The Federal Government’s budget measures delivered a raft of benefits designed to encourage small businesses to ‘have a go’. While the $5.5 billion package has been well received, the questions facing Australia’s two million-plus small business owners are two-fold: what does it mean for me and what to do with the incentive?
The budget offers owner-operators an incentive to expand their operation, up skill their team and provide their office with a suite of new tools to enable businesses to operate more efficiently. This is an unprecedented opportunity to re-invest in key drivers of operation.
Optus is in constant conversations with our business partners and we’ve identified a pattern in their responses to this government’s budget proposal. Feedback suggests our partners are looking to re-invest any savings and ‘give-backs’ into their staff and technology. Investments will be geared towards protecting current prosperity while building a solid platform for mid to long-term growth.
There may be owners and sole operators who pocket their savings. The Westpac-Melbourne Institute Small Business Index suggests small business confidence was low, however, this report was released just before the new small business measures were proposed. This budget should provide small business with confidence and an optimistic outlook for future growth.
Two key measures that will benefit small businesses are:
- Immediate tax deductions for individual assets purchased that cost less than $20,000
- The pleasant surprise tax deduction of up to $20,000 opens the gates for companies wanting to invest in their back-end technology. From company mobile devices to data networking to phone systems, small businesses now have a window of opportunity to invest in their infrastructure for future growth. Small businesses would be well advised to enquire as to their eligibility for this deduction.
- The removal of Fringe Benefits Tax (FBT) on electronic devices from 1st April, 2016
- The removal of FBT on electronic devices is great news for small business owners who want to empower staff with the latest ‘anywhere, anytime’ devices, which have the potential to boost productivity and flexibility like a new smartphone or tablet device. From next year it is possible to claim for two devices that were once deemed to be for similar use.
Looking at how small business owners can create a comprehensive plan to support long-term growth, the areas to focus on should include:
Invest in technology
- Investing in more suitable data plans, mobile devices loaded with tools for organising information, collaborating with internal team members and external partners and sharing information like cloud-based services. These tools can improve the team’s flexibility and productivity and assist the business in working smarter and with greater collaboration.
Upskilling yourself and team
- Now is the time to invest in yourself and your team. Many small business owner and operators lack a sufficient support network like a mentor or coach. Also, your team may look for new training opportunities –the local chambers of commerce offers a great place to start research for these courses- and skillsets that have the potential to contribute additional value back into your business. Now is the time to accept these opportunities and re-invest any savings back into the team and progress to the next level.
- With the savings had from this budget, now is the time to review opportunities to invest in front line marketing efforts particularly digital media. Is the company’s website mobile friendly, accurate and up to date? Also, investment into digital media is an economic and efficient platform to attract new customers and keep top of mind for existing customers. However, digital media does still cost and investment in this area should be made with returns in mind.
From conversations I’ve had with small business owners and operators, during my time in SMB, I hear a lot about the challenges faced developing a business while managing a team. The current budget proposal presents small business with an opportunity to look outside the box to find opportunities to spark growth and control greater resources to achieve objectives.
Article written by Reid Meldrum, Head of Small and Medium Business, Optus.
Note: This article is a high-level overview of the recent budget proposals and does not take into account individual circumstances or eligibility under these schemes. Independent professional advice should be sought before making any important financial decisions.