The start of a new financial year is the perfect time to stop and assess the health of your business.
As a medical professional, you spend most of your time assessing the health of your patients and you understand the importance of regular check-ups. Businesses also require regular health checks and the new financial year is the perfect time to stop and assess how your business is performing. Here are some tips to help you plan for growth over the next financial year.
- 1. Review your pricing structure
- It’s important to review your prices regularly to make sure you’re ahead of increasing costs. When you set your new prices, consider the true cost of providing the service you’re pricing. This includes your time cost, the wages you pay, your overheads and your marketing budget. Think about your desired margin, your competitors’ prices and factor in what your patients are prepared to pay. Lastly, consider what you’re working towards. If you’re not getting there quickly enough, the start of the financial year may be the best time to raise your prices
- 2. Review your loans, accounts and investments
- Make sure you are still getting the best deal from your bank and other investments. Global markets are in a state of flux and it may be worth considering your strategy to maximise your finances in the current environment. Low interest rates might mean an opportunity to secure cheaper finance. Compare your savings and debt and use your equity to ensure your loans are consolidated and you’re getting the best deal.
- 3. Create a wealth creation checklist
- It may not be heralded with the same excitement and commitment to new goals as January 1, but in many ways July 1 is just as important a date in the business calendar. It’s a great opportunity to reflect on the successes and challenges for your business thus far, and to re-evaluate your goals. Are you on track to meet previous targets? Are there new opportunities for growth? Do you need to scratch out your original plan and start again?
- 4. Sort out your super
- Superannuation is on everyone’s minds this year. The Federal Government budget changes include the establishment of a lifetime non-concessional contributions cap of $500,000; the super concessional limit has once again been set at $25,000; a transfer balance cap of $1.6 million has been placed on amounts moving into the tax-free retirement phase; and the work test for those aged 65 to 74 will be abolished as of 1 July 2017. Super contributions will continue to be taxed at a lower rate of 15 per cent, so it’s worth considering how you can make your super work for you.
- 5. Plan your tax breaks now
- How does the law help you lower your tax bill? Changes to fringe benefit tax and capital gains tax became effective on 1 July 2016. These should help to reduce red tape for small businesses. Also consider the 1.5 per cent company tax cut for incorporated small businesses and the 5 per cent tax discount for unincorporated small businesses – i.e. partnerships – which is capped at $1,000. Make note of any incoming tax laws that might affect you, for better or worse, this year. And then act to reduce your liability if possible. Capital gains tax liability, for example, can be managed with some forward planning and clever offsetting. Act now.
- 6. Investigate insurance options
- Insurance is one of the last things businesses consider, but it is one of the fundamentals for medical professionals. Many practice owners are likely to be heavily geared because of high capital costs – for example, expensive clinical equipment and practice fit outs. These debts can be onerous for families left behind, should the worst happen. If you are your family’s main income earner – it’s worth assessing income-protection and life insurance to make sure your loved ones are covered.
The information contained in this article (Information) is general in nature and has been provided in good faith and has been prepared without taking account of your objectives, financial situation or needs. Whilst all reasonable care has been taken to ensure that the information is accurate and opinions fair and reasonable, BOQ Specialist make no representations or warranties. BOQ Specialist recommends that you obtain independent legal, financial and tax advice before making any decisions.