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How are physical shops doing in Australia?

As official figures include both online and physical shops, so it's hard to say. However, an interesting pattern emerges looking at the major companies' shares that are mainly internet shopping sites in Australia, since the COVID lockdowns stopped about the start of the year.

Here are the share prices of some of these majors since the start of the year.


) eBay: 
Its chart shows over a 20% drop.


) Amazon:
Its chart shows almost a 20% drop.

) Shopify: it's not exactly a website, but it is a wholesaler for people with eCommerce websites.

Its chart shows almost a 70% drop. Now that would hurt badly.

 

) Kogan: 

Almost a 50% drop. That would also hurt badly. 

Clearly, the share market is saying something here about these business models.

This is all happening at a time when worldwide retail sales are booming. In the Australian Bureau of Statistics figures, last month was 9.1% up.

Although we have not yet got the Australian Bureau of Statistics figures for March, we look at the Mastercard SpendingPluseTM report, which states the following.

This all suggests that as COVID goes down, we buy more at physical shops than online.

Let me know what you think and what is happening in your world.

 

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If you sell your business including your customer database, you will be "trading in personal information."

I have been told that there should be minor problems with privacy on a business transfer. This is because personal information remains with the same business entity. This has never been a problem with my clients yet. 

Also, be aware that when you sell your business, you will have to sign a document that your assets, such as the computer system, are functioning. That they are fit for running your business. It is correct. On this, I have seen court cases fought over. The new owner may have very different ideas over what is a functioning computer system than you do. An old computer on its last legs became part of a small claim against the old owner. The new owner argued that it was junk and was sold as working. If there is something wrong with the system's information, you can be charged the cost of fixing the problem and any associated costs. This cost can be expensive. A week of work for a computer consultant, the new owner and an accounting office person can add up. 

Now that brings us to the issue of your customer data. As a rule, you can sell the information required for the new business. If the debts are sold, then the new owner has to have the financial information on the customers. If the debt is not sold, the new owner should not get it.

The main rule used for the rest of the data is that it should be *de-identify*. This means that the data cannot identify a person to the data. So your stock sales figures are good to give because knowing you have sold five toys does not tell the new owner who brought those toys. But, if the business does need the information for the new owner to function, it should be okay.

In the utility section of our software, you will find tools to help you *de-identify*. Select the ones that you need.

Note that we are not lawyers, so get some legal advice on this from an expert, e.g. a business agent and/or lawyer. Make sure this advice is in writing. I am telling you what these people have said to me over the years.

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This question gets asked a lot. Here are some thoughts on what people say.

Buying

This is now the preferred way of doing it. Computers today are not as expensive as before, so the outlay is much less. It is by far the easiest, quickest and cheapest way. If you have the money, this is your best route.

It also has the added advantage of locking in your Instant asset write-off. On a $5,000 outlay, you can save about $1,000 on cash flow with this here in the first year so reducing your outlay to $4,000

Finance 

One option is to get a consolidated loan for the business and add the computer to this loan. The payment and rates generally are better here, plus you get more flexibility.

There are a few other options here. From what I see, most people prefer leasing. 

The first point is that you introduce another person in the sale, and that guy will want to get paid. Computers do not attract the best rates so it's dearer. The big plus is that it does mean less cash needed upfront and allows you to plan your budget. One disadvantage is that a lease is hard to change once it is in place if your situation changes. 

As interest rates are expected to go up soon if you are planning to lease, I recommend locking it in now.

Renting

You are moving the finance company to the computer supplier. This is without the benefits of a detailed legal contract to govern the transaction. Generally, they want a high fee upfront to cover the computer and installation. Then payments are forever. You never own the item no matter what you pay. You also lose certain tax benefits. Plus, if you don't pay, your software stops and people suddenly lose access to their data.  

Summary

Without a detailed study of your situation, it's challenging to pick one choice over the other.

I would suggest talking it over with your accountant.

 

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Perhaps you are retiring or entering a different venture, so you have sold your business. Now, what happens to your records? One of my clients did not keep them, and now 12 years later, he needed them.

Here are some more examples I have come across over the years.

1) Many such as courts have no holding period. If you do not have the records, their view is often fair enough that you do not have them. But the other side often then will ask the court to assume that it is reasonable to think that these records would have supported their view. Now prove that they would not. 

Here my client had little proof to argue against this view. So they said it was a long time ago. They then admitted that they did not remember that much about it when questioned. Okay, here it is their word against the other side.

2) I have seen the situation occur with the ATO, where you only have to keep the records for seven (7) years. Yet, they can still sue you after this period. No figures. Well, they are happy to do estimates.

3) I have also seen a person who brought the business take the old owner to a small claims tribunal because the carpet was allegedly older than claimed. The old owner claimed they were looking at records of an old carpet they had replaced. But they had no evidence to back this up.

4)I have seen old owners taken to court because they claimed the historical business records supplied were wrong. That one was costly. I do not know how it went.

It is better to be safe than sorry when it comes to record-keeping. You never know when old business records can be helpful. It is advisable to keep all business records as long as possible. 

So keep all your business data, especially your POS backup. 

Worried about space, buy a heavy-duty corrugated cardboard box. Store it in a safe place, in a location protected from the weather, fire, flood, theft and other loss. In my garage at home, I have a stack of boxes. 

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Right now, almost everyone is doing some online conferencing.

Almost overnight, video conferencing services have become a must, used by everyone. In business today, it is practically a necessity. I use it for family and business meetings. It has often replaced telephone calls as it's much easier to discuss something when we can see it. 

For example, my office above is that it is not precisely a great-looking space as it is a little messy now. At least it's an office. Many people want to appear professional, yet they have to give their presentation now in a kitchen or bedroom.

Plus, people want privacy. 

So what they do use a virtual background to change their space. To do this properly, you need a green screen to add an appropriate background.

I am in my workshop.

 

See the impressive skylights in my office. These types with skylights in business background images are now very popular.

 

Some prominent executive here, see my office.

 

 

Of course, if you want to use some fun themes to have a memorable meeting.

Here am I on the Startrek ship, zooming the galaxy.

 

In a cockpit of a plane

 

In a cartoon

 

 

I am going to have fun experimenting with this with my family with green clothes on!

A suitable virtual background can help you make an engaging meeting. You should of course pick a background that is suitable for your video call.

Want to learn more, this guy explains it well.

 

 

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Your point of sale system has value and needs to be considered in your business insurance policy. It does not take long for a thief or a fire for you to lose it.

In my experience, the major insurance companies, on cost give a very competitive insurance rate, but you need to be aware that often

Chancy in the sense that often for the most unexpected reasons. 

I have seen them reject claims and the person being insured get nothing. 

They rarely move quickly.

I have seen people being arguing over the settlement for a long time.  It is not a lot of fun when you have a $20,000 bill that you paid for an emergency installation, because you need to have a working computer system is still not reimbursed a year later.

They often do not pay all

Particularly with fraud when the numbers get very high the insurance companies pay only a percentage. Say on a $1 million dollar claim, the judge nominates you for a  10%  legal slap on wrist, well that will be to you $100,000 plus maybe legal fees which will not be reimbursed.

There are several points I would recommend that when getting your business policy you consider.

When getting your business policy you consider.

Physical damage

How much is it going to cost you to install and replace the damage? 

You need here to also consider portable business equipment, like your mobile phones and laptops.

Loss of business while it is being replaced

These costs can quickly add up.

If you offer services like phone cards, bill payments, etc, you may not be able to sell these products until the computers are up and running.

You may need more staff to do the ordering.to record sales, etc

Your VIP club which now on many of our sites is generating about 4% of their trade is off.

If you have a website, it may be affected too.

Then there is loss of goodwill.

Public, Products, Privacy etc. Liability

Here is a horror scenario that happened. A power spike caused a monitor to explode, which sent flying glass throughout the shop. Luckily it was after hours, and the shop was empty, but what would have happened if it was when the shop was open and busy?

Privacy laws and the consequences of breaking it are very scary. There are special policies for this too.

If your EFTPOS is hacked, you might be responsible click here. It would not take long, with skimming your EFTPOS to build up a fair bill. Say you do 40 a day, over six days = 240 EFTPOS transaction. Say $2,000 taken off each that is $500,000+ plus damages plus legal etc.

Miss use of your systems, have a read here.

This is all worth thinking about this when making your business insurance policy.

 

 

 

 

 

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