4 minute read
Aussie Painting Contractor December 2019
The countdown to 2020 is on, and we’re almost half way through the current financial year. These are good times to take stock of how your business performed in the first half, and even better times to plan for next year. When you build a house, you need building plans. When you build a business, you need a business plan.
Looking at your business’ financial performance over the last six months is a good starting point to raise the bar or tweak your profitability strategies, such as profit margins and tax savings. That includes reviewing and updating your budget and expenditure plan as well as your tax plan for the year.
If you don’t know how healthy your business currently is, you can download the Business Profits Health Check from our Tradies Advantage website to help you understand your position.
What to include in your Business Plan update
To review and update your business plan, you’ll want to cover the following items:
1. Business Profile – includes a specific description of the business you’re in, your mission statement, legal structure, SWOT analysis and business objectives. 4. Marketing Plan – here you’ll set out your objectives, develop a sales forecast, as well as determine pricing and promotional strategies.
5. Operational Plan – set out your objective, review plant and equipment requirements (including maintenance and replacements), how you implement quality control measures, and what staff and training requirements you’ll have.
2. Product/Service and Market Analysis – this should include description of your product/service including its position in the market, any major trends affecting the industry in the past and future, your target market(s) and expected growth rates over the next 2-3 years, and your ideal customer profile.
3. Competitive Analysis – this is where you determine your business’ competitive advantage, but also where it lacks competitive advantage. 6. Financial Plan – set out your overall objectives, identify the cost for establishment or expansion of your business, create a Profit Budget Schedule and Cash Flow Projection.
The last item of the business plan neatly dovetails with the regular QBCC reporting requirements which you’ll need to keep up-to-date to stay in business. However, it never exists in isolation and the context is provided in items 1 to 5.
Further, if you wanted to apply for a business loan, the above items are a must to get your head around to be able to produce supporting documents for your loan application.
Updating your Business Plan helps to ensure QBCC compliance
There is an important date coming up which is critical for tradies and builders holding a QBCC licence. Self-certification categories (SC) 1 and 2 and category 1 to 3 licensees must provide the Queensland Building and Construction Commission (QBCC) with financial information by 31 December 2019.
We’ve been hearing of big companies being suspended by the industry watchdog, the QBCC for noncompliance issues. The same can happen to small business owners who fail to make their licence renewal payments on time or haven’t provided the information required by the QBCC Minimum Financial Requirements (MFRs).
Here are a couple of points to remember when submitting your Self-certification documents: 5. SC 1 & 2 licensees are not able to use deeds of assurance or guarantees to meet their NTA requirements.
1. The reporting requirements for SC1 and SC2 licensees are different to Category 1 to 3 licensees. SC1 and 2 licensees must provide a declaration and some basic financial information, whereas Category 1 to 3 licensees need to provide more detailed information (profit and loss; balance sheet; statement of cash flow, etc). 2. There is a new requirement for SC2 licensees to have Net Tangible Assets (NTA) to the value of $46,000. 3. The information doesn’t need to be prepared by an accountant; although if you already use an accountant, it will be easier to submit the latest information provided by them for your end of financial year tax reporting. 4. If you hold an individual and company contractor licences, you need to provide financial reports for both licenses. Interested to find out more about how to update your Business Plan or set up your accounting system to help you meet your QBCC requirements? Then call my office on (07) 3399 8844, or just visit our website at www.straighttalkat. com.au and complete your details on our Home page to request an appointment.
Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
Copyright © 2019 Robert Bauman
Depending on your business turnover, you’ll need to submit different levels of financial information to the QBCC. As a Category 1 to 3 licensee, you’ll definitely need your financial systems in order to satisfy the MFRs.
