Author: Adam_Admin

Business owners are faced with constant challenges and tough decisions to make on a day-to-day basis. Risk-taking is often necessary to achieve more in the business, but owners need to make informed choices to avoid potential damages. To manage risk effectively, a proactive stance needs to be taken in identifying and responding to risks before a crisis strikes.

Identify risks:
The Australian standard defines risk as ‘the chance of something happening that will have an impact on objectives’. Risks can be hazard-based, uncertainty-based or opportunity-based, with both tangible and intangible items posing risks for your business. Owners may find it easy to list the physical items at risk such as assets and infrastructure, yet neglect intangibles such as injury to staff, loss of important business information, fraud, product recalls, supply chain disruptions and more. It is important for business owners to be aware of the risks they could face in their business.

Calculate your risks:
Making an educated assessment of both the likelihood and potential severity of risks can help prioritise your responses. Once the risks have been identified they should be ranked on the likelihood of occurrence and the severity of consequence it might impose on the business. This risk criteria helps to form a risk rating which can be ranked from low to extreme. The risk rating helps you to determine what situations need more time, attention and resources.

Manage your risks:
Finally, the risks need to be managed effectively. There are four ways of managing risk including avoiding the risk, transferring the risk, reducing the risk and accepting the risk. Avoidance is not always the best or viable solution as there is no way to ever be completely risk free. Transferring is a common way of avoiding damage as the risk is no longer your problem, for example, insurance and product warranties. Reduction of risk comes from a sound knowledge of your business and little things you can do that make a difference. Acceptance is for those owners with experience and a clear mind. Nothing in life is without risk, the business owners who accept this and learn from challenges are the ones who find success.

Picking the wrong employee after a long interview process ultimately results in wasted time and lost money for a business. A successful interview can often start before even meeting, as social networking sites such as LinkedIn are becoming an increasingly popular way to identify job candidates. There are constantly new ideas emerging about how to best conduct interviews, many of which will be able to give you a much better idea of how a candidate will perform in the role.

Consider graduates:
Hiring recent university graduates is a great way to bring fresh ideas and energy to your business. Having learnt the newest technical skills and the best ways to implement them, graduates are eager to gain experience, giving you the potential to shape their work habits to suit your company. Graduates also have far lower salary expectations, meaning that they can be an affordable source of talent. Explaining what the different career progression options for them within the company would be or demonstrating how experience with your organisation will look great on their future CV can also help appeal to graduates with more long term goals.

Re-frame interview questions:
Most interview candidates will have rehearsed their answers to traditional job interview questions, making it hard to get an accurate reading of their abilities. If you present a question in a slightly different way to normal, you will get a more natural answer that is reflective of the candidate’s adaptability. Try using;

• Fact-based questions: helps the interviewer confirm whether or not the potential candidate has the skills required for the job, as well as provide information that can be cross-checked against their resume to verify accuracy.
• Situational questions: provides any insight into how the candidate would handle situations that may arise in the business.
• Behavioural questions: gives insight into how a person may behave, helping to determine whether or not they will work well with others and be a good fit for a business.

Get a second opinion:
Inviting other staff members to sit in on interviews, either as silent observers or active interviewers can give you a second opinion. This also helps to more accurately read a candidate as other people will focus on different qualities or skills that could be valuable to the company’s inner workings.

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:

• $30,000 from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020.
• $25,000 from 20 January 2019 until 7.30pm (AEDT) on 2 April 2019.
• $20,000 before 29 January 2019.

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. When less than the relevant threshold, the balance of the small business pool can then be written off at the end of an income year. This is calculated before applying any other depreciation deductions.

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. The threshold rule doesn’t apply separately to expenditure on an element of a composite asset. This means items that are not functional on their own wouldn’t normally be classified as a separate asset. Some examples of items costing $100 or less that fall within the threshold rule are:

• Office equipment – staplers, pens, books, etc.
• Catering items – cutlery, glasses, table linen, etc.
• Tradesperson small hand tools – pliers, screwdrivers, hammers, etc.

The threshold rule doesn’t apply to expenditure on:

• Establishing a business, business venture, building-up a significant store or stockpile of assets.
• Assets held under a lease, hire purchase or similar arrangement.
• Assets acquired for lease or hire to (or that will otherwise be used by) another entity.
• Any part of a collection of assets that are dealt with commercially as a collection.
• Trading stock or spare parts.

Although approximately 52% of the Australian population use social media, not everyone understands how online presence, both individual and work-related, reflects on a business. Your staff are representatives of your business meaning their online profiles can unintentionally affect your brand’s image and influence potential customers. While this isn’t always a bad thing, enforcing a social media policy and educating your staff on the importance of your business’ online presence can help to avoid mistakes and better prepare for issues that may arise.

Company profiles:
For best results, don’t give full access to social media accounts to everyone, too many employees logging on and changing things can lead to misuse. Instead, define team member roles and accessibility when you first employ a social media strategy to help create workable boundaries. By delegating regular tasks to particular employees, like content posting or customer service, helps to create a routine that everyone can follow and accountability if there is an issue. This also establishes who is allowed to speak on behalf of the company.

Have an action plan in place for different scenarios, such as security breaches or PR issues, and make sure everyone is aware of the procedures. In a crisis management plan, you should include an up-to-date emergency contact list with specific roles of the social media team as well as your legal and PR experts. Guidelines for identifying a crisis, communication plans and an approved process for response will also help. By having a plan in place, you are properly equipping your staff to handle problems in the correct manner and as quickly as possible.

Personal profiles:
Your employees’ online network can be a blessing and a curse to your business. To avoid reputational damage make sure your staff is aware that any inappropriate or harmful mentions of your business will be met with professional consequences. You should educate your staff on what constitutes unprofessional online conduct. Some examples include:

• Any rants bad-mouthing customers or management.
• Pictures of management or co-workers that are put up without consent or reflect poorly on the business.
• Proof of pretending to be sick to avoid work.
• Defamatory comments about your business or workplace.

Instead, try encouraging your staff to highlight the positive aspects of work such as your office environment, special offers or workplace achievements. Make sure they tag your business whether it be on LinkedIn or Facebook.