The Ruff Barn

The Task

Dacie, the owner of The Ruff Barn, a thriving doggy daycare business in Western Australia, initially started her venture as a hobby but quickly found success within 12 months of operation. Dacie realised the need to reassess her business structure and future goals as her business expanded rapidly. However, she faced challenges with her existing structure, which could result in a significant tax bill due to the booming nature of her business.

The Solution

We recognised the need for a more robust and tax-efficient structure, so we collaborated with Dacie to transition her business from a sole trader setup to a company. This involved establishing the company and setting up a family trust to hold shares, ensuring greater flexibility in distributing profits among beneficiaries.

Additionally, we implemented Xero accounting software and imported 12 months of data to analyse the business’s profit and loss, providing valuable insights into its operations. After setting up the new structure, we provided comprehensive training on Xero to empower Dacie to manage her finances effectively.

Off the back of this, we conducted wage modelling to determine the optimal amount for Dacie’s salary from the business. This strategic approach not only supported healthy cash flow for the business but also minimised tax liabilities through tax planning.

The Results

By transitioning to a company structure and establishing a family trust, Dacie gained greater control over her business finances while minimising tax obligations. Implementing Xero gave her real-time insights into her business operations, enabling informed decision-making. Furthermore, the wage modelling strategy ensured that Dacie received an optimal salary, balancing business cash flow and personal lifestyle needs while reducing the tax paid by the company.

Overall, the collaborative efforts between Dacie and our team resulted in a more resilient business structure, enhanced financial management capabilities, and optimised tax efficiency.