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We welcome you to our September e-Bulletin

In this issue ...



Family business is big business

Did you know that more than half of the Australian workforce is employed in a family business?

Unfortunately, we fear that many family businesses will fail over the next decade due to the unprecedented challenges facing the sector.
Poor succession planning, lack of capital and governance issues combined with possibly the largest generational transition in history, will assume proportions that could destroy many businesses.

A 2013 survey found that while nearly half of Australian family businesses (worth approximately $1.5 trillion to the economy) intend to pass their business on to their children, less than 44 per cent had put a formal succession plan in place. This means that as aging baby-boomers are looking at exiting the firm, their businesses, families and heirs aren't ready to take over.

There are a few reasons for this:

1. Only a few businesses have family governance structures

Without family governance, businesses are open to the risk of internal discord and ownership issues down the line.

2. Business leaders don't know how to start the process

Leaving succession planning too late is very risky; a sudden death or unexpected illness can harm the business and compromise the family's financial health.

3. Businesses have limited access to capital for liquidity

With banks, private equity firms and other traditional sources of business financing reluctant to work with the complex family dynamics inherent in family businesses, liquidity events due to retirement or family member exits can put a serious strain on business cash flow and limit exit options.

4. Businesses fail to leverage their 'family effect'

While research shows that family businesses tend to outperform their nonfamily peers, many family firms don't harness the power of their 'family effect' – such as leveraging the trust clients have for family businesses. They miss the great opportunity presented by one of their greatest advantages.


5. Focus is on estate planning not management succession


Unfortunately, many business leaders make the mistake of confusing estate planning with succession planning. Estate planning is not management succession planning. If business leaders are really serious about ensuring the longevity of their businesses, it's critical that they begin training a successor and laying the foundation for the future success of the business.

                 Glenn Ingram


If you would like to find out more about starting the process of succession planning, phone us to discuss how we can help you.


We have the specialised knowledge needed to navigate the complexities of this challenging process.

Contact Glenn Ingram or your financial advisor on 03 5144 4566.


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Bill Gates' and Warren Buffett's favourite business book

Our market analyst Fred Strauss provides in insight to the reading habits of two of the most influential people of our time.

Bill Gates recently revealed his favourite business book is 'Business Adventures', a 1969 collection of essays written by journalist John Brooks which covers major turning points at some of the world's biggest companies, from Xerox to General Electric.


Bill Gates told The Wall Street Journal that he asked Warren Buffett back in 1991 what his favourite business book was, and Buffett responded by sending his personal copy of 'Business Adventures'.


According to Bill Gates, 'Brooks's work is a great reminder that the rules for running a strong business and creating value haven't changed. For one thing, there's an essential human factor in every business endeavour. It doesn't matter if you have a perfect product, production plan and marketing pitch; you'll still need the right people to lead and implement those plans'.


One of the Bill Gates' favourite case studies in 'Business Adventures' is the story of the Ford Edsel, which remains one of the most disastrous product launches in corporate history.


Ford's executives decided that they would use research to develop the perfect car for middle-class Americans. Its designers and marketers spent two years gathering suggestions from the public and testing ideas on focus groups. But after all that research, Ford's executives did what they wanted.


They also tried to please everyone instead of focusing the brand. Ford debuted the Edsel in 1957 in 18 variations, none of which seemed to target a particular audience. As for the name, the chairman of the board decided at the last minute that the car would be named after Henry Ford's son Edsel ...

Read the full article here.


Fred Strauss is an independent and highly regarded investment expert, and is part of our investment committee.

Fred keeps a close eye on international markets, and USA in particular.

If you would like to get more of Fred's insights or to discuss your individual investment strategy, contact our financial advisors on 03 5144 5207.

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Environmental Grants - 2014/15

Wellington Shire Council is now taking Expressions of Interest for the 2014/15 Environmental Grants Program.

Please see the attached media release and poster/flyer for more information regarding this opportunity for landholders in Wellington Shire to access assistance to undertake environmental projects on their land.

Works from applicants could include fencing and replanting near streams, rivers, wetlands and bushland; or creating wildlife corridors between patches of bushland. It requires farmers to match the grant funding dollar for dollar, which can be as in-kind labour, site preparation and maintenance. Works are to be completed within twelve months of approval.
Application forms and answers to some frequently asked questions can be accessed electronically via the Council website or in hard copy by visiting either of Council's Service Centres in Sale or Yarram.

For information contact Alan Hill at Wellington Shire on 1300 366 2403.

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How to dismiss in 5 simple steps

A word from David Bates, our specialist employee relations partner.

Dismissing someone is often one of the hardest things employers need to do. Not only do we need to think about how the employee is likely to react, we also need to make sure we don't expose our businesses to costly and time-consuming legal claims. This month, we take a look at how you can dismiss employees in full compliance with the Fair Work Act 2009, while also minimising the possibility of unpleasant claims.      

Step 1: Confirm the Minimum Employment Period

Employees are only protected from so-called 'unfair dismissal' if they have completed the applicable 'minimum employment period' at the time they're fired. The minimum employment period is determined by the size of your business:
  • If you have fewer than 15 employees your business is a 'small business' and the minimum employment period is 12 months.
  • If you have 15 or more employees, your business is not a small business and the minimum employment period is 6 months. 

Dismissing employees before they complete the minimum employment period is very important, and can save you thousands of dollars and countless hours dealing with subsequent claims for unfair dismissal.


For David's full article, including confirming whether you have a 'small business'; how to follow a fair process; what the applicable notice period is; and how to prepare for a claim, click here.          

To find out more about Workforce Guardian, jump onto their website - Workforce Guardian offers subscriptions to access expert advice and resources:

The FAQs in this article reflect the types of questions the WFG team of HR experts answer every day for its HR Essential and HR Professional subscribers. For more information about these services, call WFG on 1300 659 563.

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The new iPhone 6 and iPhone 6 Plus

On 9 September, Apple launched its new slimmer and faster iPhone 6 and the larger iPhone 6 Plus 'phablet' – a cross between a smartphone and a tablet.

If you are wondering what the fuss is about, read on.

iPhone 6

The iPhone 6 is 138.1 mm long, 67mm wide and 6.9mm thick (1.7mm slimmer than the iPhone 5) with 1.6 million pixels. The iPhone 6 is powered by an A8 chip with a 25% faster processing power and up to 50% faster graphics. This makes it up to 50% faster than the original iPhone.

The new phone boasts Wi-Fi calling - a new feature for making high-quality calls when mobile phone reception is poor – and a barometer that senses air pressure to measure relative elevation. This could come in use for fitness apps, providing the capability to determine if you are going up or down mountains.

Addressing complaints from users about the iPhone's battery life, Apple claims the iPhone 6 is 50% more energy efficient, giving users a 'higher sustained performance'.

The camera has also seen improvements, now including focus pixels to provide faster autofocus, a technology previously found only in professional DSLR cameras. Apple claims it also enables next-generation local tone mapping and advanced noise reduction.

The iPhone 6's video capabilities now include: an Apple-designed video encoder, which captures slow-motion video at 120 frames per second or 240 frames per second; and cinematic video stabilization, which steadies the video camera.

iPhone 6 Plus

The iPhone 6 Plus is a 'phablet' version of the iPhone, measuring 158.1mm in length, 77.8mm in width  and 7.1mm in thickness,  with a display of over 2 million pixels. Like the iPhone 6, the iPhone 6 Plus is powered by an A8 chip with a 25% faster processing power and up to 50% faster graphics, and it includes the same camera and video capabilities as the iPhone 6.


It looks like Apple has everything 'covered', also announcing the release of Apple branded iPhone 6 and iPhone 6 plus silicon and leather protector cases.




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And finally, a word from the editor ...

We are getting dangerously close to the run down to Christmas.  Time to check that list of new year's resolutions that you thought you had months to make a start on.

Among them should be making sure that you have done everything required to keep the ATO happy. We have never seen the ATO so cranky when it comes to overdue lodgement and it is clear that if you want to stay on their good side, you need to get things done on time.

And don't forget about planning for the future – as the Family Business article in this issue teaches us, change is inevitable and to make the most of it, a plan is necessary. There is no time like the present to start thinking about the future!

Enjoy finals fever this week - look forward to bringing you more next month.



Kurt Best
General Manager

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