Should You Review Your Business Structure Before FY27?
Many business owners focus on tax deductions as 30 June approaches.
They look for expenses to claim.
They check their bookkeeping.
They make sure BAS and payroll are up to date.
But one of the biggest tax planning opportunities often gets overlooked.
Your business structure.
The structure that worked when you started may not be the structure that supports where your business is heading next.
If your revenue, profits, team size or
Is my current structure still the right fit?
For growing creative agencies, talent agencies, hospitality businesses and founders approaching $500,000 to $1 million in revenue, the answer is often no.
Why Business Structures Matter
Your business structure affects far more than your annual tax return.
It influences:
- How much tax you pay
- Asset protection
- Cash flow management
- Succession planning
- Profit distribution
- Access to investment opportunities
- Business valuation
- Compliance obligations
Many founders continue operating under the same structure they chose years ago, even though their business has evolved significantly.
What made sense at $100,000 in turnover often creates limitations at $1 million.
The Most Common Growth Problem We See
A founder starts as a sole trader.
Revenue grows.
The business gains momentum.
Clients increase.
Team members are hired.
Profits rise.
Yet the structure never changes.
The business eventually reaches a point where:
- Tax becomes less efficient
- Personal risk increases
- Asset protection becomes a concern
- Growth opportunities become harder to manage
At that stage, the structure is no longer supporting the business. It’s holding it back.
Signs Your Structure May Need Reviewing
1. Revenue Has Increased Significantly
Revenue growth is often the first trigger.
While there is no universal threshold, many businesses benefit from reviewing their structure when turnover reaches:
- $300,000+
- $500,000+
- $1 million+
As profits increase, different structures may provide greater flexibility and planning opportunities.
A review helps identify whether your current arrangement remains appropriate
2. You're Employing Staff or Contractors
Managing a team introduces additional complexity.
You may now be dealing with:
- Payroll obligations
- Superannuation
- Workers compensation
- Contractor arrangements
- Employment agreements
As your workforce grows, risk management becomes increasingly important.
Your structure should protect both the business and the individuals behind it.
3. You're Building Business Assets
Many founders start building valuable assets without realising it.
Examples include:
- Intellectual property
- Brand value
- Client databases
- Software platforms
- Digital products
- Trade marks
As these assets become more valuable, ownership and protection become increasingly important.
A structure review helps ensure those assets are held appropriately.
4. You're Retaining Profits in the Business
Many growing businesses no longer withdraw all profits each year.
Instead, they retain funds to:
- Hire staff
- Invest in marketing
- Purchase equipment
- Expand operations
- Improve cash reserves
Different structures provide different levels of flexibility when managing retained earnings.
What worked in the early years may no longer align with your growth plans.
5. You Want to Sell or Scale in the Future
Even if an exit is years away, structure decisions made today can affect future opportunities.
Potential buyers, investors and business partners often look closely at:
- Ownership arrangements
- Asset ownership
- Entity structure
- Compliance history
Planning early provides more options later.
Why FY27 Is a Good Time to Review
EOFY naturally creates a planning checkpoint.
You already have:
- Current financial data
- Updated profit figures
- Forecasts for the next year
- Strategic goals under review
This makes it easier to assess whether your structure still aligns with where the business is heading.
Recent Federal Budget discussions around trust integrity measures and ongoing ATO scrutiny of business arrangements have also prompted many business owners to revisit existing structures and ensure they remain appropriate.
A review doesn’t necessarily mean changing structures. Sometimes it confirms you’re already set up correctly. The value comes from knowing rather than assuming.
Many business owners spend June focused on deductions, but the bigger opportunity is often reviewing the foundations of the business itself. That’s why EOFY checklists don’t actually reduce tax on their own if the underlying structure no longer suits the business.
A Simple Example
Consider two creative agency owners.
Both generate $850,000 in annual revenue.
Both earn similar profits.
Agency Owner A:
- Has reviewed their structure regularly
- Has clear asset protection measures
- Has a documented growth strategy
- Understands future tax implications
Agency Owner B:
- Uses the same structure chosen when turnover was $120,000
- Has not reviewed their setup for several years
- Has limited flexibility as profits increase
The difference isn’t the revenue. The difference is the planning.
Structure Reviews Are About More Than Tax
Many people assume structure reviews are purely about reducing tax. That’s only one part of the discussion.
A good review also considers:
- Risk management
- Business growth goals
- Succession planning
- Asset protection
- Future investment opportunities
- Exit strategies
The goal is to create a structure that supports where your business is heading, not where it has been. Those that wait will scramble — and likely owe penalties.
Questions to Ask Before FY27
Before the new financial year begins, ask yourself:
- Has my revenue changed significantly in the last two years?
- Am I taking on greater financial risk?
- Have I hired staff or expanded my team?
- Am I building valuable business assets?
- Do I plan to scale, acquire or sell in the future?
- Have I reviewed my structure within the last three years?
If several of these questions produce a “yes” response, a review may be worthwhile.
Why Your Structure Matters More Than Most EOFY Decisions
Many business owners spend EOFY looking for deductions. The bigger opportunity may be making sure the foundation of the business is still fit for purpose.
Your structure affects tax outcomes, risk management, growth flexibility and long-term business value. As your business evolves, your structure should evolve with it.
If you’re still focused on what you can buy before 30 June, it’s worth understanding why the $20K instant asset write-off isn’t free money and why structure decisions often have a much bigger long-term impact.
Before FY27 begins, take the opportunity to review whether your current setup still supports your goals for the years ahead.
Need a Business Structure Review?
At The Pen Accounting, we work with creative agencies, talent agencies, hospitality businesses and growing founders to assess whether their business structure aligns with their current goals and future plans.
If your business has grown significantly since you first started, now is the time to review whether your structure is helping or hindering your next stage of growth.
Book a consultation with our team to discuss your options before FY27 begins.
FAQs
No. Many businesses review their structure after several years of growth. In fact, significant increases in revenue, profitability, staffing, or business assets are often the trigger for a review. The important thing is understanding whether your current setup still supports your goals moving forward.
There is no single revenue threshold, but common signs include growing profits, employing staff, retaining earnings in the business, building valuable assets, or planning to scale. If your business looks very different today than when you first set it up, it’s worth reviewing whether the structure still fits.
Not necessarily. A structure review is about finding the most appropriate setup for your circumstances. While tax efficiency may be one outcome, factors such as asset protection, risk management, succession planning, and growth opportunities are equally important.
Not always. Many successful businesses operate as sole traders. However, as revenue, profits, and risk increase, the limitations of a sole trader structure can become more noticeable. A review helps determine whether another structure may provide greater flexibility.
Nothing may happen immediately, which is why many business owners put it off. The risk is that you continue operating under a structure that no longer supports your business efficiently. Over time, that can affect tax outcomes, asset protection, growth opportunities, and long-term business value.
At The Pen Accounting, we specialise in helping creative businesses like yours achieve financial success. From bookkeeping to tax advisory and business strategy, our services are tailored to the unique needs of the creative sector in Australia. If you’re ready to take control of your financial records, contact us today and discover how we can help your business grow.
Disclaimer: This is general information only and is not advice of any sort. No warranty or representation is provided by The Pen Accounting as to the accuracy, currency or completeness of the information contained in this blog. Readers of this blog should not act or refrain from acting in reliance upon any information contained herein and must always obtain appropriate taxation and / or other advice as may be appropriate having regard to their particular circumstances.
