Connect Autumn- 2018

Financial news for tomorrow’s lifestyle


By John Osborne, Chairman

This Editorial is very much aimed at the small to medium size business (SME’s).  Small businesses are suffering from over compliance and government red tape and generally rising costs of running a business.

To succeed in business today it is simply impossible to work toward a productive and profitable future in business without spending more time planning.  As Michael Gerber (author of The E Myth) would say, working on your

business instead of working in it.

In business you need to have a roadmap for the future of your business if you are going to succeed in business.  Dr Steven Covey’s book “The 7 Habits of Highly Effective People”, he says that “ you don’t plan to fail, you simply fail to plan”.

The statistics on people going into business are alarming.  They indicate 80% of small businesses fail within the first five years of operation, and 20% of those 20% fail within the next five years and only 4% survive beyond the next ten years.

We have come to realise that small to medium size businesses need help if they are going to survive.  They need more than the yearly visit to their accountant at tax time.  It is vital if businesses are going to succeed and focus on change in their business, then it is vital that they prepare a business plan and set goals.

The business plan needs to set goals and the business owner needs to have a definite vision as to where they see their business currently and what they want their business to look like in the future. The secret in business is to build a business that is productive and profitable without you the owner necessarily working in the business all the time.  

We have found in coaching businesses that they suffer from three things. Time, money and their staff issues.  If you can solve these three area’s you have a business where you can have more time with your family, able to take time off to travel.  The business then is not relying solely on you.

To help businesses to succeed we now offer a full coaching service to our clients.

If you would like to receive a free business health check on your business, please call our office and make an appointment with our Business Coach.  

02 9970 3111

Visit our website and leave us a message



Things to Consider in Buying into a Retirement Village

It is important to get a lawyer or advisor to read the contract of the retirement village you are considering buying into. The retirement village operators are required by law to give you the contract and disclosure statement twenty-one days before you sign. Seek advice about the village you are considering. It is also a good idea to speak to the residents or family members of the residents. 

Be aware of the retirement village financial models, such as deferred management fees and other extra charges. Retirement village units cannot be bequeathed to the family members in a will, and many will not allow visitors to stay in the units. Further, the operators of the retirement village may force you to move out if you are deemed to be no longer able to care for yourself independently. It is vital that all people living within the unit are listed on the title, otherwise if both of the residents are not listed in the contract, the remaining person may be forced out of the unit if their partner dies, or is forced to leave the unit; for example, to go into a nursing home. 

Finally, if you do not understand something in the contract- do not sign it and seek legal advice. 

How Much Do You Need in Retirement? 

Consider Aged Care Costs. 

When calculating how much you need in retirement, you need to allow for aged care costs in your thinking. We are living longer. In about 1965, the average person retiring at sixty-five would live seven to eight years after retirement. Today, you need to factor in a possibility that you will live twenty to thirty years after retirement. In your later years, you may need residential care, or support in the home. 

The cost of aged care has been continually increasing, even faster than the rate of inflation. Due to the average person living longer, there is a good chance that we may need some sort of care as we get older. Whilst some government subsidies can help to reduce these costs, in order to obtain a higher level of care, some savings will help to improve the type of care and facilities you may want. 

It is important that you factor in the cost of aged care when calculating your retirement needs, otherwise you might find yourself running short in retirement. 

Lorena Millet





Changing the Way we Think about Business

When we started out in business we may have been the best Electrician, Plumber, Builder, mechanic, Accountant or Doctor in business in your area.  You may be the best Pastry Cook, Chef or Investment Adviser.  However, although you excel in your field of work, that doesn’t transform you into a great business owner.

So many people go into business because they excel in their chosen field, but do not have the skills or knowledge to become a great business person.

Being in business is a skill on its own, totally separate from the skill of your chosen trade or profession.

One of the worrying and sad facts is that 80% of small businesses fail in the first five years of operation.  Of the 205 of businesses that survive the first five years, 80% fail within the next five years of operation.  In fact, it gets down to about 4% to 6% of businesses going past the ten- year period.

It is this statistic that has made us see the need for coaching small to medium size businesses.

What is Coaching?

There is a big difference between consulting or business advising to coaching.

A consultant or business adviser is rather like an employee but is there to help the client meet their goals.  The focus of the coaches’ activity is to move the client towards the goals and outcomes they desire.  An Olympic Swimming Coach trains the Olympic swimmer.  The Coach walks up and down the pool encouraging the swimmer, giving instructions but doesn’t get in the pool and get wet.  The swimmer on their part must  be committed to their goals of improving their technique and their times.  They need to show up and do what is required by their coach to help them improve.

Coaching a business is no different.  The main reason clients take up coaches is usually for five reasons:

  1. They want to increase their personal and business income
  2. Increase their available time for their families and take a long- awaited holiday.
  3. Improve the client’s Team.  Help to focus their team to achieving greater productivity and wealth generating activities.
  4. Increase the client’s choices – when you are stuck in a rut life becomes a drain.
  5. Achieve the client’s desired results and goals




The Australian Economy is forecasted to have strong growth in 2018. Business investment, other than the housing and mining sectors, should show strong growth- with particular strength in the export markets. The labour market and good household incomes will help sustain private consumption. Wages are expected to pick up and an increase in inflation is set to occur gradually.

With inflation showing signs of growth, the Central Bank is forecasted to start raising the interest rates in the second half of 2018. The rising interest rates forecasted are starting to cool the housing market, which has been getting overheated.

The government’s fiscal policy is sound, in that they are helping to close the budget deficit.

The long period of low interest rates has fuelled house prices, especially in the larger city metropolitan areas. The rising house prices has created high mortgage borrowing and resulted in households being highly indebted. 

The positive side of the rising house prices has seen a population movement to regional and coastal areas along the Eastern shore line, both north and south.

World Economic Growth 

The International Monetary Fund (IMF) has raised its forecast for global growth to 3.7% for 2018. The Global Recovery has strengthened. Among the advanced economic growth in the third quarter of 2017, was higher than projected growth in Germany, Japan, Korea and the United States. Developing economies, such as Brazil, China and South Africa, showed stronger growth than expected in the third quarter of 2017. 

World Trade is showing good productivity increases in recent months, and a strong pickup in investment, particularly among the advanced economies. The release in the new smartphone models has resulted in an increase in manufacturing in Asia.

The stronger growth in 2017 is expected to flow into 2018 and 2019, with global growth possibly reaching 3.9% for both years. This is a 0.2% hike in comparison to the forecasted rate of 3.7%, and can be mostly attributed to the growth in advanced economies. 

The US tax reform and associated fiscal stimulates in recent times has raised US growth. This growth has helped countries close to the USA, such as Canada and Mexico.



It’s  Important to Systemise Your Business

To be successful in business you need to be able to deliver a high -quality product and service consistently.

If you are going to attract new business and keep your existing customers coming back, they need to be able to experience the same level of product or service each time they return.

To achieve this consistency in your product or service you need to have checklists and procedures in place.  The checklists help to maintain that consistency outlining step by step instructions to help staff remember the important information in each task they undertake.

It is not enough to just put the systems in place and produce a procedures manual.  Most procedures manuals end up on the shelf never to be looked at.  There needs to be ongoing training, coaching your staff and possibly your clients or customers to do things as outlined in the systems outlined in the procedures manual.

The Benefits of Systems and Procedures Manuals

As Michael Gerber in his book “The E-Myth”.  Business owners need to work on their businesses rather than in them.  Staff need to take ownership of the procedures and systems they are responsible for in the business.

So what Systems should I put in place?

The advantage of systemising your business with good systems is it allows you to run a profitable and productive business without you necessarily working in the day to day operations.  You can now work on the business instead of in it as Michael Gerber would say,

No matter what business you are in your aim should be to deliver a consistent and quality service to your customer.  Systemising each area of your business will achieve this.  However, it is important to train your staff to follow the systems and procedures and be consistent in delivering them.

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