Mature Businesses


Often after building an enterprise up it gets to a point where it matures in the market that it is serving and profitability approaches maximisation. Often at this point the business assets are maximised and the cash flow is used to pay down debt and accumulate more assets outside of the business. Minimising tax, accumulating assets, protecting assets and maintaining the business are often key concerns. Often at this point, the business owner’s thoughts may turn to succession planning. Assistance that many businesses will need in this phase could be as discussed here.

Taxation Compliance

Completion of statutory and compliance income tax returns remains an onerous and standard requirement during the maturity stage.

Income Tax Minimisation Advice

Advice on how to minimise the impact of taxation on trading profits through the year and particularly before the end of the financial year in the April to June period is essential to have some control over the incidence of year end tax liabilities.

Capital Gains Taxation Minimisation Advice

The impact of decision to sell or purchase capital assets that might incur a capital gain tax liability is of special importance. It is essential that you seek advice on these transactions. Also income tax can give rise to unexpected consequences. Having timely and competent advice on such issues can make a significant difference to your income tax liability at the end of the financial year.

Goods and Services Tax Advice

Assistance with the preparation of GST returns and advice on GST problems to ensure that you comply with the law and do not under or over pay your liabilities.

Business Structure

The form of legal entity through which you trade will have a significant impact on tax liabilities and the ability to share income with family members or other associated people or entities. It will also have an impact on what assets will be available to creditors in the case of adverse trading circumstances. The trading structure may be as sole trader, partnership, company, discretionary trust, unit trust, hybrid trust or limited partnership. Any of these entities may be used to hold asset, including the addition of a self managed super fund.

Business Plan

There are many different formats for a business plan. Whatever the format a business plan should include a situation analysis. A business plan would ideally consist of a mission statement, objectives in hard numbers, analysis of the product or service, marketing plan, critical success factors, management and human resources summary, production or operations strategy, innovation strategy, financial projections, sensitivity analysis, and contingency planning.

Strategic Plan

A strategic plan is an adjunct to the business plan with a more intensive analysis of the external environment and the internal environment created by the business. This analysis will often reveal the critical handful of key operations that the business must get right every time for it to continue to be successful.

Business Mentoring

It is not unusual in business that a quick five minute telephone call may save you from the consequences of making a poor decision. Being able to speak with someone with over thirty years business experience may save time, stress and money.

Management Meetings

Meetings with the owners on a quarterly or monthly basis to review the performance of the business as indicated by the actual profit and loss statements to budgeted profit and loss statements, review of cash flow information, review of financial analysis information with proposed management actions resulting from these reviews.

Asset Protection

During the maturity phase when significant assets have been accumulated often asset protection comes to the fore. Use of techniques such as the optimum ownership structure, assignment of credit loans, options over the family home and other assets, financial agreements pre-nuptial agreements, change trustees of trusts, ensure joint powers of appointment, binding nominations for superannuation beneficiary’s, review ownership of life insurance policies, floating charges secured by deed of guarantee and testamentary trusts. Management’s strategies with a regular review approach needs to be implemented to manage liability exposure.

Asset Accumulation

Commence building assets outside the business to accumulate wealth for the owners of the business. This asset accumulation program may involve business property purchase, other property purchase, and establishment of a self managed superannuation fund or investment in other assets.

Self Managed Superannuation Fund

A self managed superannuation fund is an ideal tax sheltered vehicle to use to accumulate assets for retirement. The range of investments is limited only by the investment strategy devised by the member/trustees. There are restrictions on some investments owned by the members. There is considerable compliance required by the Australian Taxation Office but if these rules are adhered to, the tax savings can be substantial.

Negative Gearing

May form part of the asset accumulation strategy. Real estate assets may be purchased using borrowed funds and by maximising the use of deductions from rental properties and capital works and assessment of capital growth prospects will enable a means of asset accumulation.


As part of the risk assessment, a business needs to consider acquiring insurance cover for workers compensation, fire and property, public liability, professional indemnity, product liability, plate glass, fidelity, machine breakdown, computer breakdown, water damage, cash in transit, goods in transit, inventory insurance, plant and equipment, building, motor vehicle comprehensive, motor vehicle third party property, loss of profits, tenants liability, key person, personal disability (sickness and accident), trauma, travel and life insurance.

Risk Management

Business risk management covers current wills, powers of attorney, enduring guardianships, partnership and shareholder agreements and funded business succession agreements.

Succession Planning

Succession planning has two main components. These are the transfer of management succession and the transfer of ownership succession. At least during the maturity phase potential management succession candidates need to be identified. The other key components are building and maintaining profits, retaining key people, and making yourself dispensable. The second component involves examination of options, family, business employees or third parties. It also involves establishing finances and valuations, due diligence of potential buyers and minimising disruption through a managed handover.

Wealth Management

The whole process of asset accumulation, portfolio management, risk management, succession planning and estate planning can be assessed and managed on an annual or more regular basis using the wealth management index assessment and reporting process. This report will indicate what areas require more attention and suggests the steps or strategies that need to be implemented to bring your plans back on track.


When the succession process has been commenced the question then arises, what is the business worth. A properly structured valuation will usually indicate the highest and lowest valuations based on the methods of valuation appropriate to the situation and the industry.

Due Diligence On Sale

There is a due diligence process that every business vendor needs to go through whether they are aware of doing it formally or informally. A solicitor has an obligation to perform certain due diligence procedures when advising on a sale, but advice on much of the business analysis is outside their legal obligations and competence to advise on. A proper due diligence review carried out in conjunction with your accountant, experienced in this process, will usually uncover most of the information you need to have available, so that you can make a considered decision on whether to sell a business to a particular purchaser or not. This analysis is the same if a farming business is being considered for sale.

Financial Statement Preparation

Financial statement preparation is a basic compliance issue for any business of substance. It is the document financial institutions require for lending purposes and purchasers require when assessing the purchase of a business. Reliable, credible and accurate financial statements, supported by well documented source records, are an essential requirement for a business.

Mature Business Checklists

The following is a collection of PDF files for download.
Asset Protection ChecklistFinancial Position Summary 2009Strategic Plan OutlineYour Investment Property Checklist