Happy New Year! I hope you had a good break and you’re back refreshed for a great 2018.
What better news could I bring to you but to be able to advise that crowd-sourced funding has finally started in Australia! Yes, the Australian Securities & Investments Commission has announced the first seven crowd-sourced funding intermediaries. Seven companies which will be able to be the ‘gatekeepers’ for this programme. They will be the organisations which will be able to check the documentation and then place the Crowd-Sourced Funding Offer Document onto their websites so the public can go and visit and read the material and, hopefully, invest.
The seven companies which have been appointed are:
It’s expected that there will be more announcements by ASIC over the next few weeks whereby they announce other companies appointed as intermediaries.
This means that private companies, which are prepared to convert to unlisted public companies, will be able to raise money from the public up to $5M, but also as low as $50,000, if that is what they want to do, every twelve months.
If accountants want to be involved in an exciting “new income stream” – now is the time to make sure that your team has been trained and reviews have been undertaken to identify clients who might be interested and that you are ready to roll out a fantastic service.
What I’m talking about is “Crowd Sourced Funding Equity Raising”!
Or you can potentially sit back and watch some of your clients being poached by other accounting or consulting firms that are aware of the tremendous opportunities that are going to be available to the Australian accounting/business consulting industries from the opportunities that Crowd Sourced Funding presents.
ESS BIZTOOLS has been supplying business advisory services products to accountants since 1997.
Each year since then we have released a range of new products to keep accountants abreast of the latest developments in the commercial market which relate to small/medium enterprises.
The latest product is “Crowd Sourced Funding”!
As accountancy businesses meet the challenges of going to the “next level”, accountancy firm leaders will need to refresh their leadership skills and knowledge to meet the ongoing challenges including:
staff recruitment and motivation
some competitors outsourcing work overseas
what sort of services do we supply to our clients e.g:
Assistance to clients wishing to raise capital as Crowd Sourced Funding Companies or Early Stage Innovation Companies
Chief Financial Officer services
Risk Management Reviews – Personal Property Securities Register/Insurance Covers
Superannuation Fund Audits
Applying for an Intermediary’s Licence for Crowd Sourced Funding Equity Raising Legislation
Other business advisory services
I’m referring to the Prime Minister’s announcement that he has instructed Australian government departments to ensure that invoices, submitted by small/medium enterprises to a government department, are paid within 20 calendar days.
That’s great news and I’m sure many small/medium enterprises will be monitoring their payment records to ensure that the government departments are paying them within the time stipulated by the Prime Minister.
The Prime Minister’s comment that small business should “not be used as a bank” is welcome news for SMEs.
It is an acknowledgement that the Australian government takes too long, or has not always paid its bills on time, which has hurt small businesses.
Equity crowdfunding is forecast to grow tenfold in just 5 years! It’s worth repeating that – equity crowdfunding is forecast to grow tenfold in just 5 years.
Australia is expected to follow crowd sourced funding trends in the United States and United Kingdom as these markets have already adopted crowd-sourced funding reforms which have overseen massive growth in capital raising via crowd-sourced funding platforms.
What an opportunity for accountants and business advisors to create a “new income stream” and, at the same time, assist SMEs that would like to raise capital to assist in the growth of their businesses!
Enable Funding (formerly ASSOB – Australian Small Scale Offering Board) has forecast that the new crowd-sourced funding capital raising market will soar from $119 million in 2016 (primarily S708 capital raising) to $1.5 billion in 2021, which would result in a tenfold increase. (www.enablefunding.com)
Why have I made this opening statement? Because innovation and change keep happening and no accounting firm will be able to avoid change. In fact, no industry can avoid change.
Think – video stores – only a little while ago they were everywhere – now hardly any!
There are disruptors everywhere:
outsourcing of processing work
machines performing more work
social media impact
big data and data analytics
For accountants prepared to meet the challenge, of proactively offering commercial solutions as well as taxation advice, there are many exciting opportunities available.
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.