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 In this issue...   Finding Your Target Market

Understanding your customer is one of the most important things every business should be able to do. However, it is particularly important for small businesses.
           
Why? Because only by having a clear definition of the exact type of customer you are trying to reach can you make the most of your limited marketing dollars and have the biggest impact on your bottom line. You need to know your 'target market'.

Narrowing the type of customers you would most like to reach (and the kind that are most likely to be willing, eager and able to buy from you) is a key building block to success. Defining your target market gives focus to all your marketing and sales activities, helps you craft your advertising messages and images, choose where and when to advertise, influences which distribution channels you use and perhaps even helps you decide the colour of your employees' uniforms or the music playing in your store.

Knowing your target market can also help to differentiate your business from competition, tailor your marketing efforts to better meet customer needs and potentially boost sales. Having a broad target market that tries to appeal to everybody can easily get lost amongst the crowd.

When defining your target market, keep the image of an actual target in mind. Demographics alone, such as age, gender, income and occupation, do not provide enough insight into the attributes of your target customer. The outermost ring of the target is the universe of potential customers; everyone who might ever possibly be interested in your product or service.

As you get closer to the centre of the target, focus on customers who are more likely to actually make a purchase. The group at the centre should be those you would most like to have as customers, who you can reach and sell to affordably, and who are most likely to buy.

Some of the factors to help you close in on the bull's-eye:
  • Features and benefits of your product or service: Which group is your product/ service best suited for?
  • Competition: Is there a segment of the market that competitors are not reaching or under-serving?
  • Market trends: Is there one part of the market for your product/service that is growing?
  • Most motivated buyers: Which part of the market has the most immediate need or desire to buy your products/services?
  • Most ability to purchase: What type of customer is most likely to have the disposable income to spend on your products/services?
  • Ease of reaching your prospects: Is there part of the market that is easiest to tell about your products/services because of trade shows, media such as magazines, or other communications directed specifically at them?
  • Ease of selling to your prospects: Are there any existing distribution channels, such as specific stores, websites, wholesalers, that make it easier or less expensive to reach one part of your market?


  New High Income Threshold

The Fair Work Commission has increased the high income threshold for unfair dismissals from $136,700 to $138,900 per annum, with effect from 1 July 2016.

Under the Fair Work Act 2009, employees who exceed earnings above the high income threshold are not entitled to make an unfair dismissal claim against their employer, unless they are covered by an award or enterprise agreement.

The Fair Work Act 2009 deems an employee's annual rate of earnings as employee wages, any amounts applied or dealt with on the employee's behalf, such as salary sacrificing, and the agreed value of any non-monetary benefits i.e. a car, mobile phone, laptop, etc.

Reimbursements, superannuation contributions and payments which cannot be determined in advance, such as overtime and bonuses, are not considered when calculating the high income threshold.

Employees are eligible to claim for unfair dismissal if they have completed the minimum employment period of:
  • 12 months - where the employer employs fewer than 15 people, or
  • 6 months - where the employer employs more than 15 people.

When considering an employee's dismissal, employers need to be aware of the new threshold and whether a modern award or enterprise agreement applies to an employee. Small business owners must comply with the Small Business Fair Dismissal Code to ensure they have grounds to object an unfair dismissal application, in the case where a matter goes to a hearing.

If you have any questions, please contact your Harris Black team member.



  HB Featured Add-On: 'Shoeboxed'

Are you having a hard time managing your receipts, invoices and other documents and trying to stay organised? 

Accounting add-ons have evolved recently in the world of accountancy. Each month we feature a range of add-ons that will help you focussed and become more efficient within your own practice.

Our featured add-on for this month will surely help you manage and organise receipts, invoices and other documents securely online with your smartphone or other mobile devices.

Shoeboxed is the industry leader in digitising and organising receipts, invoices and other documents all over Australia and New Zealand. The main aim of this add-on is to eliminate the need of data entry, saving customers, like you, from wasting precious resources including time and money, so you can focus on the parts of your business that really matter.

Shoeboxed is your extra set of hands for data entry, reconciling, filing, organising and more. With convenient integrations with Xero and MYOB, it is easy to import an existing chart of accounts, create custom rules for easy bulk categorisation, and export transactions for easy reconciliation and source document affiliation.

Keeping your business fully managed and organised will save you hours of work and leave you with more spare time to be focussed on things that really matters to your business.

To know more about this add-on, please contact your Harris Black team member today.

 
 
  Harris Black Top 14: 'Health Boosting Activities'

With the conclusion of the Rio 2016 Olympics games, our team are motivated to boost their health - physically and mentally.

In this month's edition of Harris Black Top 14, we share our team's top tips on how they stay physically and mentally healthy all year long.
  1. Do CrossFit
  2. Meditate regularly
  3. Start the day with a glass of warm water and lemon
  4. Walk for one hour with an empty tummy to burn fats
  5. Drink green vegetable juice
  6. Join Yoga classes
  7. Take the stairs
  8. Eat vegetarian food one or two days a week
  9. Get a good night sleep, preferably 8 hours
  10. Grow your own fruits and vegetables
  11. Ride your bike instead of driving your car
  12. Prepare your meals – home-cooked meals are healthier than restaurant meals
  13. Some crafty projects like colouring and knitting – they have powerful mental health benefits
  14. Do some volunteering activities in your local community.

 

  Setting Out Terms and Conditions

Establishing your business' terms and conditions may seem like an onerous task among the never-ending to-do lists, but getting it right is essential for healthy cash flow.

Terms and conditions form the basis for the trading relationship on which a business sells goods and services to customers and from which they buy goods and services from suppliers. Specific terms and conditions can be the difference from chasing up late payments to ensuring your business gets paid first.

Well-drafted terms and conditions will protect a business and provide clarity as to what should happen in any given situation. Terms and conditions can also prevent disputes and save time and money on collecting debts.

While there is no legal requirement to include terms and conditions on invoices, it is highly recommended to establish written terms and conditions in case things go wrong with one party. The terms and conditions you decide to incorporate will vary depending on your business' needs but generally should include the following:

Goods and services

A clear definition of the goods and/or services that will be provided. Including a section for definitions of the words you use throughout your terms and conditions will prevent any misunderstandings or misinterpretation.

Price and payment terms

The price should be defined and must state whether GST (or other taxes) are included or not. The payment terms should outline when the payment is due and if the price is payable in cash on delivery or on pre-agreed terms.

Warranties or guarantees

Include any warranty that will be provided. The warranty period and limitations under the warranty need to be clearly explained. If you offer any guarantees, be sure to include them and remember guarantees should be provided before any goods and services are provided.

Delivery

A timeline for the delivery of goods should be detailed. Ensure to include the method of delivery and any associated costs for delivery.

Credit

If credit is provided, include the credit terms, credit limit and any penalty or default terms. It is important to request permission to conduct a reference check to check the creditworthiness of the other party before providing credit. Remember offering credit increases your chances of receiving a late payment, or not being paid at all, so consider upfront payment or payment on delivery for customers with large payments.

Risk

Specify what will happen if either party does not deliver or pay on time. The terms should also state what notice is required to get out of an agreement or if one party wants to end the relationship. 

Retention of title clause

A retention of title (ROT) clause means that the seller can retain the ownership of goods already supplied until they have been paid for by the other party. Suppliers must ensure to register their interest in accordance with the Personal Property Security Act to remain enforceable.


  Eliminating Hiring Bias 

Despite the significant advantages of diversity in the workplace, unconscious and hidden biases still exist in the hiring process.

Even the most open-minded individuals have unconscious biases that may affect their decision-making when hiring employees. However, acknowledging these biases is the first step to ensuring hiring efforts are neutral. Here are five ways employers can remove bias when deciding between candidates:

Ask for work samples

Where applicable, asking a candidate to submit work samples may predict how well they will perform based off past performance and skills. Using past work samples allows the interviewer to judge the candidate based on their work rather than factors such as gender, race, appearance, age and personality.

Use structured interviews

Structured interviews design interview questions based on job-related skills and are standardised for all candidates. For example, questions may include "describe a situation where you have participated in a team" or "tell me about an obstacle you were able to overcome in the past." Structured interviews use the same set of questions and are asked in exactly the same way and order to each candidate. This is in contrast to unstructured interviews which tend to flow like a conversation and are generally subjective.

Collaborative interviewing

Collaborative interviewing involves using multiple team members to interview candidates. This type of interviewing helps to eliminate unconscious bias and reduce human error. Altering the interview process to include more interviewers provides a diverse range of opinions and increases the likelihood that the new hire will be a good fit.

Create an interview scorecard

An interview scorecard evaluates the qualifications and suitability of candidates based on quantitative measures, which can help level the playing field for candidates. An interview scorecard uses applicable criteria such as technical ability, leadership skills etc, and a ratings system to assess each criterion, i.e 1-5. Interview scorecards can be used to compare results between interviewers as some interviewers may be lenient on some criteria and too harsh on others.

Use gender-neutral job descriptions

"Gender-coded" language in job descriptions may unintentionally lean toward one gender than another. If your job description lists non-essential skills and qualifications, or uses masculine words such as "ambitious" or "assertive," candidates may be deterred from applying as they do not consider themselves a good fit. When writing job descriptions, separate the essential and desired qualifications, and focus on the behaviours needed to perform the role rather than personality traits.


  Changes To Employment Laws

The start of the new 2016/17 financial year has seen some important changes to Australia's employment laws.

Every Australian employer has a responsibility to remain up to date and aware of any amendments made to employment laws to ensure that they remain compliant and continue to meet their obligations.

Below are some important changes that took effect from 1 July 2016:

Increase to the minimum wage

Australia's minimum wage increased by 2.4 per cent, raising the National Minimum Wage to $672.70 per week or $17.70 per hour. The increase only applies to employees that receive their pay rates from the National Minimum Wage; a Modern Award or a Registered Agreement (in some cases).

Superstream deadline extension

Initially, small businesses were given until the end of June to become compliant with the ATO's SuperStream system. This deadline has since been extended to 28 October 2016. SuperStream requires employers to make super contributions for their employees electronically in a standard data set. The extension provides small businesses with another four months to make the changes and ensure they are compliant by 28 October.

If you have any questions, please contact your Harris Black team member. 


 

No CGT Liability For Changing Business
Structure

Eligible small businesses can now change the legal structure of their business without incurring a capital gains tax (CGT) liability due to the Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016.

Announced in the 2015 federal budget, the bill was passed by the federal parliament earlier this year.

Small business owners will have access to an optional rollover provision when they transfer active business assets to other entities as part of a genuine business restructure of an ongoing business. This rollover provides greater flexibility for small businesses to change the legal structure of their business by allowing them to defer gains or losses that would otherwise be realised when business assets are transferred from one entity to another.


  New Tax Governance Guide For SMSFs

The ATO has released a new tax governance guide that can be used by SMSFs. The ATO has worked with businesses to design a guide to help private groups with tax governance. The guide also provides practical guidance about the key elements of SMSF governance. When managing an SMSF, trustees need to apply a high level of governance to meet the requirements of both the income tax and superannuation laws.

SMSF trustees can use this guide to develop an effective governance framework and to identify ways to improve existing governance practices within their SMSFs. Issues covered in the guide include:
  • corporate governance and tax governance;
  • starting your business;
  • business expansion;
  • funding and finance;
  • philanthropy;
  • succession planning;
  • exiting a business;
  • retirement planning (covering SMSFs and CGT small business concessions); and
  • estate planning.

SMSF Early Voluntary Disclosure Service For Contraventions

The ATO has introduced a new self-managed super fund (SMSF) early engagement and voluntary disclosure service. Each year, an approved SMSF auditor must audit a fund. The auditor is required to report certain regulatory contraventions to the ATO using the auditor/actuary contravention report. The ATO encourages SMSF trustees to voluntarily disclose regulatory contraventions, which they can now do using the ATO's SMSF early engagement and voluntary disclosure service. This service provides a single entry point for SMSF trustees to engage early with the ATO in relation to unrectified contraventions.

TIP: Before using this service, the ATO says trustees should engage with an SMSF professional to receive guidance about rectifying the contravention so they have a rectification proposal to include with their voluntary disclosure. Please contact us for further information.


  Superannuation Concessional Contributions
Caps Must Be Observed


An individual taxpayer has been unsuccessful before AAT in seeking to have excess superannuation concessional contributions for the 2014 financial year ignored. In addition to having a full-time job, the individual also held a number of casual part-time jobs. To grow his retirement savings, the salary sacrificed super, but he did not check on his super balances. In June 2015, the individual was advised by the ATO that he had excess concessional contributions of around $11,000 for the 2014 financial year, an amount which was added back to his taxable income. He was therefore charged interest of $250. The AAT praised the individual's efforts to save for his retirement, but it said the circumstances did not amount to "special circumstances" in which it could invoke its powers to ignore the excess contributions.

TIP: The taxpayer's ultimate tax bill in this case would have been the same if he had stayed under the relevant cap, albeit the tax bill would have been met by PAYG deductions over time. Even so, this case is a good reminder for to monitor your super balances to ensure you don't have a tax burden caused by extra contributions being added back to your taxable income.


  Help The Kids Buy Homes, But Watch For
Land Tax


A taxpayer has been unsuccessful before the Queensland Civil and Administrative Tribunal in a land tax dispute in arguing that there was a "constructive trust" in relation to three residential properties. The taxpayer, a father, had purchased the properties for each of his three adult children to live in. There were agreements that the children would pay their parents rent and, upon the death of both parents, as specified in mutual wills, the property would be left to the respective child. The Queensland Commissioner of State Revenue assessed land tax on the aggregate value of the three properties as at 30 June 2013 and 30 June 2014 respectively. The Tribunal affirmed the Commissioner's decision, holding that the taxpayer was the "owner" of the properties and it was not convinced that there was a "constructive trust". Therefore, it held the exemption under the Land Tax Act 2010 (Qld) to assess separately trust land did not apply. In this case, the Tribunal hinted at the possibility that in future assessments the taxpayer could, on sufficient evidence, persuade the Commissioner or Tribunal otherwise.

TIP: For parents looking to assist their adult children with buying homes, this case highlights the need to consider land tax implications. It is important to note that the land tax regimes differ from state to state. Please contact our office for assistance.


  Harris Black News

August is a month of celebration for Harris Black

Brendan celebrates 17 years with Harris Black
 
Brendan Power first joined James Black and Martin Gallagher as a Director at Harris Black in August 1999 and this year celebrates his 17th anniversary. Brendan has been integral to the growth of Harris Black and over this time has seen the introduction of three new partners, a rebranding, the formation of the Brentnalls affiliation, not to mention the change from a desktop server and mountains of paper to a completely digital and paperless office.

We congratulate Brendan on his achievements and look forward to his continual provision of professional direction and development to the entire Harris Black team and the firm as a whole.

Harris Black's newest addition 


Congratulations to our new parents Nathan and Ashley Gordon!

Wishing you much happiness as you welcome Lila Kay Gordon into your family. 





From your Harris Black team… Congratulations! 

 
  Client Testimonials

"Although I have only been working with Renee for the past 12 months, I have in this time met with her on a regular basis to discuss our business strategy and goals. With Renee's valued input and professional guidance we have been able to improve our structure and ensure that we are actually building wealth in a safe and tax effective manner. Renee is personable and approachable and is someone with whom I can have both detailed technical conversations and high level strategic discussions. Renee and her team have delivered on everything we set out to achieve together over the past year both with regards to our business and personal situations."

Cameron Brandis
Brandis Industries Pty Ltd


  Important Tax Dates

25 August 2016
  • Lodge and pay quarterly activity statement for quarter 4, 2015–16 – tax agents and BAS agents.

 
28 August 2016

  • Lodge the Superannuation guarantee charge statement – quarterly and pay the super guarantee charge for quarter 4, 2015–16 if the employer did not pay enough contributions on time.

 
21 September 2016

  • Lodge and pay August 2016 monthly activity statement.

 
30 September 2016

  • Lodge the PAYG withholding payment summary annual report for payers whose registered agent (BAS agent or tax agent) helped prepare the report.
  • Lodge Annual TFN withholding report 2016 when a trustee of a closely held trust has been required to withhold amounts from payments to beneficiaries. 


     
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This newsletter is for guidance only, any professional advice should be obtained before acting on any information contained herein. Neither the publisher nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this newsletter. We recommend that you contact your Harris Black team member before making any decision to discuss your particular requirements or circumstances.

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Since 1994, Harris Black has been providing accounting and advisory services to our valued clients to help them achieve their business and personal wealth goals.

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Harris Black is a key participant in a network of nationally affiliated independent chartered accounting firms called the Brentnalls Group.

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