Let’s face it, when you can manage your finances from anywhere, using your phone to scan receipts and Xero Accounting to code them and store them in the cloud one of the hardest parts of managing a business is taken care of.
We’ve all been able to call, text and email from our mobile phones and use online marketing tools like Google Ads and Facebook for social media so when you finally get your back office tasks migrated to the cloud it’s easy right? Well, that’s what the marketing hype says anyway, but things aren’t that rosy really, are they? Continue reading Learning Xero Will Help You Run An Online Business
I’ve been speaking to an ex-corporate employee from the US lately and we were talking about buying an online business. It’s something that I have spoken with people about a lot but it seems to be more relevant now that we’re all stuck at home!
The common words online business buyers and sellers use are “drop shipping”, “affiliate marketing”, and “advertising revenue” and they are synonymous with Google and Amazon. It’s little wonder these companies continue to grow during the Covid19 crisis, but there is lots more to consider.
Airtasker is an Australian success story in the Gig-economy for individuals who want their own micro business doing odd jobs for other people. Just like Uber, Ebay and other online marketplaces they leverage their digital marketing and brand to help individuals find clients and customers – for a fee.
Airtasker and marketplaces are a great place for people who want to start their own business but these systems fail when a better alternative comes along.
EMPLOYEES IN GERMANY have the world’s shortest work week, according to SME Magazine. Their work week averages just 26 hours due to strict workplace relations laws that promote a healthy work-life balance.
Sweden is also known to have implemented a 6-hour workday, or 30-hour work week, following research which has found that countries with shorter working hours generally have higher disposable incomes, greater productivity, and a stronger economy as a result. How can you do this in Australia?
These factors combined produced a bottleneck effect in the job market, which made it difficult for certain workers to advance their careers, while others, typically young graduates, struggled to gain a foothold in the job market at all.
THERE IS A FAIRLY SIGNIFICANT gender imbalance for executive positions in the corporate world. Sure, there are notable exceptions, but men in managerial positions in the workplace still outnumber women two-to-one.
But when you look at some industries, like Bookkeeping, the numbers are massively swayed towards the female gender and one of the reasons is it can be the perfect business to run from home.
ONLINE INDUCTIONS ARE WIDELY used for contractors who visit building sites or any other site where they perform work that can be risky, like plumbing, electrical, HVAC, roofing, security etc.
Many inductions are delivered manually by a qualified staff member (usually in the WH&S department). Usually any person in the organisation or business who hasn’t yet been inducted will be notified about the forthcoming induction and urged to attend.
THE TRADITIONAL REAL ESTATE agent model is being challenged by disruptor sites like BuyMyPlace and Purplebricks. These sites are offering homeowners low-cost way to sell their homes and agents are increasingly having to be open to different ways of operating.
I was looking for a roofer to do some work for me recently. The first roofer I spoke to said he could solve my problem for a flat $1200; estimating the work could take between one and two days. Another roofer I spoke to, and ultimately ended up hiring, said he would charge me his $600 a day “day rate” until it was fixed; it only ended up taking one day.
How much time do agents spend selling your home?
Like Rome, a home isn’t sold in a day. Depending on the property and its location it could take anywhere between four and six weeks; quite likely less, but sometimes more.
But an agent doesn’t spend every one of those days working on your property. They spend portions out of their day working on it. An agent will often have three or four listings at the same time so they’ll split their time among those listings, while also chasing down leads for new listings.
Consider the Purplebricks method
Purplebicks has determined that it will cost between $4,500 and $6,000 to appoint one of their “property experts” to sell your property. Although they’re licensed real estate agents, they don’t call them that, because the service is different. (Buyers arrange inspections and make offers through the Purplebricks “property portal,” which homeowners also use to make appointments with buyers and accept offers.)
The Purplebricks fee, which is payable regardless of whether the property is sold or not, covers the cost of an agent-appraisal, all the marketing and advertising costs, as well as conveyancing. But the homeowner does the rest via the Purplebricks property portal software.
Find an agent that’s willing
If you’re prepared to pay an agent for the time they spend working on the sale of your home, regardless of whether it’s sold, you might find one that’s willing to alter how they’re paid. More real estate agents are trying to be as transparent about the process as possible, and this is just one more way that they can be.
Sweeten the pot by breaking the process down into phases (a four-week campaign may have two; a six-week campaign three) and pay them once each phase has been reached, like you would a builder. You can even add another sweetener: a bonus if the agent sells your home over a certain threshold.
For the agent, the upshot is getting regular money (which is good for their cash flow), rather than waiting until the property is settled.
Some jobs are small and straightforward, while others are blow out and become time consuming and fiddly; some work is complex and requires fine detail, while some work is basic and low level.
Managing ones’ time and figuring out how to price for different kinds of work is always a challenge in the successful running of any business.
Our EzyStartUp Course teaches you how to use digital and social media marketing to attract enquiries, how much to charge, and how to clearly define the work to be done. We explore productivity tools like Google Gmail and Calendar to help manage time, improve sales and customer service, and how to manage the change in your charge-out rate depending on what clients are willing to pay in the market.
However, I’m going to talk about it again because there are still too many talented people out there who don’t think they have what it takes to go into business for themselves. And I’m here to tell you, you do, and we’ll help you!
Register as a National Bookkeeping licensee before 30 June
As it’s nearing June 30 and the end of this current financial year, it’s a great time to kick-start your own business, by registering to become a National Bookkeeping licensee. Their license fee is a hundred percent tax deductible due to the large component of training courses included in the fee, so if you register before the end of June, it can go towards reducing your taxable income straight away.
The reason I became interested in National Bookkeeping is because I felt it provided just enough structure for new business owners to get their business off the ground, but also the right amount of flexibility for those business owners with the desire to take their business (and incomes) to the next level by providing addition services, such as content marketing, virtual assistant services, or even financial planning.
I think that in order to be successful in business and for your business to have longevity, you need to be open to new opportunities and to be able to constantly update your business model and offerings. Particularly now that we’re in an age of great technological change, staying abreast of changes to the way people work and do business is the key to staying in business, period.
…Now that we’re in an age of great technological change, staying abreast of changes to the way people work and do business is the key to staying in business, period.
New technologies mean new opportunities
There are many business analysts and economists who see the reduction of permanent jobs as a bad thing – and to some extent, they’re probably correct – but I see it as an opportunity. New technologies have made it easier for people to work at home, wherever their home may be – a city, a beachside town, outback Australia – so long as they have access to a reliable Internet connection.
Now, people who have previously been excluded from the job market have an opportunity to earn an income. That’s great news for workers and for the economy, and it’s why the government has spearheaded a move to encourage working from home, or teleworking as it’s officially known, among businesses and their staff.
We continue to need bookkeepers
Bookkeeping is a necessity for all Australian businesses, as it’s a fundamental requirement of Australian tax law to keep accurate business records. Hiring a contract bookkeeper to take care of their business’s bookkeeping allows business owners to go out and find more work and grow their business, rather than having to worry about keeping up with all of their administration and book work.
With continued training your business grows as your client’s business does too
As their business grows, the bookkeeper will become busier too and they may even be asked to provide more services – BAS services, tax services, financial planning and advice, even one-to-one training — the list goes on. The more training you have, the better you’ll able to service this client yourself and the more business you’re business will grow as a result. (Want to read more about what’s required to become a registered BAS agent?)
It’s not uncommon for a bookkeeper to start out providing simple data entry and reconciliation services to business, and then wind up providing full financial advice and planning services, providing, of course, they’re qualified to do so. And these are qualifications you can acquire while already providing services to clients and earning an income.
When you become National Bookkeeping licensee, you’re free to continue your studies so you can eventually progress from a bookkeeper through to a financial planner and adviser, and with clients to help them grow their business, just as you did yours.
TAX TIME IS NIGH and it might be a good time to think about whether there are any assets your business may need, and try to get them in before June 30 rolls around. Whether it’s new computers, tablets, office furniture, a new car — as long as each item costs less than $20,000, you can deduct it immediately, rather than depreciating it over time, as was the previous method for assets over $1,000 in value (depreciation still applies for asset purchases above $20,000) — but only until and including 30 June 2018.
The small business tax breaks were introduced by the Abbott-Hockey government, but having already been extended, they will cease on 30 June 2018. Following this date, any big ticket assets for your business (and of course there are some exceptions) can be used to reduce your taxable income immediately.
Pick an asset, any asset…
There are a lot of items you can deduct, with the exception of some small items, such as horticultural plants, software that’s allocated to a software development pool and some capital works, which have special depreciation rules. If you’re not sure of what you can claim, it’s wise to ask your account or financial adviser first, particularly if you have a penchant for horticultural plants (perhaps try artificial ones?), otherwise make sure to keep your receipts!
After 1 July 2018, the asset threshold will reduce back to $1,000. After then, any asset purchase you make that’s greater than $1,000 will have to be depreciated, using the traditional methods of depreciation, which you can read about in this blog post.
Australia is a services nation
While you’re thinking about starting a business, don’t forget to consider starting a business within the leading four service groups, identified by Australia’s Chief Economist Mark Cully:
Professional and support services
Information and communications technology (ICT) and the digital economy
Trade, transport and logistic services
Professional and support services, in particular, is currently experiencing a phase of high growth, largely because starting a business in this sector is both low risk and cost. Most businesses operating within the professional and support services sector are home-based, providing vital services to other businesses located across Australia and, sometimes, the world.
Starting Your Own Bookkeeping Business
One such profession currently in high demand is bookkeeping, specifically BAS and tax services. As more and more Australians start their own businesses, there becomes a greater demand for bookkeeping, BAS and tax services. EzyLearn recently partnered with National Bookkeeping to help registered BAS and tax agents to start, growth and develop their business, by becoming National Bookkeeping licensees.
Can you make real money by selling stuff on Amazon?
NOW THAT AMAZON has launched in Australia, one of the hottest work-at-home opportunities is to become an Amazon seller, especially if you become part of the “fulfillment by Amazon (FBA) program”, which is due to launch in Australia in 2018, along with Amazon’s “fresh” program.
In the FBA program, there are no upfront costs, and sellers don’t hold any stock or have to worry about shipping products to customers — they just have to find items to sell on Amazon.
How the FBA program works
Amazon collects products from sellers and stores them at their fulfillment centres (currently, just one centre based outside Melbourne, with another planned for Sydney). When a product is sold, Amazon ships it to the customer.
Amazon fees and charges are subtracted from the sale (sellers only pay Amazon to collect items and bring them to the fulfilment centre, not to ship to customers) and the remainder is deposited into an escrow account for a few weeks before it’s released to the seller.
Amazon vs. eBay
The Amazon FBA program is unlike any offering on rival marketplaces. Besides, not dealing with the logistical side of selling products online, Amazon sellers don’t create product listings and don’t deal with customers in any way.
By contrast, people who sell items on eBay are not just responsible for holding their own stock and shipping it to customers, but they also deal with customers every step of the way — from questions about the product through to shipping and disputes. It’s a time consuming process.
It’s similarly time consuming for buyers, who have to navigate a minefield of listings and seller pages; checking prices, shipping and seller ratings to make sure they’re getting the best deal. On Amazon, you search a product, click on the listing, and decide to buy. It’s as though you’re buying directly from Amazon.
Will the Amazon model work in Australia?
Amazon’s FBA program (and its marketplace in general) has been extremely successful in the United States (Amazon’s share price is trading above $1,100 U.S., after all), but the U.S. is a huge and very different country to ours. Each state has different sales taxes; prices for simple household items like toothpaste can vary state-to-state, and there are hundreds of large- to -medium department stores that operate in some states, but not in others.
The Australian market is far more homogenous. We have one national sales tax (GST), prices are fairly uniform across each state and territory, we have a half dozen department stores, and they operate nationally; we’re also a much smaller market.
Since Amazon’s launch in December (it’s FBA program hasn’t launched yet, though there are plans to), most shoppers reported being underwhelmed by the offering — it was limited, expensive, and shipping times too long. Items were often more expensive on Amazon than to purchase elsewhere. This could just be teething issues, due to the rushed launch, but it could be illustrative of how the Australian retail market had prepared for Amazon’s impending launch by tightening up their own offerings, and making it a lot harder for Amazon sellers to compete.
How to find goods to sell
People go to Amazon to find items they’d traditionally find at a department store, only much cheaper. That’s Amazon’s game: cheap. If you’re going to sell goods on Amazon and be successful at it, you need to be really good at procuring items that are in high demand, but can be sold far cheaper than anywhere else.
Amazon is the place you go to for books, music, DVDs, household appliances, shoes, clothing, toys, and so on. It’s not the place for unique one-offs — you want that; go to Etsy. Or if you want it secondhand, then eBay, Facebook Marketplace or good old Gumtree. On Amazon, you sell anything, whether you have a personal interest in it or not; if there’s a margin that’s favourable, sell it.
On Amazon, you sell anything, whether you have a personal interest in it or not; if there’s a margin that’s favourable, sell it.
Most people who sell on Amazon in the U.S. make money by engaging in retail arbitrage (an Amazon app lets sellers can scan the barcodes of items in retail shops to see whether it’s worthwhile reselling them on Amazon), but this would be hard to replicate in Australia.
Retail stores in Australia have higher prices due to the cost of employing staff. We have a national minimum wage remember, and the U.S. does not. In some U.S. states, the minimum wage is as low as $6 an hour, while others may be as much as $12 an hour. In California, where people earn $12 an hour, goods in shops cost more than in a state where people earn $6 an hour. This presents an opportunity for Amazon FBA sellers in the U.S. that is unlikely to ever exist in Australia.
How do you make money?
There are lots of online training courses promising to train you in the ways of Amazon’s FBA program. Some even promise to help you find inventory that’ll always be profitable — typically private label items, rather than via retail arbitrage — and teach you the dark arts of Amazon promotion — so you’re one of the top sellers on the site. (This has nothing to do with seller ratings, which don’t exist on Amazon.)
Starting out with private label items can be dicey, and it’s probably only a good idea if you’re already selling your own items on eBay, but you’re looking for an easier alternative. Again, Amazon is a good place to sell books, video games, clothing, toys, etc; handmade jewellery, clothing or furnishings: not so much.
A “recognised employer” is an organisation that’s partnered with an industry association and made a commitment to the professional development of their employees. The CPA, for example, says on its website that becoming a recognised employer will help firms attract top talent and provide training to their staff.
A mutually beneficial relationship
Organisations partner with industry associations to become recognised employers because it gives them access to the association’s members, the majority of which are often looking for work.
In turn, the organisation is attractive to members because it has the association’s endorsement. And the industry association usually gives its recognised employer partners access to discounted training for their staff.
Because of this relationship between organisations and industry associations, members will often hear or see the term “employer recognised” used by their industry association. It’s basically the inverse of “recognised employer,” and it’s not unique to industry associations.
This gives students and employers the flexibility to choose when training will take place, rather than being restricted to a specific time and place, as occurs with face-to-face training.
It also means, we’re able to deliver lots of different courses, simply by making them available to each organisation and their staff, who can then study multiple courses successively or concurrently. This would prove quite difficult to organise if training was being delivered in person.
EzyLearn is the preferred choice for dozens of companies because our courses are structured to let students choose when to study and the pace at which they’ll complete the coursework. Students can jump back and forth between the modules, studying the most relevant portions first before going on to complete the rest of the course.
Thousands of students study with EzyLearn to find work
Besides working with employers to help maintain their employees’ professional development, EzyLearn is also the training organisation of choice for thousands of students who wanted to refresh their skills to find work. Nearly all of those students went on to find employment, while many others either started their own businesses or added to their skills while already running a business. Our website has an abundance of testimonials you can view which show how people of all ages, from all backgrounds, have used the EzyLearn online training courses as a springboard to find work, start their own businesses, refresh their training and many other applications.
For students looking to start their own bookkeeping business, it is worthwhile taking a look at EzyLearn’s partnership with National Bookkeeping. Individuals who join National Bookkeeping as a bookkeeper receive help starting their own business — through lead generation, marketing and promotion — in addition to software and digital marketing training to ensure their business’s longevity in the marketplace.
Will your business be able to stand up without an earnings guarantee?
WHEN YOU START A NEW franchise business, you may be offered what’s called an “earnings guarantee” or “income guarantee” for a period of time after you first start the business. It usually lasts the first six months but it could possibly last as long as a year.
Earnings guarantees are designed to help people transition from having a salary to being self-employed, by providing them with a top-up payment each month if their sales fall short; peace of mind for those would-be business owners, concerned about all the “what if’s” that come with starting a new business.
Most franchisors offer some kind of an income or earnings guarantee, though the amounts and thresholds for when they kick in can differ business-to-business. It’s important to note than an income guarantee is merely a promise of sales revenue for a particular period of time, based on the average amount other franchisees earned in the past. And it in no way reflects what your business will earn in the area you’re looking — you may well earn more, but you may also earn less — nor is it a customer guarantee, as some franchisees may be required to carry out promotional work or make-good work for other franchisees in the event there are no leads available.
Consider the following earnings guarantees at these businesses:
Reliance Roof Restoration: A roof restoration, replacement, painting and guttering services business based in Brisbane, and became a franchise in 2011 after nine years operating throughout Queensland. It offers new franchisees a $75,000 (net) income guarantee for the first 12 months.
In other words, if you only earn $45,000 in the first year, they’ll kick in the additional $30,000. It’s not clear how frequently payments are made to franchisees — whether they’re fortnightly, monthly, quarterly, or annually — though the director of the Franchise Advisory Centre Jason Gehrke told Franchise Business that “profit guarantees tend to be assessed at the end of 12 months or at the end of the financial year.”
Cafe2U: The mobile cafe business developed a “Cafe2U Acceleration Package”, which provides new franchisees with a two-week income guarantee of $500 a day (or $2,500 a week). It’s paid to franchisees at the end of the two week period, but the business claims hardly any of their franchisees ever end up claiming it because their daily sales always exceed the $500.
Hire-A-Hubby: Australia’s largest handyman business, Hire-A-Hubby implemented an earnings guarantee for certain franchise packages it offer — there’s gold, silver and bronze packages available. The business offers new franchisees a $125,000 per annum gross earnings guarantee for the first 12 months.
To receive the earnings guarantee, the franchisee must work a minimum of 45 hours per week (a minimum of 8 hours a day), and must accept whatever leads are provided via head office. If no leads are available, the franchisee must perform whatever marketing or promotional activities that are assigned to them by the Hire-A-Hubby head office; franchisees may be asked to perform “rectification work” to other franchisee clients. The income guarantee is paid each fortnight. The business also offers a “buyback” guarantee to franchisees whose businesses are never profitable, despite following the franchise agreement to the letter.
After the income guarantee ends
Jason Gehrke from the Franchise Advisory Centre cautions potential franchisees against selecting a business based on the income or earning guarantee provided, which he says can provide a false sense of security.
“If franchisees are conditioned to receive top-up payment from the franchisor when sales are low,” he told Franchise Business, “they might not understand just how financially self-reliant they need to become.”
“A person who is used to clearing $1,000 per week may not realise that the promised sales turnover of $1,000 a week will not have the same spending power … Business expenses such as taxes could leave them with less cash for their mortgage repayments and other fixed living costs than they were expecting.”
A franchisee consistently claiming their top up payments each fortnight for the duration of the income guarantee indicates a couple of things: a) they underestimated how much work is involved in generating new business and sustaining it; or b) the territory they operate in isn’t going to generate enough leads to be profitable.
If it’s the latter, that’s often the franchisee’s tough luck. Many franchisees who bought Dominoes and 7Eleven businesses found that the franchise model would never be profitable enough to pay them a living wage, never mind cover the costs of employing staff. That resulted in one of the Australia’s biggest and most systemic instances of worker exploitation, which led to a Senate inquiry that subsequently found the company was liable to pay workers a total of $4.3 million in underpaid wages.
Do your due diligence!
At the end of the day, earnings guarantee or not, you’re still buying a business. Prospective franchisees should look around at two or three franchise models and do their due diligence — research the market, test how much demand for the business there may be. Just because a business says there are franchise opportunities in a particular area doesn’t mean the business will be viable there.
And look beyond the earnings guarantee to what the rest of the franchise agreement offers. Remember that an income guarantee is usually built into the upfront franchise fee, so a business that doesn’t offer an income guarantee but has lower entry costs might be a better option.
“I call [income guarantees] a ‘capitalised form of working capital’ and you might be better off keeping the money and controlling it yourself,” Gehrke said. “My recommendation is to make an assessment of any income guarantee as part of the overall decision-making process, but not the deciding factor.”
There’s never been a better time to start your own business!