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Hear from successful business owners and industry experts on how to tackle the new year, build your brand and grow your business.

Give your business plans a workout

To help you develop a plan for a successful business year, we’ve listed out three useful questions for you to ask yourself.

Question 1: What does my business want to achieve?

It’s a simple and obvious question and it is crucial that whatever activities develop out of it align with your mission statement.

A risk that many businesses run is that they can get distracted from their mission and fail to achieve what they set out to do.

Question 2: How is my business going to achieve it?

While there are always a multitude of activities that will have a really good impact on your mission, the challenge is that there are rarely enough resources to execute those activities.

This is where it pays to be absolutely ruthless. To determine which activities you will do, rank them by their ‘impact to mission’ against their ‘return on investment’.

Question 3: How will I measure success?

By how it positively impacts your business mission, or by how it supports ongoing operations.

Useful performance measures will do one of the following things: track how close you are to achieving your goals or identify options to address problem areas. Use these criteria to define your own performance measures, then rate your progress against them at the end of your planned period.

Next Steps

The end of the year is a great time to pause and reflect on how successful the year really was. It is also a great opportunity to plan for future success. By defining a clear plan with measurable goals, you are setting your business up with a roadmap to help navigate the twists and turns that the coming year will bring.


Buff up your digital advertising

Yearning for the ‘good old days’ of simple advertising decisions? The days before the enormous fragmentation of media? You’re not alone - most business owners are. In fact, one of the greatest challenges businesses face today, compared with 5 years ago, is how they use digital advertising.

The challenges of keeping up to date with changes in digital advertising and social media are enormous. Most feel that this is a ‘dark art’ and privately confess to struggling to keep up to date. However, what ALL business owners agree on is that promoting business IS important.

Some businesses thrive in the new online world. We heard this from a retail manager with 8 full time employees:

“The beauty of digital is that it’s so great to track – you can see the exact return on your spend”.

While others pointed out that using digital channels offer the same challenges as traditional media.

“We do a bit of it but it’s the old story – we all know that half of our advertising spend is wasted. But which half?” (Mechanic with 6 full time employees).

So what can you do about this?

  1. Ask trusted staff what they think of your advertising.
  2. Ask customers how they found out about you.
  3. Monitor what your competitors do.
  4. Monitor the effectiveness of every advertising initiative as well as you can.
  5. Simply be attuned to the fact that what worked before may not be working now.

Many small to medium-sized businesses struggle to keep up with the changes that online advertising presents them with. However, by challenging yourself to understand it more thoroughly, you open your business up to improved promotion and increased revenues.


Businesses that power through Christmas

George Andreou of Lugarno Seafood Restaurant takes us through his Christmas day.

For me, working over Christmas is a regular occurrence. It marks a period when our patrons are winding down to spend the festive season with family and loved ones. Because Lugarno is a venue for a dining experience, not just a business, Christmas Day gives us the opportunity to provide a festive feast of fresh Aussie seafood.

We start preparing for Christmas mid year, making sure that the 25-30 staff we rotate will be ready. Chefs, kitchen staff and waiters must all be capable of performing their roles.

As we specialise in the highest quality local seafood, menus have to be ready at the beginning of November so I can begin sourcing and placing orders. This is also the time we begin our social and traditional promotions.

Christmas Day starts with the Head Chef and kitchen staff at 8.00am, floor staff and myself are on deck by 10.00am and the day usually ends before midnight.

Christmas dinner at home this year is for all our family and overseas friends. I will arrive home to about 30 people when the merry making will be well under way. I will be exhausted, but I always celebrate with gusto!


Start shaping up for 2017

As we move into 2017, the national economy is ticking over at a reasonable pace but with wide differences between the States and Territories. The ‘two speed’ economy is still with us but the players have changed. Job growth and activity are now strongest in NSW and Victoria while Queensland, Western Australia and the Northern Territory have moved down a gear. The ACT, South Australia and Tasmania appear to be set for ongoing modest growth.

Key issues for 2017 will be trends in interest rates, the Australian dollar and population growth. The shape of the Federal Budget will also impact on business and consumer sentiment.

Interest rates are at historical lows and seem set to remain that way for the next while. If the economy slows and inflation remains well below 2.0% then the Reserve Bank could well nudge its cash rate below its current level of 1.5%. An RBA cash rate of 1.0% is possible in 2017 if there are hiccups in the global economy as well as persistent, extremely low inflation in Australia.

The Australian dollar is well down on the levels it reached five years ago. This has given a boost to international student enrolments, international visitor numbers and agricultural exports. If the US lifts interest rates during 2017 there could be downward pressure on the Australian Dollar which would further lift activity in Australia.

Population is a driver of economic activity but varies widely between the States and Territories. Western Australia, South Australia and the Northern Territory are expected to see softer population growth than last year. New South Wales, Victoria, Tasmania, Queensland and the ACT should see stronger population growth in 2017.

The Federal Budget is always a source of uncertainty. In 2017, it seems unlikely that the Budget will provide a boost to business activity, with further spending cuts forecast.  

In summary, we should expect ongoing low interest rates, modest economic growth, a potentially weaker Australian Dollar in the first half of 2017 and the usual uncertainty around the Budget.

Words by Chief Economist, Hans Kunnen.


Give your networking skills a lift

Effective networkers have a killer advantage over many of their business rivals. Key business connections often come from the owners ability to network and Christmas parties offer the perfect opportunity to build on that list. Here you’ll find advice that will enhance your networking abilities.

Effective networking starts before you arrive at the event. Set yourself a measure for success and while at the event manage your time and stick to your goal. That way, you’ll be sure to get what you need.

 Throughout the event, maintain a positive attitude. Small groups of 1-2 people are easier to engage. When you’re approaching them offer a smile and a confident handshake. As with all business interactions, first impressions matter.

Avoid the temptation of getting comfortable with friends. The opportunity to improve your network can pass you by. Pre-prepare a conversation starter and ender as it makes it easier to back out of a conversation without offending anyone.

Once you have made some connections at the party (or if you are attending the party with a friend), ask if they will introduce you to new people. It’s much easier to get talking once you have a mutual connection.

Finally, position yourself near the bar. Hanging around the food and drinks is an easy way to get introduced. You’ll find approaching someone in this way is less confronting.

You are now ready to make the most of networking opportunities this festive season. Remember to maintain a positive attitude, utilise your connections and strive to achieve goals at your next event and you are sure to expand upon your business network in a positive and meaningful way.


Fit in a recovery holiday

Taking a break from the day to day running of your business for a holiday is a tough choice. However, holidays can be a benefit by inspiring creativity and helping you refocus. Below, we’ve listed three family friendly travel destinations that offer year round rejuvenation and provide you with insights to implement in your business.

Japan – A lesson in hospitality

Thanks to unrivalled hospitality, Japan offers the chance for relaxation and inspiration. From the most expensive hotels to the modest setting of a local McDonalds, Japan oozes with valuable business lessons.

Take note of omotenashi, the Japanese term for hospitality. It has developed Japan’s reputation as being the global benchmark for exceptional service. Omotenashi is hospitality that’s extended with the utmost sincerity, grace and respect no matter how small the task.

Once you’ve finished admiring the service, get away on a 300km/h bullet train to the northern island of Japan - Hokkaido. The gateway city Hokadate was voted the most attractive tourist destination in the country. Go skiing, or, in the summer months try hiking, climbing and camping.

Dubai – An innovation hub for technology

Located between the crossroads of Asia, Africa and Europe, Dubai is a city that leverages its unique geography through its innovative use of technology.

Keep an eye out for The Internet of Things. A movement that connects all devices, from electronics to buildings and cars. It influences the way every business connects and transacts with their customers. All of this combines to make service more efficient and provides you with the opportunity to take advantage of the changes occurring to technology at home.

Once you’ve picked up some ways to streamline your business efficiency, take advantage of the 25C winter weather. Have fun with the kids in Legoland’s half-million gallon wave pool or on the Dragon roller coaster, designed to speed along at 60km/h. Fun for the whole family.

Rejuvenate in South East Asia

Apart from improving focus and reducing stress, rejuvenating could help you organise your time better and be more satisfied in your day to day business decisions. South East Asia offers plenty of opportunities to experience rejuvenation in a way that suits your lifestyle.

Treat yourself to a beautiful ocean view spa, glide through the air on a flying trapeze or practice your yoga postures on the beach on Bintan. Just a short ferry ride away from Singapore.

If you’re looking for a family getaway Phuket offers the perfect escape. Stay at one of the many resorts the island provides and experience the Pearl of the Andaman Sea. Splash around on the pristine beaches and savour the fresh cuisine from around the world in a variety of hip and trendy restaurant and bars.

Bali offers the perfect mix of leisure and fun. Be amazed while snorkelling on the coral reefs, hike to cliffside temples or unwind at one of the many yoga and meditation retreats.

Whether you’re looking to get away with the family or hoping to get some inspiration for your business, feel reassured in the knowledge that your holidays can be productive.


The workplace workout

Working at a desk all day can lead to your health taking the backseat. So, to give your body a boost, we’ve put together an office friendly workout.

Cardio:

Stairs
Instead of getting to work via the elevator, take the stairs. To really get your legs pumping take 2 steps, every other flight.

Walking
Get out more, take a stroll, host walking meetings or hold meetings within walking distance of your workplace. Before getting to work consider walking an extra stop for public transport.

Legs and glutes

The invisible chair
With your back against a wall, bend your knees and slide your back down the wall until your thighs are parallel to the floor. Sit and hold for 30-60 seconds. You can even do some reading while you’re there.

Standing
Make the most of opportunities to stand up. Phone calls or meetings are great opportunities for standing.

Shoulders and arms

Wall push-up
Stand one to two feet from a sturdy wall and place your palms flat against it, so your arms are parallel to the ground. Now bend your elbows and perform the first half of a push-up. Hold for two seconds. Use your arms to return to your starting position, completing the push-up. Perform 12-15 reps.

Chest, back and neck

Shoulder pinch
Roll back your shoulders as if your shoulder blades are holding a pen between them. Hold for 5-10 seconds and release. Complete 15 reps.

Shoulder shrug
Raise both shoulders up toward your ears, hold for 5 seconds then relax. Repeat for 15 reps.

Core

Oblique Abs
If you have a swivel chair, lift your feet off the floor, hold the edge of your desk and use your abs to swivel the chair from side to side. Swivel 15 times.

Abs Squeeze
While sitting at your desk take a deep breath and tighten your abs, then bring your abs towards your spine as you exhale. Stay squeezed for 5-10 seconds and repeat for 15 reps.

Start out by picking one or two activities that suit you before moving onto the full session. And remember, next time you’re working a big day you don’t have to skip your exercise.


Dive easier with AirBuddy

Many people are discouraged by the complexity, logistics, cost or the sheer weight of SCUBA gear. This inspired Jan Kadlec to devote the last three years to inventing AirBuddy.

The world’s smallest and lightest diving gear

AirBuddy is a battery-powered, portable dive compressor that floats on the surface above the diver, providing 45 minutes of dive time to a depth of 12m, without air tanks or a BCD.

Winning the St.George Kick Start Competition 

A friend of Jan’s encouraged him to take part in the St.George Kick Start Competition and, in Jan’s words:

“We were fortunate enough to get chosen from over 400 applicants for the finals. Then came a once-in-a-lifetime opportunity to pitch AirBuddy at the TEDx Sydney 2016. In front of a prominent jury, a live audience and probably tens of thousands of viewers online. An absolutely amazing experience and massive exposure for a small start-up like us!

The thought of compressing our story into a 1-minute pitch and delivering it in front of such a huge audience was daunting at first, but, thanks to the support of St.George, the coaching skills of Stephen Feneley, and a rehearsal at the VIP dinner with St.George business clients – we nailed it.”

A big deal for a small start-up 

Imagine how he felt when AirBuddy was announced as one of the winners. Says Jan: 

“Such an enormous blast of positive energy and appreciation was truly magical for the whole AirBuddy team. With St.George’s support and their generous prize, we will be able to further invest in AirBuddy and increase our online presence to build a strong customer base of early adopters for the product launch.

Thanks again St.George for all the great work supporting start-ups on their journeys to bring new innovations to the world.”


Federal Election & economic update

Will the Federal Election result prove to be good for small business?

After a marathon election campaign, uncertainty still lingers given the Coalition party has only a slim majority and may face a battle in the Senate for policy changes.

Some good news for small businesses?

A number of Budget initiatives have been positive for small businesses in recent years, like an instant depreciation write-off for assets costing less than $20,000 and a cut to the company tax rate for small businesses implemented in last year’s Budget.

This year, these measures have been extended and broadened. The Coalition is proposing to lower the company tax rate over 10 years to 25% for all businesses, and the accelerated depreciation has been extended to businesses with turnover under $10 million.

While not universally supported, what could be good news for small businesses is that there may be support for tax cuts for companies with a turnover of under $10 million.

Longer-term questions

There is also the broader question of addressing Budget repair over the long term. This task is even more difficult with a diverse Senate – as any spending cuts or revenue increases will face some opposition.

Credit ratings agencies are threatening to downgrade Australia’s credit rating if these issues are not addressed soon. While a downgrade would be unlikely to result in a significant impact on borrowing costs in the near term, it could potentially harm confidence – and that has a knock-on effect to business of all sizes.

Global issues continue to dominate our headlines, too, and Australia will invariably be affected by these. So the short-term picture isn’t as rosy as this time last year, but as we’ve seen so far this year, things can change in an instant.

It does look like those clouds will be hanging around for a while, though.

Janu Chan, Senior Economist

St.George Banking Group


Digital tech and you

Leveraging the benefits from digital technology

The benefits of digital technology include reduced cost, faster cash flow and a great customer experience. Here are some insights into key trends, and some tips on leveraging technology.

Choosing payment technologies 

Always start with the customer. Consider how they like to make payments, and how any technology will improve the transactional experience within the business.

For example, customers are demonstrating a significant preference for online payments and, when they are in a store there is a preference for tap’n’go style payments. The same considerations should also apply for business-to-business transactions.

How to leverage value out of technology

In a lot of instances, businesses only use a portion of the technology available to them. At one end of the spectrum are strategic considerations such as the ability to use the data collected from technology in a profitable way. At the other end of the spectrum are practical, operational functions that the technology can support the business with, such as:

  • Easily making payments to suppliers and staff over Christmas
  • Increasing limits for seasonal purchasing to enable customer direct entry files to be authorised
  • Enabling additional payment authorisers to cover annual leave commitments
  • Future-dating direct entry files to ensure they are not missed during peak periods

To discuss the right technologies to support your business, and how to get the best out of the technology, contact your St.George Relationship Manager or visit your local branch.


Moving to a cashless society

In 2005, 73% of all transactions conducted in Australia were completed using cash. Fast forward to 2013, and that number was just 59%. According to the Australian Payments Clearing Associations (APCA) July 2014 study, the trend indicates that only 43% of transactions will be conducted using physical cash by the year 2018.

What’s driving this trend?

There are a wider choice of payment methods, which are convenient and easy to use and have driven down the cost and time of transactions. Coupled with this, is the Australian consumer’s readiness to accept new methods of payment – and the potential benefits to business.

Cost savings

In December 2014, the Reserve Bank of Australia (RBA) released a paper titled ‘The Evolution of Payment Costs in Australia’, that said: “While cash has traditionally been the least costly method available for small payment values, developments since the previous study indicate that electronic payments are increasingly able to offer a low-cost alternative to cash.”

Greater productivity

The same RBA paper indicates that contactless payments take approximately five seconds less to process than a traditional cash payment. If you make 1,000 transactions in an eight-hour period, that would be a saving of 1.4 hours per day in productivity time, or an extra 63 days over a full year.

Extra security

Historically, retailers have significantly invested in security for cash based transactions to prevent potential theft. Cashless payment technologies can potentially remove the need for some of these security measures, as the transaction happens digitally and records of each transaction are maintained.

Improved administration

In addition to reducing many of the security issues, cashless payment methods could improve the administration of the business. All cashless transactions are recorded and can be reconciled to the businesses settlement accounts.

To find out more about cashless payment solutions, contact your St.George Relationship Manager or visit your local branch.


May we live in interesting times

What a year 2016 has been so far. Uncertainty has been elevated in many parts of the world including China and Europe. According to the IMF, we are still in a period where economic growth has been “too slow for too long”. The struggle to boost growth has resulted in extraordinary measures by central banks around the world.

Brexit and beyond

We do not know what impact the Brexit vote will have on our economy. There is early evidence that confidence and activity have been hit in the UK. However, the UK is our 13th largest trading partner, and should therefore have limited implications for the Australian economy. The risk of a negative impact via financial markets is also low, given that sentiment in financial markets has recovered fully after the vote. 

Record low Australian interest rates

In Australia, the RBA lowered interest rates to a record low in August, even though the Australian economy is growing at its fastest annual pace in 3½ years. It would seem that Australia is a stand out, but there are underlying issues masked by this strong economic growth. Income growth is weak and there is still a major drag from the downturn in mining investment.

Maybe things aren’t that bad…

Despite the risks, the domestic economy is not in bad shape. There is growing evidence that the non-mining sectors are recovering. Surveys continue to indicate that conditions among businesses are above average and that investment intentions are picking up. These provide good prospects that jobs will continue to grow. The low Australian dollar and low interest rates are still providing support. We may be far off from boom times, but we continue to expect that the Australian economy can maintain a moderate pace of growth.


Lease or loan? A car buyer’s dilemma

If you’re thinking of getting a new vehicle, there’s a lot to consider. Whether it’s a personal treat, a much-needed upgrade, or a family essential, you want to make the best financial decision.

A lease: how does it work?

A lease is a long-term agreement to finance the use of a car for a fixed period of time. At the end of the agreement, you can either re-finance the residual amount and continue leasing, or pay the residual value of the lease to gain full ownership of the car.

A financial lease 

With a financial lease, the car’s residual value is set upfront. At the end of the term, most financers will consider an offer for the set residual value, however, they are not obligated to accept it. 

A novated lease

A business can lease a vehicle on behalf of their employee. The responsibility of the lease lies with the employee and the payments will be made from the employee’s pre-tax income. This reduces their taxable income, and as a result, the income tax they pay.

You can choose between a novated finance lease (where just the vehicle is leased), or a fully maintained novated lease (where the vehicle’s running costs are also included in the lease).

The pros

  • Preserve your cash flow: A lease usually requires no down payment, and you’re able to get the car right away without making an initial cash outlay.
  • Benefit from lower repayments: Because you’re only paying for a portion of the car’s full value, leasing repayments are usually lower than loan repayments.
  • Give your employees a leg up: Novated leases reduce your employee’s pre-tax income, so they pay less tax. Plus, they get a new vehicle for work and personal use. 
  • Trade in for a younger model: You can update the motor vehicle you’re leasing every few years.
  • Avoid maintenance costs: If you choose a fully maintained novated lease, the maintenance and running costs are included in the lease.

The cons

  • Lack of ownership: Leasing does not give you ownership of the vehicle. This means you can’t make any modifications, and have to either return the car at the end of the lease or pay the residual still owing.
  • The Fringe Benefit Tax: Vehicles leased through a novated lease attract Fringe Benefit Tax. The amount charged for the car depends on its cost price or operating costs.
  • The lessor’s residual value: The lessor has the power to set the residual value at the beginning of the lease agreement. Regardless of the car’s worth at the end of the lease, you still have to pay the agreed residual value. 
  • Ramifications for early termination: Terminating a lease prior to the end of the term can incur significant costs. 

A loan: how does it work?

A loan helps you finance a new vehicle – enabling you to purchase it. You pay the entire cost of the car, as well as the interest rate determined by the lender.

The term of a car or personal loan can vary, but is generally between 12 months and 5 years.

Secured vs unsecured loan

You can choose a secured or unsecured loan. The difference is, with a secured loan, you offer an asset – such as the car you’re purchasing – as security for the loan. If repayments aren’t made, the lender can repossess or sell your asset.

The pros

  • Ownership of the vehicle: Financing a vehicle with a loan means you have ownership and can make any desired modifications.
  • Options to reduce your repayments: You may be able to structure your payments to reduce your ongoing loan repayments by making a residual or balloon payment at the end of the finance term.

The cons

  • Facing higher repayments: Loan repayments are generally higher than leasing payments, as you are paying to purchase the entire vehicle.

What’s right for you?

Different options suit different people – so it’s best to look at your current financial situation and needs before choosing a loan or lease. Speaking to a financial adviser or accounting professional may be a great place to start.

The articles represent the views of the authors and not necessarily that of the Bank. You should seek independent professional advice before acting on any matters set out in the articles. 


Give yourself an EOFY check-up

Strategies to help you get your EOFY business affairs in order.

1. Consult your accountant – now

The first big mistake many businesses make is failing to truly engage with their accountant or financial advisor. This interaction should go beyond mere compliance and tax return submissions to include growth and cash-flow strategies – according to Peter Langham, chief executive officer of business finance specialist Scottish Pacific. He believes owners of small and medium-sized entities, in particular, often focus on their work in the business at the expense of working on business strategy. “So they can miss opportunities,” Langham says.

2. Take advantage of a $20,000 asset write-off

Businesses with annual revenue of up to $2 million can take part in a generous government write-off scheme for plant and equipment purchases. Alex Duonis, ‎principal tax consultant at Crowe Horwath Australia, says the accelerated depreciation measure applies to all asset purchases up to the value of $20,000 and can significantly reduce the amount of tax a business will pay. He warns, though, that it applies to acquisitions from May 2015 to June 30, 2017, after which the limit will revert to $1,000. “So there’s quite an opportunity now to get that accelerated deduction,” Duonis says.

3. Maximise any other deductions

Aside from the write-off scheme, businesses should take advantage of other legitimate deductions. This may include bringing forward deductible expenses such as office supplies, repairs and maintenance into the current year, or prepaying monthly costs such as rent, electricity, wages and utilities before 30 June. 

4. Write off bad debts

Ensure you write off any bad debts before 30 June and prepare minutes documenting the debts and all efforts you have made to recover them, otherwise they cannot be claimed this financial year. This action also enables adjustments for any GST charged on the invoice.

5. Comply with your superannuation requirements

Getting organised on the superannuation front is a must. Super is not tax deductible until it has been paid, so it is important to ensure all super contributions for employees are completed by the end of the financial year. 

Business owners should also consider making concessional contributions into their super fund to take advantage of tax benefits (contributions are taxed at just 15 per cent). The limit is $30,000; or $35,000 for those aged 49 and over.

The June 30 deadline is also approaching for employers with 19 or fewer employees to be using SuperStream, a standardised format for transmitting superannuation data between employers, funds, service providers and the Australian Taxation Office. Larger employers should already be using SuperStream.  

6. Understand how to manage cash flow

A common error, Langham observes, is injecting too much cash into superannuation to take advantage of tax breaks while not appreciating the potential impact on the business’s cash flow. Then the business can feel the pinch on 1 July.

7. Check your trust obligations

The use of trust structures has come under scrutiny from the ATO, so it is important to understand your obligations. There is a requirement for the trustee to sign off on the distribution of income to beneficiaries before 30 June. If a valid distribution does not occur before 30 June, there is a risk that the accumulated income will be taxed to the trustee at a penalty rate.

8. Consider any capital gains tax benefits

If your business has made a capital gain in the current financial year, it makes sense to assess ways to minimise the tax on those gains. For example, you could include selling assets that have incurred a capital loss to offset those that have made gains.

One change of which many business owners may not be aware stems from the Small Business Restructure Rollover Bill 2016. The change allows small businesses to alter their legal structure without incurring a CGT liability, with the bill applying to the transfer of assets occurring on or after 1 July, 2016.

Words by Cameron Cooper

The articles represent the views of the authors and not necessarily that of the Bank. You should seek independent professional advice before acting on any matters set out in the articles.


Economic update

The past few weeks have seen several events that impact upon the outlook for businesses. The Reserve Bank cut interest rates, the Australian dollar has declined, the Budget announced tax cuts for businesses, a Federal election was called and inflation statistics were lower than expected. So what now?

The rate cut by the RBA should reduce pressures on mortgage holders and other holders of debt. This has the potential to lift demand in the economy, from retailing through to home construction and business investment.

The RBA’s cash rate is at historical lows and could go a little lower given that inflation is below the RBA’s 2-3% target. With wage growth low, it seems unlikely that inflation will rise sharply. This suggests that interest rates will remain lower for longer.

The weaker Australian dollar (AUD) will continue to boost tourism activity and international education, two of our largest service exports. The lower AUD lifts costs for imported inputs but will make some businesses more competitive against imports.  We expect the AUD to end the year around US 74 cents.

The Federal Budget saw tax cuts for smaller businesses, higher taxes on tobacco, changes to superannuation and a change to one tax bracket. There were numerous other small changes that will affect people to varying degrees. Overall, the Budget remains in deficit with little improvement over the past three years.

The official unemployment rate has drifted below 6% assisted by slower immigration and good job growth over the past six months. A stable or growing labour market can lift consumer sentiment and consumer spending.

The Australian economy has not fallen into recession for almost 25 years. At present, growth is modest as we adjust to life after the mining construction boom. That process, in some regions, is proceeding more smoothly than others.

Words by Chief Economist, Hans Kunnen.


Harnessing the power of cash flow

No matter what business you’re in, cash is king. Without a healthy cash reserve, a growing company could struggle with the simplest of task, like paying bills, employees or unexpected expenses.

For most businesses, the time between paying your suppliers and employees, and collecting from your customers is the challenge. The good news is, there are some simple steps you can take to improve your cash flow by delaying outlays and encouraging customers who owe you money to pay faster.

Here are eight simple steps to improved cash flow management:

  1. Make it simple for your customers to pay you by:
          - Providing your bank account number on your invoices
          - Asking for direct credits or automated payment options
          - Accepting EFTPOS and credit cards
          - Setting up a PayPal account on your website
  2. Offer discounts to customers who pay their bills promptly
  3. Ask your customers to make payments at the time orders are taken
  4. Do a credit check on all new non-cash customers
  5. Sell your old and outdated inventory
  6. Issue invoices promptly and follow up late payments early
  7. Track accounts receivable to identify and avoid slow-paying customers
  8. Establish a policy of cash on delivery if possible

Small business technology – what’s in store for 2016

With more and more business tasks being automated, the physical and manual jobs which were once part of running any business are disappearing. You no longer have to store and file documents in physical form – it’s all in the cloud – nor do you have to do the books or accounts in the same ponderous way.

SMEs are being presented with new ways of doing business every day.

And in 2016, we will see even more innovation. Craig Rispin, of Sydney-based Future Trends Group, notes the rise of what he terms “machine learning apps” – new neural technologies using artificial intelligence to imitate human thought processes.

In the US, IBM’s Watson and Kira Systems’ Diligence Engine are examples of neural machines designed to do contract work for you. They can analyse credit card statements, peruse mobile phone plans and rate a contract’s cost-effectiveness. “These tools tell you: you’ve paid too much for one product, here’s a better one,” says Rispin.

One neural-based function expected to come from Google this year is part of its “Inbox by Gmail” app. Known as Smart Reply, this tool can analyse emails and produce intelligent replies which match the tone and content of the mail you received.

“Many small business owners devote hours processing email – and it doesn’t make them any money,” Rispin says. “You simply give this app permission to read the mail and it gives suggestions on how you should reply – just tap ‘reply’ and move on.”

But it is in the cloud where the biggest changes are occurring. New enterprise resource tools can run everything from HR to invoice management and stock inventories.

Sholto Macpherson, a technology commentator and journalist, cites Chaser, a new debt management system which sends out reminder calls for IOUs. There is also a new wave of business intelligence dashboards, such as Crunchboards, which collate financial, customer relationship management and sales data and displays on one dashboard. “You can get KPIs from lots of areas in the business,” says Macpherson.

Macpherson also predicts big changes in the human resources arena. Employment Hero, pioneered in the US by a company called Zenith, is one example of a new wave of centralised, cloud-based platforms used to process HR activities. It covers recruitment, contracts, performance records, time and attendance, payroll and more. It claims to provide all of the tools and resources that small businesses need to hire the right people, all on a single management platform.

And, according to Macpherson, it’s even thinking of offering the service for free – with the condition that clients sign up to the app’s employment benefits scheme.

There’s the catch – once on the benefits scheme, Employment Hero has the opportunity to plug loans, insurance and superannuation products. So there is a quid pro quo. If you want the app to be free, expect to be besieged by advertising.

Another tech development built for SMEs is POSlavu, a point of sale tool which can drill into the workings of a restaurant /cash business – right down to the types of food/items ordered, the invoices issued and payments made.

There are also intelligent invoicing systems like GeoOP, Akounta and Cin 7 – the latter a one-stop shop which can be used for sales and inventory management. It even works as an online ecommerce store. All flow seamlessly into the Xero cloud accounting system, which tells you what’s been paid, what is being depleted and the monthly sales needed to remain profitable.

What’s for sure is that the technology developments of 2016 promise to revolutionise the world of small business.


A spotlight on Candles by Diana

Diana Ramljak shares her experiences after becoming a St.George Small Business Champion.

I’m Diana Ramljak, owner of Candles by Diana and one of the St.George Small Business Champion for Sutherland. Winning the competition helped me fulfil my dream of opening my own pop up shop for my beautiful range of scented soy candles. As the candle industry is becoming more competitive this was a great opportunity for me as a new business owner to showcase my candles in my local area. I really couldn’t believe my luck.

My shop was set up at the Sutherland branch where I had a breathtaking display that was perfect for my candles. Throughout my month there, the St.George staff members were very supportive in their effort to get my name out into the local area and they brought as many people as they could to my store to check out my candles. I had a wonderful time meeting the customers, and was delighted to receive so many compliments about my candles.

It’s really encouraging for a small business owner like me to be given so much support by St.George bank and their staff. I had an unforgettable time at the branch – seriously, I couldn’t have promoted myself this way, as I wouldn’t know where to start. 

The experience has helped my business grow and I now even have customers calling and ordering online. However, like most businesses, there are good days as far as sales are concerned and there are not so good days. And although starting a small business hasn’t been easy, I haven’t stopped reaching for my goals. I would like to say to small business owners out there, it’s hard in the beginning but believe in your product and yourself. Thank you to St.George for helping my small business grow.

Diana Ramljak

Reflect, celebrate and plan for 2016

The end of the year and the holiday season is just around the corner. So before the silly season kicks in, now’s a great time to plan for ways to end 2015 with a bang. Here’s what you could do:

1. Reflect on your 2015 goals and set new ones.

What could you have done differently? Use the lessons you’ve learned to set new goals and plan what you can do to better.

2. Recognise achievements.

Working hard towards reaching your business goals is important. However, celebrating and acknowledging your success and the achievements of your staff is just as important. It helps boost morale and makes all the hard work worth it.

3. Get your invoices in early.

Between Christmas parties, annual leave and finishing off the last few jobs for the year, it can be a busy time for suppliers. So get your invoices in early to help ensure a steady cash flow right into January 2016.


Free eBook about making business fun

Running and growing a business isn’t just challenging, it can be an overwhelming and frustrating experience even for the most seasoned business owner. This is the very reason why we’re introducing you to the third book in The Ten Truths Trilogy – “The Ten Truths of Making Business Fun” by small business coach and author Roland Hanekroot. In his book, Roland inspires us with his passion, experience and insights, which you can apply to every stage of your journey as a small business owner.

All three books in the trilogy, which is also available in audio book format, are free to download here.

Note from the Author: Roland Hanekroot

Roland Hanekroot


I really hope you enjoy ‘The Ten Truths for Making Business Fun’, the third book in my Ten Truths Trilogy.

In my 30 years of owning and running various small businesses, I’ve often felt overwhelmed, alone and daunted. I think most small business owners have felt that way from time to time, and some never get past it.

But over the past 10 years as a coach and mentor, I’ve learnt what it takes to move out of that feeling of being overwhelmed, and this book has grown out of that learning.

The reason why this book is available for free is because I’ve made it my mission to help as many small business owners as possible to feel great about themselves and about their business – by making business fun. I hope you find my book useful. Please feel free to send me any feedback, comments or questions. Good luck.

Cheers,
Roland Hanekroot


Helping Aussie mums build businesses

As part of our ongoing support of the AusMumpreneur Network – Australia’s leading community for mums with small businesses – we’re proud to be a part of the 2015 AusMumpreneur Awards. These awards celebrate amazing women across Australia and the success they’ve had at balancing a business with being a full-time mum.

AusMumpreneur has been a key partner in initiating a new $1 million grant program from the Queensland Government.

Grants of up to $5,000 are available to help entrepreneurs with young children develop their businesses. A limited number of grants are available.


Keeping your eyes on the big picture 

It’s easy to get caught up in what’s going on in your own business and forget about what’s happening around you. Keeping yourself in the loop can give you an overview of the wider business world, so you can take advantage of the changes in the business environment to help you to stay ahead of the game.

A simple and effective way of assessing the environment around your business is by conducting a basic PEST analysis. A PEST analysis helps you understand four key areas in the macro-environment:

  • Political or legal e.g. revised government policies or new legislation
  • Economic e.g. changes in the inflation rate or interest rate adjustments
  • Social e.g. changes to consumer preferences and the environment
  • Technological e.g. advances in technology and new digital developments

These factors can have widespread impact on local and global economies. Small businesses still have an opportunity to take advantage of the ever-changing external environments. The first step is to take the time to identify what’s happening in the world around your business. Then find ways to harness these changes to help you plan for your business’ future.

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The information contained in this report (“the Information”) is provided for, and is only to be used by, persons in Australia. The information may not comply with the laws of another jurisdiction. The Information is general in nature and does not take into account the particular investment objectives or financial situation of any potential reader. It does not constitute, and should not be relied on as, financial, investment or taxation advice or recommendations (expressed or implied) and is not an invitation to take up securities or other financial products or services. No decision should be made on the basis of the Information without first seeking expert financial and/or tax advice. For persons with whom St.George has a contract to supply Information, the supply of the Information is made under that contract and St.George's agreed terms of supply apply. St.George does not represent or guarantee that the Information is accurate or free from errors or omissions and St.George disclaims any duty of care in relation to the Information and liability for any reliance on investment decisions made using the Information. The Information is subject to change. Terms, conditions and any fees apply to St.George products and details are available. St.George or its officers, agents or employees (including persons involved in preparation of the Information) may have financial interests in the markets discussed in the Information. St.George owns copyright in the information unless otherwise indicated. The Information should not be reproduced, distributed, linked or transmitted without the written consent of St.George. 

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