Everyone Deserves a Tax Deductible Break (100% Tax Deduction)

GLOBAL BUSINESS CAMPS – The Best Business Event Ever.

How neat is this? You come along with your key people (owners, management, proactive and forward thinking team, front line people, sales people etc) and work on your business for 3 days.

In the process you receive a 100% Tax Deduction for the course, travel, accommodation. This applies during the event and for time spent before the event and after the event on the Gold Coast (while you are working on your business).

How good is that?

That is absolutely brilliant.

So not only will you get a large number of ideas, you will network with other like minded people, upskill yourself and your team, obtain 21.5 hours worth of professional development, be motivated and inspired, build strategy and grow your business whilst obtaining an 100% Tax Deduction.

On October (17^th, 18^th and 19^th) at the Hilton Surfers Paradise on the Gold Coast there’s a very special 3-day ‘Business Camp’ for business owners, entrepreneurs, managers, sales people etc.

The 3 days is all about learning how to grow and improve your business.

It is a brilliantly run event with great information for business owners who are looking for education and inspiration to take their business to the next stage of growth. This is a Massive Opportunity for YOU and we want YOU to be there with us and the Indigo Team.

Come and join us!

Have a look at www.globalbusinesscamps.com.au where there’s lots of information about the event.

We have a great list of expert speakers. Find out more on all of the speakers at https://globalbusinesscamps.com.au/event/key-note-speakers/.

IMPORTANT TAX PLANNING DEADLINE: There is an early bird offer that finishes at the 30^th of June. By booking in and paying for the event before 30 June 2022 you get the tax deduction this year.

Here’s a preview of what you’ll learn:

• The 6 Secrets™of a successful business;
• The 5 key business building strategies™;
• How to apply systemsthat will improve your business;
• How you can profit by working ONrather than IN your business;
• How to calculate the real valueof your business and what you can do to increase that value;
• You will learn how to increase the profitability of your business but NOTat the expense of your quality of life;
• Discover how the “Little Things”have a profound effect.

Running a business can sometimes feel like hard, lonely work. One of the great aspects of attending the Business Camp is that you learn from the experiences of other business owners and get to spend time with people who relate 100% to the challenges you face. (Swapping ‘war stories’ over a beer or two has to be good for the soul).

The 3 Days include:

1. The Course.
2. The Business Bible (the workbook). This is the best business book you will find. There are so many ideas, tips, strategies and examples that you will be able to refer to.
3. Morning Tea, Lunch and Afternoon Tea on all 3 days (great networking and seeing what the sponsors have to offer).
4. Cocktail event with the sponsors (on night 1, more networking, drinking and nibbles whilst seeing what the sponsors have to offer).
5. Gala Dinner on the Tuesday night (on night 2 with an International Speaker).
6. Having the Indigo Financial Team with you there for the 3 days (working with you and also socializing).
7. Ability to spend time with forward thinking and positive people just like you.
8. Ability to spend time with the speakers (specialists in their field).
9. A 100% Money Back Guarantee – “if you do not get at least one idea that pays for the course investment 10 times over we will refund your course investment in full”. So there is ABSOLUTELY NO RISK TO YOU.

Some wonderful words from some past attendees:

What I loved about GBC: John’s infectious excitement! Business bible (take home folder). Revisiting our values, mission and culture. Making sure the right people are ‘on the bus’, and improve our team.-IRENE, BUSINESS SERVICES INDUSTRY

Had a great time, John’s awesome, he’s a pocket rocket!!! Thank you.-LISA & KEITH, BUILDING INDUSTRY

John is the man that defies all of your expectations! He is the greatest cheerleader we’ve ever met! He’s exciting, engaging and challenging. John mixes his business savvy with unbridled enthusiasm and a commitment to seeing us realise our business dreams!

He comes off the stage and into the heart of the business and we love him for it! It’s John’s voice that gets into your head once you’ve left Global Business Camps, whispering to you “that’s so cool” when you’re turning the 6 Secrets™ into your reality!-TRICIA, TRAIN TO SUCCEED

We plan to go on holidays, we plan how to build our house but we don’t really plan as to where we want our business to be in 5 then 10 years so that we’ve got a set goal to get to.-IAN HEALY

In Summary:

In past years we have thoroughly enjoyed this event and wholeheartedly recommend it – we also suggest that AT LEAST TWO PEOPLE from your business attend – you will want to make changes when you return and it will be much easier if there is more than one person to spread the message.

Normal Price $3,300.00 but for you we have special VIP Rates and they are ONLY $1,980.00 per person! That is right a saving of $1,320 per person.

This special price applies as you are a client and friend of ours. You can also pay the event off over a few months.

This is a Must Attend Event.

Do not be the ones that miss out as the 3 days will truly change your life.

The date once again are 17 to 19 October 2022. This date gives you time to tell some other business associates, friends and relatives about the event and to get them to come along as well.

Special Gift and Very Special Pricing: 

As a thank you for being valued clients, friends and associates of our valued clients we are offering something we have never offered before.

As a very big thank you we would love to offer you a referral fee of $200 per person that registers and attends the event (they must tell us who referred them when they register) from your efforts from now until the date of the event.

This is just a small way of us saying thank you.

So to summarise, people that register from your referral (and they tell us you referred them) we will pay you $200 per person.

Now that is quite neat.

The camp is truly a great way to lock yourself away for a few days and seriously think and work on your business with like-minded business people.

Please Remember:

• The event is 100% Tax Deductible and is a great way to work on your business for a few days away.
• There is also an 100% Money Back Guarantee – “if you do not get at least one idea that pays for the course investment 10 times over we will refund your course investment in full”. Now that is pretty neat, so there is ABSOLUTELY NO RISK TO YOU.
• Check below for our Very Very Special Post Covid Rates.

Enjoy Our Massive Post Covid Rates – Contact us via e-mail NOW to help you get registered or call us on 08 8212 85 85 and we will help you get registered. The key is that you use this code (SMITHINKMEM) in the COUPON CODE section of the registration form and you can attend at the Extra Special VIP Rate of $1,980 pp (Normal rate is $3,300 pp, but for you ONLY $1,980 pp).

To succeed in business in 2022 is all about straying away from the traditional path and doing something different because the worldwide situation is anything but ordinary, so why should what you do in business be the same?

Instead, take the chances to learn from those who’ve walked the unconventional path, and start leading your industry rather than following the norm.

We work through all of the above in detail and you will have one of the Indigo Financial Team for every 5 clients there working with you for the 3 days (17^th to the 19^th of October 2022).

You should be coming along with as many of your key team as possible and working on your business for the 3 days.

Find out more – www.globalbusinesscamps.com.au

Register and receive VIP rates by using this special code and entering that in the coupon code area of the registration form – “SMITHINKMEM”. Full rate is $3,300 pp but VIP rates are ONLY $1,980 pp. This could well be the best investment you make for your business. Also, pay before 30 June and get a 100% tax deduction in your 2022 tax.

Registration link –  https://globalbusinesscamps.com.au/register-now/

This is a really neat way of looking at your team to see if they are engaged and onboard. This has been developed by Patrick Lencioni and should be used by anyone in business. Just follow the steps and work through the questions.

Team Assessment: Use the scale below to indicate how each statement applies to your team. Be sure to evaluate the statements honestly and without over-thinking your answers.

Scale:                    3 = Usually                          2 = Sometimes                   1 = Rarely

1. Team members are passionate and unguarded in their discussion of issues.

2. Team members call out one another’s deficiencies or unproductive behaviours.

3. Team members know what their peers are working on and how they contribute to  the collective good of the team.

4. Team members quickly and genuinely apologize to one another when they say or do something inappropriate or possibly damaging to the team.

5. Team members willingly make sacrifices (such as budget, turf, headcount) in their departments or areas of expertise for the good of the team.

6. Team members openly admit their weaknesses and mistakes.

7. Team meeting are compelling and not boring.

8. Team members leave meetings confident that their peers are completely committed to the decisions that we agreed upon, even if there was initial disagreement.

9. Morale is significantly affected by the failure to achieve team goals.

10.During team meetings, the most important – and difficult – issues are put on the table to be resolved.

11.Team members are deeply concerned about the prospect of letting down their peers.

12. Team members know about one another’s personal lives and are comfortable discussing them.

13.Team members end discussions with clear and specific resolutions and calls to action.

14.Team members challenge one another about their plans and approaches.

15.Team members are slow to seek credit for their own contributions, but quick to point out those of others.

Scoring: Add your scores for the 15 Statements as indicated below.

Dysfunction #1: Absence of Trust

Question 4: ____

Question 6:  ____

Question 12:____

Total:____

Dysfunction #2: Fear of Conflict

Question 1:  ____

Question 7:  ____

Question 10:____

Total:____

Dysfunction #3: Lack of Commitment

Question 3:  ____

Question 8:  ____

Question 13:____

Total:____

Dysfunction #4: Avoidance of Accountability

Question 2:_____

Question 11:____

Question 14: ____

Total:____

Dysfunction #5: Inattention to Results

Question 5: ____

Question 9: ____

Question 15: ____

Total:____

A score of 6-7 indicates that the dysfunction could be a problem.

A score of 3-5 is an indication that the dysfunction needs to be addressed.

Overcoming the Five Dysfunctions

Dysfunction #1: ABSENCE OF TRUST

Strategy for Overcoming:

• Identify and discuss individual strengths and weaknesses
• Spend considerable time in face-to-face meeting and working sessions

Dysfunction #2: FEAR OF CONFLICT

Strategy for Overcoming:

• Acknowledge that conflict is required for productive meetings
• Establish common ground rules for engaging in conflict
• Understand individual team member’s natural conflict styles

Dysfunction #3: LACK OF COMMITMENT

Strategy for Overcoming:

• Review commitments at the end of each meeting to ensure all team members are aligned
• Adopt a “disagree and commit” mentality- make sure all team members are committed regardless of initial disagreements

Dysfunction #4: AVOIDANCE OF ACCOUNTABILITY

Strategy for Overcoming:

• Explicitly communicate goals and standards of behaviour
• Regularly discuss performance versus goals and standards

Dysfunction #5: INATTENTION TO RESULTS

Strategy for Overcoming: 

• Keep the team focused on tangible group goals
• Reward individuals based on team goals and collective success

Source: Table Group- Patrick Lencioni. (The Five Dysfunctions of a Team)

We work through all of the above in detail at the Global Business Camp event coming up from the 17^th to the 19^th of October 2022 find out more – www.globalbusinesscamps.com.au.

Also, speak to us about how we can help you with the above and any other business assistance you may need.

Contact us to find out more.

The ATO’s Attack on Trusts and Trust Distributions

Late last month, the Australian Taxation Office (ATO) released a package of new guidance material that directly targets how trusts distribute income. Many family groups will pay higher taxes (now and potentially retrospectively) as a result of the ATO’s more aggressive approach.

Family trust beneficiaries at risk

The tax legislation contains an integrity rule, section 100A, which is aimed at situations where income of a trust is appointed in favour of a beneficiary but the economic benefit of the distribution is provided to another individual or entity. If trust distributions are caught by section 100A, then this generally results in the trustee being taxed at penalty rates rather than the beneficiary being taxed at their own marginal tax rates.

The latest guidance suggests that the ATO will be looking to apply section 100A to some arrangements that are commonly used for tax planning purposes by family groups. The result is a much smaller boundary on what is acceptable to the ATO which means that some family trusts are at risk of higher tax liabilities and penalties.

ATO redrawing the boundaries of what is acceptable

Section 100A has been around since 1979 but to date, has rarely been invoked by the ATO except where there is obvious and deliberate trust stripping at play. However, the ATO’s latest guidance suggests that the ATO is now willing to use section 100A to attack a wider range of scenarios.

There are some important exceptions to section 100A, including where income is appointed to minor beneficiaries and where the arrangement is part of an ordinary family or commercial dealing. Much of the ATO’s recent guidance focuses on whether arrangements form part of an ordinary family or commercial dealing. The ATO notes that this exclusion won’t necessarily apply simply because arrangements are commonplace or they involve members of a family group. For example, the ATO suggests that section 100A could apply to some situations where a child gifts money that is attributable to a family trust distribution to their parents.

The ATO’s guidance sets out four ‘risk zones’ – referred to as the white, green, blue and red zones. The risk zone for a particular arrangement will determine the ATO’s response:

White zone

This is aimed at pre-1 July 2014 arrangements. The ATO will not look into these arrangements unless it is part of an ongoing investigation, for arrangements that continue after this date, or where the trust and beneficiaries failed to lodge tax returns by 1 July 2017.

Green zone

Green zone arrangements are low risk arrangements and are unlikely to be reviewed by the ATO, assuming the arrangement is properly documented. For example, the ATO suggests that when a trust appoints income to an individual but the funds are paid into a joint bank account that the individual holds with their spouse then this would ordinarily be a low-risk scenario. Or, where parents pay for the deposit on an adult child’s mortgage using their trust distribution and this is a one-off arrangement.

Blue zone

Arrangements in the blue zone might be reviewed by the ATO. The blue zone is basically the default zone and covers arrangements that don’t fall within one of the other risk zones. The blue zone is likely to include scenarios where funds are retained by the trustee, but the arrangement doesn’t fall within the scope of the specific scenarios covered in the green zone.

Section 100A does not automatically apply to blue zone arrangements, it just means that the ATO will need to be satisfied that the arrangement is not subject to section 100A.

Red zone

Red zone arrangements will be reviewed in detail. These are arrangements the ATO suspects are designed to deliberately reduce tax, or where an individual or entity other than the beneficiary is benefiting.

High on the ATO’s list for the red zone are arrangements where an adult child’s entitlement to trust income is paid to a parent or other caregiver to reimburse them for expenses incurred before the adult child turned 18. For example, school fees at a private school. Or, where a loan (debit balance account) is provided by the trust to the adult child for expenses they incurred before they were 18 and the entitlement is used to pay off the loan. These arrangements will be looked at closely and if the ATO determines that section 100A applies, tax will be applied at the top marginal rate to the relevant amount and this could apply across a number of income years.

The ATO indicated that circular arrangements could also fall within the scope of section 100A. For example, this can occur when a trust owns shares in a company, the company is a beneficiary of that trust and where income is circulated between the entities on a repeating basis. For example, section 100A could be triggered if:

• The trustee resolves to appoint income to the company at the end of year 1.
• The company includes its share of the trust’s net income in its assessable income for year 1 and pays tax at the corporate rate.
• The company pays a fully franked dividend to the trustee in year 2, sourced from the trust income, and the dividend forms part of the trust income and net income in year 2.
• The trustee makes the company presently entitled to some or all of the trust income at the end of year 2 (which might include the franked distribution).
• These steps are repeated in subsequent years.

Distributions from a trust to an entity with losses could also fall within the red zone unless it is clear that the economic benefit associated with the income is provided to the beneficiary with the losses. If the economic benefit associated with the income that has been appointed to the entity with losses is utilised by the trust or another entity then section 100A could apply.

Who is likely to be impacted?

The ATO’s updated guidance focuses primarily on distributions made to adult children, corporate beneficiaries, and entities with losses. Depending on how arrangements are structured, there is potentially a significant level of risk. However, it is important to remember that section 100A is not confined to these situations.

Distributions to beneficiaries who are under a legal disability (e.g., children under 18) are excluded from these rules.

For those with discretionary trusts it is important to ensure that all trust distribution arrangements are reviewed in light of the ATO’s latest guidance to determine the level of risk associated with the arrangements. It is also vital to ensure that appropriate documentation is in place to demonstrate how funds relating to trust distributions are being used or applied for the benefit of beneficiaries.

Companies entitled to trust income

As part of the broader package of updated guidance targeting trusts and trust distributions, the ATO has also released a draft determination dealing specifically with unpaid distributions owed by trusts to corporate beneficiaries. If the amount owed by the trust is deemed to be a loan then it can potentially fall within the scope of another integrity provision in the tax law, Division 7A.

Division 7A captures situations where shareholders or their related parties access company profits in the form of loans, payments or forgiven debts. If certain steps are not taken, such as placing the loan under a complying loan agreement, these amounts can be treated as deemed unfranked dividends for tax purposes and taxable at the taxpayer’s marginal tax rate.

The latest ATO guidance looks at when an unpaid entitlement to trust income will start being treated as a loan. The treatment of unpaid entitlements to trust income as loans for Division 7A purposes is not new. What is new is the ATO’s approach in determining the timing of when these amounts start being treated as loans. Under the new guidance, if a trustee resolves to appoint income to a corporate beneficiary, then the time the unpaid entitlement starts being treated as a loan will depend on how the entitlement is expressed by the trustee (e.g., in trust distribution resolutions etc):

• If the company is entitled to a fixed dollar amount of trust income the unpaid entitlement will generally be treated as a loan for Division 7A purposes in the year the present entitlement arises; or
• If the company is entitled to a percentage of trust income, or some other part of trust income identified in a calculable manner, the unpaid entitlement will generally be treated as a loan from the time the trust income (or the amount the company is entitled to) is calculated, which will often be after the end of the year in which the entitlement arose.

This is relevant in determining when a complying loan agreement needs to be put in place to prevent the full unpaid amount being treated as a deemed dividend for tax purposes when the trust needs to start making principal and interest repayments to the company.

The ATO’s views on “sub-trust arrangements” has also been updated. Basically, the ATO is suggesting that sub-trust arrangements will no longer be effective in preventing an unpaid trust distribution from being treated as a loan for Division 7A purposes if the funds are used by the trust, shareholder of the company or any of their related parties.

The new guidance represents a significant departure from the ATO’s previous position in some ways. The upshot is that in some circumstances, the management of unpaid entitlements will need to change. But, unlike the guidance on section 100A, these changes will only apply to trust entitlements arising on or after 1 July 2022.

How to contact us

We’re available to assist you with detailed advice on trusts and trust distributions.

The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

Lock the dates in your calendar. This is a MUST ATTEND EVENT.

When: 17 – 19 October, 2022

Where: Hilton, Surfers Paradise

The camp is truly a great way to lock yourself away for a few days and seriously think and work on your business with like-minded business people.

The other benefit is you will have heaps of fun and network with forward thinking people.

The event is 100% tax deductible and is a great way to work on your business for a few days.

There is also an 100% money back guarantee – “if you do not get at least one idea that pays for the course investment 10 times over we will refund your money”.

See below for our awesome rates for you and a special gift.

Some of the things we will work on over the 3 days:

• Working through the importance of the right culture in your business, Culture is a key differentiator form high performing businesses to other businesses.
• Working ON and not in the business (what is it and how to achieve it).
• What is effective leadership and how to ensure you have that in your business.
• Undertaking strategic planning (strengths, weaknesses, opportunities and threats) for your business. This will highlight many things that will push your business forward.
• Looking at financial management in the business. Without knowing the numbers and which numbers are important you are missing out massively.
• Focusing on ‘what customer service really is’. This is even more important in today’s fast paced business environment.
• Focusing on how to differentiate your business from your competitors. What is your advantage? Why would I choose you instead of your competitors. This is vital in business today.
• What an elevator pitch is and why have one in your business.
• Looking at examples of successful businesses (Australian and overseas businesses) and what they do.
• Focusing on the traits that all successful businesses have from generation to generation. What works, what doesn’t.
• The importance of having a customer focused business.
• Complete a ‘19 point check list’ that gives every individual a chance to tackle things that are easy and can make a massive difference to your business.
• Discover the ‘little things’ that will have a profound effect in your business.
• Look at moments of truth within your business and ensure you understand the importance of these events.
• Work through our proprietary software ‘GBC Business Analysis Software’ to highlight the impact to your business of what the changes will do. This is a truly powerful tool and ties everything together well. This will highlight what impact focusing on some key drivers will have for you.
• Discovering the importance of having a management control plan in your business to track progress.
• Looking at the areas that affects the value of your business and working on improving those areas.
• Discovering the importance of a succession plan even if you are not looking at selling the business. Just working through this process will dramatically increase the value of your business.
• And much more.

For those of you that are already registered that is awesome and for the rest of you do not miss out on this massive opportunity to come along.

Now is the time to get organised so that you can attend in October and spend quality time working ON your business.

To find out more- www.globalbusinesscamps.com.au

Detailed agenda/outline of the 3 days and speaker bio’s –https://globalbusinesscamps.com.au/wp-content/uploads/2022/02/Invitation-compressed.pdf

To register either call us on 08 8212 8585, e-mail us on jtsoulos@indigofinancial.com.au or go to the GBC website and register at https://www.globalbusinesscamps.com.au/registration/#.

Don’t forget our clients and friends of our clients receive very special pricing so please use the code – SMITHINKMEM when registering and you see ‘coupon code’ and attend a the reduced rate of $1,980 pp.

Why you cannot afford to miss this business camp:

• 88% of business failure is due to things we can control.
• Over 50% of Small to Medium Enterprises (SME’s) have no strategic business plan and 50% will change generation in the next decade.
• It costs 6 times more to get a new customer to deal with you than what it takes to get an existing customer to buy more from you.
• A 15% increase in customer loyalty can increase profitability by up to 80%.
• 80% – 90% of the success of any business ad, letter or communication comes from the heading.
• A fully systemised business is worth up to more than 86.7% more than an unsystemised business.
• The cost of employee turnover is up to 150% of their remuneration package.
• The business landscape has dramatically changed, business people risk falling behind their competitors.
• We have all of the answers and strategies to keep you at the forefront and have you and your business thrive

It is truly an event not to be missed by anyone in business no matter how many times you have attended before.

We will also have our team there working with you over the 3 days. That is massive value in itself.

The date once again is 17 to 19 October 2022. This date gives you extra time to tell some other business associates, friends and relatives about the event and to get them to come along as well. Due to COVID and what has happened we are offering all of our valued clients and friends a very special gift.

Great Offer: As a thank you for being valued clients, friends and associates of our valued clients we are offering something we have never offered before:

As a very big thank you we would love to offer you a referral fee of $200 per person that registers and attends the event (they must tell us who referred them when they register) from your efforts from now until the date of the event.

This is just a small way of us saying thank you.

So to summarise, people that register from your referral (and they tell us you referred them) we will pay you $200 per person.

Now that is quite neat.

The camp is truly a great way to lock yourself away for a few days and seriously think and work on your business with like-minded business people.

Check below for our Very Very Special Post Covid Rates.

Enjoy Our Massive Post Covid Rates – Contact us on 08 8212 8585 and we will help you get registered by using this code (SMITHINKMEM) in the COUPON CODE section of the registration form and attend at the Extra Special VIP Rate of $1,980 pp (Normal rate is $3,300 pp, but for you ONLY $1,980 pp).

Massive Saving for everyone. It is our way of making it a NO Brainer for people to join us.

Contact us to find out more.

Written by Anna Lee.

Janine Allis is no ordinary woman. An industry icon. Leading entrepreneur. Shark on Shark Tank. And so much more.

But her beginnings were humble, starting Boost Juice from her kitchen table with no prior business experience or knowledge. Now two decades later, it’s one of Australia’s most well-known brands with 580+ stores across 13 different countries, and counting.

She’s not taken any traditional form of path to business success and to her, that’s what sets her brand and her way of leading the business forward apart. Now more than ever, the world demands entrepreneurs to think differently, like Janine has because if you do what you’ve always done, you’ll get what you’ve always gotten.

Our key comments/additions –

As we say at Indigo Financial and Global Business Camps – ‘Change is the Only Constant’. If you are in business today and you are doing the same things you were doing 12 months ago or a few years ago you are falling behind. You must be doing and thinking differently. The business environment and business landscape has changed dramatically and will keep changing. If we do not change and think and do differently we run the risk of becoming extinct. (end key comments/additions).

This is the fundamental truth in 2022 and if you’re looking to replicate the success of Boost Juice for your business this year, then you need to learn from the likes of unconventional entrepreneurs like Janine.

It’s when we learn from those who’ve walked the beaten path before us that we start creating lasting and profound change in our businesses and our lives.

Here are 3 gems to consider:

1.  Fully embracing the mistakes you make in business.

“The best lessons are the ones when things go pear-shaped.”

If someone asked Janine, “Tell me all the things that went wrong in your 20+ years in business”, it would take her years and years to run through everything because of all the things that went wrong.

In business, making mistakes is normal but with Janine, making mistakes is crucial and even fully embraced. Her business would not be where it is today if she hadn’t had all this experience and lessons learned throughout the beginning of her journey (and to this day). In fact, she views these mistakes and failures as some of the best learning experiences she can to build her business up in the future.

Our key comments/additions –

Mistakes if we learn from them are blessings in disguise as that is when we improve. See below how powerful they truly are.

When it comes to problems or defects, the customer will remember the satisfying outcome, not the original error. Studies conducted by the Marriott on guest return rates found the following astonishing results:

• If there was no problem with their stay, the return rate was 89%.
• If there was a problem and it was not corrected the return rate dropped to 69%.
• However, this is where it gets really interesting. If there was a problem and it was solved to the guests satisfaction the return rate jumped to 94%.

So the moral of the story is constantly speak to your customers, patients, clients and find out how you are doing as a business. Find out are you serving their needs, are you adding value to them. Are they having a positive experience when they are coming to deal with you.

As you can see from the Marriott example if there are issues and problems and they are rectified then the relationship actually can get stronger. That does not mean that we should go out of our way to create problems so we can fix them. It means that when they do crop up do not blame the customer, fix them and the relationship will be stronger than before. (end key comments/additions).

Further, one thing Janine does recommend is to really embrace those lessons early on when your business is smaller. Because when you’re small, when things go wrong, the pain is small. But when you’re big, when things go wrong, the pain will be big.

2.  Having a small business mentality at all stages of business.

“This is key for businesses, that ability to maintain that smallness, to be profit culture, and people culture, and not just become this huge entity that is a bit soulless.”

No matter how big the business has grown, for Janine, one of the key factors to her success has been to maintain a small business mentality. This means being focused on things like innovation, ability to pivot, culture, and people management with all your team being aligned under the same purpose and goals.

And it’s not just relevant with the structures of your team or how many layers of approvals you have but also within yourself as well – staying open to change and new direction, listening and working with your team on all levels, and keeping a sense of naivety too where you don’t put up barriers on what you can or can’t do. It’s about just doing it and approaching the challenges and goals you face in the same mentality you would as a small business.

3.  Stop doing everything alone!

“None of us were arrogant enough to know we knew it. But we were all determined to make it work.”

When your business starts growing and you get to a certain size of revenue and team hires where you start to no longer be able to wrap your arms around the business anymore, that’s when you should start to realise that you can’t run the entire business on your shoulders only for the rest of your life.

It’s impossible!

You need to source out experts. Whether you’re hiring people who are smarter than you at certain things, with different skills to what you know depending on the challenges you’re currently facing, or you’re finding mentors, coaches, or advisors who can actually give you the right advice to make sure you’re on the right path.

It’s so important that you ensure that you have the right support network around you and you’re not only surrounding yourself with either nobody or people who you still need to look after as well.

Because the best of the best entrepreneurs know, including Janine, that the best way to move forward is through learning from those with been-there-done-that experience, helping you shortcut past the challenges towards success.

Our key comments/additions –

We work with many businesses and their key people in helping them get to the next level. We catch up monthly and look at the numbers, discuss key issues, debate ideas, mentor and coach. Contact us to find out more about how we can work with you to make your results even better than what they currently are.

Also, getting involved and attending our Global Business Camp event is a great way to focus on the things that are important in your business. We have had thousands of people attend our signature 3 Day Global Business Camp events and typically they attend a number of times. Find out more by contacting us or visiting www.globalbusinesscamps.com.au.(end key comments/additions).

Key takeaways

To succeed in business in 2022 is all about straying away from the traditional path and doing something different because the worldwide situation is anything but ordinary, so why should what you do in business be the same?

Instead, take the chances to learn from those who’ve walked the unconventional path, and start leading your industry rather than following the norm.

Find out more about how we can help you plan, do achieve more in your business. We work with many businesses and their key people in helping them get to the next level. We catch up monthly and look at the numbers, discuss key issues, debate ideas, mentor and coach.

Contact us to find out more about how we can work with you to make your results even better than what they currently are.

It costs nothing to find out how we can help as the initial discussion is FREE.

Contact us to find out more.

Two landmark cases before the High Court highlight the problem of identifying whether a worker is an independent contractor or employee for tax and superannuation purposes.

Many business owners assume that if they hire independent contractors they will not be responsible for PAYG withholding, superannuation guarantee, payroll tax and workers compensation obligations. However, each set of rules operates a bit differently and in some cases genuine contractors can be treated as if they were employees. Also, correctly classifying the employment relationship can be difficult and there are significant penalties faced by businesses that get it wrong.

Two cases handed down by the High Court late last month clarify the way the courts determine whether a worker is an employee or an independent contractor. The High Court confirmed that it is necessary to look at the totality of the relationship and use a ‘multifactorial approach’ in determining whether a worker is an employee. That is, if it walks like a duck and quacks like a duck, it’s probably a duck, even if on paper, you call it a chicken.

In CFMMEU v Personnel Contracting and ZG Operations Australia v James, the court placed a significant amount of weight on the terms of the written contract that the parties had entered into. The court took the approach that if the written agreement was not a sham and not in dispute, then the terms of the agreement could be relied on to determine the relationship. However, this does not mean that simply calling a worker an independent contractor in an agreement classifies them as a contractor. In this case, a labour hire contractor was determined to be an employee despite the contract stating he was an independent contractor.

In this case, Personnel Contracting offered the labourer a role with the labour hire company. The labourer, a backpacker with some but limited experience on construction sites, signed an Administrative Services Agreement (ASA) which described him as a “self-employed contractor.” The labourer was offered work the next day on a construction site run by a client of Personnel Contracting, performing labouring tasks at the direction of a supervisor employed by the client. The labourer worked on the site for several months before leaving the state. Some months later, he returned and started work at another site of the Personnel Contracting’s same client. The question before the court was whether the labourer was an employee.

Overturning a previous decision by the Full Federal Court, the High Court held that despite the contract stating the labourer was an independent contractor, under the terms of the contract, the labourer was required to work as directed by the company and its client. In return, he was entitled to be paid for the work he performed. In effect, the contract with the client was a “contract of service rather than a contract for services”, as such the labourer was an employee.

The second case, ZG Operations Australia v Jamse produced a different result.

In this case, two truck drivers were employed by ZG Operations for nearly 40 years. In the mid-1980’s, the company insisted that it would no longer employ the drivers, and would continue to use their services only if they purchased their trucks and entered into contracts to carry goods for the company. The respondents agreed to the new arrangement and Mr Jamsek and Mr Whitby each set up a partnership with their wife. Each partnership executed a written contract with the company for the provision of delivery services, purchased trucks from the company, paid the maintenance and operational costs of those trucks, invoiced the company for its delivery services, and was paid by the company for those services. The income from the work was declared as partnership income for tax purposes and split between each individual and their wife.

Overturning a previous decision in the Full Federal Court, the High Court held that the drivers were not employees of the company.

Consistent with the decision in the Personnel Contracting case, a majority of the court held that where parties have comprehensively committed the terms of their relationship to a written contract (and this is not challenged on the basis that it is a sham or is otherwise ineffective under general law or statute), the characterisation of the relationship must be determined with reference to the rights and obligations of the parties under that contract.

After 1985 or 1986, the contracting parties were the partnerships and the company. The contracts between the partnerships and the company involved the provision by the partnerships of both the use of the trucks owned by the partnerships and the services of a driver to drive those trucks. This relationship was not an employment relationship. In this case the fact that the workers owned and maintained significant assets that were used in carrying out the work carried a significant amount of weight.

For employers struggling to work out if they have correctly classified their contractors as employees, it will be important to review the agreements to ensure that the “rights and obligations of the parties under that contract” are consistent with an independent contracting arrangement. Merely labelling a worker as an independent contractor is not enough if the rights and obligations under the agreement are not consistent with the label. The High Court stated, “To say that the legal character of a relationship between persons is to be determined by the rights and obligations which are established by the parties’ written contract is distinctly not to say that the “label” which the parties may have chosen to describe their relationship is determinative of, or even relevant to, that characterisation.”

A genuine independent contractor who is providing personal services will typically be:

• Autonomous rather than subservient in their decision-making;
• Financially self-reliant rather than economically dependent upon the business of another; and,
• Chasing profit (that is a return on risk) rather than simply a payment for the time, skill and effort provided.

Every business that employs contractors should have a process in place to ensure the correct classification of employment arrangements and review those arrangements over time. Even when a worker is a genuine independent contractor this doesn’t necessarily mean that the business won’t have at least some employment-like obligations to meet. For example, some contractors are deemed to be employees for superannuation guarantee and payroll tax purposes.

Quote of the month

“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”

Martin Luther King, Jr.

Contact us to find out more.

Businesses that develop a reputation for being excellent in an area that their industry is frowned upon will gain far more repeat business and help grow their customer base through referrals – customers will hardly be able to wait to tell their friends.

You don’t expect to see the words ‘excellent customer service’ and ‘plumbers’ in the same sentence, do you?

The negative perceptions associated with plumbers have tarnished the industry and it is a challenge that plumbers have to overcome in their business. Perhaps your industry suffers from negative perceptions also. ‘Honest lawyers’, ‘tidy builders’ or ‘personable accountants’, anyone?

I will say it again – Businesses that develop a reputation for being excellent in an area that their industry is frowned upon will gain far more repeat business and help grow their customer base through referrals – customers will hardly be able to wait to tell their friends.

The best way to do this in your business is to create a system that can be followed by everyone in your organisation. Here is a great example of a system that is based upon creating a wonderful experience for anyone who uses Pipe Perfection Plumbers services.

To give you an idea of what such a system could look like in your business, here is an overview of theirs in their words:

1.Receive enquiry

We have developed scripts and templates that our receptionists and virtual assistants use to ensure phone and email interactions are professional and pleasant. This creates a great first impression with the customer and also makes sure that all information given out is consistent, clear and helpful.

2.Send helpful information after enquiry

Regardless of whether or not the person making the enquiry decided to go ahead with our services, we want to be as helpful as possible so we send a follow-up email that is specific to the enquiry.

The email contains a free e-book that we have written to help people know their rights with tradespeople and also to help them choose the right plumber. If a booking has been made we also include the details of the booking, an overview of what they can expect, and even the bio and photo of their plumber.

3.Sharing expertise and complimentary assistance

Regardless of the job that any of our plumbers have been called out to do, we offer all our customers a complimentary peace-of-mind maintenance inspection of fixtures and fittings both inside and outside the home. If possible, the plumber will do some free adjustments and will also show the customer how to turn off their water and gas off in an emergency.

The plumber then puts a thorough report card together which even includes photos of areas of their home that need attention with an indication of when a check-up or replacement is required so the customer can plan ahead. It also helps the customer to change their outlook on plumbing maintenance, from something that needs fixing once the house is flooded, to regular maintenance that actually helps to prevent problems and lower costs.

Why give away so much of our plumbers’ time for free? It is all part of exceeding expectations and changing negative perceptions. By putting together a professional report that is e-mailed as a PDF after the inspection, it also gives us another reason to stay in contact with the customer.

More importantly, it means that our customers can have a totally different experience with us than with any other plumber. That is worth our time and also makes good business sense. The result? When those jobs that we point out need to be completed, they come to us first.

4.Follow up call

Approximately one week after a job is completed, the customer receives a follow up call to see if they have any new questions they would like a specialist plumber to answer and to make sure they were happy with their service. We take the opportunity to get feedback that can be shared and acted upon in our weekly meetings.

5.Thank you!

We send all customers an environmentally friendly thank you gift and/or seasonal offers. At the moment, we are sending out high-quality reusable drink bottles with our branding on them. In the past we have given out Keep Cups and shower timers.

Our customers also receive a voucher that they can either use on their next plumbing service, or can give to a friend to use, supporting both repeat business and referrals.

Then what?

When you build your system, make sure you create opportunities for future communication.

For example, our customers can opt-in for reminders when their assessments have expired or when repair jobs need to be completed. They can also sign up to receive DIY tips, how-to’s and seasonal offers to help them keep their biggest asset at its best.

We have a professional telemarketer periodically contact past customers to offer free maintenance inspections – no strings attached. All our customers appreciate this and since it keeps us top-of-mind for future plumbing jobs, it has also resulted in more business.

Social media is another great tool for staying in contact with customers. Don’t forget that you can offer incentives for social media engagement.

Finally, we share competitions, media coverage, helpful advice, referral incentives and invitations to get involved in charity projects that Pipe Perfection Plumbers are supporting. By using a sophisticated CRM system for all of this, you can ensure that contact is spread out and based on the type of customer.

Sound like too much work?

When you are first creating your system, it does require an investment of your time and perhaps even the input of a consultant to give you an independent or customer-centric perspective, but it is worth it! Not only will it become part of your unique selling point, but it will result in happier customers (which leads to happier staff), repeat business and great word-of-mouth referrals.

Their business has now grown to the point that they use automation tools, apps and clever CRM systems to make the process smooth and efficient. Now you can find it less surprising to see the words ‘excellent customer service’ and ‘plumbers’ in the same sentence!

Contact us about implementing key systems to dramatically improve your business. We speclialise in helping people have a better business. Also, you can attend our next Global Business Camp and begin working on your business in a totally different way.

Written by Robert Kiyosaki, Author, entrepreneur and investor

Does your toolkit include these key financial ratios to become a sophisticated business owner?

Whether you’re investing in a business, the owner of one or thinking about starting one, my Rich Dad’s wise words remain true: “The numbers tell the story.”

In school, your report card is the marker for success. In business, your financial statements are. If you want to be successful in business, you must know how to read a financial statement and how to draw fact-based conclusions about the health and potential of a business.

When it comes to reading a financial statement, there are various levels of sophistication. As a baseline, you should be able to understand income, expenses, assets and liabilities as well as the relationship between theseyou’re your cashflow.

But, to become a sophisticated business owner and investor, you need to grow your knowledge base and understand even more advanced financial concepts to know the health of either your business or one you’re planning on investing.

What are key financial ratios?

When it comes to understanding the health of a business, there are key ratios that you can use to determine the financial health of a business.

As Investorpedia defines them, “Key ratios take data from the subject company’s financial statements such as the balance sheet, income statement and statement of cash flows. Items on these statements are compared with other items to produce ratios that represent key aspects of the company’s financial picture such as liquidity, profitability, use of debt and earnings strength.”

These key ratios are not difficult to calculate, but many people don’t know them. Just by reading this post, you put yourself well above most people in your ability to evaluate the health of a business.

The following are eight key financial ratios you need to know.

Key financial ratio #1: Gross margin percentage

Calculation: Gross margin percentage = Gross margin / sales

Gross margin is sales minus the cost of goods sold. So, if you sell $100 in bananas and they cost you $75, your gross margin is $25.

Gross margin percentage is the gross margin divided by sales, which tells you what percentage of sales is left after deducting the cost of the goods sold. In this example it would be $25/$100, which equals a gross margin percentage of .25 or 25%.

Why is the gross margin percentage important?

Rich dad used to say, “If the gross isn’t there, there’ll be no net.” If, for instance, you’re investing in a business that has a high gross margin percentage but isn’t making money, you can look to see if it is simply being mismanaged. Cleaning up the operations could mean a highly profitable business once fixed.

How high the gross margin percentage needs to be depends on how a business is organized and the other costs it has to support. For instance, after calculating gross margin percentage, rich dad’s convenience stores still had to pay the clerks, the utilities, the taxes, rent, and a list of other expenses. They also had to have enough left over to give rich dad a good return on his original investment.

Today, if you own an internet business, the potential for high overhead is lowered, so it’s quite possible that you can afford to sell and make a profit with a lower gross margin percentage. But, in all businesses, the higher the gross margin, the better.

Key financial ratio #2: Net operating margin percentage

Calculation: net operating margin percentage = EBIT / sales

This ratio tells you the net profitability of the operations of a business before you factor in your taxes and cost of money, which are out of the business owner’s control.

Earnings Before Interest and Taxes (EBIT) is your sales minus all the costs of being in business, not including capital costs (interest, taxes, and dividends). It factors in the costs of a business that can be controlled and gives you the sense of how well a business is being managed.

A highly variable EBIT can indicate a risky business. A stable one could indicate a well-managed and predictable one.

Why is the net operating margin important?

The ratio of EBIT to sales is called the net operating margin percentage. Businesses with high net operating margin percentages are typically stronger than those with a low percentage. The higher the better!

Key financial ratio #3: Operating leverage

Calculation: operating leverage = contribution / fixed costs

Every business has fixed costs that must be accounted for in the overall cost structure. The percentage of fixed costs relative too all costs is called operating leverage, and is calculated by dividing contribution, which is the gross margin (sales minus cost of goods sold) minus variable costs (all costs that are not fixed costs that fluctuate with sales), by fixed costs.

Examples of fixed costs are labor related to full-time employees and most costs related to your facilities. This is what most people call overhead.

Why is operating leverage important?

A business that has an operating leverage of 1 is generating just enough revenue to pay for its fixed costs. This would mean that there is no return for the owners. Anything over 1 is indication of profit. Again, the higher the better.

If a business has a low operating leverage, it may be worth seeing if another lever like operating margin is being under leveraged. Increasing gross margin through things like price increases could lead to a higher operating leverage.

Key financial ratio #4: Financial leverage

Calculation: financial leverage = total capital employed / shareholder’s equity

Almost every business needs to borrow money in order to operate.

Financial leverage is a key financial ratio that refers to the degree a business uses borrowed money. Total capital employed is the accounting value of all interest-bearing debt plus all owners’ equity.

So, if you have $50,000 in debt and $50,000 of shareholder’s equity, your financial leverage would be 2 (or $100,000 divided by $50,000).

Why is financial leverage important?

As in life, you don’t want a business to be over leveraged. The higher a business’s financial leverage, the riskier it is because there is more debt to be repaid.

That being said, each business type has different standards for what a healthy financial leverage is. Other factors, such as cash flow and cost of debt, play a big part in the overall picture of financial health.

Key financial ratio #5: Total leverage

Calculation: total leverage = operating leverage x financial leverage

Total leverage is calculated by multiplying the operating leverage (key ratio #3) by the financial leverage (key ratio #4). If you are the business owner, and therefore on the inside, you have at least partial control of your company’s total leverage.

Why is total leverage important?

Total leverage represents the total risk that a company carries in its present business. Total leverage tells you the total effect a given change in the business should have on the equity owners.

If you are looking at the stock market, total leverage will help you decide whether or not to invest in a company. A well-run, conservatively managed American company usually keeps the total-leverage under 5.

Key financial ratio #6: Debt-to-equity ratio

Calculation: debt-to-equity ratio = total liabilities / total equity

This one is pretty self-explanatory. It’s the measure of the portion of the whole enterprise (total liabilities) financed by outsiders in proportion to the part financed by insiders (total equity). Most businesses try to stay at a ratio of one-to-one or below.

Why is the debt-to-equity ratio important?

Generally speaking, the lower the debt-to-equity ratio, the more conservative the financial structure of the company. The more conservative the financial structure of a company, the less risk there is. Now, less risk isn’t always what an investor is looking for, so you’ll have to determine your own level of risk. This key ratio will help you know if a potential investment is meeting or exceeding that level of acceptable risk.

Key financial ratio #7: Quick and current ratios

Calculation: quick ratio = liquid assets / current liabilities

Calculation: current ratio = current assets / current liabilities

Quick and current ratios are both designed to tell you whether or not the company has enough liquid assets to pay its liabilities for the coming year.

A quick ratio takes liquid assets into account only. This means things like cash, receivables, and securities. Unlike the current ratio, it doesn’t take into account things like inventory, which may take time to liquidate in the event of a need to pay off liabilities. Depending on what type of business you’re looking at will determine which of the ratios are best to use. For instance, a business with a history of high inventory turnover might be better suited for a current ratio while one that moves its inventory slowly is better served by the quick ratio.

Why are the quick and current ratios important?

If a company doesn’t have enough current assets to cover its current liabilities, it is usually a sign of impending trouble. On the other hand, a current ratio and a quick ratio of 2 to 1 or higher is more appropriate.

Key financial ratio #8: Return on equity

Calculation: net income / average shareholder’s equity

Return on equity is often considered one of the most important key financial ratios. It allows you to compare the return a company is making on its shareholders’ investments compared to alternative investments.

Why is return on equity important?

The whole point of investing in and owning a business is to make money. If a business has a low return on equity, it’s not worth your time. A lot of factors go into return on equity, however, so it’s important to utilize all these ratios to see if there are hidden areas of opportunity in a business. For instance, a mismanaged business could have lots of seemingly bad numbers, but in the right hands it could be a goldmine.

What do these key financial ratios tell me?

Rich dad taught to always consider at least three years of these figures. The direction and trends can tell you a lot about a company and its management, and even its competitors.

Contact us about implementing these key ratios into your business and then tracking them on an ongoing basis. We have a number of clients that we work with in this capacity. As we say which owner or manager runs a business without knowing the numbers? They are important and you must know them so you can make the correct decisions.

We are often asked the question – How can we increase profit? If you’re looking for ways to increase your profitability, you have to focus your attention on the 4 profit-determining factors: price, volume, variable costs and fixed costs.

Let’s look at each of these 4 factors under 3 headings—the factor, the possible action you could take to enact change, and the required conditions that would have to occur to increase profits.

It’s important to note that profitability can be increased by taking action to increase or decrease any of the 4 factors, as long as some conditions are met. Let’s have a look below.

The interesting thing to notice about the previous summary is that no single factor can be considered without considering its impact on, or the impact from, each of the other factors.

The second thing to notice is that a profit improvement strategy may involve either an increase or a decrease in each of the 4 factors. There is no standard formula for improving profitability; it depends entirely on specific circumstances and the relative strengths and weaknesses of your business.

The third thing to notice is that a favourable change in price and/or your variable costs improves your gross margin per dollar of sales. On the other hand, a favourable change in your sales volume and/or your fixed costs indicates greater productivity. Therefore, the overhead you incur in running your business involves lower costs per dollar of sales.

In other words, any profit improvement strategy must focus on either or both of 2 things:

1. Achieving a higher gross margin per dollar of sales by increasing price and/or reducing variable costs.
2. Achieving greater sales per dollar of fixed costs by increasing the productivity of those things that have a fixed cost.

So that we can put everything into perspective, let’s consider the profit improvement potential that would arise from a modest improvement in each of the 4 factors.

We’ll use the figures previously given as a base. To demonstrate the powerful effect of small changes, we’ll make a 5% improvement in each of the 4 factors.

Base               % Change                     Result

Price                                                 100            5% increase                            105

Sales Volume                                   100           5% increase                            105

Total Revenue                             10,000                                                         11,025

Variable Costs                     ($60)  6,000         5% decrease ($57)             5,985

Gross Margin                                 4,000                                                         5,040

Fixed Costs                                    3,000           5% decrease                        2,850

Net Profit                                     $1,000                                                        $2,190

To find out more about the above and how we can help you focus on the things you can control please speak to us.

We also have proprietary software that we can use to analyse your business and that will highlight how small changes within your business (no matter what industry you are in) can have profound effects on your profit.