For some businesses, their biggest threats may come from changing government funding or regulations. It is vital to keep your finger on the pulse of what is happening within your industry and take active steps to plan for these so they have the smallest impact possible on your business. For example, in agriculture, adjustments in water allocations/availability or new rules about land clearing can be game changers. Changes in minimum wage or penalty rates can have major implications for a business' bottom line.
Changing political climates may also mean some businesses may want to reconsider their business model. For example, we were recently talking to a friend in the United States who works for a major environmental consulting firm. She was telling us that several years ago, the company she works for identified that almost 100% of their contracts were coming from government sources and they realised that this was a major threat to their business. They then started more actively pursuing work in the private sector. Given the Trump administration's major cuts in funding for environmental projects, they are glad that at the moment they only rely on such contracts for about half of their revenue as if they were still working almost entirely for government clients, they would likely be closing their doors in the near future.

While we would all like to assume that people will keep supporting our businesses, there are always market threats out there which businesses must be aware of and make provisions for if they want to continue to grow and thrive. Many businesses will see changes to their customer base over the life of the business. For some businesses there may be demographic changes to your customer base. For example, imagine your business provides parts to tradespeople. If you realise that the majority of your best customers are older, primarily sole-operators that are likely to retire in the next five years, it is urgent to start today to recruit additional younger customers who will fill this void as others retire. If you have good relationships with your existing customers, they may even be able to help you by referring others, but you may have to invite them to talk about your business to their friends and colleagues.
Alternatively, you may provide goods or services which are only relevant to your customers for a particular period of their lives (e.g., baby goods, children's sporting activities). It is critical that you have a thorough understanding of who your customers are, how you are best to engage with them, how long they may need your products or services and what events
or situations would cause them to no longer be your customers.

Learn why your customers come to you

Once you have identified who your customers are, the next step is to figure out why they come to you as opposed to other competing businesses.
Do they come to you out of habit or loyalty?
Is it because you have the cheapest prices?
Do you offer a superior level of customer service and care?
Do you offer something that nobody else in your local area provides?
Identifying why your customers come to you will help you find the strengths of your current business model so that they can be built upon in the new financial year. If you are unsure, you can always start asking them to get a better understanding of what your business may be doing well.

Learn who your customers are

While it is easy to get caught up with the day to day running of your business, it is vital that you never forget that it is the customer who is keeping your business alive and well. Hence, at the beginning of the financial year, one of the first things to review is who your customers actually are.
How many customers do you have?
Are they generally one-off purchasers or repeat customers?
What are their demographic characteristics?
Identifying your customers' traits and preferences is the first step to figuring out how you can service them better.

Looking forward to the new financial year

Now that your wild end of financial year celebrations are winding down (okay, maybe only accountants do that), it is time to take stock of your business' current financial position and review your business plan. Over 2,500 years ago, the Greek philosopher Heraclitus was credited with penning the quotation "The only thing that is constant is change." Looking to the 2017-2018 financial year, it is not just the taxi industry that has had to adapt as new competitors and ways of doing business enter the market. Retailers in Australia have the expansion of Amazon. Hoteliers have the rise of sites like Air BnB. Within smaller regional areas, even the opening of a new competitor to the market (e.g. coffee shop, restaurant, mechanic, IT consultant, medical practice) can significantly impact on existing businesses. Only businesses that are nimble, in touch with what their customers want, and financially sound will continue to grow and prosper.  Over the coming weeks I'm going to be posting advice on how you can review your current operations to give yourself the best chance of success this financial year.

Happy New Financial Year

The team at C.T. Harris & Company would like to wish you and your family a happy and prosperous New Financial Year.  It is now time to start putting your New Financial Year's resolutions into action.  However, have you set yourself the right goals?  Remember, goals must be SMART (Specific, Measurable, Agreed Upon, Realistic, Time-based).  Best wishes.

With the end of financial year only a few days away there is limited time left to make donations to deductible gift recipients.  The benefit for the recipient is that they receive funds to continue their good work. The benefit for you is that you may be able to claim the donation as a tax deduction which results in you having less income tax to pay for this financial year. 

As there are a lot of worthy causes to choose from we recommend that you consider organisations which provide critical support.  While some organisations have significant marketing budgets and are well known there are others which you may not have heard of which provide great assistance in your local area.

Some of the organisations which we support are: Beyond Blue, Camp Quality, Cancer Council, Capricorn Rescue Helicopter, Doctors without Borders, Edmund Rice Foundation, Endeavour Foundation, Guide Dogs Qld, Horse Riding for Disabled, Leukaemia Foundation, Mater Hospital Appeal, Qld Meals on Wheels, Red Cross both in Australia and International, Royal Flying Doctor Service, St Joseph's Cathedral Conservation Fund, State Emergency Service Queensland, Shelter Box Australia, Spinal Cure Australia, Spinal Injuries Association, Sporting Wheelies and World Vision. 

Ensure that you receive and retain receipts for any donations made. 

The amount you give is totally your decision. 

As businesses usually only pay tax quarterly, it is very easy for large tax bills to arrive unexpectedly and this would have a negative impact on your cash flow.
This can cause great stress to business owners and can potentially threaten their operations if a significant amount of their working capital has to be paid to the Australian Taxation Office. 
Tax planning helps business owners know in advance what their tax obligations will be so they can budget accordingly.

At the end of the financial year, it is worth reflecting on what has gone well for your business and what can be improved. 
The tax planning process provides you with detailed information, allowing you to know how your business fared throughout the year.
This information can be used to make improvements in the coming year and to consider ways that staffing and operations can be best adjusted to account for likely periods of high and low activity. 

As a business owner, it is important to make sure you plan for your retirement.
Making contributions into Superannuation are a great way to reduce your taxable income while building up your retirement nest egg.
To be able to qualify for a deduction for a superannuation contribution there are a number of conditions which need to be met.
Also your taxable income and availability of cash are also considerations. 
Tax planning is a good way of reviewing your taxable income to determine if putting more money into superannuation is beneficial for you.
To benefit from this for this financial year you will need to act before 30 June, 2017 so if you need assistance on determining whether this is suitable or not just let us know and we would be happy to assist.