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Pick Where You’re Going To Play

by niche

One of the big challenges we see with clients is they cannot take advantage of all the opportunities they identify.

There may be lots of opportunities, but they have limited;

  • Resources
  • Capabilities
  • Funds
  • Skills

For example, they cannot get the people they need to take full advantage of an opportunity because of demand for these particular types of people, or alternatively they get the people but a significantly higher cost than they had budgeted for. So they take on work where they do not have enough capability or capacity, and their margins are being diluted.

While there are many opportunities for these particular companies, they often end up dealing with unprofitable clients that are consuming a lot of time and resources.

Where to play

The key for this issue is to determine if the business needs to narrow their focus.

For example – a business was dealing with large corporate clients who were consuming a lot of their resources, the payment terms were stretched and they expected the business to be available on demand. This business also worked with smaller clients where the payment terms were better, they were much more flexible, there was less complexity, less risk and the smaller clients actually appreciated it. The business determined that by narrowing their focus and working on smaller clients their revenue would decrease but their profit would increase.

Is it about revenue or profit?

It should be about profit, what’s the point of doing $1 million revenue when you’re going to make $50,000 profit when you can do $300,000 somewhere else and make $100,000. You’re just busy filling up all your valuable time in the wrong areas.

There are lots of opportunities for businesses and an important consideration when setting strategy needs to also be about what you shouldn’t do.

What is the lesson here?

Pick where you’re going to play, look for the greatest opportunity where there is a match between your capability and the opportunity to make the most profit.

To know more about where you should play, contact your Harris Black team member today.

A Business Property Decision-Buy Or Rent?

by niche

When running a small business that requires bricks and mortar, the big question is – do you buy or rent? There is no single right or wrong answer to this question, but we have summarised here the advantages and disadvantages of buying.

Advantages to Buying

Fixed Costs – Knowing your long term commercial mortgage repayments can be reassuring when budgeting (subject to any interest rate changes, fixing rates can mitigate risk).

Tax Benefits – As an owner, there are tax deductions available for costs associated with the property. Capital gains concession may be available for profits on sales of business premises.

Access to equity – You may be able to use the property as security for other business/property finance.

Additional income – In some cases, the property may be too big, allowing the opportunity of renting out a portion of it to a tenant. If your business outgrows your premises, you have the option of renting out the entire space or selling it.

Capital growth – If you have purchased your property within an area of appreciating land values, the prospect of selling for a profit is a positive one.

Control – The security and freedom gained by owning is an advantage. If any improvements are required, you can add value to your investment.

Disadvantages to Buying

Lack of flexibility – You do not know what the future may hold – for example if your business grows rapidly, your owned space may be inadequate, forcing a premature sale of the property.

Upfront costs – You will usually need a deposit even if you are borrowing funds. The initial upfront costs of purchasing a property can be high, such as appraisals, associated fees such as stamp duty (if applicable), property improvement and transfer costs.

Agility – Be aware of the risks associated with selling (especially if it becomes urgent) and the vacancy rate in your area. Make sure to do your homework, understand your risks and keep abreast of the current market.

Capital loss – Sale of the property could result in a loss if it is sold for less than the amount for which is was purchased.

Maintenance and improvements – as an owner you are solely responsible for maintaining the property and making any improvements.

If you are considering buying premises for your business, please contact your Harris Black team member to discuss further.

Major ATO Focus On Work-Related Clothing And Laundry This Tax Time

by niche

This tax time, the ATO will be closely examining claims for work-related clothing and laundry expenses. Clothing claims are up nearly 20% over the last five years and the ATO believes many taxpayers are making mistakes or deliberately over-claiming. Around a quarter of all clothing and laundry claims in recent years were exactly $150 – the amount claimable without a specific requirement to keep detailed records about the work-related clothing expenses.

TIP: The ATO has issued a stern reminder that the $150 threshold is not a “safe amount” that everyone can claim. We can help make sure your tax return claims are done right – contact us to find out more.

To know more about work-related clothing and laundry expenses, contact your Harris Black team member.

Charity – “One Year On Our Bike”

by niche

Harris Black is proud to be supporting “One Year on our Bike“.

One Year on Our Bike (Wolters Family) is inspired by the work of Motor Neurone Disease Association Queensland (MNDAQ) and wanted to support them by raising money and awareness.

Diana and Josef Wolters together with their daughter (Chloe, 14) and son (Jack, 12) are in the middle of a tough and fun adventures riding solely their push bikes while raising money for MNDAQ.

Wolters Family are doing a full round trip of Australia and have to carry everything with them in two tailor made trailers that they made themselves. They started their journey in Bundaberg on Australia Day and are currently in Karratha in outback Western Australia.

In the next 4 months, the team at Harris Black will raise funds through various activities to be organised by Bjorn Kirberg, brother of Diana Wolters, to help One Year on our Bike raise funds for MNDAQ.

Harris Black 2018 Staff Day

by niche

On Friday 10 August 2018 all at Harris Black attended the firm’s annual “Staff Day”. This is a day where we collectively review the past 12 months at Harris Black, reaffirm our core values and further develop strategies that will improve our service and better help our clients achieve their goals.

Guest appearances were made by Jack Perlinksi, from Dais marketing consultants and Troy Schoenfisch from Beyond Blue. The former invited us to embrace and promote our firm’s identity as an organisation that is focused on helping our clients achieve their goals whilst the latter promoted the need to provide support and understanding when a workmate is struggling. Both were well received.

Last year’s Staff Day saw all at Harris Black identifying ways to actively develop a strong Growth Mindset (one that embraces challenges and learning experiences in a positive manner). The Growth Mindset concept is now a huge part of how we operate as a team and with our clients. With the introduction on Staff Day of the “5 Second Rule” concept we’ve now extended this even further… “The 5 Second Rule” encourages us to move forward on those things we are avoiding. The initial move we’re required to make is often the hardest and that which stops us getting started on a difficult or challenging task. The key idea behind “The 5 Second Rule” is that when needing to start one of those difficult tasks, we should count backwards from 5 and at the count of 1, make a physical action towards the task, even if it is something that ongoing requires largely mental application. Our reference for “The 5 Second Rule” was a book of the same name by Mel Robbins. A lot of great pointers in this one for those interested in self-improvement both from a personal and business perspective.

As usual we made sure there was plenty of fun and laughter tied up our Staff Day learning activities… Blind-folded challenges, a baby photo competition and the creation of promotional video’s “off-the-cuff” were interspersed across the day and all were both extending and entertaining (hopefully the latter will look a little more polished before they hit our website!).

The Harris Black Staff Day was as entertaining and productive as always and ended with the entire team heading out to enjoy a belated EOFY celebration at 1889 Enoteca. As is generally the case with any Harris Black Staff Event, an exceptional night was had by all!

New Financial Year Changes

by niche

A reminder of legislative and compliance changes that have come into effect from 1 July 2018.

Minimum wage increases

A new minimum wage is now in effect starting from the first pay period on or after 1 July 2018. The new hourly minimum wage is $18.93 per hour, up from $18.29 – a 3.5 per cent increase. The base rates of pay in modern awards will also increase. Employers must ensure that they check the new wage rates that apply to their business and take action immediately.

High income threshold

The high income threshold in unfair dismissal cases will increase to $145,400 per annum. The previous threshold was $142,000 per annum for dismissals that took place on or after 30 June 2017. The compensation limit will be $72,700 for dismissals occurring on or after 1 July 2018.

Changes to penalty rates for some awards

From 1 July 2018, Sunday penalty rates for workers in the Fast Food, Hospitality, Pharmacy and Retail awards changed, following a Fair Work Commission decision made last year. The rate cuts are between 10 to 15 per cent, depending on the award.

Tax

Online retailers are now required to register for GST on sales of low-value imports of physical goods imported by consumers. Businesses that meet the $75,000 registration threshold will need to take action now to review their business systems to ensure that they comply. They will need to:

  • register for GST;
  • charge GST on sales of low value imported goods (unless they are GST-free); and
  • lodge returns to the ATO.

These businesses may be merchants who sell goods, electronic distribution platform operators or re-deliverers.

Also, the 32.5 per cent income tax rate increased to $90,000 from $87,000 as of 1 July 2018.

If you have any questions about these changes, contact your Harris Black team member today.

How can we help you?

Today’s financial environment demands a regular review of strategy and a focus on execution.

Contact Us