There is no doubting the success of franchising – especially in Australia, which is now the most franchised nation in the world on a per capita basis!

Australia currently has over 80,000 franchised outlets, employing 413,000 people! That’s a lot of Hamburger Bars, Mowing Operators and Pizza restaurants! You only need to have a look at a franchise directory to see the huge range of businesses you can buy into.

There is no doubting the benefits that can be gained  from entering into a franchise arrangement, but there may be alternatives. To be fair, the franchising sector has boomed by giving consumers what they want: better value and standardised products. Consumers know that if they go to Starbucks in Melbourne they will get exactly the same product as if they went to Starbucks in Brisbane.

I would argue however that there is now room for individualism – for something that is not standardised. One only has to look at the success of the website NotOnTheHighStreet to understand that people want something different. This website specialises in giving a marketing advantage to those businesses who are different and who want to reach a larger target market.

From my year s of experience, there are only two thing that I am certain of – after a boom comes a bust and after a bust comes a boom! It may be that we are over franchised now and that it is time to think for ourselves again. It is true that franchised outlets have a lower failure rate than independently owned small enterprises – but the assistance of good advisers can help you through those dangerous early years .

Take care of paying big prices for a franchise – do your due diligence and search for value. No one ever made money by paying top price at the top of a boom!

If you would like to discuss this article or anything else about accounting, tax and business life, call Mike on 0401 631 904

Small business owners need to be aware of recent changes to the way the ATO calculates income in order to qualify for the co-contribution benefit.

For the 2011 financial year, the Federal Government will match contributions that individuals make to their super fund, as long as that individual meets the income test.

From 1st July 2010, an individual must earn less than $31,920 to qualify for the maximum co – contribution of $1,000. For every dollar earned over this threshold, the co-contribution reduces by 3.35 cents until it cuts out completely at the upper income threshold of $61,920.

What has changed is that reportable employer super contributions (ie those contributions above 9%) are included in earnings for the co-contribution benefit as is fringe benefits.

Small business owners need to consider their total income, as defined by the co-contribution benefit – when looking at the tax efficient way to extract money form their private businesses.

If you need to discuss these changes, please call Mike on 0401 631 904

If you have a rental property you may be interested in the services provided by Rent Savers. They provide a fixed fee rental management service for your rental properties. Go to their website Rent Savers and use their calculator to see how much you can save by using their services.

For Accounting advice, call Mike Harding on 0401 631 904