Maximise holiday sales during the pandemic

This holiday season is not going to be like any other. Preparing for how your business will tackle the change ahead of time will help maximise sales. 

  • Maintain a human and compassionate approach in all customer communications: This will make your customers feel more comfortable and be pleasantly different to the technology-based interactions they are likely to have had due to the pandemic. 
  • Use real-time data to understand buying trends and change the products that you focus on selling depending on this data: Using the data your business has access to in an effective way can be extremely helpful to plan advertising campaigns that are catered to your consumers and what they desire.
  • Promote sales as early as possible: This gives customers an opportunity to spread out their buying and minimises in-store traffic closer to the holidays. This is especially important due to restrictions placed on the number of people that can enter stores. 

Considering the financial difficulties every business has experienced this year, it is important to take advantage of the holiday season where possible. These tips will assist your business in making use of the surge of buyers that is likely to occur.

First home super saver scheme

The first home super saver (FHSS) allows individuals to save up for their first home in their super fund. The money saved in the super fund is taxed concessionally and therefore, individuals are able to save faster. 

Individuals can make voluntary concessional (before-tax) or voluntary non-concessional (after-tax) contributions into their super fund. They can then apply for those contributions to be released. This also releases any earnings associated with those contributions. 

This scheme can only be used by a first home buyer if both of the following apply: 

  • They are living in the premises they are buying/intend to buy (when practicable)
  • Intend to live in the property for at least 6 months within the first 12 months (when practicable to move in) 

The eligibility criteria to participate in FHSS is as follows: 

  • Make super contributions from any age BUT only request a determination or release of amounts after 18 years of age
  • Never have owned a property in Australia (includes investment property, vacant land, commercial property, lease of land in Australia, company title interest in land in Australia) other than if there has been financial hardship as deemed by the Commissioner of Taxation.
  • No previous request to the Commissioner to issue an FHSS release authority in relation to the scheme. 

Eligibility is assessed on an individual basis; couples, siblings, or friends can access their FHSS contributions to purchase the same property.

There are many other considerations for FHSS which individuals should take into account if they plan to use the scheme. 

Tax relief for individuals

The Federal Budget for 2020 announced personal and business tax relief through various tax cuts. The legislation was approved by parliament meaning that individuals and businesses will be paying less tax, and have more money to invest and spend into the economy. 

For individuals, the government has brought forward tax cuts which were initially planned for 2022, now they will be backdated to July 2020. These cuts are set to amount to $17.8 billion and will assist low to middle-income earners. 

What are the specifications? 

  • Tax bracket thresholds were increased. The top threshold of the 19% bracket increased from $37,000 to $45,000 and the top threshold of the 32.5% bracket increased from $90,000 to $120,000. 
  • The low-income tax offset increased from $445 to $700

Therefore, depending on which bracket an individual falls under, they will receive tax cuts as well as a one-off payment. These payments can vary from $510 to $2745 depending on which bracket the individual falls into. However, if their income is higher than $126,000, then they will not receive the one-off benefit. 

Consolidating your super

Consolidating your super can save you time and money. Consolidating your super means that rather than having multiple different accounts, all your super is in one account. 

Why you should consolidate your super:

  • Choosing to consolidate your super means that you will no longer be paying fees to multiple super funds. 
  • There is also less paperwork to complete each time
  • You will be able to track your super more easily 

Before you consolidate your super: 

  • Consider how changing super funds affects employer contributions: Certain employers may contribute more to one fund than another. In which case, you should consider switching to the fund that your employer is most compatible with.
  • Consider how changing super funds impacts insurance you have through the fund: Changing funds might mean you no longer receive benefits of the insurance. Double checking the details of this is particularly important if you have a pre-existing medical condition or you are aged 60 or over. 
  • Inform your employer of any change in details they may need, to pay to your chosen super account. 

Don’t simply choose the account with the highest balance. Rather, take into consideration the performance of that super fund, the fees you are required to pay, whether it is linked to any insurance and any other factors. Upon reviewing this, you may find that rather than choosing between your current super funds, starting with a completely new fund might be the best way to go. 

How to consolidate to one of your current super funds:

  • Create an account on the myGov website
  • Link your myGov account to the ATO
  • Go to ‘Super’ and then ‘Manage’
  • Select ‘Transfer Super’ 

Transferring to a new fund

In the case you decide that transferring to a new fund is the best option, you can consolidate either by contacting the new fund directly, or using an ATO rollover form. 

Small businesses and mental health

Owning and running a small business often means that you are responsible for most or all of the tasks that need to be completed. Often, owners will find their time being entirely occupied with their business. This can take a toll on their mental health and cause work related stress. Which not only inhibits one’s ability to complete the duties of their role, but also puts them at greater risk of developing mental health conditions. 

Keeping work hours in check

Although it is tempting to focus on your business at all times, this can prevent individuals from participating in other activities which are important for physical and mental health. Business owners may feel motivated and enthusiastic to put extra time into their work, however, long work hours have been associated with poorer mental health, fatigue, burnout, worry, and irritability. 

Creating a work life balance by setting time limits on work hours might be a necessary precaution at the start. Taking breaks during the work day and setting time aside during the week will be extremely beneficial. 

Accessing support

Running a small business can often be isolating as there is rarely someone to share concerns of the business with. This will mean that owners are dealing with all of the issues on their own.

Discussing issues that arise with family or close friends can help reduce the feeling of being isolated. Alternatively, there are groups of small business owners who, and business mentors who may be able to understand and relate to what owners are experiencing, and potentially provide relevant advice. 

Maintaining a healthy lifestyle

A healthy lifestyle can help individuals manage stress and work towards improved mental health. This will also improve the ability to focus and concentrate when working. 

Developing good sleeping habits is a great way to kickstart this process. It can also be helpful to try different relaxation techniques such as meditation and exercise is an important start. Remember that this is a trial process, so trying different techniques to find the most effective one is essential.

Building a strong team

Individuals often need to come together to form a team in order to successfully accomplish tasks in the workplace. Employers should aim to build team cohesion so that team members are co-operating and working efficiently. 

Employers should:

  • Encourage regular communication within team members. Simplifying the communication process for individuals so that they can keep team members updated with relevant information is important. 
  • Establishing a set goal and allocating specific tasks to each team member will ensure that the team is working towards the same endpoint without clashing in the responsibilities they take on.
  • Identify and utilise individual strengths and weaknesses and assign responsibilities accordingly. This will provide individuals with opportunities to work on certain skills with other team members who might excel in them. 
  • Conduct team-building activities to assess how certain members work with one another. This will be useful when forming teams and allocating tasks. 
  • Create teams that have a diverse range of individuals and skills. Teams benefit from different experiences which may assist in responding to problems with creative and out-of-the-box solutions. 
  • Celebrate team successes when the team accomplished their task. When a team works together to successfully complete a task, their individual and team efforts should be recognised. 

Building a team and ensuring that each team member is satisfied with their roles and duties within the team is an ongoing process. It requires employers to observe the team and how they are cooperating with one another, as well as engaging in regular communication with team members to assist with any issues that may arise. 

Basics of fringe benefits tax

What are fringe benefits?

Employees may opt to make an agreement with their employers that provides them with fringe benefit ‘payments’ in a form other than salary or wages. 

There are various types of fringe benefits:

  • Employees being able to use work car for private use
  • Discounted loans
  • Paying an employee’s gym membership
  • Providing entertainment (e.g. tickets to concerts)
  • Reimbursing expenses (e.g. school fees)
  • Giving benefits under a salary sacrifice scheme

What is fringe benefits tax?

Employers pay FBT on certain benefits they provide to their employees or employees’ families. FBT will apply even if the benefits are provided by a third party through an arrangement with the employer. 

Employers are required to self-assess their FBT liability for the FBT year –  which spans from 1 April to 31 March. It is calculated separately to income tax based on the taxable value of the benefit provided. 

Usually, employers are able to claim tax deduction for the cost of providing fringe benefits and for the FBT paid. Employers will generally also be able to claim GST credits for the items they provided as fringe benefits.

Employers are able to reduce their FBT liability by providing benefits that are income tax deductible. They may also consider an agreement in which the employee contributes to the cost of the fringe benefit. Finally, providing a cash bonus can also help reduce FBT liability. 

Choosing a super fund

Choosing a super fund requires taking multiple things into consideration. Such as its performance, the fees you will be required to pay, details of the insurance, and different investment options that are available. 

Performance

Performance is one of the most important things to consider when choosing a super fund. Take a look at how the super has been performing over the years. Compare how one super compared to others, but remember to compare within categories. 

Low fees

All funds will charge a fee – this could be amount or percentage or even both. Checking to make sure that you aren’t paying excessively high fees when there are lower cost options is integral. Fees will usually be charged at the end of every month, or actions such as switching investments. 

Insurance

Super funds will have three different types of insurance for members: Life (or death cover), total and permanent disability (TPD), income protection. When selecting a super, you should check the premium rates, the amount of cover and any exclusions or definitions that might affect you in the future. 

Investment options

Funds will provide you with a range of options as to how you would like to conduct investment. Such as: growth, balanced, conservative, ethical, etc. Some funds may also allow you to choose the weighting of different asset types or direct investments. 

Taking all of these factors into account is difficult. Comparison websites for superfunds make this process a bit easier. These websites may have vested interests, so you should take this account before making a decision based purely on one website.

The 2020 Budget also announced provision of ‘YourSuper’ which will be a tool the government creates to compare super products. This might further help in comparing and deciding which super fund you choose or change to.

Best practices in business management

Engage employees in the company vision

It is important to share the business vision with employees so that they feel more motivated and enthusiastic. This will not only develop an interest in the work being completed, but also increase productivity. Further, engaged workers are more likely to bring in ideas and contribute  to the growth of the company. 

Reward Effort

Continually recognising and rewarding effort will encourage employees to continue putting in the effort. It lets employees know that they are appreciated and builds company loyalty. 

Being Vulnerable

Upholding a stoic demeanour rather than being vulnerable prevents teams from developing strong professional relationships that are effective. Instead, vulnerability assists in team building and allows employees to feel comfortable with making suggestions that could be extremely promising. 

Encourage differing opinions

Businesses should steer clear from creating an atmosphere where people avoid making suggestions because they are in conflict with other ideas. An environment where conflict is welcomed can lead to productive discussions and the generation of good ideas. 

Company culture

Determining the core values that your business holds and sharing them with employees can help with creating a strong team. The dynamic between team members is important in ensuring productivity and efficiency. Identifying a company culture will assist the hiring process as well as team dynamics later on. 

Protecting your business from cybercrime

Having a digital presence nowadays is crucial to getting the most out of marketing your business. However, being online puts you at risk of being a target for cybercrime, which means that you and your customers are at risk of being scammed, hacked, harassed or stalked. Business owners have legal responsibilities to ensure that their business and customer information is safe. For this reason, it is vital that you take precautions when putting anything online.

While social media platforms such as Facebook and Instagram have policies in place to prevent people being victim to cybercrime, it is still possible for hackers to dodge these measures and attack your business. It is therefore important that you implement your own safety measures to reduce the risk of being targeted.

Many cybercriminals target business’ social media accounts to get access to a large following of people they can trick or manipulate. It is crucial that your business account has a strong password consisting of at least 8 characters, with a mix of upper and lower case letters, numbers and symbols. Ensure that only authorised users have access to the business’ social media accounts. 

Create a social media use policy for your staff to ensure that they are aware of the consequences and risks of sharing account information and being careless with social media handling to reduce the risk of misuse and security breaches. It is also useful to provide a cybersecurity incident response management plan to help your business prepare for security breaches and know how to respond to them quickly and effectively to prevent them from escalating. 

When planning a social media campaign, think about ways you can prevent your campaign from being hijacked by hackers to keep you and your followers safe. For example, if your campaign is a competition that involves participation from your followers such as them uploading a photo, think about ways to keep them safe from hackers. Perhaps you can provide guidelines for entering the social media competition, such as discouraging them from geotagging their location and ensuring they don’t have their house or any other personal details evident in the picture.