Blog Page 216

Have you considered seasonal packaging?

0

Even though special seasonal packaging has become an important part of the holiday season for many brands, is it always a worthwhile endeavour for smaller businesses?

Getting seasonal packaging right can be difficult and may take a few years of practice which involves making mistakes and then learning from them. Even though it might be an easy way to engage with, and attract new customers to your business, there are still quite a few things that can go wrong.

Getting your business’s numbers right in terms of both demand and distribution is very important for a special holiday packaging initiative. Overestimating customer demand or expectation can end up in a business discounting their leftover products, which can severely eat into a company’s profit margins.

Seasonal packaging is a fun way for businesses to mix up their traditional brand identities, but going too far may lose customers, not gain them. Straying too far from your original or traditional identity may confuse and even annoy customers who may not be able to find your product because it looks so different.

Large businesses can often afford to make mistakes with seasonal packaging. Sadly, many small businesses often do not have this kind of luxury and are usually the ones who have the most to lose from taking this kind of marketing approach.

Clever seasonal packaging can play the deciding factor for a new customer choosing between your product and a cheaper, more generic option. So if your small business is ready to take the risk, all it comes down to is if you’re going to do it, make sure you do it right!

When is the best time to register for GST?   

0

The Australian GST system can appear to be quite complicated for some small businesses just starting out, due to the different types of GST goods and services, such as input taxed, GST-free and GST taxable.

Input taxed items are commonly financial services or products and rent from residential property.

GST-free items are goods and services provided as a part of education, medical and health services, and unprocessed food and produce.

Goods or services that are not classified as input taxed or GST-free are considered to be taxable. These products or services must have GST included in their selling price if the business selling them is registered for GST.

A determining factor of whether a business should register for GST is whether or not they can pass on the GST in the price they charge, or whether their industry’s market determines their product price, meaning GST cannot be added to the price.

Another factor businesses need to consider is whether they are able to increase their selling price to include GST. Businesses who cannot increase price effectively lose one-eleventh of the selling price (which must be paid to the ATO).

Businesses that turnover less than $75,000 a year are not required to register for GST. These businesses receive an Instalment Activity Statement, rather than a Business Activity Statement, from the ATO that advises them of their PAYG tax instalments. The IAS also must have completed the details of amounts paid to employees and how much has been deducted as PAYG withholding tax.

Managing your cash flow over Christmas

0

The holiday period can account for a significant amount of sales for some businesses. For other industries it may be a challenging time of the year, particularly in terms of cash flow.

Businesses can take a proactive approach to managing their cash flow by adopting some of the following strategies:

Invoice quickly
Stay on top of your accounts receivable by prioritising collections and invoicing your clients quickly to avoid chasing up overdue accounts in the new year. Contact problem payers early with a courtesy call to check they have the invoice in their system and remind them of the due date.

Tighten up payment terms
Consider shortening your payment terms or offering Christmas early payment discounts to encourage advance payments. For large sales, you may want to consider a full or part deposit to be paid up front.

Consider debtor finance
Debtor financing is an option for those business owners who don’t want to deal with the headache of chasing up accounts. A debtor financing company takes control over your accounts receivable and allows up to 90% of your invoices to be received immediately. Your customer then pays the debtor financing company and your business pays commision to the debtor financing company. The advantage of using debtor finance is the certainty of payments over the festive season to help create a healthy cash flow.

Pin It on Pinterest

Share This