esports business owners are on a roll. They’ve witnessed the birth of a dynamic business sector that’s on a rapid growth trajectory fuelled by an expectation of making huge amounts of money. Unfortunately, for esports business owners who are financially disorganised, enjoying the trappings of success will probably be short lived.
I’m a big fan of esports and in particular, esports business. It’s exciting and dynamic, and it’s full of challenges that extend from managing teams, players and technology life cycles within the esports ecosystem to understanding how to attract, then manage sponsorship funding from external organisations wanting to get on board the esports juggernaut.
I know this from firsthand experience, providing business and financial management advice for one of the world’s most successful esports organisations. I know what it takes to play the long game, to outlive your competitors in an environment where many recently founded esports businesses will not survive past the initial hype, but crash and burn in financial ruin.
It’s my experience, that esports business owners should be asking their accountant or business advisor FIVE fundamental questions, and as you’ll see all the answers point to getting informed business advice and financial leadership specific for this specialised esports business niche.
Q: Will my business be standing in two, five or 10 years times?
A: Yes, if you invest in quality accounting & financial management systems customised to your specific needs.
Longevity is all about taking control of your business. And by that, I mean firm control. In my earlier article, I covered the need for customised systems that provide meaningful insights that provide a deep understanding of your business. Organised financials will enable you to manage your business effectively and make good financial decisions. These are the hallmarks of being in control.
Q: How will I fund growth and still have the money to pay for day to day expenses?
A: Simple, get business advice.
To grow, you will need a strong understanding of your own business as well as the greater esports ecosystem. Knowing your financial capabilities will enable you to afford your daily operational expenses and still have funding reserves for pursuing opportunities that may include developing technologies, investing in equipment, building your asset base and attracting sponsorship.
Protecting your assets will need your urgent consideration and this too falls under the business advice umbrella. A quickly evolving business may require a different, more secure structure today than was required when you were a start-up. You need to be financially safe from creditor claims, legal challenges and unnecessary tax burdens at all stages of your business lifecycle.
Q: How do I manage my affairs so I’m not crucified by tax here in Australia and other countries too?
A: Engage a specialist tax advisor who is closely following the Tax Office’s approach to esports.
In my next article I’ll address tax more thoroughly, but for now I’d like to point out that tax treatment for esports is still evolving. Should esports be aligned with tax treatment traditional of sport, how teams, players and prize money is paid and taxed will need to be addressed. Tax planning particularly when you operate a global business that spans multiple, differing and usually complex domestic and international tax requirements is the key to only paying no more tax than is required.
Q: How do I, as the business owner, protect my personal financial interests and create my own financial prosperity?
A: You’ll need retirement planning advice, which may include a SMSF.
I hear you, retirement is a long way off, however changes in superannuation laws have significantly reduced annual contributions caps and record low interest rates on super balances means it takes more time to build retirement savings. Super and particularly SMSF, which is a tax effective structure, is an important consideration for your personal prosperity. What you do now will impact directly on your future. Sound business advice in the early years will provide the foundations necessary for a valuable and saleable business that can shore up your future livelihood.
Q: There are so many demands on my time, how will I keep on top of my business?
A: Find qualified professionals with experience in esports and make them part of your team.
I know how exciting this business sector can be, but you didn’t create your esports business just for fun. It’s more than that. Building a valuable business that can be sold at some point in the future and that supports your lifestyle in the meantime, are your key drivers.
The solution is to invest in qualified accounting and business advice, and engage a team that specialises in esports, has a strong understanding of all the matters mentioned here, and who is technology savvy and can work with you wherever you might be in the world.
The fees you pay will be well worth it. Not just because you stand to save tax and build a valuable business, because quality professional support can relieve much of the stress you are likely to be feeling as a business owner.
For business advice committed to helping you to survive beyond the initial hype and mature into a sustainable and valuable esports business, contact me on email@example.com