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  How To Reinvent Your Business 
 
Small businesses should always be open to the idea of reinventing themselves to stay relevant to today's customers and marketplace.

Business owners who resist change and leave it too late to reinvent risk stumbling behind and at worst failing. Instead, businesses should focus on a proactive approach to growth for optimal business performance and success.

Making a commitment to reinvention before the need does not come naturally; it requires planning. Here are three ways to make sure your business does not get left behind:

Continually forecast


Industries are continually shifting - competitors are introducing new products, customer needs are ever-changing and technology is transforming the way business was traditionally performed. Forecasting change is essential to be a competitive leader in your industry.

High performing businesses exploit existing businesses that have not yet peaked and recognise untapped markets. High performers also understand that remaining competitive means some form of risk taking is necessary.

Focus on strategy

Strategic planning is imperative to make reinvention possible. Businesses need to detect shifts in their industry ideally before they happen.  The best way to predict these shifts is to involve line managers, frontline employees, store managers etc into the strategic process, as they often pick up on insights business owners can easily miss.

For a business to reinvent itself, it needs a permanent strategy which continually scans the market for unsolved problems and untapped customer needs.

Invest in top talent

Successful businesses need teams of talent to run and grow the business effectively.  Business owners need not only hire the right type of candidate but they must strengthen and prepare individuals for the challenges that will arise when reinventing. Businesses need to invest time into developing their employees to enable them to succeed in their work.

By first looking at what their employees are required to do day to day, business owners can assess what factors are fuelling (or limiting) their success.

 
  How To Find Your Target Market 
 
Knowing your target market can help to differentiate your business from competition, tailor your marketing efforts to better meet customer needs and potentially boost sales.

A broad target market that tries to appeal to "everybody" can easily get lost amongst the crowd.

Demographics alone, such as age, gender, income and occupation, do not provide enough insight into the attributes of your target customer.

When constructing a target market profile, narrow down your typical customer with consideration to geographic, psychographic, and behavioural characteristics to develop a clear and specific vision of your target market.

Geographic

Segmenting your target customer through geographic involves considering what continent, country, city or town they may live in, the size of the area, the climate and if they live in specific neighbourhoods.

Psychographics

Categorising your target market through psychographics, uses personality and interests to define your target customer.  Psychographics analyses variables such as lifestyle, attitude, values, personality traits, social class, activities and opinions.

Behavioural

Behavioural segmentation involves your target customer's behaviour towards your products or services.  It can include the benefits sought, how often they will use your product or service, their loyalty to your brand, their readiness to buy your products/services or if your products or services are used for a specific occasion.

 
  The Ins And Outs Of Workplace Warnings 
 
Warnings are an important workplace tool in helping to ensure that employees understand their employer's expectations.

They also serve as evidence of a fair performance management process and provide supporting evidence should the employee be terminated.  Warnings can play a crucial role in defending unfair dismissal claims as it provides evidence that the employee was aware that they were displaying unsatisfactory workplace performance and conduct.

A workplace warning is defined as a communication, be it verbal, or written, to an employee about their performance or conduct at work. Warnings are a tool used to communicate an identified area where an employee needs improvement, or where their conduct does not meet the required standard.

The aim of delivering a workplace warning is to give the employee an opportunity to improve their workplace performance or conduct. Verbal warnings are usually administered before a written one as they are less informal and are usually of a less serious nature.

That is they do not warrant summary dismissal. Once a warning has been issued the employee's performance or conduct is usually monitored for a set period of time.

A written warning should be issued after a warning meeting has taken place.  At the conclusion of the meeting, the employee is advised that they will be receiving a written warning in the following couple of days.

Generally, most written warnings will comprise of the following:

  • record who was present at the warning meeting
  • record the fact that the employee was invited to have a support person present
  • outline the conduct or performance which is the reason for the warning 
  • where appropriate refer to a relevant policy or the employment contract
  • refer to previous warnings that were issued
  • record the employee's responses to the matters in issue
  • clearly state that the employee needs to improve, including an explanation of the consequences for failure to improve
  • where relevant, provide support for the employee to improve such as training
  • preferably be countersigned by the employee as evidence of their understanding of the warning

There is no legal requirement as to how many warnings must be given prior to termination.  The unspoken rule is to use anything from one to three written warnings, to ensure that the employee is given enough notice and time to improve their performance or conduct.

However, it is always a good idea to refer to the company's policy and any performance management procedures that may be in place before deciding when to terminate an employee.

There is also no legal rule that defines how long a warning remains current. Generally, it is unusual for a warning to remain current after six months had passed with no more warnings being issued.  Workplace warnings are an important tool for employers to communicate their expectations to their employees. Failure to implement, or appropriately manage, warnings can come at a high price.

 
  Securing Your Data 
 
IT security threats can wreak havoc on a small business, posing concerns for business owners and customers alike.

Securing your data does not have to be a daunting task; there are some simple steps you can take to minimise your risk of a data breach, such as the following:

Update software

Security software needs to be installed on all of your business's devices and regularly updated to protect against emerging online threats. Keep up to date with antivirus and anti-spyware software, use good firewall and a secure wireless connection.

Regularly back up

Backing up your data regularly is one of the most important safeguards to protecting your data.  A combination of on-site, i.e. hard drives connected to a computer, and off-site (cloud technology) backups should be used.

Cloud-based backups are useful for storing sensitive information but are not suitable for large backups, such as videos and photos. Cloud technology allows you to retrieve your data from elsewhere, if one backup goes down. It protects against internet theft as the data is encrypted before it sent to the cloud.

Build a culture of data privacy

Creating a culture of IT security in your workplace helps to educate staff and set expectations around technology uses. A good privacy policy should outline IT security and confidentiality.  Reviewing your policy regularly and creating a contingency and disaster plan can help to prevent and manage mishaps.

 
  ATO Scam Alert: Fake Demands For Tax Payments 
 
Although tax time 2018 is over, the ATO has warned taxpayers and their agents to remain on high alert for tax scams.  Scammers are growing increasingly sophisticated and hope to exploit vulnerable people, often using aggressive tactics to swindle people out of their money or personal information.
  
Be wary if anyone contacts you demanding payment of a tax debt that you didn't know about.  The ATO will never ask you to make a payment into an ATM or using gift or pre-paid cards such as iTunes and Visa cards, and will never you to deposit funds into a personal bank account.

TIP:
Scammers have been known to impersonate tax agents as well as ATO staff.  If you have any doubts about the legitimacy of a phone call or other communication, contact your Harris Black team member or you can call the ATO directly (toll free) on 1800 888 540.


 
  Small Business Corporate Tax Rates Bill Is Now Law 
 
The company tax rate for base rate entities will now reduce from 27.5% to 26% in 2020–2021,
 and then to 25% for 2021–2022 and later income years. This means eligible corporate taxpayers will pay 25% in 2021–2022, rather than from 2026–2027.

The new law also increases the small business income tax offset rate to 13% of the basic income tax liability that relates to small business income for 2020–2021.  The offset rate will then increase to 16% for 2021–2022 and later income years.

The maximum available amount of the small business tax offset does not change – it will stay capped at $1,000 per person, per year.


 
  GST Reporting: Common Errors And How To Correct Them 
 
Some businesses are making simple mistakes reporting their GST.  The ATO reminds taxpayers that avoid the following common GST reporting errors:

  • transposition and calculation errors – these mistakes often happen when manually entering amounts, so it's important to double-check all figures and calculations before submitting your BAS;
  • no tax invoice – you must keep tax invoices to be able to claim GST credits on business-related purchases;
  • transaction classifications – it's important to check what GST applies for each transaction; for example, transactions involving food may be GST applicable; and
  • errors in accounting systems – a system with one coding error can classify several transactions incorrectly. 

    First Home Super Saver Scheme And Downsizer Super Contributions: ATO Guidance 
   
In November 2018, the ATO issued a Super Guidance Note to provide people with general information about how the First Home Super Saver (FHSS) scheme works.  The guidance note explains who is eligible to use the scheme, the kind of contributions that can be made and then released from super for buying a first home, how to apply to the ATO for a FHSS determination, and the requirement to purchase a house.

The ATO also issued guidance on the recently enacted downsizer superannuation contribution measures, which allow people aged over 65 to contribute the proceeds from selling certain property into their super.

 
    ATO Information-Sharing: Super Assets In Family Law Proceedings 
   
Superannuation is often the most significant asset in a separated couple's property pool, particularly for low-income households with few assets. Parties to family law proceedings are already legally required to disclose all of their assets to the court, including superannuation, but in practice parties may forget, or deliberately withhold, information about their super assets.

The Government has announced an electronic information-sharing mechanism to be established between the ATO and the Family Law Courts to allow superannuation assets held by relevant parties during family law proceedings to be identified swiftly and more accurately from 2020.  This measure was included as part of a broader financial support package for women announced on in November. 


    Another Successful CAANZ Achiever Program for Harris Black 
   
As we did in early 2018, in January 2019 Harris Black again participated in the Chartered Accountants Australia and New Zealand (CAANZ) Achiever Program and offered a couple of accounting graduates the opportunity for a 3 week 'paid industry experience' at our firm. The program 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.

The graduates joining Harris Black for the CAANZ Achiever Program were each selected from hundreds of final year tertiary accounting students who applied to be part of the program and were required to participate in quite a rigorous selection process before ending up with placement at Harris Black.  The selection regime included an initial online application followed by some serious interactive cognitive testing, a video submission, phone conversations and a personal assessment before finally attending a one on one interview with HB Director, Renee Bettenay.
  
Prior to last years' CAANZ Achiever Program, all Harris Black Directors and staff collaborated on an induction and orientation process for use with our visiting CAANZ Achievers which covered all aspects of working as a Harris Black team accountant. It was quite a successful program previously and after some review and update, it was again put into action for our 2019 participants. With an exceptional team effort by all HB staff members, our CAANZ Achievers were able to actively participate in a variety of accounting work under supervision and had opportunity to apply and develop their learning further. Everyone in the HB team participated and had a part to play, something which our visiting grads found incredibly impressive and well exceeded their expectations with regards the attention, support and training they received.

Ultimately, the program was a resounding success for both Harris Black and for participating graduate, Matthew Mok. During a 'debriefing session' with Renee towards the end of his stay, Matthew 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 Matthew'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 Matthew. All are excited to have you on board!

 
    Important Tax Dates 
   
28 February 2019

  • Lodge tax return for non-taxable large/medium entities as per the latest year lodged (except individuals).
  • Payment (if required) for companies and super funds is also due on this date. Payment for trusts in this category is due as per their notice of assessment.
  • 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.

21 March 2019

  • Lodge and pay February 2019 monthly business activity statement.

     
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This material 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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