Crowd-Sourced Funding Equity Raising is in the final launch stage before being available to Australian small/medium enterprises which could benefit by being able to raise capital from the public.
Now is the time for proactive accountants to identify clients who might be classified as a “Crowd-Sourced Funding Equity Raising Company”.
Crowd-Source Funding Equity Raising is brand-new in Australia; therefore, no accountancy business has an historical advantage in this market.
ASIC is currently finalising applications from businesses with Australian Financial Services Industry Licenses for the crowd-sourced funding endorsement so that those businesses can become Crowd-Sourced Funding Intermediaries.
ASIC has indicated that the initial group of Intermediaries should be known by the end of October 2017.
ASIC has released the forms for conversion of a proprietary limited company to a public company.
The ESS BIZTOOLS Crowd-Sourced Funding Product Package has been refreshed following the release of a number of regulatory guides by ASIC in the last few weeks.
The scene is set!
You might ask – where are the opportunities to create “new income streams” from other than compliance work?
The opportunities include:
Personal Property Securities Register
I have recently completed a series of workshops for the Entrepreneurs Program (Australian government). When I asked the directors and officers attending the workshops whether they knew anything about the Personal Property Securities Register, less than 5% indicated that they had heard about the PPSR.
When I enquired as to how many of the directors/officers had been contacted by their accountants to advise them of the significant risks that they were incurring by not registering customers on the Personal Property Securities Register, only 1 out of 120 attendees indicated that their accountant had contacted them to discuss the risks that their business was running by ignoring the Personal Property Securities Register.
This director indicated that he was very grateful for his accountant’s advice – because after their conversation his business was very aware of the potential risks if a company had a liquidator appointed and the liquidator issued a “preferential payment claim”.
WHY? Because SMEs love Government Grants, they are able to access services that in the normal course of events they might not have worried about, but when they can access these services for around a 50% discount, invariably many of them are far more interested.
The Governments of Australia, Federal, State and Territory Governments contribute about $3 billion each year into the fund that pays hundreds of Government grants.
Your clients are all contributing to that pool of money. Are they all gaining access to it? You are the trusted advisor for your clients. Most SMEs are looking to their accountants to keep them informed about Government grants.
We have developed a product – ESS BIZGRANTS, that facilitates you being able to advise your clients on the grants that are suitable to their particular businesses.
There is no doubt that quite a number of accountants around Australia are not interested in identifying grants. I really have no idea why they adopt this attitude, perhaps, they just want to remain preparing annual accounts and income tax returns for the rest of their careers. Unfortunately, that type of work involvement is not what most small/medium enterprises are looking for today.
SMEs are looking for accountants who will supply a broad range of services and there is no doubt in my mind, that the broader range of professional services includes being very proactive in identifying opportunities to obtain grants for your clients.
This is part of commercial advice – not just taxation advice and it is a great way of you being able to show to your clients that you care because you have offered them proactive advice and they have found out from you rather than hearing from their competitors who are ”gloating” because they have been awarded a particular Government grant.
Out of the hundreds of grants that are available, you could even specialise in some industries and indeed I heard some stories this week from one of Australia’s leading consultants to the accounting industry about a client of his in Western Australia who has secured a whole range of clients because all were from the same industry and he was able to become an expert in that industry and the grants that were available business operating in that industry. It is a great way to be able to diversify your services.
From my point of view it is preferable that the “someone” be an accountant.
Surveys conducted over the last fifteen years by MYOB, CCH and various other organisations have all identified that a significant majority of small/medium enterprise operators want to access services that will contribute to “adding value” to their businesses.
Most small/medium enterprise operators agree that taxation services whilst important do not equate to “adding value to their businesses”.
To assist accountants to meet the challenge of providing a broader range of commercial services ESS BIZTOOLS has utilised our knowledge of small/medium enterprises, accountancy businesses and listed public companies to develop a range of products to assist accountants to “move beyond taxation services”.
Accountants will benefit by utilising the “preparation/training” program to get the team ready. These eleven modules take partners and accountants and other team members through a range of activities to prepare the team to offer more than taxation services.
This training includes understanding the concept of:
• “Industry Champions”
• “Product Champions”
• Utilising the “SME Needs Analysis” to assist clients to identify the additional services that they would like to receive.
A tremendous opportunity for small/medium enterprises is about to occur in Australia whilst at the same time a potential new income stream will be available for accountants and business advisors who grasp the opportunity to assist their small medium enterprise clients to participate in this tremendous new opportunity for their businesses.
For accountants, an additional benefit is that your accountancy team members will be able to undertake “real accountants work”.
Crowd-Sourced Funding is the new product on the market that is causing significant excitement to small/medium enterprise operators.
Crowd-Sourced Funding is in its final rundown to the launch date on 29th of September 2017.
ASIC will be announcing in the near future the regulations that will relate to “propriety limited companies” being able to convert to “unlisted public companies”.
ASIC will also be finalising the regulations relating to the financial services industry licensees who have a special endorsement for Crowd-Source Funding who will be the “Intermediaries” under this program.
The Intermediaries will be responsible for ensuring that all of the legislative requirements have been attended to and that the company has been able to present adequate documentation to be able to have their company listed on the Intermediary’s website where investors will be able to visit for a period of up to ninety days to review the Offer Documents and to contemplate making an investment into the company.
On 29 September 2017, small/medium companies of any age, size or industry will be able to raise capital from “Retail Investors” as well as “Sophisticated Investors” of up to $5 million per annum.
Smaller companies that have a business with prospects will be able to present their vision and strategies to potential investors, so that they can raise capital to expand their businesses or reorganise their finances by paying off debts. Programs like “Shark Tank” have alerted the SME community that there is nothing wrong with growing companies seeking to raise capital from investors who may end up owing 25 to 40% of the company in exchange for much needed capital.
Whilst company directors need to be comfortable with this process and not be paranoid about owing 100% of the company – the benefits of raising capital can be immense – funding for the business to bring to market a new product, process or service – capital for business expansion – or saving interest by paying out “family/friends” loans or paying off credit cards that have been used to finance the business operations.
Most directors of small/medium companies will need assistance from accountants/business advisors to prepare the company for the capital raising process.
Accountants, are you adding value to company directors?
With Crowd-Sourced Funding Equity Raising, available from 29th September 2017, now is an appropriate time to consider how accountants can help mentor small/medium enterprises for the challenges that company directorship presents.
The Australian government expects thousands of companies to take the opportunity to raise capital from the public over the next twelve months.
In the first phase (at least) of Crowd-Sourced Funding Equity Raising, the eligible entities will be unlisted public companies with a requirement of three directors.
Whilst many small/medium enterprise operators are company directors, the vast majority of them have never had the responsibility of stewardship of money invested in their companies by people who many of them will not know.
Crowd-Sourced Funding Equity Raising and Early Stage Innovation Companies offer businesses tremendous opportunities to add value, but also brings a whole new group of directors potentially into the full glare of public and governmental scrutiny.
ASIC and other government agencies will be closely observing this significant opportunity being given to small business – too many mistakes and the legislation will undoubtedly be tightened to make the whole process far more difficult for smaller companies to raise capital.
What can accountants do to assist company directors, from a small/medium enterprise background, master this process? Offer support to directors by presenting seminars on the “Role of a Director in Small/Medium Business” including encouraging directors to develop an “elevator pitch” on their company’s ambitions and why investors should want to join them in their business.
Consultants’ training to deliver business advisory services is very important if you’re going to meet the challenge of being able to deliver outstanding new products and services for your clients ‘beyond taxation’.
There is an old saying – ‘There is no gain without pain’. This is very true when it comes to examining how you’re going to go about delivering business advisory services.
The subject that I want to talk to you about today is the training material that is available within the ESS BIZTOOLS’ Gold Package to assist you to prepare your team to be able to deliver a vast range of very interesting corporate and commercial products that your clients want you to produce for them.
To start the ‘journey beyond taxation’, our recommendation is that firstly you appoint a facilitator for this process. This could be a partner, a manager or an external consultant. The team that is going to be involved in the delivery of business advisory services; your accountants; your marketing people (if you have them) would then meet once a week for three months for 1-2 hours to work their way through the training material to prepare them for this challenge of performing, what is often called, ‘chief financial officer services’.
Where do we start? The first couple of modules are basic introduction; the team training introduction to your team as to what business advisory services is all about. They then move into leadership, because understanding leadership principles is very important for your accounting team as they undertake this wider range of professional responsibilities.
Part of this process will be the identification of industry “champions”. Those accountants within your team who are going to know a bit more about a particular industry that is one of the key industries of your clients.
Accountants, do you want to offer consultancy services? ESS BIZTOOLS’ Gold Package includes a range of courses for accountants relating to business advisory services for small/medium enterprises.
Small/medium enterprises are seeking consultants who can advise them on a range of commercial matters to assist those small/medium businesses to add value to their businesses. They’re not just seeking advice on income tax which they view as being a contribution to the Federal government. It doesn’t add value to their businesses.
The ESS BIZTOOLS’ Gold Package includes:
Accountants, how to create value-add for your clients is undoubtedly one of the biggest questions you need to answer at the beginning of the 2017/18 financial year.
We suggest that, in the first instance, you develop a plan; a plan for how you’re going to deliver business advisory services’ products to your clients. In the beginning, you’re going to have to concentrate on team training to get your team prepared for this new challenge; some new work beyond taxation compliance work.
Who are your clients? What industries do 80% of the clients’ fees that you receive belong to? What services do those industries require? What services have your clients asked you to perform for them over the years? Have you classified your clients into “A”, “B” and “C” class clients? “A” class clients are the ones that you should be able to rollout a wide range of value-adding services.
Let’s look at some of the services that you could supply to your clients to help them to add value to their businesses: