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Knowing when to cut a product

Businesses looking to improve their profitability may need to consider cutting under-performing products and services that are unnecessarily draining resources. It might be time to discontinue if a product fits the following scenarios:

When deciding whether to discontinue a product, there are a few ways you can examine your services and make the decision that is best for your business.

80/20 rule:
This rule states that businesses should focus their attention on the 20% of the products that generate 80% of revenue. Using this principle, companies should compile a shortlist of the products and services that bring in the most profit and scrutinise the products that fall short of this mark.

Trial run:
Try going a week to a month (no longer) removing all promotion and marketing for a product. This can help the business to visualise what it would look like without that service and see if there are any clients who miss it.

Harvesting:
Cutting the costs associated with the business or increasing the price of the product without increasing production or operation costs allows the business to continue generating revenue on a failing service. Once the product ceases to provide a positive cash-flow, it can then be discontinued.

Posted on 16 October '19, under business. No Comments.

What employment type is best for your business?

Each employment type has different entitlements and obligations that must be met by both the employer and employee. Before hiring a new worker, take the time to look at what each employment type would mean for you and your business.

Full-time and Part-time employees:
Though both permanent employees, a full-time employee will work an average of 38 hours a week whether as a part-time employee would work on average less than 38 hours a week, usually at regular times. The specific working hours in a week are agreed upon in the employee contract. Under the National Employment Standards (NES), there are 10 minimum entitlements that need to be provided to employees;

Casual employees:
A casual employee does not have a definitive commitment from an employer about how long they will be employed for or the days/hours they will work. A casual employee doesn’t get paid sick or annual leave, can end employment without notice, has a higher pay rate than equivalent full-time or part-time employees due to ‘casual loading’, two days unpaid carer’s leave and two days unpaid compassionate leave per occasion, five days unpaid family and domestic violence leave in a 12-month period and unpaid community service leave.

Posted on 9 October '19, under business. No Comments.

Budget-friendly ways to promote your small business

Promoting your business can seem tricky to navigate and expensive, especially when there are budget and staff restrictions to think about. However, there are a number of ways to promote your business easily and cost-effectively.

Blog content:
Posting well-written and relevant blog content on your website can help boost website traffic while capturing the trust and engagement of potential customers. Regular content that aligns with the interests and needs of your audience will generally work best in gaining profile views.

Social Media:
While social media may seem like an obvious channel to keep running on as a background form of promotion, it can be worthwhile to invest more time and resources to get the most out of your business’s social media presence. Keeping the aesthetics and content of your social media pages regularly updated and relevant can be a great way to establish a brand image and gain attention from your target audience.

Email Marketing:
Growing your mailing list can be a great way to establish customer loyalty and to encourage customers to remember your business and revisit your website. Websites like Mailchimp and Benchmark are free email marketing services that are easy to use with predesigned templates.

Posted on 30 September '19, under business. No Comments.

Dealing with a bad day at work

Bad days can happen to the best of us, but that doesn’t stop work from needing to get done. Whilst working when you’re feeling down is the last thing you want to do, here are a few ways to pick yourself up and carry on with tasks you need to do.

Take a break:
Stepping away from the office to think can drastically improve your mood and help you look at the day more clearly. Going for a walk or sitting in the park on your lunch break can help you feel relaxed and better energised to go back to work. Even stepping out of the office for a moment to the bathroom can help remove yourself from a stressful situation. Don’t let yourself think about what has gotten you into a slump, think instead of what you can proactively do once you return to the office.

Express emotions appropriately:
Expressing your emotions is ok and necessary to feel better. It can be very easy to rant to colleagues or friends when you are feeling rough but there is a line between venting and gossip. Strong emotions such as anger can see you act out instead of thinking a problem through. Try to observe the problem through an objective lens before discussing it with colleagues or management and keep it strictly professional. This can help you to communicate better and avoid getting caught up in office politics.

Learn from the day:
Problems or unforeseen circumstances are opportunities to learn and grow. After a particularly trying day, take a moment to reflect on what didn’t go so great and possible reasons why. Evaluating what went wrong can help you to better understand how to avoid doing the same thing in the future, teaching you to be proactive, rather than reactive.

Posted on 24 September '19, under business. No Comments.

Hiring working holiday makers

In Australia, there are approximately 100,000 working holiday makers employed each year. Any employer can hire working holiday makers provided they meet the requirements to do so. Employers must confirm the working holiday maker has a valid visa subclass, either 417 (Working Holiday) or 462 (Work and Holiday).

Register:
Employers will need to register to apply the 15% working holiday maker tax rate and declare they are aware of the obligations associated, including complying with the Fair Work Act 2009. Working holiday makers can’t claim the tax-free threshold and must provide their tax file number (TFN). Employers who do not register must withhold tax at 32.5% from every dollar earned up to $87,000 and foreign resident withholding rates apply to income over $87,000. Those who do not register may be subject to penalties.

Working holiday maker tax rate:
Once registered, employers can withhold 15% from every dollar that a working holiday maker earns up to $37,000. Tax rates change for amounts above this. The tax rate applies to all payments made to working holiday makers, including salary and wages, termination payments, unused leave, back payments, commissions, bonuses and similar payments.

Super payments:
Eligible workers are entitled to receive super payments from their employers. When leaving Australia, working holiday makers can apply to have their super paid to them as a Departing Australia Superannuation Payment (DASP). The tax on any DASP made to working holiday makers on or after 1 July 2017 is 65%.

Posted on 18 September '19, under business. No Comments.

When do you need an ABN?

An Australian business number (ABN) is a unique 11-digit number that the Australian Business Register issues to all businesses, identifying your business to the community and government whilst also making it easier to keep track of business transactions for tax purposes.

While it is compulsory for businesses with a GST turnover of $75,000 or more to have an ABN and to be registered for GST, businesses with a GST turnover of less than $75,000 can still apply for an ABN and may choose to register for GST.

You are entitled to an ABN if you are carrying on or starting an enterprise in Australia. An enterprise includes activities done in the form of a business, as well as acting as the trustee of a super fund, operating a charity and renting or leasing property. Features of a business include:

Posted on 10 September '19, under business. No Comments.

Are they an employee or a contractor?

Employers that incorrectly treat employees as contractors can face hefty penalties and charges as well as claims for entitlements and superannuation contributions. Even if employers are only hiring someone for a few hours or a couple of days at a time, it must be established whether they are employees or contractors to get tax and super requirements right.

When hiring an individual, it is the details within the working agreement or contract that determines whether they are a contractor or employee for tax and super purposes. The agreement or contract the business has with the worker can be written or verbal.

Workers such as apprentices, trainees, labourers and trades assistants are always treated as employees. In most cases, apprentices and trainees are paid under an award and receive specific pay and conditions. Employers must meet the same tax and super obligations as they would for any other employees of the business.

Companies, trusts and partnerships are always contractors as an employee must be a person. If a company, trust or partnership has been hired to work, then it is a contracting relationship for tax and super purposes. The people who actually do the work may be directors, partners or employees of the contractor.

Sham contracting arrangements, where an employer attempts to disguise an employment relationship as an independent contracting arrangement, are illegal and breach the Fair Work Act 2009. Employers who engage in sham contracting arrangements can face serious penalties for contraventions of these provisions. The courts may impose a maximum penalty of $54,000 per contravention.

Posted on 3 September '19, under business. No Comments.

Quick fixes to boost email marketing

While email marketing remains one of the most effective platforms for businesses to reach clients on a personal level, it does not always deliver the results you may be after. If you’re finding that email marketing isn’t going as well as you had hoped, here are five simple ways to improve your campaign:

Experiment with your “from” name:
Seeing “from” information that isn’t clearly related to a person or place that clients know, is often a red flag for individuals who are becoming increasingly wary of email spammers. Make sure your recipients know they’re getting emails from someone they actually asked to hear from by making your “from” information as obvious as possible.

Target behaviour:
While segmenting an email list by demographics can produce results, it is much more effective to segment subscribers by their behaviour. Send clients targeted messages based on their service or purchase history, send loyalty offers to those who consistently open your emails or re-engagement campaigns to those who never do.

Remember mobile optimisation:
With approximately 53% of emails being opened on mobile devices, using mobile-friendly layouts and graphics will help with continued engagement. If the content doesn’t appear properly on a mobile device, chances are the subscriber will be less likely to open another email. Make sure images do not look stretched or take too long to load and use appropriate ratios on all platforms.

Posted on 28 August '19, under business. No Comments.

Evaluating risks in business  

Business owners are faced with constant challenges and tough decisions to make on a day-to-day basis. Risk-taking is often necessary to achieve more in the business, but owners need to make informed choices to avoid potential damages. To manage risk effectively, a proactive stance needs to be taken in identifying and responding to risks before a crisis strikes.

Identify risks:
Risks can be hazard-based, uncertainty-based or opportunity-based, with both tangible and intangible items posing risks for your business. Owners may find it easy to list the physical items at risk such as assets and infrastructure, yet neglect intangibles such as injury to staff, loss of important business information and more. It is important for business owners to be aware of the risks they could face in their business.

Calculate your risks:
Making an educated assessment of both the likelihood and potential severity of risks can help prioritise your responses. Once the risks have been identified they should be ranked on the likelihood of occurrence and the severity of consequence it might impose on the business. Risk ranking can help you to determine what situations need more time, attention and resources.

Manage your risks:
Finally, the risks need to be managed effectively. Avoidance is not always the best or viable solution as there is no way to ever be completely risk free. Transferring is a common way of avoiding damage as the risk is no longer your problem, for example, insurance and product warranties. Reduction of risk comes from a sound knowledge of your business and little things you can do that make a difference. Acceptance is for those owners with experience and a clear mind. Nothing in life is without risk, the business owners who accept this and learn from challenges are the ones who find success.

Posted on 19 August '19, under business. No Comments.

Deduction rules for small businesses

Spending on capital assets usually cannot be deducted immediately. Instead, small businesses claim the costs over time in accordance with the asset’s depreciation. There are many different processes that businesses can employ to make claims on their assets. For small businesses with lower-cost assets, methods such as simplified depreciation or the threshold rule can help to make more effective claims.

Simplified depreciation:
Under simplified depreciation rules, business owners can immediately deduct the business portion of each depreciating asset that was first used or installed ready for use up to:

Owners can also pool the business portion of most other depreciating assets that cost more than the relevant threshold in a small business asset pool. Then they can claim a 15% deduction in the first year, regardless of whether they were purchased/acquired during the year, and then a 30% deduction each year after.

The threshold rule:
The threshold rule allows owners to claim an immediate deduction for most expenditure of $100 or less, including any GST, to buy physical assets for the business. The rule is designed to help save time as purchases don’t have to be specified if they are of revenue or capital nature. Some examples of items costing $100 or less that fall within the threshold rule are:

Posted on 12 August '19, under business. No Comments.

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