What to consider when developing a sales strategy plan
Business | 08 13th, 2020|

A successful sales strategy plan will provide your business with clear priorities, goals, and outcomes that can help you increase sales.

Outline your mission and goals

What’s your business’ mission statement? What are the goals and objectives that will help you achieve this? Your mission statement should define what your business stands for and what it aims to achieve, while your goals and objectives should be aimed at executing your mission. Consider using the S.M.A.R.T. framework when developing your goals to ensure that they are specific, measurable, achievable, relevant, and time based.

Identify your ideal customer

Knowing your ideal customer persona is crucial as it will be the basis of your marketing strategy. Assess your ideal audience by researching their demographics, needs and wants while thinking about how your products or services have to offer them. Don’t limit your demographic research to age, location, and gender, but also consider their attitudes, aspirations, and lifestyle.

Conduct a SWOT analysis

Assessing your business by using a SWOT analysis can help you identify areas to consider when developing a sales strategy plan, by addressing:

Strengths:

  • What are your strongest assets?
  • How skilled is your sales and marketing team?
  • What advantages does your business have over competitors?
  • What resources are available to you?

Weaknesses:

  • What are your areas of improvement?
  • What types of complaints do your customers have?
  • Where do you fall behind from your competitors?
  • Are you working with limitations on resources or skills?

Opportunities:

  • Are there changes in the business environment you can benefit from?
  • Have there been changes in the market that could present an opportunity?
  • Do your competitors have weaknesses or gaps you can fill?

Threats:

  • Are your competitors expanding or getting stronger?
  • How satisfied are your customers?
  • Are there changes in the economy, consumer behaviours, or government regulations that could affect your sales?
Buying property through your SMSF
Super | 08 13th, 2020|

Using SMSFs to buy property has become increasingly popular among Australians in recent years, particularly since it became possible for SMSFs to borrow money to fund a direct property purchase.

Residential property

A residential property owned by an SMSF has some limitations as to who it can be leased to.

To buy property through your SMSF, the property must meet the following requirements:

  • It meets the ‘sole purpose test’ of solely providing retirement benefits to members of the fund.
  • It is not acquired from a related party of a fund member.
  • It is not to be lived in or rented by a fund member or a party related to a fund member.

Commercial property

A commercial property owned by an SMSF can be leased to a wider range of tenants than residential properties. Commercial property purchased for business purposes can be purchased from a member of the SMSF or a related entity. This allows small business owners to use their SMSF to purchase the premises from which their own business is run, enabling them to pay rent directly to their fund. This can be preferable to paying rent to an alternate landlord. However, keep in mind that rent must be at market rate and be paid promptly and in full at each due date.

SMSF borrowing

SMSFs can borrow money to purchase a property, however, the borrowing criteria for an SMSF is generally much stricter than regular property loans taken out by individuals. All loans must be undertaken through a limited recourse borrowing arrangement (LRBA). An LRBA involves an SMSF trustee taking out a loan to purchase a single asset, such as a residential or commercial property. Under the Superannuation Industry (Supervision) Act 1993, super fund trustees can use borrowed money to pay for regular repairs and maintenance. However, borrowed money under the LRBA cannot be used for property improvements or renovations that result in the acquirable asset becoming a different asset. This may include adding additional rooms to the property or completely renovating a room.

Tax consequences

Buying and renting property through an SMSF also comes with tax consequences. SMSF funds are required to pay 15% tax on rental income from properties purchased through the fund. However, properties held for over 12 months receive a one third discount on any capital gains made upon the sale, bringing any CGT liability down to 10%.

Expenses such as interest from loans, council rates, maintenance and insurance can be claimed as tax deductions by the SMSF.

As well as this, once SMSF members reach pension phase, any rental income or capital gains arising in the fund will be tax-free.

SMSF property costs

SMSF property sales often attract higher fees that can end up reducing your super balance. Fees and charges can include:

  • legal fees,
  • property management fees,
  • bank fees,
  • advice fees, and
  • stamp duty.
What is a TPAR and do you need to lodge one?
Tax | 08 13th, 2020|

The Taxable Payments Annual Report (TPAR) is an industry-specific report through which businesses inform the ATO of the total payments made to contractors for services in that financial year. This information is then used by the ATO to match the contractors’ income declarations to improve their compliance efforts.

A TPAR is generally required by businesses that have an Australian Business Number (ABN), have supplied a relevant service and have made payments to contractors for services completed on your behalf. Contractors can be operating as sole traders, partnerships, companies or trusts. The following services are considered relevant:

  • Building and construction services
  • Courier or Road freight services
  • Cleaning services
  • Information Technology services
  • Investigation or surveillance services

If your business provides these services, regardless of whether it is only a part of the services you offer, or if it is a federal, state, territory or local government entity, you are obligated to report the payments made to third parties through a TPAR.

It is important to remember that not all payments need to be reported. Your taxable payments annual report does not require details of:

  • Payments for exclusively materials
  • PAYG withholding payments
  • Contractors who do not provide an ABN
  • Incidental labour costs
  • Invoices that are unpaid as of 30 June
  • Payments within consolidated groups
  • Payments for private and domestic projects.

Only payments made to contractors for work that is relevant to carrying on your business needs to be reported. Your TPAR is due by 28 August each year, and fines may apply for not lodging the report by the specified deadline.

If your business does not need to lodge a TPAR for a particular financial year, consider submitting an optional non-lodgement advice through the ATO business portal to avoid unnecessary follow-up about TPAR lodgements.

Growing your business with referrals
Business | 08 7th, 2020|

‘Word-of-mouth’ referrals may seem like an outdated concept in today’s digital age of online reviews, but a few credible and positive opinions can still go a long way when it comes to attracting new clients. Customer referrals are never guaranteed, but here are a few methods you can use to increase the number of people who will remember and improve the chances of a client recommending your business to another.

Remind customers you exist
Maintain high levels of brand awareness and make sure your customers can easily remember your business and products. Use a mailing list database and keep in touch with your clients regularly through email or social media. Make sure to update your clients (personally whenever possible) when you have special offers and new products to keep them engaged with your business.

Join communities
From professional organisations to online community groups, getting involved in different activities will give you new contacts, boost your business profile and increase your brand awareness. For example, using community hashtags on your social media posts when promoting a product will direct interested audiences to your business. Simply remaining active in such community spaces can go a long way in indirectly advertising your products and services.

Exhibit at industry events
Industry-relevant exhibits and events are a good way to increase your business’ brand awareness and meet a lot of new potential customers at once. Being active at these kinds of events (through sponsorships or networking) will keep your name in front of your current customers as well.

Use testimonials
Similar to reviews, testimonials from your existing customers can help improve your brand’s reliability and encourage loyalty and trust with your new customers. The fact that a client allows you to use their name adds credibility and serves as another kind of referral.

Ask customers for feedback regularly
Constant improvement and clear communication is key to impressing clients and increasing the chances of referrals. By soliciting suggestions from your existing clients, responding to them personally, and providing high-quality service, you can let customers know that you care about them and want to meet their needs. Establishing such a caring relationship with your customers will improve your business’ reputation as well.

How to select a default fund for your business
Super | 08 7th, 2020|

Business owners might be required to select a default fund for employees when they do not want to nominate their own superannuation funds. Funds should meet specific requirements that are stated as per super law, so it is important to select a complying fund. However, there are other factors that you may have to think about before selecting a default fund to make sure that you and your employees get the most out of it.

Pricing
Naturally, one of the main considerations while selecting a super fund should be pricing. Funds that have a lower fee may not cover extras, and this requires careful analysis to see what extras have been left out. Coverage for extras like being able to track down missing super is a key feature that employees will prefer your default fund has.

Employee preferences
Employees are likely to prefer funds that allow flexibility with their investment options and have essential features like insurance policies covering death, total and permanent disability (TPD), and income protection. You may want to consider options that give your employees a comprehensive cover while keeping an eye out for any exclusions that might affect you.

Industry fund
Checking industry funds may help reveal awards that are particularly applicable to employees from your industry. It is a requirement that your default fund is a MySuper product. All listings under Industry SuperFunds are MySuper products, so this can simplify the process of finding an affordable super fund for your employees.

Fund management
Finally, consider taking a closer look at the fund’s insurance offerings. Past performance of the fund doesn’t guarantee high returns in the future. But it is important to be aware of the returns on the fund’s investments to compare how their options have performed against their return objectives. This can increase the chances that the selected super fund will be beneficial to you and your employees.

Applying for small business income tax concessions
Tax | 08 7th, 2020|

Businesses looking to save on tax for the financial year may consider applying for income tax concessions.

Businesses classified as a small business entity are eligible for income tax concessions. Since 1 July 2016, businesses are considered small business entities in the case that they:

  • are a sole trader, partnership or trust,
  • operate as a business for all or part of the income year, and
  • have an aggregated turnover of less than $10 million.

In the event that you meet the above requirements as a small business entity, here are the income tax concessions available to you.

Small business structure rollover
Small business entities can change the legal structure of their business and transfer active assets from one entity to another without incurring any income tax liability. Assets such as capital gains tax assets, trading stock, revenue assets and depreciating assets are eligible in this rollover. The rollover is also only available in the case that it is part of a genuine restructure and there is no change to ultimate economic ownership.

Simplified trading stock rules
Under the simplified trading stock rules concession, you can estimate the value of your trading stock at the end of the financial year when reporting in your tax return. However, small businesses will also need to show how they calculated their estimated trading stock value. Businesses which choose not to use an estimate will need to account for value changes in their stock and conduct a stocktake. Stocktakes do not need to be conducted if there is a difference of $5,000 or less between the value of your stock at the start of the income year.

Immediate deductions for prepaid expenses
Payments which cover a period of 12 months or less that are ending in the next income year are eligible for immediate deductions. Prepaid expenditure is also immediately deductible when the period ends no later than the last day of the income year following the year in which the expenditure was incurred.

Two-year amendment period
Small businesses receiving a notice of assessment from the ATO have a two-year time limit for reviewing an assessment.

Getting your money back from late-paying customers
Money | 07 30th, 2020|

Businesses can be heavily impacted by customers who cannot, or simply will not pay when payment is due. A single unpaid invoice can cause issues, and the longer this debt is left uncollected, your chances of getting your money back become slim. Consider these tips to avoid and manage debt recovery to save your business from major losses.

Reduce credit terms
If late payments and managing bad debt is a regular occurrence, consider reducing your credit terms. You may want to remove your credit terms entirely, but it is important to look at your customer base, the services you offer, and whether there is an average credit term that is expected by your clients. If you offer credit terms shorter than your competitors, you may end up losing valuable customers. However, if your credit terms are too spacious, your cash flow will be slow, putting you at financial risk.

Encourage timely payments
Your business might require a set credit term to meet the industry average. In these situations, consider offering discounts on payments made early or within a set date from invoicing. An alternative is to charge a late fee to encourage your clients to pay on time. In these situations, it is necessary to first make your customers aware of the introduction of this policy clearly through your terms and conditions. To maintain good customer relationships, try to limit overdue fees to repeat offenders. You may want to monitor incoming payments to see if these policy changes are reducing your late payments.

Hire a debt collection agency
Efforts to pursue your late-paying customers may not always be successful. If the debt amount is less than $1000, it may not be financially viable to pursue legal action for violation of your credit terms. In such situations, consider outsourcing your debt collection to professional collectors. However, timely involvement is key to getting your money back. Give your clients sufficient time to make a payment, and if over two times the trading terms have passed, hire a collection agency to prompt your clients into making defaulted payments.

JobKeeper to be extended
Business | 07 30th, 2020|

The Australian Government has announced that JobKeeper payments will be extended for a further six months after the initial 28 September 2020 deadline. However, the extended JobKeeper program will have substantial payment reductions compared to the original JobKeeper amounts, as well as revised eligibility requirements.

The new JobKeeper flat-rate payment after September will be reduced from $1500 per fortnight to $1200 a fortnight for eligible employees who were working an average of 20 hours per week in the four weeks before 1 March 2020. The rate for employees who were working less than 20 hours per week for the same period will be reduced to $750 a fortnight. These rates are set to apply until the end of 2020.

A further reduction in JobKeeper payments will be administered from 4 January 2021. After this date, eligible employees who were working more than 20 hours per week in the four weeks before 1 March 2021 will receive a flat rate of $1000 per fortnight, while employees who were working less than 20 hours per week for the same period will receive $650 per fortnight.

The JobKeeper extension shares a similar eligibility criteria as the initial JobKeeper program, however, it will be targeting support to businesses and not-for-profit organisations that are facing continual impacts from COVID-19. Those seeking to claim the JobKeeper extension payments must reassess their eligibility by demonstrating that they have met the decline in turnover test for the new required periods. Businesses who have experienced either one of the following will meet the decline in turnover test:

  • A 30% fall in turnover for an aggregated turnover of $1 billion or less.
  • A 50% fall in turnover for an aggregated turnover of more than $1 billion.

To be eligible for JobKeeper from 28 September to 3 January 2021, the decline in turnover test must be met for the June and September quarters 2020. Businesses must reassess their eligibility again in January 2021 to be eligible for JobKeeper from 4 January to 28 March 2021. To remain eligible for the March 2021 quarter, businesses will need to demonstrate that they have met the decline in turnover test in each of the previous three quarters.

The extended JobKeeper program is set to end on 28 March 2021.

How to avoid SMSF disputes
Super | 07 30th, 2020|

Self-managed super funds (SMSF) can be vulnerable to disputes, especially when family members are involved.

SMSF disputes may be caused by a number of reasons such as relationship breakdowns, (common in funds where parents and siblings are in a member and trustee relationship) and fundamental differences in opinions. Other common triggers for SMSF disputes include:

  • investment strategy disagreements,
  • differences in opinions over the payment of benefits, especially in SMSFs involving both parents and their children,
  • payment of death benefit disputes, and
  • disagreements on the distribution of SMSF death benefit payments between surviving members.

Consider the following methods to avoid SMSF disputes.

Clear decision-making procedures
Disagreements are bound to occur when it comes to money, so it is important to include concise decision-making provisions to keep things fair for all parties involved. For example, trustee decisions can be made by a simple majority rather than unanimously, and a particular trustee may be provided a casting vote in the case that a deadlock occurs. Provisions could also include voting rights that are based on the value of a member’s account balance within the SMSF to avoid situations where a member with minority interest out-votes a member with a large fund account balance.

Updating your SMSF regularly
An SMSF trust deed will provide provisions which determine the trustees’ rights, obligations and options. It is important to keep your SMSF and trustee information up to date to prevent any unwanted beneficiaries and claims. For example, in the case of an unfinalized divorce or legally unchanged relationship status, a former spouse can claim the others’ superannuation death benefits. To prevent such situations and avoid their inevitable disputes, be sure to update your super fund regularly.

What types of income do you need to include in your business’ tax return?
Tax | 07 30th, 2020|

Due to changing economic circumstances, businesses may be receiving income from sources they have never received from, and may be unaware of their tax implications. In the event that they are listed below, you will need to include them in your business’ tax return.

Government payments
Due to COVID-19, many government grants and payments have been made to businesses this year. Businesses receiving the following grants will need to report them as part of their assessable income in this year’s tax return:

  • JobKeeper payments,
  • Supporting Apprentices and Trainees wage subsidy,
  • Grants under the Australian Apprenticeships Incentives Program,
  • Subsidies for carrying on a business.

Keep in mind that COVID-19 cash-flow boost payments are non-assessable and non-exempt income, meaning they do not have to be included as part of your assessable income.

Crowdfunding income
Crowdfunding refers to the usage of the internet or social media platforms, mail-order subscriptions, benefit events or other methods to find supporters and raise funds for your business’ projects and ventures. Profits made through crowdfunding are considered part of your business’ assessable income in the case that you have:

  • used crowdfunding in the course of your employment,
  • entered into a transaction with the intention of making a profit
  • received money or property in the ordinary course of your business.

Income from online activities
The current pandemic may have also forced you to move your business operations online for the first time. The ATO provides a clear distinction between online selling as a business or hobby. In the event that you meet the following circumstances while selling online, you will need to report your earnings as part of business’ assessable income:

  • Your main intention is to make a profit,
  • You sell items online on a regular basis,
  • The items or services you are selling are commonly available in a physical store, and
  • You pay for your online-selling presence.

Other basic income streams such as cash income, investment earnings and capital gains and losses also need to be reported in tax returns as usual.

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