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Setting goals involves having an end date, but deadlines could be killing your business.
While deadlines can help motivate employees to complete their work within a given timeframe, research shows that there are a number of downfalls to setting strict deadlines.
Consider the following:
Deadlines have been proven to hinder an individual’s creativity and the likelihood they will take positive risks. Deadlines can cause narrow-mindedness which can be detrimental to your business, particularly if the deadline is set around design and marketing strategies.
When people feel pressure to complete a task within a number of days or hours, the quality of their work may decrease because of the stress they feel. While stress can work in an individual’s favour, too much stress can be counterproductive and can actually hinder progress and quality.
Deadlines mean a lot of work can get jam-packed into a tight time frame, however, the quality of the work may be compromised. Employees are more likely to rush when they have an impending deadline, do less research and take on more stress. Instead, consider setting a soft deadline, particularly for work that requires creativity, innovation and out-of-the-box thinking.
Opting for a self-managed super fund (SMSF) can be a clever financial decision, but it’s not for everyone.
If you aren’t prepared to adhere to the following tips, your SMSF will most likely fail to perform as well as you would of hoped it to.
You can’t expect your SMSF balance to be the most profitable for you in your retirement phase if you don’t remain educated on the vastly changing compliance laws. Remaining up-to-date with these changes, and how they impact upon your nest egg is an essential aspect of making your SMSF work for you, your spouse and your children.
The ultimate long-term goal of your SMSF is to allow you to retire comfortably, maintaining the life you have become accustomed to throughout your working years. To do this, you need to have a strategy; the decisions you make regarding your SMSF should be part of this strategy, not just transfers here and there because your financial advisor told you to. Your strategy should be reviewed at least annually. You need to be aware of how each decision will impact upon and ultimately lead you towards the financial security you work so hard to achieve for your later years.
Running a self-managed super fund doesn’t involve having all the answers, but it does require understanding when it’s time to talk to a professional to get the best advice on your SMSF. You can never ask too many questions when it comes to your future financial security.
It is quite common for small businesses to provide their staff with car parking benefits, however, many business owners may not take into account the effect parking has for fringe benefits tax (FBT) purposes.
Fortunately, if you are a small business, car parking benefits are exempt if you meet all of the following conditions:
– the parking is not provided in a commercial car park
– you are not a government body, a listed public company, or a subsidiary of a listed public company
– either your gross total income for the last income year before the relevant fringe benefits tax (FBT) year was less than $10 million, or you were a small business for the last income year before the relevant FBT year.
Where an employer reimburses an employee’s car parking fees, i.e., if they park at a commercial car park, this will subject the employer to FBT.
Superannuation funds in Australia have delivered a return of 10.5 per cent for 2017 – the first double-digit growth since 2013.
According to recent findings, there was a 1.3 per cent rise in November 2017 and 0.6 per cent rise in December 2017 alone.
The new figures mark the sixth consecutive year of positive returns for super funds.
Super fund returns overtook returns in the property market, as property returns weighed in at 9.1 per cent last year.
Investors should review their super fund’s performance at the start of the new year and make sure it is delivering value for money outcomes.
Although the returns provide a degree of confidence for investors, it is important to remember that markets are volatile and having a long-term investment strategy in place is vital.
The Australian Tax Office (ATO) is targeting privately owned and wealthy groups that display specific behaviours and characteristics in relation to their tax affairs and lifestyle.
A large focus is currently on lifestyle assets and private pursuits that generate deductions or are mischaracterised as business activities. The ATO is also looking at those assets and pursuits which are incorrectly accounted for in terms of Division 7A or Fringe Benefits Tax (FBT).
Activities that attract the Tax Office’s attention include:
– private aircraft ownership or activities
– art ownership and dealings
– car or motorbike racing activities
– luxury and charter boat activities
– enthusiast or luxury motor vehicles
– grape growing and other farming pursuits
– horse breeding, racing and training activities
– holiday homes and luxury accommodation provision
– sporting clubs and other activities involving the participation of principals or associates of principals of private groups.
The ATO is addressing the following tax risks:
– Entities claiming deductions from ownership lifestyle assets or private pursuits against other income derived by the entity but not carrying on a business.
– Individuals disposing of assets and not declaring the revenue or capital gains on those disposals.
– Entities incorrectly apportioning deductions where assets have been used privately or periods not available for rent or hire.
– Division 7A – individuals purchasing assets through their business entities but applying assets to the personal enjoyment of a shareholder or associate of a private company giving rise to a deemed dividend.
– Individuals purchasing assets through their business entities but applying those assets to the personal enjoyment of an employee or associate giving rise to a FBT liability.
– The purchasing of assets or expenditures concerning private pursuits for personal use through their business or related entities and claiming input tax credits they are not entitled to claim.
– SMSF’s acquiring assets but applying them to the benefit of the fund’s trustee or beneficiaries.
The summer holidays may be a period of increased sales for some businesses, but for many, it can be a quiet time with a heavily reduced cash flow.
Staying ahead financially, if you are the latter, can be difficult which is why you should consider the following:
Use it to your advantage
A lull in sales does not have to be a negative, you can use it to your advantage. You can use the quiet time to organise your administration and get everything in order for the New Year. Revising the books and taking care of any financial obligations that have fallen by the wayside throughout the year is perfect while you aren’t distracted by making sales.
Plan the New Year
The holiday season is the ideal time to plan for the New Year, particularly in regards to marketing strategies, increasing cash flow, the introduction of new products and/or services, and maximising customer satisfaction. Sit down with your team and map out a plan for heading into the New Year; give them projects or tasks to take ownership over, either individually or in teams.
Hiring and training
Taking care of the hiring and training during the holiday slump is a very clever strategy. It saves the new employees being thrown into the deep end and allows them to get used to the business as well as their the job role and what is expected of them.
The First Home Super Saver (FHSS) Scheme and the downsizing contributions into superannuation measures passed Parliament on 13 December 2017.
As of 1 July 2017, individuals can make voluntary concessional and non-concessional contributions into their super fund as part of the FHSS Scheme. The scheme may help first home buyers save faster due to the concessional tax treatment within super.
From 1 July 2018, individuals can then apply to release their contributions, along with associated earnings, to help purchase their first home.
The downsizing contributions into super measure allows individuals who are 65 years and over to make a contribution into their super after selling their home.
Contributions of up to $300,000 from the proceeds of your main residence can be added into your super fund. Your spouse may also be able to make a contribution.
To be eligible for a downsizer contribution, you must have entered into the contract of sale on or after 1 July 2018 and have owned the home for 10 years or more.
Downsizer contributions will be taken into account for determining eligibility for the age pension.
The holiday season is a peak time for activities in the sharing economy to increase. During this time those participating in the sharing economy must not forget their tax obligations.
The most common sharing economy activities around the festive season include:
– Providing ride-sourcing services for a fare.
– Completing jobs or errands for payment.
– Renting out a room or a whole house or unit.
– Renting out a vehicle or a car parking space.
Depending on the activity, the tax obligations vary. The ATO is reminding those that participate in the sharing economy to consider the following:
– declaring income in their tax return
– what income tax deductions and GST credits they can claim for expenses related to earning income and what they can’t claim because of personal use
– how all of their sharing economy earnings added together affect their income tax and GST obligations
– keeping records of their income and expenses to meet their tax obligations
Managing debt in your small business is essential in maintaining the financial health of your business as well as preventing bankruptcy.
Consider the following tips to ensure your small business debts do not spiral out of control:
Reshuffle or remove expenses
Reviewing your expenses is one of the first steps to take when tackling debt. Look at the costs you can cut out and find alternative solutions. Whether this means cancelling unnecessary subscriptions, getting rid of expensive systems or selling assets such as a company car. If you cannot completely cut out costs plan to delay them. For example, take the full amount of time to pay an invoice so you have some extra cash to pay for unexpected expenses.
Consider incorporating low-cost marketing techniques to generate additional revenue. Create low-cost promotions, such as special discounts for loyal customers, coupons, limited-time sales or offering discount codes in your email marketing for subscribers. Look for opportunities for improvement within your business – there may be an underutilised area that could make more sales and needs heavier promotion.
Evaluate all of your debts and prioritise them according to the size of each debt and interest rates. Depending on the debt amount and what types of debt you have acquired, you could either choose to pay off the debt with the highest interest rate first or pay off the smallest debt first. Paying the smaller debts first may help psychologically as you may feel as though you are making progress. However, paying off debts with higher interest rates can help you save money on interest over the long run. Regardless of which option you choose, be sure to continue making the minimum repayments of all your debts.
Talk to creditors
Don’t be embarrassed to contact creditors to inform them of your situation. Letting your creditors know your financial situation may put you in a better position to negotiate payment terms and conditions. For instance, if you have debt through a bank you may be able to arrange a hardship plan or consolidate your loans into one single monthly payment and so on.
Maintaining a healthy work-life balance may seem impossible as a business owner, but it is achievable, if not, necessary in running a successful business.
Not carving out time and space to enjoy your personal life, such as spending time with loved ones, exercising, travelling or enjoying your hobbies, can have a negative impact on your stress levels, ability to concentrate, and may even damage your relationships.
Consider the following tips to achieve a better work-life balance:
Overcommitting is a surefire way to add unnecessary pressure. Overscheduling your day, saying ‘yes’ to everything, and fearing delegation will see you lose time and efficiency in your business. You cannot perform at your best if you are trying to do too many things at once. Instead, give yourself some flexibility by delegating tasks and outsourcing where possible. This could mean paying an external company to manage your marketing, hiring an office cleaner or asking a staff member to take on a new task such as invoicing, etc.
Lead a healthy lifestyle
Living a healthy lifestyle helps to support your overall wellbeing and equips you with the tools to manage stress and hassles in the workplace more effectively. If you don’t think of yourself as “healthy,” a good starting point is to simply become more aware of your behaviours and coping mechanisms. For instance, you may notice you reach for a sugary drink when feeling overwhelmed or stay back at work late every day to “catch up on jobs.” Identifying these behaviours helps to map out options for dealing with unhelpful coping strategies.
Setting manageable goals daily helps to prioritise your workload and provides a sense of control over your day. Having control helps to ease associated stress and feel positive towards the work you are doing. Goal-setting is also useful in motivating you to meet your deadlines and eliminating unhelpful behaviours such as procrastination. Achieving your work-related goals also reinforces you to focus on your “personal” goals – therefore, creating more work-life balance.