Empowering Smes

Government Grants for SMEs

The Early Stage Innovation Company legislation which commenced operation on the 1st July 2016 gives small/medium enterprise operators, inventors and young companies that have been involved in research and development, have been a participant in Accelerating Commercialisation Grant Program, have already received capital investment from arms-length investors of $50,000 or more; or if you've already registered a patent, a plant patent, an innovation patent or a registered design, or you are a business that has developed a new product, process, service, marketing or organisational methodology. So that's a very broad aspect of business operations. If you've been involved in any of those things, then you are potentially an organisation that could be deemed to be an Early Stage Innovation Company.

Hello, I'm Peter Towers, Managing Director of ESS Small Business.  Welcome to Survival Hints for Small Business.   The Early Stage Innovation Company legislation which commenced operation on the 1st July 2016 gives small/medium enterprise operators, inventors and young companies that have been involved in research and development, have been a  participant in Accelerating Commercialisation Grant Program, have already received capital investment from arms-length investors of $50,000 or more; or if you've already registered a patent, a plant patent, an innovation patent or a registered design, or you are a business that has developed a new product, process, service, marketing or organisational methodology.  So that's a very broad aspect of business operations.   If you've been involved in any of those things, then you are potentially an organisation that could be deemed to be an Early Stage Innovation Company.   If you're not currently a company, but you've carried out all of the research and ready now to try to

Hello, I'm Peter Towers, Managing Director of ESS Small Business.  Welcome to Survival Hints for Small Business.   There are tremendous opportunities for investors under the Early Stage Innovation Company legislation.   What is an Early Stage Innovation Company?  This is a new corporate structure that the Australian government legislated for in May 2016 and commenced operations from 1st July 2016.  The legislation is targeted at companies that are developing new products, processes or services.  In the main the companies have to be under three years of age, but in some circumstances the companies could be under six of age.   There are three tests with which the companies have to comply.  They have to pass two of these three tests.   The first test is the "Provisional Test" (that's the name we've given it) because it looks at the age of the company, and whether it's income is under $200,000 in the previous income year, not including any grant income from the Accelerating Commercialisation Grant. The company's

Hello, I'm Peter Towers, Managing Director of ESS Small Business.  Welcome to Survival Hints for Small Business.   Will you have an ESIC story?  Do you know what ESIC is?  Well, please join me for the next couple of minutes and I'll give you an overview of an ESIC story.    Have you developed a new product, process, service or developed an organisational or marketing methodology?  Have you been undertaking research and development?  Have you already participated in the Accelerating Commercialisation Grant Programme?  Have you registered a patent, plant patent or a registered design?  These are some of the requirements for you to join us on an ESIC story.   First of all you need to talk to an accountant and have a strategy determined for you.   You'll need to have a company and undertake a self-assessment process.  The accountants that I'm going to introduce you to later have a product which we've developed which will assist them to assess whether your company can be deemed to be called an "Early Stage Innovat

Do you know that there are accountants/advisors around Australia who are committed to supplying a Virtual Chief Financial Officer (CFO) service to their small/medium enterprise clients?   ESS Small Business and ESS BIZTOOLS have developed material for those accounting/advisory businesses to utilise, to give you a more effective service and to give you the products that you’ve asked for as an industry of small/medium enterprises, in survey after survey over the last 15 years.   In fact, the ESS Small Business and ESS BIZTOOLS’ package gives accountants/advisors access to a wide range of information and products that they can utilise to help you add value to your business.   One of the key articles we’ve prepared is a summary of what public companies are looking for when they hire a CFO or chief accountant.  You might say, “I’m not a public company”.  However, it’s amazing how many of the services that public companies have listed that they require from CFOs, which also apply to small/medium enterprises.  I was

How diligent are you about your succession planning?   Do you know that, in various surveys that have been conducted by MYOB, CCH, Smithink and other companies over the last 15 years, succession planning has been identified as a very important process from a small/medium enterprise operator's point of view?  Are you getting the assistance you require for your succession or exit planning as it relates to your business?  Are you talking to your accountant/advisor about providing those services?   Accountants have access to a range of products that we have produced, to enable them to assist you in your succession or exit planning.  We believe that it's very important that the accounting profession is able to support you in this very important activity, so the package which we've produced includes questionnaires for the owners, CEO, management team, directors and the employees (the team that is doing the work) to get their input as to what they believe should be happening in the business.   The package also inclu

Have you got a business plan?  Do you know what purpose it will serve your business?  Have you talked to your accountant/advisor about helping you to prepare a business plan?  This is the facilitation role that accountants/advisors could perform.  The main group of people involved in a business planning process are you and your team and your accountant/advisor is there to facilitate, ask the questions, record what you’re saying and try to get feedback from you and your team as to what they perceive should be happening within your business.   ESS BIZTOOLS and ESS Small Business have developed material that accountants/advisors can utilise to be able to fully discuss with you all aspects of your business.  This can be encompassed with forms, articles, briefing documents and questionnaires, to assist in understanding what your aims are in your business.   This is a very important process because, if you have a business plan, you can then measure your actual performance every month, quarter, six months and, indee

I'm Peter Towers, Managing Director of ESS Small Business.  Welcome to Survival Hints for Small Business.   According to the “Accounting Market Pulse”, a publication produced by the Commonwealth Bank targeted at accountants, this is the year of “business advisory services”.   What are you going to do to be able to make sure that you receive more commercial services from your accountants/advisors during this financial year - the year that the accountancy profession has acknowledged as being the year of business advisory services?   ESS Small Business supplies resources to accountants/advisors to assist them to be able to deliver a wider range of commercial services, other than taxation, to you, the small/medium businesses.  These services include: articles forms templates videos powerpoint slides webinars news releases to assist your accountant/advisor to be able to offer these services, without them having to spend an enormous amount of time in preparing that material.   The overall objective is to try to s

As a small business operator, are you aware of the Personal Property Securities Register (PPSR)?  Has your accountant/advisor talked to you on how you can minimise the risks under this register?  Do you know that, in Australia, over $120M has been lost by small and large businesses in court cases involving the Personal Property Securities Act (PPSA)?  Virtually in every one of those cases, the company or business had not registered on the PPSR.  It’s rumoured that over $200M in addition has been lost by other businesses who haven’t registered on the PPSR, sought some legal advice and found that they had no case to be able to present.  Therefore, they lost that money.   You could insure on the PPSR for under $5 for a 7-year period per transaction.  Undoubtedly, this is the cheapest insurance in Australia.   ESS Small Business provides material to accountants and small/medium enterprises to help you review your business operations, to determine your risk areas.  The risk areas cover virtually every asset in you

Do you know that, in survey after survey over the last 15 years, you and your peers have identified that small/medium enterprises want to receive additional commercial services?   One of the services that would benefit most small/medium enterprises is assistance with debtors’ management.   Accountants/advisors who are offering business advisory services, other than taxation, can assist you to manage your debtors.   At ESS Small Business, we provide a debtors’ management service that many accountants/advisors use, to provide specialised advice to small/medium enterprises.  These services will help you: Identify ways to welcome your new customers but ensure that, first of all, you’ve undertaken appropriate due diligence reviews on your potential new customer. Identify ways to reduce debtors’ days outstanding – an area where a lot of money can be tied up in your business. Improve debtors collections. Provide a debtors’ reduction checklist to help with the identification of particular debtors that needed to be a

Welcome to 2016/17!   A new financial year – what are you going to try to achieve this year?   Are you happy with your financial performance?  Are you happy with the support that you’re receiving from your accounting/advisory firm?  Are you getting feedback?   I’m going to ask you six questions to undertake a review of your preparation to be an outstanding business during 2016/17.  If you would like some further advice on the questions that I’m going to raise, I will have suggestions on where you can turn to for support.   Debtors’ Days Outstanding “Is the debtors’ days outstanding in your business less than 40 days?  If not, my recommendation is that you have a debtors’ due diligence system review undertaken for your business.”   Personal Property Securities Register (PPSR) “Are you aware of the PPSR?  Do you know that approximately $300M has been lost by businesses in Australia since this legislation commenced about 3 years ago?  Have you considered the risks that you’re running by not registering assets?”

The Australian government has finalised the legislation for the Early Stage Innovation Companies (ESICs) prior to the Parliament being adjourned for the Federal election.  Unfortunately, the legislation for Crowd Funding Equity Raising entities was still being debated in the Senate when the Senate adjourned.  Hopefully, this legislation will be finalised after the election when the Senate reconvenes.   The ESIC legislation has benefits for small/medium enterprises, sole traders, entrepreneurs and inventors who have some new innovation products, processes, services, organisational or marketing methods that wish to raise capital.  There are also significant benefits for investors via a tax rebate, based on an investor’s investment and potential CGT exemption on that investment in an ESIC.   To be an eligible ESIC, the company must have been incorporated in the last 3 years, although there are some ways that a company incorporated 6 years ago could be eligible.  The company must have incurred total expenses of l

Do you know that accountants/advisers have been identified by small/medium enterprises as being your “trusted adviser”?  This is a recognition of accountants/advisers supplying a wider range of professional services other than taxation.   Taxation doesn’t help you add value to your business, however some of the other non-compliance areas that accountants/advisers have been trained to offer can assist you to build real value in your business.   ESS Small Business develops a range of products for small/medium enterprises to use.  We offer webinars, videos and interviews with people who can assist small/medium enterprises and small/medium enterprise operators themselves.   We’ve also developed tools to assist accountants/advisers to be able to deliver this range of non-compliance services to you as a small/medium enterprise operator.   In fact, our products will assist you to have a better grasp of your overall business operations and hopefully will contribute to adding value to your business.  A selection of th

Business plans are very important for all types of businesses, large and small.   Business plans for businesses are just like maps for tourists.  It helps you determine where you’re going to go and to be able to measure along the way whether you’re on target.   Some of the key things contained in developing a business planning strategy is to determine where you want to be in one year, two years, five years and 10 years.  It also helps to give some consideration as to what your exit strategy might be.   Accountants and business advisers can assist you to prepare business plans.  In fact, I recommend that you have a conversation with your accountant or business adviser, to help you in the business planning process.   Where do you start?   My recommendation is you start with a Think Tank Meeting with your key team members or whole team if you like, along with your key advisers.  Appoint someone to be the facilitator, in many cases, this should be your accountant or business adviser, to guide you through the busi

The normal understanding of succession is basically what would happen within the business if something happened to the owner or CEO.   I believe that a “succession strategy” requires a far broader review of what’s happening within a business relative to succession because there should be a succession plan for virtually every position within a business.  The concept of a “succession strategy” will become far more important in the near future with the introduction of Early Stage Innovation Companies (ESIC) from 1st July 2016.   As experienced business people commence evaluating proposals for investment in ESIC, as part of their due diligence process, they will be very keen to look at: The management team. The ownership of the Intellectual Property (IP). Is the IP properly registered? Has the IP been properly documented? Have assignment of IP agreements been prepared? What is the “succession strategy”?   Is everything “locked up” in the CEO’s head or do a number of key management personnel have direct day-to-d

Many small/medium enterprises have indicated to me that they’re looking for assistance from accountants to identify grants for which they might be eligible to apply.  I know that many of you get upset when the first thing you know about a grant is when you hear that one of your competitors has received a grant.  You ask a very legitimate question: “How come no one told me about the grant?”   It’s a realistic expectation of business operators that accountants, acting at the “trusted adviser” to small/medium enterprise clients, should be able to advise you on grants that are available.  Billions of dollars are allocated in Australia each year, by the Federal, State and Territory governments, for grants, most of which are targeted at small/medium enterprises.   Are you receiving information about government grants?  Have you actually received a government grant?   Grants that are available will supply financial assistance from the government, ranging from 25% to 75%, with the average being 50%.  In these difficu

The Parliament has passed the legislation for Early Stage Innovation Companies (ESIC).  This is a great opportunity for small/medium enterprises that have developed a new product, process, service, marketing or organisational method, to be able to raise capital.   To be an ESIC, the company needs to have been formed in the last 3 years, however it could’ve been formed in the last 6 years, subject to some additional tests relative to expenditure.   The total annual expenditure of the company has to be $1M or less and the total assessable income has to be less than $200,000.  If a company has obtained grant funding from the Accelerating Commercialisation Grant, that grant is not included in the assessable income.   There are 2 ways that companies can satisfy the requirements as an ESIC:   The Gateway Test This is a 100-point innovation test relating to: Research and development expenditure. Has the company been a participant in the Accelerating Commercialisation Grant? Has the company participated in an accele

The Personal Property Securities Register (PPSR) and the associated Personal Property Securities Register (PPSR) can affect every business in Australia.   Many small business operators say to me, “Why are you worrying about a personal property piece of legislation?”  Unfortunately, the term “personal property” is a misnomer.  This applies to business property.  In fact, it applies to every business asset except land and attachments to land, including your debtors, stock, vehicles, Intellectual Property (IP) and items that you’re renting or leasing to someone else.   In the first instance, it’s highly desirable that you have a consultation with a commercial solicitor, especially if you haven’t done so since January 2012, relative to the two key documents that you need for this legislation – the Terms of Trade Agreement and the Retention of Title Agreement.  Your solicitor will give you a general overview as to how this legislation works.   Then we believe that you need input from your professional accountant o

On the ESS Small Business’ website, we have a wide array of information (some free, some available for purchase) relating to debtors’ management.   The free material includes the debtors’ overview, looking at the various aspects of the management of debtors and suggestions on how to collect debts (Debtors’ Collection).   We also have a subscription service available, whereby you can subscribe for an SME Debtors’ Manual that you can review, edit as you require and then customise as yours so that you have a manual in your business to guide the persons who have the responsibility for debtors and covers items such as: opening an account approving an account PPSR function collection of debtors calculation of debtors’ days outstanding sending of statements to your customers   The manual also looks at some of the due diligence services combined with debtors’ management.   The SME Debtors’ Manual includes introduction on an effective debtors’ system, debtors’ management system and setting up for a debtor.   Setting