Month: November 2020

Difference between website and social media for businesses

Posted on by Adam_Admin

Businesses may be questioning whether they need to create a website if they have a social media presence. However, each plays a distinct role in the formation of a brand identity and therefore, both are important. 

Social Media

Social media is straightforward and simple to set up, with no maintenance costs. It allows businesses to build brand awareness and interact with their customers in a more casual and relaxed way. Social media is essentially an in-depth marketing strategy which allows for paid advertising and has the capacity to reach many prospective customers from across the globe. 

On the other hand, businesses could spend many hours working on content that does not end up reaching the expected audience. A lot of time is required to continually create and post content which receives engagement and loyalty from customers. Although there are no costs with having an account, if you want your content to be targeted to your audience, this requires payments which can be expensive. 

Although social media gives access to customers you might not have otherwise had access to, it is difficult to convert these interactions into sales or use of your business services.

Website

Your website means you have full control of the platform. You can create a platform that reflects your business and your values. This also means that there are no external terms and conditions you are required to follow, instead, you determine those conditions. A website is also perfect for referrals, as it demonstrates professionalism and builds confidence in your business. 

Owning your own website means that you are able to track all incoming traffic and monitor the characteristics of your audience. This will provide you with a clear indication of what facilities you need to have on your website. 

However, maintaining a website that is heavy in content can be time and money consuming. There are also a lot more details to be weary about when it comes to marketing – but considering the amount of customisation you can have on a website, this is no surprise. Finally the design and set up of a website can be quite complex, and isn’t necessarily something you can or should tackle on your own. 

In summary, you should have both a social media presence and a website. Social media is an excellent marketing tool but a website is the heart of your brand’s online presence. 

Tracking your spending to spend less and save more

Posted on by Adam_Admin

It’s hard to know where to start when you decide to take control of your money. It can be helpful to know exactly how much money is coming in and going out to start this process. 

Understand where your money is going

Although it can seem daunting to track every dollar you spend, it will give you a clear view of where you are spending your money. Small things often go missing when you estimate your spending, so taking note of these will help you understand the gap between your estimations and your actual spending. 

Track your spending and expenses

You should start tracking your spending every day for a set period of time. This could be a few weeks or a few months. You will begin to notice patterns of spending the longer you track your expenses. 

A simple way to track your spending is through a phone app. Certain apps will even allow you to limit your spending and give you an easy-to-understand overview of your expenses. 

If you regularly use your card, then your bank statement will contain every translation detail. Views these regularly or at the end of the week. 

Alternatively, you can also write down where you spend your money and how much you spent. This is especially useful if you regularly use cash. 

Reflect on your tracking

At the end of this tracking period, you should be able to see where you most spend your money. Being aware of this might help reduce your spending but there are also other things you can do. 

Take note of where you can save your money. There may be certain items that you regularly buy over time, which you might be able to cut down spending for by buying for the long term. 

You should also distinguish between what you ‘need’ and what you ‘want’. This will give you a good estimate of what ‘wants’ you are spending most on and how to best cut down on them. 

Test out a budget

Using this information, test out a budget and see if it works. This time, you should aim to set a realistic limit for the next week or month. You should account for some of your wants as well as your needs. 

Your budget may require revising, but you should create one which balances your previous spending habits, and your future financial goals. 

What is an annuity?

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An annuity provides guaranteed income for a number of years, or for the rest of your life. It is also known as a lifetime or fixed-term pension. 

You can buy an annuity from a super fund or life insurance company. You are able to choose whether you want the payments to last for a fixed number of years, your life expectancy, or the rest of your life. 

In order to buy an annuity through your super fund, you must be in the ‘preservation age’ which is between 55 and 60. Additionally. You are required to meet a condition of release e.g. permanently retiring. 

You are also able to buy an annuity in joint names using savings. Through this method, you can split income for tax purposes. If either you or your partner dies, then the survivor has ownership and access to the funds. On the other hand, buying an annuity using a super lump sum can only be in the name of the owner.  

When you buy the annuity, you decide the payment amount you will receive. This can increase each year by a fixed percentage or indexed with inflation. Further, you can also choose if you are paid monthly, quarterly, half-yearly or yearly. There are some conditions the ATO has about minimum annual payments if your annuity is bought with super money e.g. must pay a certain percentage of the balance based on your age. 

You decide what happens with your annuity if you pass away. You can either nominate a reversionary beneficiary or choose a guaranteed period option. A reversionary beneficiary will receive your income payments for the rest of their life, usually at a reduced level. The guaranteed period option will allow your beneficiary to receive their payments as a lump sum or an income stream. 

An annuity will impact your eligibility for the Age Pension as it is accounted for in the income and assets tests which are conducted. You should discuss exactly how the annuity will impact Age Pension entitlement with a Financial Information Service (FIS) officer. 

Claiming your tax deductions

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There are different types of deductions that individuals can claim to reduce their taxable income. 

Work-related expenses

In order to claim work-related tax deductions, the expenses must have to meet three criteria. Firstly, all the expenses have to be paid by the individual, without being reimbursed by the employer. Secondly, they must be directly related to earning your income. Finally, there must be a record of the expenses (i.e. a receipt). 

There are various different expenses that can fall under this category. 

  • Vehicle and travel expenses: Commuting between different locations but not usual travel between home and work
  • Clothing, laundry, and dry-cleaning expenses: Cost of work uniform which is distinct and unique (i.e. has a specific logo)
  • Self-education expenses: Any courses or study associated with employees current role, such as textbooks
  • Tools and other equipment: If you purchase tools or equipment, then a deduction for some or all the cost could be claimed

Investment expenses

The cost of earning interest, dividends, or other investment income can also be claimed. This can include:

  • Interest charged on money borrowed to invest
  • Investment property ex[enses
  • Investing magazines and subscriptions
  • The money you paid for investment advice

Home office expenses

A portion of the costs associated with installing your home office can be deducted. The process is now much easier due to COVID-19. It allows people to claim 80 cents per hour for all running expenses. Additionally, people living in the same house can claim this individually, there is no need for a dedicated office. 

Other deductions

There are also other deductions available. These include:

  • Union fees
  • The cost of managing your tax affairs
  • Income protection insurance (If not through super)
  • Personal super contributions
  • Gifts and donations to organisations that are endorsed by the ATO as deductible gift recipients

How innovation can help business

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Innovation doesn’t have to be a revolutionary and world-changing breakthrough. It can also be small changes you make to continually improve your business. Innovation can help in multiple aspects of business.

  • Improve sales and customer relationships: Putting the time and effort into improving your products and services is essential if you want to retain customers. Customers will recognise the changes you make and your commitment to doing the best you can for them. This will inevitably translate into improved sales.
  • Reduce waste and costs: Implementing changes which utilise new ways to eliminate waste and increase efficiency are extremely important. This will help you either increase your profits, or invest the money you save back into other necessary improvements for the business.
  • Improve employee performance: Creating a work environment that promotes innovation is more likely to keep employees stimulated and interested in their work. When employees are given the opportunity to suggest and implement changes, they are more likely to take pride in their work. This will also result in greater productivity.
  • Boost your market position: Innovation is also important in keeping up with changes in the market. Creating a company culture which is flexible and facilitates regular changes will mean that you can transform according to the needs of the market. This will differentiate you from competitors and boost your position in the industry.

Customer retention strategies

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Retaining customers is just as important as acquiring new ones, if not more important. This is because unless customers had a negative experience with your company, they will use your services or buy your products again. 

Here are some strategies you can use to retain your customers:

  • Observing customer behaviours: Analysing customer behaviour patterns will help predict customer needs and create services or products that respond to those needs. This could involve having a sale during periods when your customers show a tendency to engage with your company. 
  • Targeted approach to customers: Collecting data can also help you personalise your approach to individual customers. For example, a certain demographic of customers may value free delivery, while others prefer discounted products. Ensure that you are making the best of the data you collect.
  • Create VIP programs: Rewarding customers that regularly buy from or use your services is important in making them feel valued. Create a VIP program that gives regular customers incentives and benefits so that they are encouraged to continue coming back.
  • Individualised communications: Interactions that are personalised have been found to be effective. This can start with something as basic as sending email campaigns that have the customers’ names. 

Breach of employment contracts

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Employment contracts contain terms and conditions which both the employee and employer agree upon. Ideally, this contract should be written rather than confirmed verbally to avoid miscommunications or misunderstandings. Contracts may also contain implied terms i.e. not misusing confidential information. 

Employment contracts are also governed by legislation that provides further information about the minimum terms required, remedies that can be utilised, and basic regulatory frameworks. The industry you are in may also have additional industry-specific requirements that are legally reinforced. 

Breach of employment occurs when employers or employees fail to comply with the terms of the contract. The innocent party may be entitled to sue for the damages that have occurred as a result of the breach – so that they can be restored. A substantial breach may also allow an immediate termination of the contract and additionally allow individuals to sue for any loss incurred. 

In the case that an employer or employee has breached a contract, it may be easier to navigate the difficult processes that need to be completed with the help of a legal advisor. This is because a breach of contract can be fairly nuanced and information provided on websites may not be sufficient enough to lead the process without help from a legal professional. 

The government may be able to provide free or concessional legal advice which should be utilised as legal proceedings can often be costly. 

 

Super scams: What to look out for

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The market for super funds is extremely competitive. Scammers take advantage of this by promising unrealistic benefits to acquire personal or account details. They are able to use this information to steal your identity or transfer your super to an account they can access. 

Scammers can approach you in various ways. You could receive a phone call, email, or be contacted online. 

This is what you should be wary of: 

  • Advertisements promoting early access to super
  • Offers to ‘take control’ of your super
  • Offers to invest your super in property
  • Offers quick and easy ways to access or ‘unlock’ super

The best way to spot a scam is to know what the rules about your super fund are. Knowing when you can legally access your super will protect you from false promises. Additionally, the ASIC website lets you check if someone is licensed, if they are not licensed, more likely than not, they should not be trusted. 

If you believe that you’re being targeted by a scam, then rather than simply ignoring approaches and not engaging, you should report the scam. You can do this by calling the ATO or completing the online complaint form on the ASIC website. 

How are investments taxed?

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Investment income needs to be included when conducting tax returns. This includes any income acquired through interest, dividends, rent, managed funds distributions, and capital gains. The income yielded from investments is taxed at a marginal tax rate. 

Individuals are able to claim deductions for the cost of buying, managing, and selling an investment. However, the Australian Tax Office (ATO) provides rules about what an or cannot be claimed as a tax deduction. 

The MoneySmart website has a simple and easy-to-use tax calculator that may give an indication as to what the annual tax will be. However, it is recommended that if an individual has a diverse portfolio that yields income from multiple sources, then should consult an accountant or advisor that can lead them through the process as it can become quite complex. 

In order to minimise taxation on investment income, individuals should consider tax-effective investments that provide concessional taxation. These include superannuation and insurance bonds.