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March 18, 2020 at 12:39 pm #1222644Up::0
I have an online friend I know through a business group. She had a successful business built over ten years.
She had been on the market at around the $500k mark. Some bites but no takers.
That was a couple of years ago.
Today, she shut her doors.
March 18, 2020 at 8:29 pm #1222645Up::0Paul – FS Concierge, post: 269058, member: 78928 wrote:I have an online friend I know through a business group. She had a successful business built over ten years.She had been on the market at around the $500k mark. Some bites but no takers.
That was a couple of years ago.
Today, she shut her doors.
Very sad and very common at the moment.
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900March 18, 2020 at 8:35 pm #1222646Up::0Paul – FS Concierge, post: 269058, member: 78928 wrote:I have an online friend I know through a business group. She had a successful business built over ten years.She had been on the market at around the $500k mark. Some bites but no takers.
That was a couple of years ago.
I always treat these stories with the biggest grain of salt and call BS on them, I once had my house on the market for $5million, it was only really worth $20K, but I deluded my self that it was worth $5million.
A business is really only worth what someone will pay for it, it was obviously not worth what your friend wanted, maybe only $20K like my house..
Lets get into facts not dreams.
March 18, 2020 at 8:54 pm #1222647Up::0bb1, post: 269062, member: 53375 wrote:Lets get into facts not dreams.I know it afforded her the opportunity to have a Manager and for my friend to work part time remotely.
So call it somewhere between $1 and < $500K up in smoke if you need to, but the valuation is not quite the point of the post.
March 18, 2020 at 8:55 pm #1222648Up::0bb1, post: 269062, member: 53375 wrote:I always treat these stories with the biggest grain of salt and call BS on them, I once had my house on the market for $5million, it was only really worth $20K, but I deluded my self that it was worth $5million.A business is really only worth what someone will pay for it, it was obviously not worth what your friend wanted, maybe only $20K like my house..
Lets get into facts not dreams.
Who knows the more recent financial condition. The problem with a small business is that its only as good as its profitability shows. If that declines value drops. Things can change quickly which is why they are hard to sell. I had a quarter share in a smart phone number about 10 years ago that we paid total about $5000 for. We leased it out and actually made about 4 times that from it HOWEVER the “telco industry experts” were telling us the number was worth about $1m. Think it was de-registered a couple of years ago for nothing no buyer. Only worth what someone is prepared to pay.
On Paul’s point. I have spoken with a lot of small businesses in last few days and some have had good profitable businesses that have had trade fall off a cliff. They can’t last more than another few weeks and are making plans to lay off staff. There are good businesses that are going to fail because of this but at least those will probably be able to reboot. The borderline businesses will never reboot.
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900March 21, 2020 at 10:58 pm #1222649Up::0Part 2 of the Stimulus Package has dropped.
Details are sketchy but small business is to be given up to $100,000 to maintain the employment of staff.
March 21, 2020 at 11:11 pm #1222650Up::0Very interested in everyone’s take on the second part of Stimulus. I think it’s not enough for Tourism and Hospitality.
An example of how the payments work
Sarah owns and runs a building business in South Australia and employs eight construction workers on average full-time weekly earnings, who each earn $89,730 per year. Sarah reports withholding of $15,008 for her employees on each of her monthly Business Activity Statements.
Under the government’s changes, Sarah will be eligible to receive the payment on lodgement of her BAS. Sarah’s business receives:
A credit of $45,024 for the March period, equal to 300 per cent of her total withholding.
A credit of $4,976 for the April period, before she reaches the $50,000 cap.
No payment for the May period, as she has now reached the $50,000 cap.
An additional payment of $12,500 for the June period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
An additional payment of $12,500 for the July period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
An additional payment of $12,500 for the August period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
An additional payment of $12,500 for the September period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
Under the previously announced “boosting cash flow for employers” measure, Sarah’s business would have received a maximum payment of $25,000.
Under the new enhanced “boosting cash flow for employers” measure, Sarah’s business will receive $100,000. This is an additional $75,000 to support her business and help her retain her staff.March 21, 2020 at 11:24 pm #1222651Up::0Personally our Cafe and Gallery employs 2 full time staff and a few casuals over the weekends.
In a CBD location in Newcastle.
Turnover has dropped to about 10% of normal M-F as all our surrounding businesses have commenced working from home, Uni is shutting down, etc etc.
Weekend turnover is down to about 20% of normal with tourism, isolation etc.
It’s at the point where it is costing us hundreds of dollars a day in wages above our turnover, not even counting our fixed overheads like rent power etc.
We were going to give it a last go tomorrow (monday) to see what we can do and try and muster support from surrounding apartments with marketing etc. But that was the last day before we shut for 3-6 months and layoff our staff. Have to figure out how the package changes things. If we don’t have anything productive for the employee’s to do though because we have no turnover, what is the point??
Not sure how the gov package works for us, I withhold about 2500 in PAYG a quarter. Have to try and run the numbers.
March 21, 2020 at 11:30 pm #1222652Up::0Details will be released shortly because there are a range of nuances and other measures that are yet to be announced (later today). We will be producing a video either late today / this evening or tomorrow with details and opinions / tips.
we need measures for sole traders
we need measures for more payroll support. Something like UK government announcement on Friday where they are paying 80% of employers gross payroll (not paygw) indefinitely up to average uk wage. That’s a big measure and frankly what we are going to need here if they don’t want businesses imploding.
More to come
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900March 21, 2020 at 11:36 pm #1222653Up::0JamesMillar, post: 269095, member: 5318 wrote:Details will be released shortly because there are a range of nuances and other measures that are yet to be announced (later today). We will be producing a video either late today / this evening or tomorrow with details and opinions / tips.we need measures for sole traders
we need measures for more payroll support. Something like UK government announcement on Friday where they are paying 80% of employers gross payroll (not paygw) indefinitely up to average uk wage. That’s a big measure and frankly what we are going to need here if they don’t want businesses imploding.
More to come
Agreed completely. This needs a war time footing and attitude.
UK’s wage gaurantee is the perfect solution in my opinion.
A system where employers can release employees to the Gov would be great too. Cafe workers chefs baristas waiters etc can be utilized by the Gov to enhance logistical delivery lines for food and veg, or pick fruit in place of backpackers, or feed the elderly via charities or something. That would take a massive amount of setup though. I don’t think the Fed Gov is capable of it.
March 21, 2020 at 11:40 pm #1222654Up::0Daniel Courtney Gallery, post: 269096, member: 113302 wrote:Agreed completely. This needs a war time footing and attitude.UK’s wage gaurantee is the perfect solution in my opinion.
A system where employers can release employees to the Gov would be great too. Cafe workers chefs baristas waiters etc can be utilized by the Gov to enhance logistical delivery lines for food and veg, or pick fruit in place of backpackers, or feed the elderly via charities or something. That would take a massive amount of setup though. I don’t think the Fed Gov is capable of it.
Well it will cost them in the long run with 20% unemployment
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900March 21, 2020 at 11:45 pm #1222655Up::0I also think they are inflating the level of support by including the max potential guaranteed loans as “stimulus spend”. Yes some is at risk but that will not all be used. Personally I don’t think loans are the solution as they are still left in the hands of the banks to approve manage administer. Plus who covers the other half of loan security if the banks require it? What loan serviceability tests are they going to apply? If a business is in crisis with losses and negative cash flow there is no way they will get a loan approved – I can’t see that happening
Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900March 22, 2020 at 12:22 am #1222656Up::0JamesMillar, post: 269098, member: 5318 wrote:I also think they are inflating the level of support by including the max potential guaranteed loans as “stimulus spend”. Yes some is at risk but that will not all be used. Personally I don’t think loans are the solution as they are still left in the hands of the banks to approve manage administer. Plus who covers the other half of loan security if the banks require it? What loan serviceability tests are they going to apply? If a business is in crisis with losses and negative cash flow there is no way they will get a loan approved – I can’t see that happeningPersonally as a small business with very little debt and marginal profitability at best, I haven’t drawn a wage for our first year yet, there’s no way I’ll take a loan no matter what the terms, just to keep my doors open for no customers.
Personally – They just need to put a pause on things hospitality and tourism for 6 months. Close them down to prevent virus spread. Pause their bills power, water etc, pause their rents and the landlords mortgages. Just put a pause on everything and give our staff 80% of their normal wages and they should be able to survive.
March 22, 2020 at 1:19 am #1222657Up::0[USER=113302]@Daniel Courtney Gallery[/USER] – I feel for you and send you, your family and your staff best wishes.
It is heart breaking to build something, then to see it vanish.
I feel it is easy to get emotional in these times and doing so is good for the psyche.
But business decisions and financial decisions that will affect your long term survival should be made with the rational mind and without the emotional side taking over.
March 22, 2020 at 1:22 am #1222658Up::0Paul – FS Concierge, post: 269101, member: 78928 wrote:[USER=113302]@Daniel Courtney Gallery[/USER] – I feel for you and send you, your family and your staff best wishes.It is heart breaking to build something, then to see it vanish.
I feel it is easy to get emotional in these times and doing so is good for the psyche.
But business decisions and financial decisions that will affect your long term survival should be made with the rational mind and without the emotional side taking over.
Completely agree.
Will be spending some time tonight crunching numbers.
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