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Knowing when to cut a product

Posted on October 16, 2019 by admin

Businesses looking to improve their profitability may need to consider cutting under-performing products and services that are unnecessarily draining resources. It might be time to discontinue if a product fits the following scenarios:

When deciding whether to discontinue a product, there are a few ways you can examine your services and make the decision that is best for your business.

80/20 rule:
This rule states that businesses should focus their attention on the 20% of the products that generate 80% of revenue. Using this principle, companies should compile a shortlist of the products and services that bring in the most profit and scrutinise the products that fall short of this mark.

Trial run:
Try going a week to a month (no longer) removing all promotion and marketing for a product. This can help the business to visualise what it would look like without that service and see if there are any clients who miss it.

Harvesting:
Cutting the costs associated with the business or increasing the price of the product without increasing production or operation costs allows the business to continue generating revenue on a failing service. Once the product ceases to provide a positive cash-flow, it can then be discontinued.

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When do you have to pay tax on shares?

Posted on February 20, 2020 by admin

Investing in shares is a popular method of growing your wealth, however, there are tax obligations you need to be aware of to get an accurate sense of how much you’ll need to put aside for your investments.

When you own shares, you need to declare all your dividend income on your tax return. It is possible to claim tax deductions for certain expenses you pay to receive income from your shares. The deductions you are eligible for will depend on if you are carrying on a business of share trading or if you are an individual share investor, but they can include:

Individual share investors cannot claim a deduction for the cost of acquiring shares, such as costs for brokerage and stamp duty, however, they can claim deductions on the prepayment of expenses related to the shares such as internet fees or seminars.

Buying and selling shares can involve capital gains tax (CGT), depending on whether you make a capital gain or a capital loss on your shares. Your capital gains or loss is the difference between the price you paid for the shares and the price you sell them for. If you end up selling your shares for more than you paid for them, then you make a capital gain which may be taxed.

How much CGT you need to pay varies depending on:

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