Business structuring and investment decisions are challenging at the best of times, but focusing on diversification can assist in mitigating long-term risk.
Principal at Hillross Financial Services, Ryan Morse says that starting with the end in sight is the key to success. “Successful owners have a clear direction for their business and are able to scale it appropriately. They know their customer and can confidently provide a service or product to match.”
It is important for owners to have their wealth spread across multiple investments. In the early stages, your business will be your primary asset. Over time it is important to ensure you are building other passive investments. This may include property, an investment portfolio, superannuation, artworks, or investment in other businesses or companies not owned/ directed by you. A good financial adviser should work with you not only on your business goals, cash flow and planning, but they should seek to mitigate risk ensuring you are accumulating wealth across multiple assets.”
Mr. Morse emphasized that businesses should consider speaking to a financial advisor for guidance. “Focus on understanding your customer; leave the specialty financial tasks to the professionals with your business’s best interests at heart.”
When selecting a good financial advisor, Mr. Morse says that businesses should focus on relationships. “It is extremely important to select not only a competent, qualified professional, but one you can speak freely with. This is vital so that your advisor can really understand you, your business and where you want to take it.”
A good financial advisor can also provide guidance around other business necessities, such as superannuation payments, an area that businesses commonly make mistakes with.
“Superannuation payments can often be a hassle for employers from both an administration and cash flow perspective. Making sure payments are made in a timely fashion (at maximum, quarterly), and are correctly allocated with the employee’s super fund details, is crucial to remain within legal parameters.”
Recent changes to legislation make this even more imperative with superannuation payments now needing to comply with SuperStream laws which state that superannuation payments must be made electronically and that payment transaction details are also sent to the superfund, including employee name, TFN and superfund member number. “You can no longer just BPay an employee’s super contributions. Employers with over 20 employees should have made this transition by October 31st, 2015, whereas smaller businesses with less than 12 employees, have until July 1st, 2016.”
Hillross Financial Services is an occupant at BTP Northshore Hamilton specialising in wealth management. For more information, visit: hillross.com.au.