Month

September 2023

Passion and Grow profits

How to Build a Business You Love, A Business With Purpose: 7 Steps To Help You Find Your Passion And Grow Profits

Creating a business you love is not something that can be done overnight. It requires a lot of introspection, creativity and planning. You can do many small things to ensure your business has a purpose and that it aligns with your values. The key lies in breaking the cycle of doing things just for the sake of it. Instead, create an atmosphere where you’re creating a business for the pure joy of it. The rewards will follow and grow with your passion. In this blog post, we will discuss seven practical steps you can take to help you find your passion, and grow with purpose as a business owner:

Assessing your values

Do you have love and passion for your business? When you first start to consider building a business, the first thing you should do is assess your values. This will help you identify the values that are important for your business, and for you as a person. There are many ways you can go about this; one way is to identify the core values that form the basis of your personality. You can also look at the core values of your industry, and choose those that feel most aligned with your values. Once you have identified your core values, you can also look at how they align with your business. This is important, as you want to ensure your business is aligned with your values.

Define your business’s purpose.

When assessing your values, you must consider why you do certain things. This will help you to decide on a purpose for your business. Purposes are important in business and can help businesses align with their core values, and best fit their customer’s needs. A business with a purpose will generally align more with customers’ needs and have a higher success rate.

Decide on a growth path for your company.

Another important step is deciding on the growth path for your business. This can help you to start aligning your actions to your values. It is important to start with a growth path that fits your values and is feasible. This can help you avoid wasting months or years of your life on a growth path that does not align with your values or business goals.

Develop the practices you can rely on

As you build your business, you will find that much of your time will be spent on practices. These practices can be for your staff members or your own business. Some of the practices you will find yourself investing a lot of your time in are: – Training. Businesses thrive on people who are fully trained and know how to do the job. You will need to invest time in training your staff members on best practices and make them fully aware of your values and purpose. – Managing expectations. In any business, people will have expectations. You must manage expectations by setting realistic expectations and aligning actions with values. –

Planning and forecasting. Businesses thrive on planning and forecasting for profit growth. Again, you will be on a constant planning and forecasting cycle if you get excited about your plan. Planning and forecasting will help you to make well-informed decisions and align your company’s growth path with its purpose. – Day-to-day operations. As an owner, you must monitor day-to-day operations and ensure your practices run smoothly. Practices must be well organized and managed. – Communication. Businesses thrive on communication and must ensure they communicate with their staff members and clients. Communication is a two-way process.

Build a team that reflects your philosophy.

Many small businesses struggle with hiring the right team members. This can be because they did not plan well for their company’s growth. They might not have planned for their hiring, or they might have hired the wrong people. Hiring a team that reflects your philosophy and values can help you avoid many of the struggles businesses face when hiring the right team members. It is important to note that you should hire for fit, and not just for skills. You should hire for values. This does not mean you should hire people with the same values as you, but it means you hire for a values fit. You can hire for values like passion, tenacity, creativity, etc. You can hire for less obvious values, like how people approach work. You can hire for values like high integrity or kindness.

Get out there and just do it!

Businesses thrive when profits grow when they have a purpose; you must align values. It is important to assess your values and those of the industry that you play in. This will help you identify the core values that are important to you and most aligned with your industry. When you have identified these values, you can start working towards creating a business with a purpose and a growth path aligned with these values. One of the practices that you can employ is building a team that reflects your philosophy. This will help you to avoid hiring team members who do not align with your philosophy and help you to get team members who reflect your philosophy.

SMSF property

SMSF property rules

Self-Managed Super Funds (SMSFs) allow individuals to take control of their retirement savings and invest in assets they have confidence will be right for their retirement strategy.

Property investment is a popular choice for many SMSF trustees. However, it’s crucial to understand the rules and regulations surrounding this investment strategy.

Understanding the rules

Let’s explore the golden SMSF property rules of holding property by your SMSF!


The Importance of your role as a Trustee of your SMSF

Before delving into the specifics of property investment, it’s essential to emphasise the importance of responsible SMSF management. As an SMSF trustee of your Fund, you have a fiduciary duty to act in the best interests of your members and beneficiaries. This is fundamental behind the SMSF property rules.


This means prioritising the maximisation of retirement savings as the sole purpose of your SMSF. All members in an SMSF need to be Trustees. They must understand the rules and regulations, and understanding your obligations is crucial to ensure compliance and protect your members’ financial well-being.

Common Property Investment Misunderstandings when it comes to SMSF property rules.

Investing property through an SMSF can be more complex than many trustees initially assume. T
To help you navigate this investment strategy successfully, let’s address some common property investment misunderstandings and provide valuable insights into the rules and regulations.
Location and careful planning is the key, but SMSF Rules Apply.


Selecting a property that has a return and can be sold when it is right is important. Buying and trying to borrow for an SMSF purchase in Humpy Doo won’t get Bank support. It also may be hard to sell down the track when it comes to realising assets for retirement. Property investment for retirement needs clear objectives, and using emotion and ideas of holiday thoughts is the wrong approach.


It’s important to note that the SMSF property rules and regulations significantly impact structuring the SMSF property purchase. While you may have extensive knowledge about property investment, you must familiarise yourself with the specific rules that apply to SMSFs.

The Superannuation Industry (Supervision) Act (SIS Act) governs how you, as a Trustee, can operate your SMSF. It’s crucial to understand the rules and regulations it entails. Interactions between different sections of the SIS Act can make navigating SMSF property investment complex.


Limitations on Property Ownership

When it comes to property ownership within an SMSF, certain limitations apply. If you get them wrong, it can be disastrous and costly. General rules you need to understand before committing to a property contract for your SMSF.


1. You cannot purchase a residential investment property owned by you, any related individuals, or any companies or trusts you, including any related individuals, control. It’s essential to be aware of this restriction and avoid any schemes or attempts to circumvent the rules.

The SIS Act includes an anti-avoidance provision that imposes significant fines and potential imprisonment for those caught trying to bypass the regulations.

2. You can buy a commercial property you own, but proper valuations etc. apply. Please seek our advice advice in this area.


3. You should never buy a residential property for an SMSF borrowing situation where there are two contracts i.e. one for the land and one for the build

What are the consequences of circumventing the SMSF property rules and regulations?

It could be costly to get it wrong. This could include fines, making your fund non-compliant or worse still trying and reverse the transaction.


Restrictions on Personal Use of SMSF-Owned Property


Note any property owned by your SMSF, including beach houses or apartments, etc. cannot be used by you or any of your relatives. Even renting the property to relatives at market rates is not permissible. Some attempt to circumvent the rules and this could lead to severe penalties. It’s essential to prioritise compliance and act responsibly to protect your SMSF and its members.


Limited Recourse Borrowing Arrangements (LRBAs) and Property Investment


LRBAs can be a valuable tool for funding property investments within an SMSF. You cannot Cross-collateralise SMSF properties. Therefore, this means multiple properties are used as security for a single loan. Each property needs to have its own bare trust and loan arrangement. It’s important to seek professional advice when considering LRBAs to ensure compliance with the regulations.


The Character of the Asset and LRBA Limitations


When using an LRBA to fund your SMSF property investment, it’s important to consider the character of the asset. This means the loan proceeds must only be used to acquire a single asset.
The fund cannot change the character of the asset while the loan is in place. I.e. cannot split the property or convert a property into a commercial space or enterprise.
.
Purchasing a property investment within an SMSF can be a complex undertaking. We offer advice as a Superannuation accountant, and as a licensed financial accountant in SMSF, we can help you make informed decisions. Plan your property purchase and ensure it is done correctly to meet your investment strategy and long-term retirement planning needs.

September 2023 – Client Newsletter

Our September Newsletter has some interesting reading, find out about:

  • Trademarks and intellectual property
  • Can I claim my caravan for business?
  • SMSFs being targeted by schemes
  • CGT discount – what is it?
  • Self Education deductions

Click here to download our September Newsletter

Contact us on 03 9597 9966 if you have any questions relating to matters raised in any of our Client Newsletters.