift in openness to technologies and new streamlined processes.  Business owners now have access to apps and software that are affordable, giving them a comprehensive and real time view of their trading results and cash flow position.  Business owners who previously preferred traditional methods are beginning to realise that they must adapt or be left behind.

Innovation

Business operating in the innovation field fared well during 2016 with a range of policies and grants delivered to foster innovation.  The commercialisation of innovative products and services continues to be an area of growth with ongoing rounds of funding and tax incentives.  One of the most generous of the concessions is the Early Stage Innovation Company (ESIC) tax concession which provides investors with a rebate of 20% on their investment and the ability to disregard capital gains for assets sold within 10 year.

On the radar for 2017

The 2017 landscape for SMEs will continue to present challenges.  SMEs will need to be focused and savvy when it comes to steering their business in a winning direction.

Business Planning is Key

The top concern keeping business owners awake at night in 2016 was business planning (or lack thereof).  With research showing that 72% of business owners don’t have a business plan. Too many owners are concentrating on day to day operations and either don’t have the time, skills or support to focus on long term planning and growth.

Given the tools available to SMEs, 2017 will see in app based resources, there is no longer any excuse to shy away from strategic business planning and ongoing monitoring.  Benchmarking, industry averages and real time comparative data is readily available and should be put to work. 

People & processes – get these right and ease your stress

As engage with remote employees or “gig” workers, processes will need to be dynamic and streamlined.  Focusing on new ways of working along with smarter processes will be a key theme of 2017 and can also help ease the stress levels for business owners.

Stress and Lifestyle concerns rose from #5 in the 2015 SME research report to #3 in 2016.  The majority hold a belief that their business can’t operate without them. To avoid burnout and missing out on family time business owners should invest focus in this area. Cloud based tools that allow time away from the business without compromising connectivity can also be a useful planning tool for business owners.

Actively managing cash

The record low borrowing rates of 2016 can’t last indefinitely and cash should always be a key focus for business.  Most businesses that fail still do so because of cash flow issues.

In 2017, we recommend using KPIs, benchmarks and cash flow planning apps to make cash management a priority for your business. Once you’ve harnessed your cash flow you can take advantage of business opportunities when they arise.

SME Owners to plan for Financial Freedom

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Financial independence, key person risk and being too busy to grow their business are some of the most common stresses facing SME businesses in Australia today.

Formal business planning is squarely in the ‘too hard basket’ for many business leaders (72%) and this is holding them back when it comes to financial independence, growth and financing, and planning for retirement – with many SMEs without a retirement date and no succession plan (90%), or worse, they don’t know what income and assets they need at retirement (88%).

So says a comprehensive face to face study conducted over 12 months with more than 500 SME business leaders.

To access the research report findings and commentary please contact us on 02 4907 7222.

Why aren’t businesses doing strategic planning for growth?  We found 66% of participants in this study are too busy working in their business with no time to work on their business.

Here are some key business planning tips for SMEs, across the key areas of Strategy, People, Processes & Cash, to take the mystery out of planning and to help business leaders to take charge.

1) Everything is relative – Even if you do planning – how do you know it’s going to work?  Benchmarks are fundamental indicators of success and without knowing how your business and activity currently performs against other SMEs, you could be flying blind. Ask your adviser about helping you with benchmarking your business against others.

2) What are you solving for?  You need to determine what your end game is – where are you going and why? What do you need to get there? What’s holding you back? What does your vision look like in terms of what you sell, to whom, when, where and how.

3) Do you have the processes and systems in place to implement a plan? Identify your key processes, highlight what needs to change to grow where and how you want, then develop the processes and enlist your team to troubleshoot and own them.

4) How much money do you need? Revenue for cashflow, profit target, capital for growth. How much is enough and what’s the best sources of finance for your business? What do you need to secure it?  How healthy is your credit history?  All of these factors are important if you are looking to secure outside investors or fund your growth through debt. Your accountant can help you to put sums around your plans.

5) Do you have the right skills and experience in-house to implement a plan? If not, where can you find them?  Do they need to be in-house or can you use a virtual CFO, marketing team or cloud accounting solution? If you need experienced resources for sales or development then what will it take to get them and how much will it cost?

6) Have you thought about what it will take to align your staff so you can get the 1+1=3 effect? Make sure you have champions for each aspect of your plan or it will fail. Hold people accountable through alignment and integrating the plan into every day activity. Do you need a reward system to get the best out of your staff? Something simple may not cost you a lot of money but could create a step change in your business culture.

7) What are your indicators for success?  Every plan needs to have indicators of success and clear timelines. These help form KPIs for your team and will demonstrate outcomes to investors and owners when the time comes.

8) Reassess and refocus. Use real time financial and management reporting to steer incremental change. Cloud Accounting solutions are your go to. Set yourself a timeline for assessing success periodically and refocus where you need to in real time. Cash flow is king regardless of the size of your business. Don’t let your focus on expansion blind you to the need for strong cash flow and money in the bank.

There is always plenty to think about when you run your own business. Sharing the load with a trusted adviser will help you to put perspective on your vision as well as reality around your plans. A Board of Advice is a term used widely when it comes to business advisory and it can be a useful step for you to consider if financial freedom is your goal. Enlisting a structured Board of Advice with those who you trust to give you honest and informed insight could mean the difference between feeling stressed by the treadmill, and seeing your vision blossom.

Opportunities for improved patient outcomes and fee growth

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Many of you would have heard that as a result of consultations with the Primary Health Care Advisory Group in August 2015, the Federal Government has legislated reform plans designed to increase quality of care. One of the key initiatives is the provision of comprehensive care plans to over 65,000 patients with chronic or complex conditions, who require ongoing care. The plan is to roll out to 200 practices nationwide who opt to become Health Care Homes.  Financial incentives will be available in the form of regular bundled payments. The total allocated funding until 2019 amounts to $114.3 million in additional funding and redirected MBS funding.

The Health Care Homes opportunity is a new approach to care in the community however as with any new reform program, it is important to plan carefully how and when to get involved so that your practice is well equipped to participate. There are some upfront differences that will arise with the new approach, not least the need for tailored care plans which need to be managed and scalable, and the integration with various practitioners will bring a raft of challenges.

Below are some of the areas to consider for practices looking to be involved:

  • The patient relationship will change.
    The Advocacy Group is of the opinion that increasing emphasis will be on regular contact instead of appointment based management as the focus will be less on today’s problem and more on the plan. Less face to face visits will be required as follow up and tracking can take place remotely using new technologies. Similarly, patient visits to allied health practitioners will become a regular visit as part of the care plan.
  • Collaboration with specialists and allied health practitioners will need to improve
    The main aim of the initiative is to provide comprehensively managed care to patients with seamless transition from practitioners to allied health practitioners. Building integrated networks with the required specialists and allied health providers to assure quality at a reasonable cost will be of the highest priority and is not an insignificant hurdle
  • Information technology will become ever more important
    Workflows will need to be tracked and actioned from multiple locations by multiple users. Information sharing between various practitioners will be of high importance and needs to be effortless in order to be successful. Automation of workflows is a key concept that will free up resources which can then be re-deployed where they add more value. Cloud based information sharing and data management will provide practices with an opportunity to minimise IT spend while at the same time enjoying application support and maintenance under a service model; the practice can focus on its core business without the need to maintain hardware and software. A seamless integration with billing and management analysis will ensure that changes in profitability can be identified early and profit can be maximised.
  • Communication needs to be open
    While traditional practice management will remain vital to running the practice efficiently, it is important to ensure that administration staff and nurses understand the deliverables and strategy behind the change in how the practice is run. Engaging them early and enabling them to contribute to the change will result in a smooth transition.
  • Staffing is critical to success
    As information technology and process flow management become increasingly important, having the right people with the right skills on your team is essential. Problem solvers and staff who embrace change to improve daily operations will be an asset to the practice and drive the change proactively, identifying risks and possibilities early. An understanding of new technologies, project management and also traditional practice management is required. It’s not the number of staff, but their quality and ability to leverage resources will be a key success factor.
  • Impact on associate doctors
    Feedback we have received from associate doctors is around the fear that over the long term the changes will benefit only practices and support staff and divert funding from associate doctors who will not be able to provide the desired client care due to a lack of resources. Careful consideration should be given to how rewards for associate doctors are aligned and the benefits of the new model will need to be tangible for them.
  • Fees per patient and profitability will be major key progress indicators.
    Funding comes with very little conditions and can be used as each practice deems fit to serve its patients the best way possible. This puts cost management and efficiency at the centre of the success of the new health care homes. Fees per patient will be a strong indicator regarding how much care each individual will require. Profit per patient will indicate the efficiency of the practice and ongoing improvement in operations over time.
  • Outcomes will be tracked over time and benchmarked.
    As only ten primary health networks have been nominated for the first stage it has already been announced that the results from these ten networks will shape the future of the program and the rollout into other areas. Regional averages of patient health improvement in areas such as diabetes, body mass index, strokes and other medical events will be used to compare the different approaches used by the different Health Care Homes. The better performers will be rewarded with additional funding while the lower performers might see funding withdrawn. This approach to KPI setting introduces a risk/reward mechanism to the management of individual health. It sets a new precedent for healthcare in Australia.
  • Not every Health Care Home will be successful.
    Due to the limited amount of conditions attached to funding, different approaches will be developed by different practices. As the public seeks to maximise the value of the spend on Health Care Homes, practices which score higher in benchmarking exercises can be expected to be granted additional funds for expansion while under performing practices will see funding reduced.

Overall, the aim is that successful practices will deliver improved services to patients. In order to do so, the practice will need to run efficiently which in turn will result in greater profitability for practice owners. As practices demonstrate this efficiency through better client outcomes, funding will increase which will again lead to further growth and profit potential.

At Prosperity Health we understand the challenges that Health Care Homes will be facing in the coming months. Our team is able to support practices with this new operating environment, provide teams with the right tools to analyse your success and help practices to plan and implement a strategy to achieve  beneficial outcomes for all involved To find out more, please contact Prosperity Health on 1300 795 515 or mail@prosperityhealth.com.au.

How outsourcing can drive efficiencies in your Medical Practice

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In recent months we have experienced a lot of interest among medical practices looking to fully ‘outsource’ their medical accounting tasks, resulting in improved time management for practice staff and more time for their patients.

We are now seeing the focus being shifted from ‘lost time’ (administrative functions such as manual bookkeeping, payroll processing and other accounting tasks) to better ‘productive time’ with more focus on practice management, patient care, performance, future growth and forward planning.

Why consider outsourcing?

There are some very good reasons to consider outsourcing in your practice. Before embarking on any outsourcing program, you should consider the root causes, or underlying reasons, why inefficiency may be present within your practice. By doing this first, you can then consider the type and extent of outsourcing which is right for you and your team.

Some questions to ask to see whether outsourcing might be right for your practice include:

  • Are general administrative functions such as payroll processing, bookkeeping and other general accounting tasks taking up valuable hours which could be used for more meaningful practice management?
  • Do you experience frequent staff changes resulting in increased training costs and lost time?
  • Are you finding it a challenge to keep up to date with constant changes in ‘medical-accounting’ regulations?
  • Is managing software changes, renewal costs and training updates an issue?
  • Are you experiencing increases in quarterly or annual bookkeeping costs?
  • Are you spending many hours outside of work completing accounting tasks?
  • Are you finding it hard to review practice profits, performance and future growth plans?
  • Are you doing the bare minimum to get by without really taking notice of the data and what your financial results are telling you?

Burning the midnight oil is a common trend faced by many practitioners and this impacts on the quality of work delivered due to fatigue and stress.

Practice managers, doctors and other key staff sometimes face frustration in having to do so many tasks in very limited time without being fully resourced or trained sufficiently. This, in addition to their respective individual daily tasks, can result in high turnover from dissatisfied staff and disharmony within the practice.

What to consider when outsourcing

Finding efficiency in lost time is a key area of focus to improving overall business efficiency.

We recommend you review your internal time and costs versus a one-off monthly or quarterly outsourcing cost to assist you with making the right choice. The costs of system upgrades, office space, training, supplies, salaries and benefits of a full time equivalent employee all add up over time.

Some of the common medical-accounting tasks that can easily be outsourced include preparation of:

  • Monthly bookkeeping including
    • Bank reconciliations
    • Ensuring data flows linking from practice software
    • Entering supplier invoices
    • Coordinating supplier payments
  • Monthly management accounts to give you a snapshot of your business performance
  • Monthly payroll for staff and superannuation management
  • Monthly calculation of payments to contracting doctor/s
  • Lodgement of monthly/ quarterly Business Activity Statements
  • Reviews and advice of your business affairs if live data is available
  • Quarterly performance updates and tax savings estimates
  • Annual payroll reconciliation and reporting including preparing end of year PAYG Payment Summary Statements

Plus support by email and phone throughout the year on any accounting or tax issues.

Improving practice efficiency by outsourcing some or all of these tasks will free up more time during work hours for practice managers and doctors to focus on the business strategies that can help the practice to prosper.

If you are interested in reviewing the outsourcing opportunities for your practice, you can contact your Prosperity Health adviser to discuss the options available.

Financial fundamentals to fund a growth strategy

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(First published by Inside Small Business)

It’s vital the primary financial controller of the business takes a commercial approach to the different funding options available and how each will lead to improvement in the business performance.

With the Federal Government currently promoting innovation and risk-taking in Australia through support and generous tax concessions, it’s now more attractive to invest in Early Stage Innovation Companies (ESICs) and to obtain capital funding. Whether it’s a new business or an existing sustainable business, what funding options do you look at to continue to grow and expand your business?

Generally, SMEs seek funding through two sources, capital contribution from owners and debt financing with a corporate lending institution. SMEs tend to provide the last set of financial statements to their banker and hope for the best. Lenders will evaluate the business to determine the ability to repay debt. The healthier the business looks, the more the funding options available, and usually at better rates.

How can you avoid the pitfalls of seeking finance?

One of the key steps that businesses fail to consider prior to seeking funding is reviewing their credit profile. Whether you are seeking financing through debt or equity, here are a few key areas that will better your credit profile for lenders or potential investors:

  • Prepare an Information Memorandum (business plan). Outline the key information that investors will be seeking, such as:
  1. growth plan and forecasting
  2. identified opportunities within your business
  3. clear breakdown of how the money will be spent
  4. valuation of the business
  5. core drivers of the business
  6. ability to repay debts or return on capital
  7. strategic value and key assets
  8. outline of key stakeholders within the business.
  • Identify the amount of funding required to uplift the business through the growth stage. This ensures profits are not diluted through debt repayments or capital return.
  • Seek professional advice and assistance from tax and legal advisers.

Linking with the right investor may be valuable as you may be able to leverage off their experience and networks. Look for opportunities where the investors can add more value to your business. Consider whether you are able to leverage off their experience and networks (this is known as ‘smart money’).

You are the heart and soul of the business, and as much as you would like to work with a particular investor, they would need to want to work with you, too. Potential investors will not only be looking at the business opportunity but who they will be partnering with.

What other financing is available?

Besides larger scale debt and equity financing, your business may require short-term capital. For example, where you need additional funds to satisfy short-term cashflow requirements. This type of funding generally doesn’t require the same level of detail as above. Partner with an advisor who can help you to analyse your situation to determine what funding would best suit the circumstances.

Capital for cashflow management could take the form of one or more of these arrangements:

  • Debt factoring – selling outstanding invoices to third parties at a discount to help with cash flow management.
  • Trade financing – with international trading getting easier, there are still some risks involved such as currency fluctuations and non-payment for goods or services. To protect against these risks is to issue a letter of credit, i.e. the exporter is guaranteed payment by the bank upon receipt of confirmation the goods have been shipped or services provided.
  • Inventory financing – loan or a line of credit to assist the purchase of inventory which then serves as collateral should the business be unable to sell the products or repay the loan. This can help cash flow during seasonal fluctuations and/or slow moving inventory.
  • Credit-card stacking – using credit cards to finance purchases of supplies or equipment. As credit cards tend to have higher rates, planning is required to ensure consideration for: 1) minimum amount required, 2) ability to repay debt, and 3) timing of repayment (considering the rate of interest).
  • Reward crowdfunding – A way to raise capital (as well as increase your customer base) through products, gift cards and rewards.

It’s vital the primary financial controller of the business takes a commercial approach to the different funding options available and how each will lead to improvement in the business performance and ultimately meets the requirements of the business and its investors.

Paving the way for women in finance

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We all know there is a large gender gap in the finance and accounting sector. A recent report showed that in financial institutions, women are holding only 19% of senior positions, 14% of board seats, and a shocking 2% of CEO roles.

Many firms are struggling to reach appropriate levels of diversity, even though gender-diverse workplaces have been shown to perform better. While this gap has been shrinking in recent years, it is still an issue when looking at leadership positions. At Prosperity Advisers, you wouldn’t be able to tell by looking at our senior roles. Over 47% of our leadership team are women.  We sit squarely within the finance sector, and hold a total staff count of 60% women.

We have celebrated rapid growth within the company across our offices in Sydney, Newcastle and Brisbane. With this growth, there has been a strategic shift in management and staffing requirements. Prosperity is proud of our eight recent internal promotions, of which five went to women within the company – from accounting to the management team to Human Resources. The current promotions will bring the leadership team to almost 50% female.

Chief Executive, Allan McKeown said, “Our goal at Prosperity has always been to foster an environment that supports the growth and involvement of our people. We provide challenging professional experiences and deliver the right tools and support to assist our people to drive their careers forward.”

We are proud to have created a working environment in the financial sector that builds women and men up equally. Our unique work environment fosters the growth of the individual and business together.

One of the recipients of the new internal promotions is Kelly Chard. Kelly has elevated from the Business Services and Tax team to become a new Associate Director. Having worked for the firm for 10 years, Kelly is a role model to others, representing Prosperity’s equal love for mentoring others and promoting the firm’s vision.

Kelly’s career has evolved over time: “At the start of my career I thought a great accountant would just get the numbers right or find the best tax outcome. With the internal training and mentoring through Prosperity I was able to extend this mindset and focus on getting to know my clients on a more personal level so that I now advise them in far broader areas including growth planning, managing their time efficiently and financially protecting their families.”

Stephanie McCauley is another great example of the career diversity evident in Prosperity. Having worked for the firm for many years, Stephanie initially started in administration, and then moved through marketing before landing in Human Resources. She has just been promoted to Manager within the HR team. She was able to test her strengths and support our growth plans across many different departments. Highly capable, Stephanie has earned her promotion through dedication and a strong work ethic.

Katrina Brooker has been promoted to Team Leader within the firm’s Smart Drive group. Her expertise and management prowess ensures efficiency and high quality service to our clients. Kerry Kreutzer in the SMSF team has been promoted to Supervisor, and Ashley Read from our Outsourced Payroll team has been promoted to Payroll Officer. These promotions show the range and extent to which we are dedicated to raising all of our employees to their best potential selves.

When considering where to work, flexibility is a big part of the equation for professionals in today’s world. Prosperity strives to make this possible for both women and men. Kelly said, “I’ve worked part time and at times remotely to juggle my study and family commitments during my time with Prosperity which has been really important to me and my family.”

Prosperity’s Director of Human Resources, Tanya Craft says “the right cultural fit is integral to our success. We have clearly articulated our Prosperity DNA so we closely align values and beliefs with those of our team and prospective team. This alignment supports our high standards of performance and ethics and a strong culture of learning, development and achievement.”

Women are thriving in all offices at Prosperity Advisers, proving that the gender gap within the financial sector will hopefully soon be a problem of the past.

Making your business attractive for tax free investing

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In the continued boost to small business and start-ups, new tax concessions came into effect from 1 July 2016 which are set to stimulate investment in innovative companies as part of the federal government’s “Ideas Boom” under the National Innovation and Science Agenda. Just one of the agenda items as part of the “Ideas Boom”, the Early Stage Innovation Company (ESIC) tax concession is to encourage both innovation and investment in Australian companies.

In only two months we’ve seen a growing number of prospectuses aimed at tempting investors under the concessions. Broadly, the tax concession benefits for investors are generous and include:

  • Rebate of 20% of an investment (capped at $200k)
  • Rebate allowed to be carried forward if not all used
  • Rebate can be allocated to beneficiaries if in a trust
  • Modified CGT rules apply to the investment:
    • Hold between 12 months and 10 years – disregard any capital gain
    • Hold longer than 10 years – cost base becomes the market value at the tenth anniversary
  • Tax concessions available to both Australian tax residents and non-residents.

Small business and start-ups that want to leverage the new concessions to attract investment to grow and innovate should keep in mind how they package their offer to investors. To be fully compliant and eligible for the concessions, investors will need to:

  1. Purchase new shares in the ESIC.
  2. The ESIC cannot be associated to the investors.
  3. Cannot own more than 30% of the ESIC.
  4. Investors will need to check the Private Tax Ruling on the ESIC. While it’s not mandatory that an ESIC attain a private ruling, one is likely to be requested so investors can ensure they are able to take advantage of the tax concessions. If your ESIC doesn’t have one, you may want to get one.
  5. For investors who are not deemed to be a “Sophisticated Investor” (gross income over $250k for the past two years or net assets of over $2.5M), their investment will need to be limited to $50k in one or more ESICs in total per annum.
  6. Keep in mind that capital losses are disregarded within the first 10 years of the investment.
  7. Be aware that capital gains within the first 12 months are included as assessable income.

By their very nature an ESIC would be considered a highly speculative investment category – a technology based investment in a rapidly changing world. These are not main stream investments so this style of investing is not for everyone. Often the product being developed by the ESIC is yet to find a market or generate any cash flow, and is unlikely to do so for several years.

The biggest issue for any investor to consider with any investment is the return the investment will make over the long term. Small business and start-ups need to consider how they package the return in order to be compliant and attractive from a tax perspective as well as to deliver a return on investment which is achievable and attractive.

To qualify as an ESIC, a company will need to meet both:

  • the ‘early stage test’ and either the
    • 100-point innovation test or
    • the principles-based innovation test.

According to the ATO, “In practice, if a company undertakes activities that meet the 100-point innovation test, this is likely to be the simplest way to determine its eligibility, when compared to the principles-based innovation test.” Details are available here.

While every business is not Facebook, if you take the Facebook example you can see how powerful these concessions can become. Facebook started in February 2004 and was initially capitalised with US$12,000 from one of the early investors. In 2005, a further US$13.7M was invested into the company. The company floated in a public listing in February 2012 and ten years after being created, the value of the company was US$64.32 Billion. Currently the company is worth US$124.88 Billion. Imagine applying the above concessions to these amazing growth statistics of Facebook!

Are you hungry, smart and humble?

Team player

Image source: The Ideal Team Player: How to Recognize and Cultivate The Three Essential Virtues Hardcover – April 26, 2016 by Patrick M. Lencioni

 

An organisation is only as successful as the great people that go above and beyond to see the company succeed and to make clients happy.

Success is a team sport and there are various theories on what makes a great team player.

As our old friend Verne Harnish says those who don’t read barely have an advantage over those who can’t – one of the latest books he has recommended The ideal team player“ (by Patrick Lencioni) reminds us of the key attributes that we should look for when we are recruiting new members to the team.

Lencioni explains it like this ….

The Concept
An ideal team player embodies three virtues: humility, hunger and people smarts. The power this combination yields drastically accelerates and improves the process of building high-performing teams.

Hungry
Ideal team players are hungry. They are always looking for more. More things to do. More to learn. More responsibility to take on. Hungry people almost never have to be pushed by a manager to work harder because they are self-motivated and diligent. They are constantly thinking about the next step and the next opportunity.

Smart
Ideal team players are smart. They have common sense about people. Smart people tend to know what is happening in a group situation and how to deal with others in the most effective way. They have good judgment and intuition around the subtleties of group dynamics and the impact of their words and actions.

Humble
Ideal team players are humble. They lack excessive ego or concerns about status. Humble people are quick to point out the contributions of others and slow to seek attention for their own. They share credit, emphasize team over self and define success collectively rather than individually.

We have a great team here at Prosperity and this also resonates with our Prosperity DNA (Passion = Hungry and Team/Integrity= Humble) and our Brand promise of One Team, One Plan, Smart Advice.

Do you know if you have the ideal team players in your business? Do you agree with the ideal team player attributes that Lencioni discusses?

Did you know that Prosperity Advisers Group has business consulting services that can benchmark your business performance against others? Benchmarking is a great way for SMEs to measure the effectiveness of their team and their business against their competition in order to improve internal processes and ensure they stay one step ahead of the game.