All businesses face the necessity and reality of expenses. However, when was the last time you reviewed the expenses in your Management Letting Rights business (MLR)?
Given that your income can often remain unchanged for long periods of time (unless you are subject to rapid fluctations in your letting pool), reducing your expenses is a quick and relatively easy way to increase your bottom line and put more money in your pocket.
Ways to reduce costs for your MLR
Expenses are always tricky as you must ensure that the reduction in expenditure does not compromise service or quality. However savings can often be made.
Start by looking at your regular and fixed outgoings:
- Can trade agreements be negotiated?
- Can you buy in bulk and save?
- Are you buying the best, cheapest products?
- Will your suppliers provide you with special rates for exclusivity and regular work?
- Can you benefit from off-peak rates?
- Make sure you review your outgoings regularly while keeping your standards and reputation high
Generating tax efficiencies for your MLR
Another area to look at when reviewing your expenses is your current tax situation.
“Am I Paying Too Much Tax?” is a common and valid question in the market. For our clients we would typically seek to generate tax efficiencies by analysing:
- Your tax rate
- The tax situation of your spouse (especially if they do not work)
- If your children are under or over 18 years of age
- Your family income structure
- Where gearing is applied and if it is applied to the right assets*
- Your superannuation, if it is being used correctly, salary sacrificing and spouse splitting
- Insurance premiums in relation to your family structure and how / where they are being paid
- How FBT is being used and the efficiency of GST, payroll tax and the payment of dividends
*The focus can often be on negative gearing to create tax efficiencies. However, the trade-off for negative gearing is less robust asset protection.
Talk to Archer Gowland for a through review of your financial situation to identify opportunities for tax efficiencies.
Want more information on how you can increase the profitability of your management rights business?
Instantly download the FREE Archer Gowland Ebook (below) "Increasing the Profitability of Your Management Rights Business". In this guide you will find a list of key success factors, ways to make more money and how to prepare your MLR for sale.
You are also invited to contact Scott Wicks from Archer Gowland on 07 3002 2699 for a free information session regarding your MLR business.
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