Professional advice
Small businesses seek the advice of qualified professionals, such as accountants, on a regular basis. Independent professional advice can be very useful in assisting businesses improve their strategic direction and their business management practices, and hence better position businesses for growth.

Marketing

It is important that businesses have a marketing strategy to achieve that increase in sales. We suggest:
• develop an annual marketing plan that is supported by adequate resources
• ensure that there is sufficient cashflow to implement the plan
• understand what your existing and potential customers want
• ensure that any promotion is supported by appropriate stock levels
• have separate strategies for attracting new customers and retaining existing customers
• undertake activities that are measureable

Review your business plan for the changed environment

It is good practice to revisit your business plan and budgets and
amend them to reflect current circumstances. We suggest:
• review the assumptions underpinning their business plan and,
if those assumptions have changed, amend the plan to reflect the changes
• evaluate their performance and incorporate strategies to improve performance
in the business plan
• reflect any amendments to the business plan in budgets and forecasts

Review your cost structures for savings

If a business cannot bring costs under control, or pass increased costs onto customers,
it reduces cashflow and profitability and can impact the future viability of the business.
We suggest:
• reviewing costs, businesses should be strategic when cost-cutting as it is
not uncommon for businesses to cut aggressively
• asking suppliers for discounts and/or changing how and when they deliver stock.
• comparing their cost structures with both past results and other businesses
in the industry to identify areas for improvement

Improve your efficiency

For a business to be successful in good times and bad, it needs to ensure that
the business is operating as efficiently and effectively as possible. We suggest:
• evaluating the current performance of the business by collecting data on business
performance and comparing that performance to previous performance, industry benchmarks
and the strategic goals of your business
• identifying key drivers of the business and setting goals for such drivers
• regularly evaluating the performance of identified key drivers against goals
and identifying areas for improvement.
• implementing strategies from evaluations and monitoring their effectiveness,
and thus adjusting the strategy as necessary

Although business conditions seem to be challenging, opportunities remain likely to emerge.
Small businesses should not turn a blind eye to such opportunities if they are consistent
with the strategic direction of the business, and can be properly funded.

A number of benefits are exempt from fringe benefits tax (FBT). Exempt benefits are not only exempt from FBT, they are also (with one exception) exempt from income tax in the hands of the employee to whom you (the employer) provide them.

Car Benefit

There are circumstances in which private use of a car may be exempt from FBT.
An employee’s private use of a taxi, panel van or a utility designed to carry less than one tonne, or any other road vehicle designed to carry a load of less than one tonne is exempt if their private use of such a vehicle is limited to:

• travel between home and work
• travel that is incidental to travel in the course of performing employment-related duties
• non-work-related use that is minor, infrequent and irregular – for example,
occasional use of the vehicle private use.

For example, a small construction company employee takes the company van (carrying capacity of less than one tonne) home each night because there is no security at the company premises. The only non-work-related use during the FBT year was a trip to pick up some materials and take it to the employee’s home – this use of the van would be exempt from FBT. If the use of the vehicle exceeds the limits set out above, it is a car fringe benefit. All the private use of the vehicle, including the travel between home and work, is taken into account in determining the business percentage under the operating cost method. If no logbook records are maintained, the statutory formula method must be used to value the car fringe benefit.

Living-away-from-home accommodation – expense payments

Rather than paying a cash living-away-from-home allowance to an employee whose duties of employment require them to live away from their normal residence, you may prefer to reimburse the employee for the accommodation expenses or pay these expenses on behalf of the employee – that is, as with an expense payment fringe benefit.
In these circumstances, the payment is an exempt benefit where the living -away-from-home accommodation requirements are met.

Recreational facilities, child care facilities – residual benefits

Recreational or child minding facilities are exempt benefits if the facilities are provided on your business premises for the benefit of employees. Where such facilities are provided on business premises of a related company in a wholly owned company group, they are also exempt.