Applying for a small business loan

Whether a business needs money for its initial start-up or to simply buy resources and equipment, there will always come a time when a business will require a loan to continue moving forward. Business owners can improve their chances of loan approval by showing the potential lender that they can support their business ideas and plans with valid financial information.

The below checklist is designed to give business owners an idea of what to include in their loan application:

– A short (but detailed) excerpt of what your business does, its history and ownership details.

– The owner’s personal financial information, such as credit history, tax returns and personal assets.

– A business’s financial information. This may include balance sheets, profit and loss statements and cash flow statements.

– A forecast of financial information. The forecast should reflect what the business owner expects from the loan (assuming that the loan is approved). To have this work in the owner’s favour, they should include best and worst case scenarios.

– A detailed description of why the business needs a loan. Owners must remain critical when they have to decide what type of loan they need. They should state the amount and the time it will take to pay back the loan. Including a business plan here can help to improve the chances of getting a loan approved.

Finding your ideal customer

Attracting more customers to a business is typically the focus of many marketing strategies. However, attracting the right kind of customer for the business should be the real focus.

An ideal customer sees the value in employing your services, actively seeks out your advice, and is willing to pay you for what you’re worth. Surprisingly, it can be quite easy to find these customers. Knowing who to look for is the key.

Businesses should begin by creating a customer persona. This persona should include the customer’s age, family status, income, wants and challenges. Businesses should consider what would specifically appeal to this person and how they can achieve it.

Businesses should then create a list based on what they expect from their ideal customers. Some aspects to consider could include whether the customer would:
– Pay on time
– Pay the price asked for
– Take fast action on assignments
– Provide feedback and;
– Tell others about the business’s products and services

Once a business has identified and understood their ideal customer, the process of targeting these customers is much easier. Narrowing the search for ideal customers can help build a better business faster with the right customers.

Tips for avoiding unfair dismissal claims

An unfair dismissal claim is a costly and time-consuming issue that many employers face each year. Under the Unfair Work Act, unfair dismissal actions are available to employees working for a business with more than 15 employees (whereas, the fair dismissal code applies for small businesses with under 15 employees). Employees who are dismissed in an unjust manner may receive up to six month’s pay. Below are five steps employers may want to consider to minimise the possibility of unfair dismissal claims.

1. Probation period
Provide the under-performing employee with some constructive criticism and a chance to improve their work ethic. This gives them time to assess what they have done wrong and correct their performance. Employers should ensure they arrange a meeting with the employee to discuss the problem and find possible solutions.

2. Give the employee a chance to respond
The employee must be clearly aware of any allegations made against them and given the opportunity to respond. Employers can spell out allegations in writing and then arrange a later date to discuss the employee’s poor performance, which gives them time to consider their response.

3. Clearly communicate business policies and procedures
Ensure all policies and procedures are known to all staff, including termination of employment provisions. Regularly referring to these policies will help to prevent any behaviour that could constitute as a serious breach to an employment contract.

4. Do not abuse the process
Dismissing an employee for personality reasons can have negative repercussions for a business. Some employees abuse the complaints system just to get rid of people who are not liked, so it is important for employers to be aware of this issue and the correct way to dismiss an employee.

5. Avoid on the spot dismissals
If an employee commits a gross breach of their employment contract, implement a procedure where another manager becomes involved. The event should be recorded and a decision reached after all parties have had a chance to respond.

SMSF’s and non-arm’s length income

Self-managed super funds and related parties must transact on arm’s length terms. This ensures that both parties are acting in their own self-interest and will not succumb to any pressure from the other party. The true market value of an asset should always be reflected in the purchase and sale price of assets.

Members need to be aware of any income that can be classified as non-arm’s length to avoid being taxed at the highest marginal rate.

A potential non-arm’s length hazard is a limited recourse borrowing arrangement (LRBA). Under an LRBA, a member can borrow money to purchase an asset and receive the beneficial interest, but the legal ownership of an asset is held on trust by a related party for the SMSF member.

Problems arise when the alleged loan is not at commercial rates. For example, the ATO found two members of a self-managed super fund had a loan with zero interest. Consequently, the income acquired by the SMSF member as a beneficiary of the holding trust was considered to be non-arm’s length and they were subject to 45 per cent tax.

Tax discount for unincorporated small businesses

To drive small business growth, the Government’s 5 per cent tax discount for unincorporated small businesses with an annual turnover of less than $2 million will take effect from 1 July 2015. The discount will be capped at $1000 per individual for each income year and will be delivered as a tax credit in their tax return.

It is expected to deliver a tax cut of $1.8 billion over the next four years.

Individual taxpayers can still calculate their business income the same way and then add a 5 per cent discount on the income tax payable on the business income.

The tax discount builds on the success of the first two small business bills passed through the Senate, where all small businesses gained access to an immediate tax deduction for assets costing less than $20,000 and small companies with an annual turnover of less than $2 million were handed a 1.5 per cent tax cut.

Are marketing automation tools worth the investment?

Developments in cloud technologies have made marketing automation tools more accessible for small businesses.

However, this doesn’t necessarily mean that they are essential for every business. Marketing automation tools can help drive a business forward, but they often require a lot of time, in-house resources and upfront financial investments.

Below are three aspects of marketing automation tools a business should consider before investing:

The sales cycle
Marketing automation tools can be extremely beneficial for businesses who regularly engage in lengthy sales cycles or complex purchasing decisions. Automation tools can provide relevant information at an appropriate time during the buying cycle, which can help nurture relationships with customers.

Time to value
Marketing automation tools are difficult to implement and use to their full potential. Businesses should consider whether they have the resources to make an automation program successful. For example, it is probably not worth the investment for a business with 10 to 20 leads per month. Whereas, businesses generating a minimum of 10 leads per day from their website should consider the investment.

Existing platforms
The sales organisation infrastructure of a business must be able to handle an increased workflow when a business decides to implement marketing automation tools. A clearly defined sales process should also be in place between the marketing and sales teams for marketing automation to succeed.

Seven steps to writing an engaging blog post

A quality blog can help businesses build a strong online presence. But one of the main challenges they face is crafting original content on a constant basis. Using systems can help businesses overcome this problem and produce regular, high-quality blog content.  A systematic approach to blogging may sound boring, but in reality, it can make the task a whole lot easier. Below is an example of a system that is designed to make writing blog posts as simple as possible.

1. Pick a topic ahead of time
Choosing a topic and trying to write it at the same time can kill productivity. Make a list of topics and titles to work from ahead of time to make this process fast and simple.

2. Write an engaging introductory paragraph
Introductions help to define the progress and flow of a blog post. They should be kept simple, capture readers attention, and share the main idea of the article.

3. Create an outline
Blog posts need a structured outline to be successful. Blogs with no outline tend to ramble, and may confuse or bore readers.

4. Share research
Find a case study, news article or other high-quality content that supports the point you’re trying to make in the blog post. Backing up your claims with actual research can build trust with online readers.

5. Add Images
Break up your content with a few relevant images. But be aware of online copyright laws, and always cite your sources.

6. Create a Conclusion
Sometimes writing the conclusion before writing the blog post can be productive. It causes the blog article to stay tight and focused. Conclusions should be short and summarise the article.

7. Finish with a question
Questions can get readers thinking about your blog post, which in turn can increase reader engagement.

Last-minute tax tips for individuals

With just over a week until June 30, here are some tips that can help savvy individuals make the most out of their tax refund for the 2014-15 year. The following tips are by no means exhaustive and may not be relevant to every personal situation.

• Keep your receipts

The most important thing every individual taxpayer needs to know when it comes to claiming their tax is what expenses they can claim.  For most individuals, finding and organising receipts at tax time can be challenging and time-consuming. But, some of this stress can be avoided if they are mindful that they can claim up to $300 of work-related expenses without receipts. Even though there is no written evidence, taxpayers must be able to show how they worked out their claims.

• Claim your work uniform

People who are required to wear a uniform for work may be able to claim  clothes or laundry expenses.

•  Bring forward deductible expenses

Individuals who are earning less next year due to maternity leave or working part-time may be better off bringing forward any tax-deductible payments into this financial year. Rental property investors may also find it beneficial bringing forward any property maintenance costs, as they can be claimed in full or in part.

•  Hit contribution caps

Self-employed individuals who are younger than 50 and haven’t exceeded the before-tax contribution cap of $30,000, or $35,000 if they are aged 50 or older, can make a personal deductible contribution.

•  Delay any income

Investors who are selling a property should consider deferring the sale until after 30 June 2015 to delay incurring CGT for another financial year. Although it will need to be paid eventually, freeing up short-term cash flow may be handy.

• Claim vehicle expenses

Individuals who use their car for a work purpose beyond travelling to and from their workplace can deduct the cost if they have a log book.

SMSF’s under scrutiny for ‘loose’ loans

The ATO has reiterated it will be investigating self-managed super fund members who have an estimated $600 million in related-party loans for shares and property in their funds.

Some members are taking out loans with a related party, which refers to friends, associates or family, on terms more favourable than what might have been attained from a bank. The tax office is concerned that these loans are not being made and maintained on a strict commercial basis and so, are breaching regulations. The ATO is willing to assist members who are caught up in such arrangements and resolve any issues.

There are certain characteristics that can help lenders identify these inappropriate loans:

– no compensation.

– no repayments.

– a single lump sum when the loan term ends.

– the loan amount provided for 100 per cent of the value of the assets purchased.

– the lender has not sought personal guarantees from the members of the fund.

Time-saving social media templates

The maintenance of a business’s social media can either make or break a brand. Typically, a social media strategy plan follows the structure of creating a page, posting information and gaining followers. However, this does not always guarantee success.

Social media templates are designed to save time, and can help a business operate a successful social media page. Templates can help keep content creative, organised and up to date.

Editorial templates
Editorial templates can help a business keep track of their social media ideas and plans. The tool addresses aspects such as publishing posts, the focus of the posts, whether the posts will include multimedia or if they will include links to other blogs or pages.

Content calendar templates
A content calendar can track the web content posted. It also includes easy-to-read columns to show what’s working and what’s not. A content calendar can keep a business aware of aspects like what copy has been clicked on the most, what accounts are posted on too much and which stories aren’t getting traffic.

Media strategy templates
These documents can help guide the purpose behind a business’s online presence. A good social media strategy plan outlines your goals like what a business wants to achieve through social media and if accounts and profiles accurately represent the brand.

Profile aesthetic templates
A business’s social media presence is only as good as the impression it gives. Businesses may need image templates to arrange and update social media images or consider trying out a colour scheme and sticking to it. Keep things clean, professional, and modern.