The following information provides owners, partners and directors of professional services firms (including legal, architectural, engineering, financial services, information technology, management consultancies and human resource firms) with an update on economic predictions in Australia during the 2015 - 2016 financial year.
In Australia in 2015 ...
- Commodities prices have fallen and slower growth in China has reduced demand
- Consumption is continuing to grow at below industry pace meaning Australian consumers are not spending
- There is modest growth in non-mining expenditure
- Non-residential building approvals remain relatively low in trend terms and demand for commercial property remains relatively weak
However (some good news) ...
- Some growth will be seen as LNG exports grow in demand
- Interest rate cuts will also spur on some growth – a policy action that was required in response to weaker wages growth, commodity prices, confidence and currency
What does this mean for professional services firms?
- Professional services firms will need to seek alternative income streams
- Firms are under pressure to outsource "general" work to keep prices down
- New client opportunities will be reduced - therefore look at ways to cross-sell products across your firm
- Happy clients buy more so look at ways to delight your existing client base. Take the time to research your clients' situation and industry to identify ways you can increase your support
- Continue to more towards "pricing" instead of "billing". Have a proper conversation about pricing at the start of the project and keep clients informed on the way through
- Seek progress payments to keep cash flow moving and to avoid end of project write-downs
- Offer products based on value not hourly rate
What does this mean for high net worth professionals?
- Make your income and investments work harder for you
- Ensure you have the best tax efficiencies possible in place
- Plan for the future
Want more information on how you can increase your wealth and protect your assets?
Instantly download the FREE Archer Gowland Guide (below) "Wealth Creation to Fund Your Ideal Lifestyle - A FREE Guide for Partners of Professional Services Firms". We provide an indication of how much you will need at retirement, the changes in ATO interpretation of partner remuneration, how to generate tax efficiencies, market opportunities, a self-assessment of your financial situation and how to establish your own personal wealth plan.
You are also welcome to contact Ian Walker from Archer Gowland on 07 3002 2699 for a free and confidential discussion regarding your personal situation.
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