business, strategy

Budget and Cash Flow Modelling for Medical Professionals

January 6, 2020

Medical Professionals earning a high income face the impulse to spend consistent with their pay. But without a good budget and an understanding of your cash flow, problems will quickly come to the surface.

In addition to paying for some of life’s luxuries, you also have to make substantial payments in other areas such as your mortgage, education, career development, tax and superannuation.

Life can be more expensive than you may think.

How can you effectively manage your income to meet all of your financial needs without feeling stressed?

It all comes to having a budget and managing your cash flow.

What is cash flow modelling?

Let’s keep it simple. What we’re talking about is getting a good grasp of what’s coming in, and what’s going out.

It’s having a plan and a system to forecast the sources and use of your money.

That plan starts with a budget.

Yes, Medical Professionals need budgets.

A budget is just as beneficial for Medical Professionals like you as it is for anyone else. It’s a very useful tool that will help give you power over your finances.

There’s no set format that you must use to structure your budget. Your budget should reflect your individual situation and personal priorities. The important thing to remember is to keep track of every dollar so that you can get your money working for you.

A budget will help get you on the right path to let you reach your wealth goals.

Don’t like the idea of preparing a budget? Think about your priorities.

If ‘budget’ is a dull word to you, then you should take a slightly different path to managing your money while working towards your goals.

Simply work out the cost of your biggest and most important expenses and pay those first. Then use the rest of your money as you choose.

Essentially you are ‘paying yourself first.’ You get those major expenses out of the way so that you have peace of mind and can spend your money guilt-free. It’s a substantial step towards effectively managing your cash flow.

Examples of your large expenses include:

– Paying your mortgage and personal loans
– Contributions to your super
– Education expenses for your kids

Effective cash flow management for Medical Professionals.

Managing your cash flow effectively will enable you to reach your financial goals, expand your business and grow your wealth.

To get started, track your current spending habits for a couple of months. This will help you identify which areas you may be spending too much in.

Do you run your own medical practice? A Cash flow model is even more important, as you have many more expenses to look after. A great plan will set you up for success.

Get advice

For help in designing a budget just for you or just learning how cash flow works, you need to talk with a professional adviser who understands the unique financial challenges that face the Medical Professionals.

business, strategy

Medical Professionals: Service Trusts for Asset Protection

By admin on

October 11, 2019

- business, strategy

A Service Trust is a must for doctors and health experts who want to reduce risk and protect their assets.

Medical professionals are looked at with high esteem within society, as we all look for a healthy and long life. However, this brings with it costs at times, and often medical professionals find themselves as targets for litigation.

A person’s health is serious business. If something goes wrong in a medical setting, someone usually must take the blame. As medical professionals usually make a substantial amount of money, the chances of a lawsuit are increased.

It means that for doctors and health experts, protecting your assets is absolutely essential. It can only take one lawsuit to have devastating result to your wealth.

Is Insurance Enough?

Insurance is an essential part of business for all professionals and is more substantial to those in the medical profession than most other professions. At the very least medical professionals should have basic and efficient insurance. This is usually compulsory for medical professionals.

If a medical professional owns property, they should have building and contents insurance. They should also have public liability, cyber attack, business and medical indemnity insurance. But, is just having insurance enough?

Insurance companies have an obligation to generate profits for their shareholders, and unfortunately settling claims does not always serve this purpose. This regrettably means other measures need to be put in place to have sufficient and effective protection over assets. This is where the Service Trust comes into play.

Trust the Trust

When a medical professional owns their medical practice, their name is usually tied to their Medicare number; thus, their business is under their name. However, their assets outside of their business should be held under someone else’s name – spouse, child, sibling, etc. This is where you split the risk and the assets – the person with the risk should not hold the assets.

The next step for a medical professional is to establish a Service Trust, lessening future risk and allowing for the efficient system to pay staff members and rent premises. The service fee – typically 30-40% of the Doctors billings – produces profit for the trust. This can then be distributed to family, or other beneficiaries. The ATO have benchmarks for Service Fees. Anything outside of the benchmark will need to be justified to the ATO under an audit.

If a medical professional is looking to acquire a property, it is wise to set up a property trust with a corporate trustee. However, the medical professional should make his/her spouse (or another trusted person) the director of the trustee company, and the sole named beneficiary. This allows for assets to be protected under the medical professional’s benefactor’s name in the case of an unfortunate event.

Only for Steady Relationships

In most cases, assets are owned in the names of both parties in a marriage. However, for medical professionals, it is highly recommended to keep assets, especially real estate, in the spouse’s name. If the medical professional and his/her spouse both can attest that their property is their primary residence, then it will be capital gains exempt.

Now you can see why it is so important that medical professionals keep their assets in their spouse’s (or other deeply trusted person) name, and not their own.

Nonetheless, although highly recommended, the stability of the relationship will really decide whether this method is effective or not.

It’s vital to seek personalised advice about Service Trusts and asset protection. OnPoint Advisory specialises in accounting, tax and financial advice for medical professionals. Contact us now for a no obligations discussion about your needs.

business, strategy

Small Business Strategic Plan

By admin on

January 14, 2019

- business, strategy

In this article, OnPoint Advisory Gold Coast Business Accountants discuss what a Small Business Strategic Plan is and how it is used within a business.

A strategic plan can provide a map to help your business achieve specific goals and will increase your chances of success in meeting you objectives on time and budget.

WHAT IS A STRATEGIC PLAN?

A Strategic Plan for a business is the process of defining a strategy so the business can achieve specific goals and objectives.

A Strategic Plan can be utilised for large scale ideas, such as planning for business growth over several years.

A Strategic Plan can also be used on a more micro level, such as developing a marketing plan or strategies for a specific department within the business.

Strategy is different from planning. Strategy looks at why certain steps should be taken, whereas a plan outlines how to enact those steps.

Strategic planning brings these ideas together to determine the best possible course of action.

The purpose of strategic planning is to provide a thoughtful approach to obtaining the objectives based on an analysis of both internal and external factors affecting an business.

Benefits of Strategic Planning

There are benefits of strategic planning, which including the following:

Bring into line the goals of a department with the larger business goals;
Provide clear communication to team members, stakeholders, and / or clients;
Clearly state the vision and mission of the business;
Provide clarity on how to deal with internal or environmental variations.

Parts of a Strategic Plan

The best way to see a strategic plan is that it helps outline how you get from where you are now to where you want to be in the future.

Numerous factors are taken into account in order to devise an effective plan.

Here are some of the elements often included in a strategic plan.

– Introduction: The introduction should briefly describe why the strategic plan was developed and for what time period.

– Background: This section may provide information about the business or you could use this for a brief business statement to describe your business.

– Structure:Include this information if it’s relevant to evaluate how your business operates and it is structured.

– Vision: A vision statement should briefly describe what a company wants to achieve or become.

– Values:These are the principles that an business stands for.

– Mission Statement: A mission statement describes the purpose of a business. This is different from a vision statement because it is not a projected goal for the future.

– Problem Statement: Some plans include a problem statement, which is used to outline key issues that need to be addressed.

– SWOT Analysis: A SWOT analysis provides the foundation for developing a strategy plan by examining the strengths and weaknesses within and outside the business.

– Goals: Goals should be liked to KPI’s and broken down into steps, and the action plan for each goal should indicate who is responsible for implementing the strategy, a timeline for starting and ending the action, and how the outcome will be evaluated.

– Evaluation: Methods for evaluation should be spelled out in the strategic plan.

– Executive Summary: The final summary helps end users of the plan quickly understand your thoughts.

We have provided here a Strategic Plan Template for you to use.

If you would like to discuss your businesses Strategic Plan, or need assistance in developing one, please contact us today.

business, strategy

Ten Ideas to Maximize the Value of Your Business

By admin on

January 10, 2019

- business, strategy

In this article, OnPoint Advisory Gold Coast Business Accountants, will discuss ten ideas to maximise the value of your business.

Realizing the maximum value for a business when it sells is the goal of all business owners.

Businesses value can exist separately and apart from its owners. This occurs when there are processes, methods, products, property rights or anything else that allows the business to continue without its current owners.

The ten ideas below will give you a guide to help you see if you are on the right path:

1. Have a Stable Management Team

A business with a solid management team, allowing for important activities to operate autonomous of the owner, will command a higher price.

The stability and knowledge of the management team are an extremely important part of the valuation review by a potential buyer.

If most of the main relationships between the business and suppliers / customers, buyers will factor this risk into the valuation or the deal the proposed deal. Part of the proposed purchase price may become contingent on the owner staying with the business for a period to help continuing customer relationships as part of the hand over process.

2. Demonstrate Sustainability of Earnings

Revenue and earnings that have been steadily growing over several years, versus earnings that fluctuate dramatically, will improve the business valuation.

Year over year growth shows a solid business that is attracting new customers and/or market share. Big fluctuations in sales typically indicate that either the businesses products may be subject to outside factors, or the business has experienced other issues, which could indicate that management may not be stable.

It makes sense to have a written plan detailing future growth and how that growth will be achieved based on industry information, increased demand for the company’s products, new product lines, market plans and growth via acquisition.

3. Systems and Procedures

The amount of goodwill that a buyer is willing to include in the purchase price will be dependent upon systems and procedures.

A business must exist separate from the daily involvement of the business owner to create goodwill. If the owner is seldom away from the business for any length of time, buyers will question the strength of the procedures, systems, and the management team.

4. Maintain Excellent Financial Records

Poor financials are a concern for both buyers and lenders. Business Valuation will be based primarily upon the numbers and the more reliable the financial statements, the more chance they will hold up in due diligence.

5. Keep Personal Expenses Paid by the Business to a Minimum.

When the financials are clean with little “add backs” related to the business owner’s personal expenses, potential buyers and lenders have higher faith in the numbers.

6. Transition Planning

When a seller has a definite plan to “phase out” of the business over a period of time, a potential buyer will recognize that sound planning and thought has gone into the process.

Developing a transition plan will often generate excellent suggestions for improvement in management’s role in the everyday operations of the business. Many business owners should begin this process by outlining their job description, This will highlight functions that should be delegated more to their management.

7. Diversification

Having a concentration of customers is often a detriment to the value of a business. When the sale to any one customer accounts for a significant part of the sale for the business, the business will be valued down. If you were to lose this one customer, what impact will it have on the business? Working to diversify the customer base will result in a significant increase in the value of the business.

8. Solid Reputation

People looking to acquire a business are constantly searching for “industry leader”. These people now have a wealth of information and feedback about the business at their fingertips, thanks to a multitude of websites where customer can leave comments and feedback about the business.

9. Diversified Suppliers

A for having only a small concentration of customers can be a problem to a business, so can also having a limited number of suppliers. Many businesses buy from multiple sources just to manage the risk that if one supplier experiences a shortages or interruptions in supply, they have a fall back provider. “What happens if…” is a typical question a buyer may ask – and many sellers do not have a ready answer for that question.

10. Secured Premises

A business may or may not be dependent upon its location, but a buyer will not want to take the risk of moving the business right after the purchase. The business should have the right to remain in their current facility for at least 3 – 5 years through an existing lease, or ownership of the building. If the lease is about to expire, and the buyer will have to renegotiate the lease right after settlement, this situation creates uncertainty for the buyer, which will reduce the valuation. Lease options are an excellent method to remove this uncertainty, whereby the business has the right, but not the obligation to extend their lease beyond the current term.

If you want to learn more about how to improve your business value, contact us today.

business, strategy

De-risking Your Business

By admin on

January 7, 2019

- business, strategy

In the article, OnPoint Advisory Gold Coast Accountants, will discuss the some current trends in de-risking your business.

Business owners are becoming increasingly aware of more business risks they are becoming exposed to. More than just financial issues.

Reliance On One Person

Many Small Businesses are totally reliant on one or a hand full of key people who are vital to the running and survival of the business.

But what would happen to the business if something was to occur to these key staff?

The unexpected can occur, like death, illness or they just decide to move onto new ventures.

Will your business survive.

The first thing a business needs is a strategy and contingency plan for these key roles.

Businesses should, as part of this, consider:
– Process Documentation;
– Shareholders agreements, which include buy / sell agreements, if there are unrelated owners;
– Relevant Insurance Policies;
– Estate Planning.

Market Risk

Does your business rely on a few major clients to generate a majority of it’s income?

What would happen to your business if that client restructures and reduces the requirement to use your business? What if they went out of business themselves?

You need to look at extending your market reach, either by expanding your client base and doing a strategic review of your offerings to see if your key market is looking for new products or services you may be able to offer.

At the end of the day, the more you can de-risk your business, the more valuable your business can become.

You would need to have have the necessary processes in place for at least three years for the flow on effect to the valuations to show the full impact.

The sooner the process is started for any business the better you will be.

To discuss more ways you can de-risk your business, reach out to us for a free consultation.

business, strategy

Board Of Advice Program

By admin on

November 19, 2018

- business, strategy

As the business grows, owners seek out specialist advice on:

How to protect their business and all their assets,
Grow the business value and;
Maximise the value on sale of the business so they can achieve financial independence.

In order to provide support to business owners we offer a unique strategic Board of Advice Program service.

Our Board of Advice Program features:

o Valuing your business to determine its true value;

o Analysing and tracking your business profit and cash flow to budgets and targets;

o Comparing your business performance to financial and industry performance benchmarks;

o Regular meetings to:

o Track how your business in performing against its financial goals;

o Discuss any governance matters that need to be addressed and resolved to reduce your business risks;

o Manage strategic growth opportunities as they arise and address any operating matters that are affecting your business performance;

o Agree strategies and action plans that will make your business more profitable and valuable;

o Introduce a trusted team of experts where specialised advice is required;

o Periodically re-valuing your business to quantity the value created.

The objective of our Board of Advice Program is to provide an independent sounding board so enabling you to make informed decisions on how you can strategically grow and transition the value of your business.

We charge a fixed monthly fee for our Board of Advice Program to spread the cost of this service over a 12 month period.

Click below to request a meeting with one of our Board of Advice Program specialists.

[md_call_to_action call_to_action_title=”I Want To Know More?” call_to_action_heading_color=”rgb(255, 255, 255)” call_to_action_description=”Contact us to see how the Board of Advice Program can assist you and your business” call_to_action_description_color=”rgb(255, 254, 254)” call_to_action_heading=”h1″ call_to_action_background_type=”color_background” call_to_action_background_color=”rgb(37,37,37)” call_to_action_button_style=”animation” call_to_action_button_size=”standard” call_to_action_left_right_padding=”0″ call_to_action_button_text=”REACH OUT” call_to_action_button_icon_class=”icon-chevron-right” call_to_action_button_color=”rgb(255,255,255)” call_to_action_button_text_color=”#fff” call_to_action_button_bg_hover_color=”#9b9b9b” call_to_action_button_hover_color=”#FFF” call_to_action_button_url=”https://onpointadvisory.com.au/contact/” call_to_action_button_target=”_self” md_call_to_action_animation_type=”fade” md_call_to_action_animation_speed=”200″ md_call_to_action_animation_delay=”0″ md_call_to_action_animation_position=”center” md_call_to_action_animation_show=”once” md_call_to_action_animation_easing=”Quart.easeInOut” md_call_to_action_parallax_speed=”1″][/md_call_to_action]