Business News

Home alone: keeping it from the client

Over half of Australian home based businesses choose to keep clients in the dark about operating from home in fear of losing business, according to a survey of Australian home operators.

The survey conducted by Serviced Offices International found 56.2 per cent of business owners believe prospective customers are hesitant to work with a business that is home based.

Of those businesses that do tell clients, 67.6 per cent said they would never hold meetings at their home office. The top two reasons being that it looks unprofessional (47.4%) and ultimately, is their personal space (30%).

Michelle Mills, Managing Director, Serviced Offices International said: “There are nearly one million people running home based businesses across Australia, but it is no surprise that such a large number keep their place of business a secret. Image is very important, especially for a home operator who has to convince customers that home life will not infringe on the quality of product and service provided.”

The best perks to working from home according to home based operators are the flexible working hours (82.5%), not having to travel to work (68.9%) and being able to live and work from wherever (52.4%).

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My Business: Be prepared for the IR changes

The second phase of the Federal Government’s IR changes comes into force on 1 January and in December’s My Business magazine employment law specialist Robyn Anderson outlines the key elements of the new National Employment Standards (NES) and ‘Modern’ Industrial Awards.

The NES will apply to all employees, regardless of industry, occupation or income and it will see high-income earners receiving statutory entitlements that currently do not exist. Also, Australia presently has over 4800 awards in operation; as of 1st January 2010, these will be disbanded.

In their place will be around 100 new ‘modern’ awards. These ‘modern’ awards are argued as being more streamlined and will remove many state differences, which is a benefit for employers who operate nationally.

The NES include: 38 hours becoming the maximum weekly hours of work; flexible working arrangements for parents; the option of 24 months unpaid parental leave; the introduction of community service leave; long service leave; and the issuing of a Fair Work Information Statement to each new employee.

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Business lending drops away

There was a sizeable decline in the value of new loans taken out by business in October. Figures released by the Australian Bureau of Statistics indicate that value of commercial finance commitments fell by just over 16 per cent from September to October after seasonal adjustment.

The decline follows two prior months of good growth in commercial lending. Personal lending also showed a small slippage with loans and credit cards, falling by 1.5 per cent seasonally adjusted. The seasonally adjusted figures from the Bureau of Statistics showed the value of new housing finance commitments was $23.3 billion in October.

While this was a fall on the previous month, the average economist forecast was for a steeper 2 per cent decline. There are indications that personal borrowing is on the comeback trail after the substantial declines during the height of the GFC. Housing finance figures also showed a 1.7 per cent fall in home lending during October.

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New NSW program for commercialization and export

The New South Wales Government’s agency, Industry & Investment NSW, together with the Australian Technology Showcase have developed a new Innovation Pathways Program that brings together existing and new initiatives to assist NSW organisations that are commercializing innovative technologies.

The Pathways Program was designed to complement Federal Government initiatives such as the R&D Tax Credit and Commercialisation Australia and the Australian Technology Showcase (ATS). It targets organisations with a maximum turnover of $15 million and with innovative technologies supported by intellectual property.

The first stage of the Pathways Program focuses on building commercialisation and export skills and knowledge in a group learning environment, through a one day diagnostic followed by an 8-10 week program of workshops and mentoring. Eligible organisations may include researchers, start-ups and established SMEs.

Following a panel review, the subsequent stage of the program will provide grant assistance up to $25,000, (up to $35,000 for ATS members) to individual organisations, and will be available on a merit basis, where the organisation is able to identify a clear growth pathway with achievable outcomes within 12 months. Assistance may include capital raising, export market planning or development of a technology demonstration site.

The program will be managed by the ATS unit in Industry & Investment NSW. Organisations interested in accessing the program should initially submit a completed expression of interest (EOI) . Further information is at http://www.business.nsw.gov.au/innovation/innovationpathways.htm

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My Business: Learn from your ex-employees

Remember that sinking sensation when a fantastic employee informs you they are leaving – and it dawns on you the negative impact this could have on the running of your business? In the latest My Business magazine Sheralyn Guy, director of HRhelp, offers a number of ideas to ensure that your departing employee becomes an asset and not a loss.

First, she recommends asking for their feedback before they leave. To make this idea work you must create a way for the feedback to be given honestly and objectively. Information from employees leaving your business can be a goldmine of insight into ways for you to improve the workplace for your current employees – and in the process your productivity. In addition, your employees will feel valued and respected if you genuinely seek feedback from them when they leave the business.

Another suggestion is to make sure that you farewell them with respect. It can be a stressful time for everyone when a great employee leaves – especially in a small to medium sized business where team members work closely. But remember, your past employees could also be your future customers and are potential advocates for your business.

If you treat them well when they leave they are more likely to speak positively about your business to others in the future. Throw them a party, buy them a thank-you present and support them in their future endeavours.

Guy also recommends that you leave the door open for them to return. You could save loads of time and plenty of money by hiring a past employee, who is happy to return, rather than recruiting and training someone new. Just remember to update them on your new practices and they will be an asset to your business once more.

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My Business: Tapping into advisory boards

In the December issue of My Business magazine, Kim Mei-Li Dennis, the Chair of SME Boardroom, outlines the benefits of appointing an advisory board.

SME owners usually operate their business using their own limited expertise, experience and perspective. This might be sufficient to help the SME owner achieve their goals. However, an Advisory Board can help make this process much easier and quicker, and less stressful and costly. An Advisory Board provides the immediate benefit of diverse expertise, proven experience, independent perspective and quality contacts.

SME owners are also time and resource poor and need issues to be resolved quickly with minimum effort on their part. An Advisory Board allows SME owners to learn about real issues in real time, and to apply what they have learnt immediately to address the issue at hand.

Advisory Boards may be customised to meet the needs of an SME owner at any particular point of time. The structure, the advisors appointed, method of operation and level of usage can also be adjusted as needed.

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Lawyer warns of increased litigation risk with social media

A leading media and communications lawyer is warning of a dramatic increase in civil and criminal defamation cases against Australian businesses and individuals, due to the lack of awareness and understanding of the legal ramifications at stake for users of social media.

Nicholas Pullen, Partner at TressCox Lawyers, said this threat is potentially holding back Australian businesses from embracing social media in their customer marketing activities.
He said his views are backed by a spate of recent cases where online postings on media such as Twitter and Facebook have resulted in amongst others an employee losing their job, an insurance benefit entitlement being cancelled and a teenager being convicted of criminal defamation.

Given that there are now more than six million Facebook accounts in Australia, Mr Pullen warns the cause for concern and the need for action is significant. “My fear is that these cases represent the thin end of the wedge, and that as social media continues to become an everyday part of our lives, more organisations and individuals will unwittingly find themselves exposed to civil and criminal defamation cases,” he said.

Mr Pullen further points to a recent report published by a global media agency which highlights that many of the global brands in Australia are still hesitant to adopt social media as part of their overall communications strategy. “The report supports the view that companies are aware of social media defamation risks, and that until some of the pertinent defamation issues are addressed, the rate of [social media] adoption at a corporate level runs the risk of stagnating.

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My Business: First impressions do count

The first seven seconds of time spent on your web site is critical for your audience. In December’s My Business magazine online expert, Brad Martens, outlines how to ensure that your site visitors decide to investigate your site further rather than hit the close button during this crucial time.

If the product, service or feature a visitor is looking for isn’t quickly obvious, many people will discard the website and move on. For a more complex business, labelling the click-through points that go to different areas of the site clearly is vital, especially if visitors are specific in the area of service they need. Otherwise it’s like a shopping mall with no directory.

Frequently updated content is important for engaging and encouraging return visits. For new visitors, it adds credibility to the site. To see something recent means there’s something happening here. It’s not a dead, obsolete or seldom visited website. And it’s more likely to have something relevant to look at. For return visitors, the visit may be just a quick check to see if anything new has happened.

The layout and functionality of a home page needs to be flexible and able to adapt to changes in the functionality, content, audience and offering of the website. If the development process has been long, consider revising or revamping the home page at the end. As challenging as it can be, the first seven seconds is critical for every website big or small. Don’t neglect it.

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Construction activity is slowing with fewer new orders

Activity in Australia's construction industry has slowed with fewer new orders and employment numbers dropping in the industry.

The Australian Industry Group’s Construction Index fell 3.3 points to 47.6 last month, in seasonally adjusted terms, below the 50 point level indicating expansion. The November decline was driven by a significant fall in apartment building and a further drop in engineering construction.

The AiGroup's director of public policy, Dr Peter Burn, says further falls are expected over the next few months as the First Home Owners Boost expires totally on December 31. "The survey results reaffirm the fragile state of current conditions in the construction industry which has slipped back from the tentative signs of recovery seen during the previous two months," he noted in the report.

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My Business: Engaging with your employees

A recent survey conducted by consultants Watson Wyatt of 14,000 employees in SMEs has thrown up some very interesting revelations about employee engagement. The study revealed that more than four out of 10 employees are actively considering leaving their current employer.

In this month’s My Business, author and management consultant, Dr Tim Baker, looks at how you can keep your good employees happy.

Generally speaking there are three attitudes that determine an employee’s level of engagement in the workplace. They are desire, cost and obligation. A desire to engage is based on an employee’s emotional attachment to the company. In other words, if an employee can identify with the goals of the business they are likely to feel a desire to engage in their role in providing the products and services to the customer in the best way possible. They are engaged because they ‘want to’. These employees can be further engaged by positive feedback and through the products themselves.

The costs of leaving a business might be perceived as being harmful to an employee. In other words, an employee thinks that by leaving, they may lose their friends and working colleagues or lose bonuses or other financial incentives such as superannuation accruals. They are engaged because he or she ‘has to’. Staff incentives such as long service leave might help engage these staff members.

Some employees may feel engaged through a sense of obligation to the business. In other words, an employee engages with a company because of a feeling of indebtedness. They are engaged because they ‘ought to’. Baker’s tips for engaging these staff members include offering long-term training opportunities.

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My Business: Five steps to email success

In this month’s My Business magazine online marketing expert Joanne Rigby looks at five simple steps to ensure your email marketing campaign is a success. Email is a medium that can be used to market your business economically and effectively. It makes use of a quantifiable strategy that allows you to monitor progress in real-time, while ensuring measurable and ROI driven results. It’s a strategy that’s definitely proving its worth. In fact, a recent Jupiter Research report revealed that email marketing is set to grow at a staggering 75 per cent by 2012, reaching $2.1 billion.

It’s crucial for businesses considering email marketing to also have the right processes, procedures and measurements that ensure a message is interesting and of value to the target audience. How do you create email campaigns that are not only exciting, but will also have high conversion rates? More importantly, how do you ensure that communication channels with your different audience segments stay open and interest is sustained?

Rigby’s five steps will help point you in the right direction when devising an effective email marketing strategy. She runs through how to establish your objectives, define your target audience, build your message, determine your offer and test and measure your results.

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Innovation Ministers adopt national innovation policies

Federal, State and Territory Innovation Ministers have adopted a set of national innovation principles to guide policy development and increase the consistency of government innovation programs across Australia.

“This is a real first for national innovation policy, and a vivid demonstration of governments working together to make all Australian innovation programs efficient and accessible,” said Australian Innovation Minister, Senator Kim Carr about the release of the Framework of Principles for Innovation Initiatives.

“The adoption of these principles by all governments will increase the coordination of innovation program design to ensure that innovation programs are complementary and respond to the changing needs and priorities of Australian businesses.”

Senator Carr said the agreement to build on existing commercialisation capabilities in each State and Territory, through Commercialisation Australia, will further support high-wage, high skill jobs amongst Australian innovators.

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My Business: Beware the ATO Scrooge

In the latest My Business, tax accountant Lynne Russon offers a timely warning about the possibility of incurring fringe benefits tax liabilities when throwing a Christmas party or giving gifts for your employees.

Fringe benefits tax (FBT) is imposed on employers on the value of certain benefits provided by employers to employees and their associates. The current FBT rate is 46.5 per cent. Fortunately, since the raising of the minor benefit exemption threshold from $100 to $300 in 2007, many businesses will be exempt if Christmas is the only time they provide non-salary benefits to employees.

So what are the most tax effective ways for employers to spend on meals and gifts? According to Russon the best tax breaks can be obtained when buying gifts for clients (not employees) and providing light meals (without alcohol) on your premises.

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Litigation on the rise to protect against ex-employees

Employment lawyers across Australia have seen a sharp rise in litigation over the past six months as companies demonstrate an increased determination to aggressively challenge claims from outgoing employees. According to Harmers Workplace Lawyers, this trend is likely to continue, with a predicted increase specifically in restraint of trade litigation.

Shana Schreier-Joffe, Partner at Harmers Workplace Lawyers, said that when economic circumstances were favourable during the boom, companies were more willing to settle claims with outgoing employees on issues such as unfair dismissal and restraint breaches. However, in the midst of the economic downturn, companies have shown that they are prepared to litigate more readily as they actively seek to discourage similar actions from other employees.

Ms Schreier-Joffe said that while employees may still be sceptical about their employment opportunities in the current economic climate, they may be tempted to leave their current employers as the economy continues to strengthen. As this happens, and employees are hired by competing firms, it is likely that there will be an increase in restraint of trade litigation as employers continue to vigilantly guard their assets.

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My Business: Combating your office clutte

In December’s My Business magazine professional organiser Kat Tate outlines the costs to productivity caused by an untidy workplace. According to Tate paper management is the biggest issue facing businesses today, with the average executive wasting an hour each day hunting for papers. For a business of ten staff, this equates to nearly $50,000 each year in lost productivity due to poor paper management.

However, the cost of office clutter is not only lost productivity. It’s buying ink cartridges and stationery that you already have, but can’t find. It’s looking unprofessional in front of clients when you have to rifle through paper piles to find their file. It’s neglecting to invoice promptly or at all. Above all, clutter causes an increase in stress levels, resulting in absenteeism and poor performance, which equates to a loss of income and profit.

It’s not just paperwork that can cause clutter. Virtual clutter can also hinder productivity, as well as cause frustration from not being able to find the location of a saved document or retrieve an important email. Take the time to go through your inbox and take stock of your emails. If you have a large backlog of emails, it’s often easier to move them to an archive folder and start afresh than go through each one.

It should only take ten to fifteen minutes each day to keep your office clear and clutter-free. Place items back where they belong and file paperwork and emails regularly to keep everything organised. The results, in both increased productivity and wellbeing, will be well worth the effort.

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My Business: Learning is the E key

In December’s My Business, Andrew Vincent, creator and producer of the television series ‘Your Business Success’, explains the importance of adopting an ‘entrepreneurial mindset’.

As he explains it: The plumber, hairdresser, accountant, butcher, baker and candlestick maker all wake up one morning and decide they are sick of working for the boss. So they quite their jobs and set up their own business doing the technical stuff they did as an employee. It’s only on the first day in business that they realise that being able to do the technical work has got nothing to do with running a business.

At some stage successful entrepreneurs realise that they ‘don’t know what they don’t know’ and most importantly that it is okay not to know. Often after losing money, going broke, poor health, or whatever, they realised that although they were the best technical person doing the work of the business, that wasn’t good enough. They needed to develop an entrepreneurial mindset and learn how to run the business.

The first step to doing this was to ‘want to learn’. They were prepared to ask the dumb question, employ people better than them selves, delegate to others and ultimately leave the technical work they know so well and move on to the roles of manager and entrepreneur.

Website: www.yourbusinesssuccess.com.au.

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