In the first few years of having my online store and my first shopfront, I remember constantly being amazed at the retail laws, rules and regulations that I needed to make sure that my business adhered to.
In consulting with hundreds of retailers every year, there are many rules that you have to comply with, that may not be the most obvious.
And whilst I’m certainly not a lawyer, knowing that ignorance is not a defence should you and up with one of those official looking letters (you know, the ones that you’re not entirely sure whether or not it’s a scam) I wanted to share the top three “laws” that I see retail business owners getting caught out on, time and time again.
Turn up the Tunes
Music is one of those factors that can make or break a store.
Entering a store that has no music can often feel like you’re walking into a library or museum. That ‘dead’ atmosphere can make customers feel hesitant to browse, plus there’s a subconscious feeling to get out as soon as possible.
Quite simply, there’s no soul (pun fully intended!).
Music has been proven to change customer buying habits, length of time in store and of course, the overall customer experience – the vibe.
But did you know that in Australia, you have to have a license to play music, even if it’s just in the background? Oh, and if have hold music on your phone lines – you’ll need a license for that too.
If you think that having a paid subscription to a streaming service like Spotify is going to cover you – guess again.
Head over to the APRA website to read more and apply for your license.
Think Twice About Stocking Up On Supplier Stocktake Sales
My first year in business, I shopped up BIG in June.
It seemed like every supplier wanted to off load perfectly good stock at low prices. I took advantage of those discounts like a possessed business owner with cash to burn.
If you know what’s coming next, you’re probably smiling and nodding, chuckling a little to yourself.
For those that haven’t been through their first end of financial year stocktake (you’re doing those, right??) and the subsequent meeting with your accountant, let me share a little tip with you, learnt the hard way.
There’s a REASON stores and suppliers do stock take and sell off as much as possible. Simply put, if you have a higher value of stock at the end of the year than you started with, you’ll pay tax on that difference.
Here’s the ATO’s official wording:
“ You are required to undertake a stocktake as close as possible to the end of each income year.
An increase in your trading stock’s value over the year is assessable income, while a decrease is an allowable deduction.”
I know it can seem gobsmacking that you have to pay tax on stock you haven’t sold, so head over to the ATO’s website and speak with your financial advisor to ensure you’re complying with your tax obligations (reference https://www.ato.gov.au/)
No retail owner can run a business on their own.
Having a great team of people behind you, whether they’re working on the shop floor or packing orders in your warehouse, there’s a more-than-likely chance they are covered by an Award.
Here’s an example: for a store NSW that has a team member responsible for opening or closing the store, their classification (Retail Level 3) will be different to staff that don’t (Retail Level 1/2).
And if you have more than one team member in the store, who is in charge of whom? If there are four or less staff (including themselves) the person supervising would be classified as Retail Level 4. If there are five or more staff, then they move up to Retail level 5.
Even though your team may be more than happy to do those little extra tasks and responsibilities, it’s your job as the business owner to ensure that you are paying your team (and providing for them as required), in conjunction with the appropriate General Retail Award for your state.
Pay rates for each classification can change on a regular basis – jump on over to the Fair Work website and refresh your knowledge on staff classifications and pay rates.
Ignorance is not a defense when it comes to your obligations as a business owner.
Staying abreast of the laws, rules and regulations can be overwhelming for independent retailers. Subscribing to updates from government sites like Fair Work and the ATO can help to keep you in the loop.
* The advice in this article should not be deemed as legal in nature – they are simply my observations as an independent retailer and should not be relied on when making business decision.