Month: February 2020

Things to consider before rebranding your business

Posted on by Adam_Admin

Rebranding your business can seem like a daunting task, as it can involve a range of arduous tasks such as changing designs, updating clients, retraining staff and changing your marketing strategies.

However, rebranding can be an option for many businesses if:

  • Your business is too similar to competitors.
  • Your designs and values are updated.
  • You want to outgrow a poor reputation.
  • Your business is growing and changing.
  • You want to tap into a new demographic.
  • The market is changing.

To make the task of rebranding seem less daunting, consider these tips before starting to help you in your process.

Evaluate your need for rebranding
Make sure that the reason for your rebranding is valid and don’t act on impulse decisions. Rebranding can take a lot of time and resources and can often decrease your business if not done successfully, so it is important that you evaluate if rebranding is right for your business and outline the reasons why. It can be helpful to talk to staff about it to get ideas from people who are also invested in the success of your business.

Plan a budget
Before you rush into rebranding your business, make sure you have the funds to do so. Research and estimate how many resources will go into different areas of rebranding, e.g. marketing, website design, training staff etc. and outline a budget that can help you manage your finances through the process.

Have a strategy
Before you start rebranding, plan out a strategy that will guide you in the process and can increase the chances of success. This will help the process run more smoothly and prevent unexpected challenges that could detriment your business.

Solidify your mission and values
Having a clear understanding of the mission and values you want your business to have going forward can help you make important branding decisions and help build the foundation for your new brand. Having you and your staff on the same page with the business mission and values can improve efficiency and motivation when working on the rebrand.

Can you claim deductions for employee training?

Posted on by Adam_Admin

Employees of a small business may need to develop their expertise or skills in a particular area to better perform their duties. While training courses like seminars and one-day intensives can be a worthwhile investment, there are still a few things employers should consider from a tax point of view.

Employers can generally claim deductions for the full costs incurred when providing education to employees, including aspects like course fees and travel costs. Many owners tend to forget possible FBT implications.

Paying for employee work-related course fees commonly constitutes as a fringe benefit and is subject to FBT. However, FBT law allows a full or partial reduction of FBT payable provided that the ‘otherwise deductible’ rule is met. The ‘otherwise deductible rule’ implies that if the employee had paid the expense themselves, they could claim a deduction for the expense. The business could then provide the benefit to the employee without having to pay FBT on the amounts.

An education expense is considered to be hypothetically deductible to the employee depending on the type of course or education studied. The course must have a satisfactory connection to an employee’s current employment, maintain or improve the skills or knowledge required for the employee’s current role, or result in an increase in the employee’s income.

Employees cannot claim a deduction for education expenses if there is no connection to their current employment, even if it assists them to gain new employment.

When a trustee goes bankrupt…

Posted on by Adam_Admin

SMSF members need to be aware of the rules that govern their fund, including what to do when one member becomes bankrupt.

A requirement of an SMSF is that each individual trustee of the SMSF must be a member of the SMSF. In the case of corporate trustees, every member must be a director. This means all members are connected and held accountable for one another. If one member enters bankruptcy, they will be categorised by the ATO as a “disqualified person”, meaning they can no longer act as a trustee of the SMSF.

Where a disqualified person continues to act as an SMSF trustee or director, they will be committing an offence that is subject to criminal and civil penalties. The ATO provides a six-month grace period to allow a restructure of the SMSF so that it either meets the basic conditions required or can be rolled over into an industry fund. During the six-month grace period, the ATO requires:

  • The bankrupt to remove themselves as trustee.
  • The bankrupt to inform the ATO in writing.
  • To be notified within 28 days if there is a change in trustee.
  • The bankrupt to notify ASIC of the resignation as a director (if the SMSF is run by a corporate trustee).

Other members will need to remove the bankrupt’s balance from the SMSF before the grace period is over, this may involve:

  • Selling any real estate or shares.
  • Transfering the bankrupt’s balance to a managed fund.
  • Deciding whether they want to remain as a single member SMSF, or rollover their entitlements to a managed fund.

For members who enter bankruptcy, they must sell all assets for the market value available at the time and then transfer all of the liquid assets to a managed fund.

Keeping your virtual team on track

Posted on by Adam_Admin

Managing a virtual team can offer challenges that you won’t experience in-person teamwork. It can be harder to schedule meetings, show demonstrations and build connections. However, having a virtual team offers convenience, opportunity and freedom for the team members, so here are some tips to help you make it work…

Define goals and roles
At the start of the project, outline the project goals and objectives so that everyone is working towards the same thing. Delegate roles and obligations to each team member to avoid confusion and overlap. This will keep the team on track despite not physically seeing what each other is up to.

Stay engaged
In-person teams have many opportunities to check in with each other and see each other’s progress. As a virtual manager, it is important to create opportunities to stay in touch with your team, such as having regular phone calls or checkpoint meetings. This will provide your team with regular reminders of work that will help keep them on track and meeting checkpoint deadlines.

Use online tools
While you’ll most likely already be using online messaging tools, there are plenty of other apps and platforms you can also use to improve organisation and productivity. You can search for collaborative tools for things like mind mapping, video calls, sketching, calendars, to-do lists and schedules. These online tools can help your team see each other’s ideas, progress and deadlines.

Create time for casual interactions
Building connections between team members can be difficult with exclusively online work. If appropriate, you can consider creating opportunities for your team to get to know each other on a more casual basis to improve moods and collaboration. If everyone in the team lives very remotely, you can have more relaxed video calls where everyone can introduce themselves and chat as well as work. If the team lives in the same city, consider having in-person meetings and outings.

What to know about reverse mortgages

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A financial dilemma that is becoming increasingly common is finding a way to fund a comfortable retirement lifestyle without having to sell the family home. One solution to this is a reverse mortgage; a loan that allows homeowners to convert part of the equity in their home into cash.

Money from a reverse mortgage can then be received as a regular income stream, line of credit, lump sum, or a combination of these options. No income is required to qualify for a reverse mortgage, which makes them ideal for those who have retired from the workforce.

However, interest is charged just like any other loan. Since no repayments are made, the interest compounds and is added to the loan balance. The loan is then repaid in full (including interest and fees) upon the sale of the house, the death of the homeowner, or in most cases when the borrower moves into aged care.

Given the nature of this type of loan, it is important that homeowners understand the risks involved and consider how they can protect themselves as much as possible. Risks associated with reverse mortgages include:

  • The interest rates are usually higher than average home loans.
  • Variable interest rates mean that there will be changes to what you are charged over time. Debt can rise quickly since the interest compounds over the loan term.
  • The loan can affect your pension eligibility.
  • Drawing funds from your property can reduce what you could potentially access later on, leaving little left for aged care or other future needs.
  • For those who fix their interest, the costs to break the agreement can be very high.
  • If you are the sole owner of the property and someone lives with you, that person may not be able to stay when you die (in some circumstances).

Protecting your digital assets

Posted on by Adam_Admin

Cyber risk is one of the leading threats for small businesses in Australia, with the cost of a cyber incident averaging $276,000 for businesses.

Whether it’s marketing material, legal documents or customer details, businesses nowadays depend on the digital for operation. This is why it’s so important to make sure your digital assets are protected and safe from hackers, viruses and malware.

Keep track of all your digital assets
Listing all of your digital assets will make it easier to ensure that you’ve got everything covered, as we often don’t realise how many digital assets we have. These could include your social media accounts, trademarks, customer information, contracts and websites. You can prioritise these assets by which ones you want to protect the most to ones that wouldn’t affect your business if they were stolen.

Secure your servers
You can physically protect your servers by keeping server rooms cool, monitoring and limiting access to server rooms and keeping servers, switches and hubs locked. Securing your servers digital can be done by restricting the number of administrator passwords, using updates anti-virus software, regularly backing up data, setting up a firewall and keeping track of server reports to monitor changes and irregularities. You can see what security measures are available for your servers by seeking advice from a trusted supplier.

Implement two-factor identification
Two-factor identification requires a user to get through two layers of security in order to be allowed access. For example, having to enter a password and then entering a code sent to your phone. Implementing two-factor identification wherever possible will help add an extra layer of security, and for most online platforms such as Google and Mailchimp, no additional software is needed as you can choose to enable two-factor identification.

Secure networks
Protecting your network from unauthorised access can be done by using a firewall and reviewing firewall logs for unusual activity on your network. You can also restrict your staff from installing software and content for personal uses as they may allow remote access to the network and could bring in viruses and hackers. Additionally, it is important to always keep your operating system and security software up to date. Replacing any weak passwords with strong and unique ones can also go a long way.

Consider cyber insurance
Cyber insurance can be used to protect your business against digital breaches and risks, meaning that if your digital assets are lost, cyber insurance can cover related costs such as investigation and crisis management costs such as notifying customers and lawsuits. If you’re thinking of implementing cyber insurance, check if your current insurance company has the option to add it to your plan. If not, there are many separate cyber insurance companies you can use.

Tax implications of leasing commercial premises

Posted on by Adam_Admin

Leasing commercial premises, such as an office building, hotels or stores have their own struggles compared to being a residential landlord. Making the correct tax payment and knowing what you can and can’t claim is key in being a successful commercial landlord.

When leasing out a commercial property, you must include the full amount of rent in you earn in your income tax return. You can claim deductions for expense related to renting out the property for the periods it is being rented or is available for rent, such as:

  • Immediate deductions can generally be claimed for expenses relating to the management and maintenance of the property, including interest on loans.
  • Expenses such as depreciation costs of assets and certain construction expenditure can be claimed over a number of years.

Tax deductions cannot be claimed on:

  • Acquisition and disposal costs of the premise.
  • Expenses that you do not pay for, such as water and electricity costs that your tenants pay for.
  • Expenses that are not actually used for the commercial property.

As a commercial property landlord, you are liable for GST when your property is up for lease if you are registered, or required to be registered for GST. You can claim GST credits on your purchases that relate to renting out your property, such as managing agent’s fees subject to the normal GST credits rules.

Proposed law to restrict cash payments

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New restrictions on cash transactions may be coming into effect after the government released the draft Currency (Restrictions of the Use of Cash) Bill 2019, which proposed to make it an offence to make or accept cash payments of $10,000 or more.

The bill proposes that people using cash above the $10,000 limit could face a two-year jail sentence and fines up to $25,200. There are, however, transactions that are to be exempt from the cash payment limit, including:

  • Payments related to personal or private transactions, excluding real property transactions.
  • Payments that exceed the cash payment limit due to the payment also including an amount in digital currency.
  • Payments that only exceed the cash limit due to the payment being part of a transaction involving cash in transit providers, where the payment results in collecting, holding or delivering cash.
  • Payments, where there are no reasonably available non-cash payment methods and the inability to use a non-cash payment method was not a choice by either party involved in the transaction.

The bill was originally set to be enacted on 1 January 2020, however, after a flood of community objections, the Senate Economics Legislation Committee has agreed to hold a public hearing on 30 January 2020. The committee has opened an inquiry accepting concerns from Australians and plans to report back by 7 February 2020.

Why you need business interruption insurance

Posted on by Adam_Admin

With many small businesses often being the livelihood for their entire families, owners should consider taking out business interruption insurance in order to safeguard against financial loss experienced as a result of incidents such as fire, floods, damage and burglaries.

With statistics showing one in four small businesses would not survive if they had to close their doors for three months, business interruption insurance can get you through a temporary crisis by protecting your cash flow.

Business interruption insurance provides cover against a loss of gross profit and differs from insurance covering business property, equipment and stock. This form of insurance covers the ongoing expenses that need to be paid even if a business is not generating any revenue, like staff wages, supplier invoices, rent or loan repayments.

Business interruption insurance claims can be one of the more tricky types of claims a business can make. Some common issues include:

  • The definition of ‘damage’ in the policy.
  • Whether the business losses claimed have been the result of the specified damage.
  • Damage covering a wide area.
  • How the losses should be calculated and getting the values right.
  • Settling the indemnity period.

Business interruption insurance is not sold as a stand-alone policy. It can be added on to a business’ Property Insurance Cover or it can be purchased through a comprehensive package policy.

Small business owners worried about insurance premiums should note that most premiums including those covering property, fire, theft and loss of profits are tax deductible.

Is a pay cut worth it?

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When looking for a new career opportunity, a pay cut is something that may come up with a job offer. There are factors such as experience, field of work, job demand and potential for growth that all affect a salary offer.

Deciding whether or not to take a pay cut with a new position can be difficult and is best done after looking at the pros and cons of the opportunity.

You are changing careers
Jobs within your existing field and changing industries should be treated differently. For a new career, it is likely that you will need to take a pay cut to gain a new set of skills and establish yourself in the industry. Before you take the offer, make sure that the rate of pay is competitive and assess the opportunity for future promotions, to ensure that this pay-cut will not be something permanent.

You want to improve your work-life balance
Your work-life balance is crucial to maintaining your physical and mental health. Taking a new role that reduces your workload will result in a cut to your pay. Find the balance right for you and consider if what you will gain back in family time, free time and a reduction of stress compensates for your pay cut.

Opportunities for future growth
The short-term loss in salary may be worth it in the event that the new job opportunity has the potential to grow your salary past your current earnings in the future. For example, young businesses and startups with proven growth periods of time may be a good choice if you get in early and reap the financial rewards in time. Making less money in the short term may not be too bad if your salary, job satisfaction and experience are growing in the long term.