Q: Starting, growing, managing and leading a business is a tough gig. It's important we don't forget the lighter side of things, have a bit of fun so here's my 10 point accountability tool using the initial of my first name.
Partnerships – continue to build partnerships with people - you never know who could be or help create a new business opportunity.
Payment – if you're running a business, you're not guaranteed a paycheque each Friday. You need paying customers so respect and understand your own time management, systems, processes, profit margins and the value you offer.
Persistence – ain't that the truth. The key to persistence is being able to celebrate wins and enjoy the moment.
People – surround yourself with good people who believe in the business, the vision and prepared to go outside their comfort zone for themselves, the business and the team.
Plan – long and short term. Make Monday the day you plan for what you want to achieve the following week and see how many meeting you have scheduled. If the calendar is bare then you can’t expect to achieve any plans.
Play – play around with ideas and sales pitches for selling. It's not an exact science and yes you're a salesperson, we all are. Put an imaginary hat on and just play the role. Who wouldn't want to be an actor in a Hollywood blockbuster?
Poor me – you’ve only got a couple of minutes because people will stop listening. Keep the glass half full.
Process – what processes do you have in your business to ensure your customers have the best possible experience?
Procrastinate – Recently, I was working with a group of 10 self-employed people and they were asked to write down the one thing they would like to stop doing for their business to move forward. Everyone, 100% had written “stop procrastinating” What’s the Nike slogan?
Proud – be proud of what you do. I meet a guy a couple of weeks ago who just started his own I.T business. When I asked him what the business was he looked down at the ground and mumbled IT Services. If you aren’t proud and if you haven't got that imaginary hat on then why would people pay for your services or products?
There's mine, I’d love to hear yours. If your first name starts with a P, then feel free to put the hat on.
A: Keeping in line with the first initial theme, I think a successful business is built on the following foundations - sight, scope, shape, spend and sow.
Sight – without understanding your vision how can anyone expect to maintain their motivation which leads me to Scope.
Scope – without a true purpose around your vision most people cannot work hard without being rewarded because their purpose is not enough of a motivator - it’s that simple.
Shape – a business needs to be able to adapt to be able to take alternating steps that will propel them forward to their vision. It doesn’t matter if you take a different route as long as you end up at the right destination.
Spend – if you offer $100 worth of value you will only gain $100 worth of income, short-sightedness limits your cashflow. You may have real value to give but how do your prospective clients know that and how can they get to know your value when they have to commit to buy from you first? If you look at the majority of billionaires they started with a purpose backed by a free platform that provided exceptional value.
Sow – what you sow today you reap tomorrow. The more seeds you plant and the more time and effort you put in, the more opportunities you will have.
By investing in your vision and a true purpose, your value will increase along with your return on investment.
Should super be used to enter the property market?
As a millennial who has built wealth through investing in property I don't believe first home buyers should be able to access their super early to fund the deposit to purchase a property. I s ...
Q: Hi, I’d like to ask the industry experts on simplyaskit about their opinion on the discussion about first home buyers being able to tap into their superannuation as a means to come up with the deposit to buy their first home. Is it a good idea and should there be any conditions or restrictions to accessing their super?
A: Hi Sophie,
As a millennial who has built wealth through investing in property I don't believe first home buyers should be able to access their super early to fund the deposit to purchase a property.
I say this for many reasons, firstly super was introduced in Australia in the 1800s as an employee benefit scheme that was later revised to help the government cope with the ageing demographic which also saw the introduction of the Old Age Pension Act. Super enables people that have an inability to or are unable to save the financial support they need during their retirement. By releasing super to fund the deposit of a first home means that the very reason super was created is being diluted.
If a first home buyer wants to utilise their super to invest in property then they should do so by setting up a Self Managed Superannuation Fund (SMSF) so their retirement is financially protected.
Should they wish to purchase a property outside of super, there are plenty of strategies to enable them to do so. My concern is that there are two main reasons why first home owners cannot afford to purchase a property and fund the deposit and that comes down to lack of advice available in the market place and also a lack of discipline by first home buyers as they cannot delay gratification and therefore have an inability to save.
Now if they were to release their super, the majority of people that are first home buyers won't have enough to cover the deposit or the stamp duty and legal costs associated with purchasing. If the government really wanted to help first home buyers they would remove stamp duty and only charge land tax for investors that had multiple properties, as stamp duty concessions are pointless and often you have to spend a significantly greater amount of money to gain a very minimal rebate. I also firmly believe the government should be integrating into the education system knowledge around investing and budgeting, which is the first step to creating wealth, to help assist both current and future generations of first home buyers.
If a first home buyer were to purchase property within 20km's of Sydney CBD for under $700K for a one bedder, they would need approximately $35K for a 5% deposit and $26K stamp duty, $2K legals totalling $63K. I question how many first home buyers would have this amount in their superfund to begin with. These figures are much more achievable if the government where to remove stamp duty.
I believe that until the government does take a serious look at removing stamp duty then first home buyers also need to review their expectations and be realistic about what they can financially afford to buy as opposed to what they want to buy. They could also look at interstate or international options to increase their savings more rapidly to be able to invest back into the Sydney market and then in a couple of years into the home they really want.
Accessing their super won't remove the problem, it is an ineffective bandaid solution at best.
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Q: I have a total of $50k saved up and I'm a first home buyer looking to get into the property market. Is now a good time to buy in Sydney? And if not, where can you recommend I consider looking instead? Or should I just wait?
A: Hi Victoria,
Exciting to hear you're looking at buying your first place!
The first step would be to understand why you're investing and what you would like to achieve and then work backwards from there. The reason I say this is the area and the type of property and how you structure the loan will depend on how what you want to achieve from your investing.
For example if your goal (which can and will change over time) is to replace your salary of say $100K through investment properties then you would want to look at how many properties you need and in what area, ie. you would need 4 properties with a $500per week rent return.
Then you would also want to look at your timeline to pay off the debt against the property so you could retire from work if you wanted to.
If you have a short timeline then you may want to look at a major CBD like Sydney that has the population growth to support property prices increasing, as within 20kms of the Sydney CBD we cannot build property for how fast the population is growing and even if interest rates increase there will still be high demand to rent the investment properties you purchase.
You may also want to consider purchasing a property that needs renovation so that you can add value and increase the purchase price and therefore your equity.
A few things to consider above but the first step is really to understand what you personally want to achieve from investing and then find a property that matches your goal, not the other way around.
You should also consider speaking with a broker about how much you can borrow, they can give you a more accurate picture of this rather than using calculators on the internet as each bank has different internal policies.
If you were looking at buying in Sydney with $50K, you may want to look at an owner occupier loan and a 5% deposit and capitalise the LMI (lenders mortgage insurance - this is a standard fee the banks charge when the deposit is less than 20% of the purchase price of the property you are buying). Then after a month or two or less of the loan settling you can rent this out and make it an investment property which means you will be in a better position to build wealth with a tenant paying the majority of the expenses - this strategy will be dependant on your salary and how much you can afford to borrow.
I wouldn't over extend yourself at this point as owning a property can be expensive and you will want to ensure you can afford this in your own budget and not just relying on a banks borrowing calculator as these calculators don't accurately reflect the costs of owing a property such as the cost of maintenance, strata levies, council rates &c.
If you want a hand with what you should do, have a look at this app we're releasing soon, it's a guide to how to enter the property market and build your portfolio anywhere in the world from your smartphone. It also goes through the different strategies for investing in property and some key questions you should be asking yourself and the professionals you choose to work with... www.investwithsteph.com.
Q: I rent in Victoria, prior to moving in I had to pay a bond plus 6 weeks in advance. I want to give my 28 days notice to move out, do I need to continue to pay rent or should the 6 weeks that was paid in advance cover my rent for the next 28 days? Also should I be refunded the other 2 weeks that was paid?
A: Hi Nikki,
If your lease has expired or is about to expire then you should give your notice to vacate to your property manager in writing. They should send you a response and let you know where your rent is paid up to, if your rent is paid to your vacate date then there will be no need to continue to pay rent, if you have paid further than this date then under the standard terms of the residential tenancies act, they will need to refund addition money to you. The bond will be refund after the outgoing inspection. The refund of your bond in full is dependant on returning the property to the same standard you received the property in minus any reasonable wear and tear, to ensure you do this you would have been given an ingoing report at the time you leased the property.
Q: I have a business/app idea that would require capital to get it off the ground - what are the first steps go about funding and what would be needed on my end to ensure a positive outcome?
A: Hi Nicola,
If you have a business/app idea and are looking at capital to start the business the steps you would need to consider are as follows:
- a business plan will always go a long way however I firmly believe that there's a step before this that is more valuable to you and your business idea and that would be a lean canvas, this is where you can break down in one page the problem you are solving, why you are solving it, who are your target market (who out of this are your early adopters - the first people that will try your product before the early majority), how will you make money ie subscription model, referral agreements, selling your 'big data'. How will you market your app/brand? What are the estimated costs?
- The next step is looking at market validation, this can be done by interviewing a range of people inside and outside of your target market and early adopters and gauging their thoughts on your product.
- The next step is to work out how the market relates to your lean canvas and tweaking this if possible - this is best done by white boarding the user experience of your app ie your customer/user journey
- The next step is to build an MVP (minimum viable product) if you have the funds to do this, depending on the scope you can get a basic MVP put together from $500-$6,000 or at the very least you will want to get some design screens put together based off your user journey.
- The next step would be to get people to test your MVP and give you feedback
- Then make any changes if required.
- Then put together a pitch deck/Information Memorandum which will provide an in depth overview of the company/financials.
- Then approach VC firms or reach out to friends and family looking for small sums of money for an equity share in the company - this is your seed round of funding. You can look into sites like kickstarter as well.
Most investors in your IM will want to understand what the business does, why you started the business, some information on your background and experience, information on the industry you app/idea is in, where is the gap in the market, how does your app solve it, what traction/market research have you done, what are the costs involved for the next 12 months of your business (do not include a wage for yourself), what funding are you seeking or have you received, what is the equity stake for the investor, what is the company valued at, when will the investor see a return on their investment, what is the timeline for the business to make money and for the investor to see their return. What is the exit strategy for the investor ie IPO, sale, dividend structure, buy backs. You will also want to look into which grants apply to you and one which will be attractive to investors is the ESIC Grant, you can seek a private ruling for this from the ATO, you don't need an accountant to do this, it's basically submitting your IM to the ATO.
If you would like to chat further, let me know, I am an advisor and investor to some startups so happy to have an initial chat and see if I can guide you in the right direction for where you are at.