The Mentor Mark Bouris: ‘Don’t become a tax target’
HE’S one of Australia’s most successful entrepreneurs and he’s now writing for The Sunday Telegraph. In a new column, Mark Bouris will share his extensive business skills and answer your questions about doing good business.
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HE’S one of Australia’s most successful entrepreneurs and he’s now writing for The Sunday Telegraph. In a new column, Mark Bouris will share his extensive business skills and answer your questions about doing good business.
How does it feel to have a target on your back before you’ve even filed your tax return?
Business owners know: several weeks ago the Australian Taxation Office warned it’d be contacting a million of them following the end of the financial year, and asking them to substantiate ‘standard’ claims.
The ATO wants substantiation on all expenses no matter how small and they’ll be approaching 250,000 more Australians than they did last year.
That was mid-June — most business owners hadn’t even thought about tax, they were too busy working.
People wonder why I’ve put myself forward as a mentor to business owners, through my podcast, TV show and website.
To me it’s pretty obvious: business owners are vulnerable to government and corporations, and they need a guiding hand.
The first thing I suggest is that they not call themselves ‘small’ business. Because the small and medium-sized enterprises (SME) sector is actually significant. It includes more than two million business owners, employs around 70 per cent of the labour force and accounts for more than half of the economy.
It’s a powerhouse, yet also fragile: most SMEs are micro businesses, sole traders or mum-and-dad firms that employ up to 20 people. Yet they’re expected to compete with Amazon, produce their financial reports like a corporation and deal with staff as if they have an HR department.
It’s exhausting and along with the little victories come the disappointments, loneliness and fear. And fear makes people freeze and stop making decisions, which is a disaster.
As businessmen and women have approached me for advice over the years I’ve realised these hardworking Aussies are typically out there alone, making the same mistakes week-in, week-out.
They’re so busy fighting their battles and paying the bills that they often don’t stand back and see the whole picture. All it takes, sometimes, is for an experienced outsider to ask a good question.
That’s a mentoring role that needs filling as our economy accelerates and becomes more complex, and it’s a role that people like me should be playing where we can.
One tip that most business owners could use is that they need to do more work on the business, not just in the business.
Most business owners are so busy making revenues that they forget about value-creation, which typically means planning. Standing back from the fray and doing some business planning — for just one afternoon a month — changes your business because you’re no longer just showing up for work.
Once you’re doing this, you can think about having your business ‘sale-ready’ where your goal is to get the sale price you want — a multiple of revenues. Now you’re focused on producing more revenue, with lower costs and without the owner needing to be involved in everything.
It’s a better business.
There are hundreds of hurdles, but our business owners keep on, employing people, paying their taxes and generating economic activity in their communities. I’m in awe of some of the owners I talk to.
So I’m glad to be back in the Sunday Telegraph, talking about business and business owners and helping this crucial sector. I look forward to answering questions and making a difference. So send me a question about your business — just don’t call it small.
* Mark Bouris is chairman of Yellow Brick Road, ybr.com.au
* Watch The Mentor on Channel 7, Mondays at 9pm
Ask Mark at mentored.com.au
Q&A
I need a sales professional in my business — how do I lure one away from big business?
Start with research: understand the employment market and know what level of talent you can attract, at what cost. You probably can’t compete on salary, so what can you offer? Location? Seniority? Interesting work? Bonuses? Flexi-time? Be clear on your proposition — be a leader.
I’m a sole-trader who needs to employ people. When should I become a company?
Get expert advice, probably from an accountant. Together, model the scenarios into the future: a company can mean more administration but it helps to alienate family assets from the business and it’s a better entity to employ through. Simpler taxes, too.
How do I get really good insurance products at fair premiums?
Do what large companies do and use an insurance broker. Most business insurances have complex exclusions and caveats and a broker is a good way to find the policy that suits your business, at the best price.