Chinese New Year: A time for change?
Do you want a Chinese New Year resolution for your small business? We have one: Be like the monkey!
On February 8, the sky across much of Australia was doused in the sparks and shimmers of fireworks as we celebrated Chinese New Year. Regardless of your heritage, now is a great time to get out with the family, try some top-notch street food and take in the festivities.
It's also a good time to think about your business. What's happened in your company over the past 12 months, and how could you improve in the year to come? Chinese New Year is linked with prosperity, and is also a good time to look at change.
As we enter the year of the monkey, or “hou” - an animal characterised by its cleverness and agility - what lessons can small-business owners learn to take them forward in the Chinese New Year? More specifically, can they be like the monkey?
If you're truly looking to emulate the monkey as a small-business owner, you'll need to be smart and quick. While you won't be swinging through trees any time soon, you can make it easier to clamber through your day-to-day finances.
Make the most of your leverage as a small business, particularly with the concessions made in the Federal Budget last year. Businesses have the opportunity for accelerated depreciation for assets purchased before 30 June 2017.
New equipment, tools or furnishings up to the value of $20,000 can be immediately depreciated, as long as the buying company has less than $2 million in annual turnover. If your business is a little larger than this, you can still be smart in the funding options you choose.
For instance, you could choose to acquire any new or used assets using Equipment Finance on a Rental Agreement or Secured Loan Agreement, opening the door for possible tax concessions whilst at the same time taking the pressure off your cash flow.
Small businesses can also put flexibility and speed on their list of Chinese New Year resolutions. If cash flow is difficult to maintain, funding time frames slow and your debt mounting up, why not look at alternative forms of funding than a traditional bank overdraft?
Making the most of debtor finance could be an ideal way to change. You receive the majority of the money that was tied up in outstanding invoices from your clients, you pay a small fee on receipt of the rest (once your debtors pay up) and it can be done incredibly quickly - great for when cash flow constraints tighten.
It's an option that lets you swing into action faster when you need a cash injection, while helping to avoid any common business banana skins, such as using personal assets as collateral or building up company debt.
Meanwhile, if your existing debtor finance facility is not living up to expectations, ask yourself now: is it time for a change?
If you have any questions, give the team at Classic a call. Until then, have a great and prosperous Chinese New Year!