Leenane Templeton – Newcastle Business Accountants, Business Advisors & Financial Planners

Author: Harlan Marriott

  • Practical Positivity For Business Owners

    Practical Positivity For Business Owners

    A framework to help business owners to see their situation through a different lens and move upward.

    • MELTDOWN. If you need to have a meltdown, do it. Negative emotions will never go away, only fester. Don’t be ashamed to have a cry and a bit of a panic.
    • ESTABLISH A BETTER VISION OF THE FUTURE. You and your clients have possibly got quite a negative vision of what’s to come. Armageddon, recession, etc. This needs to change. Start to vision the  other side.
    • SCENARIO PLANNING. Produce a cash flow forecast for the next 3 months. Imagine the worst scenario in terms of sales, then plan for it. Maybe you get no revenue for the next three months? The reality will be much better, but plan for it anyway. This will be a dip. It won’t last forever.
    • CUT BACK. Cut on any costs that are maybe excessive. You need to be careful with this bit. Don’t strip back operations completely, only those that seem excessive. I don’t mean staff here AT ALL if it can be helped.
    • GALVANISE YOUR TEAM. Communicate your better vision of the future. They are on this mission with you. They have probably had the same panics that you’ve had. Explain that you’re going to get through this together. The reason we’re cutting back (in the step above) is to preserve your team.
    • BUILD BACK INTO THE FOUNDATIONS. This is where we look at things you may have been neglecting. Systems, processes, getting your pricing right, marketing. Whatever it is you need to do, build back into these key systems. Some of the peripheral things (maybe small jobs on your to-do list), they aren’t important in times like now. Work on the fundamentals.
    • SET UP AS A LEADER. This is your time. If your team are working from home, get them fired up, have daily calls, keep everyone positive.
    • EXPLORE OPPORTUNITIES. What opportunities do you have now to give value to your clients or customers? For your clients, this could be digitisation of your product. It could be new products, new markets.
    • MARKETING. Don’t be aggressive with selling. Start to build relationships. Be there for your community and the clients or customers that you serve. Invest in long term nurturing processes.

    Final Thoughts

    Stay safe. Do what you can with what you have. Control what’s in your control. Help as many people as you can through this period with any spare resources you have, whether that’s time, money or love. This will not last forever, nor for very long and we will get through this… together… and be stronger at the other side.

    For help with your business speak with your LT accountant.

  • Don’t fall for dividend yield traps

    Don’t fall for dividend yield traps

    Australian shareholders are set to reap around $27.5 billion in interim company dividends over the next two months, courtesy of the latest corporate earnings season.

    Those dividend flows will be very welcome to many investors during some of the most volatile market trading conditions on record, and following another cut to official interest rates last month to an all-time low of 0.25 per cent.

    Yet, investors seeking out dividends, especially from companies that currently appear to be paying very attractive dividend yields, should be extremely careful.

    What may look like a good yield opportunity at the moment may not pan out that way over the medium term, particularly as the economic and financial fallout from COVID-19 on the 2020-21 earnings results of listed companies becomes much clearer.

    The spike in yields

    Right now, the notional dividend yields on many of Australia’s largest listed companies look very attractive.

    Dividend yields are calculated by dividing a company’s prevailing share price by its declared annual dividend payment per share. Yields move constantly, in tandem with share prices.

    Take the major banks, for example. All of the “big four” are yielding between 7 per cent and 12 per cent, based on their share prices at the close of trading on Friday 27 March.

    But keep in mind that a month ago, at the point global equity markets began to tumble, the same banks were yielding between 5 per cent and 7 per cent.

    The recent upturn in their dividend yields directly correlates with the plunge in their respective share prices since late February – on average their share prices have fallen around 40 per cent.

    In fact, the same scenario is evident for all of the companies in the ASX top 20 when their share price to dividends ratios are compared between 20 February (the market peak) and late March (following weeks of sharp falls).

    Dividends pain ahead

    Australian shareholders have a distinct advantage over those in many other countries when it comes to dividends, thanks to favourable tax laws.

    Dividend imputation enables some or all of the income tax already paid by a company to be distributed back to shareholders, or imputed, as a tax-paid franking credit.

    But there are now widespread expectations that many ASX companies, including the major banks, will either cut or defer dividend payments to shareholders as a result of severe business losses stemming from COVID 19. Franking credits could also be cut at a company’s discretion, based on its earnings results.

    After announcing a 30 per cent increase in its final dividend to 13 cents per share fully franked in August 2019, last week Qantas said it was deferring the payment of its 2019 December-half interim dividend from 9 April to 1 September.

    Which is one of the fundamental lessons for income-focused investors – dividend payments are not locked in stone, in the same way that dividend yields, especially during volatile trading conditions, can gyrate wildly from day to day.

    In the latest earnings reporting period, for the half-year to December, a slightly smaller percentage of ASX 200 companies (87 per cent) have chosen to pay a dividend – down from 88 per cent in the August 2019 reporting season. Of these, just over half elected to lift dividends.

    Difficult operating conditions, even ahead of the latest market downturn, are largely to blame.

    Reducing dividend income risk

    The easiest way for investors to reduce dividend income risk – the risk of being over-exposed to the payout policies of specific companies – is through diversification.

    And the best way of achieving that is by having broader exposures to diversified income streams via a large pool of listed companies, such as though a managed fund or exchange traded fund covering the largest companies in a single market or across multiple markets.

    Think of funds as a form of fishing net that will catch the dividends of very company that falls into their investment focus, for example every company that’s contained within the S&P/ASX 300 Index.

    The key advantage for investors is that irrespective of individual company dividend yields and payouts, a fund will aggregate all dividends and distribute them to investors.

    While dividend flows may decline over them medium term, having exposure to many companies allows investors to capture a greater amount of the total dividends spectrum.

    Doing this also eliminates the need to focus on the dividends of individual companies and their dividend yields, which recent events have proved can be a dangerous trap for investors.

    Article written by Tony Kaye – Personal Finance Writer at Vanguard Australia

    To speak with one of our financial advisors contact the LT Team.

  • NSW Small Business Support Fund

    NSW Small Business Support Fund

    Thousands of small businesses across NSW struggling to cope with the COVID-19 shutdown will receive grants of up to $10,000 under a new assistance scheme announced today by Premier Gladys Berejiklian, Treasurer Dominic Perrottet and Minister for Finance and Small Business Damien Tudehope.

    The NSW Government will put $750 million into the Small Business Support Fund as the centrepiece of a third wave of support measures to keep small businesses afloat.

    To be eligible, businesses will need to:

    • Have between 1-19 employees and a turnover of more than $75,000;
    • Have a payroll below the NSW Government 2019-20 payroll tax threshold of $900,000;
    • Have an Australian Business Number as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020;
    • Be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020;
    • Use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice;
    • Provide appropriate documentation upon application.

    Businesses will need to apply:

    Applications for a small business grant of up to $10,000 will be available through Service NSW within a fortnight and remain open until 1 June 2020.

    LT can assist:

    If you would like our assistance to apply for the small business grant, please contact us on

  • COVID-19 – Providing rental relief for the tenant in my SMSF property

    COVID-19 – Providing rental relief for the tenant in my SMSF property

    The economic impacts of the COVID-19 crisis are causing significant financial distress for many businesses and individuals.

    If your SMSF has a property and a tenant in financial distress, you may be able to provide your tenant with rental relief under an agreed commercial arrangement. This may even be the case when the tenant is a related party or yourself.

    Ordinarily, charging a tenant a price that is less than market value in an SMSF is usually a breach of superannuation laws. However, the ATO have provided guidance which allows SMSF landlords to provide for a reduction in or waiver of rent because of the financial impacts of the COVID-19.

    For the 2019–20 and 2020–21 financial years, the ATO will not take action where an SMSF gives a tenant – who may also be a related party – a temporary rent reduction during this period.

    What do you need to do?

    There are some important things you should ensure are in place when you are providing a rent reduction to a tenant, especially when this is a related party.

    • Ensure the relief only applies to rent.
      • Any relief offered to a tenant can only relate to the rent component of the lease agreement. The ATO concession does not extend to other lease incentives.
    • Ensure that the reduction in rent is only temporary.
      • This means it should have an agreed period of time or agreed date where the rent is reviewed in light of the economic circumstances.
    • The financial difficulty faced by the tenant is linked to the financial impacts of COVID-19.
      • Any negotiated rent relief will need to be measured against the COVID-19 financial impact suffered by your tenant.
    • Clear arrangements which detail the amount of discount, waiver or deferral of the rent.
      • In evidencing that the rent relief is reasonable, it would be best practice if it is consistent with an approach taken by an arm’s length landlord.
    • Ensure you have proper documentation which allows your independent auditor to be satisfied that the temporary rent relief satisfies all of the above.
      • This may take the form of a signed minute, renewed lease agreement or anything deemed appropriate to amend the terms of the lease temporarily.
      • Even if you are both the tenant and landlord, the above should all be documented.

    These are extraordinary times and the ATO is providing this guidance to allow SMSF trustees to be flexible and agile.

    If trustees act in good faith in implementing a reasonable and measured reduction in rent because of the impacts of COVID-19 they should not fall foul of the law.

    How can we help?

    If you need assistance providing rental relief or whether this is the right action for you and your specific circumstances, please feel free to give LT a call so that we can discuss in more detail. Alternatively, you can refer to the SMSF Association’s trustee education platform, SMSF Connect.

  • Accessing your superannuation early

    Accessing your superannuation early

    You may be aware that the Government recently announced measures which allow individuals affected by the economic impacts of COVID-19 to access a limited amount of their superannuation early.

    Making the decision to access your superannuation early is a significant one and if possible, should be encompassed by financial advice.

    The Australian Taxation Office have now released guidance on the process for accessing superannuation early from SMSFs to assist in cushioning the adverse economic effects of Coronavirus.

    How much can you take out?

    You will be able to apply online through the myGov website (https://my.gov.au/) to access up to $10,000 of your superannuation before 1 July 2020.

    You can access a further $10,000 of your super from 1 July 2020 until 24 September 2020.

    You will only be able to make one request for each financial year. For example, should you nominate for a lesser withdrawal amount in 2019/20, you will not be able to apply again before 1 July 2020 for the remainder nor will you be able to apply for more than $10,000 from 1 July 2020.

    If you access your superannuation you will not be required to pay tax on amounts released and any amounts withdrawn will not affect your Centrelink or Veterans’ Affairs payments. These amounts will also not be included in your assessable income for the financial year the withdrawal is made.

    Satisfying early release requirements

    The intention of the legislation is that you are adversely affected by the economic impacts of COVID-19 and require early access to your superannuation which is ordinarily preserved until your retirement.

    To apply for early release of your superannuation, you must satisfy one or more of the following requirements:

    • You are unemployed.
    • You are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance.
    • On or after 1 January 2020, any of the following happened:
      • You were made redundant.
      • Your working hours were reduced by 20% or more.
      • You were a sole trader and your business was suspended or your turnover decreased by 20% or more.

    These are the only requirements that must be considered.

    How to apply to access your superannuation

    From today, those affected can register their interest to access through the myGov website (https://my.gov.au/).

    If you satisfy one or more of the requirements entitling you to access your superannuation early, you will be able to do so from mid-April.

    After applying through myGov, the ATO will issue you with a determination advising of your eligibility to release an amount. Only once your SMSF receives the determination from you, will the trustee be authorised to make the payment. If you apply to access superannuation benefits from a non SMSF, the determination will be issued by the ATO direct to the APRA regulated funds and the trustee will proceed to release your benefits to a nominated bank account.

    Other ways to access superannuation

    You may be allowed to withdraw some of your super due to other reasonings, such as

    • Access on compassionate grounds
    • Access due to severe financial hardship
    • Access due to a terminal medical condition
    • Access due to temporary incapacity
    • Access due to permanent incapacity
    • Your super balance is less than $200

    I would recommend getting in touch with me to discuss your specific circumstances in more detail to ensure you aren’t breaching any regulations.

    How can we help?

    If you need assistance with the early access of your superannuation or whether this is the right action for you and your specific circumstances, please feel free to give LT a call so that we can discuss in more detail. Alternatively, you can refer to the SMSF Association’s trustee education platform, SMSF Connect.

  • Understanding JobKeeper Payment

    Understanding JobKeeper Payment

    Your business may be eligible for the new JobKeeper Payment which was announced on 30 March 2020 to assist businesses to continue to pay their employees.

    We are waiting on legislation to support the measures so it is unclear at this stage how the mechanics of the JobKeeper payment system will work. We expect that the devil will be in the detail and we will update you once further clarification is provided.

    Here is what we know so far.

    Amount and timing of subsidy

    The JobKeeper payment is a subsidy of $1,500 per fortnight per eligible employee from 30 March 2020 for a maximum period of 6 months. The first payment will be received by employers from the ATO in the first week of May.

    Eligibility

    Employers will be eligible for the subsidy if their business has a turnover of less than $1billion and their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month).

    Employers with a turnover of $1 billion or more will be eligible if their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month).

    Eligible employees

    Eligible employees are employees who:

    • are currently employed (including those stood down or re-hired);

    • were employed at 1 March 2020;

    • are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);

    • are at least 16 years of age;

    • are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and

    • are not in receipt of a JobKeeper Payment from another employer.

    If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.

    Mechanics and Application process

    Employers will be required to:

    • register an intention to apply on the ATO website (ato.gov.au) from 30 March 2020 and assess their eligibility based on turnover decline;

    • subsequently apply on line;

    • ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax. It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

    • provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired). For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.

    • notify all eligible employees that they are receiving the JobKeeper Payment.

    • continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

    LT can assist

    LT can assist in the application process if you think your business may be eligible for the JobKeeper payment.

    Please don’t hesitate to contact us.

  • Second Stimulus Package – Business Owners

    Second Stimulus Package – Business Owners

    With the country locking down it’s borders, empty airports, cafes, bars, restaurants and more changes to come the Commonwealth Government has released the second stage of its plan to cushion the economic impact of the coronavirus.

    For small to medium sized businesses (SMEs), the key elements of the second stimulus package are:

    • Relief from PAYG withholding obligations on salaries and wages, and an additional payment;
    • A wages subsidy to support apprentices and trainees;
    • Increased access to working capital; and
    • Temporary relief for financially distressed businesses.

    > Relief from PAYG withholding obligations and an additional payment

    Package overview
    This is referred to as Boosting Cash Flow for Employers Payments in the stimulus packages.

    The Government has enhanced its initial stimulus package with the following changes:

    • Not-for-profit entities (NFPs), including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible;
    • employers will receive a “payment” equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000;
    • the minimum payment is being increased from $2,000 to $10,000. The payment will be available from 28 April 2020; and
    • an additional payment is being made from 28 July 2020. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments received. 

    You should note that “payment” refers to an automatic credit to your business activity statement and is NOT a cash injection directly to your business unless the credit puts your business in a refund position.


    Eligibility for PAYG withholding relief


    SMEs and NFPs with aggregated annual turnover under $50 million and that employ workers will be eligible for PAYG withholding relief.

    Eligibility will generally be based on prior year turnover.

    The payments will only be available to active eligible employers established prior to 12 March 2020.

    However, charities which are registered with the Australian Charities and Not-for-profits Commission will be eligible regardless of when they were registered, subject to meeting other eligibility requirements. This recognises that new charities may be established in response to the Coronavirus pandemic.

    PAYG withholding relief

    The payment will be delivered by the ATO as an automatic credit in the activity statement system from 28 April 2020 upon employers lodging eligible upcoming activity statements.

    Relief for eligible employers will be provided as follows:

    • A credit up to a maximum of $50,000 for any withholding tax already paid on salaries and wages to the ATO; and
    • A minimum credit of $10,000 for all businesses that pay salaries and wages, even if they are not required to withhold tax.

    The credits will be applied to a limited number of activity statement lodgements up to the June 2020 quarter.

    The ATO will deliver the payment as a credit to the entity upon lodgment of their activity statements. Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.

    Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.

    Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgments.

    To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300 per cent) in the March 2020 activity statement.

    The minimum payment will be applied to the entities’ first lodgment.

    Eligibility for additional payment
    To qualify for the additional payment, the entity must meet the above eligibility criteria and continue to be active.

    Additional payment
    The additional payment will be applied to a limited number of activity statement lodgments. The ATO will deliver the payment as a credit to the entity upon lodgment of their activity statements. Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.

    Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020. Each additional payment will be equal to half of their total initial PAYG withholding relief (i.e. the Boosting Cash Flow for Employers payment) up to a total of $50,000. This will be paid following the lodgment of their June 2020 and September 2020 activity statements.

    Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 lodgments. Each additional payment will be equal to a quarter of their total initial PAYG withholding relief (i.e. the Boosting Cash Flow for Employers payment) up to a total of $50,000. This will be paid following the lodgment of their June 2020, July 2020, August 2020 and September 2020 activity statements.

    This means that eligible entities will receive at least $20,000, up to a total of $100,000 under both the PAYG withholding relief and the additional payment.

    Please note that all other BAS obligations, including PAYG instalments and GST, must continue to be satisfied.

    > Wages subsidy to support apprentices and trainees

    Package overview

    The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020.

    Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.

    Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

    Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

    Please note businesses must apply for this subsidy, it is NOT automatic.

    Eligibility for subsidy

    The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee.

    The apprentice or trainee must have been in training with a small business as at 1 March 2020.

    Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy.

    Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.

    Deadline for applications

    Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.

    Further information
    Further information is available at:
    * The Department of Education, Skills and Employment website at: www.dese.gov.au
    * Australian Apprenticeships website at: www.australianapprenticeships.gov.au For further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.

    > Increased access to working capital

    Coronavirus SME Guarantee Scheme

    The Government will establish the Coronavirus SME Guarantee Scheme to assist SMEs to get access to working capital.

    Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs.

    The Government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs. 

    The Scheme will complement the announcement the Government has made to cut red-tape to allow SMEs to get access to credit faster. It also complements announcements made by Australian banks to support small businesses with their existing loans.

    This builds on the investment the Government is making to enable smaller lenders to continue supporting Australian consumers and small businesses, through providing the Australian Office of Financial Management (AOFM) an investment capacity of $15 billion to invest in wholesale funding markets used by small authorised deposit-taking institutions (ADI) and non-ADI lenders.

    It further supports the Reserve Bank of Australia’s announcement of a $90 billion term funding facility for ADIs, that will reduce the cost of lending, with particular incentives to lend to small and medium enterprises.

    The Government will guarantee up to $20 billion to support $40 billion in SME loans. 

    > Temporary relief for financially distressed businesses

    The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.

    The package also includes temporary relief for directors from any personal liability for trading while insolvent.  

    The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the Coronavirus.

    FOR MORE INFORMATION For more information on the Australian
    Government’s Economic Response to the Coronavirus visit
    treasury.gov.au/coronavirus. Businesses can visit business.gov.au to find out
    more about how the Economic Response complements the range of support
    available to small and medium businesses.

    NEXT STEPS We recommend business owners to book an advisory session with your LT accountant to maximise these opportunities.

  • Second Stimulus Package – Individuals

    Second Stimulus Package – Individuals

    Details on the second stimulus package announced

    A summary for individuals

    The Commonwealth Government yesterday released the second stage of its plan to cushion the economic impact of the coronavirus.

    For households including casuals, sole-traders, retirees and those on income support, the key elements of the second stimulus package are: 

    • the Coronavirus income supplement;
    • payments to support households;
    • early release of superannuation;
    • temporary reduction to minimum super drawdown rates; and
    • reduction in social security deeming rates.

    Coronavirus supplement 

    The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight.  This will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit. 

    The Coronavirus supplement will be paid for the next 6 months. Eligible income support recipients will receive the full amount of the $550 Coronavirus supplement on top of their payment each fortnight. 

    An increase of up to 5,000 staff for Services Australia will assist to support delivery of new Government measures. 

    Payments to support households

    In addition to the $750 stimulus payment announced on 12 March 2020, the Government will provide a further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement. 

    This second payment will be made automatically from 13 July 2020 to around 5 million social security, veteran and other income support recipients and eligible concession card holders. Around half of those that benefit are pensioners. 

    The first payment will be made from 31 March 2020 to people who will have been on one of the eligible payments any time between 12 March 2020 and 13 April 2020. 

    Early release of superannuation

    The Government will allow individuals in financial stress as a result of the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. 

    Eligible individuals will be able to apply online through myGov for access of up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments. 

    Temporary reduction to superannuation minimum drawdown rates 

    The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets. 

    Reduction to social security deeming rates

    On top of the deeming rate changes made at the time of the first package, the Government is reducing the deeming rates by a further 0.25 percentage points to reflect the latest rate reductions by the RBA. 

    As of 1 May 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent. 

    The change will benefit around 900,000 income support recipients, including Age Pensioners.

    For more information about the above speak with your LT advisor.

  • NSW Stimulus Package

    NSW Stimulus Package

    NSW Treasury officials Premier Gladys Berejiklian, Treasurer Dominic Perrottet and Minister for Health Brad Hazzard today announced a NSW stimulus package in response to the coronavirus crisis.

    In a nutshell, the package is aimed at three things – saving lives, creating jobs and supporting small business in NSW.

    The key elements are:

    1 – A $700m investment into heath care which represents around a 75% increase in the health care budget over the next 6 months to provide health care officials with the support that they need to keep people safe across NSW.

    2 – A small business package which will:

    a. Waive the payroll tax liability for businesses with a payroll of up to $10M, which is an average saving of around $15,000, for the June quarter. On average, these businesses have employees of around 25 and up to 100 employees at the higher end. Whilst not currently clear it is expected that this payroll tax exemption will be applied automatically.

    b. Bring forward payroll tax cuts, which were scheduled for subsequent financial years, to next financial year in the form of an increase to the payroll tax threshold from $900,000 to $1M. This will mean that some 2,000 small businesses will no longer have a payroll tax liability.

    3 – Additional financial support will be provided to bring forward maintenance and capital projects over the next 6 month period. Forestry corporations will receive an equity injection of $46m to commence work immediately on rebuilding and replanting the forests that have been devastated by the bushfires; and other areas across the state such as education and road maintenance will receive additional support to bring forward projects and assist creating jobs and stimulating the economy.

    For more information to see how LT can help your business over this challenging time please call our team.

  • ATO supporting COVID-19 impacted businesses

    ATO supporting COVID-19 impacted businesses

    The Australian Taxation Office (ATO) issued a special edition Business Bulletin yesterday, 16 March 2020, which contains information about how the ATO can support your business during the COVID-19 crisis.

    How the ATO can assist

    The ATO will implement a series of administrative measures to assist Australians experiencing financial difficulty as a result of the COVID-19 outbreak. 

    The options available to assist businesses impacted by COVID-19 include:

    • deferring by up to four months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise;
    • allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to;
    • allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters;
    • remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities; and
    • working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.

    Outside of business, the ATO will also work with individuals experiencing financial hardship, and their tax agents, and will apply appropriate tax relief measures for serious and exceptional circumstances, such as where people cannot pay for food or accommodation.

    The ATO acknowledges that this is a time of significant uncertainty and has undertaken to be flexible in its approach to assisting taxpayers.

    Employers’ ongoing obligations

    Employers will still need to meet their ongoing super guarantee obligations for their employees.

    Applying for relief

    Unlike the bushfire relief measures, which applied automatically to particular geographic areas, assistance measures for those impacted by COVID-19 will not be automatically implemented.  Businesses impacted by the corona virus are encouraged to get in touch with the ATO to discuss relief options on its Emergency Support Infoline 1800 806 218. 

    How LT can assist

    We encourage you to review your situation and, if you think you are eligible, please contact our office so that we can apply for relief on your behalf and work with the ATO to tailor a support plan for your needs and circumstances.

    The ATO’s ongoing support

    The ATO has said that it will continue to work with the tax profession, other government agencies and local organisations to make sure other impacted communities are also supported during this time. It will ensure its services are tailored to the needs of the community and will work with taxpayers and their tax agents to tailor support to their individual circumstances.

    Contact the LT team to discuss your tax and business planning throughout this challenging period.

  • Government Announces $17.6 billion stimulus package

    Government Announces $17.6 billion stimulus package

    The Federal Government has announced a $17.6 billion economic stimulus package in a bid to keep Australians in jobs as the economy takes a hit from the spread of coronavirus.

    The stimulus package is projected to have a $22.9 billion impact to prevent Australia from slipping into a recession. 

    The temporary and targeted package includes an accelerated depreciation scheme, a cashflow boost of up to $25,000 for small and medium sized businesses, and wage assistance for apprentices and trainees.

    Nearly 700,000 small to medium businesses employing 7.8 million people will be able to get cash payments of between $2,000 and $25,000 to help pay wages or hire extra staff. This is estimated to cost $6.7 billion. This payment will be automatically made to those eligible small businesses from 1 April 2020 and with the entitlement calculated as 50% of the PAYG withholding remitted on your activity statements from March to June 2020. This payment will be tax free. Payment will be made within 14 days of lodging your activity statement.

    The stimulus package also includes $1.3 billion in support payments to keep apprentices in their jobs to minimise the effect on employment.

    The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.

    Casual workers who contract COVID-19 or have to isolate will be eligible for a Newstart welfare payment whilst out of work.

    Businesses will be able to access the expanded instant asset write-off from today.  Currently small businesses with an annual turnover of less than $50 million can claim tax deductions of up to $30,000 for things like vehicles, tools and office equipment. But the increases will now apply to much bigger businesses with a turnover of up to $500 million and for much bigger items worth up to $150,000, this will be immediate and until the 30 June 2020.

    In addition, there is also a 15 month investment incentive to 30 June 2021 which enables businesses with a turnover of less than $500 million to deduct an additional 50% of the asset cost in the year of purchase. This is in addition to any other deprecation deduction.

    More than 6 million welfare recipients will receive government assistance with a one off payment of $750 from March 31.  Almost half of welfare recipients are pensioners, with other welfare recipients being veterans, carers, families, jobseekers, young people. These payments will occur automatically.

    $1 billion is provided to support severely affected regions and communities including those heavily reliant on industries such as tourism, agriculture and education. This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National Parks. Plus identification of alternative markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. 

    If you would like to discuss how these impact your business please contact us.

  • Dealing With Market Turbulence

    Dealing With Market Turbulence

    The share market decline since the peak of 20 February 2020 has been fast and brutal.

    Immense fear has now engulfed the market just like it has engulfed society through the perceived necessity to stockpile toilet paper. COVID-19 is undoubtedly impacting world trade with borders being closed and the world’s ability to trade normally being heavily curtailed.

    In times of extreme market volatility like we are experiencing now, investors are faced with two choices:

    1) Sell out and move to cash

    2) Ride out the ‘storm’

    Option 1 may feel like the safest thing to do right now but history has told us that this can actually do more harm to long-term returns than good.

    This is due to the following:

    1) As share markets can fall quickly, they can rebound just as quickly and getting the timing right to reinvest can be difficult. This may mean you ‘sell low and buy high’ which is the exact opposite of what is generally required to achieve strong investment returns.

    2) If you are selling, someone is buying. For a trade to take place, there has to be a buyer and seller. Selling quality shares after they have dropped means someone else is buying that asset at a massive discount.

    3) A well diversified portfolio includes exposure to ‘defensive’ asset classes such as fixed interest and cash. In times of market volatility, fixed interest assets can counteract market falls which smooths out the volatility and cash can provide liquidity to fund withdrawals such as pension payments.

    The alternative is to ride out the storm and history has shown us that markets have always recovered and gone beyond previous highs. Whilst volatility may continue, our portfolios contain a mix of different assets and have been designed to weather such events.

    If you would like to discuss your portfolio, please contact us.

  • FBT exemption for emergency assistance

    FBT exemption for emergency assistance

    Businesses that provide benefits to employees during an emergency situation are likely to have assistance costs be exempt from fringe benefits tax (FBT).

    It is worthwhile to know what kinds of benefits you as a business owner can provide for different emergencies that will be excluded from FBT. Exemptions will apply to benefits you provide to employees who are being impacted by or will be potentially impacted by:

    • A natural disaster such as a bushfire, flood or cyclone.

    • An accident such as a car accident.

    • A serious illness such as cancer.

    • An armed conflict such as a war.

    • A civil disturbance such as a riot.

    The types of benefits you provide to your employees that can be exempt from FBT include health care, temporary repairs or emergency needs such as food supplies, clothing, accommodation, transport or household goods.

    Short-term benefits you provide to an employee such as temporary repairs to damaged property due to a natural disaster are exempt from FBT. However, long-term benefits provided to employees after an emergency event will not be exempt, such as a replacement car, new house or ongoing renovations.

    When providing health care, there are certain requirements that must be followed. FBT exemptions only apply to health care provided:

    • For an employee of yours or from a related company.

    • On your premises or the premises of a related company.

    • By a company doctor at an accident site.

    • At or near an employee’s worksite.

    If you decide to pay for your employee’s ongoing medical or hospital bills, then the FBT exemption will not apply.

    The costs of benefits would be deductible to the employer but not assessable to the employee and will not appear as part of their salary and wages on their payment summary.

    For more business advice speak with our business advisors at Leenane Templeton. Contact us today.

  • Understanding the market impact of the COVID – 2019

    Understanding the market impact of the COVID – 2019

    It has been a turbulent start to the year with Australia beginning the recovery process from the tragic bushfires followed by the threat of a global pandemic with cases of the coronavirus (COVID-2019 as it is now known) increasing across the globe. Despite these events markets did not flinch in January, with equity markets generating strong returns for the month as liquidity conditions continue to be supportive of markets.

    If we look at previous incidents of viral outbreaks, such as SARS in 2003 and H1N1 (swine flu) in 2009, short-term corrections were within the range of 5% to 15%. These corrections were followed by strong rebounds. The consensus view is that global growth will be down in the first quarter of the year as a result of COVID-2019 with the key variable being how long the threat of the virus persists.

    While history is a useful guide in this case, it must be said that the effect of this epidemic is likely to be greater given China’s dominant presence in the global economy, given the faster spread of the disease and the measures taken to combat it. The extended closure of Chinese industry, restrictions on people movement, disrupted supply chains, declines in key commodity prices, bans on Chinese travel and the flow-on effect to confidence will severely hamper growth in China and the countries and regions most heavily reliant on China.

    While at the time of the SARS outbreak China accounted for around 9.0% of global output on a PPP basis, it now accounts for 19%, and this proportion is only likely to increase in coming years, according to the IMF. China accounts for 18% of global tourism spending (up from 4.0% in 2008) while overall tourism (domestic and global) spending accounts for more than 10.0% of Chinese GDP and has been contributing almost 1.5% to annual GDP growth. To place China’s emergence on the global stage into perspective, in 2003 there were 20 million Chinese overseas visits and in 2018, 150 million. The Chinese economy accounted for about 30% of global growth in 2019. So, a drop in Chinese GDP growth to 5.0% for the year, assuming the virus is contained within a short period, would detract 0.2–0.3% from global growth.

    China now accounts for around 19% of global output

    Source: IMF, Lonsec

    From an Australian equities perspective, we are likely to see earnings outlook downgrades across a number of sectors (based on Lonsec equities research), at a time of elevated valuations and a sub-par growth outlook. While earnings across the Healthcare, Consumer Staples and Infrastructure sectors should be relatively immune to recent events, 2020 earnings estimates for the Resources (Energy, Iron Ore and Copper), Tourism/Travel and Consumer Discretionary sectors are likely to see significant one-off earnings revisions, capturing the impact of COVID-2019 outbreak and the recent bushfires across Australia. However, such downgrades are unlikely to impact the long-term investment thesis for most companies and should be regarded as short-term headwinds, reflecting a series of one-off unfortunate events.

    While there is a high degree of uncertainty regarding the COVID-2019 outbreak, research indicates that this event could pose a long “tail risk” for global markets should the outbreak get out of hand. In other words, it could go on for a while. These factors make it a challenging period for investors, where factors other than fundamentals are having a material impact on the trajectory of markets. In such an environment, balanced portfolio construction is critical to insulating your portfolio. The proof in balance portfolio construction has been reflected in the stellar returns from both domestic and international fixed income securities over the last 18 to 24 months. 

    If you feel concerned by the current situation we encourage you to talk with an advisor sooner rather than later.

    Source Information: Lonsec Group

  • Restoring damaged tax records after a natural disaster

    Restoring damaged tax records after a natural disaster

    With the recent bushfires devastating many parts of Australia, it is not a top priority to be thinking of tax obligations, either personal or business related.

    In the event that your records have been damaged or destroyed in a natural disaster, such as bushfires, there are a number of ways you can reconstruct them. The ATO is able to help with reconstruction in the event tax records have been lost or damaged.

    Where the tax records are lost or destroyed as a result of a natural disaster, the ATO will allow time for individuals to get their more pressing issues in order. They provide support by:

    • Allowing lodgment deferrals of activity statements or tax returns without penalties.

    • Allowing additional time to pay tax debts without incurring general interest charges.

    • Making arrangements for tax payments to be done by instalments. • Fast-tracking refunds.

    • Arranging field visits to help with reconstructing tax records.

    The ATO holds and can re-issue or supply copies of tax documents, such as:

    • Income tax returns.

    • Activity statements.

    • Notices of assessment.

    If you have lost your TFN, you can still access your tax information by phoning the ATO. They will allow for other information to verify identity, such as an individual’s date of birth, address or bank account details.

    Employers should have copies of individuals’ PAYG payment summaries and banks should be able to provide bank records that have been destroyed. Registered agents may also have copies of individual records. In the event your bank charges a fee for replacing bank records and other services to help reconstruct records or provide information due to a disaster, individuals can claim a deduction in the income year that those fees are charged.

    If you are unable to substantiate claims made in your tax returns or activity statements because records have been damaged or destroyed, the ATO can accept the claim without substantiation, where it is not reasonably possible to obtain the original documents

    For help with your business call our team of Newcastle advisors at Leenane Templeton. Contact us for more details.

  • Negotiating a business deal

    Negotiating a business deal

    The business deals you make or don’t make can drastically change the course of your company, so it is important that you enter negotiations well prepared.

    Research:

    Have a well thought out, flexible strategy and plan that you can use to negotiate effectively. Make sure you research thoroughly and have points in your head that you can use to support your proposal and strengthen the appeal of your side of the deal.

    Build a good relationship:

    Taking the time before any official negotiation has begun is a great way to generate positive relations and get to know the other party better and understand how they work. As well as making negotiations more comfortable, this can also help you assess whether engaging in a deal with them is the right move as you can identify whether their values, work ethic, and goals align well for business interactions with you.

    Prepare for tricky circumstances:

    Most business negotiations don’t go as smoothly as people hope, and often involve a lot of back and forth between parties. Take the time to brainstorm any potential disagreements that may arise and think about ways to diffuse them, or the best alternatives for both parties.

    Be professional:

    If negotiations get heated or the other party isn’t cooperating, it can be easy to become rude or angry. This usually isn’t helpful and can put your company’s reputation on the line and damage your chances of striking a deal with others. Throughout the interaction, remember to keep things professional and courteous in order to uphold your business’ reputation and to increase your chances of working with the other party in the future.

    Make an agreement draft:

    You or your lawyer can prepare a draft copy of the proposed agreement to bring to the negotiations. If your side has the first version of the agreement, you are able to frame and structure the deal more on your terms The other party may not think about making extensive changes to the document and are more likely to accept points if they’ve already been established as statements rather than questions during the discussion.

    Ask the right questions:

    Don’t be afraid to ask questions and get informed about the best agreements you can come to. Depending on the type of deal being made, you can ask questions about pricing, benefits for both parties, any other offers available, competitors, documents etc.

    Need business advice and accounting, call the team at LT to discover how we can help your small business. Our offices are on King Street, Newcastle.

    Call (02) 4926 2300 or Contact us.

  • SMSFs & Family Law Super Splitting

    SMSFs & Family Law Super Splitting

    Introduction

    A superannuation interest is considered ‘property’ for the purposes of the Family Law Act 1975 (Cth) (‘FLA’). Thus, it may be split in a similar manner as the parties’ other assets in response to a relationship breakdown.

    Indeed, the superannuation splitting laws extend to all de facto relationships in all states and territories, except for Western Australia where superannuation for de facto couples currently is not a separate splittable asset and instead receives treatment as a financial resource.

    This article provides an overview of some of the key aspects to be taken into consideration when undertaking a super split in a self managed superannuation fund.

    What is a splitting order?

    A superannuation split may occur under either a splitting order or a superannuation agreement, which forms part of a financial agreement (‘Splitting Order’).

    Where an SMSF trustee receives a Splitting Order certain obligations apply. Broadly, the SMSF trustee is bound to apply the terms of the Splitting Order whenever a splittable payment (ie, a spouse’s superannuation interest) becomes payable.

    Who are the parties?

    The superannuation splitting laws refer to the relevant parties as the member and non-member spouse.

    The member spouse is the member whose superannuation interest is being split. Typically, the member spouse will be the member remaining in the SMSF. In contrast, the member obtaining the benefit is referred to as the non-member spouse. Often the non-member spouse is the departing member exiting the fund once the payment split is carried out.

    Note that if there is a split of each member’s interest in the same SMSF, both parties may be a member spouse in respect of their own interest and non-member spouse in respect of their former partner’s interest.

    What is a splittable payment?

    A splittable payment includes the following:

    • a payment to a spouse;
    • a payment to another person; or
    • a payment to the legal personal representative (‘LPR’) of the spouse, after the death of the spouse.

    While splittable payments typically occur on the retirement, rollover or death of a member, a Splitting Order places an additional obligation on an SMSF trustee to split the member’s benefit between the member and non-member spouse, pursuant to the particular terms of the Splitting Order.

    Splitting a superannuation interest

    Indeed, the SMSF trustee must observe the operating standards contained in Part 7A of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (‘SISR’) when they receive a Splitting Order. The Splitting Order will set out the terms of the superannuation split. Broadly, the amount of a Splitting Order may be determined by either a ‘base amount’ or ‘percentage’ method.

    Under a base amount split, a Splitting Order will specify a particular amount or formula for determining the amount payable. In contrast, under a percentage interest split, the amount payable is determined by reference to a percentage payable to the non-member spouse.

    Naturally, the most appropriate splitting method will depend on a number of factors. Thus, each party should ensure they obtain expert advice from their family lawyer and adviser before deciding on what method best suits their particular circumstances.

    Once the superannuation interest becomes subject to a payment split, the non-member spouse may generally request one of the following options in respect of the interest:

    • create a new interest in the same fund –– this option may be precluded under the SMSF deed;
    • transfer the benefits to another complying rollover fund; or
    • receive the amount as a lump sum payment if the amount constitutes unrestricted non-preserved benefits.

    Once the non-member spouse has made an election in relation to how the superannuation interest should be dealt with, the SMSF trustee broadly has an obligation to give effect to that choice.

    Implementing Splitting Orders

    While the FLA empowers the court to make orders in relation to the superannuation interests of the parties, what SMSF trustees and advisers often do not realise is that Splitting Orders do not enliven the relevant splitting provisions in the SISR, nor do they bind the SMSF trustee as a third party to the relationship.

    Accordingly, additional documents are required to implement a legally effective superannuation split.

    DBA Lawyers’ suite of Family Law SuperSplitting documents provides practical guidance to SMSF trustees and advisers in relation to the steps required by the SISR to implement a legally effective split.

    These documents cover both married couples and couples terminating a de facto relationship including same sex relationships.

    SuperSplitting in an SMSF context typically results in a restructure of an SMSF. Naturally, each member that is undergoing a separation should consider their wills, powers of attorney, binding death benefit nominations, shareholdings/directorships in companies, who are nominated as appointors to any discretionary trusts, etc, that invariably must be changed after a separation and/or divorce.

    Other matters

    Numerous other issues should be considered before implementing a Splitting Order. In particular, among other things, the following should be considered:

    • transfer balance account issues;
    • tax consequences including capital gains tax (‘CGT’) liabilities and whether any CGT rollover relief should be claimed; and
    • stamp duty.

    Conclusion

    There are a range of issues involved with a super split. A super split must be properly documented and strategically managed to be legally effective. We offer a document suite and advice that focuses on SMSF aspects.

    Note that the above commentary is a general summary only and is not intended to be relied on as advice.

    Article written by DBA Lawyers

  • Protecting your super

    Protecting your super

    Protecting your superannuation – Further changes to insurance in super is now law.

    Did you know that superannuation fund members under the age of 25 and members with balances below $6,000 risk losing their insurance cover unless they actively opt in to retain their cover?

    Background

    These recently enacted changes were the remaining “Protecting your super package” (PYS) measures that did not pass through parliament when the federal election was called in May this year. This second tranche of measures is known as ‘Putting Members’ Interests First’ or PMIF changes.

    Originally announced in the 2018 Federal Budget, the measures aim to address concerns that superannuation balances are being eroded by premiums for insurance that members may not need or may not be aware of.

    The changes add to the already enacted PYS legislation which requires trustees to switch off insurance cover for members if their superannuation account has been inactive (i.e. no contributions or rollovers received into the account) for 16 months or more, unless they opt in to maintain their cover.

    The PMIF changes – what it means for superannuation fund members

    From 1 April 2020, a superannuation trustee cannot provide insurance to a member where:

    • the member is under the age of 25 and begins to hold the product on or after 1 February 2020, or
    • the balance of the product is less than $6,000 and it has not been $6,000 or more since 1 November 2019, unless the member has elected to maintain their insurance.

    Tip – A written direction to retain insurance cover by a member who is either under 25 or who has a balance of less than $6,000 will be valid indefinitely unless their account becomes inactive. Additionally, an election to opt in by a member who is under 25 will be taken to satisfy the opt-in requirement for low balance products, and vice versa.

    Exemptions from the PMIF changes

    Some individuals will not be impacted by the PMIF changes, including:

    • existing superannuation fund members who have opted in or elected to take out or maintain insurance (i.e. had underwritten policies) before 1 November 2019.
    • members of self-managed superannuation funds (SMSFs) or small APRA funds
    • members whose employer makes contributions to a fund on their behalf which cover the full costs of the member’s insurance premiums (on top of superannuation guarantee obligations)
    • defined benefit fund members
    • Australian Defence Force (ADF) Superannuation members (or a person who would have been an ADF Super member if they had not exercised a choice not to), and
    • superannuation fund members engaged in dangerous occupations (see below).

    The PMIF legislation includes a ‘dangerous occupation’ exemption that applies to:

    • emergency services workers, including members of the police force or service, fire service or ambulance service, and
    • fund members who are employed in an occupation considered to be in the riskiest quintile of occupations in Australia (as certified by an actuary based on rates of death, or death and total permanent disability).

    What superannuation trustees will be doing

    Trustees will need to determine whether a member has elected to take out insurance through the fund (i.e. applied for a personally underwritten policy) before 1 November 2019. If so, the member will be deemed to have opted-in.

    Other fund members with account balances below $6,000 on 1 November 2019 will be notified by 1 December 2019 that they will lose their cover on 1 April 2020 if their balance remains below $6,000. Note that cover can be maintained if member elects to retain it, and the trustee communication will set out the opt-in method that may be used (i.e. opt-in via paper-based form, web-based form submitted online, email to trustee, etc).

    What superannuation fund members need to do

    Members impacted by the PMIF changes who wish to retain their cover can do so by submitting a valid election in writing (an opt-in notification) to their superannuation fund prior to 1 April 2020 to maintain their insurance cover. Alternatively, impacted members can also choose to do nothing if they do not want their insurance to continue.

    For advice on superannuation, insurance and financial advice call the team at LT.

    As seen in our Financially Speaking Newsletter

    Source: AIA

  • Recovering from a business setback

    Recovering from a business setback

    Whether it’s the terrible impact from the recent fires, the economy, personal issue or other setback, bouncing back from setbacks is a key skill for business owners as things don’t always go the way they are planned with unexpected situations arise from time to time.

    How a business owner deals with setbacks can be the difference between success and failure. To be successful in your career or business, you need to be able to take losses, grow from them and ultimately become better than before.

    Acknowledge the problem:

    When faced with a setback it can be easy to turn a blind eye or place blame. Denying a problem or shifting blame is unlikely to help you work through it, so it is best to address issues head on. Consider all the factors that may have contributed to the problem, such as external circumstances or weaknesses in the business’ model, and develop a plan of action to address any issues.

    Look at the bigger picture:
    It is easy to lose sight of your vision and focus on the negatives when facing a setback. Instead, think of your setback in perspective of your business as a whole and question whether it will matter in one, five or even twenty years time. Consider the new opportunities that may arise from your setback and focus on moving forward.

    Take action:
    When dealing with a setback it is important to re-evaluate and prioritise your business objectives; this may mean exploring an alternative path or tweaking your business plan. List all the steps you need to take to get back on track. This may mean asking yourself difficult questions or letting go of elements that aren’t working for. Don’t be afraid to seek advice and support from others as they can help you gain perspective and come up with solutions to address the problem.

    Celebrate small wins:
    Perspective is everything. Though a setback in your business dream can dampen your enthusiasm for your ideas, looking at the positives can help you get back on track faster. Each time you experience rejection, you develop a thicker skin which prepares you for your next business venture. If you aren’t feeling ready to restart your plans so quickly after a loss, use that time to plan what your next move will be, how you can take on what you’ve experienced and then use it to better yourself in future business pursuits.

    To discuss your business plans and finances meet with one of our business accountants. Call (02) 4926 2300.

  • Sales Strategies For 2020

    Sales Strategies For 2020

    The New Year is a good time to reflect on the past year and focus on goals for performing better in the year ahead.

    In particular, it is a great opportunity to reflect on your business’ marketing plan and set forward new strategies to hit the ground running. Increasing sales and revenue is usually a top priority for small business owners.

    Utilise customer feedback:
    Asking customers for feedback via customer satisfaction surveys or asking for a referral can help to boost your business’ reputation and also provides insight into what’s working and what needs to be improved.

    Give clients extra:
    Products or services with a limited time offer can help to increase demand. Consider running sales promotions with a set time frame, only selling a limited number of products or offering limited numbers for a service.

    Focus on what you can offer:
    Clearly outline the benefits of using your products or services, whether it means customers save time, money or effort. Using an emotional appeal in your campaigns also helps to better connect with your customers and ultimately drive sales.

    To discuss more sales and marketing strategies for your business call Harlan at Leenane Templeton on (02) 4926 2300 or send an email to marketing@leenanetempleton.com.au