Planning for Success

Tax Time Essentials: Learn how to navigate tax basics as a business owner

Chances are you may have experienced some changes that will affect your small business. COVID-19 has impacted us all to varying degrees and has no doubt created more stress in our lives.

Understanding what your tax obligations are is one way you can alleviate some of the stress you may be feeling. Read on to learn about some of your tax time essentials.

1. Home-based business expenses

If you are a sole trader or in a partnership, you can claim deductions on a lot of home-based expenses if you operate your business from home. These can include:

– Rent

– Electricity costs

– Phone and phone bill

– Plus many other expenses (ask your accountant)

If you run your business from home and  your work area is also shared with your living area, this will affect what you can claim.

Remember to keep the records of all your expenses for at least five years. For a full list of deductions and information, visit the ATO website here.

2. Motor vehicle expense

The ‘Cents per Kilometre’ method or the ‘Logbook’ method are the two ways to claim motor vehicle expenses. You can claim travel expenses of up to 5000 km at a rate of 72c/km from July 1, 2020.

If you want to claim travel expenses then you must be able to show a calendar, diary or logbook that documents your travel time.

Remember, the only motor vehicle expenses you can claim are the kilometres you use exclusively for business-related travel. You cannot claim personal travel expenses.

The types of expenses you can claim are:

  • Fuel
  • Oil
  • Services
  • Repairs
  • Interest on a motor vehicle loan
  • Lease payments
  • Insurance
  • Registration
  • Depreciation of the vehicle.

For more information, visit the ATO website here.

3. Travel expenses

Similar to motor vehicle expenses, you can also claim travel expenses.

These expenses can include:

  • Airline tickets
  • Train tickets
  • Bus tickets
  • Tram tickets
  • Taxi expenses
  • It may also include accommodation and meal expenses

Again, all expenses must be only business-related (not personal) and you must keep exact records that will prove your expenses for five years.

For more information about travel expenses, visit this page on the ATO website.

4. Pausing or permanently closing your business due to COVID-19

There are a few things you will need to consider if you are either pausing or permanently closing your business.

If you are permanently closing your business, you will need to prepare your final activity statements and income tax returns before you cancel your ABN.

Then you must cancel your ABN within 28 days of closing your business.

If you are registered for GST, you must also cancel your GST registration within 21 days of ceasing business activity.

To see all the obligations of pausing or permanently closing your business, go to this page on the ATO website.

COVID-19 has brought about a lot of changes for many people in small businesses and so it’s important you stay up to speed on what you need to do. This will give you peace of mind, and help you avoid complications further down the line.

Do you need help with your business tax?

Vibrant Business will help take care of all of your business financial needs. From tax and accounting to bookkeeping, coaching, and mentoring, we can help you plan and structure your business to achieve your milestones. This means less stress for you as a business owner.

For more information on these services, please contact us or book a time to chat here.

Planning for Success

Having a positive outlook is your best defence in business

For those of you trying to run your own business successfully, the COVID-19 pandemic is almost definitely a source of concern.

Worrying about the future of your business, money, clients, and grappling with all the constant changes, is making it harder to stay in a positive mindset, and even harder to turn things to your advantage.

It’s never been as important as now to develop a strong frame of mind because, for many of us, we are facing business challenges that we have not encountered before, and there are, no doubt, going to be more challenges to face and overcome in the next 6-12 months.

Adopting and maintaining a positive mindset is important because it will help you build resilience, self-esteem, and encourage you to use your creative thinking skills to help your business.

Learning how to come up with ideas and solutions that will help you navigate your business through the COVID crisis. It will empower you and make you better equipped to handle whatever else comes your way.

But what you think, believe, and expect has a direct influence on your ability to achieve and maintain success in life.

Consciously choosing to see the silver lining in every situation can help you to stress less, focus, and still achieve your goals. Be open to new ideas, practice an abundant mentality, don’t be afraid, keep sight of your long-term vision, and trust in yourself and the services you offer.

How to up your positive mindset game in business in 3 steps

1. Take a few tips from the OARBED behavioural model

It is a simple way to become more aware of behaviours that will help you thrive in business and to be aware of those who serve no purpose for you.

  • OAR’ – Ownership, Accountability, Responsibility

These are the skills you want to practice all the time when dealing with team members, employees, employers, and clients.

It’s vital to demonstrate that you have these skills so that even when unfortunate situations arise, you know how to handle them maturely. Realising the role you play when dealing with other people and incorporating these skills as an integral part of your mindset will foster trust, patience, and understanding with people around you.

And not just in your professional life, but in your personal life, too!

  • BED’ – Blame, Excuse, Deny

On the other hand, if you regularly use these behaviours when you interact with others, you are likely to encounter friction, low morale, and a lack of productivity in your workforce.

It’s not always easy to take responsibility when things aren’t going your way, but showing that you have the mental strength and maturity to own your actions will foster stronger relationships with others and they will feel more supportive and honest.

2. Focus on your big goals and vision for your business

When you focus on the future of your business, it’s easier to maintain your positivity because you are constantly working on something that you love.

You can do this easily by following the ‘The Man on the Moon Principle”. It’s a concept that shows how important it is to have a big goal or vision that unites people.

To achieve this goal, it must be broken down into smaller goals or milestones that work towards getting you and your team closer to the big goal.

Remembering that you have a vision, not ever losing sight of it, and working on what you can do right now is an important motivational mindset to adopt.

3. Choose happy and healthy thoughts

According to the ‘Happiness Pie’, we only have 40% control over the happiness we generate in our lives.

This makes it even more crucial to foster healthy thoughts that improve your mindset. Expressing gratitude, thinking optimistically, helping others, and practising living in the moment can improve your state of mind.

Working on your relationships with others, having a positive attitude, and maintaining a focus on your goals will also guarantee you the best chance of getting through this difficult time with the least amount of stress.

Remember, the best thing you can do right now is to stay focused, remember your dream, and don’t lose sight of it!

Taking the next steps for your business success

Once you have worked on your mindset, and are using these skills to help you in your business, then it’s time to talk to a qualified finance team.

Vibrant Business will help take care of all of your financial needs. From tax and accounting to bookkeeping, coaching and mentoring, we can help you plan and structure your business to achieve your milestones. This means less stress for you!

For more information on these services, please contact us or book in for a complimentary Business Impact Session.

Planning for Success

Stuck in the “too-many-tasks” trap? You need to outsource.

Nothing makes us procrastinate more than the “too-many-tasks” trap when you are already feeling overwhelmed and you don’t know what to do next.

But it’s your business (and your cash) that will take the hardest hit.

If you are overwhelmed by your business and the workload attached to it, the first thing to outsource is your tax, accounting and bookkeeping tasks – because this is where the money is – and don’t you want to look after your money?

You need to be across you accounting and bookkeeping, but you also need an expert who knows these areas like the back of their hand and can guide you in the right direction so you can lower your expenses and tax and increase your profits and cashflow.

Vibrant Business is now a one-stop accounting, bookkeeping and mentoring business with a team ready to help you understand your numbers and grow your business with more profit.

We can help you in 3 main areas:

  1. Tax and Accounting
  2. Bookkeeping
  3. Business Mentoring and Courses
  • Tax and Accounting

Our tax and accounting service is ideal for all business owners. Being compliant in this area of your business can be easily be overlooked if you don’t have a specialised accountant on your team.

We can help you build a system to keep your business running smoothly, stay compliant, ensure accuracy, and organise and maintain your financial records.

We specialise with sole traders, partnerships, trusts and companies that require assistance with tax and accounting.

Learn more

  • Bookkeeping

Bookkeeping isn’t always fun but it is a must. We let you do what you are good at in your business while we do the “stuff” you don’t like or don’t have time for.

Not only that, but we keep you updated with real-time reports so you can stay up to date. Keeping in check with what’s going on in the background will help you make strategic business decisions to grow and develop a vibrant business you love.

Learn more 

  • Business Mentoring and Courses

This can all sound overwhelming but with our business mentoring and courses we can help you get clear on the steps required to grow your business.

Our quarterly or monthly coaching programs and our 8-week Planning for Success online course can provide you with increased accountability and support so you can achieve the results you want from your business. The outcomes include increased profitability and cashflow, customised reporting templates to measure actual performance against forecasts and access to an expert sounding board to ensure you continue working towards your goals.

Learn more

The framework for business success

At Vibrant Business, we will set you up for success with our five-step system to ensure clarity, direction and purpose. (It’s a RIPPA! 🙂 )

  • REVIEW: Step back and see where you’re at. What have you achieved since last year? Do you have accurate and viable systems in place?
  • IDENTIFY: What’s holding you back? Did you miss anything or overlook something that can affect you in the long run? Now is the time to knock out any burning issues.
  • PLAN: Now that you have clarity over what you have achieved, now it’s time to plan what needs to be done. Write down your goals and check them every day.
  • PUT: Get cracking! What do you need to put in place to achieve your goals? How long will it take you?
  • ACCOUNTABILITY: Who will keep you in check? Being a business owner, it’s easy to become overwhelmed and lose sight of your goals and end result. Having someone outside of your business to keep you in check is essential for you to stay on track and never lose sight of your dreams.

Taking the next steps for your business success

Gaining clarity, direction and purpose will help your business grow – and the biggest success driver is having a qualified finance team on hand.

Vibrant Business will help take care of all of your financial needs. From tax and accounting to bookkeeping, coaching and mentoring, we can help you plan and structure your business to achieve your milestones.

Not sure where to start or what you need? Book a session with us now to discuss your situation.

_Website business impact BOOK (1)

Planning for Success

How to Bulletproof your Business and kick COVID to the kerb.

COVID … The “C” word no one wants to hear because it has stolen the livelihood from so many businesses since it came into existence in Australia.

With 60% of businesses reported to be affected greatly by COVID in March alone, active cases ramping up again, and states and suburbs going into lockdown and self-isolation again, there’s a high probability you have been affected in some way too.

Adding to the pain people are suffering right now is the fact that JobKeeper payments (as we know them) will end for some businesses from the end of September.

However, while these payments will remain available for eligible employers until March 28, 2021, the light at the end of the tunnel still feels so far away and these combined factors are adding to the stress businesses are facing.

So what do you do now?

How can you shield your business from another hit?

It comes down to putting a plan in place – just like many businesses have with their COVID-safe strategies.

Putting a plan in place to protect your business

The step is looking at your current business plan and upgrading it. If you don’t have a business plan, it’s time to get one in place.

Take a look at your expenses and cashflow. Cashflow is the single most important factor in your business.

Like blood to the heart, without cash, a business won’t succeed. To safeguard your cash and future cashflow, here are four actions you can take right now.

  • Prepare a cashflow forecast and make this part of your annual business planning.

The first time you prepare this type of forecast it can be confronting as you really look at your situation and challenges.

Having your forecast in place can set you up against any issues you might face in the short and long term. You’ll be able to predict those months when there is more cash going out than coming in. You’ll also know in advance about any seasonal fluctuations in your business.

  • Incorporate your forecast into your accounting or reporting software

Doing this allows you to report actual results against your forecast every month to show you where you are against your targets. You’ll also learn how to become aware and comfortable with your cashflow cycles and where you can improve them.

  • Understand your Cash Conversion Cycle

Having a cashflow forecast in place is one thing. Using that knowledge to change how your cash flows is another. To do that, you have to understand your Cash Conversion Cycle, improve your business processes to shorten it, and set goals.

  • Get a coach or mentor

Having someone to encourage and support you ‘work on your business’ is the fastest and easiest way to get ahead. It’s best to have someone outside of your family life and business, so they can be objective.

The difference between cashflow and profit

Now that you have your cashflow forecast in check, it’s time to understand the difference between profit and cashflow.

Here is a simplified version: Profit indicates the amount of money left over after all expenses have been paid. Cashflow indicates the net flow of cash into and out of a business.

It sounds like flowers and rainbows, but if you find yourself with cashflow issues or blocks, it can send your entire business into chaos.

There are many causes of poor cashflow, here are the top 7:

  1. Poor accounts receivable process – resulting in debtor days (the time between billing and banking) being too high, stifling your cashflow.
  2. Accounts payable process – a review of all supplier’s terms may identify ways to improve cashflow or just get better Terms of Trade.
  3. Carrying stock for too long – this might mean full shelves but an empty bank account. This is no different if you’re a service provider with work in progress that is yet to be billed.
  4. Debt/capital structure needs to be reviewed – perhaps your debt should be consolidated and paid off over a longer-term. Maybe you need to have an honest look at your drawings from the business, or the business needs an injection of capital to fund its growth. Often significant cashflow and interest charge improvements can be achieved with a regular review of existing debt.
  5. Overheads – every business should do a thorough review of its overheads every year.
  6. Low gross profit margins – this is another way of saying that your variable costs are too high. There is a large number of strategies you can implement to improve margins.
  7. Sales levels are too low to support overheads and other cash demands on the business – this comes down to how viable the business is right now. If the businesses in high-growth mode and sales are increasing rapidly, then the business needs finance to support that growth and we need to review a financing plan. If the business isn’t in growth mode, we need to focus on how we grow sales.

REGISTER FOR OUR CASHFLOW FREEDOM WEBINAR

How to counteract the negative effects of the economy

With the loss of jobs and no tourism, the economy has taken a hit. This means when we all get up and running again, the ability to grow and build your business will be harder, especially with a tougher economy.

You now need to consider what might happen in your business as a result of tougher economic times and put some measures in place to counteract any (more) negative effects.

– Increase customer retention – Get to know your customers. Building a relationship with your customers increases their loyalty. It’s always easier to keep pre-existing customers, but making new connections will be harder.

– Increase leads – First, ensure you have a strong online presence. Most people find new products or services on the internet, so make sure you’re easy to find. Use Google My Business to increase your visibility in Google searches.

– Maximise your SEO ranking – Ensure your website is modern, demonstrates your value, and has clear contact information and calls to action.

– Turn those leads into customers – A customer should receive the same awesome experience, no matter which person they deal with or product/service they buy from you. Ensure you have a sales process in place and train the team on how to follow it.

– Make more money per transaction – The most obvious way to do this is to increase your prices. While discounting can be a good way to get customers through the door (online or physical), it can lead to a lower transaction value. Where possible, try to limit discounts and only discount end-of-line products or those becoming obsolete.

– Lower your cost of sales – Ensure you’re taking full advantage of any early payment discounts offered by your suppliers or contractors. Have a look at how you can give the same experience and quality at a lower cost to you.

How to improve your cashflow

There are hundreds of ways to improve your cashflow. As part of our service, we focus on how to improve your cashflow with practical and proven strategies relevant to your business.

Here are just a few ideas:

  1. Make sure you have a robust process for debt collection and ensure you adhere to it. Consider outsourcing your debt collection to a third party.

  2. Communicate your Terms of Trade from the beginning. Contact customers the day their invoice becomes overdue. Be persistent with your contact and try different methods, for example, phone, email, social media messenger, and traditional letters.

  3. Get credit references or personal guarantees from customers, set credit limits, and require goods and services to be paid upfront.

  4. Regularly monitor stock levels and get rid of obsolete stock.

  5. Ensure you understand buying trends so you can plan for quieter times.

  6. Create a personal budget and stick to the amount of the monthly drawing.

  7. Consider financing asset purchases instead of paying cash outright.

Take the next steps to help your business succeed

As Richard Bach said: Every problem has a gift for you in its hands.

With the current circumstances, you can run or face what must be changed within your businesses with gusto.

Vibrant Business is holding a Cashflow Webinar so you can understand your business figures and inject more cash when it’s needed at any time of the year.

In this online training, you will learn:

  • Your break-even point and how to reduce the cost of sales
  • To identify management strategies to boost your cash stocks
  • How to determine your Cash Conversion Cycle
  • How to differentiate your business and prepare for economic downturns
  • Simple tips and strategies to inject more cash into your business

It is happening on September 9, 2020, from 1-2pm AEST.  Register to get your link to this webinar here.

Cashflow freedom
Showing a profit, but no cash in the bank? Learn where the cash goes and how to achieve cashflow freedom.
Planning for Success

The simple 3-step action plan you need to achieve your business goals

 

The path to success is to take massive, determined actions.” ― Tony Robbins

When you fail to implement your goals, plans, and strategies, success will be out of reach – this is not a news flash

Over on our previous blog, we delved right into what it takes to plan for your business’s success. The planning stages can be overwhelming, intense, and stressful, but you need to stay focused for the incredibly important next step. You are only halfway there.

In this blog, we are going to share what it means to have an ideal action plan and what it takes to remain accountable.

An action plan plays a vital hand in your business’s journey and success. It can help you to:

– Prioritise business goals

– Understand what you need to accomplish in order to grow and scale

– Create timelines and deadlines

– Stay ahead of problems

– Take the right steps at the right time

– Clarify and assign tasks

– Achieve business success

…and go from where you are now with your business to where you want to be.

Structure your thoughts, efforts, and goals with these three actionable steps  

FACT: 13% of small businesses collapse because they lose focus, while 7% are doomed by their failure to pivot. (Source: CBInsights)

  1. Do you know your goals for the next 12 months?

Goal setting may not be child’s play, but to pen down an annual growth strategy is invaluable to any business.

To actually reap the benefits of a business plan, it takes commitment and action (that’s what we do inside our Planning 4 Success 8-week online course).

It’s the new financial year and the best possible time to re-evaluate and plan for your next 12 months – so start listing your goals for the next year.

It’s a simple strategy: Write down what you want to achieve, then get out a calendar and start mapping it all out. Then break down your goals into smaller tasks and jobs to make it more manageable, achievable, and realistic.

  1. Next, unlock the power of the 90-day action plan

While an annual plan is extremely helpful in redirecting your business and staying the course, believe it or not, 90-day action plans are where the magic begins for any business. It is critical to your achievement and boosts your momentum.

All you need to do is focus on the actions you will take to accomplish your short-term business goals.

Essentially, your 90-day action plan is an extension of the annual plan – it gives you more control to steer the business and operations in the direction you desire every day. Maybe you want to launch an ebook in 3 months? Whatever your bigger business goals are, break them      down into small, sharp, and strategic steps.

This means that you will need to have the ebook and the marketing material ready by a certain date. Then you need to ensure there is enough time to launch and promote it to the world. This requires getting your emails, newsletters, and promotional posts ready to go. If you work with a team and share the load, assign tasks well in advance so everyone knows what needs to be done and by when.

  1. Stay accountable

We are all dreamers, but only a handful of us are achievers. What about you?

You may have the greatest idea, most talented team, an unmatched business plan, and the ambition, but if you slack off when it comes to implementation and taking action, there is no one else to blame.

As a business owner, you have built this amazing business with a focus on goal setting and action plans. It will all have been for nothing if you do not stay accountable to this very plan.

Only when you implement these steps you can expect results. Don’t let procrastination, ignorance, and lethargy get the best of you.

Do what you must to shake off anything that is holding you back from great results – push yourself, commit to a schedule, get an accountability buddy (or ten of them), celebrate milestones and wins, or find an expert or a mentor to guide you.

Unless commitment is made, there are only promises and hopes; but no plans. Peter F. Drucker

Take the first step to lead your business to massive growth and success

If you are a business owner and want to steer your business in the right direction towards your end-goals, or more time and money, our Planning 4 Success 8-week online course is the boost you need.

Inside it we cover:

  1. Your why
  2. Vision and core values for the next 12 months
  3. Budget, KPIs and the numbers
  4. Target market, ideal client, and value proposition
  5. Identifying opportunities, vulnerabilities, and your most critical challenges
  6. 12-month goals
  7. 90-day goals and action plan
  8. Accountability

Are you ready to seize the day?

Take your first step to business success and register for our 8 week online course here

Alternatively, if you have a burning question or wonder how this course will help you specifically, don’t keep it to yourself … book a call with us here and let’s talk.