The Top 5 Things Every Small Kiwi Business Must Know
1.) Word of Mouth is the most important
Good, old fashioned word of mouth marketing is undeniably still one of the most powerful sources for business. Basically, consumers are far more inclined to listen to their family and friends, people they trust, over a paid advertisement.
Your ‘gold’ customers essentially doing your marketing for you, you can build a very strong clientele and
will find work more enjoyable and
profitable. Win win, right?
The best thing about word of mouth is you don't need a high budget to harness its power. Here are a few ways you could incorporate and drive word and mouth marketing in your business:
Provide consistent and excellent customer service, to everyone!
Ensure you are easy to contact. For not only the new, but existing clients.
Give your clients a reason to talk. You could host events, or introduce referrals and incentives.
Engage with your clients. The popularity of social media has become a facilitator for word of mouth marketing. If a happy customer simply ‘likes’ or ‘shares’ a post, it is then seen by their extended friends and becomes, in a lot of cases, a trustworthy referral.
Maintain a positive image. Aim for appealing and professional.
Ask for testimonials and use them in your marketing strategy.
Get positive publicity.
Be visible in your local community.
Work your way through this list and over time I have no doubt your businesses will be a hot topic at the local cafe.
2.) Which Business expenses are claimable (and which receipts you need to keep)
Tax can be a difficult topic to wrap your head around, especially when running your own businesses. In short, businesses get taxed on their income minus any business expenses, so the more you can claim, the less tax you will need to pay. If you’re in businesses, including self employed or working as a contractor, you need to keep records of your expenses and income. Below are a few noteworthy tips and a list of expenses you can claim. Happy tax day!
- Any costs necessary to run the business will probably be tax deductible.
- If you have incurred an expense but have not yet paid it, you can still claim it.
- Some costs, providing future benefits like insurance, may not be fully claimable in the year incurred.
- Business expenditure: Pay as much as you can through the business bank account, and for other small petty cash items keep a notebook. Record date, nature of cost and amount, keep supporting receipts where you can, and when the business owes you a reasonable amount, get reimbursed from the business bank account and record.
- Keep supplier tax invoices, you can also claim GST on the business share of these costs.
Expenses you can claim:
- Expenses which have an ongoing benefit to the business over a period of years (‘fixed’ or ‘non current’ assets). You can only claim a proportion of their costs per year, known as depreciation.
- If you use part of your home (or garage) for business you can claim for a share of rates, insurance, interest on mortgage, repairs and maintenance, power, and depreciation on the house. Note: substitute rent for rates etc here if you don't own the house.
- Phone. You can claim 50% of your phone bill if the phone is used for both business and private. Full time farmers can claim 100% as business.
- Entertainment. This can be difficult but if you provide food and drink you can claim up to 50%.
- Interest. Generally tax deductible, however, borrowing to buy a new home and retaining your old home for rental is not tax deductible even though you might use your old home as a security for a mortgage.
It is good practice to at least record the date, description, cost and supplier for everything you buy for your business. Fortunately, there are many great apps available to make this easier, a great one is Receipt Bank. Using MyIR also keeps copies of anything you send to Inland Revenue. Your accountant will thank you for this!
Keep records of:
- Wage books
- Banking records
- Petty cash
- Vehicle log books
- Asset registers and depreciation schedules
- Emails, e.g. arrangements of business meetings if claiming travel
- If you’re GST registered you also need to have tax invoices for your expenses that are over $50 so you can claim back the GST.
3.) The difference between an employee and a Contractor
A contractor is a self employed person. They charge a fee for their services and are usually hired to work with organisations because of their expertise.
An employee is someone who works for a company where they usually have an employer from the business controlling and supervising their work. They are paid a salary or a wage by an employer, who in turn pays the employees PAYE and ACC.
4.) XERO or WAVE? Which accounting software is the best
When you are deciding which accounting software is the best to use, there are a range of options, for example quickbooks, MYOB, XERO and wave. I’ve decided to judge the difference between the top of the range “XERO” and the simple-to-use “WAVE”.
First you have to ask yourself what your business will be using the accounting software for, the size of your business, extra accounting requirements such as payroll and stocktaking. How many clients you currently have and how many you might have in the future. What are your future goals for the business, for example you might be alright to use WAVE for current accounting needs but in the next six months your accounting needs may become more complex.
Feel free to start of using WAVE as you begin your accounting and business journey, as the transition to XERO can be fairly easy if you follow the right steps. There is a quick video showing the XERO conversion here.
Price - The biggest factor with small businesses accounting software may be price. WAVE is completely free of cost, XERO can be anywhere from $ 27.50 a month up, check out the pricing subscription here.
In saying that, do check with your accountant as some have some special deals with XERO and are able to offer you a lower price.
Accounting capabilities - XERO wins out on this one with many more reports to help you forecast the future of your business. While they both have bank reconciliation features, chart of accounts and basic accounting reports, WAVE has it's limitations when it comes to reporting.
Features - XERO provides very similar features in a more in depth standard. However, if you aren't interested in spending the time to understand these features, just choose WAVE. They have an extra lending feature and you'll still get the basic features that XERO provides. I have to admit, for a free software, WAVE really pulls out all the stops for most small business needs. Here I also want to mention that for ease-of-use this is where WAVE really shines.
Mobile Apps - Both XERO and WAVE provide mobile app options. XERO have an all-in-one app, WAVE have Receipts by Wave, and Invoices by Wave.
In summary, for simple easy-to-use free accounting software, WAVE is your best option. However for more complex accounting practices, XERO is where you want to be.
5.) How to schedule Social Media Posts (step by Step)
Let's talk about consistency. Brand and marketing consistency helps to build awareness that allows the customer to easily and immediately recognise your brand. Maintaining regular interaction with your customers helps to build trust and customer loyalty.
For many businesses social media is the main platform where they engage and interact with their consumers. People today use social media more than they use search engines, so you’d be silly to delay that social media image any longer!
Facebook is a highly recognised and popular social media site, and very helpfully, allows you to schedule posts. You can therefore publish your posts well in advance and schedule them to appear regularly and at the date and time of choice. This is great, so you can always keep on top of your posts and maintain consistency.
Here is a step by step guide of how to schedule posts on Facebook:
Step 1: Go to the top of your Facebook page’s timeline, click ‘Publishing Tools’
Step 2: On the left hand side click ‘Scheduled Posts’
Step 3: Click ‘Create Post’
Step 4: Once you have created a post, click ‘Schedule Post’ and select the date and time you want this post to be published
Step 5: Click ‘Schedule’