Repeal of ‘Mining Tax’ (MRRT) and other consequential changes
You may think that the introduction of the Mining Tax and its proposed repeal by the Abbott Government would have no impact on your business.
You would be wrong in this belief.
When the MRRT was introduced, the government of the day incorporated a number of measures that ‘gave’ some of the taxes (that were expected to be collected) to small business and low income earners.
The repeal of the MRRT will now reverse some of the original ‘relief’ measures.
You need to recognise that this repeal is not yet legislation and needs to pass both Houses of Federal Parliament where it could be altered from the current proposals.
Despite that possibility, some of the measures have a time consequence which might be relevant to your business decisions in the short term, so are worth your immediate consideration.
The items listed below are the ones most likely to be of relevance and are explained briefly including the ‘timing’ aspects. In its current form, the Repeal Bill would discontinue or re-phase the following measures:
1. Repeal loss carry back for companies.
This measure ONLY applies to businesses set up as COMPANIES (and Trusts which are taxed as companies). The repeal will mean that the original measure only applies to the 2013 FY. There is no ‘tax planning’ that can be implemented to utilise this measure in 2013 – it is a question of ‘fact’ and most businesses will get no benefit for the 1 year that the rule applies.
I will speak specifically to my clients who may be able to use the measure in 2013.
2. Reduce small business immediate asset purchase write-off threshold
This is the big change.
Since 1 July 2013, small businesses have been able to claim a full deduction for capital expenditure up to $6,500 per item of plant and equipment in the year of purchase.
This is going to revert to the old limit of less than $1,000 per item if acquired after 31st December 2013. Back to the Future!!!
If your business is contemplating asset purchases greater than $999.00 and less than $6,500, it could be important to ensure that purchase is completed before 31st be entitled to the immediate write-off in 2014 Financial Year.
Assets costing $1,000 or more acquired after 31st their ‘effective life’ or may be ‘pooled’ and depreciated under the special rules applicable to small businesses as they previously were, so all that has changed is the asset purchase cost threshold will revert to its old $1,000 level.
3. Repeal accelerated depreciation for motor vehicles purchased
Since 1 July 2013, small businesses have been able to claim a $5,000 immediate deduction for the cost of new or second hand motor vehicle expenditure. The amount above $5,000 was then able to be depreciated over effective life of the asset or via the ‘pooling’ rules.
This special ‘accelerated depreciation’ for motor vehicles will be abandoned from 31st
December 2013 and such purchases will be treated the same as described in 2 above (ie revert to the $1,000 cost threshold just like any other asset).
If your business is contemplating purchasing a motor vehicle (of any price), you should consider whether the purchase is best completed before 31st to be entitled to the
$5,000 write-off in 2014 Financial Year (plus depreciation for the cost above $5,000).
4. Extend by two years the phase-in period for increase in compulsory super guarantee
Unlike 1-3 above, this change is a ‘plus’ for business cash-flows.
The current compulsory super contribution for employees has been 9.25% since 1st July 2013. This is scheduled to increase progressively until it is 12%.
The rate will remain at 9.25% until June 2016 and increase to 9.5% from 1st July 2016
The rate will still phase-up to 12% by 1st July 2021, but the 9.25% rate remains in place for an extra 2 years
5. Repeal the low income super contribution
This change won’t affect businesses – only low income earners (who of course could be the business owner).
Under the current rules, a low income earner (defined as ‘adjusted taxable income’ up to $37,000) could get an amount up to $500 contributed to their super by the Government.
The repeal of this rule will apply from 1st July 2013 so there is no 'tax-planning' opportunity on this measure.
This is only a brief outline of the proposed measures and need to be fully considered as applicable to your business. You should therefore speak with me before you choose to act on these matters.
Registered Tax Agent
Pinterest is a useful and convenient way of promoting your company’s services and products. It recently introduced new-look business pages and terms of service that allow users to make commercial use of the services on offer. This includes product promotion, sales and leads generation and numerous other commercial uses.
To get started, your personal profile will have to be updated into a business account. If you don’t have a personal account already, you can dive straight in by opening a business account.
Here are a few tips on how you can get started using Pinterest commercially to most effectively promote your business.
Theme your merchandise
Your products may be better promoted if you group them around a theme. This can be based on colours, materials, designs, ingredients or anything else you desire. When you’ve settled on a theme, choose a number of different boards based on it. A colour theme, for example, will have products of the same colour pinned to one board, and so on. Set the boards up and start pinning the appropriate products to them, and remember to add a decent description. This will help potential customers find products based on a favourite colour.
Highlight the most popular products
Buyers are attracted to popular products as they know that such products are selling well and they’ll want to get in on the action before stocks run out. So create a board for your most popular products and let your customers know in the description attached that these are your big sellers. Pin a few images of the most popular items to it, along with their descriptions, and you could also rank them individually for that added professional touch. Be sure to keep the board updated regularly because incorrect or outdated information never goes down well.
Generate a few leads
To use your Pinterest page to get some leads generated, start off by creating quality content such as case studies or detailed reports that include an opt-in form. An effective cover image for that file should then be a good image of the product, which will then be pinned on a board where your premium content will be shared. Essential to this is a call to action embedded in a short description of the product, whereby visitors are invited to sign up on your website. This should all generate more leads and increase traffic landing on your home page to ultimately drive increased sales.
Like all businesses, your aim is to generate sales and leads for your products and services, and for this you need to build an audience. You can then start promoting your products after gaining an audience potentially interested in buying them.
The best way to gain audience on Pinterest is to set up a board dedicated to the products you’re most interested in selling. Pin products just the once to avoid giving the impression of over promotion. Once you’ve pinned up a product, include with it all the comments, repins and initial likes to give it social kudos and encourage others to check it out.
Guest post author: Carlo Pandian is a social media enthusiast and coach on SME bookkeeping software by Intuit. He has previously worked for Adzuna, a tech start-up in London and likes to share business and marketing tips with the online entrepreneurial community.
Have you considered where your business would be today without your clients and your hired team of employees?
Logical answer really, isn't it! Your business would be closed.
Now consider why you started your business in the first place.
Building businesses with a "lets make money, create jobs, get rich" philosophy is dangerous for a number of reasons.
- Was it to make money, get rich, retire early?
- Was it to buy that boat, take a world trip, have time with your family?
- Have you considered the value of your desires in business, and your thought process toward money?
- How is it all working out for you?
- Is your business growing successfully or is it struggling?
1. A strictly money driven business mindset overlooks the heart of business, which is excellent customer service.
2. Many companies as large and as long standing as Darrell Lea have faced difficult outcomes, such as when voluntary administrators were appointed to Darrell Lea amid fears of deep financial distress.
* source: www.news.com.au 18/07/12
3. The economy has no regard for people, while travelling in financial cycles based on external factors resulting in GFC.
4. Without valued clients and a happy productive team, all businesses, regardless of their size, will struggle and financial stress may occur.
5. When work is hard to find, discounts are given more freely and prices reduced in fear, clearing away any potential profit.
The greatest challenge modern businesses face today commences with their thinking toward success and how they will achieve it.
Most people think of businesses in terms of products, services, cashflow, marketing, expenses, vehicles, and making money at all costs.
Rarely do we stop to consider the life blood of any business, which is its valued clients and hired team. The people our business serves within the community, and the team that is hired to grow the business to better serve its valued clients - is the businesses greatest asset.
On the other hand, stress is the enemy of business. The reality of today's modern small businesses is the high stress levels of the owners, and their shortage of financial resources and clients.
This stress has repercussions. It effects the atmosphere by impacting on existing clients, and the working team while clouding the owners thinking. Stress holds a business back from productive growth.
The solution for management is to delegate and train your team to be excellent in customer service.
Delegating can be the most challenging task self employed business managers do in their day. Yet to delegate and to create a happy, productive team environment is to create the most valuable asset in any business.
Invest in self development training, and conduct weekly team meetings.
Create a team attitude of " working with you, not for you!"
Teach your team everything they need to be successful within their roles.
Encourage working productively and happily together towards team goals, by being respectful and positive, therefore leading by example.
Encourage feedback and improvement from your team regarding their roles, both collectively and individually at team meetings.
When your customers feel valued, and your team feels valued, your business will succeed. Referrals and testimonials will follow, creating opportunity.
By engaging your clients with a well trained, happy team - you have created a business that will grow and develop beyond the management which oversees it. This will provide you the time and profit to grow your business further.
Let us explore this concept shared with me by a business friend:
'The energy for today is all about the momentum of working in a team. Sometimes we believe we can do it best by ourselves and yet when we explore the avenue of a team it brings together different energies and ideas - opening up to greater opportunities in life and work.'
Consider a Team which unites to become: Together We Achieve More!
With this team philosophy at heart, your team will become your businesses most valued resource. By working together in a happy environment, everyone will succeed.
The backbone of any business remains its valued clients. Build your team, and train them to be a cooperative, collective group to serve and value your clients.
With this client / team mindset, your business will grow to be successful, as money is no longer the underlying factor in the equation.
Until next time.
Stacy Nichols is the managing director of Infinite Electrical in the Gold Coast. She has 20 years experience working in both private and public enterprises within Australia. She now owns and operates her own businesses. She is always looking for new business ventures and ways to create income.
Have you taken the time to look at what the true cost of employment is to your business?
Recently the financial officer of a large business figured out the cost of an employee by performing the following calculation:
Annual Salary ($80,000) divided by weeks of the year (52) divided by hours per week (38)
$80,000/52 = $1,538 per week
$1538/38 = $40.47 per hour
Is this really the true hourly cost of an employee? He was correct on the hourly rate at face value but when I asked if he knew the real hourly rate is he still tried to convince me it was $40.47 per hour, this is about the time an HR Consultant starts ripping her hair out.
What this financial officer failed to take into account was the real cost implications of hiring an employee; now let the education begin!
Obviously there is a base salary as outlined above, but he had not worked out the associated costs of that employee. Consider an employee on a base salary of $80,000 example, did you know that this employee will end up costing you up to 1.4 times more than $80,000?
How you ask;
1. Firstly there is superannuation, which is paid on top of the base salary for any employee earning over $450 in a calendar month, which is a minimum of 9%. So immediately you need to factor in another $7,200 that you need to pay out.
2. Next is annual leave. Although this is built into their wage, you are effectively paying $80,000 for 48 weeks of work in the year, which means the correct annualised wage for the employee is roughly another $6,667.
3. In addition you have sick leave, which is generally 10 sick days per annum, roughly another $3,333.
4. Next you have public holidays, again there are usually 13 public holidays in Australia each year, adding another $4,332.90.
5. Compulsory workers compensation varies depending on the industry you’re in, but can be in excess of 15% of the total annual wages. For our example, we will use 5%, another $4,000.
6. Payroll tax is payable in each state when you pay over a certain threshold in wages, the threshold and percentages vary from state to state, but QLD for example has a threshold of $1,100,000 and a rate of 4.75%. Even though you may not have passed the threshold yet, if you are planning on expanding your business, you may pass it in the future, and thus should account for it. This would mean another $3,800
7. Another cost you must consider is the cost of actually recruiting staff, on average this will cost around $5,000, which includes the recruitment costs, down time and training. If your staff member were to stay with you for 2 years, this would be an annualised cost of $2,500.
After taking these things into consideration, your staff member who you employed on $80,000 p/a, is actually costing you roughly $111,833, a new hourly rate of $56.60 a little bit more than the $40.49 my client first thought. Keeping in mind that these aren’t all the costs associated with employing someone, you would also need to consider ongoing training and professional development, office space, stationary, computers, office furniture, staff amenities etc. to get the full cost of employing someone.
Now that you have a better understanding as to what your employees are costing your business what measures will you put in place to reduce turnover and manage non-performing employees to get a better return on investment?
Sharon Collitt is known as the Employment Relations Specialist, and founder of Employment Toolkits. Sharon is a qualified Human Resources Professional who is passionate about empowering business owners to take control of their employment relationship management to ensure legal compliance and an efficient workforce. With the right people and processes Sharon has proven that their business will stand out from the crowd and make a difference. She achieves this by providing the most up to date information and toolkits that gives employers the leading edge in managing and developing their people.
My business 'Fun Fondues' is a mobile fondue (tabletop style of cooking) catering service located in the ACT. I am inspired through my recently deceased mother - back in the 70s she would host the most amazing fondue parties, creating my most cherished, memorable memories growing up.
Recently I went to a used gold jeweler to sell some gold, diamond and sapphire wedding and engagement rings left to me to help with my start up business. They only offered me $125 for the lot!
I noticed that one ring had some words engraved on the inner ring. Not being able to read it clearly, I asked the jeweler to use his magnifying glass and read it for me.
It read..." the journey of one thousand miles begins with one step."
The hair stood up on the back of my neck, tears welled in my eyes - a message from beyond.
This has become my mantra. Every day now I take one step in the development of my business.
Recognizing our worth, NO I did not sell the jewelry.
02 6262 9845
...whipping your staff admin processes into shape!
Your workforce is your most important, and often your biggest, business asset, so better structure and processes around managing your staff offers many obvious benefits such as time savings, money savings, better staffing decisions, increased control and peace of mind. However, there are benefits that are not always so obvious... one of those is better customer service!
Essentially, your staff are your business. They are your representatives, your front line, the driver behind your day to day operations. Your product and service offerings, customer service and reputation all rest on your staff - so you need to ensure you manage them effectively.
It’s easy to understand that when your administrative processes and your workforce are well organised and working effectively it results in a professional looking business (which consumers do notice) and happier staff - and that means better customer service and a better overall customer experience!
See our three key ingredients to gearing your workforce towards better customer service...
1) The “right” number of staff
It’s the thing that keeps you up at night - figuring out how many staff you need working at any given time, who will work what shifts and what's it going to cost you. It's called rostering and if you don't have processes around how you do it, it will cost you time and your business money.
Not enough staff rostered on - customer’s won’t get the level of service they expect, you'll lose sales and the staff you do have on will be overworked and stressed. Too many staff rostered on - it’s a waste of resources and money... and your staff are bored and frustrated.
REAL LIFE EXAMPLE: You are at a bar... the line up is 5 people deep. It’s slow, it’s frustrating and all you want is a beer or a wine or maybe even just a soft drink. Is that too much to ask? It is a bar after all – isn’t serving drinks their staple?
Rather than wait you bail and go to the bar down the road (there is always a bar close by!). Not only did that bar lose your business, you’ll tell everyone about that bad experience you've had and you’ll think twice about going back there or maybe you’ll never go back there again!
All that bar needed to do was make sure it had more staff members on to serve... imagine the extra cash that business could make by putting just one extra person on. Now, what if they could use software to predict their “busy” periods and suggest appropriate numbers of staff. Or what if they could see it was getting busy and send a broadcast SMS to all the staff the system knows is free to work a shift at that time – a staff member could be there within 15mins! This is all very possible!
2) Organised and informed staff
If you want your staff to feel like a part of your business "team" then treat them in a way that shows you respect them. Keep them well informed and manage them in a way that is consistent.
Your staff want to be kept in the loop and want easy ways to communicate with each other and with you. Most importantly they want to know you have things under control. They want to be able to come into work and do their job. No one likes surprises!
When your staff feel secure in your ability to manage them and run your business that attitude of calmness and confidence is passed onto the customer.
REAL LIFE EXAMPLE: Joe comes to work and does his hours, he fills in his paper timesheet... it’s hard because he has to rely on his memory quite a bit but he uses some post it notes to jot down his times every day to make it easier.
Every time his pay is deposited into his account he goes through it with a fine tooth comb making sure to match it up with the post it notes he has been keeping. It’s such a hassle for Joe but he has to do it because his pay packet is sometimes wrong. Joe doesn’t want to be underpaid or overpaid because every time there is an error it is such a hassle to chase up and takes a lot of time for him to do so.
All he wants is for his work hours to be documented accurately and his pay to be correct every time. Is that too much to ask? He does his job properly why can’t he be paid properly? Eventually frustrated, Joe goes and finds a job with another business that has automated systems in place that make his life much easier! Joe was a great worker and the customers loved him... he was a great asset that is now lost.
If only Joe’s employer had an automated roster, timesheet, pay rate calculation system. That way Joe could fingerprint on and off his shifts, have his hours automatically recorded, have his pay rates calculated automatically and then that could all be sent through to payroll. With the reduced reliance on human intervention in that process, Joe could ditch his post-it notes and have the confidence in knowing his pay packet is correct!
3) Happy staff
It's simple. If your staff are happy it will influence how they behave with your customers. It's all about positive vibes - most customer experience goes beyond words - attitude and actions is where it really counts.
A major gripe of staff is how they are managed especially with regards to administration or as we like to call it "the paperwork". For instance, staff want to be allocated shifts based on their availability and they want to easily see what shifts they are working. They want to do as little admin paperwork as possible - they see it as a waste of time, and it usually is!
Having sound processes around how you manage your staff will make their lives, and yours, easier!
REAL LIFE EXAMPLE: Susan always makes sure her manager knows what times she is available to work. She studies and works part time at another job so she has to manage her time effectively and make sure she is super organised.
Even though she goes to the trouble of detailing her availability in emails and post it notes her manager is always losing them or not looking at them when he does up the roster. So many times she finds out about shifts less than a week in advance or she is rostered on to work at times she has already said she can't do. She has had to amend other parts of her life many times to accommodate shifts that she didn't know she was working.
Every time she is given an incorrect shift she gets frustrated and often the manager asks her to help out and find a replacement. Eventually Susan becomes so frustrated that her "needs" are not being taken into account that it starts to show when she is dealing with customers. She still does a competent job but she is less than happy and customers see that - they walk out of the store saying things like "gee, it would have been nice if I could have at least gotten a smile". They will get that smile somewhere else and then you lose their business.
Staff feel respected when their employer takes into account that fact they are human and have lives outside of work, that they like to know what they are doing in advance and that they can't just drop everything and work a shift. If only Susan's work had an automatic rostering process. She could enter her availability online and the rostering software would take it into account when building rosters. Then the system would sms her the shifts she is to work, well in advance! She could sms back to confirm she can work those shifts and if for some reason she couldn't work a shift wouldn't it be great if the system could find a replacement for her. How easy would that be for Susan! How easy would it be for her manager as well!
...and of course with any good recipe there needs to be a binding ingredient: Technology.
To enable the above three ingredients to be achievable you need to add a fourth “binding” ingredient that pulls everything together – and that of course is, technology.
The days of rostering via Excel spreadsheet, staff availability scribbled on bits of paper, phone calls to communicate shifts, written timesheets based on memory, calculators to add up hourly rates and fat fingering numbers into payroll, are over. Those frustrating, error prone tasks are now able to be completed quickly, easily and accurately by software solutions that are geared specifically to helping administer a business workforce.
Look for a cost effective, web-based, easy to use software product backed by a provider who will deliver you a fully supported solution. Web-based is the way technology is moving (you will hear “the cloud” mentioned a lot these days!) and it’s great because you can access your system from anywhere with an internet connection – so you can run your rostering, payroll, check what staff are on duty etc from home, work, Hawaii – wherever!
Look for guarantees as well - like metrics on exactly how much time and money the product is likely to save you. Also your provider should be able to do continual evaluations and analysis of your “savings & benefits” for a couple months after the software solution is implemented - just to check its working properly for your business.
Be careful of big up-front costs. Older desktop based solutions will cost a lot up front as you are paying for expensive and probably already out of date hardware. Look for solutions that have small set up costs, require minimal hardware and charge an ongoing monthly rate that is calculated on a “per person” basis – that way you will only pay for what you need.
...and most importantly look for a provider who will actually get to know your business processes before they even suggest a solution. The more they find out about how you currently manage your staff the more value they can offer in terms of streamlining your processes and matching software to your business needs.
Streamlining staff admin processes will result in better staffing choices and a smoother running and happier workplace for owners, managers, and employees. The flow on will be obvious as a better work environment will result in a better customer experience.
Streamlining may seem like it’s a difficult or costly thing to do, but it’s not. There are tools out there that can be tailored to your business to quickly and easily streamline your staff admin processes. Just be sure to look for a cost effective, web-based, simple to use product that does everything you need and is backed by a provider who will deliver you a fully supported solution.