Finding the right people for your small business


Finding the right staff for your small business doesn’t have to be a daunting challenge, even when you don’t have the resources and budget that bigger businesses have.

Be transparent and open about what you’re looking for in a new hire with others who are involved in the hiring process. Find common ground and work together to get the right person in the job sooner rather than later. Having a clear picture of your dream hire’s role and responsibilities will make the process smoother and easier.

When trying to attract quality candidates, offer additional incentives as well as a fair (or if possible generous) salary, which may already be limited by budget constraints. Instead, look to offer flexibility around office hours or where permissible, allow remote work days. Other ideas to consider are bonuses such as a work phone, covering their fuel costs, free or subsidised gym memberships, etc., Get creative!

This will also give you something very positive to discuss during the interview process. Ask what the candidate is looking for in a job apart from their pay cheque. Listen to their answers carefully and respond to them honestly to ensure it is a good fit.

Often, in a small business a large onus is placed on finding a ‘cultural fit’ however you shouldn’t be blinded by a candidates talk. At the end of the day, you need someone in the job who can walk-the-walk and not just talk-the-talk. If an employee is failing to do their job then tensions are going to quickly arise. Having the wrong person in a role can actually create work for you.

Another way to ensure your hire is a good fit is to get the on boarding done right. That way the new employee will hopefully start off on the right foot immediately. Ensure everything the employee needs to know to get to work is ironed out on the first few days on the job. Ensure both of you understand and are clear about what is expected of them.

Of course, having someone on your team who is well versed in not only daily HR tasks but also recruitment helps. Utilising your in-house skills to bring in new and qualified staff is going to save the business time and money. It will also boost the bottom line long-term.

Perhaps you need to upskill your HR staff to create an efficient hiring process. Upskilling your staff provides the opportunity to assign them the responsibility of hiring where they might not have had the skills beforehand. Investing in education and training for your staff is sure to result in a great ROI – this helps to boost productivity and also helps with staff retention rates.

Alternatively, can you hire internally? You might already have staff capable of the position you are recruiting for. Or there might be a hardworking employee due for a promotion. Again, could this just be a case for some further education and in-house training?

Recruiting the right candidates doesn’t have to be a daunting prospect for your small business. Sure, you might not have a fancy hiring process like bigger companies. However, you do have a passion for your business and the dedicated staff that work for you. Having a clear vision of what tasks and responsibilities your new hire will have before you even begin looking is a great start. Communicating this with others in the business that many be involved in the hiring process will help make the whole process more efficient.

Consider what benefits you can offer good candidates to help attract their talent to your business aside from money. And don’t get sidetracked by the prospect of a great talker rather than a great worker. Good luck!

4 red flags your small business needs help


More than 60% of small businesses fail within the first three years of starting up. So, what are the four key red flags you need to be aware of to keep you on track and steering your business towards success?

1. Not planning for taxes


Plan ahead and don’t damage your credit rating and reputation. Small businesses make up 65.2% ($13 billion) of all outstanding ATO tax debt. From 1 July 2017, all outstanding ATO debt greater than ten thousand dollars and at least ninety days overdue will be reported by the ATO to credit reporting agencies. This has the potential to damage your credit rating and reputation. If you are unable to meet your tax obligations then it is wise to engage an experienced adviser who will negotiate with the ATO on your behalf.

2. Limited access to funding


The power of leverage to grow your business. A number of business owners are spreading their business across several banks to leverage more opportunities to borrow. To be able to access these funding opportunities it is a necessity to have up to date records. Cloud-based accounting systems are now making it easier for businesses to have reliable and up to date data available on the go. This allows for business owners to secure funding for growth and to be able to capitalise on low interest rates faster. Furthermore, this assists with negotiating better interest rates on existing funding.

3. Owner dependence and failure to delegate


Small business owners who dedicate every minute and penny to their business may be limiting business growth and setting their own expiry date. The large majority of small business owners continually fail to delegate responsibilities and decision making, making it very difficult for their business to continue to grow and operate without their constant presence. To improve the value of your business you need to start delegating more control to your employees and partners. This can prove difficult for owners who have spent years tied to their business but in the long run you will unlock scope to grow and create more spare time.

4. Cash poor?


There are a number of things to consider when managing cashflow effectively: do you have a large amount of capital tied up in stock and work-in progress?, do your customers pay on time?, do you pay your suppliers on time? A great way to analyse your cashflow is to start looking at your management reports on a weekly basis, including reviewing your debtors, creditors and stock turn over. Always remember that cashflow is the lifeblood of your business.


Why small business tax cuts aren’t likely to boost ‘jobs and growth’


The Turnbull government’s signature economic policy at last year’s election was a 5% cut in the company tax rate, over a ten-year period, at a cost to revenue estimated to be in excess of A$48 billion. As the government itself has conceded, this now stands very little prospect of being passed by the Senate.

However, there is one element of the government’s proposal which appears to enjoy almost universal political support – the idea that “small” companies should get a tax cut. The only disagreement among the Coalition, Labor and the Greens on this score is how small a company should be in order to be deserving of paying a lower rate of tax.

From the standpoint of good economic policy this is surprising. There has been a lively debate for a while among economists as to whether cutting company tax rates will boost economic growth, employment and real wages – and the extent to which this theory is supported by evidence. But there is no evidence at all to support the notion that preferentially taxing small businesses will do anything to boost “jobs and growth”.

Advocates of tax and other preferences for small businesses often argue that small businesses are the “engine room of the economy” – because, for example, 96% of all businesses are small businesses, or because small businesses employ more than 4.5 million people.

According to the latest available ANS data, small businesses (defined as those with fewer than 20 employees) employed just under 45% of the private sector workforce in June 2015. Despite this, small businesses accounted for only 5.2% of the increase in private sector employment over the five years to June 2015.

By contrast, large businesses (defined as those with 200 or more employees) employed less than 32% of the private sector workforce in June 2015 – but they accounted for more than 66% of the increase in private sector employment over the five years to June 2015.

Employment and employment growth by size of business


Similarly, a smaller proportion of these small businesses engage in any of the four categories of innovation which the ABS recognises in its annual survey of business innovation than of medium or large businesses.


So on the basis of the available evidence, a policy which sought to encourage employment creation and innovation via the use of preferential tax treatment would surely preference large businesses, rather than small ones.

However, that would be politically challenging, given that a large majority of voters think that big companies should pay more tax, not less.

What sort of businesses create jobs and growth when tax is reduced?
An alternative approach, which would be much more likely to have positive effects on employment, investment and innovation, would be to tax new companies at a lower rate.

OECD research shows that young businesses are the primary drivers of job creation. And new companies are more likely to be at the frontier of productivity growth.

New businesses are of course likely to be small, at least initially. Confining preferential tax breaks to new businesses – for example, by prescribing that a lower tax rate is only available to a business for the first (say) three years after its incorporation – focuses the assistance on those businesses which are actually likely to innovate, and to create jobs. This is instead of dissipating it on the much larger number of businesses who have no desire, intention or ability to do either.

Preferentially taxing new businesses is therefore much more likely to achieve the stated goals of boosting jobs and growth, and of encouraging innovation, at much lower cost.

In addition to this, preferentially taxing new businesses avoids the perverse incentives that inevitably arise when the eligibility for some form of preferential treatment is determined by a business’ size. This is frequently demonstrated by the reluctance of businesses to put on an extra worker when doing so would render them liable to pay state payroll tax.

Of course, there would need to be compliance measures designed to forestall “rebirthing” of companies in order to prolong access to tax preferences intended to benefit new companies, but that would not be difficult to provide.

The Coalition’s support for a preferential tax rate for small businesses appears to owe more to its long-standing, almost religious, belief that there is something inherently more noble or worthy about owning and operating a small business, than there is about managing or working for a large one (or a government agency). Also that this belief should be reflected in the tax system, rather than basing it on any evidence that taxing small businesses at a lower rate than large ones will have any positive impact on economic or employment growth.

Why Labor and the Greens should support this view is much more of a mystery.

Categories: Tax

Want to hold onto a great employee? Here’s how!


These days it doesn’t take much for employees – especially the talented ones – to find a reason to move on to greener pastures, and fast.

While it’s unrealistic to expect employees in this day and age to consider a position in your business a ‘job for life’, it is still important to consider how you can attract and retain the best and brightest.

High turnover rates can cost your business financially and also in terms of productivity – think of the time you’ll have to spend on recruitment and extra training when you could’ve just kept a good staff member.

This is why it’s so important that you have a clear understanding of how to get the best staff and keep them. Ultimately, being able to keep your employees with you benefits your business’ long-term success

Here are five tips to make your business the ‘greener pasture’ employees want and ensure you hire and retain great staff.

# 1. Recruit the right people
It seems like such an obvious point, but so many businesses set themselves up for failure by not hiring the right person for the job. You need to have a clear idea of the kind of person you want even before you start the recruitment process.

Employment contracts and new hire documents should be specifically tailored to the employee’s role and needs. Ensure you have a discussion with your existing team as to what kind of employees you want in the company, and make sure the job description is detailed with all criteria agreed upon before even advertising the opening.

If you have an idea of the type of person you want in the company, it becomes much easier to create the specific employment contact you need and help them integrate into the company.

# 2. Have an effective onboarding and management procedure
One of the easiest ways to hire and retain the best staff is to have an on-boarding process that transforms the way new employees are involved and managed. Successful staff retention is about creating long-term employee engagement and growth.

Implement a procedure which allows for the on-boarding experience to be a personalised one, and you will have more success with keeping good employees.

# 3. Create a positive and welcoming work environment
Feeling unwelcome or out of place in the workplace is one of the key reasons that employees start to wander and seek out greener pastures. Ensure your workplace is open with communication, flexible and supportive so everyone feels included and comfortable.

A good way to do this is to ensure workplace policies around bullying and employee conduct are regularly updated and enforced. It’s also a good idea to encourage an environment where employee feedback and communication is valued – for example, have a system or procedure in place where employees can regularly express their opinions and ideas freely without fear of reprimand.

# 4. Make sure you provide feedback and career development options
Employees need to feel like they are valuable to the business and they’re being given an opportunity for growth and development. If your business doesn’t have a performance management system, put together a plan so you can give timely feedback on your employees’ performance.

A good performance management system makes it easier for you to recognise and reward good performance while allowing you to manage underperformance.

Ongoing training is also an important part of your employees’ professional development, and thus, the business’ development. For new employees, having a comprehensive training program and induction process laid out allows them to feel integrated and take on new challenges faster.

Providing training for current employees means they can grow and take on more valuable roles within the business.

Survival kit for cash-strapped businesses


Being cash-strapped in your business can be soul destroying with all your hard work leading to what feels like nothing – but help is on the way.

Hopefully, you can follow a few of the steps below and put them in your game plan for surviving this challenging time and rising above the stress:

Get more business

I know, I know – easier said than done, right? Wrong.

Get on the phone, make those calls, drum up the business.

Make it about your clients and what you can offer them. What is it that’s going to add value to their lives and drive more profit into yours?

Think about other offerings. Is there another service, product or program you can offer that will leverage more income to you?

Think outside the box – perhaps a referral agreement with another vendor that can drive some interest to you and some fresh leads.

Look at your expenses – seriously

So you think you have looked at your expenses and you have cut as much as you can.

Again, have you really? Have you cut costs or just trimmed the fat? Is there still room to move?

I know it won’t make you popular at first but consider taking the coffee machine away and saving on those coffee pods.

I can hear your gasps, but I’m sure your staff would much rather have a company to work for than a coffee pod in the morning.

I did a calculation on how much this would cost on average, a business with six employees.

I worked out that the average coffee pod is 63c, and most staff would have about three coffees a day.

So 63c x 3 x 6 (staff) x 5 (working days) and you are looking at nearly $60 per week.

That means well over $3,000 per year can be saved with this one small change.

Meanwhile, have a chat to your insurance broker. Have you analysed your premiums recently? Can you put all your premiums with one company and get bigger discounts?

Can you premium fund your policies so the cost is spread over the year rather than bulk amounts?

You can also look at the space you have: is it a complete necessity to your business?

If it is, could you perhaps get the same productivity in a smaller space? Would your landlord be open to a reduction in your rent if you gave us some space?

Look at your invoices

There is technology out there, that allows you to take card payments on your smartphone.

You can even accept online payments directly from your invoices.

Think about the technology that exists to get paid faster and increase your cash flow.

Outsource smartly

Your hourly rate as the business owner is huge.

Its value is probably a lot more than you are even aware of. Are there things that you do that you can outsource so that you can concentrate on the tasks that bring in more customers?

Can a Virtual Assistant help with your newsletters, social media and mail organisation?

Call Wamit Bookkeeping Services now to chase up your debts and keep your books ticking along so you know your accurate cash position?

The key here is to use the time driving more business to you. Don’t get complacent otherwise you are just adding costs instead of driving profit.

Being a cash-strapped business owner will hopefully be a short-term ailment for your business.

By being in tune with your figures and considering the effects of decisions you make today and how they can affect you further down the track, you can keep ahead of the pack and be more empowered day by day.

ATO data regarding Super Guarantee non-compliance

Editor: The ATO has provided some information about Superannuation Guarantee (SG) non-compliance in its recent submission to a Senate inquiry into the impact of the non-payment of the Superannuation Guarantee.

In addition to marketing and education activities to re-enforce the need for employers to meet their SG obligations, the ATO conducts audits and reviews to ascertain SG non-compliance, with 70% of cases stemming from employee notifications (the remaining 30% of cases are actioned from ATO-initiated strategies).
On average, the ATO receives reports from employees which relate to approximately 15,000 employers each year, although the ATO finds that nearly 30% of these employers have in fact paid the required SG to their employee.
However, an SG shortfall is identified in the remaining 10,000 cases (this represents approximately 1% of the estimated 880,000 employers who make SG payments).
The top four industries from which reports are received by the ATO are from:

  • Accommodation and Food Services;
  • Construction;
  • Manufacturing; and
  • Retail Trade.
These four industries represent approximately 50% of the audits and reviews undertaken.
The ATO also noted that the proposed Single Touch Payroll (‘STP’) will help overcome certain limitations in the data currently provided to the ATO (as well as simplify taxation and superannuation interactions for employers, by aligning the reporting and payment of PAYG withholding and SG with a business’s natural process of paying their employees).
Use of STP is mandated for businesses with 20 or more employees from 1 July 2018, and a pilot program will be undertaken in 2017 to identify the nature of STP benefits for small businesses.