In our last post we outlined what the 2015 budget meant for small business owners of cafes and restaurants. We specifically took a look at the instant asset write off and why it could be time to invest in a new POS. Today we take a further look at the range of other small business incentives announced in the 2015 budget and how your hospitality business can benefit.

The instant asset write off wasn't the only tax concession announced in the 2015 budget. If you are restaurant and cafe owner and your business has an annual turnover of less than $2 million then you will receive a tax cut from next financial year.

If your restaurant or cafe is registered in a company structure then from July 1, 2015 your tax rate will reduce from 30% to 28.5%. 

If you're an unincorporated business then you will receive a 5% tax discount from July 1, 2015. This means that any income you earn from your cafe or restaurant is eligible for a 5% discount on your tax bill. This concession is capped at $1,000. 

The government also announced a range of measure in the 2015 budget aimed at reducing red tape for small business.

One of these was a change to the Fringe Benefits Tax (FBT). For businesses whose annual turnover is less than $2 million then any portable electronic device you provide to employees from July 1, 2016 will no longer attract FBT. A portable electronic device covers things such as mobile phones, laptops and tablets.

Another measure announced in the budget was Capital Gains Tax (CGT) relief for small businesses who decide to change legal structure and incorporate their business. 

Currently CGT relief is only available for individuals who decide to incorporate, its is not available to businesses in any other structure, for example a partnership or trust. The new rules apply from July 1, 2016 and are aimed at small business who decide that their initial business structure may no longer be appropriate once they have begun operating and are more established.

The third aspect of the governments small business package that is set to benefit the hospitality industry in particular is assistance when hiring employees. There are three ways operators of cafes and restaurants could benefit:

1. Under a new National Work Experience Programme, the government will provide opportunities for employers to offer work experience for unemployed job seekers. This will come into effect from January 2016
2. Flexible wage subsidies will be available to employers under the Restart, Youth and Long Term Unemployed wage subsidies program.
3. Changes to the Restart Programme from January 2016 will make it easier to get government support when small business hire older workers.

Small business were a big focus of the 2015 budget and we have outlined three areas where owners of cafes and restaurants can benefit. The tax cuts, in combination with the instant asset write off, cuts to red tape and employer incentives gives the hospitality industry an incentive to invest in productive assets for their business and look to hire new workers.

One of the big announcements from last week's budget was the range of incentives for small business to go out and invest. The one incentive that attracted the most headlines was the $20,000 instant asset write off. So what does it mean for us in the hospitality industry? How does this incentive work and is now the time to look at purchasing new assets like a POS system?

While the instant asset write off covers most asset purchases there are restrictions:

1. Horticultural plants and software developed in-house cannot be claimed (software purchased for the business like the ViViMobile App can be claimed though)
2. Assets must be physical items
3. To claim the deduction the asset must be purchased outright. Any assets acquired through hire-purchase or leasing are not deductible.
4. If you purchase an asset that is worth more than $20,000 then it is not eligible for the tax deduction straight away. Instead it will be depreciated over a number of years, 15% in the first year and 30% for every year thereafter.

For small business that are already operating or those that are thinking about starting, there hasn't been a better time to purchase a new asset like a POS System.

The ViViPOS system is designed especially for those small business running a cafe, restaurant or retail outlet. It has a range of customisable features, over 20 different kind of reports to ensure your business is tracking how you want it to be as well as an intuitive interface and systems that will make you a more efficient business operator.

We are happy to provide an onsite visit to assess your needs or you can get in contact via our website and we will be in touch.

There has been plenty of talk recently around whether restaurants offering BYO is a thing of the past. In this post we look at the history of BYO in Australia as well as the arguments for and against offering it in your restaurant.

Their appears to be a numbers of factors that contributed to the development of the BYO culture in Australian restaurants. In the past liquor licences have been more expensive and difficult to obtain, making BYO the default position for many restaurant. Going out for a meal on a regular basis was never as common as it is today. In the past eating out was seen as an expensive indulgence. Today some people decide never to cook at home. Wine matching is also a relatively new phenomenon. Not as much thought was given to matching wine with menu items. If wine was available it was usually a choice between red and white wine usually from a cask. In this environment it is easy to see how bringing your own wine became quite widespread. Given the changing times is it still something that should be offered today?

Is BYO dead? That's the question people have been asking of late. Let's look at the reasons against offering BYO in your restaurant:

• The industry's slim margins in Australia with high labour costs makes BYO unviable. Even charging corkage means your more reliant on food to make money.
• Diners miss out on the full experience of dining at your restaurant if they bring their own bottle of wine. Much thought is given to matching wines with menu items by restaurants. BYO doesn't allow for this.
• It has become quicker, easier and more affordable to apply for and obtain a liquor licence. In Victoria for example it costs $429.50 to apply for a full licence In NSW the cost is $700.

Does the choice have to be between offering BYO or forgoing it all together? Some restaurants are having a bet each way and offering BYO on some nights of the week. For example you might wish to offer BYO from Sunday through to Thursday when there are fewer customers. On the weekend you offer a licensed only service. Hospitality Magazine provides the example of Barrel Bar and Dining in Sydney's suburb of Cremorne as an example of a restaurant who has done just that. During the week when the restaurant offers BYO, diners are encouraged to bring along their own wine with the food then matched accordingly at the suggestion of staff.

The decision about whether to offer BYO at your establishment depends on what type of restaurant you want to be. BYO is more common in smaller eateries, offering an affordable meal out that want to attract a regular customer base. Those not offering BYO are usually larger, full service restaurants that diners would eat at less often. Think about your restaurants offering before deciding what the best option is for your business.

To build customer loyalty for your restaurant, diners want to feel that you care about them. One strategy to do this is to put in place a system to ensure new dinners feel welcome and returning guests are recognised. This kind of attention makes diners feel special and increases the likelihood that they will return.

One tip when greeting new patrons is to share your name with them straight away. Ensure all your staff are trained to do the same. People feel a greater sense of connection when they know each others name. It also shows diners that you're prepared to be accountable. This small step can be the first step in building a loyal customer for your restaurant.

For returning customers it is important you and your staff remember names. If you have a system in place to remember when and what they last ate at your restaurant you are able to offer a more personalised service which they will appreciate. For example "Welcome back Jane and Jim, I remember last month when you ate with us you particularly enjoyed our seafood dish, well we've since updated our menu and I'm really keen for you to try out our new seafood pasta!"

You can build customer loyalty for your restaurant by paying attention to customer feedback.  Consider these tips to ensure your getting the feedback you need to consistently improve your business.

• Ask new customers why they have chosen you
• Ask existing customer what you do well and what can be improved.
• Review and respond to reviews left by diners online
• Encourage and make it easy for diners to provide feedback

By paying attention to customer feedback you have an opportunity to resolve any issues and improve your customer service. Customers both new and returning will see (with the help of some self-promotion) that you have listened and have improved. This will set you up to build long term customer loyalty.

It is important to remain in contact with customers to promote the fact that you care about their patronage. You could choose a number of methods by which to do this:

• Phone
  
• Email newsletter
  
• Social media

Whatever tool you use to reach your customers you should make sure they are aware of how your helping them through better customer service. If you fail to promote the fact that you have taken their feedback on board and have acted, then they may not notice. You could promote the fact that your now accepting online reservations or that you have introduced a special set menu following customer feedback.

Set up the mechanisms to reach out to existing diners and dedicate the time to maintain a database with which to contact them. This is especially the case on social media. If you're going to have a presence on social media platforms, ensure that when people visit they are greeted with up to date information.

What should be clear from these tips is that technology should play a central component in building customer loyalty. Technology can help make your processes more efficient. 

A POS system like ViViPOS can help maintain a customer loyalty program. This will help you record, organise and plan your contact with existing customers.

Sources: Inc.; Marketing Donut; Entrepreneur; All Business.