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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.

Boost employee productivity

All businesses need to look at ways to increase the productivity of their staff. When your employees get more work done, it will ultimately lead to the business making a bigger profit. As well as increasing productivity, employers should also aim to improve the happiness and wellbeing of their workers. Here are some ways to boost employee productivity without losing staff engagement.

Use feedback:
Collect as much data as you can from your employees. This can inform how you create the workplace to best suit their needs. Data you might collect could include information on their performance levels by installing productivity tracking software on their devices. You could also regularly survey your staff to gain more qualitative data on their personal insights and happiness levels at work.

Provide good tools:
A business can only foster a productive environment when employees have access to the best tools. Provide your staff with excellent hardware, software and office supplies. This includes laptops, office furniture, and amenities. The more comfortable that your employees feel at work, the more work they will get done. High-quality software will also help your business to achieve work more efficiently.

Allow flexibility:
Having an employee schedule in place may be one way for you to ensure your workers stay on task and produce a consistently high standard of work. However, rigid schedules do not always suit all employees. Allowing your employees to make minor changes, such as swapping shifts, flexible start or finish times and remote working arrangements can actually improve productivity and loyalty to the business. It can also benefit employee communication, dependance and engagement.

Posted on 6 August '19, under business. No Comments.

Supporting mental health in the workplace

Business owners have a responsibility to look after their staff and ensure they have a healthy working environment. This extends to mental health as well as physical. With one in five people experiencing a mental health issue at some stage in their life, there is a greater need to have mental health support specifically within the workplace environment of small businesses.

While most workers can successfully manage their illness without it impacting on their work, some may require support for a short period of time and others may require ongoing workplace strategies. Employers should be aware of mental health issues they can encounter and how best to approach them. Research is key in helping to understand what your employee is going through, how to recognise the illness and ways to successfully manage it.

Employers need to recognise the role in which work can play in an individual’s mental health. An ‘unhealthy’ work environment or a workplace incident can cause considerable stress and possibly contribute to or worsen mental illness. Under the Disability Discrimination Act 1992, employers must make changes to the workplace to enable someone with anxiety and/or depression to remain at or return to work, provided they can continue to meet the core requirements of their role. These changes can be temporary or permanent.

Further ways to promote mental health initiatives within your business include encouraging members of your workplace to seek help, reducing the stigma surrounding mental illness, and fostering connectivity and communication. Managing mental health within your business by avoiding conditions that lead to excessive stress and encouraging awareness and support can have many positive outcomes and cultivate a mentally safe and healthy workplace. Employers should also familiarise themselves with the work health and safety regulatory body in their state or territory.

Posted on 29 July '19, under business. No Comments.

Managing business growth

It can be exciting and reassuring when your new business venture achieves growth and success. When things reach a certain threshold, however, you may no longer be able to oversee everything as a business owner. Here are some key things to consider in order to manage the development of your business.

Key performance indicators:
As your business expands, determine some key performance indicators (KPIs) to evaluate certain tasks and how you will get regular data for each. Some examples include:

Develop your skills:
In addition to making changes that improve how your business operates, you should also focus on adjusting your own leadership style. In areas where you recognise you could improve on, think about delegating tasks to your employees to maintain growth. Brainstorming with your staff and other advisors may open you up to different perspectives and insights, facilitating a diversity of ideas within your organisation.

Anticipate competition:
Growth will inevitably attract competition. If the growth of your business begins to take away your competitor’s market share, they may implement strategies to counter your success such as lowering their prices, increasing advertising or adding new products. Be prepared for this and pay attention to the other businesses in your market.

Posted on 22 July '19, under business. No Comments.

What makes a successful business plan

When starting a new business, there are many elements you need to consider. Careful planning is essential to ensuring the longevity of your business, but what exactly goes into a good business plan?

A good business plan is one that is detailed. Sections should include; an executive summary, company description, market analysis, organization and management, service or product, marketing and sales, funding request and financial projections. These topics cover as much of the business as you can in the planning stage.

Showing attention to detail in your written plan demonstrates a commitment to the business going forward. When writing a business plan, there are a few ways to ensure you are creating the best guide for your idea. Researching the industry and other companies in the market you are looking to step into can give you an insight into more than just the competition. As a business owner, it is your responsibility to know how and if audiences will respond to you.

If you aren’t presenting your plan to investors or potential partners, determine what purpose your business plan will serve. A good business plan can be used not only as a sales document but a map for the business into its future. Writing a business plan that makes projections for the first five years can keep you on track and show you areas in which you need to focus on.

A business plan is a guide to help you create and maintain the best business you can. Even if things don’t go exactly as planned, a successful business plan is one that teaches you the things you want to get out of the business and ways in which you can achieve them.

Posted on 15 July '19, under business. No Comments.

Improving efficiency in your business

As a business owner, making the most of your day to optimise productivity is crucial to your success. The most efficient businesses are those that can create more with less and are driven by highly motivated employees and inspiring leaders. To maximise efficiency within your business, it is necessary to understand the importance of time management, organisation, and managing resources.

Tackle the hardest things first:
Ticking off the jobs that will require the most effort are usually done more effectively first thing in the morning. Also known as ‘eating the frog’, this can help you to avoid procrastination. Once you have done these tasks, all subsequent jobs will seem much more manageable, allowing you to get into a more productive workflow.

Avoid multitasking:
While trying to do many jobs at once may seem like an important skill for increasing efficiency, in reality, it may have the opposite effect. Attempting to multitask can result in lost time and reduced productivity, as you are not focusing properly on each task. Instead, consider making a habit of committing to a single job, completing it thoroughly, and then move on to the next project.

Set manageable goals:
It a common problem for business owners is not having a solid understanding of whether their employees are performing highly or not. This can be caused by a lack of achievable and motivational goals. By offering manageable deadlines for tasks to be completed, it can provide your staff with an incentive to stay on track. Giving clear direction to your employees can assist in clarifying your expectations of the business, helping to increase efficiency.

Posted on 8 July '19, under business. No Comments.

The art of reinvention

Small businesses often rebrand or reinvent themselves to keep up with marketplace trends. Knowing when to let go of an idea so you can grow is a smart trait for a modern business owner to have. Those who resist change and leave it too late to reinvent risk stumbling behind and even failing. Instead, businesses should focus on a proactive approach to growth for optimal performance and success.

Know when to reinvent:
A new idea may seem exciting and different but rebranding without properly considering how it will affect the business can doom an idea before it can take off. Look at your reasoning for wanting to change, is it the market? Has the economy shifted? Are you not challenged anymore? All are valid reasons for wanting to reinvent your small business but practicality is key. Know your means and what it will take to rebrand.

Continually forecast:
Industries are continually shifting, competitors introduce new products, customer needs change and technology is constantly transforming the way business is performed. Anticipating market changes is essential to be a competitive leader in your industry. High performing business owners understand that remaining competitive means you need to expect changes and prepare as such.

Focus on strategy:
Strategic planning is imperative to make reinvention possible. Businesses need to be able to detect shifts in their industry, ideally before they happen. The best way to predict these shifts is to involve line managers, frontline employees, store managers etc into the strategy process, as they often pick up on insights business owners can easily miss. For a business to reinvent itself, it needs a permanent strategy which continually scans the market for unsolved problems and untapped customer needs.

Posted on 27 June '19, under business. No Comments.

How bullying brings your workplace down

Bullying is a serious issue in workplaces and can affect your business on many levels. Workplace bullying is where repeated and unreasonable behaviour is directed towards an individual or group of employees. It is considered to be workplace bullying where it poses a risk to health and safety.

Reduced productivity:
As people don’t perform well in high stress and anxiety situations, businesses will face a loss of productivity due to workplace bullying. When workers are distracted by bullying, research suggests that productivity could decline by 40%. Employees who are being bullied may also experience a loss in motivation, which will cause them to avoid putting in any effort or time into their work.

Higher staff turnover:
People that do not feel comfortable at work due to the effect of bullying will be inclined to look for work elsewhere. This can cause a business to have high rates of employee turnover, which will have significant economic impacts on the employer. This includes the replacement costs associated with recruiting, hiring and training new staff. A culture of bullying within a workplace can also create low morale, making the business even more susceptible to high turnover rates.

Financial impacts:
There can be many legal costs and other financial impacts associated with bullying within a business. In some cases, employers may be found to be liable for the bullying that takes place within their organisation. They may be required to pay for damages, costs of legal proceedings, or even settlements in more extreme cases. Further financial impacts may be associated with rehabilitation costs if the bullied worker chooses to stay with the business. These costs may include counselling fees, team-building activities or anger-management training.

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

Good record keeping practices

Starting your business with a good record keeping system can help you track your business performance, meet reporting responsibilities and access financial history with ease. Since different rules apply to different types of documents, the length of time that a business needs to retain documents depends on what the documents are. Some businesses may need to keep documents indefinitely.

The seven year principle is recommended as a base due to the fact that seven years is sufficient time for defending tax audits, lawsuits and potential claims. Government departments and organisations, such as the Australian Securities and Investment Commission (ASIC) and The Fair Work Ombudsman (FWO), require company and employee records to be kept for seven years.

Owners should note that there are some circumstances where it may be required to keep documents for more than seven years. For example, documents relating to intellectual property rights, such as trademarks and copyright should be kept indefinitely by businesses. These documents should be retained for as long as the rights in the intellectual property exist.

Financial, legal, employee, policy and procedural records are the main categories of documents that a business will need to retain. Keeping good records can save you a lot of time and money when a situation arises as you may need to rely on these files if disputes or other issues appear in your business.

The general standards for record keeping in Australia are as follows, documents need to;

There are benefits and risks to storing files both on paper and electronically. The most important thing to remember, regardless of storage method, is to back up your records. A combination of both methods can ensure you have documents available when needed.

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

Building the right team for your business

While hiring the right staff is a key element when running a business, to be successful you will need to build a strong team. Here are some tips on turning a group of individuals into a cohesive, collaborative team that will help your business to reach its full potential.

Have a vision:
When starting a new business, defining what your motivations are can help you to visualise the type of organisation you want to create. This can help your staff to know what you are aiming for and understand the goals of the business. Don’t just focus on your products or services, outline the principles and characteristics you wish to build in your organisation. For example, some of your core goals may be to have outstanding customer service or to create a supportive workplace. Once you have outlined your vision, you can use it as a guideline for both you and your employees.

Involve your staff:
By getting your employees involved in the day-to-day operations of your organisation, it will allow them to use their strengths to integrate and develop into the business. Challenge your staff by giving them timelines or specific goals to strive for. If they have achieved these, acknowledge their success. This will motivate them to work hard if they know they are being recognised for their efforts. Consider team-building exercises or activities outside of work as a way to foster a friendly and positive environment. When your employees are happy and enjoy coming to work, this will reflect in your business.

Posted on 11 June '19, under business. No Comments.

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