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Super Guarantee Change – Deadlines, Payments & Everything Your Business Needs To Know Before The EOFY

It is easy to get caught out with superannuation, particularly when you are the owner of a business. With so many things to occupy your mind, superannuation may slip from the forefront.

But as a business owner, you must pay the superannuation guarantee for your staff, and you must pay it on time. A failure to pay it on time will mean that you are no longer able to receive a tax deduction for the payment for that financial year. 

On top of that, you can face hefty penalties (which you won’t get a tax deduction for either!). Now imagine being five days late on a $10,000 super payment, losing the tax deduction on that payment and then copping a $20,000 penalty as well. 

The first thing is to make sure that your super is paid well before the time it is due. This should be a priority payment (a payment that you make before anything else).

As the end of the financial year approaches, it is time to be thinking about the June Super Guarantee payment. You may have until July 28 to make the payment but leaving it until then will not net you a tax deduction until the next financial year. From a tax perspective, this may not be what you want to do (unless you know that in the next year, you will need more tax deductions).

Superannuation also has a few strange rules when it comes to claiming a tax deduction.  For employee superannuation, it is critical that it is paid on time.  More than that, the money has to actually be in the bank account of the super fund for you to claim a tax deduction.  

Unlike other expenses where you can show the money coming out of your bank account, this money needs to be present in your super fund for you to make the claim. If your super guarantee payment hits the bank account of the super fund on June 30th then you can claim a tax deduction for that year.  If, however, it hits the bank account on July 1st then the tax deduction is claimed in the financial year after.

Problems arise when you are paying your super through a clearing house, which takes a number of days to clear your payment and get it to the super fund. For example, you may pay the clearing house on the 25th of June, but your super fund does not receive it into their bank account until the 1st of July. 

The ATO’s Small Business Superannuation Clearing House usually has some concessions in these instances.

If you want to get a tax deduction for your June Super Guarantee payment, you need to work out with your clearing house the latest day that they can guarantee that the super fund will then receive the payment this financial year.  Some of these clearinghouses are quoting that you should be paying as early as the 14th of June.

Finally, with regards to Super Guarantee, remember that the rate increases to 10.5% from 1st July.  This rate applies to wages paid on or after July 1st so make sure your payroll system either automatically updates the rate or that you have updated it to reflect the increase.

Employers who fail to meet their Super Guarantee obligations may also be liable for a range of penalties or charges on top of the super guarantee charge. 

Paying super is an important part of being an employer. To ensure your business remains compliant, remember to: 

• pay the right amount (10 per cent) of employee ordinary time earnings until 1 July 2022 (when it will rise to 10.5
• pay on-time
• pay the right way and
• keep records to show you have met your obligations

Director Identification Number Compliance Reminder For Businesses

As of 5 April 2022, new Directors will need to have applied for their Director Identification Number (DIN) prior to their appointment to the position.

Existing directors were required to obtain a DIN prior to the end of the transitional period (30 November 2022), whereas directors of Indigenous Corporation have until 30 November 2023. Failure to do so could result in penalties for non-compliance.

What Is A Director Identification Number?

Previously a company or business was registered through ASIC, where a Tax File Number and an Australian Business Number would be required. These are obtained through the Australian Taxation Office (ATO) and are a critical part of setting up a business or company.

Introduced in November 2021, there will be an additional step introduced in the registering of a company, involving a Director Identification Number (DIN). This director identification number is a unique identifier that a director will apply for once and keep forever.

They were brought in as a part of a broader regulatory strategy to address the issue of phoenixing – this is where controllers of a company deliberately avoid paying liabilities by shutting down indebted companies and transferring assets to another company.

DINs are recorded in a database to be administered and operated by the Australian Tax Office and are made available to the public.

The ATO has the power to provide, record, cancel and re-issue a person’s DIN. A DIN will be automatically cancelled if the individual does not become a Director within 12 months of receiving the DIN.

Who Does A DIN Apply To? 

Director ID only applies to companies and corporate bodies registered under the Corporations Act and CATSI Act.

Director ID does not apply to sole traders, partnerships or trusts unless the trust has a corporate trustee.

Deadlines For Applying For A DIN

When the announcement of DINs was made in April 2021, there were set deadlines in place for those involved in profit and not-for-profit entities, as well as for Indigenous Directors. As of 5 April 2022, those deadlines have changed.

For profit entities, the deadline for applying for a DIN under the Corporations Act must be done before your appointment as a director.

For non-profit entities (including those entities registered under the ACNC Act as either private or public companies), you also need to have applied for your DIN before you are appointed as a director.

For new directors of Indigenous Corporations, the same requirements for applying are advised (prior to appointment).

How To Apply For A DIN

All directors must apply for their own DIN. This cannot be done by a third part, unless it can be proven to the Registrar that the director is unable to make the application on their own behalf (such as suffering some sort of incapacity, etc).

There are three ways to apply for a DIN:

1. Online application via the myGovID app. This is different to myGov and is the quickest way to obtain a DIN.
2. Phone application.
3. Paper application (which is the slowest process).

These methods require proof of identity documentation, however, you may be able to use certified copies (witnessed by a Justice of the Peace) if you are using the paper application.

Paid Parental Leave Scheme Update For Federal Budget Announcements

If you have employees who are expecting to expand on their family (whether they are adopting or looking to become pregnant), the Federal Budget 2022-23 announced a change to paid parental leave that could impact you and your employees.

Single parents and fathers are now eligible for longer paid parental leave after the government proposed an ‘enhanced’ 20-week scheme from announcements made during the Federal Budget 2022.

Under existing arrangements, up to 18 weeks of paid parental leave can be taken by whoever is designated a baby’s primary carer – usually the mother – at the minimum wage, while a secondary carer is eligible to take two weeks. If the secondary carer does not use the two weeks, it is lost.

As a result of the recent announcements made in the Federal Budget 2022-23, the secondary carer’s leave will be merged with the 18 weeks of Paid Parental Leave to increase the government-funded scheme to 20 weeks of leave.

Single parents will see two additional weeks of paid parental leave added to what they normally would be entitled to, whereas two-parent households will be able to split the Paid Parental Leave as they would like. However, this leave must be taken within two years of the child’s birth or adoption.

The ‘use it or lose it’ incentive will not be implemented into the new scheme, but an emphasis may still be placed on the primary caregiver to take the bulk of the leave.

The enhanced scheme will also broaden the eligibility for paid parental leave to include a household income threshold of $350,000 per year.

This fully flexible leave aims to help working parents make caring decisions that suit their specific circumstances and encourage fathers to take up parental leave.

Presently, women who earn up to $151,350 can access paid leave, but women earning more than the threshold are not entitled to this scheme, even if their partner has lesser or no income.

The rate of paid parental leave has not increased either – it is simply that eligible parents will be able to access more of it. This may be a disincentive however to the higher income earner, as taking the paid time off may be less than what they would otherwise earn working.

Notably, though, the proposed scheme still does not include superannuation payments in parental paid leave. Paying super on paid parental leave would allow parents to continue building their retirement savings while taking time out of the paid workforce to care for children.

If all goes to plan, these changes to the paid parental leave scheme will take place no later than 1 March 2023.

Paid parental leave is a topic that can be tricky for employers. Having a discussion with a professional can be a way to alleviate concerns about what your employees are entitled to or the risks of failing to match standard employee obligations around the matter.

Passing The Business To Family? Here Are Three Things You Probably Hadn’t Considered

Succession planning for the family businesses has a number of factors that could impact the decision to pass the business onto the next generation. Namely,  you’ll be looking for someone in the family who is willing to assume the responsibility.

But if you intend to pass your business down the family tree there are also a number of taxation, financial and managerial considerations that need to be taken into account for a successful succession.

Taxation Implications

When transferring your family business and placing it in the name of another family member you may trigger a myriad of taxable consequences, including Capital Gains Tax (CGT), wine equalisation tax, fuel tax credits and excise duty. You need to consider, when preparing the business for succession include:

•     Consulting the ATO to check if you are eligible for tax concessions
•     Document all business restructuring operations and the tax impact in the succession plan

Consider A Family Trust

It is often suggested before a younger family member gains ownership of the business they should first assume managing responsibilities to prove themselves. If you want to relinquish control gradually rather than permanently, re-structuring the business as a family trust is an option.

Although this may be complicated and incur costs, as a trustee you will be able to have control of the assets from a distance and be able to step in should the need arise in the early phases of new leadership. Family trusts also carry increased tax benefits and concessions that can be taken advantage of.

This is a great solution for those looking to go into semi-retirement or looking to step back from the business but still want some involvement with the process.

Create A Family Constitution

To make the hand-off occur as smoothly as possible a family constitution should be drawn up collaboratively by all, directly and indirectly, involved in the business. The following should be included:

•     A detailed business plan, stipulating goals, outcomes
•     Hierarchy of the business, both present and future
•     Will of the business
•     Code of conduct for interactions between family members in business

Develop A Succession Plan To Successfully Succeed

A succession plan is designed to assist you in transferring your business to a successor. To do so, it should include the following to further guide the process.

• Choose A Successor

Identify who you would like to take over your business. If you wish to keep it in the family, you need to be certain that the person who will be taking over is skilled and prepared for the responsibilities to come. Make sure that you consider what is the best path for the business.

• Value Your Business

Understand how much your business is currently worth by getting your business valued. By doing so consistently, you can mark out how much your business is worth during events, the general day-to-day and more. This valuation may change substantially before you plan to leave, but having a valuation may assist you with planning for your succession.   

• Keep The Plan Current

Review your plan regularly, as your circumstances and the business’s circumstances may change over time. Having an up-to-date succession plan will ensure you’re always ready in the event that you need to pass the business on earlier than expected. 

• Make The Final Handover

If the final preparations have been properly made, and you’re ready to go, you should simply be able to hand over the business and step aside. A clear and current succession plan should facilitate a smoother transition with far less chance of disruption to the business’s everyday operations.

A Business Plan Requires Structure – Here Are 5 Things You Should Be Including In It

When you are first setting up a business, understanding exactly what you are setting out to achieve can be a daunting task. But a business plan takes some of that stress away by helping to cement your business idea into achievable goals. It can be as simple as dot pointing your strategy on the back of an envelope, or a 30-page report of what your business is hoping to achieve.

However, a formal business plan should consist of specific information that you can present to investors (or a bank, or just your spouse) as an indication of how your business will succeed.

Your Concept

What is the point of the business? In this section, try to outline your plan succinctly.  You should discuss the industry that your business will be operating within, what structure your business will take, the particular product or service

Actioning The Strategy

What goals do you have for your business? When and how will you reach your goals? Do you have a clear set of steps that you need to take to implement your strategy into being?

Why Your Product?

What’s the competitive advantage of your product over the others in your field? Are you a solicitor who specialises in family law? Do you sell vintage merchandise for Aussie Rules football teams?

What niche does your business fulfil that your customers need? Provide solid information about your product to your readers, and explain the reasoning behind why your customers will want to purchase your product, and not those of your competitors.

The Market

Who are your target customers? What demographics do your customers primarily lie in? How will you attract and retain enough customers to make a profit? What methods will you use to capture your audience? What sets your business apart from the competition?

Answering these questions will assist you in planning out your marketing strategy, and demonstrate to your investors that you understand how you will be targeting your customers.

Financial Needs

These will be based on your projected financial statements. These statements provide a model of how your ideas about the company, its markets and its strategies will play out.

Obviously, a report that outlines your business plan is probably preferable to a scrap of an envelope, but the main point to this is working through the business idea in a written form that you can take to your business strategists to formulate a more comprehensive and viable business plan that aligns with your goals.

As you write your business plan, stick to facts instead of feelings, projections instead of hopes, and realistic expectations of profit instead of unrealistic dreams of wealth. Facts—checkable, demonstrable facts—will invest your plan with the most important component of all: credibility.

It’s time to start writing that business plan if:

• You have a new idea for a business and want to explore its feasibility
• Your industry is undergoing significant changes and dramatic developments, and you want to map them out for your current business
• You’re looking to sell your business and want to establish a value for it that can be supported by facts and figures.
• You require financing for your business idea and want to plan out how you’ll expend the resources you’re committing.

If you’re looking for assistance with planning for your business’s future, you can come speak with us.

Cash Flow Checks For Businesses Are Best Done As Soon As Possible

After the stress of the holiday period, there are plenty more times throughout the year that cashflow issues can become a recurring problem that you need to get on top of.

Small businesses with cash flow problems may put themselves at risk of failing or suffering significant financial hardship.

Cash flow provides a business with stability so they are able to pay employees, avoid loan defaults and pay the overheads necessary to keep their business up and running. Follow these tips to boost your cash flow so you can secure your business’ future.

Perform A Business Health Check

Preparing financial statements will give you an objective insight into the health of your business. Identifying if you have a cash flow problem is the first step to coming up with solutions. Looking into the following reports will allow you to see if your cash flow is up to scratch.

•     A balance sheet will tell you what your business is worth on any given day. The value of your business is calculated by subtracting your liabilities from your assets.
•     Profit loss statements reveal if your income is meeting your expense requirements. If your profit is dipping below your expenses, it is time for a change.
•     Cash flow reports reveal the money that is going in and out of your business over a set period and identify peak and off-peak periods

Use A Business Budget

After analysing your cash flow situation, is your cash flow cyclical?

Creating a yearly budget is not only imperative to receive financing in future, but will also help you identify the best months to save to cover the quieter months. Where applicable, business owners can consider flexible rostering, whereby employing casuals and using a flexible roster can help you cut back on hours when you need to improve your cash flow in quiet periods.

When you have identified your quieter periods of the year, try to find additional revenue streams for when cash is low. Is there a product or service that could be introduced? Work with your team for new ideas to cover low cash months.

Get On Top Of Your Accounts Receivable

Allowing late repayments jeopardises your cash flow and can put you in a tight financial spot. Avoid being out of pocket by implementing some of these credit policies:

• Collect the debts on time – allowing late payments means that you’re without those funds for longer
• Offer an early bird discount to incentivise early repayments – it pays to repay that kindness
• Set credit limits and payment terms – know exactly what your terms and conditions are so that you can make sure that those who owe you are abiding by them
• Make credit applications and carry out credit checks on all new customers
• Penalise late payments with interest – set a specific interest rate that will apply and which you deem as fair.
• Consider cutting down on inventory – unsold stock can be a waste of funds, and if you’re finding yourself with plenty of it, you may not need to be ordering as much.
• Request upfront payment or a non-refundable deposit where viable, especially when dealing with large orders.

If you’re looking for assistance with invoicing, chasing payments or a general checkup of your business’s cash flow situation, accountants like us are equipped to help. Speak with us to find out what we can do for you.

SME Recovery Loan Scheme Rules Amended To Cope With Impact

Are you an SME who has been impacted economically by COVID-19, and who could use financial assistance to get back on their feet?

The SME Recovery Loan Scheme has been extended to 30 June 2022 with a reduced Government guarantee of 50 per cent. This is known as the 2022 Scheme expansion, where loans will be available from 1 January 2022 at the new Government guarantee.

Earlier this year (April 2021), the Government announced the SME Recovery Loan Scheme (also known as the Scheme), which was designed to support economic recovery and provide continued assistance to small and medium enterprises dealing with the economic impacts of the coronavirus pandemic.

The Scheme was initially slated to be available from 1 April 2021 through to 31 December 2021 at a Government guarantee of 80 per cent of the loan amount.

The scheme is open to small and medium-sized businesses with up to $250 million turnover including self-employed and non-profits. The Scheme has been open to (so far) eligible SMEs that were:

• The recipient of a JobKeeper payment between 4 January 2021 and 28 March 2021 (only approved under this eligibility prior to 1 October 2021)
• Affected by the floods in eligible LGAs in March 2021 (only approved under this eligibility criteria prior to 1 January 2022
• Adversely economically affected by COVID-19 (can only be approved under this eligibility criteria prior to the Scheme Expansion Date, 1 October 2021).

These loans that are issued under the Scheme are able to be used to refinance existing loans, or for a broad range of business purposes, including to support investment. They cannot be used to:

• Purchase residential property
• Purchase financial products
• Lend to an associated entity, or
• Lease, rent, hire or hire purchase existing assets that are more than halfway into their effective life.

These loans may be used to refinance any pre-existing debt of an eligible borrower, including those from the SME Guarantee Scheme.

Participating lenders are offering guaranteed loans on the following terms under the SME Recovery Loan Scheme (2022 Scheme expansion):

• the Government guarantee will be 50% of the loan amount
• the expanded Scheme will not be available for loans to flood-affected SMEs that are not adversely economically affected by COVID‑19
• the expanded Scheme will commence on 1 January 2022 and end on 30 June 2022.
• lenders are allowed to offer borrowers a repayment holiday of up to 24 months
• loans can be used for a broad range of business purposes, including investment support
• loans may be used to refinance any pre‑existing debt of an eligible borrower, including those from the SME Guarantee Scheme
• borrowers can access up to $5 million in total, in addition to the Phase 1 and Phase 2 loan limits
• loans are for terms of up to 10 years, with an optional repayment holiday period
• loans can be either unsecured or secured (excluding residential property)
• the interest rate on loans will be determined by lenders but will be capped at around 7.5 per cent, with some flexibility for interest rates on variable rate loans to increase if market interest rates rise over time

Loans that are backed by the scheme will be available through participating commercial lenders. The decisions to extend credit and the management of the loan remains with the lender.

The SME Recovery Loan Scheme may be a viable option for your business if it has been impacted by financial hardship. If you would like to know more about this scheme, you can begin that conversation with us or a participating lender.

Minimum Rate Increase To 21 Awards – Is Your Business Compliant?

From 1 November 2021, minimum wages in 21 awards were increased. If you are not paying your employees this new rate of pay, you may find yourself facing significant penalties for failure to comply with the Fair Work Ombudsman. This increase is to be applied to anyone who is paid the minimum award wages or the national minimum wages.

As an employer of workers, you must pay them a fair wage according to the award that their profession exists under. That wage must meet the minimum wage expectations for the award, which is the minimum amount an employee can be paid for the work that they’re doing. Employees may be paid more than that wage, but the bare minimum that they can be paid is set out in the awards and as a part of the national minimum wage base rate.

The national minimum wage was increased from $19.84 per hour to $20.33 per hour, or 772.60 per week (increased from $753.80). This increase should have applied from the first full pay period starting on or after 1 July 2021. In addition, employees who are covered by awards should also have had their base rates increased by 2.5 per cent, though these increases may begin on different dates for different groups of awards.

Most award wage increases applied from 1 July 2021, though there were 21 awards where the Fair Work Commission deemed there to be exceptional circumstances in place that would affect the increase. Those 21 awards were increased from 1 November 2021, and include:

• Pilots Award
• Cabin Crew Award
• Airline Ground Staff Award
• Airport Award
• Alpine Resorts Award
• Amusement Award
• Dry Cleaning and Laundry Award
• Fitness Award
• Hair and Beauty Award
• Hospitality Award
• Live Performance Award
• Models Award
• Marine Tourism and Charter Vessels Award
• Nursery Award
• Racing Clubs Events Award
• Racing Ground Maintenance Award
• Registered Clubs Award
• Restaurant Award
• Sporting Organisations Award
• Travelling Shows Award
• Wine Award

This increase is a result of the Fair Work Commission’s announcement after conducting its Annual Wage Review.  The Fair Work Commission is the independent national workplace relations tribunal. It is responsible for maintaining a safety net of minimum wages and employment conditions, as well as a range of other workplace functions and regulations.

Workplaces are expected to ensure that all of their employees are being treated fairly and paid the minimum rate relevant to their circumstances (award/base minimum rate).

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their pay and compliance requirements.

Are you concerned about potential non-compliance with the new minimum wage, want to know more about the other increases to different kinds of rewards? Trying to get your head wrapped around the new superannuation guarantee requirements, or after some business planning advice in the approach to the new year? We’re the people you can speak to about any concerns you may have for your business and its future.

Director Identification Numbers And What Companies Might Need To Do To Get Prepared

Did you know that there are 31 different business registers that a business or company may need to be registered with that are a part of ASIC? Some of these registers are being brought together, in what will be known as the Australian Business Registry Services (ABRS).

The Commissioner of Taxation was appointed in April 2021  as the Commonwealth Registrar of the ABRS. In the near future, registering a company will be done through the ABRS instead of ASIC. This is a part of the government’s move towards a more efficient digital economy.

Previously, a company or business was registered through ASIC, where a Tax File Number and an Australian Business Number would be required. These are obtained through the Australian Taxation Office (ATO) and are a critical part of setting up a business or company.

Beginning from November 2021, there will be an additional step introduced in the registering of a company, involving a Director Identification Number (DIN).

This director identification number is a unique identifier that a director will apply for once and keep forever.

Every company director will need to have a DIN prior to 30 November 2022, with Indigenous directors having an additional year (till 30 November 2023) to adhere to the new requirement.

This applies to directors if their organisation is a company, registered foreign company, registered Australian body or Aboriginal and Torres Strait Islander corporation.

In the future, registering a company will be done through the ABRS instead of ASIC. This is a part of the government’s move towards a more efficient digital economy.

Directors will need to apply for their director ID themselves because they will need to verify their identity. Eligible persons that have sufficiently established their identity, will be provided a DIN that they will keep for their lifetime – even if they cease to be a Director.

No one else will be able to apply on their behalf.

The new DIN Requirements apply to appointed Directors and acting Directors of Australian corporations and registered foreign companies, which includes those companies who are responsible for managed investment schemes and registered charities. This is set out under the Corporations Act 2001 (Cth). 

As of the time of writing, the DIN requirements do not extend to unincorporated bodies, de facto or shadow Directors, or company directors.

DIN’s will be recorded in a new database to be administered and operated by the Australian Tax Office and be made available to the public.

The ATO will also have the power to provide, record, cancel and re-issue a person’s DIN. A DIN will be automatically cancelled if the individual does not become a Director within 12 months of receiving the DIN.

Following the DIN, the ARBS will then take over the Australian Company Register, the Business Names Register, and the Australian Business Numbers (currently on the Australian Business Register).

The ABRS is responsible for the implementation and administration of director IDs. ASIC will then be responsible for the enforcement of associated offences.

It is expected that around 10% of all Australians will require a DIN.

Despite the small number, it is a crucial part of the plan to prevent and halt phoenix directors from being appointed to companies, who then rack up significant debts that no one is held accountable for.

It is believed that this change will make the process cheaper, faster, and easier, as companies will no longer need to be first set up through ASIC before dealing with the ATO for an ABN and TFN.

If you currently have a company and do not already possess a MyGov account, now is the time to rectify it in the move towards DINs.

Innovation Stems From Collaboration – So How Can Your Business Get Involved?

Innovation is one of the pinnacles of good business practice. However, sometimes innovation isn’t a process that can be achieved by one person alone. In business, some of the best ideas and practices that your business might achieve could occur through collaboration.

Most businesses will have understood the impact and importance of internal collaboration between team members and already put into place tools to help promote this. However, what exactly does effective business collaboration look like?

Business collaboration is the leveraging of internal and external connections in order to generate ideas, find solutions and achieve common goals for your business. It can be done internally (through collaboration with your team), or externally (through the combined efforts of multiple businesses).

Many businesses are already seeing the benefits of remote collaboration within their teams, especially with regards to the time being saved and the increase in productivity.

Businesses may also find that learning opportunities are presented to their employees and team members through the interaction and collaboration with other businesses that could benefit them, with additional knowledge and skillsets gained throughout the process.

Even with many restrictions remaining in place that limit travel on both domestic and international scales, businesses are able to confer with remote workers and businesses through the assistance of digital technologies, thus enabling collaborative efforts to continue

As restrictions ease and businesses are able to engage with one another once again in face-to-face settings, remote collaboration tools can be used to facilitate inter-business collaboration from the ease of anywhere.

These include:

• Instant messaging – allows for quick online communication for day-to-day business with the teams involved.
• Video conferencing – replicating face-to-face contact without the need to travel into the office or to a meeting space.
• Online workspaces – communicating, collaborating, and sharing ideas in one online space, without the need to be in the same room or even area
• Cloud sharing – cloud tools offer functionalities for collaborating on files, tasks, projects, and calendars in real-time in one accessible, shared online space.

These tools allow businesses to work uninterrupted with individuals, clients and other businesses, as the distance between is no longer a major inhibiting factor to operations (if operations can be conducted away from the site). It can also potentially promote global interconnectedness for the business, as collaboration does not have to occur at a local or domestic level.

Your business might not collaborate with other businesses in exactly the same way as a business in the same industry. It’s important to know what might be the right form of collaboration for your business to benefit from it – and doing that will depend on what you may want to get out of it, and how long you may want it to last.

Alliance

This is known as the traditional type of business collaboration, usually involving two or three companies temporarily working together. They are able to reach a common goal by combining their resources and knowledge, which can be effective for businesses with knowledge/resource gaps that another business could temporarily fill.

Co-Opetition

Competitors can be great collaborators if used appropriately. Co-opettion involves collaborating with competitors so that businesses can share resources, avoid duplication of their work and generate new customers for all parties involved.

Portfolio

When one large business manages a broad collaboration with multiple smaller, external partners, this is known as portfolio collaboration. The main, central business sets the rules for the collaboration and maintains it, offering many of the benefits of an alliance but in a long-term form that generates more connections between businesses.

Community 

Simply put, community collaboration uses one of the greatest resources that a business may have at its disposal – the community. Essentially, businesses collaborate with individuals or other businesses that are within their community. This can be done via both the business community (e.g local business partnerships) AND the customer community (e.g. social media influencers).

Network

If a business knows of other businesses with similar goals and values that they want to uphold, they may instigate network collaboration. This style of collaboration means that the businesses may not necessarily be in competition with one another but, with shared interests can collaborate on mutually beneficial projects with access to one another’s resources and customer base.

Your business may choose to collaborate with other businesses through:

• A wiki, which can be used to share knowledge, improve training and contribute towards a strong company culture.
• Cross-promoting, where the businesses promote one another on various platforms. This could be done through social media, running partnered promotions, or even by getting creative with guest posts on websites or a shared podcast.
• Running a networking event to find new clients and potential future collaborators, which can be conducted online or in person.
• Community events can be a great way to connect your business with potential customers and collaborators, and running it with another local business is an effective way to put yourself out there and foster connections that could lead to long-term partnerships.

The rapidly changing and digitally-inclined business world means that businesses that don’t prioritise collaboration – both internally and externally – are likely to fall behind. Making the most of collaboration solutions and tools allows collaborations to be streamlined, which is beneficial to all involved.

If you are looking for advice on how to structure these collaborations or work out the best way to get involved with other businesses, you can plan out your way forward with our help. Start a conversation with us today.