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     Stop Procrastinating - Essential Planning for business success

    Ever wondered why business seems to pick up after you have been on holidays? Do things
    appear a little less challenging after you have had time away to relax?  Some of your best
    ideas germinate when you are not engaged IN the business.

    Many small business owners are so busy working IN their business they don't seem to find
    the time to work ON their business.  This is unfortunate and leads to diminished opportunities
    that may eventually lead to exhaustion, lack of   growth or complete business failure. 

    "Some of your best ideas germinate when you are not engaged IN the business"


We are always too busy to plan and then we keep following the same path and wonder why our results   do not change the way we want
them to. The better question could be; "how can I afford not to take time out to plan"?

It's important to have some down time and have some fun and relaxation with your family and friends to help brush off the shackles from
the past year.  Also, when you return from your break or feel inspired why not spend 3 to 4 hours planning the next 12 months?  What are
your goals both personally and professionally?  What are you main business objectives for the coming year and what actions to you need
to take to achieve them?

Sometimes it helps to have a trusted adviser to brainstorm ideas and to hold you accountable.
This may be your Business Accountant or a Business mentor.

Enjoy a well-deserved rest and enjoy planning!

"Employees join companies but leave managers"
Marcus Buckingham

One of my good associates Wayne Gillan, a top business coach wrote this blog some time back. 

It really resonated with me because I have witnessed many business owners who lack the appreciation that their staff are their greatest asset. Most businesses spend vast amounts of money marketing and advertising for new customers forgetting their most important internal customers…their staff.  

Cheers Ross

How hard is it to attract "A Grade" team members only to have them leave just when they are producing amazing results? Is it time to do an audit of your management team and assess the quality of their relationships with their team members?

For some, in smaller companies, the management team may be the business owner who occupies all the management positions. How about investing some time engaging your team members and work shopping improvements?  If all your team members felt as valued as your top clients do, what sort of environment would exist inside your business?

The interesting thing is that in just about every case, customers are treated better the treatment than the team member in his or her employment.  Why would you not look after the people who are looking after your customers?

Put simply, if you want to improve your customer satisfaction scores then perhaps you could start with team member satisfaction. If this was the path towards improved customer loyalty and hence sales, then imagine the return on investment from your time spent!

 

     Have you ever considered what would happen if you couldn't operate your
     business for a period of time?

     I have seen many businesses that are not set up and prepared if something
     unexpected should happen, for example a sickness or family crisis etc. 

    If any on the below statements concern you, you might like to consider
    talking to a professional business advisor to ensure you are prepared.

    • Do you have measures in place to safeguard your business should an
      unexpected event happen?
    • Would this enable you to continue with "business as usual"?
    • What if you couldn't work for a period of time? Would your business suffer?
    • Could someone come in, take over and run the business?
    • What impact would this have on your clients and on your Team?
    • Are your Insurances up to the task?
    • Do you have your systems and procedures documented so as someone could
                                                                                          fill your shoes?


"Every great and deep difficulty bears in itself its own solution. It forces us to change our thinking in order to find it"
Niels Bohr 

I enjoy reading biographies and articles about successful people and I have observed that most
have had to overcome difficulties to find a solution that produced a significant breakthrough for themselves personally and or ultimately for their business or career.

The business world is full of success stories that
began in times of economic difficulty. There are
many examples all around us.  Jim's Mowing is one
of them. The business was started during the
recession in the early 90's. The business flourished
because there were many people seeking work and
it was relatively easy to attract people interested in
running a lawn mowing franchise whereas in strong
economic times this is not the case and he has a
challenge satisfying demand from his clients.

During difficult times the difference between success and failure is often persistence and perseverance and having a never give up attitude. There is a solution to most problems and challenges. Think about those decisions and actions you are putting off because they seem too difficult.

The marketplace is full of potential customers looking for a solution to their difficulty.

Be careful..... WHO really owns your home? 

   Once again we have come across a business owner's home
   being tied up and owned inside a company rather than by
   the owners personally. This has resulted in causing some
   personal grief, unnecessary capital gains tax, income tax
   problems, large stamp duty amounts payable and retirement
   planning complications.

   Having the personal home owned by the company was a common
   practice from the seventies through the nineties when laws were
   substantially different to today.

   If your personal home is owned by a company or a trust, seek
  some help as soon as possible, you probably need it.

 

10 simple ways to increase business profits

10 simple ways to increase business profits

I am always conscious of how our clients can increase their business profits simply.  Many business owners are not aware of simple strategies that can have a powerful effect on their bottom line.

Here are a few tips that we recommend to clients.  Why don't you give some of them a go?  You might be surprised by the result.

10 simple ways to increase business profits

  1. Can you increase the average sale?
    A restaurant with 25% profit margins might make 50% on additional sales to existing customers (less labour to bag one large order than two smaller ones). Asking "What would you like to drink (fries) with that?" works, and it's just a start.
  2. What's the least expensive way to get a customer?
    Before you spend another thousand dollars advertising to get new customers, could you get as much business by spending a few hours contacting previous or existing customers?
  3. What low-risk ideas can you try?
    A Restaurateur once sent a letter to several visiting basketball teams, inviting them to visit our restaurant, and giving the coach a free meal as an incentive. The cost? Two dollars. The payoff was two bus loads of customers. At that rate, you could increase your business profits even if nine out of ten ideas fail. In our own case, a small gesture on a With Compliments Slip ultimately resulted in the arrival of one of our largest and interesting clients.
  4. Have you tested prices?
    If a business that sold a product for a $1.05, which cost them $1.00. At a price of $1.20, it is doubtful that they'd lose half their sales, but if they did, they'd still make twice the profit. Some things even sell better at a higher price. There are ways to Test your price points.
  5. Can you measure your advertising results? 
    How do you know that you're not spending more for a customer than they're worth? You should consider the acquisition cost against the value of the customer. Make sure you ask them, how did they found you? Also, if you are not communicating to your audience through social media then you may be left behind and are wondering why you are not getting the same results from your advertising efforts.
  6. How do you know your customers are satisfied?
    When you had your worst restaurant meal you ever ate, did it go down without a comment, but I'll bet you never returned to that restaurant. Maybe the owner should be talking to the customers.  A customer satisfaction survey is a great way to find out what your customer really thinks of your product or service.  We can also help you with this!
  7. Can you enhance the perceived value of your product?
    Years ago, we know of someone who sold walking sticks for $10 at flea markets, and $20 at craft shows. Sometimes location alone can enhance the perceived value of a product. What else can you do? Have you thought about differential pricing?
  8. What are similar businesses doing?
    See what your successful competitors are doing. Can you do the same? On the other hand, what are your customer's complaints about your competition?
  9. What other products can you sell?
    There's a reason stores have sweets and magazines near the checkout. Extra sales are a great way to increase business profits.
  10. Why not consider a referral program?
    Word of mouth is your best advertising.  How can you encourage your customers to recommend you?

   Wayne Gillan is an associate of Ross Wadeson Accountants having
   partnered with us for a number of years.  I came    across a blog
   he wrote some time back. It resonated with me as we are conscious
   of the importance of our clients Business Growth and we are always
   looking at the numbers to ensure that business is growing and not in
  the decline phase.

   It is a good quick read.
 
  Cheers
   Ross Wadeson

   All in life is an experiment. The more experiments you make the
   better..... Ralph Waldo Emerson

   Seems like this is a huge part of growth in business as well as life. When
   we stop experimenting in business, the business stops growing and as
   businesses cannot stand still, they begin the decline phase.  

   Often the point where we stop experimenting (growing) in business
   comes about when we stop experimenting in life. After all, isn't
   experimenting in life often preceded by goal setting; working out what
experiments you plan to pursue? 

Ever noticed that often where businesses enter the decline phase (often slow decline) occurs where the business owner has failed to
pursue personal goals and hence there is no drive or real reason to pursue change in their business?

Wayne Gillan Business Coach

 


From 1 July 2017, the ATO will be able to disclose to the Credit
Reporting Bureaus (CRBs)
the names of certain taxpayers who have
unpaid taxation  liabilities. This means that for
businesses with tax
debts, the true financial position of the business will become available
to the public.

This is information
which has previously not been able to be released and could be a big
game changer for some businesses, as suppliers will have this information available
when
making credit decisions.


At the outset, the threshold for this reporting will be restricted to those ABN's who have tax
debts exceeding $10,000 and with he debt outstanding for at least 90 days. It is uncertain at
this stage as to whether the ATO is obligated to notify the taxpayer in any way before reporting
the debt to the CRBs.

The aim of this change seems to clearly be requiring those with unpaid taxation liabilities to
better manage their debt. There is a view that the ATO has become way to stem that practice.

What does this mean for you?

  • For those business with large tax debts this will mean that your suppliers will have access to this information and may reassess their terms with you, potentially refusing to supply.
  • For those business who supply goods, you will now have access to this information about your customers and may need to reassess your terms with them if you feel necessary.

Worst case scenario – for businesses with large tax debts who are highly dependent on suppliers for the running of their business, this could potentially result in suppliers refusing trade credit and consequently the business failing as the business becomes unable to continue.

What can you do?

  • If your business does fall into this tax liability category you need to contact us now to sort out a payment arrangement with the ATO at the very least, potentially a restructure of your business entity(ies) or even potential liquidation for insolvency to protect the directors.
  • If you're in the business of supplying goods, be aware that this information will soon become available to you and should be used when considering credit terms for your trade creditors.

Contact us should you have any concerns about what this change will mean for you and your business.

Jenny Smith CPA – May 2017

 

 

Payment of bills (yours and theirs) in business

The Victorian Government has recently taken an initiative to try to assist smaller businesses who are being
abused by the delayed payment of their Invoices and Debtors Payable when due.  Below is the Government
Code. 

Apart from the potential legal issues that may become involved if businesses don't comply, this is a good,
simple and sensible guideline for dealing with customers and suppliers, to develop good business relationships. 

Good relationships keep you in good business

     The Victorian Fair Payment Code provides a framework for businesses
     to pay their small and medium suppliers on time.  The Code recognises
     the importance of small and medium businesses to the Victorian
     economy and its aim is to promote good payment practices.

     The Code will be administered by the Victorian Small Business
     Commissioner (VSBC) and will come into effect on 1 July 2017. We
     encourage businesses of all sizes to become signatories to show their
     leadership on this important issue.



Victorian Fair Payment Code of Practice

Code signatories undertake to:

1.  Pay on time

• Pay small and medium suppliers within 30 days from the date of the receipt of a tax invoice

• Not change the length of payment on unreasonable grounds

 

2.  Communicate clearly with suppliers

• Prepare contracts in clear and simple language

• Give suppliers clear guidance on payment terms and procedures

• Promptly advise suppliers if there is any reason why an invoice will not be paid within the agreed terms

 

3.  Undertake to resolve disputes quickly

• Inform suppliers of the internal process for handling a payment dispute

• Participate in alternative dispute resolution including mediation through the VSBC for disputes that
  cannot be resolved internally

 

4.  Encourage fair payment practice

• Encourage suppliers to adopt the Fair Payment Code within their own supply chains

• Identify your business as a leader in fair payment by using the Fair Payment Code branding

 

If you'd like to provide feedback on the Code (by 31 May), or your business is interested in being a signatory
please contact Victorian Small Business Authority.

Super for the self-employed

Many small business owners don't start paying super for their retirement until they are into their 50s. Often they see their business as their major retirement asset, however sadly, this is rarely the case and the value of the business usually drops significantly when the owner stops working (unless they have deliberately set it up for succession. Hint: talk to us early).

It helps to start paying into your super account early. The longer you contribute to super, the larger your retirement income will be when you stop working.  Compound growth is a wonderful thing but it requires time – years.

Being self-employed, you can usually claim a full tax deduction for contributions you make to your own super until you turn 75 up to the contributions caps. You may also be eligible for the super co-contribution payment.

You may want to discuss strategies for retirement planning with us now. Now is the time to act!

Claiming deductions for personal super contributions

You may be able to claim a tax deduction for personal contributions you make to your superannuation (super). This includes people who get their income from:

  • salary and wages
  • a personal business (for example, self-employment)
  • investments (including interest, dividends, rent and capital gains)
  • government pensions or allowances
  • super
  • partnership, companies or trust distributions
  • a foreign source.

Keep in mind that contributions you make may attract extra tax if they exceed the contributions limit for that year.

You may also be eligible for the super co-contribution payment

This helps eligible low-to-middle income earners save for their retirement. If you're eligible and you make personal super contributions, the government will match your contribution up to certain limits, unless you have already claimed your contribution as a tax deduction.

Super co-contribution help eligible people boost their retirement savings.

If you're a low- or middle-income earner and make personal (after-tax) contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500.

The amount of government co-contribution you receive depends on your income and how much you contribute.  When you come in to lodge a tax return, we can work out if you're eligible. The way your co-contribution is calculated depends on the financial year in which you made your personal super contributions.

 

Eligibility for the super co-contribution

You will be eligible for the super co-contribution if you can answer yes to all of the following:

  • you made one or more eligible personal super contributions to your super account during the financial year
  • you pass the two income tests described below  
  • you were less than 71 years old at the end of the financial year
  • you did not hold a temporary visa at any time during the financial year (unless you are a New Zealand citizen or it was a prescribed visa)
  • you lodged your tax return for the relevant financial year.

From the 2017-18 financial year:

If this extra source of funds for your retirement is of interest to you, you should talk to one of our Accountants or speak with Jenny Smith, our Head of Superannuation – 9580 9866.

Related Pages:

Business

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Taxation

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Superannuation

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