Here’s a simple script and checklist with a built-in Action Plan you can use to follow-up all your sales:

If you need help with calls to follow up your sales or would like to share your experience about them, why not join the A+BAC community on Facebook. This is a place where business captains get real-time, practical answers to their questions as well as add their experience to the knowledge pool.

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This together with the news of the demise of yet another local retailer I use (or used to!) made me think, once again, about the future of traditional retailing. The problem, in many cases, is the attitude shown by many retailers, who just sit back waiting for something to happen and blaming everything and everyone for what has happened. This is not just my view – this was a comment made by a retailer client to me today. So what should retailers be doing?

• Find a niche. Some traditional retailers are still really successful and often it’s because they have found themselves a niche, perhaps the over-50’s, these looking for quality, or fashion conscious ladies. Study independent retailers who are successful and copy them.

• Get some decent systems in place. Only a half of the retailers in my local town have a computer in their shop. Many have absolutely no idea whether they are making or losing money or what stock they are carrying, let alone what it cost them. If someone asks you for a deal, wouldn’t it be so much easier if you knew exactly what your margin on that item was so you could drop the price or decide not to, or perhaps meet them halfway but still make a profit?

• Get out and do some marketing. Build your database, send out newsletters, get on Facebook, hand out some referral vouchers or hold some closed door sales – it’s all very easy and if you’re quiet you’ll have plenty of time on your hands to do this.

• Concentrate on the overall customer experience. Many retailers and especially their staff are shockingly poor at showing interest, customer service, adding value, and after-sales care.

• Very importantly, focus and capitalise on the advantages that traditional retailers have over on-line retailing e.g. you can take the old model and all that annoying packaging away, give advice on the best options, visit homes and businesses to see what suits or up-sell.

• Teach your staff how to sell or fire them they’re no good. Use scripts, role play, develop some tricks – it can be done!

• Join them! Get yourself an on-line shopping cart. These don’t have to be super expensive, but choose you web-developer with care.

• Go on the attack. It’s a bit like what’s happening with pubs (such a shame!), when less people go, they have less money to spend, so it looks shabby so even less people go and there’s an ongoing cycle of decline! Keep up with the times, refurbish your premises and keep your stock levels up. A tired-looking shop with no stock is not going to attract anyone.

• Face facts. If you’re in a marginal location, faced by really stiff competition or in sector which is just history and have no resources left to move or reinvent yourself, perhaps it really is time to throw in the towel.

There will always be a demand for traditional retailers, at least in our lifetimes, so come on retailers, modernise and take affirmative action. There are so many things you’re still better off buying off-line! Your future is in your hands and your hands alone.

If you need help with your business why not join the A+BAC community on Facebook. This is the place where you can get all your business questions answered free, in real time and in a practical way. You can also add your own experience to the pool and start helping fellow business captains.

You can also contact Nick by email.

This was our second trip to Port Moresby, and again my colleagues and I were privileged to meet some very switched-on business owner-operators. These are locals, not expats, and I’ve been very impressed with their professionalism and business skills, and what they’ve achieved despite the difficulties they face. In addition, because of the difficultly of obtaining business finance, the businesses are virtually all self-financed from profits – try finding that in NZ or the UK!

The contrast in wealth reflects itself in many ways, with shanty towns and slums alongside luxury hotels and apartments, locals paying 10.5 Kina for a beer when the average wage is 3 Kina an hour, the new cinema which charges 25 Kina entry, thousands of roadside stalls selling limes and betel nuts and not much else, the streets full with expensive looking cars driving by rickety-looking villages built over the sea which is full of rubbish and sewage sludge, stories of Australian pedophiles who buy the local girls and live with them in the villages, the virtual death sentence arising from a serious illness or the huge bride price the men have to pay to find a wife – between 50,000 to 150,000 Kina.

Despite the tales of crime and violence and the Port Moresby police being called out to stop cinema-goers taking in hand-grenades the people are very friendly.

I was lucky enough to be invited to the pub by my client Joe (where I met his client John), and not only did we share a joke over a couple of cold beers (much needed in the hot and sweaty non-air-conditioned local’s pub!) but it was a fantastic opportunity for me to chat informally and find out all about life in PNG. I’ve been sending Joe & John email jokes since my return and I’m sure we will remain firm friends.

I think Kiwi business owners (me included) could learn a lot from my new friends in Port Moresby, so complacency and any sense of superiority are most definitely out of place. We’ve got it very easy in comparison!

Firstly, there’s a concession available for commercial property owners as at 1 April which allows you, in the right circumstances, to claim depreciation for the fit-out element of your building contained within the original cost for the foreseeable future.

Secondly, many commercial building owners can still claim depreciation for items of building fit-out bought separately from the building at depreciation rates much higher than the 3% available for the entire building.

Lastly, don’t forget that you can still claim the depreciation on your commercial building if you sell this for a price lower than the depreciated net book value as at 1 April 2011. It might therefore, be a good time to bite the bullet and crystallise the reduction in value of your commercial building you’ve suffered over the last two to three years.

And, of course, for lots of building owners depreciation on buildings was just a nasty trap, since the tax saved on the building depreciation all had to be paid back when the building was sold. In short, perhaps deprecation going was not so bad after all?

If you’re a building owner and you’re not sure if you’re claiming all you should, why not get in touch by email or join the A+BAC community on Facebook: this is the place where you can get real-time, practical answers to all your business questions as well as share your own experience with other business captains.

There are a number of issues with Look Through Companies:

1. Unlike LAQC’s, profits as well as losses MUST be allocated to shareholders. This may not suit, especially as the personal tax rate could be higher than that for a company.

2. The allocation of the profits to a shareholder will be treated as the payment of a dividend, which means that the allocation will have to pass the Solvency Test. What happens if it doesn’t?

3. If there a change in shareholding of the company the shareholder is deemed to have disposed of their underlying share of assets in the LTC at market value (subject to some exceptions) which means that there will be a recovery of depreciation and possibly notional profits on loans or investments.

4. Again unlike with LAQC’s, the losses that can be offset against shareholder’s income is finite, limited to the amount that the shareholder has at risk. Unfortunately, this is not as simple as it seems and there are a number of complications that arise necessitating the maintenance of an ongoing record of losses utilised on the one hand and on the other, adding together borrowing facilities guaranteed with the shareholder’s advance account to determine the amount at risk.

5. Supposing the plan was to use a LTC when you were making losses but revoke LTC status when the company turned around and started to make a profit? Unfortunately this is not as straightforward as it used to be since when LTC status is revoked, again the shareholders are deemed to have disposed of their underlying assets in the LTC at market value (and the company is then deemed to have immediately reacquired those assets at market value).

6. If you want to receive wages or a salary under PAYE from the LTC you will need a written contract of service, which is unwelcome cost and hassle and cuts down on flexibility.

7. From the ACC point of view, the LTC is tricky, since it depends on whether the shareholder is a “working” or “non-working” owner or a passive investor. A working owner (not one who necessarily works but who is under PAYE) is treated as an employee whilst a non-working owner (no not someone who is lazy but someone who works in the business of the LTC but not under PAYE) is treated as self-employed for ACC purposes. A passive investor who plays no active part in the LTC’s business is not subject to ACC levies. What would you rather be?

Confused and lost already? You’re not alone. Even professionals are complaining about how difficult the LTC rules have been set and think that it’s unrealistic that clients are going to want to pay their advisers to work through all these tricky issues!

If you need down-to-earth and sound practical help with your LTC (or your ex-LAQC) why not join the A+BAC community on Facebook. You’ll be able to get real-time, practical answers to all your questions as well as let others benefit from your experience. A;ternatively, you can contact Nick by email.

I’ll be sure to give a complete update next week.

• US corporations lose 50% of their customers every 5 years.

• The longer a customer stays with a company, the more that customer is worth

• Reducing customer defections by as little as 10% can double your profits.

• It’s 6 times easier to sell to an existing customer than to a new one.

Why then do business owners not do more to stem defections, by keeping in touch with their customers regularly, measuring customer defection rates and following up customers who haven’t bought recently?

Here’s a rare example of a company who actually follows up customers who might be dropping off their radar, a postcard I received the other day:

If you’d like to learn more about reducing your customer defection, why not get in touch or join the A+BAC business community on Facebook. This is the place where you can get all your business questions answered for free, in real time, as well as bring your business experience to others.

http://www.stuff.co.nz/business/industries/6696290/Cash-jobs-crackdown-by-IRD

Nowadays the ID don’t do many audits but if they do and catch you out it generally turns out to be a very expensive lesson, as you will be used as a warning to others. By the time they’ve added interest and penalties it’s a bit like a mortgage, you will owe them several times the actual tax you thought you’d saved in the first place!

It’s dead easy for the IRD to spot one of their “customers” (as we’re called these days!) who is doing a load of cash jobs, as the huge majority make the same old mistakes:

• Benchmarking. Your trading results and your gross margin are compared to others in your line of business. Be prepared then to try and explain why you are doing so badly!

• Low or No Drawings. Man can’t live on bread alone…….or in this case on nothing! A very common mistake!

• No Cash Withdrawals. In the days before Eftpos I once took over the affairs of a trader from another accountant who was being investigated by the IRD who had drawn no cash from any of his bank accounts for 4 years, yet he hadn’t paid for any petrol or shopping by credit card or cheque over this period. Needless to say the IRD thought it was Christmas!

• Unidentified Deposits. Any deposits paid into your bank accounts or those of your family are treated as diverted takings. They’ve heard all the excuses under the sun many times before – TAB winnings, gifts from mum, found it under a bush etc!

• Involving Others. One of the best sources of information for the IRD are disaffected ex-employees, ex-spouses or suppliers or customers where cash deals have been involved! So silly yet still widely practised!

• Paying using Credit for Materials or Parts for Cash Jobs. A mistake as old as the hills, the IRD just traces the things you’ve bought through to customer invoices, or not!

• Buying Assets. If you buy a boat, car or toys like jet-skis where did you get the cash from?

• Slip-Ups. It’s very easy to slip up and drop yourself in the mire, as a client of mine did whilst on holiday overseas. He had paid for the entire trip in diverted cash but just at the last minute decided to buy his old mum a gift at the duty free. Having spent all his foreign currency he used his credit card, just the once. The result? The IRD spotted this and assessed him for $30K worth of tax plus interest and penalties, assuming he had travelled overseas every year which he had apparently! Ouch!

For more advice on how to stay on the right side of IRD, just just join the ABAC community on Facebook. We answer all your business questions free and post regular business success tips.

I have business premises, Can I still claim use of home?

Yes most certainly providing you are doing some work at home and are careful to only claim what is reasonable.

My spouse already claims use of home. Does that mean I can’t?

No, just apportion the claim between you based upon the area you each use.

Some of my rooms at home are not used exclusively for business so does that mean I can’t claim them for use of home?

Not at all. Just ensure you claim only part of the rooms, perhaps based on a time apportionment.

My accountant says it’s not worthwhile claiming use of home. Is he right?

That depends on whether he or she is paying the additional tax which will arise if you don’t claim!

I work from my shed in the garden. Can I still claim use of home?

Yes you can, but you may have to apportion your expenses differently e.g. if for example you bought the shed later than the rest of your property omit the mortgage interest.

My mate John says my home has to be commercially zoned before I can claim use of home?

Not so, that’s completely irrelevant.

Jack at the pub doesn’t claim use of home because he hasn’t got a separate entrance for his business at home.

Well Jack needs a new accountant as that doesn’t matter either!

Don’t pay tax unnecessarily, get help with your claim for use of home for business.

If you have any questions regarding your use of home for business  or upcoming tax bill, join the ABAC community on Facebook. You’ll be able to ask all your questions and get real-time, practical answers -at no charge!
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Previous surveys have found, of the answers to taxpayer enquiries supplied by the IRD, nearly a quarter are wrong and more than half those dealing with GST are incorrect. The IRD is not responsible for its mistakes. You are expected to find the right answers and to seek expert advice if needed.

It is no use saying an IRD staff member told you, even if you can quote the person’s name and the date you were advised. If you have a tax problem, consult us: if we do not know the answer immediately we can find it.

Recently an acquaintance of mine told how she solved her tax problems. She would ring three different IRD officials with her question. She would then compare the answers and if there was one which suited her, she would accept it and make her tax claim accordingly. She figured if she were ever challenged she could always say she was advised by the IRD and followed this.

To be fair the IRD has a huge staff and it would be impractical for the Department to train all its employees, to the level of a tax consultant – after all, it us taxpayers who would foot the bill! Tax law is vast and it requires considerable experience to understand the nuances.

An example is the fine line between personal and business expenditure. Why, for example, if I have to have a car for work should the costs of running it between work and home not be tax deductible? If I need reading glasses to do my job, why should I not be able to claim them as a business cost? If I meet regularly with friends for a drink and I do business with them, why is this considered a personal cost? At other times, having a drink with business associates can be accepted as a business entertainment cost. We should not expect IRD staff to have such a detailed knowledge.

Tax law is built up from a mixture of statutes and case law. Every year there are acts of parliament and regulations which change tax law and there are cases decided in the courts which also change the law.

If you seek the advice of an officer of the IRD, you do so at your peril. There are numerous examples of the IRD changing its mind despite the taxpayers having fully disclosed all the necessary information leaving the taxpayers exposed to the tax, interest and penalties.

The message here is clear – avoid ringing IRD for advice. If you are tempted, do not rely on the answer you receive!