How negotiate like a pro

The stakes are always high in negotiating, especially in business, as it involves professional repercussions. But negotiating doesn’t have to be stressful or hard. Here some tips to help you succeed at business negotiation to close more deals:

• Don’t view negotiation as a battle

Negotiation is often talked about in terms of winning or losing against an opponent. But negotiation isn’t a game with a win-lose outcome. Good negotiators strive to achieve an outcome that both parties want. Shift your mindset to keep things positive and keep the conversations productive.

• Anticipate prospect objections

Before entering a negotiation, anticipate possible prospect objections to equip yourself to address their concerns. This can help make you look more impressive as you know what the prospect cares about before they tell you.

• Read between the lines

Whether you’re negotiating over the phone or in person, you need to understand what’s not being said as well as what is being said. Look for behaviour changes like a change in voice tone or a shift in body language that could indicate whether a conversation is going well or poorly.

• Know when to walk away

Good negotiators know where their bottom line lies and if a negotiation’s terms cross it, they know it is sometimes better off to simply to walk away than keep fighting.

Creating an e-commerce returns policy

A comprehensive returns policy is imperative for every e-commerce business. It is not only good practice, but it provides customers with confidence and demonstrates your business’ commitment to customer service.

A solid returns policy will ensure the returns process is professional, reduce the time and money spent on returns and keep your customers satisfied.

Here are five tips to consider when designing your e-commerce returns policy:

• Avoid legal jargon

Your returns policy needs to be easy simple and easy to understand. It is best to avoid legal jargon and complex terms. Instead use plain english and terms that everyone can understand.

• Ensure accurate product descriptions/images

To avoid customer disappointment, it is critical that your site displays accurate product descriptions and photography. Use 360-degree view of the items you sell alongside informative descriptions of products/services.

• Keep the policy front and centre

The returns policy should be posted on everything including your website, receipts, emails and even packaging so customers have every opportunity to review the policy.

• Highlight timeframe for returns

State the timeframe in which customers must return the product, i.e. 30, 60 or 90 days from purchase. For goods that are damaged or malfunctioning, there may be a shorter time frame.

• Exchange, credit, cash?

The policy must state the customer’s options to receive a store credit, exchange or a cash return for items. Businesses have flexibility in these preferences, for example, a full refund does not have to be provided. However, every effort should be taken to replace an item or provide a refund without incurring any costs for the customer.

Small business company tax rate reduced

The small business company tax rate has been reduced from 30 per cent to 28.5 per cent. The new lower rate applies to small businesses that are corporate unit trusts and public trading trusts.

When completing company tax returns, use the new rate of 28.5 per cent on calculation statements at label T1 – Tax on taxable or net income. The franking credit cap has remained unchanged at 30 per cent, and still applies to those eligible for the reduced company tax rate of 28.5 per cent.

ATO advice for SMSFs with related-party loans

The ATO has recently provided recommendations for self-managed super funds (SMSF) trustees with related party LRBAs that are lodging before the 31 January 2017 compliance deadline.

The Tax Office stated that the relevant income of an SMSF is considered NALI (non-arm’s length income), and should be reported as such in the SMSF’s 2016 annual return, when trustees have:

• taken no action to ensure any LRBA in their fund is on terms consistent with an arm’s length dealing and;

• not made the required catch-up payments at the time of lodgement of its 2016 SMSF annual return

Prior to 31 January 2017, the Tax Office will not be allocating compliance resources to review the borrowing terms of a fund’s LRBA. Therefore, provided the LRBA in an SMSF is consistent with an arm’s length dealing and the required catch-up payments are made by 31 January 2017, the fund is not at risk of ATO enforcement action.

Strict consequences, such as ATO compliance and enforcement action, await SMSF trustees who do not ensure that any LRBA in their fund is on terms consistent with an arm’s length dealing and if catch-up payments are not made by 31 January 2017.

Where the necessary action has not been undertaken by 31 January 2017, SMSF trustees must take immediate action to amend any previously lodged 2016 SMSF annual return if it did not correctly report relevant income as NALI.

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.

Building the perfect LinkedIn profile

Having an optimised LinkedIn profile is key to gaining maximum online visibility and revenue through the professional social network. LinkedIn has over 97 million monthly active users around the world, so businesses need to start paying some attention to creating a decent profile if they want to stand out. Those with a complete profile are 40 times more likely to be found by others online. So how can small businesses create a ‘complete’ profile? Here are some basic tips to help make your profile as visible as possible:

Headline: Your LinkedIn headline is one of the most important aspects of your profile. Business owners should be succinct, creative and include key terms that make it easy for users to define your role in your industry.

Name: Include your first, last and middle name. LinkedIn is not the place for nicknames or funny references to job titles, like ‘business extraordinaire’.

URL: Customise your LinkedIn profile’s URL to make it easier for people to find you. You can find the URL in the light-grey box underneath your name.

Profile photo: First impressions matter, especially when people see your profile picture. When choosing the appropriate headshot, make sure you consider your industry, as well as potential customers and peers who will view the photo. It might be a good idea to hire a professional photographer to take the photo.

Your background: The background section of your LinkedIn profile only has room for 2000 characters. Therefore, owners should be careful to write a succinct description of themselves, including their present and future ambitions for their business. Add other points of contact if you have them, like your mobile number, Twitter page or email address.

Experience: Complement your career information and experience by including in-article quotes, images or other content that you have created that is related to your professional life. The better you can intrigue viewers, the longer they will view your profile, which can better your chances of making a new business connection online.

Projects: Add in any projects you have led or executed to demonstrate your skill set and reinforce the assertions made in your description. Adding links to your current projects can support your credibility.

Creating an anti-bullying workplace culture

Quite often, being too slow to name bullying behaviours that pose health and safety risks in the workplace can cost businesses millions of dollars each year through lost productivity.

Workplace bullying is repeated unreasonable behaviour directed towards a staff member or a group of workers that puts their health and safety at risk. Instances of workplace bullying include deliberately intending to cause physical and psychological distress and includes behaviour that intimidates, offends, degrades or humiliates a victim.

Here is a simple process businesses can implement to build an anti-bullying culture at work:

• Always keep an eye out for bullying

Bullying can be fairly easy to recognise. Forms of bullying include repeated harassment, exclusion and setting unreasonable expectations that a person is certain to fail. Recognise when staff are unhappy, quiet or unengaged with their work and whether there is a positive or toxic atmosphere in a workspace.

• Recognise the patterns of bullying

There is no mistaking bullying in action; the way people interact at work is a dead giveaway as to whether bullying is taking place. Examples of bullying patterns include one or several staff members converging on one or a minority of other staff members, snide comments slipped into conversations around the water cooler and the body language workers have to one another.

• Speak up when you see bullying

Bystanders of bullies are often reluctant to become involved when a bully is having a go at someone, but staying silent can be considered by many as simply accepting the practice as normal.

The importance of diversification in an SMSF

Self-managed super funds (SMSFs) that are not well diversified are quite risky investments since they aren’t as protected as they could be against shocks and volatility in the market.

Diversification aims to maximise an individual’s return by investing in different asset classes that react differently to the same event. Although it does not guarantee avoiding a loss, diversification is an important component of reaching long-term financial goals while minimising risk.

Diversification can control a super fund’s risk, as the better performing asset classes will help offset the others that aren’t performing very well. It also provides the super fund with the opportunity for long-term growth, as the portfolio is exposed to asset classes with strong growth potential.

SMSF trustees that don’t have the appropriate blend of different asset classes in their fund risk their portfolio experiencing increased and unnecessary volatility. Well-diversified SMSFs include all the major asset classes including cash, fixed interest, shares and property.

The first step to ensuring an SMSF is properly diversified is to consider the exposures the fund currently has to the major asset classes and assess how diversified the fund is. Trustees must then engage in the process of working out which asset classes the fund requires to be properly diversified.

For many SMSFs, the idea is looking to invest in other asset classes that could help improve the fund’s diversification. These may include assets that have a negative or low correlation with one another.

Those concerned about the diversification of their fund need to review their fund according to their investment strategy to assess whether it makes sense to increase diversification. However, it is important to work out any capital gains tax consequences before selling down any assets to buy investments to improve a fund’s diversification.

Intellectual property law basics

While intellectual property can be a valuable business asset for business owners, it must be legally protected if a business owner wants to increase the value of their business.

Intellectual property can add further value to a business when it is sold. Intellectual property is the collection of ideas and creations of your mind or intellect such as trademarks, logos, concepts, designs, computer programs and so on. Most businesses will have some form of intellectual property that derives commercial value.

There are several types of legal ownership available depending on the nature of the intellectual property. The most commonly used types are trademarks, patents, design rights, domain names and copyright.

Trademarks
A trademark is a right granted to a sign or device used by a business to distinguish its goods and services from other businesses. They can take the form of a letter, number, word, phrase, sound, smell, shape, logo or picture.

Although it is not compulsory to register a trademark, registering provides exclusive rights to use the trademark across Australia for commercial purposes and assign, transfer or sell the rights to the trademark to another business.

Trademarks can protect businesses against imitation since they can use the trademark to identify with a particular product or service. However, owners should be aware that even though trademarks offer a greater degree of protection, trademark breaches are not enforced by the Trademark authority; rather they must be pursued by the trademark holder.

Design rights
A design can refer to the features of a shape, configuration or pattern that gives a product its unique appearance. Examples of a design include a logo, branding, packaging and so on. A registered design gives the owner exclusive rights to commercially use, sell or licence it.

Patents
A patent is a right granted for any device, substance, method or process which is new, innovative and useful. If you have developed a new product or process, you may consider applying for a patent.

There are two types of patents in Australia; the “standard” patent provides long-term protection for 20 years or more and the “innovation” patent lasts for up to eight years and applies to innovations that would not qualify for a standard patent.

Patents only provide protection within Australia. However, you can make a separate application in each country or file a single international application and select the countries in which you wish for protection.

If you are considering applying for a patent be wary not to disclose or promote your idea to anyone without first applying for a patent, otherwise you may risk your chances of registration.

Copyright
Copyright is a free and automatic legal right applied to any original work such as art, literature, music, films and so forth. Copyrights do not have to be registered for ownership. You cannot copyright ideas, the works must be tangible.

Domain names
A domain name is your website address on the internet. It helps to form your business’s identity and allows your customers to find your business online. To register a domain name it must be unique and not already registered as a business name or company, or a registered or pending trademark.

Negotiating with customers

Knowing how to negotiate with customers is imperative to a business’s success. Salespeople need to be able to understand what the customer wants, set objectives, negotiate a higher price and also close the deal smoothly.

The following techniques are designed to help businesses and buyers come to a mutually beneficial conclusion.

State your purpose
It is fundamental to make the customer feel like you’re working with them, not against them. Begin a negotiation by stating an ideal outcome that’s good for both yourself and the other person. Using language like ‘best possible solution’ can show that you’re striving for a deal where both parties benefit, rather than one party benefiting at the expense of the other.

Be honest
Avoid using tactics designed to force the buyer’s hand. Never threaten to back out of the deal at the last minute or make them feel guilty. Instead, be transparent about the compromises you’re making.

Build rapport
Build rapport with the other person by matching their way of speaking. Use the same words and phrases, talk at a similar pace and echo their tone, whether it be casual, professional or humourous. To make this strategy more effective, you can also create some goodwill by paying them a genuine compliment.

Engage in active listening
Good negotiators spend most of the conversation asking questions and listening to build trust, rapport and gather information. Show the buyer you’re engaged and paying attention by recapping what they say, asking confirmation questions and avoiding interrupting or answering too quickly.