Five Ways to Stabilise Your Small Business Income

It’s 2016 and the world around you is changing. More and more people are owning small businesses. The internet has progressed and evolved since its early days, and people are flooding to get their small businesses out there through websites and other platforms. For those of us who are current small business owners, it was not easy to get here. So many hurdles to jump, so many failures to overcome. But here we are and we plan to stay here so long our income continues to go up and not the other way. Stabilizing your small business income should be at the top of your list of important things to keep in mind. With the economy note yet on its feet, it’s best to focus your attention on this subject. In this article we will give you 5 ways to stabilize your small business income.

1. Track All Of Your Expenses

This one might seem like a simple one but creating a budget for literally everything is essential when running a small business. Make sure you are keeping an eye out on ALL of your accounts as your small business keeps growing. It’s as simple as gathering all receipts used throughout the day and making sure to either write down or put in the computer any and all payments coming in and out. Do not leave anything out; meals you eat on the go, gas used to get from one place to another, supplies bought at another location – it all adds up in the end. By not keeping up with all of the expenses, you end up not being able to create a reliable financial statement or conjure up correct reports on your tax returns.

2. Boost your SEO

SEO is important when wanting to up your revenue or attract more customers. SEO is not difficult and should often be updated to keep up a certain amount of traffic on your small business website. You’re going to wanna utilize keywords that are a bit closer to your niche and that have fewer competitors. The URLs you use be able to take your customers back to your main site and should also have indicators of the content on the same page, such as the page title. Also, you’re going to want to avoid using numbers or odd strings of text in your URLs – this is so that you do not lead people away from your page. And finally, every article you publish on your page should also be be accompanied by social share icons that lead to your small business’s Facebook page or Twitter account. In a sense, it’s like killing two birds with one stone.

3. Learn To Separate Personal and Business Money

This applies to new and seasoned small business owners alike. It’s important always to keep business, and personal money separate. Try going with easy-to-use software, such as QuickBooks. Honestly, you don’t need to be an accounting expert to keep track of your income and expenses. However, if you know you won’t enter information into the computer software every once in awhile while it’s still fresh in your mind, you might want to get a simple cash book from the local supply store. Make sure to write all the money that comes in and all that goes out. You can end up with way too many financial headaches if you do not organize and optimize your financial records.

4. Stop The Habit Of Using Your Sales Tax Money

This one should come as no surprise to all small business owners. It will certainly cost you way more in future penalties, fees, interest, time and aggravation than obtaining some short term financing. The most reliable strategy is to discipline yourself to deposit all the sales tax money you gain each and every day into a separate bank account. Now, why do this you may ask; it’s simple; tax liabilities grow due to business owners using the tax money they collect and will gain working capital for their current operations

5. Don’t Forget To Pay Yourself The Right Amount And No More

It’s Friday afternoon, and it’s time for the weekend to begin. So like always, you pay yourself what you want and sometimes even take a little more out that you need for whatever weekend plans you might have. In the short run, this seems like an okay thing to do – but in the long term, this is just bankruptcy waiting to happen. Even when the business is thriving, it is important to continue to draw only YOUR salary. This is because the “down times” will be coming eventually through the natural business cycle of your small business. It’s not fun to leave the money in the firm during times of plenty, but it sure is nice to have those reserves when the company is struggling in future. So make sure only to grab what you need and leave the rest. It’ll surely help shortly.

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Joel House runs a leading Queensland based SEO Agency  – Black Shirt Marketing. When he is not growing businesses across Queensland, he has his head in books to ensure he is on the cutting edge of all things small business and digital marketing

Pricing Your Products and Services

Some people wildly overprice their products. The more common mistake though by those just starting out in businesses is to be too cheap. As a freelance copywriter and web marketing guy who’s been around a few years, I’ve seen the effects of this both in my own business dealings and in those of clients.

My Early Mistakes

My first venture into selling web marketing services was selling cheap and cheerful search engine optimisation plans to local businesses. Years of experience writing and promoting web content on my own websites meant I knew the work backwards, but that didn’t mean I was totally new to dealing with clients.

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The cost of upgrading your iPhone every year

The iPhone resale market in Australia is thriving through marketplace sites such as Gumtree & eBay raising the question of whether you should sell your old handset and splurge on Apple’s latest version each year, or hold on to it for a few years until technology changes make it worthwhile to upgrade to the next model.

It’s smarter to buy your phone outright

Many of us lock ourselves into financing plans with the major telcos so we can get our hands on the latest phone for “free”, but there is a smarter way to go about it. Tying yourself to a financing plan means you lose the flexibility to decide how often you upgrade to a new phone and in reality, that latest phone isn’t really “free”. You’re paying the mobile service provider a lot more for that handset over the course of your contract; instead, you can pay less overall and recoup some of your cost by buying  the new phone outright and selling your old one online when you’re ready for an upgrade.

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Commercial property owners could be saving thousands in depreciation

Commercial building owners remain unaware of the taxation benefits their property can generate. One of the most beneficial, yet often missed deductions available is building depreciation.

As a building gets older and items within it age, they depreciate in value. The Australian Taxation Office (ATO) recognises this and allows property investors to claim deductions relating to the wear and tear on buildings and the fixtures and fittings within.

According to Bradley Beer, property expert and Managing Director of BMT Tax Depreciation, “claiming depreciation is the key to increasing cash flow on commercial properties.”

Building write-off can be claimed on the structure of a commercial building so long as construction commenced after the 20th of July 1982. In cases where construction commenced before this date, depreciation can still be claimed on fixtures and fittings.

“Many commercial property owners assume they are unable to claim depreciation on their property, or receive significant deductions because it is too old. However, there are still significant depreciation deductions available on the fixtures, fittings, plant and equipment contained within the property,” says Bradley.

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Healthy Staff = Healthy Profits

Even if you don’t pay your staff sick leave (perhaps they are casual or contract), sick staff cost our businesses in lost productivity. If you are also paying your staff to not work, then this adds up in real dollars to the financial loss if a staff member is sick. Remember also that you may have to get someone to cover them; further adding to the costs. So, let’s look at how you can keep your staff healthy:

• Coming up to winter, offer your staff free flu vaccines. If might cost you $50 or $60 per head, but you’d lose that in just half a day sick. Even better, organise a doctor to come in and immunize the team in the workplace. Check legislation, but I don’t think you can make it compulsory, but by paying for it, and making it easy to do, most staff will welcome the opportunity.

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Reduce Fit-out Costs With Depreciation Deductions

Starting a new business can be quite daunting, particularly if you’re trying to do so within a strict budget.

On top of other initial start-up costs such as purchasing stock or merchandise, arranging insurance, budgeting for staff overheads and (if you don’t own the building) allocating funds to pay rent, there are often costs involved in installing assets to fit-out the new space before you can open the doors for business.

What commercial property tenants are often unaware of is that they are entitled to claim deductions in the form of depreciation for many of the assets installed during the fit-out of a property.

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Claim depreciation for older commercial investment properties

One of the main reasons commercial investors continually fail to take advantage of the depreciation deductions available from their property, is because they believe their property is too old to warrant making a claim.

According to Bradley Beer, the Managing Director of BMT Tax Depreciation, this myth needs to be dispelled.

“Often investors make the mistake of thinking they will not receive deductions for an older property due to the date restrictions the Australian Taxation Office (ATO) place on claiming the available capital works allowance. The reality is that any property, no matter how old the building is, will entitle its owner to valuable deductions in the form of depreciation. This is because the owner is also entitled to claim depreciation for the plant and equipment assets contained within the property,” said Brad.

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Dangers To Watch For When Moving To Commercial Premises

I’d love to share my own real word experiences as I’ve just recently moved to commercial premises and whilst I am a ‘seasoned’ business owner, I certainly learnt some valuable lessons. Some of my business principles and practices came in very handy plus I learnt quite a few other things. Please let me share:

1. Do a budget.

Specifically for the move, prepare your budget as you will soon discover the costs can quickly run up. Signage, removalists, new phone systems, computers, furniture, legals, deposits and so much more. This doesn’t even cover any refurbishment you may need to do. The costs really can escalate, so prepare a realistic budget and ensure you have the cash to fund this project. Naturally of course, ensure that ongoing you can afford the premises, including rent, electricity, security, telephones, etc.

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Hidden Cash

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What may commercial properties be hiding from tenants?

Property depreciation is mostly claimed by the owner of an income-producing property. It is for this reason that many commercial tenants often miss out on the hidden cash available to them through depreciation.

Commercial tenants can claim depreciation deductions based on any fit-out or plant and equipment assets that they add to the property.

Tenants can claim depreciation deductions on all fit-outs while the owner of the commercial property is simultaneously able to claim a deduction on the building and any plant and equipment items that they own.

Dependent upon lease conditions, if a tenant vacates a building and does not remove the fit-out from the building at the end of their lease, the owner of the property may be able to claim any remaining depreciation. However if a tenant’s lease stipulates that the property must be returned to its original condition at the end of the lease, then the tenant can benefit from claiming any remaining depreciation on the items removed and scrapped.

It is important to consult a qualified Quantity Surveyor when dealing with commercial property depreciation to ensure that not only are maximum deductions achieved but that they are claimed correctly.

For more information on commercial property depreciation, visit BMT Tax Depreciation’s new commercial depreciation page by clicking here.

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Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Managing Director of BMT Tax Depreciation.  Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.

 

Improve the Cash Flow of an Industrial Investment Property

Did you know you can claim deductions in the form of property depreciation for an industrial property?
Legislation set by the Australian Taxation Office (ATO) allows the owners of any income producing property to claim depreciation.

Depreciation deductions are due to the decline of a building and apply to both the structure of the building (via a capital works deduction) and to any plant and equipment assets contained within the property.

An investor’s depreciation benefits will vary depending on the type of building, its age, its use, its size and its fit out. In commercial and industrial buildings a tenant is also entitled to claim depreciation for any fit out they install in the property once their lease starts. For these reasons it is very important to consult with an expert to find out what deductions are available.

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