Looking for a change in scenery, Quentin Haywood left his life on oil riggs in Perth where he spent weeks at a time away from his young family. Part of his change involved moving himself and his family to Brisbane where his extended family lived. He had heard of the growing demand for organic farming in both Australia and the Asia-Pacific region. Queensland Country Life newspaper published an article stating that organic agriculture was growing at 15.4% per year in an industry now worth over $1.72 billion. There was a shortage in the supply of chemical and GM-free foods including fruits, vegetables and grains, and these high demands were not being met.
Quentin saw this as an opportunity and transformed his life to take up farming, meeting both his personal and financial needs. He approached ATB Chartered Accountants in early 2014 with his vision: to grow and sell his own organic produce. Out of this, Sunup was born.
There were four main areas where ATB Chartered Accountants was able to provide assistance; business structuring, budgeting, software implementation, and reporting.
It became clear within the first meeting with the client that a standard business structure would be too restricting in meeting both his personal and business goals. ATB Chartered Accountants analysed all of the possible alternatives for the business structure of Sunup, before deciding on one which would allow the client the freedom and flexibility he required. There cannot be a ‘one size fits all’ approach to business structuring, due to the differing in each individuals needs and wants.
In order for Sunup to purchase all the tools and equipment necessary, a budget would need to be developed. The budget covered the period for the first 12 months, prior to any crops being planted.
It covered areas such as what expenses were allowed for, how to allocate limited funds and how much money would be spent before the first crop was planted. Simply, it showed the total funds used in the business start-up.
This budget allowed for a safety blanket, showing what could be afforded, and what alternatives could be used in this process. An issue which rose from this was that Quentin wanted to purchase a ute to use in his business. This would have caused a great deal of financial strain within the budget, and so, he opted to use the family car instead.
Budgets are a necessary tool for all businesses in order to make sure they don’t bite off more than they can chew. This allows room for unplanned and unforeseeable costs to be accounted for, aiding the process of starting up your own business.
As the client is operating their business from Brisbane while ATB is situated in Parramatta, it became clear that easy-to-use, reliable accounting software was required to ensure we were able to keep an eye on the business, making sure it remained compliant.
We provided the client training on our chosen software, Xero, and this was implemented shortly after. Xero provides real-time data on the business activity, allowing us to ensure from our offices that operations were running smoothly, and problems within the business were addressed before they become serious problems.
We also provide quarterly management to the client. These allow ATB and Sunup to be able to compare their budget with actual expenses. In doing so, adjustments in both the budget, and company expenditure, are made as required to better suit the circumstances. In addition to this discrepancies are identified and we were able to provide advice on how to correct these before they become problematic.
Regular reporting is crucial in both the start-up of a business, and the day-to-day operations, to ensure that everything is going as planned. This allowed Sunup to become aware of their business performance before the first crop was planted, allowing them to set reasonable and realistic goals for the future and most importantly of all to provide comfort with the knowledge that his business would provide him and his family a comfortable future.
This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.