Common ways of borrowing

Customer Service  We formed the Barcaldine Business Council in the 1980s. At one stage we had over 100 financial members. A record 68 members attended one night-time meeting. The two big issues on the agenda were “buy local” and “customer service”. All members pledged to buy from each other wherever possible. Our main goal was to persuade people to buy local. After a number of years, it became apparent that only (at a guess) 15% of people would almost always buy local. The figure had hardly moved from what it was before our buy-local campaigns. Even members were not buying from other members causing some resentment. We learnt a lesson. No matter how much work we put into the campaigns, in the end most people buy in their own best interests. It took a further while to understand that this is how it should be. People can only live their best lives if they act in their own best interests. We should not want people to live less than their best lives in our town. This is a bitter pill for businesses to swallow. It means that local businesses somehow have to convince consumers that it is their best interests to buy locally. In some cases, this is just not possible. There are better deals elsewhere. However, there are strategies which can at least improve the odds. (I understand that it is difficult for small business owners. 75% of them earn less than the average wage and 43% make no profit at all, despite working long hours with no leave entitlements and often no super. There is no magic wand. I hear you. I know that the strategies below are easier to write than they are to fulfil. Do what you can and I hope it helps. Let me know). Customer Service Outstanding customer service reaps rewards. Do not give customers a reason to look elsewhere. They might stay elsewhere. Convenience It is not only a material world, it is a convenience world. Barcaldine has thousands of products and services that you can access in a few minutes rather than waiting for the item to arrive from a distant city. Sometimes the shop assistant will say “We are out of stock but we can have it here next Wednesday”. In most cases, that is still far more convenient than ordering online. Consistency It is not an ideal world. If you break a leg, you might also have to break some promises. The goal is to get as close to reliability as possible. Nobody is perfect all the time. However, based on anecdotal evidence, consistency of opening hours, products and services seems to be the number one issue with consumers. A very common comment is “We don’t care what the opening hours are as long as they are consistent”. Courtesy A hairdresser once said to me “We have to be the world’s most hypocritical people because we agree with everyone”. She was on the money, but it is not limited to hairdressers. It applies to everyone. You do not have to betray your own beliefs to be a sympathetic listener. You do not have to curtsey to be courteous. I remember buying two flat pack-chairs from the old Meacham and Leyland. I could not work out how to screw them together so I went back to Chook to ask him. We knew each other well enough to have a go at each other so, in a spirit of playfulness, Chook called out to a shop full of customers “Look at this clown. He can’t even screw a chair together” All the customers chuckled a big haha and I said haha too but not quite so big. It turned out that I had bought the last of those flat-pack chairs so I drove home to get one of them. After some head-scratching, Chook said in a small voice “Oh we gave you the wrong screws”. At this stage I wanted to say “OH YOU GAVE ME THE WRONG SCREWS” but when I looked around, all the customers had gone. I was literally the only customer left in the shop. Theoretically, therefore, there could be people still living in Barcaldine and perhaps their descendants who are of the opinion that I cannot screw a chair together. That was sixty years and five months ago. It’s water off a duck’s back to me. I expect to shrug it off shortly. The point is, some take offence more easily than others. You can not only lose a sale if you offend a customer, in a small town you can lose a customer for life and in some cases, you can lose a whole family. “The customer is always right”. We all know that is a load of hogwash, but would you rather show him the error of his ways or take his money? Cooperation Do try to buy in town wherever you can. The seller might become your customer. What goes around comes around in different ways. If you shop out of town, take the freight into account. Sometimes single item freight is many times the freight if the item is on a pallet or one of a bulk delivery. Communication Communication = Sender – >Message –> Receiver. Be a sender and a receiver. As a sender, let people know your opening hours and your products and services in as much detail as possible. You cannot be too detailed. As a receiver, listen closely to what your customers want. Ask them. Do not limit your products to the ones you like. You can do that in a big city but not in a small town (unless you have a very special product). Cast your net Obviously, if you are in the food business you cannot sell Friday lunches to people in Brisbane, but if you work on a computer or sell special products or services, utilise the internet. If only one person in a million in Australia likes your offerings, you have 24 customers you would never have had otherwise. There are success stories. I wish success to you all. I’m not sure my wife thinks I can screw a chair together. By Lionel Walsh

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Capital gains tax and holding costs  Did you know that if you sell an asset such as a vacant block of land, you can add holding costs such as rates, insurance and loan interest to the cost base when calculating the capital gain or loss. You can only claim these holding costs if they were not deductible in any year. For example, if the property was rented out at any time, the holding costs related to the time it was rented cannot be included in the cost base even if you did not actually claim them at that time. These holding costs can even be used to create a bigger capital loss, which you can use to reduce the tax on other capital gains in the current year or in future years.

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How to claim tax deductible expenses as an individual

Energy Bill Relief Fund: How do you claim relief? In March 2025, the Government announced an extension to the Energy Bill Relief Fund for every Australian household, and around 1 million eligible small businesses. This rebate on your energy costs takes effect from 1 July, with a $1.8 billion extension of the Energy Bill Relief Fund for the six months leading up to the end of 2025. How big will your energy rebate be? The rebate will be up to $150 and will be payable to all Australian households and small businesses that meet the eligibility criteria. Who is eligible for the rebate? 1. Households: Australian households are eligible for the relief if you receive an electricity bill and are connected to the grid. This includes households in the external and non-self-governing territories and will apply until the end of 2025. 2. Small businesses To qualify, your small business must meet the state and territory definition of an electricity ‘small customer' for your state and territory. This is defined by your annual electricity consumption threshold. If you’re eligible, you should receive the rebate. How can you claim your rebate? Rebates will be automatically applied to your electricity bill in two $75 quarterly instalments. You shouldn’t need to take any action to make use of the rebate. You can find out more about eligibility for the small business energy relief here

Accounting basics: the profit and loss and balance sheet reports Understanding your finances is a vital part of managing your business. The profit and loss report and the balance sheet are key reports in this regard. What is your profit and loss statement? Your profit and loss statement is commonly called your P&L, but is also referred to as your income statement or statement of earnings. It is a full breakdown of your company’s revenue (money coming into the company as sales and other business income) and your expenditure (direct costs, overheads, expenses and other costs). The profit and loss statement is good for: Letting you know your profit (or loss) Highlighting areas where you might be able to increase income or reduce expenses Comparing current year results with previous years. Providing information you need to include in your tax return What is your balance sheet? The balance sheet offers a snapshot of the financial health of your business on the last day of the year or period. The balance sheet shows shows you: Assets (what you own) Liabilities (what you owe) Equity (the net worth of the business) The balance sheet is helpful for: Assessing your current financial position (It is also called the Statement of Financial Position) Assessing whether you can pay your debts as they fall due (by comparing current assets with current liabilities). Assessing longer term solvency (by comparing total assets with total liabilities) Tracking growth Supporting loan or other finance applications making informed investment decisions Providing a foundation for the value of a business (for succession planning or sale of the business). Nothing is as simple as it seems. You might sell an item for $1000. That $1000 will be included in sales in the profit and loss statement whether you have been paid for it or not. If you have not been paid, it will still be included in your net profit, but it will also be included in debtors in the balance sheet. You have to look at both the profit and loss and the balance sheet to assess the true result of the sale. You have not made the profit until the $1000 is in your bank account. You might buy an asset for $10,000. That asset might stay in the balance sheet at original cost for years or decades. It might currently be worth scrap value or it might be worth $50,000. You have to take that into account when reading the balance sheet. The Australian Taxation Office (ATO) often has rules about income or expenses which are different from accounting principles. If you prepare the accounts to suit the ATO they might prove to be misleading in assessing your true profit or net worth. Time is the enemy of the accounting profession. At any point in time, how do you assess the value of a tractor which was purchased five years ago and which has a useful life that can only be estimated. Both the profit and loss and the balance sheet have to be interpreted in order to glean useful information. Please get in touch if you would like an analysis of your profit and loss and balance sheet. 

Artificial Intelligence (AI). The Good, The Bad and The Ugly. There was a little girl, Who had a little curl, Right in the middle of her forehead. When she was good, She was very, very good, But when she was bad she was horrid. In no way am I inferring that AI is a girl, but otherwise the cap fits. if you define AI as information produced by a machine, it has been around for decades. The Ugly Between 2000 and 2015, the UK Post Office wrongfully prosecuted more than 700 sub-postmasters and postmistresses for theft, false accounting or fraud. Many of the accused were financially ruined, wrongfully imprisoned, lost their homes and reputations and suffered mental health issues. Some committed suicide. They were innocent. A flawed accounting system was incorrectly reporting shortfalls in takings. The UK Post Office believed the system and not the victims. To this day many of the victims have not been compensated. The full story is heart-breaking. Do yourself a favour and research it, or you might be able to find a four-part 2024 ITV drama titled “Mr Bates vs the Post Office”. Was AI or IT the problem? No. The software was flawed, but humans were the problem. This is the most horrific example you will ever find of how not to use AI. In Australia, you might remember the Robodebt Scheme, which the Royal Commission condemned as “crude and cruel” and “neither fair nor legal.” The Bad Firstly, do not give AI any information you do not want to be in the public domain (or in the hands of the baddies). Secondly, AI does consume enormous amounts of electricity worldwide, although currently not as much as cryptocurrency. Thirdly, AI “hallucinates” which is the term used for getting it wrong. You need to verify. If you press the wrong buttons on a calculator you get the wrong answer. You own the problem. If you blindly believe AI, you own the problem. The Good When it is good it is very, very good. Try it. Choose your most difficult problem, one that might take days to research. Then ask AI. I can almost guarantee that it will provide you with an answer within four seconds. It is next level and then some. Of course, you must verify, but overall it is a massive time-saver. I do not think anybody knows the future of AI, but it will certainly change the nature of many jobs. I am hopeful that it will be for the common good because I cannot envision a time when humans will not be needed. When calculators first came on the scene, the general opinion was that this would cause problems because people would not know how to add up anymore. When computers arrived, there was fear that many jobs would be lost. Now everyone embraces calculators and computers as useful and in fact essential, and the number of jobs has proliferated. I am hopeful that it will be the same with AI. One thing is certain. Ignore AI and you will be left behind.

Rise in the minimum wage: the impact for your business On 3 June 2025, the Fair Work Commission’s Expert Panel announced the National Minimum Wage and award wages will increase by 3.5% from 1 July 2025. This wage increase follows on from the 2024-25 Annual Wage Review and its recommendations. This increase in basic pay is great news for Australian workers, especially with the country facing an ongoing cost-of-living crisis. But how will an increased wages burden affect your small business? What’s the new minimum wage? The 3.5% increase will mean that the National Minimum Wage will increase by: $0.85 to $24.95 per hour $32.10 to $948.00 per 38-hour week $1,669.20 to $49,296.00 per year. How will the wage increase impact your payroll costs? If your workforce includes a large percentage of employees that are currently on the minimum wage of $24.10, that jump of 85 cents per hour will put extra pressure on your cashflow. For example, if you’re currently employing 20 people on the minimum wage, and pay them every two weeks, the salary component of your payroll will jump from $36,636 to $37,920. That’s an extra $1,284 on your payroll bill every fortnight – and that’s before you factor in super contributions and other benefits. Talk to us about preparing for the wage increase If you’re concerned about the cashflow impact of an increase to the minimum wage, please do come and talk to the team.