May, 2017

Eight characteristics of a successful small business

In a tough economic climate, small business owners are always looking for ways they can improve performance.  Check out these eight characteristics of a successful small business – could you adopt some of these and reap the rewards?  How does your small business stack up?

Eight steps to success

International researchers have studied many small businesses and found that these characteristics consistently play a part in their success:

  • Owners leading by example
  • Having a simple business structure
  • Information sharing among employees
  • Employees are carefully chosen
  • Employee commitment and loyalty
  • Unique product or service
  • Specific customer focus
  • Prompt follow up

1.    Owners leading by example

The owner or manager leads by example.  He or she is usually the first to arrive, the last to leave.  The owner knows everyone by name and their presence is obvious.  They show a strong commitment, setting the standard in their work.  This commitment should be easy to understand – after all, if they don’t work hard in their own company, how can they expect anyone else to take their business seriously?

2.   Simple business structure

They operate a simple and open business structure, encouraging easy access to them for every employee.  They value the contribution of each employee, many of whom are given the opportunity to influence aspects of the business that would ordinarily be denied them in a large hierarchical company.

3.   Information sharing among employees

When employees receive information as soon as the owner does, goals, problems and concerns are discussed openly.  Feedback on issues is encouraged and employees are asked to contribute their own ideas for making improvements and overcoming difficulties.  It is often this aspect of open communication that employees appreciate the most, and it is fairly unique to small businesses.

4.   Employees are carefully chosen

Employees are recruited very carefully, because owners recognise they are the lifeblood of any small business.  They are hired on the basis that their knowledge, skills and abilities will be beneficial to the business, rather than because of friendships or family relationships.  Employees are not only carefully chosen but are nurtured and trained so that both the employee and the business get the maximum benefit possible out of the relationship.

5.   Employee commitment and loyalty

All employees should be committed and loyal; good performance is rewarded with praise, extra responsibility and/or money – poor performance is not. Consistently poor workers should be removed as they upset the rest of the team.  A small business whose employees show maximum commitment and loyalty have a source of competitive advantage that is hard to copy or to beat.

6.   Unique product or service

Most successful businesses have unique products or services such as their own designs, products, systems or some other aspect which sets them apart.  This uniqueness is an important source of competitive advantage and one which many businesses work hard to sustain, adapting and innovating their products or services as their competition catches up.

7.   Specific customer focus

Successful small businesses have a specific focus on their customers and are geared to supplying them with exactly what they want.  This focus means adopting a market led approach, with the owners and managers consistently looking for ways to solve their customers’ problems and improve their products to match their customers’ requirements.

8.   Prompt follow up

On occasions when an enquiry or complaint is received, a successful small business actively follows up and resolves them as quickly as possible. The results are promptly reported back to the customer and, in the case of complaints, measures are put in place to reduce the likelihood of similar issues reoccurring.  Successful small businesses view complaints and problems as opportunities for growth and improvement within their business.

If you need help and support to get more out of your small business, then speak to us today.  As small business specialists, we can help you review your performance and identify ways to improve, reduce your tax and generally help make your business more successful. Contact us today for a FREE no obligation meeting.

Tax Tips for Small Business Owners

Preparing for tax season really is a year-round endeavour for all small business owners, so here are few tax tips.  Tip number one is to update financials on a monthly basis, using a streamlined software or cloud-based system.

This way, come tax time, everything you’ll need is all in one place and you’ll be better positioned to minimize your tax bill while avoiding penalties associated with inaccurate information and/or late lodgements.

Here are four more ways to take the stress out of tax time, and get the most out of your return.

Know your credits & deductions

Small businesses typically benefit from a wide range of tax credits, from special allowances for research and development, to programs that supplement wages for student employees and apprentices.  Knowing which credits apply to your business can save you a bundle on taxes.

It’s also important to be savvy about deductions.  After all, you want to keep as much of your hard-earned revenue as possible.  Deductions that are often overlooked include:

  • Seminars, courses or conventions you attended to improve your professional skills;
  • Unused inventory that you’ve donated to charity (a good reason to consider donating your excess stock, rather than paying for storage); and
  • Capital assets such as office furniture, computers, and equipment.

Speak to your accountant about the full range of available deductions so you can plan ahead for each tax year.

Be careful about what you claim

If you run your business out of your home, you may be able to claim a portion of expenses like utilities, insurance, property tax and rent.  But you’ll need to keep good records and all your receipts to justify why you’ve allocated business costs to your home office.

The same goes for home office computers and mobile phone expenses. The ATO will want to see how you’ve separated the personal and professional use of these assets when you claim them as work expenses.

Want to claim travel to and from work as an expense?  Ensure you submit a log of your business-related kilometres so you can clearly demonstrate how your personal vehicle was used for business purposes.

Don’t miss the deadline!

This should go without saying, but every year businesses are hit with severe penalties for late lodgements. Missing the deadline can have negative repercussions, including:

  • Added interest to amounts already owing, plus a late lodgement penalty; or
  • Delay of loan approvals (lenders require a copy of your lodged tax return in order to process your application).

Seek expert advice well in advance

A recent survey of small business owners found that many don’t understand their tax obligations.  What’s more, 27% only speak to their accountant at the last minute, just before the lodgement deadline.

Software has made it easier than ever for small business owners to keep on top of their record keeping, but when it comes to thoroughness and accuracy, nothing can replace the expert advice of an accountant.  Consult one well in advance to ensure you’ll get the most out of your tax return and that your documentation is complete.  On the bright side, accounting fees are often tax deductible!

Speak to us today!  We are small business and tradies tax specialists and can help you pay the least amount of tax possible.  Call us now and book in for a FREE, no obligation tax review.  Take action now and keep more of your hard earned money in your pocket.