RA Business Advisors

Australia

What To Do When You Want To Keep Your Business ‘In The Family’

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What to do when you want to keep your business in the familyHave you got a family business you love but want to have some peace of mind for when it’s time to step away? You aren’t alone as more and more Australians start their own business, we are hearing about more people worried they will have to sell or close down their business they have worked so hard for. 

But this anxiety doesn’t have to plague you, transferring your family business to the next generation can be a very straightforward and hassle-free experience! 

Who will take over the business? 

This is an important question everyone asks themselves, and there are a few things to keep in mind when considering this. Skills should always be at the top of your list when you rattle through your list of candidates – you may have a great affinity to help out your daughter, but your son’s best friend may be better skilled for the position. Make sure you take the time to find the ideal candidate, hold a panel, a series of interviews, whatever will give you the best insight into the perfect candidate! 

What’s the steps for handing over the business? 

There are a number of steps if you are transferring to a family member and you will no longer be a part of the business and these may include: 

  • Transfer business name or cancel your business name 
  • Cancel tax registrations such as GST 
  • Lodge all required tax returns 
  • Pay outstanding bills, activity statements etc. 
  • Make GST adjustments on your final activity statements 
  • Transfer any other assets such as domain names or web domain registrations 
  • Transfer business records, customer records and employee records 
  • Cancel your ABN after you have met all of your obligations for lodgement, reporting and payments 

Start planning now! 

A succession/exit plan is integral to a smooth transition for you and the new business owner. When you develop this plan, remember: 

  • Will you transfer both ownership and management? 
  • Are you going to review the plan regularly? 
  • Are you going to include direct family members in the business? What roles are they going to play? 
  • Is training or mentoring required on your part for your successor? 

A terrific guide issued by the Australian Government on what steps are best can be found HERE

Small Business Booming in the Burbs’

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Small Business Insights

Xero has recently launched Small Business Insights, which provides a monthly snapshot of Australia’s small business sector – courtesy of data aggregated from Xero’s hundreds of thousands of subscribers. Xero has decided to provide these insights with the aim to “help policymakers and large enterprises make more informed decisions that benefit the small business economy” (Xero SBI). On top of metrics that give insights to the small business environment in Australia; KPMG, small business owners, business journalists provide commentary on the small business sector.

small bus

A New Trend

One interesting trend that has been observed by Xero is the increase of small business employment in more suburban locations in major Australian cities. Bernard Salt of KPMG has reported this pattern being evident in Brisbane, as small business employment increased in the period of January – September this year. Nearby CBD suburbs Red Hill (woo!) and Clayfield experienced a 17% increase in small business employment. More suburban areas such as Camp Hill and Bridgeman Downs also had an increase of small business employment, going up 23% & 18% respectively.

This suburban small business employment trend is also replicated in other large Australian cities such as Sydney, Melbourne and Perth. It seems that middle suburbia in Australia is acting as an incubator to nurture new small businesses, says Bernard Salt. It is important to note that whether our economy is performing well or poorly, middle suburbs in our large cities still flourish and experience growth in employment. These small business employment patterns that have been uncovered by Xero’s Small Business Insights give a new perspective on Australia’s modern economy. This pattern provides evidence that small business is as vital as ever to Australia’s economy.

We as small business advisors are excited about these findings, as it displays Australia’s evolving economy – and more importantly outlines the importance of small business to our evolving economy. All information was gathered from the “Small business beats in the heartland” article by Bernard Salt – read the full article here.

small business booming in the burbs

Post Contributor:
Andrés Pascoe