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Marketing

5 email marketing mistakes to avoid

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SBDC BLOG 5 email marketing mistakes to avoid Email marketing can be a powerful and cost-effective tool for connecting with your customers. With the right approach, you can reach your audience, drive sales, build relationships and much more. Here are five mistakes to avoid so you can make the most of email marketing for your business growth. Email marketing can have a big impact on your customers – and your bottom line. However, your efforts may go to waste if you don’t approach this powerful marketing channel in the right way. We asked Kasia McNaught of McNaught Media for her insights into common email marketing mistakes, and how you can avoid these in your business. Here’s what she shared. Mistake #1: Thinking you don’t need email marketing Even you if you have built a large following through social media, email marketing should still have a role in your overall marketing strategy. As Kasia shared in our blog on email marketing for beginners, depending on social media can leave you vulnerable to platform changes or shutdowns, while building an email list can become an asset for your business. “The thing is, you want to get in front of people by using social media and get their email addresses as fast as possible so that you can build your own list, as this can be a goldmine for your business,” explains Kasia. Mistake #2: Sending too many emails You might have experienced this kind of email marketing in your own inbox. You sign up to somebody’s list and suddenly get inundated with daily promotions and offers that you don’t want to read. “Sending too many emails can lead to subscriber fatigue and higher unsubscribe rates,” says Kasia. “Focus on quality over quantity.” Mistake #3: Forgetting about mobile phones It’s likely that many of your target audience will read their email through their smartphone – not through their laptop or PC. Kasia says it’s important to remember to optimise your emails for mobile phones before you send out an offer, promotion or update by email. “Always ensure your emails are mobile-friendly. I always check my test emails on desktop and mobile before sending them out to my audience.” Digital marketing expert Kasia McNaught will be presenting an upcoming SBDC workshop on email marketing. Mistake #4: Ignoring your analytics As with other types of marketing, the more you know about your target audience and how effective your channels are for influencing them, the more impact you can have and value you can deliver to them. “Don’t ignore email analytics, as this data can provide valuable insights into campaign performance and help refine your strategy,” Kasia warns. “Email analytics are usually provided for free within the platform you use.” “Segmentation and personalisation can also help you to tailor your emails based on your subscriber preferences, demographics and behaviour. You want to avoid generic content which doesn’t resonate with your audience.” Mistake #5: Leaving out a call to action Not every email you send needs to sell – but Kasia notes that it’s important to let your subscribers know what action to take next. “Remember to include a clear instruction or button at the top of your email to guide subscribers. Whether it’s making a purchase, signing up for a newsletter or visiting your website, your call to action should stand out, be easy to find, and relevant to the content of the email.” Find out more Not every email you send needs to sell – but Kasia notes that it’s important to let your subscribers know what action to take next. “Remember to include a clear instruction or button at the top of your email to guide subscribers. Whether it’s making a purchase, signing up for a newsletter or visiting your website, your call to action should stand out, be easy to find, and relevant to the content of the email.” Marketing Share Facebook-f Instagram Youtube Linkedin Related Articles Tax-time tips to prepare for a downturn Learn more Our quick guide to tax deductions Learn more Why your credit rating matters in business Learn more

Marketing

Getting started on social media

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SBDC BLOG Getting started on social media Not sure where to start when it comes to promoting your business on social media? Social media can seem overwhelming, but fortunately there are a few basic principles that can help guide you through the ‘getting started’ stages. The golden rule of social media is to engage with your target market on their preferred platform, using relevant and useful content. Your customers are more likely to come across posts on the platforms they prefer to use and to read, share, like and comment on posts that interest them. Sometimes this means there is a disconnect between the content you want to post (such as special offers and product information) and the information your audience will find useful and engaging. Unless you’re one of the lucky few who have a knack for writing engaging content off the bat, you’re going to need to do a bit of research and put together a social media strategy on how to create and deliver that content. Here are some tips to help you get started. Work out which social media platforms are best for your business Choose a platform you want to include as part of your social media mix (for example, Facebook). On the social media platforms you’re interested in using, search for similar businesses to yours. Look for businesses with at least a few thousand followers that post on a regular basis (at least weekly). Browse through their profiles to find posts that their audience are engaging with (posts that get a lot of likes, shares, comments). Make note of the content theme (eg. was the post educational, problem solving, entertaining or news focused). Repeat this process for several business pages and identify popular topics or themes. Plan your social media content Now you’ve done your homework, it’s time to use your research to help you plan your social media content. You could: Create your own content from scratch, including written updates, images, infographics and/or videos. Experimenting with different content types is a useful way to test the kind of content that your audience engages with the most. Comment on relevant content you’ve found elsewhere. You could use a social media post or article someone else has created to express your view on a popular topic. Use a quote from an article and then express your view or standpoint. Provide a link to relevant content on an external website. Share content created by someone else (make sure you have their permission and/or credit them for their work). Tips to help you create social media content Once you’ve decided on the type of content you’re going to post you need to develop it. This can be one of the most challenging parts of the process – the big question is ‘what am I going to share today?’ Luckily, there are some useful tools that can help you generate ideas for your social media posts. Content idea generator websites These tools allow you to enter a topic or keyword related to your business and in return you will be given a list of potential topics that are popular in relation to your industry. Google tools There are a range of tools freely available from Google that you can tap into for insights into what people are searching for in relation to your product, service or industry. Google’s Keyword Planner can give you an insight into what people are searching for when it comes to your product or service, helping you generate content that answers the questions they are asking online. Google search suggestions/autocomplete can be used to explore what users are searching for. By typing a topic into the Google search bar, you’ll see a list of auto suggestions based on what’s popular for that topic. Google Search Console provides you with insights into how visitors are being drawn to your website. This free tool reports on the search terms people are putting into Google that result in them visiting your business website. AI tools Apps like ChatGPT can be used to brainstorm new content ideas as well as help you develop key information to cover and calls to action. Read our article AI made simple: An introduction for small business to find out more. Draw on human experiences Are there questions you are frequently asked about your products or services? Or compliments you regularly receive from happy customers? The conversations you have in your business with customers, suppliers or staff could provide inspiration for social media content that you hadn’t considered. Behind the scenes (BTS) Providing your customers with a ‘behind the scenes’ look at your business can be another affective way of building up a social media following and customer loyalty. BTS content can seem more genuine and less ‘marketing’ focused than some other content, which may appeal to certain audiences. Want to learn more about social media marketing? This is just a summary of the steps involved in getting started with your social media strategy. If you’re interested in learning how to develop and implement a complete digital strategy in your business then join us for our Digital Marketing Essentials workshop or explore our range of practical sales and marketing workshops. Finance Share Facebook-f Instagram Youtube Linkedin Related Articles Tax-time tips to prepare for a downturn Learn more Our quick guide to tax deductions Learn more Why your credit rating matters in business Learn more

Finance

Tax-time tips to prepare for a downturn

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SBDC BLOG Tax-time tips to prepare for a downturn Like many businesses in our current environment, you may be expecting a downturn in your turnover for the next financial year. We’ve put together some tips on how to prepare from a tax perspective. From staffing challenges and supplier constraints to customer behaviours and global events, there are many reasons your business might be preparing for a quieter financial year. Here are some things you might be able to do now in terms of your tax planning to get ready for the year ahead. If your business has been impacted by an emergency event or disaster, call the ATO’s emergency support line 1800 806 218 or visit their website. Take control of your planning If you’ve taken a look at your expected taxable income (that’s the assessable income for your business after any allowable deductions) for this current financial year (2023-24) and created projections for your likely taxable income for next financial year (2024-25), that’s a great start. By knowing a downturn in your income could be likely, you can take control of your tax planning now. Speak to your accountant If you don’t already use the services of a suitably qualified accountant, now could be the perfect time to work with one. Take a look at our Choosing an accountant information guide to help you make the right decision about your support network. Your accountant can help you with tax planning strategies you might not have considered, such as taking advantage of any special depreciation measures. For example, they might help you explore temporary full expensing or the instant asset write-off which allow you to immediately deduct the business portion of the cost of eligible depreciating assets that are first held and first used (or installed ready for use) for a taxable purpose between the eligible date periods. Review your cashflow Depending on your situation, there could be some tax advantages to prepaying some of your 2023-24 expenses in the current financial year. This could include expenses such as your rent, insurance or subscriptions to professional associations. Speak to your accountant for advice, as you may be eligible to deduct up to 12 months of the following year’s expenses in the current tax year. You might also be able to take a look at your invoicing and delay some of it to next financial year, rather than account for that income in this financial year. Always check with your accountant to make sure this is an appropriate strategy for your business. If your business makes a loss, you may be able to claim a deduction for it in a future year, offset it as a current year loss or carry back your tax loss. Find out more about business losses and discuss your financial position with your accountant. Consider other income If your business received government income such as COVID-19 stimulus payments, remember that you will need to include them as assessable income in your business income tax return. You may be eligible to apply for a range of small business grants or payments to help support your cashflow. For example, there may be stimulus payments available or the Australian Apprenticeships Incentives Program if you have apprenticeships in your business. Remember to speak to your accountant about whether these would need to be included as assessable income for your business. Learn about your deductions If your business is new, ask your accountant about whether you could be eligible to deduct any start-up expenses such as obtaining legal or accounting advice on your business structure, or set-fees such as your ASIC company registration fee. To help make this easy, keep receipts for all business expenses with notes detailing the nature of the expense and how it applies to your business. Your accountant can then maximise your deductible expenses within the permitted rules. Even if you have been in business for some time, you might be surprised at some of the items you can and can’t deduct for your business.  Build your tax-time toolkit The more you understand about your tax obligations and opportunities, the better for your business. If you’d like to learn more about managing your finances, register for one of our upcoming workshops. You might also like to check our end of financial year checklist, explore our range of financial tools and templates to help you plan ahead or read our quick guide to tax deductions. More information For more tax-time tips, explore what you can do if you’re expecting a higher income next financial year or expert tax tips. For tax advice or specific tax information, please speak to your accountant or check the ATO website for details. Finance Share Facebook-f Instagram Youtube Linkedin Related Articles Tax-time tips to prepare for a downturn Learn more Our quick guide to tax deductions Learn more Why your credit rating matters in business Learn more

Finance

Our quick guide to tax deductions

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SBDC BLOG Our quick guide to tax deductions Tax time can be a stressful time for many business owners. It can be confusing keeping on top of deadlines, changing rules and deductions. The best place to start with your taxes is by enlisting the help of a tax professional to make sure you’re on track with your deductions and tax obligations. You don’t want to claim for deductions you later find out you’re not eligible for, as strict penalties could apply. The good news is that the money you pay for professional tax advice could even be deductible in your next tax return (your tax adviser can confirm if their fees are tax deductible). Here’s a quick guide to help you streamline your tax deductions. Know your industry Every business and industry is different, so don’t assume you can claim the same tax deductions as a friend or family member with their own business. What you can claim depends on what kind of business you run. For example, if you run an entertainment business, you might be eligible to claim the cost of musical instruments or dance lessons – but this wouldn’t be a legitimate deduction for a bakery, plumbing or book-keeping business. To find out what counts as a deduction in your business – and what kind of records you need to keep – speak to a professional tax adviser. You can also visit the Australian Taxation Office (ATO) website for occupation and industry specific tax deduction guides. Know what you can’t claim As a general guide, the ATO accepts a valid business deduction as an expense for your business incurred for the purpose of generating a profit,  not for private use. If the expense is for both business and private use, you can only claim the part used for your business. As an example, if you travel to a different city to attend an industry conference or meet with clients, you could be eligible to claim the cost of your travel as a tax deduction. You can’t, however, add a few days to your hotel stay for a holiday and claim those extra days as a deduction. Along the same lines, the business book you buy in the airport lounge could be a legitimate business deduction (depending on your business) but a souvenir snow globe would not be likely to count as a deduction. Keep efficient records A shoebox of receipts is probably not the best way to keep your tax records – but there are many other solutions available. Speak to your accountant about the software, apps or record-keeping systems which might suit your business. These may not only help you keep better records, but save you time and money. If you’re planning to claim deductions related to a vehicle, make sure the log book for your business vehicle is up-to-date. You’ll need to start a new log book if your current one is more than five years old or if your vehicle usage has changed significantly. You could also consider investing in an app to track your mileage in digital form. Stay informed as things change Times change, and so do the tax rules. The pandemic changed working conditions for a lot of people, so you might also be eligible for working from home deductions which didn’t apply before. Check with your accountant – or with the ATO – about exactly what you can claim as a deduction. Don’t assume that you know from previous years. And keep in mind, while you may be able to claim items as a deduction, there could be other implications to consider, such as fringe benefits tax. Your accountant can provide advice and actions to follow that are specific to your business. More information For more tax-time help, explore our: information on what can you really claim as a tax deduction end of financial year checklist expert tax planning tips  attend one of our financial management workshops tips on what you can do if you’re expecting a higher income next financial year information on how to prepare for a downturn in your income Finance Share Facebook-f Instagram Youtube Linkedin Related Articles Our quick guide to tax deductions Learn more Why your credit rating matters in business Learn more 1 July 2024 changes that may affect your business Learn more

Finance

Why your credit rating matters in business

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SBDC BLOG Why your credit rating matters in business A bad credit rating isn’t helpful in your personal finances – but did you know it can impact your business finances too? While your business may experience fluctuations in cash flow for a range of reasons, it’s worth ensuring you can pay your bills and debts on time to protect your credit rating.  Here’s what you need to know about your credit rating – and what you can do to avoid a bad credit rating which could impact your business in the future.  What is a credit rating? At some point in your business, you may need to apply for credit with suppliers, a credit card or a loan for personal or business reasons. Your credit rating provides information to the credit provider (such as a bank or other business) about whether you’re likely to be able to manage to repay that credit. A credit rating is a way of providing this information in a way to protect your personal details and give your credit provider the information they need to assess your application. If your business operates as a sole trader, your personal credit rating is also your business’ credit rating, as you are the entity in business. What is a ‘bad’ credit rating? Your credit report will include information about any debt agreements, payment defaults, bankruptcy, financial hardship and other relevant details. A credit rating can be considered “bad” if any of these details show you are not likely to be able to repay future debts, such as a loan or credit card you might apply for. Depending on your business, your situation and the type of credit you are applying for, having trouble paying one type of credit can impact the likelihood of getting further credit. Changes in credit scores can significantly affect business operations. For instance, when one business experienced a shift in its credit rating, its suppliers became aware and reevaluated their terms. Consequently, they moved the business to a cash on delivery (COD) payment arrangement, which had an immediate impact on the cash flow of that business. How to avoid a bad credit rating There are a few simple things you can do to protect your credit rating, both in personal and business terms: Know your rating You can access your credit report through a credit reporting body throughout the year. Pay your bills on time Whether it’s your utility bills, personal credit card debt or supplier invoices, it’s important to keep your bills paid and up to date. If you think a payment might be late, take action and contact the biller sooner rather than later. You may be able to arrange a payment extension or payment plan to stay on top of your debts. Manage your debts Review your business and personal debts regularly and try to only borrow what you can comfortably afford to pay back.  Tip : If you do find issues with your credit score, try to take action as soon as possible to repair your credit score. Don’t pay to fix your credit report. If something is incorrect, you can have it fixed – but you can’t erase something just because you don’t want it to appear on your credit report.  Find out more Check the four key factors banks check before giving business loans or learn more about business finance and loans. If you need urgent help with your finances, take a look at help for businesses in financial distress. If you’d like to discuss an issue in your business, contact our free business advisory service to speak with a business adviser. Finance Share Facebook-f Instagram Youtube Linkedin Related Articles Why your credit rating matters in business Learn more 1 July 2024 changes that may affect your business Learn more Are you using the right tax or BAS agent? Learn more

Finance

1 July 2024 changes that may affect your business

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SBDC BLOG 1 July 2024 changes that may affect your business New minimum wages The minimum wage for both the national and state industrial relations systems will increase from the first pay on or after 1 July 2024.  National minimum wage increase If your business operates under the Fair Work federal industrial relations system (covering businesses such as ‘Pty Ltd’ companies), the new national minimum wage will be $915.90 per week or $24.10 per hour. This rate takes affect from the first full pay period starting on or after 1 July 2024.  The national minimum wage increase covers all employees who are not covered by an industry award or registered agreement.  Visit the Fair Work website for more information about the national minimum wage increase.  State minimum wage If your business operates under the WA state industrial relations system (covering sole traders, some micro businesses, unincorporated partnerships and unincorporated trust arrangements), the new minimum wage will be $917.80 per week or $24.15 per hour.  Visit the Wageline website for updated WA award summaries and minimum pay rates for award free employees.  Super guarantee rate increase The super guarantee rate will increase from 11 per cent to 11.5 per cent on 1 July 2024. This change is part of incremental increases that will see the rate increase by 0.5 per cent annually until it reaches 12 per cent on 1 July 2025.  The rate of 11.5 per cent will need to be applied to all salary and wages paid on and after 1 July 2024, even if some or all the pay period it relates to is before 1 July 2024.  Visit the Australian Taxation Office (ATO) website for details of future increases to the super guarantee.  Employment conditions For businesses operating under the national industrial relations system (eg: ‘Pty Ltd’ companies) there will be changes to the terms and conditions for casual employment and independent contractors.  These changes include new definitions for casual employment and independent contractors and new frameworks to allow casual employees to change to permanent employment and to protect independent contractors performing work on digital labour platforms that are employee-like workers.  While these changes will take place from 24 August 2024, you may find it beneficial to review these changes ahead of time to ensure it doesn’t affect any employment arrangements you have with your staff.  Ban on engineered stone From 1 July 2024, the use, supply and manufacture of engineered stone slabs, panels and benchtops will be banned.  A transition period will be in place until 31 December 2024 to allow for pre-existing contracts to be honoured, as long as the contract was entered into on or before 31 December 2023.  Find out more about the ban on engineered stone.  Federal Budget commitments As part of the 2024-25 Federal Budget, the Australian Government announced the following measures which take effect from 1 July 2024.  Energy bill relief  Eligible small businesses will receive a credit from the Federal Government towards their electricity costs. This is in addition to the $400 in energy bill relief announced by the Western Australian Government as part of the 2024-25 State Budget announced on 9 May 2024.  Instant asset write-off extended  The instant asset write-off has been extended for an additional year. Under the scheme, eligible small business owners can deduct up to $20,000 per business asset/resource for the 2024-25 tax year. These purchases must be installed and ready for use in your business between 1 July 2024 and 30 June 2025.  Please Note : this extension is dependent on legislation being passed through Federal Parliament. We recommend discussing this tax measure with your accountant, bookkeeper or financial adviser.  Keep up to date with the latest small business news Looking for the latest information to help you run a business in Western Australia? Sign up to our fortnightly e-news to get stories like this (and other important updates for small business owners) delivered straight to your inbox.  Sign up for the SBDC e-news Legal and Risk Finance Share Facebook-f Instagram Youtube Linkedin Related Articles 1 July 2024 changes that may affect your business Learn more Are you using the right tax or BAS agent? Learn more How eInvoicing can save you time and money Learn more

Finance

Are you using the right tax or BAS agent?

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SBDC BLOG Are you using the right tax or BAS agent? Using an unregistered agent to lodge your tax return or business activity statement (BAS) can put you and your business at risk. The costs of being in business are rising because of An unregistered tax or BAS agent may not have the appropriate qualifications or skills needed to handle your BAS or tax requirements. If the agent is negligent with your return, you will not be protected by the safe harbour provision that protects you from liability or penalty for these errors, which would be the case if your BAS and tax agent is registered. inflation, interest rate rises and other economic factors. If you rent your business premises, you might find your lease includes details of annual rent increases. Rental increases are often calculated using a formula such as the consumer price index (CPI) plus two per cent, or what’s known as a market review (MR). Here’s your guide to understanding market reviews and how these can impact your rent and therefore, your bottom line in business. How can I check that my agent is registered? The good news is that checking that your agent is registered is as simple as: using the Tax Practitioners Board’s online register to search for your agent looking for the registered agent symbol (pictured right), a tax practitioner would also display their registration number along with the symbol Benefits of using a registered BAS or tax agent By using a registered agent you can be confident that: your agent is fully qualified and bound by a professional code of conduct you are protected under their professional indemnity insurance you can enjoy extended lodgement dates for tax returns and BAS statements End of financial year resources For more information on your business and tax obligations, read our finance information and our tax time tips, including: free end of financial year checklist expert tax tips tax planning tips for a bumper year ahead how to prepare for a downturn in your income. quick guide to tax deductions You can also contact our free small business advisory service on 133 140. More information If you discover the agent you are using is unregistered, contact the Tax Practitioners Board For more tips on finding an accountant, read our choosing an accountant information guide. Finance Share Facebook-f Instagram Youtube Linkedin Related Articles Are you using the right tax or BAS agent? Learn more How eInvoicing can save you time and money Learn more 1 July 2024 changes that may affect your business Learn more

Finance

How eInvoicing can save you time and money

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SBDC BLOG How eInvoicing can save you time and money You might think eInvoicing is what happens when you email invoices from your accounting system but there is much more to it, including a number of benefits for your business. Here is our quick guide to the benefits of eInvoicing. What is eInvoicing? eInvoicing is a secure payment method designed to streamline payments between businesses and their suppliers, contractors or clients, using existing small business accounting softwareeInvoicing allows invoice information to be digitally transferred directly between a buyer’s and supplier’s accounting systems, even if these systems are different.  This removes the need to generate manual invoices or enter invoices for payment into your financial system. Importantly, as eInvoicing is done via a secure network, it reduces the likelihood of invoice scams. What do you need to get started? Many business accounting software providers are building eInvoicing into their products and may include free or low-cost solutions depending on your invoicing needs. To start eInvoicing, your accounting software (and that of your recipient) needs to be connected to the Peppol network (eProcurement framework as well as main secured network used in many countries and adopted in Australia) where eInvoices are delivered securely by Australian Taxation Office (ATO) approved service providers. The ATO administers the network but can’t access or view your invoices.  Your software provider will provide instructions on how to connect to the network. If you send or receive invoices using accounting software such as MYOB or Xero you should check with your software provider to see if they are eInvoicing enabled and follow their steps to get started. If your accounting software can’t eInvoice, you can start eInvoicing now by either: connecting your software to an add-on eInvoicing product, or purchasing accounting software that can eInvoice. The benefits of eInvoicing REDUCES THE LIKELIHOOD OF INVOICE SCAMS eInvoicing reduces the risk of scams and fraud as: eInvoices are sent via a secure network by ATO-approved service providers (the ATO administers the network, but can’t access or view your invoices). An Australian Business Number (ABN) is used to deliver invoices to the right business, with less risk of fake or compromised invoices, which were the most prominent scams reported by business in 2023. SAVES TIME eInvoicing can save you time by not having to re-key or scan invoices, fix errors or chase up overdue or lost invoices. Your invoice data will also be more accurate and complete as key details are checked before the eInvoice is sent. FASTER PAYMENTS eInvoicing means fewer errors and lost invoices, avoiding unnecessary delays in getting paid. Federal government agencies are paying eligible eInvoices within five working days. COST SAVINGS Research shows it costs businesses around $30 to process a paper invoice and $27 for an emailed PDF invoice, but it costs less than $10 to process an eInvoice. Your actual savings will depend on your processes, how many invoices you send and the time saved in managing your invoicing. INCREASED VISIBILITY OF YOUR FINANCES eInvoicing provides better visibility throughout the invoicing process which can help you better manage your cash flow, planning and budgeting, helping you more accurately manage your business financials. CONNECT ONCE, TRADE WITH MANY Australia has adopted Peppol, an international standard, that allows digital invoices to be exchanged between different software or systems. Once you’re connected to the Peppol network, you can exchange eInvoices with any business on the network that is also connected, regardless of their size or software. Next Steps in eInvoicing If you think eInvoicing might work for you, getting started is easy: Check with your software provider to see if your software is eInvoicing enabled and follow their steps to get started. If you don’t use software, there are free and low-cost options available to help you start eInvoicing now. Talk to your trading partners to see if they’re already connected. If not, encourage them to connect and start exchanging eInvoices with you. More Information Visit the ATO website for more information on eInvoicing for business. Government leads the way to shorter payment times How to turn excuses into payments Providing credit to customers Finance Share Facebook-f Instagram Youtube Linkedin Related Articles How eInvoicing can save you time and money Learn more Ready, set, GROW your business Learn more 1 July 2024 changes that may affect your business Learn more

Business premises

How to make good at the end of your commercial lease

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SBDC BLOG How to make good at the end of your commercial lease There can often be confusion and disputes when you’re exiting a commercial lease and need to meet a number of ‘make good’ obligations. The make good clause in your lease will outline the condition the building must be in when the lease comes to an end. Here is a summary of the top make good obligations that most often lead to a dispute, and some actions you can take to keep things sailing smoothly. Tip Make sure that you refer to your lease before doing any make good works. If you are unclear about information in your lease, call our free business advisory service for guidance from one of our commercial tenancy advisers. Returning the premises to an ‘as is’ basis It’s quite common for tenants to make improvements to what was in place during the course of their lease. Your lease may state that you have to return the property to the state it was in prior to you accessing and fitting out the premises. If you have completed any work in the tenancy (ie. installed partitions, false ceiling, or floor coverings) it’s best to talk to your landlord first and clarify what, if anything, they want to keep in place. In the absence of any agreement, the premises must be returned to the state which is specified in the lease. A landlord may be happy to accept the premises back with the modifications you have made, which will save you time and money. It is, however, best practice to get this confirmed in writing so you have a record of this agreement that you can refer to in the future, if needed. By reviewing your lease, you will be able to determine any fixtures and fittings that are owned by the landlord, and will help you work out what you can take with you and what remains the landlord’s property at the end of the lease. Tip When seeking confirmation from the landlord, it’s best to provide a date for response in your request. For example: ‘Please confirm by that the works completed in the tenancy can remain in place. If we do not hear back from you by this date, work will commence to remove these modifications.” When should make good work take place? It is best to do them during the term of the lease. If you are carrying out works when the lease has ended, this can lead to disputes over when the lease technically ended, as you are still in the tenancy and delaying the landlord from renting to other tenants. The landlord could, in this situation, charge additional rent and outgoings in addition to making good the premises themselves at your cost. Who is responsible for building damage and repairs? Like most things when it comes to renting, it’s best to refer to your lease. It’s quite common for make good terms to require you to paint the walls, regardless of the state they were in when you entered the lease. There may have been building damage before you entered into the lease, so refer to any property inspection reports and photos you have to use as evidence of any pre-existing issues that you do not believe you are responsible to repair or replace. Resolving structural or fair wear and tear issues Tenants are generally not responsible for structural repairs or damage through fair wear and tear. Each lease can vary so it is important to refer to your lease. What is considered structural damage or fair wear and tear can often become a cause for dispute. In this situation, our dispute resolution service or commercial tenancy advisers may be able to assist. If you are unable to come to an agreement with your landlord contact one of our commercial tenancy advisers on 133 140 for free guidance. Approval for trades to work on site This is specific to businesses located in shopping centres. If you will have trades entering your tenancy, centre management might have a policy that requires you to get their permission and/or need to complete occupational health and safety paperwork before your tradies can come on site. Getting your bond or bank guarantee back When you’re approaching the end of your lease, contact the landlord or renting agent to schedule an agreed deadline for a final property inspection to take place and commitment for the return of the bond. Check your lease to see if the final sign off on make good works lies with the agent or the landlord, and ensure you have sign off in writing from the required party. An area where business owners can often get stuck is tenants saying they received sign off from the agent, however the landlord believes that the requirements of the lease have not been met. While this dispute is taking place, you’ll be unlikely to have your bond or bank guarantee returned, so be sure to get sign off in writing from the appropriate party. If you’re in dispute over the return of a bond or bank guarantee, you can contact our free dispute resolution service for help. In summary When it comes to leasing, we recommend that you: Refer to the lease Be proactive Communicate regularly (and keep records in writing) The SBDC’s commercial tenancy advisers and dispute resolution service are always available to provide free assistance if you’re having issues communicating with your landlord or finalising disputes related to your lease. You can access both services by calling 133 140. More information Read our tips for resolving leasing problems Download our Leasing business premises: A commercial and practical guide Find out more about our free business advisory and dispute resolution services. 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Has your rent increase been calculated fairly?

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SBDC BLOG Has your rent increase been calculated fairly? The cost of renting your premises can be one of the biggest overheads in your business, and can put the pressure on you when a rental increase is looming. Learn about market rent reviews and what you can do if you’re a tenant facing rising rental costs. The costs of being in business are rising because of inflation, interest rate rises and other economic factors. If you rent your business premises, you might find your lease includes details of annual rent increases. Rental increases are often calculated using a formula such as the consumer price index (CPI) plus two per cent, or what’s known as a market review (MR). Here’s your guide to understanding market reviews and how these can impact your rent and therefore, your bottom line in business. What is a market review? A market review is a formal process conducted by someone who is licensed under the Land Valuers Licensing Act 1978. Just as homes and commercial properties are valued for sale, a licenced land valuer will take the property value and a number of other market factors into account, to work out what kind of rent could be payable at the time of the review, in a free and open market. What is an informal market review? Some landlords or managing agents (real estate agents) conduct their own informal market reviews. They might base their reviews on local factors and conditions to come up with what they see as a relevant value. Here’s how that might happen: The managing agent might either assume the inflation rate (from the daily media) or access research from the Australian Bureau of Statistics website. They then apply this CPI inflation figure to the rent. Their tenant is then informed of a rent increase, which is usually based on a percentage increase to their current rent. Case study Our SBDC advisory team was contacted by a commercial tenant whose managing agent calculated an 88 per cent increase in their annual rent. This kind of rental increase may be designed to test the tenant’s level of resistance. If they agreed to pay this much extra, it could create a new level of property value, which could easily lead to further rental increases in future. When the tenant challenged this rent rise, the managing agent stated that a legal opinion supported the calculation. Sometimes, if tenants challenge the informal market review, the landlord might not have any evidence except for examples from other properties in the area. Tenants who question the rental increase are sometimes met with a breach notice and intimidation tactics. In this scenario, the tenant can: Request the managing agent provide evidence* to support the legal opinion of the calculation. If no scientific evidence is provided, the tenant can undertake their own research on local values and use this information as part of negotiations. If there is no resolution following the steps above, contact our commercial tenancy advisers for further advice. *The rent obtainable in a free and open market if the property was vacant and being let on similar terms as contained in the current lease, but excluding any fittings or fixtures in the property that are not owned by the landlord or structural improvements paid for by the tenant. What to do if you’re facing an unfair rent increase If your business is facing a rent increase and you think it may have been calculated using an informal market review system, you might like to: Check your lease documents to understand how any price increases are calculated, according to what you have agreed in your contract. Ask your accountant for an independent calculation of the rent increase. Once your accountant has calculated a new figure, ask them to write a letter to your managing agent setting out the correct figure. They can include how this has been calculated fairly and correctly in line with your lease documents. By engaging your accountant to calculate and communicate a fair rental increase to your managing agent, you can take more control of the situation and might be able to avoid any intimidation tactics from your landlord or managing agent. At the Small Business Development Corporation, we’ve found an increase in the number of small business owners getting in touch about the rising cost of rent. We have between five and ten enquiries on these kinds of issues every week . Even if your rent increase is fair, you still have options Your rent could be increasing after a formal market review conducted by a licensed professional and in line with your contract or lease. If this has been calculated properly, you may not be able to challenge your new rent, but you still have options within your business. Here are some tips which could help you manage an increase to your rental costs. Consider your business model Look at your long-term plans for your business operations. If you don’t see the value in paying more for your current premises, you might be able to find other premises or explore other options such as an online model. Check your supply contracts Make sure you understand the terms and the risks of any unexpected price increases from your suppliers.. Look at your costs Review your annual leasing costs, employment costs and other expenses to calculate at what point you might encounter financial issues. Calculating this as your benchmark can help you be better prepared and make informed decisions. Consider your pricing If your pricing needs to be reviewed and raised, take steps to put this in place and give your customers some advance notice. Try not to leave a price increase until you’re already facing financial pressures. With a rent rise looming, the sooner you act, the more options you might have. Your business might not suffer any financial stress when your rent is first raised, but you might find that other costs rise at the same time. It can take six to eight months before

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