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Cheating in business happens more than we like to realise.
Trust in business is the foundation upon which successful partnerships are built. Without trust, a business partnership is like a house of cards that is vulnerable to collapse at any moment. As a business owner, it is crucial to understand the significance of trust. Cheating in business has detrimental consequences when your business partner isn’t on doing the right thing!
In business, we see Trust in business as believing that your partner will act in your best interest with integrity and honesty. It means relying on their actions and knowing that they will follow through on their commitments. It’s a partnership like a marriage.
When you suspect that your business partner is cheating you and your business! It’s time to act! Recognizing the signs of potential cheating or betrayal is crucial in protecting your business, your ownership share, and profits and preserving your own well-being.
When things are wrong at worst, It may indicate that the business relationship is over. You will need to determine the extent of business cheating and organise a business exit plan.
Warning signs that indicate that things are not right include sudden changes in behaviors or attitude. Your business partner may have unexplained secretive actions, excessive control or manipulation, frequent and unexplained financial discrepancies. There also be a lack of transparency or accountability.
If you notice any of these signs, addressing them promptly and openly is important. Ignoring these red flags can damage your business and personal life irreparably.
You might be aware why things are right such, but leads people to undertake to cheat against you maybe reasons such as:
+ A feeling of being undervalued.
+ Greed
+ Marriage and other personal problems
+ Addiction such as gambling or drug and need to make extra.
+ Other influences such as offers of a better deal.
Trust your instincts and gather evidence before confronting your partner about your suspicions. It then means you can have a clear, evidence-based conversation rather than relying purely on emotions or assumptions.
Be diligent and watch for hidden business relationships.
Discovering that your partner is working with competitors or starting side businesses without your knowledge can be common for those looking at going out alone.
· The decline in business performance: A sudden drop in business performance without any valid explanation could signify mismanagement or unethical practices.
· Lack of commitment or interest: If your partner appears to be less involved or engaged in the business, it may indicate that their attention is focused elsewhere.
· Unavailability or avoidance: Difficulty reaching your partner or constant avoidance of meetings and discussions might indicate they are hiding something.
Detecting cheating or fraud in a partnership requires a combination of vigilance, attention to detail, and a proactive approach.
– Regular financial review of the records may uncover discrepancies or irregularities.
– Monitoring cash flows, expenses, and financial records is essential to detect any signs of embezzlement or misappropriation of funds.
– Implementing robust internal controls, such as segregation of duties and regular reconciliations, can deter fraudulent activities.
– Understanding all aspects of your business, not just your area of control
– Be curious and ask questions.
Do you have open lines of communication with your partner? These should include regularly discussing the state of the business, sharing financial information. You must ensure transparency which can help identify any inconsistencies or discrepancies. Being vigilant about changes in behavior or attitude by conducting background checks on potential partners can also provide valuable insights into their integrity and trustworthiness.
If your business partner stops talking about their life outside of business, it could be a sign they are becoming secretive.
Cheating or betrayal in a business partnership can have severe consequences for your business, both financially and emotionally. It can lead to financial losses, reputational damage, and the erosion of client trust. The fallout from a cheating partner can disrupt operations. It will strain relationships with employees, suppliers, and customers, and even result in legal battles. The emotional toll of betrayal can be equally devastating, causing stress, anxiety, and a loss of confidence in future partnerships.
The impact of cheating extends beyond the immediate fallout. It can create a culture of mistrust within your organization and make attracting and retaining talented employees and clients more challenging. Rebuilding trust after a betrayal takes time, effort, and a commitment to change. It requires acknowledging the pain caused, taking responsibility for one’s actions, and implementing measures to prevent a recurrence.
Preventing cheating or betrayal in future partnerships starts with due diligence and careful partner selection. Thoroughly vetting potential partners, conducting background checks, and seeking references can help identify any red flags or warning signs. Choosing partners who share your values, have a track record of integrity, and are committed to open and transparent communication is essential.
Establishing clear boundaries from the outset and a robust shareholders agreement are crucial in preventing cheating or betrayal. This includes defining roles and responsibilities, setting up internal controls, and regularly reviewing and discussing the state of the business. Implementing checks and balances, such as regular audits, can deter fraudulent activities and provide peace of mind for both partners.
Communication and transparency are the cornerstones of maintaining trust in a business partnership. Regular and open communication allows for sharing of information, ideas, and concerns. It fosters a collaborative environment where both partners feel heard and valued. Transparent communication involves being honest and forthcoming about the state of the business, financial matters, and any challenges or concerns that may arise.
Transparency also extends to decision-making processes. Ensure that both partners have an equal say and are informed about important decisions in the business. This includes sharing financial information, including revenue, expenses, and profitability, to build a shared understanding and ensure accountability. By fostering an open communication and transparency culture, partners can build trust and strengthen their partnerships over time.
Before pursuing legal action, it is important to gather evidence and document any instances of cheating or fraud. This may include financial records, emails, contracts, or witness statements. Presenting a strong case will increase the likelihood of a favorable outcome and hold the offending party accountable for their actions. Legal action should be considered as a last resort after all other avenues of resolution have been exhausted.
Addressing cheating or fraud in a partnership can be emotionally and legally complex. Professional help can also provide an objective perspective and help navigate the legal aspects of addressing cheating or fraud. Advisers can offer insights into the best course of action, potential risks, and the likelihood of success.
Professionals can see things that may not be obvious to you. Engaging the services of professionals with expertise in business partnership issues early can greatly assist in achieving a fair and satisfactory resolution.
Protect your business and partnership by prioritizing trust and vigilance. Regularly communicate with your partner, If you suspect your business partner of cheating or unethical behaviour, addressing your concerns openly and honestly is crucial. In many cases, denials will be the first reaction Consider discussing the matter with them directly but have your ducks lined up so that you understand that if your business partner has been undertaking actions that are detrimental to you, you have a plan as to what to do next.
Invariably cheating in a partnership is irreparable, and a solid exit plan for you to salvage any undermining or financial loss is imperative for a successful outcome. As a small business accountant we can assist you in developing a plan with an outcome that protects your interests and sanity.
#cheating #trustinbusiness #businessowners #exitplanning #businessdisputes
Should I pay a dividend from my company? When it comes to running a successful business, one of the most important decisions you’ll have to make is what to do with your profits. Should you pay a dividend to yourself as the business owner, or reinvest the money back into the company? It’s a question that many business owners struggle with, and there’s no one-size-fits-all answer.
We argue that paying dividends is a great way to reward the owners.
Others believe that reinvesting profits is the key to long-term growth and success. In this article, we’ll explore the pros and cons of both options, so you can make an informed decision that’s right for your business.
First, let’s define what a dividend is. A dividend is a payment made by a company to its shareholders, usually in the form of cash or additional shares or allocated to the loan account. Dividends are paid out of a company’s profits and are distributed on a regular basis, such as quarterly or annually.
There are different types of dividends, such as regular dividends, and special dividends.
Regular dividends are the most common type and are paid out on a regular basis. Special dividends are a one-time payment made by the company, usually when the company has extra profits. Stock dividends are paid in the form of additional shares of stock instead of cash.
Now that we know what dividends are, let’s explore the advantages and disadvantages of paying dividends to shareholders.
One of the main advantages of paying dividends is that it can be a great way to reward you as the owner. Shareholders receive a share of the company’s profits, and this can help to attract new investors and retain existing ones.
Importantly paying dividends reduces Retained Earnings. This reduction in retained earnings for a small business helps :
One of the main disadvantages of paying dividends is that it can limit the company’s ability to reinvest in the business. When a company pays a dividend, it’s taking money out of the company that could be used to fund growth initiatives or invest in new projects. If the company doesn’t have enough cash to fund these initiatives, it may need to raise additional capital through debt or the owners lending money back
Another disadvantage of paying dividends is that it can create expectations among shareholders. If a company pays a dividend, shareholders may expect the company to continue paying dividends in the future.
Now, let’s explore the advantages and disadvantages of keeping profits in the company, rather than paying dividends.
One of the main advantages of keeping profits in the company is that it allows the company to reinvest in the business. By reinvesting profits, the company can fund growth initiatives, invest in new projects, and improve its products or services. This can help to increase the value of the company over time and attract new investors.
Keeping profits in the company can also help to reduce the company’s reliance on external financing. If the company has enough cash to fund its growth initiatives, it may not need to raise additional capital through debt or equity financing. This can help to reduce the company’s debt load and improve its financial health.
One of the main disadvantages of keeping profits in the company is that it can inhibit profit reward and extraction. If the company doesn’t pay a dividend, shareholders won’t receive a share of the profits in the short term.
As the owner this has 2 serious disadvantages
Another disadvantage of keeping profits in the company is that it can create excess cash that isn’t being used effectively. A business owner should have a clear plan for how to reinvest its profits. If not, it may be better to distribute the profits to shareholders in the form of a dividend.
Finally take profits as you go and dont leave it for someone else if something goes wrong ie liquidation or legal action . Paying out dividends is like passing the gate way of no return. Be careful though as declaring a dividend with poor trading can lead to insolvent trading!
Let’s look at some criteria for deciding which option is best for your business.
One important criterion for deciding whether to pay dividends or keep profits in the company is the financial health of the business. If the company is financially stable and has excess cash, it may be a good idea to pay a dividend. However, if the company is in a growth phase and needs to reinvest profits to fund growth initiatives, it may be better to keep the profits in the company.
Another important criterion is the company’s growth potential. If the company has a high growth potential, it may be better to reinvest profits in the business. Thereby funding growth. However, if the company doesn’t have many growth opportunities, it may be better to pay a dividend . Reward shareholders and extract the excess cash from the business.
Finally, it’s important to consider the preferences of the company’s shareholders. Some shareholders may prefer to receive a dividend, yet the other business owner may prefer to see the company reinvest profits in the business. It’s important to understand the preferences of the company’s shareholders and make a decision that’s in their best interests.
Look at the Franking account as a small business and see how this may impact your future tax liability personally. Remember declaring a franked dividend have credits attached. However, while tax is paid with the lowering of the company tax rate there may be top-up tax payable
Top-up tax is effectively the shortfall of tax that may be incurred in the event that a shareholder is on a higher tax rate ie tax credits typically for small business is @ 25% but you may have taxpayers on higher rates such as 32.5% and beyond
In conclusion, the decision to pay a dividend or keep profits in the company is a complex one that requires careful consideration of the company’s financial health, growth potential, and shareholder preferences. While paying dividends can be a great way to reward shareholders and attract new investors, reinvesting profits can be the key to long-term growth and success. Ultimately, the decision will depend on the unique circumstances of each business. By weighing the pros and cons of each option and considering the criteria outlined in this article, business owners can make an informed decision that’s right for their company.
Is your business sale ready for that next opportunity? Selling a business is a complex process, but it doesn’t have to be overwhelming. With the right strategies and preparation, you can maximize the value of your business and make it sale ready.
Selling a small business can be a daunting task, but with the right exit plan and growth strategies, you can make sure that you get the best deal possible. Retirement may seem like a distant goal, but with careful planning and the right resources, it can become a reality.
Let’s explore how to get your small business sale ready by understanding the basics of exit planning, growth strategies, and retirement options. With this knowledge, you can start your exit plan strategy today.
Here are five steps to help you do just that. By following these steps, you will be able to increase your business’s value and attract potential buyers with ease.
Being sale ready is an important step for businesses that are planning to enter the market. It involves preparing the company and its assets to be attractive to potential buyers. This includes creating a clear financial structure, developing a business plan, and ensuring that all legal items are met. It also means having an understanding of the company’s value. But where you may have an opportunity to improve on that value before going to the market. You need a good understanding of the business value and being able to communicate it effectively to potential buyers. Being sale ready is essential for businesses that want to maximize their return on investment. Ultimately it also ensures a successful sale transaction.
Financial analysis is an important part of any business strategy. It helps identify areas of opportunity and improvement to make the most of available resources. By analyzing your current financials, it is possible to identify areas where changes can be made . This can maximize profits and look at reduce costs. This Analysis also helps measure the performance of the company in terms of its financial health.
We offer a ValueBuilder Asssessment that can provide valuable insights into potential future strategies to work on your business value.
Keeping your internal processes up to date is essential for any business. It helps ensure that your team is working efficiently and effectively and that tasks are completed on time. Regularly improving your internal processes can help you stay ahead of the competition, save money, and improve customer satisfaction. In this article, we will discuss the importance of reviewing and updating your internal processes, as well as some tips on how to do it effectively.
As businesses move towards digitization, investing in new technology and innovations is becoming increasingly important. Investing in the right technology can help businesses stay competitive and increase their productivity. It can also help them save time and money, as well as improve customer experience.
In this step, we will explore how businesses can use the latest technology and innovations to their advantage. We will look at different types of technologies. And how they can help businesses streamline their operations, automate tasks, and generate more revenue. We will also discuss how to evaluate the potential of new technologies before investing in them.
Building strong relationships with strategic partners is an essential part of any successful business. By forming strategic partnerships, businesses can leverage the resources and expertise of other organizations. The aim is to create more value for their customers. Through collaboration, businesses can gain access to new markets. From here thet can develop innovative products and services, and increase their competitive advantage in the marketplace. Strategic partnerships also provide an opportunity for businesses to share knowledge and expertise, helping them stay ahead of the competition.
There are many areas in which you can improve your business to make it sale ready. We offer you the opportunity to complete a detailed review of your business. Let us help you find those hidden gems. You can undertake a free Valuebuilder assessment here,
Being sale-ready means you can be ready to for any potential offers and be confident in selling at the maximum value achievable. This is called business freedom and allows you to be ready for Mr. Right who will love your business as much as you do.
The last 2 years have highlighted major issues for small businesses and cash flow is one on top of the list.
Small businesses have been plagued by closures and staff absenteeism due to Covid. This can account for why some businesses’ cash flow is facing an uphill battle in recovery. But there is also a fundament lack of planning by some small businesses. Not knowing where you going is like a hose that you turn on it flicks and turns and you have no control.
Typically when cash flow impacts things blow out. Our friendly ATO becomes the bank of last resort. Changes in Debt reporting on CRA reports of tax debt may make it harder for some small businesses to recover. It’s a tool the ATO now can use to be recognised as a Creditor in the public domain like any other supplier. Don’t ignore the ATO as they won’t don’t like taxpayers that don’t engage with them. Better to open up to them about your situation than ignore them and shovel your way out of a hole later on.
Nether the less positive cash flow is an opportunity that every business can undertake.
Don’t be like an emu with its head in the sand. Take a positive stand. Start with predicting when the cash will come in. Fundamentally 80% of the hard work is done if you know that the cash is coming in the door. Struggling to predict cash in the door . Start with Sales Budget . Look at last year’s monthly turnover and then replicate that into the coming year. Then don’t forget to invoice your customer. It’s surprising how many people forget or delay the invoicing process
When it comes to costs, slash where appropriate but don’t slash costs that are fundamental to the business or costs that help you make money. As a small business accountant Gartly Advisory can help you.
When you’ve worked out your budget put it straight into your cloud software and each month see if the actuals are close to or better than what you predicted. So when the cash starts rolling in remember the golden goose 10% for the ATO, 10% for investment and 10% for you.
Brighton (3186) accountants are here to help based in Ormond!
Gartly Advisory are Accountants based in Ormond, Melbourne. While we are not based in Brighton 3186, many of our clients are!
You need a professional Chartered Accountants group that will offer you a professional quality service to assist you and your business to grow. Our clients are based all around Melbourne and we have a great selection of clients based in Brighton. Also, we have clients located in the nearby Bayside suburbs.
Clients love our service because the team at Gartly Advisory ensures that we provide advice and knowledge that small business clients can act on!
It’s true we are not based in Bay Street or in Brighton but we are not far away. Our clients love the easy parking and hot coffee. Gartly Advisory has a team of a number of professionals and the firm has been in operation almost 20 years helping many small businesses.
Geoff loves swimming and loves going down to Brighton Bathes for a quick dip in summer. Talk to us about your small business needs and see if we can help you on your business journey.
When you need a Small business accountant who can provide you with advice that you can act on, talk to Gartly advisory
Gartly Advisory is a passionate small business accountant. We help the businesses that grow and provide you with timely information to work fast in this challenging environment.
Taking a proactive approach to your needs, we can work with you to help you meet your taxation and business advice needs
Our team can help you make sure your accounting system runs like a racing car, ready for the following formula one.
Our hands-on approach can look under the bonnet for any of the popular accounting packages such as XERO, MYOB, Quickbooks, and any other program for that matter. In addition, we encourage our clients to ensure their records are accurate so timely decisions can be made. The moving parts of small business, you the business owner and having a trusted business adviser
Running a small business, big or small, can be taxing and sometimes lonely. You will need the support of a Chartered Accountant to help you work through the maze of situations that confront you as a small business owner.
We are here for you and help many small business owners make profitable decisions, reinforce that you are doing things right or be a second set of eyes to help you find a way forward
We use data analysis to help you make your next move to make an informed decision. We also encourage our clients to plan and explore what their business can deliver in value and freedom.
Please book an appointment with Geoff Gartly and his team
We are one of the best small business tax advisers and accountants based in Melbourne
We’re always happy to discuss your needs and your business objectives Call (03) 9597 99667