Growing your business with referrals

Most businesses benefit from “word-of-mouth” referrals. They are one of best ways to get your name on the tip of everyone’s tongue, along with running a terrific business for many years.

Here are a few tips that may speed up the referral process and increase the number of people who will remember your business the next time someone asks them for a referral:

Remind customers you exist
Keep your name and number in front of past customers so they won’t forget about you. Maintaining a mailing list database, and keep in touch regularly. Send postcards when you have special offers, write a newsletter, or just drop a note or send holiday greetings. With e-mail, it is more cost effective to send messages. Contact past customers no less than twice a year and no more than every other month.

Ask customers for referrals
Tell customers that you really do appreciate them giving referrals, and then surprise them with a gift or a “Thank You” card when they do.

Testimonials
You can use testimonials from past customers in your marketing materials or on your website or advertising. The fact that other customers let you use their name adds credibility and trust and serves as another kind of “referral.”

Ask customers and clients for feedback regularly
By soliciting suggestions — and responding to them — you can let customers know you really care about them and want to meet their needs; you can establish a relationship with them.

Do exceptional work
When you do something that not only satisfies a customer but delights and surprises them, they will remember it, and they will become part of your “word-of-mouth” advertising campaign.

Simple ways to make meetings more effective

Business meetings can often be a drag. Some go longer than they are supposed to and others involve people talking so much that the meeting ends up completely off topic.

But not all meetings have to be boring or time-wasting. When conducted properly, meetings can make everyone’s job much easier. Including breaks, having a short ‘walk and talk outside’ and following a tight starting schedule are all ways that can make meetings more efficient, productive and even a little bit of fun for those in attendance.

Here are five simple ways to regain control to have more productive meetings in your workplace:

Set a clear schedule ahead of time: Since it is always helpful when people are fully prepared for a meeting, those in charge of organising a meeting should send out a clear outline of the meeting well in advance to those attending to give them time to prepare.

Assign who will be in charge: It is important to pick someone to lead the meeting who is comfortable and will be able to keep the meeting on track. Those who are trusted and respected by employees often make the best candidates.

Have a device-free meeting: Make it a rule to have a ‘device-free’ meeting to put distractions like emails, phone calls and notifications to one side.

Keep the meeting small: Having too many people at a meeting can render it ineffective. Only invite those who will make an important contribution to the meeting.

Take your meeting outside: If there is no paperwork involved, try having a ‘walk and talk’ meeting outside. Alternatively, you could organise the meeting to take place at a local cafe for a relaxed, comfortable setting to talk.

Rental property owners on ATO radar

The Australian Tax Office has announced that it will be paying close attention to rental property owners during this tax season, especially in areas where excessive interest expenses are claimed and where there is an incorrect apportionment of rental income and expenses between rental property owners.

The ATO will also be focusing on those who make incorrect claims for newly purchased rental properties and those who own holiday homes that are genuinely not available for rent.

The Tax Office has advised rental property owners that they need to better understand their obligations to get their claims right.

Those who claim deductions for their rental property need to include all rental income and ensure that their property was genuinely available for rent when the expense was incurred. Owners must also make sure to apportion any deductions to take any private use into account and have records for the claims made.

Some examples of incorrect practices the ATO will be looking out for include:

• Occasionally advertising a new purchased rental property (that has not returned any rental income) on community notice boards and online. The ATO does not consider this a genuine way to actively seek tenants or genuinely advertise the property for rent.

• The higher earner of a couple who jointly own a rental property claiming the larger proportion of the property’s expenses. Expenses must reflect ownership interest.

• Reporting high rental interest claims that are not supported by evidence such as bank statements.

• Providing false receipts for property management fees.

• Inappropriately claiming a deduction for repairs to defects present in a newly purchased property. Capital works and borrowing expenses need to be spread over several years.

SEO friendly images

Image optimisation can increase exposure and decrease load times for your website, resulting in better SEO rankings.

Websites with images not only improve the user experience but bring in organic traffic via search engine image results. When adding images to your website, they need to be optimised accordingly. Here are some things to consider:

File name
Be sure to use descriptive keywords in the image file names as search engines will search for keywords within your image file names. The file name should be the main subject of the image.

Alt tags
When a browser cannot read the file name, the alternative text will be displayed to ensure that no information or functionality is lost. Be sure to add alt tags which contain your SEO keyword and describes the image. Using alt tags helps to achieve better website rankings as associating keywords with images helps to show up in the image and web search.

Reduce file size
Images with slow load times rank poorly in search rankings, as Google uses page load time as a factor in their algorithm. Make sure the image is in the smallest file size possible for the best overall user experience. A good rule of thumb is to keep your image file size below 70kb.

Finding your target market

Who’s your customer? That’s one of the most important questions any business can answer, but it’s particularly important for small businesses. Why? Because only by having a clear definition of the exact type of customer you’re 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’d 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.

When defining your target market, keep the image of an actual target in mind. 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 underserving?

• 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?

Taxation of employment termination payments (ETPs)

Redundancies, whether forced or elective, can become complex as there are many taxation issues to consider when receiving a payout.

The most common form of payment an employee will receive is an employment termination payment. Employment termination payments (ETPs) include payments for unused rostered days off or for unused sick leave; payments in lieu of notice; payments due to redundancy or early retirement that exceeds the tax-free amount, or payments due to invalidity.

Mistakes in employment termination payments (ETPs) are common as it is up to the employer to work out how much is owed to the employee and how much tax needs to be withheld from the various components that make up an ETP. Errors are generally made around how much leave is owed, whether the payment includes the correct tax-free amount and if the correct tax rate is used.

ETPs are made up of two components, the tax-free component and the taxable component. The tax treatment of the components will vary depending on the type of redundancy, whether it is an early retirement scheme; genuine redundancy; invalidity or compensation for personal injury, unfair dismissal, harassment and discrimination.

The ATO classifies a redundancy as “genuine” if the employer has made a decision that the job no longer exists and employment is to be terminated. A genuine redundancy has special tax treatment where an amount paid up to a limit is tax-free. To qualify for tax concessions the employee must be dismissed before the day they turn 65 and there must be no arrangement at the time of termination to re-employ the dismissed person.

Employees being offered a redundancy payment should check the right tax is applied to the right component. A genuine redundancy payment is tax-free up to a limit based on a formula which includes the base amount determined by the ATO. This is added to a service amount multiplied by the years of service. The base rate for 2015-16 is $9780 and the rate for each completed year of service is $4891. The formula depends on completed years.

Tax will be withheld by the employer where there is unused long service leave, rostered days off, pay in notice of lieu or golden handshakes. The tax withheld on long service leave would be either 17 per cent or 32 per cent (including Medicare) depending on the age of when redundancy occurred. For those over the preservation age (usually 55 and over) you will pay 15 per cent tax when you take redundancy and for those younger, 30 per cent tax will be payable, excluding Medicare.

Amounts that exceed the tax-free limit will be taxed based on your preservation age at the date of the redundancy and individual marginal tax rate. There is an ETP cap, which for the 2015-16 year is $195,000. When the cap is reached, the individual’s marginal tax rate is applied, plus the Medicare levy.

Employees receiving a redundancy payout need to ensure they understand how the calculations have been done and seek professional advice to confirm they are accurate.

Misleading conduct on social media

Businesses are becoming increasingly dependent on social media as a marketing tool and way to interact with existing and potential customers.

Although social media draws many benefits for businesses and customers alike; social media needs to be treated like traditional forms of advertising in that comments and opinions are not false, misleading or deceptive. Business owners are responsible for the content on their pages, irrespective of who published it.

Consumer protection laws apply to social media in the same way they apply to any other marketing activities. The Australian Competition and Consumer Commission (ACCC) may require businesses to substantiate any claims that may be false, misleading or deceptive on their social media pages.

To avoid breaching any consumer protection laws, business owners should consider the following:

• Do not allow misleading claims in comments

Business owners are accountable for the posts and public comments made by others on their social media pages. Therefore, it is your business’s responsibility to monitor comments to ensure they are not false or likely to mislead and deceive consumers.

• Monitor social media accounts

Social media pages need to be regularly monitored to ensure followers of your business’s page do not post claims that could be considered false, misleading or deceptive. The amount of time you dedicate to monitoring your social media will depend on the size of your business and the amount of followers you have.

Consider establishing ‘house rules’ that apply to the behaviour expected from your social media followers, and ensure it is featured prominently on your pages. Followers who breach these rules should be blocked from your pages.

• Responding to misleading comments

Businesses can choose to respond to false or misleading comments instead of removing them but it may not override the false impression made by the original comments. In most cases, it is safer to remove comments as soon as you become aware of them.

Encouraging teamwork

Strong teams are at the very core of any successful business and often produce far greater results than lone geniuses.

Teamwork allows staff members to share workload, work towards a common goal and enhances overall communication. For teamwork to flourish, business owners must create the right conditions and environment. Here are five ways to improve teamwork in your workplace:

1. Value team contributions
Involve all team members in decision making, assign them with responsibility and be sure to reward all staff members for team efforts.

2. Give and receive feedback
Good teamwork involves a continuous flow of communication and information between team members. There should be a strong emphasis on positive feedback when someone performs well and criticism when necessary.

3. Set team-based goals
Set challenging yet achievable goals for your team to work towards. When the team reaches a goal, set a more challenging goal to encourage team members to learn from their previous successes. Be sure to recognise the team for their efforts and discuss what tactics were successful.

4. Facilitate idea-sharing
Encourage team members to bounce ideas off each other by brainstorming and discussing progress on current projects. Brainstorming ideas fosters creativity and can help with problem-solving.

5. Welcome suggestions
Be open and supportive of new ideas presented by team members. Work as a group to improve on ideas and eliminate ideas that will not work.

Building your customer base on a budget

Businesses starting out will often be challenged by the need to generate brand awareness but with a limited marketing budget.

Minimising costs will often be at the forefront of business owners minds with uncertain revenue and copious amounts of capital expenditure; marketing is unlikely to be a top priority. However, new businesses need brand exposure in the early stages as potential customers or clients are unlikely to just appear.

Here are some ways business owners can cost-effectively create awareness:

Social media
Many small businesses are reluctant to use social media. Whether they are “time-poor” or “confused” by social media, there are ways to get involved without hassle. Social media could take as little as a few minutes each day and can be delegated to a staff member who is confident with using different social platforms.

Businesses selling tangible products can take advantage of platforms intended for sharing photos such as Facebook or Instagram, as visuals are a key selling point. For businesses such as professional services firms, utilising platforms that sell their knowledge and expertise is important, for example, creating a blog.

Communities of interest
Unlike well-established businesses, new businesses need to form brand equity to attract new customers and clients. When starting out, businesses need to present their brand proposition to target audiences and referral partners, also known as communities of interest. For example, a wine-maker would present themselves at a local wine and food festival. There will be a community of people interested in your product or service, so presenting and engaging in the places where they are gathering makes sense.

Partnerships and associations
“It’s not what you know but who you know” is a popular phrase and for good reason. Social connections and associations are everything. Many businesses will seek out partnerships or sponsorship’s with complementary brands to enhance their reputation via association. If a well-known, respected brand wants to associate with your brand, then people may conclude your brand must have something unique to offer.

Planning your exit

When you’re busy trying to build your business, you don’t spend much time thinking about how you’ll eventually end it. Sure, you might think that one day you’d like to retire. But while you can envision yourself golfing or gardening, what’s happened to your business? You need an “exit plan.”

An exit plan is the long-term strategy you have for transferring ownership of your business to others. Your thoughts about an exit help shape decisions you make now and give you a clearer direction on how to grow your business.

 Why bother developing an exit strategy? First of all, you may want to exit in the not-too-distant future. It used to be when someone started a business, their intent was to build a business, make money and perhaps leave it to their children. Today, many entrepreneurs hope to start a business, grow it and then have it acquired by a larger company.

Even if you hope to run your business for 20 years, it’s important to consider what you’d eventually like to do with it. If there is more than one partner in the business, it’s imperative you all discuss your eventual exit. Unspoken exit assumptions can cause a great deal of friction. Here are some of the most common exit strategies:

Sell
All types of companies can be sold, not just retail or manufacturing enterprises. Typically, professional businesses, such as doctors’ and dentists’ practices, are ‘bought into’ by new partners.  Even a one-person consulting business may be able to be sold if you find someone who wants a built-in customer base.

Be acquired
Your company may be a good fit for a larger company. Perhaps they want a product you’ve developed, your customer base, or your visibility and connection in the part of the market you serve.

Have family members take over
Many people dream of leaving their business to their children. But you still need a plan. After all, your family members might not want to or be capable of running the business.   

Employee Buy-Out
An excellent way to keep your business together and to retain the jobs you’ve created is to structure a way for management or employees to buy the company. But your company still has to have intrinsic value.

Close, retire.
This is the simplest way to end a business, but you also get the least financial reward. But sometimes, you just want to get on with the rest of your life.