Almost 10 years ago, I wrote a blog on hitting the business wall. I spoke about business and the rules changing at the speed of light back then, which given what we all went through with Covid seems absolutely laughable looking back. Ah, the halcyon days of 2012.

But it does give you pause for thought though.

What if, go with me here, 2022 (or FY22-23) is also a golden year that you’ll look back on by comparison to what’s to come. You might be thinking ‘well, that’s a cheery thought, thanks’. It’s not so much gloom and doom as you might think though. Rather it’s about being prepared and taking advantage of opportunities.

According to a recent piece of research by Xero, the boom in small business is expected to continue over the next 10 years with more than 3.5 million extra small businesses opening their doors. This is a continuation of the trend formed over the last few years (2019-21) with a 34% increase in business registrations during that time, to an all-time high of 300,000 registrations a year (predicted to be 400,000 a year by 2032).

My guess, having seen several economic up-swings and down-turns since I started my career as an accountant a while back, is that during Covid, people not only craved a feeling of greater certainty in an oddly uncertain time (where a lot of people were still earning a basic income aka JobKeeper) they also had more ‘free time’ which allowed them to stretch their wings and experiment with starting a business. This is the antithesis of what happened previously in that in severe economic downturns such as the GFC, people ran from business ownership toward the safety of more stable employment (you might remember interest rates were around 7-10% around that period too which might have something to do with people wanting ‘stable employment’. And if you think 10% is awful/unthinkable, there are many of us that remember interest rates hitting 17% in the early 90’s recession we had to have).

The most recent growth areas for business ownership? Almost everything, especially in fin-tech, edu-tech and ecommerce; the exceptions being retail and travel/tourism that were so badly hampered by Covid – but mark my words, they’ll stage a come back too – they might be in a different format from previously, but they’ll come good again because customers need them to.

So now there’s good news into the future for business owners and those servicing small business, back to being prepared and taking advantage of opportunities.

Xero suggested that there were several reasons driving the increase in small business registrations;

  • Job uncertainty due to lost jobs, hours, etc
  • People looking for greater life balance and job satisfaction
  • Digitalisation of work bringing about changes to the how and where we can work now

If you’ve recently started a business or you’ve been in business for a while, you’re probably already across the opportunity of life balance and job satisfaction and you’re likely already taking advantage of the ‘work from anywhere’ that running a small business can often allow.

However, there are several opportunities for small business owners to further enhance their businesses moving forward. Federal Government initiatives currently on offer include;

  1. $150K instant asset write off (ending in mid 2023) – claimable this year for any assets used/installed prior to June 30, 2022 (and if installed/used after that, the deduction is claimable in next year’s return). But you might not know that, if you’d previously claimed a loss, say due to a Covid downturn, you might be able to claim the tax-write off from previous years. Best talk to your accountant though first.
  2. A $120 tax deduction for every $100 of eligible training or technology investment up to a maximum $100K for each in the relevant tax year.

That having been said, it might pay you to be prepared to act sooner rather than later to make the most of these opportunities. You have until 30 June 2023 for technology investment boost and 30 June 2024 for the skills and training boost to make the most of them*.

According to the ATO, the technology boost allows you to deduct an additional 20 per cent of the cost incurred on business expenses and depreciating assets that support digital adoption, such as portable payment devices (think Square), cyber security systems or subscriptions to cloud based services (think Xero/MYOB, Google suite, LastPass, etc). A deeper look into the budget papers, also suggest that laptops and new generation websites will also be claimable.

There are also caveats for the skills and training boost to enhance your workforce’s digital skills in that the training must be conducted externally from your organisation, by an Australian registered training provider (RTOs and TEQSA) and is currently only for employees – ie: it doesn’t apply to sole traders.

Of course, if we can help you navigate the road ahead to best take advantage of the available opportunities for your business or provide some objective advice, you can call us on 6023 1700 or connect with us via Facebook or LinkedIn.

* A word of warning, these twin budget policies (outlined in point 2) haven’t been passed into legislation by the new government yet (having been introduced by the previous govt), so as always, seek professional advice first prior to embarking on any spending campaign.

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