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In this issue...


 
 
 
  Identifying Your Target Market 
 
When it comes to marketing your business, having a vague target market or a target market which is too broad can mean your marketing messages get easily lost.

Understanding what makes your customers tick will help you to reach the right people and create more successful marketing campaigns.

Here are three ways to better understand and define your target market:

Research

In a business context, any data is better than none. Look to existing resources such as industry publications, news, case studies, examples and so on. Often these can provide much-needed insight into how your target customers think and behave, and what motivates them to purchase or not. This type of research also helps you to uncover external factors that might be influencing customers' purchasing patterns such as the state of the economy, technological and legal changes, etc.

Conducting your own research can complement existing research by discovering the gaps in the existing information. By creating surveys, interviewing customers, utilising social media for feedback and so on, you can gain a more comprehensive and detailed view of your typical customer.

Create a profile

Once you have some background knowledge of your target market, you can start to create a profile of your typical customer(s). Examining your typical customer through the lens of geographics, psychographics, demographics and behavioural characteristics can help to gain a clear and specific vision of your target market.

Categorising through geographics involves consideration of continent, country, city or town that the customer lives in as well as the size of the area, the climate, and if they live in specific neighbourhoods.

Demographics focuses on factors such as age, income, gender, occupation and education level. Whereas, psychographics focus on the interests, opinions, lifestyle, values, attitudes and personality traits of your typical customer.

Behavioural characteristics explore your target customers' behaviour towards your products and services. Analysing behaviours is helpful in understanding when they are most likely to purchase, what products and services they buy, if they prefer to purchase online or in your physical store, whether they purchase for a special occasion or regularly and how loyal they are to your business.

Evaluate

After gaining insight from your research and completing profiling of your typical customer, you can evaluate how well you are currently serving your target market and look at which areas require improvement. Evaluate how well you meet your target market's needs in comparison to your biggest competitors. Is your pricing, positioning and marketing efforts working? Look at what tactics work for your competitors that are successful.

Consider implementing feedback and suggestions provided by customers, using your research to change your marketing messages to better align the key benefits of your products and services, and so forth.

Monitoring your marketing efforts regularly is worthwhile as your customers and industry continue to evolve. What works now may not be as effective in 12 months. Also, your target market may change completely in the future, making regular reviews and refinements even more important.

   
  Getting Out Of Small Business Debt 
 
Managing debt in your small business is essential for 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.

Increase revenue

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.

Prioritise debts

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.

 
    Harris Black's Digital Tool Box – 'BRiN' 
   
Digital technology provides great opportunities to amplify the impact of your business activities and practices.

Gone are the days where you need to do everything manually within your practice like ordering, logistics, payments and receipts, marketing, HR, motor vehicle log book and so many more.

Every month, Harris Black will showcase a digital tool that will surely improve awareness, knowledge management, communication, and productivity within your business practice.

In this issue, we give you BRiN.

Brin is a personal advisor app which uses artificial intelligence to provide personalised education and human like support to millions of business owners, all at the same time.

The app uses a simple chat interface to understand and pinpoint your business problems better than most humans can and give you solutions and recommendations within seconds.

 
Source: BRiN Youtube

The other side of the app is education. The app provides thousands of recorded online course and training videos on every area of business from over 250 experts around the world. Showcasing the teachings and advise covering the topics of strategy, Marketing, Human Resources, social media, Management , business operations and many others.

When you use BRiN, you are accessing the information any other business coach would charge thousands for. This incredible app has the power to change your business, from your pocket.

To know more about the BRiN, contact your Harris Black team member today.

    
    Signs It's Time To Sell-up 
   
An important skill to being a successful entrepreneur is knowing how to transform your vision into a profitable business.

Another important skill is knowing when to recognise when a business idea or venture is simply not going to work out. Consider the following questions when weighing up what is the best move forward in terms of your business and making money:

Customers

Changes in new customer intake and the interactions you have with existing customers may be cause for concern. If people no longer want to do business with you, there may be something causing this, such as poor word-of-mouth or online reviews. It could also be that you and your staff have lost motivation to chase after sales and convert potentials into dollars.

Employees

High employee turnover and low retention rates are major indicators of a failing business. People want to feel secure in their job, and a fleeting flock shows they can tell the business isn't performing how it once did. Employees can easily pick up on signs the business is going under, such as their work slowing down, the attitude of the employer is changing or customers are dropping off.

Cash flow

A business with no steady cash flow may be a warning sign. The inability to make a sale and maintain a continuous amount of money coming into the business means your business isn't performing. Many industries have periods of high performance and low periods, but continuous underperformance in a manner that has become the norm rather than a seasonal fluctuation means you should be weighing up your options about whether it's time to sell-up.

Bills

Bills adding up without the money to pay them is a big indicator that you need to re-evaluate the business and what direction to move in. Making payments such as bills, wages, super, etc., should not be seen as a hassle or something eating away at the business, but rather part of every business model. When these payments start to become hard to meet, something needs to be changed.

 
    Xero And MYOB Update 
   
Two Step Authentication

Xero and MYOB are currently in the process of making two step authentication mandatory for client access to their online accounting file. At this stage no date has been set, however if you would like more information on how to setup two step authentication then please contact Harris Black.

Xero Subscription Discount

The monthly discount on existing Xero Business Edition files may be reduced from 15% to 5%. This discount only applied to clients who are currently receiving the discount.

To know more about this update, contact your Harris Black team member today.

 
    Fringe Benefits Tax: Employees' Private Use Of Vehicles  
   
The ATO has issued guidance for employers on determining an employee's private use of a vehicle.

Draft Practical Compliance Guideline PCG 2017/D14 should provide more certainty and transparency about the circumstances where the ATO won't apply compliance resources to investigating whether private vehicle use meets the car-related FBT exemptions.
Eligible employers who rely on this guideline won't need to keep records to prove that an employee's private use of a vehicle is minor, infrequent and irregular.

TIP:
The guideline includes specific eligibility conditions for employers and their employees' vehicle use. Talk to us about whether the new guidance applies to your FBT circumstances.

 
    Housing Affordability Measures Now Law 
   
Legislation has been passed to implement the 2017–2018 Federal Budget housing affordability measures. The following will start on 1 July 2018:
  • the First Home Super Saver (FHSS) Scheme, which allows individuals to use specific amounts from their super to buy or construct a first home; and
  • the option for individuals aged 65+ to make "downsizing" contributions of up to $300,000 to their super from selling a home they have owned for at least 10 years.
TIP: An exemption from meeting the FHSS Scheme "first home" requirement will be available for people suffering financial hardship. "Financial hardship" criteria are likely to include circumstances where someone has limited savings, is currently renting and had a past interest in a home that was in a cheaper real estate market or when the person was in a relationship that has since broken down.

 
    Tax Consequences Of Trust Vesting  
   
The ATO has issued a long-awaited ruling on trust vesting, including changing a trust's vesting date and the CGT and income tax consequences of vesting.

TIP:
A trust's "vesting date" is the day when the beneficiaries' interests in the trust property become fixed. The trust deed will specify the vesting date and the consequences of that date being reached. Vesting does not, of itself, ordinarily cause the trust to come to an end or cause a new trust to arise. In particular, the underlying trust relationship continues after vesting while the trustee still holds property for the takers.

The key points in the draft ruling are that:
  • before vesting, it may be possible to extend the vesting date (by applying to a court or by the trustee exercising a power to nominate a new vesting date);
  • it is too late to change the vesting date once it has passed (and the ATO says it is unlikely that a court would agree to do so); and
  • continuing to administer a trust in a way that is inconsistent with the vesting terms can have significant CGT and income tax consequences.


    Disclosing Business Tax Debt Information To Credit Agencies 
   
The Federal Government has released draft legislation and a draft legislative instrument that, when passed, will authorise the ATO to disclose a business's tax debt to registered credit reporting bureaus where the business has not effectively engaged with the ATO to manage the debt.

The draft legislation intends to place tax debts on a similar footing as other debts, to encourage timely payment or engagement with the ATO for businesses that want to avoid having their debt information affect their creditworthiness. Disclosure to credit reporting bureaus will only be permitted if the ATO has given the taxpayer at least 21 days' notice beforehand.

 
    ATO Guidelines: Profit Allocation Within Professional Firms
   
The ATO has become aware that its guidelines on Everett assignments and the allocation of profits within professional firms are being misinterpreted for some higher-risk arrangements, including the use of related-party financing and self-managed superannuation funds (SMSFs).

The guidelines have been suspended from 14 December 2017 to allow the ATO to consult with stakeholders on replacement guidelines.

Anyone considering new arrangements beginning after the cut-off date should contact the ATO to discuss the arrangement risk profile and the possibility of a private ruling.

Arrangements beginning before the cut-off date that comply with the guidelines and do not exhibit high risk factors shouldn't require action, but arrangements with high risk factors may be subject to ATO review.

TIP:
The ATO encourages anyone who is uncertain about how the law applies to their existing circumstances "to engage with us as soon as possible".

   
    Taxing Employee Share Scheme Dividend Equivalent Payments  
   
The ATO has made a new determination that dividend equivalent payments made under an employee share scheme (ESS) are assessable to an employee as income when they receive the payment for or in connection with services they provide as an employee.

A "dividend equivalent payment" is a cash payment to an employee participant and beneficiary an ESS funded from dividends on which the trustee has been assessed in previous income years because no beneficiary of the trust was entitled to the income at the time.
A trustee that makes a dividend equivalent payment under an ESS must withhold an amount from the payment, even though the trustee is not the employee's employer.

TIP:
The ATO offers a safe harbour from such payments being treated as income under specific circumstances. Get in touch with us to talk about whether your situation makes you eligible.

The new determination applies to dividend equivalent payments paid under the terms and conditions attached to ESS interests granted on or after 1 January 2018.

 
    Guidance For SMSFs On Transfer Balance Reporting 
   
The ATO has released further guidance on when SMSFs need to report events affecting their members' transfer balance accounts (by making a transfer balance account report, or TBAR) for the purposes of the $1.6 million pension cap.

From 1 July 2018, SMSFs that have any members with a total superannuation balance of $1 million or more must report events impacting that member's transfer balance account within 28 days after the end of the quarter in which the event occurs.

SMSFs where all members have total super balances of less than $1 million can choose to report events which impact their members' transfer balances at the same time that the fund lodges its annual return.

The guidance also covers reporting requirements for retirement phase income streams and commutations (including commutation authorities).


 
    Combat The Increase In Audit Activity
   
The government has proposed a 55% increase in audit funding over the next four years. A target of $3.7 billion is anticipated for the gross revenue that will be raised as a result. So what does this mean for you? We suspect an increase in audit activity in relation to individual, business and SMSF lodged returns.

Our recommendations to combat the increase in audit activity:

Be in the know


Gain a better understanding of your financial position and tax particulars by talking with your accountant. Your accountant can also conduct a risk assessment, and in doing so you could both discover a better way to structure your affairs.

Seek expert advice

In the event that you are contacted by the ATO or other government revenue agencies, the best action for you to take is to advise them that you would firstly like to talk to your accountant. As your accountant, we have the experience in dealing with these matters and will be more likely to reduce the time and cost required to attend to the audit activity in question.

Consider Audit Shield

We offer our Audit Shield service as a mechanism to protect you against unplanned professional fees that can arise as a result of audit activity. With the government's focus on increasing gross revenue, taxpayers will be scrutinised – increasing your chances of an audit, enquiry, investigation or review. Even if no adjustments are required to your lodged returns, significant costs can still be incurred in order to satisfy the requests of the ATO or other government revenue agencies responsible for the instigation.

Click Here to read more about Audit Shield.

Alternatively, if you would like to hear our experiences with the increase in audit activity, or if you would like to learn more about how you can protect yourself with our Audit Shield service, please contact your Harris Black team today.

 
    Charity – Capricorn Animal Aid  
   
Harris Black is proud to be sponsoring Capricorn Animal Aid (CAA).

CAA is a Rockhampton based charity that provides care and attention, including veterinary care, shelter and food to unwanted, stray, neglected and abused animals. The organisation is run by volunteers and being funded through generous donations, membership and various funding activities.

In the next six months, the team at Harris Black will raise funds through various activities like "Morning Tea" auction, Trivia Night (Friday night drinks), Lunch Fundraising and the most exciting of all is each pod in the office will have their own pet to provide for until June this year. This will include providing pet food, toys, bedding and other pet necessities.

To know more about CAA, visit their website here


    CAANZ Achiever Programme – A Success Story for Harris Black 
   
As part of Harris Black's involvement and commitment to the Chartered Accountants Australia and New Zealand (CAANZ) Achiever Programme, we were pleased to offer accounting student Daniel Wattimena a 3 week 'paid industry experience' with our firm in January of this year. The programme is designed to give employers such as Harris Black access to some of the most exceptional graduates and in turn to give accounting graduates a real taste of working as a team member in their chosen industry.

Daniel was one of hundreds of final year tertiary accounting students who applied to be part of the CAANZ Achiever Programme. To be accepted he was required to successfully navigate a rigorous selection process including online application, interactive cognitive testing, video submission, phone and personal assessment before finally having a one on one meeting with HB Director, Renee Bettenay.

Prior to Daniel's commencing with our firm for his three week programme, all Directors and staff collaborated on an induction and orientation process which covered all aspects of working as a Harris Black team accountant. Our programme was designed to have Daniel actively participating in all areas of accounting work under supervision so as to give him opportunity to apply and develop his learning further. Every member of the firm participated and had a part to play, something which our young visiting graduate found incredibly impressive and valuable.

Ultimately, the program was a resounding success for both Daniel and Harris Black as, during his 'debriefing' with Renee towards the end of his stay, he expressed his sincere gratitude and admiration of the Harris Black team culture and their commitment to clients. Harris Black on the other hand were so impressed with Daniel's ability and enthusiasm over his time with our firm that we offered him a permanent position as a graduate accountant… which he readily accepted!

Welcome to the firm Daniel. Very pleased and proud to have you on board!

   
    Harris Black News 
   


This month we shout for joy to our new parents Bjorn and Michelle Kirberg!

Wishing you much happiness as you welcome baby Anneke Ivy June Kirberg into your family.

Congratulations from your Harris Black Team!  







    Important Tax Dates 
   

28 February 2018
  • Lodge tax return for non-taxable large/medium entities as per the latest year lodged (except individuals).
  • Lodge tax returns for new registrant (taxable and non-taxable) large/medium entities (except individuals).
  • Lodge tax return for non-taxable head company of a consolidated group, including a new registrant, that has a member who has been deemed a large/medium entity in the latest year lodged.
  • Lodge tax return for any member of a consolidated group who exits the consolidated group for any period during the year of income.
  • Lodge tax return for large/medium new registrant (non-taxable) head company of a consolidated group.
  • Lodge and pay Self-managed superannuation fund annual return (NAT 71226) for new registrant (taxable and non-taxable) SMSF, unless they have been advised of a 31 October 2017 due date at finalisation of a review of the SMSF at registration.
  • Lodge and pay quarter 2, 2017–18 activity statement for all lodgement methods.
  • Annual GST return – lodge (and pay if applicable) if the taxpayer does not have a tax return lodgement obligation.

21 March 2018
  • Lodge and pay February 2018 monthly activity statement.

31 March 2018
  • Lodge tax return for companies and super funds with total income of more than $2 million in the latest year lodged (excluding large/medium taxpayers), unless the return was due earlier.

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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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