Insolvency levels are rising, as is uncertainty in a wide range of businesses right across Australia. There are many reasons for this including high interest rates, high inflation, a tougher stance from the ATO and cash flow difficulties because of the level of debtors, high inventory levels and numerous other factors.
How can you help these clients?
One way would be to confidently advise specific clients that they need to improve their liquidity. One of the options that is available is that a private company is able to raise capital direct from the public. However, the business operator needs to be fully briefed on the operations of a company and the legal position relative to raising capital, and what it means to have part of their company owned by other people and an extra director or two.
They will also need a Business Plan, Predictive Accounting Reports (budgets, cash flow forecast, projected balance sheets) and a Vision for their business – great work for your accounting firm and assists with attracting and retaining talent!
To be able to confidently give this advice, you will need to have knowledge of the intricacies of raising capital for a private company. You might already know all that there is to know. Unfortunately, based on the enquiries received from SMEs, many of our profession do not understand what is available for them. Allow me to explain…
Late last year, I received a telephone call from an INVENTOR who told me that he had been referred to me by an Accounting Industry Advisor in Sydney.
The INVENTOR asked me this question: “Are you able to explain to me how the EARLY-STAGE INNOVATION COMPANY process works?”
My reply is, “Yes.”. To which he responded, “Thank goodness! After 17 phone calls, I have finally found an accountant who knows something about Early Stage Innovation Company.”
I explained to him how it worked, and he was very happy and was ready to move on with his life.
I was staggered. I knew a lot of accountants didn’t seem to know much about Early Stage Innovation Companies, but I didn’t expect a score of 0/16! The INVENTOR explained that he had rung accountants in three states and kept on getting referred to another accounting firm.
Every one of these accountants indicated that they didn’t know what the Early Stage Innovation Company was about! I find this concerning, considering that this legislation was developed exclusively for SMEs.
Additionally, the Government also included a significant incentive targeted at the INVESTOR – yes, the INVESTOR! I don’t recall that happening previously where the Australian Government instructs the ATO to process a taxation rebate to people who invest in eligible private companies.
Can you imagine a win-win situation on this, where not only both the eligible SME and the investor benefit from the incentive, but your accounting firm also gains a significant fee income out of this exercise?
You can change those 0/16 odds, and this is how…
ESS BIZTOOLS, in collaboration with CPD For Accountants, have developed the SME Business Equity Course. This course was created with accountants and business advisors in mind, to provide extensive knowledge on capital raising opportunities for SMEs, such as the Early Stage Innovation Company, and your part as their accountant/advisor.
The course comprises of six (6) modules, to be completed within 12 months from the day of enrolment:
Module 1: Private Investment
Module 2: Government Grants
Module 3: Raising Capital Using Section 708 of the Corporations Act
Module 4: Early-Stage Innovation Company Capital Raising
Module 5: Crowd Sourced Funding Equity Raising
Module 6: Venture Capital Raising Processes for SMEs
CLICK HERE to find out more.
Ready to take the step? ENROL HERE.
We would love to hear your thoughts – you could send us an email – peter@essbiztools.com.au or trevor@marchantdallas.com.au
ESS BIZTOOLS Pty Ltd | Telephone: 07 4724 1118
Email: peter@essbiztools.com.au
Website: www.essbiztools.com.au
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