Client Story: Head for the Hills

September 2, 2020

Head for the Hills was founded in 2015 by director Tyson Schmidt, an elite level mountain bike racer. Originally working in the entertainment industry, Tyson decided to take the risk and invest in his dream of running his own business.

Head for the Hills was created to provide coaching and development opportunities for young mountain bike racers in South Australia, as well as make it easier for anyone who wanted to try mountain biking but hadn’t had the opportunity. Tyson felt that unless you personally knew somebody who could help you, it was very hard to get into the sport.

Since then, his reputation and business have grown in a variety of ways, including working as the Team Manager and Performance Support for the Junior World Championship downhill team and working with various state entities and clubs to promote South Australian youth development. Over the past 12 months, Tyson hired his first employees.

Both Head for the Hills and Oreon Partners are long-term sponsors and board members of Inside Line Incorporated, a state-level club which has helped develop multiple top 10 world cup racers. After attending board meetings hosted by Oreon Partners and recognising the rapid growth of his business, Tyson decided to engage Oreon Partners as accountants for Head for the Hills.

Challenges

The original business structure was restrictive in terms of promoting and winning business. It also didn’t provide adequate asset protection, which represented a significant risk to the business owners due to the inherent dangers of the sport.

At the same time as the restructure, Tyson was considering taking on additional coaches to assist the business and was looking for advice on how and whether they should be taken on as employees or contractors.

With the COVID crisis beginning in March 2020, the business also faced major issues due to the close proximity of trainers and riders, as well as government-imposed restrictions. This led to uncertainty about whether or not training could be performed safely for current and prospective clients.

Solutions

During initial meetings with Oreon Partners, Tyson expressed his concerns about the business structure. Due to the risks of the sport, it was vital that we help him restructure to maximise asset protection for both Tyson and his wife, Kara, as the couple was soon due to have their first child. The first step was to establish and roll over the business into a trust structure, which came with the added advantage of minimising tax implications via trust distributions to family members.

Discussions were then held to review the structure of the new coaches’ employment arrangements, and after potential contractor insurance issues were identified, they were taken on as employees.

Oreon then helped set up Xero, working closely with Tyson to sync it to his online booking system and set up payroll to ensure all payroll obligations were met.

To combat COVID-related issues, we worked together to ensure that the business received access to the various government stimulus packages that were brought into action in March 2020, including JobKeeper and Cashflow Boost.

Going forward

With the correct infrastructure in place, Tyson can now focus on ensuring the business continues to grow. Plans are already underway to:

• Diversify the business by working hand-in-hand with various South Australian mountain bike clubs to provide a high level of training and race support
• Establish a new junior development regime for kids aged 6 and up to be run on the same day as current race events (since many younger brothers and sisters of participants are left on the sidelines watching state and national events)
• Employ more trainers to provide further access to South Australia’s youth development programs
• Continue to offer COVID-safe mountain bike training plans.

To learn more about Head for the Hills, visit their website at headforthehills.net.au.