A simple hypothetical example was provided showing a business with a small profit and the flow on effects a 5% increase in sales, a 5% decrease in cost of goods and a few adjustments to some expenses would have on the net profit. The result came with several ideas on how easy this could be for many businesses and more importantly a huge difference in the net profit.

At the end of the day the value of your business will depend primarily on the profitability. Several other elements contribute to the value of a business but profit often determines an asking price with the return on investment percentage yield an essential point of interest to both the accountant and the bank manager for the purchaser.

Attendees of the boot camp were provided with awareness and clarity on how the profit and loss statement was a tool to measure trading performance for a business. One attendee left with a page full of ideas that he would share with staff and implement. Now that he had knowledge, clarity and focus he believes his business will be worth much more when it comes time to sell and will be more appealing in the market.

If you have an existing business, proper preparation of the business can make a huge difference especially when buyers are comparing all the possible options available in the often competitive market.

Understanding what your business is worth and planning for the sale will almost certainly increase the opportunity for a maximum sale price.

Jason Maxwell Principal of Raine & Horne Newcastle said “This increase is typical for this time of year, with employees and students relocating.” Mr Maxwell predicted that the February figure will be somewhere around the 1.3%

“Bidding was slow, however I was able to use my strong negotiation skills to achieve a price which exceeded the vendors expectations” Mr Mana said.

The 25 basis point fall comes on the back of a similar cut last month. The reduction is good news for people paying off a mortgage. “This will put an extra $60 into the pockets of borrowers each month,” says Domain property expert Carolyn Boyd.

The official interest rate is now 4.25 per cent.

Each 0.25 per cent drop in interest rates slices about $60 off the monthly interest cost of an average Australian mortgage.

Boyd says, coupled with last month’s cut, the drop represents a double windfall for borrowers because if they can keep their repayments at the same level they will be able to pay down their mortgages faster.

“It’s a smart idea to keep your repayments at the same amount as you were paying before this cut, and the one on Melbourne Cup day,” she says. “That way you can pay your mortgage off sooner but have no less money in your pocket than you did last month. There’s plenty to gain here with no extra pain.”

Many lenders don’t automatically readjust repayments when rates are cut, meaning borrowers often have to simply sit back and watch their loan shrink faster when rates fall.

“Our agency’s opinion of price was between $380,000 to $420,000″,  Josh Mana Raine & Horne’s area specialist for Tighes Hill said. “It just demonstrates the value of auction as a selling method” he said.

The 25 basis point fall is the first movement in rates since Melbourne Cup Day 2010 and has been widely tipped since lower-than-expected inflation figures were released last week.

The 25 basis point reduction is good news for people paying off a mortgage.

“This fall in rates will be greatly appreciated by households as it will put an extra $60 into their pockets each month,” saysDomain property expert Carolyn Boyd.

The official interest rate is now 4.5 per cent. Until today, mortgage holders on variable interest rates were being charged a standard variable rate of about 7.83 per cent by their lenders.

Each 0.25 per cent drop in interest rates slices about $60 off the monthly interest cost of an average Australian mortgage.

Boyd says it’s a good idea for mortgage holders to keep paying their loans at the same rate they have been for the last year, and not take advantage of the opportunity to decrease their repayments.

“You’ll still get any rate cut your lender passes on, of course, but if you keep your repayments at the same level, you will pay your loan off sooner and build a buffer for any unexpected rough spots.”

Today’s rate cut will provide a welcome boost to the property market, which has slowed in the last year and remains subdued in most parts of Australia. It could also improve the confidence of potential first home buyers.

Further details on what the decision to decrease interest rates to 4.5 per cent means to you and the Australian property market will be outlined in this week’s Domain Property Newsletter. If you are not already subscribed to our FREE weekly newsletter

The need for First Home Buyers to pay Stamp Duty after 1 January 2012 may significantly effect their ability to afford a new home, keeping in mind that Stamp Duty on a price of $450,000 is over $15,000.

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The Federal and State governments really needs to do something to entice investors back into the marketplace. With low investor buying activity and a genuine lack of newly constructed property coming to the market, rental properties will continue to scarce.

REINSW Report is here.