28 November 2017

The Tax Man Takes a Little More!

By Steve Marsten

To all property investors - on Wednesday 15th November, 2017 Parliament passed the Treasury Laws Amendment (Housing Tax Integrity) Bill. This is the biggest change to property investment rules in 15 years .

So an outline of the legislation is that all contracts entered into for second hand properties (purchased for investment purposes) after 7.30pm on 9th May, 2017 will not get Depreciation deductions for existing plant and equipment assets and removable and mechanical assets.

Assets like Air conditioners; exhaust fans, garbage bins; smoke alarms; solar paneling and hot water systems; dishwashers and blinds etc. Note that new additional assets can still be claimed as before along with any capital works carried out on the purchased property after the contract has settled. Assets like sheds; carport or garage extensions and fencing etc.

Also what appears interesting is that contracts signed (but perhaps not settled prior to 7.30pm on the 9th May 2017 do not appear to be affected. Not that there will be many of these.

Commercial property owners and tenants are unaffected by the legislation and should be business as usual. They will continue to claim deductions on building structures (subject to original build dates etc) as well as wear and tear on plant and equipment assets.

Assets affected by the change in legislation may still be useful in reducing future capital gains or increasing capital losses.

And finally the Quantity surveyors will not be out of a job in respect to the need for investors buying new properties or still requiring an assessment on the original build cost for the capital allowance claims. Their property reports are still essential for supporting depreciation and capital allowance claims. Also the cost of getting a Quantity surveyors report on an investment property still remains tax deductible.

So if you have any question on property and tax feel free to ring the experienced team at Sothertons on 4972 1300.

21 November 2017

Passion, Persistence and Patience

By Tina Zawila

If you are in business or are a business student, you have probably heard of the “4P’s of Marketing” – Price, Product, Promotion and Place.  It is argued that executing a marketing mix using these 4Ps is crucial to a successful product offering. 

Today, I want to introduce you to another set of P’s that I believe are just as crucial to launching a successful product offering, and in fact, to operate a successful business:

Passion – I know its cliché, but you must be passionate about what you do and what you can offer your customers to be successful in business.  If you don’t believe in yourself, and your product and service, no one else will! 

Your team must also be on board.  I visited a workplace recently, where the team members were demonstrating a new product that they had been working on and they could hardly contain their pride and excitement – they even had their personal mobile phones out to take photos of the demo!  

Persistence –Again there are many quotes and examples of how success is born from preparation, hard work and learning from failure.  Successful entrepreneurs persist even when they make mistakes or encounter challenges.  They keep trying and accept failure as part of the process.

Patience - Things take time.  There is no such thing as a true overnight success story.  Many instant entrepreneurs have in fact spent years researching, developing and honing their ideas, skills and ultimately their product or service offering.   They have often had to wait for the right time in the market, and then be patient while their product or service is adopted, accepted and embraced by their customers.

At Sothertons Gladstone we support entrepreneurs and business owners throughout their business journey.  Call us today on 4972 1300 and share your passion, persistence and patience stories with us. 

14 November 2017

The “Uber” for banking has arrived!

By Steve Marsten

Recently a bunch of Gladstone Businesses gathered to hear commentary from one of the big four banks. It was quite sobering as he candidly explained why it was necessary for the banking systems in Australia to change.

Currently 80% of all banking transactions is “preferred to be carried out by customers” on the internet. That’s probably true. Busy people do their banking at night. Most transactions and bill payments are currently being carried out via our phones, iPads and Laptops. 
Only 15% of customers “want” to walk into a bank. Clearly we can all see what’s coming. Why would a business maintain heaps of real estate and office space to service 15% of their clientele? AND that portion is shrinking.

What was also interesting is the speed in which Chinese banks are growing around the world. One Chinese financial institution that only operates online, has grown to 200 million customers in  just 2 years and is expected to double again in less then 12 months!

The other economic point is that it costs the average Chinese bank (who only operate online) 4c for every $1 of earnings they receive from customers. It costs Australian banks about 40 cents! Many people already think that Australian Banks are the bogeymen of big business however in the scheme of things they will need to compete in Global markets or face ever declining revenues and customer bases. I know many will say that “we would never use a foreign bank” but the fact is many people in this country are already using European and American banks. When foreign banks are established without the cost of real estate, its obvious to see them making very attractive offers to the Australian Market in the not too distant future that will lure many customers away from their traditional financial suppliers.

One Big bank has copped a hiding for saying that they will be laying of several thousand personnel. I think they are just being honest with their shareholders and their customers. This is going to be the case for all big banks in Australia. The future of the financial industry is going to change rapidly only this time their “Uber” is coming from Asia.

Remember for all your financial business advice contact the team at Sothertons on 49721300.

07 November 2017

Play Together, Stay Together

By Tina Zawila

What are you doing for the Race that Stops the Nation today?  Most workplaces will at least stop for a few minutes to watch the Melbourne Cup, however, many will take the opportunity to take a long lunch or even take the afternoon off.  

Australians all over the country take annual leave to go the Cup itself, or to attend a function or race day locally.  

So what does this lost time cost business and our economy?  Clearly there is a loss of productivity, and for retailers business is slow at best, or even non-existent after lunch. 

However, for employers who embrace the Cup and take the opportunity to reward their team with some extra time over lunch and/or organise a team event/luncheon, what does this do to boost morale and promote employee loyalty?  Often the value of this flow on effect cannot be accurately estimated or measured.

The benefits of a happy and engaged team are often qualitative rather than quantitative however, there is a mountain of anecdotal evidence which proves that quantitative business results improve when employee turnover is low and moral is high.

People don’t leave roles, they leave people.  Looking after your team, offering them regular (even small) rewards will reap significant benefits.  The cost of recruitment is often much higher than the investment in rewarding and nurturing your team. 

Let us know what you do to reward your team.  Call Sothertons Gladstone on 49721300.

02 November 2017

Obstacles to Small Businesses

By Steve Marsten

Small businesses are facing countless obstacles to their success at present - whether it’s performing day-to-day operations or planning long-term growth. From rising office supply costs to the health of the national economy, sometimes prioritising the issues to focus on is a huge challenge by itself.

We should be conscious though that there is no magic bullet in business. What we notice is that most of the things that people worry about are things that they have little or no control over. So, you should prepare for a variety of situations.

Hence the question – Well what situations should business owners be worried about? In a recent 2017 Small Business Survey of over 500 Small Businesses to find out the biggest business challenges they all face.

Here’s a look at those top concerns and how they could help shape your priorities.

Interest rates on funding and access to funding is a major issue. With the four big banks quietly increasing interest rates on many loans during 2017, one wonders what the reserve bank does anymore. Small Business owners are well aware of the banks controlling money rates more then ever and the cost of money is a great concern. Rate hikes have made securing funding for a small business more difficult than it already was. Cash management — and planning it properly — is also a common challenge for small companies and good advisors should be part of your management team to assist you.

Beware the banks offering extraordinarily low interest rates for the sting is in their charges. One of the four big banks appears initially to offer small business owners exceptionally low rates however when you add back the fees they are suddenly on equal par with their competitors. Where you pay more is that the fees do not reduce as you pay down your loan only the interest does hence the banks make more money.

Business owners need to be aware of the terms of any loan, line of credit or business credit card they have and how interest rates could impact monthly payments.

Interestingly, other issues that came up were the health of the National and local economies and the rising cost of health care in this country. That will need to be a discussion for another day.

If you have any questions regarding small business concerns, feel free to phone the team at Sothertons on 4972 1300 for more information.