Deal With Credit Issues

One of the most important aspects of creating successful partnerships is to know yourself first. It’s essential to understand your own weaknesses, biases, and prejudices. Knowing these things does not make you weaker. In fact, it makes you much stronger. Knowing where you are vulnerable enables you to seek out those people who can reinforce and strengthen those areas. Keeping your weaknesses hidden from yourself does not ensure that others won’t spot them immediately and exploit them readily.

Knowing yourself also relates to business. An organization must have a realistic assessment of its own culture, its way of viewing the world. Understanding the organization’s strengths and weaknesses is as critical to a business partnership as understanding your personal pluses and minuses is to a personal partnership.

Once you have calculated the ‘amount liable to CGT’ you still need to know how much tax to pay the IR. The rate at which CGT is payable depends on the individual taxpayer’s income tax rate for the year in question. The amount liable to tax is treated as the ‘top slice’ of your income (i.e. it is added to your income for the year) and charged to CGT at the rate applicable (sometimes known as the ‘marginal rate’).

Depending on your total income for the year, the rate could be at the basic rate or the higher rate, or some at the basic rate and the balance at the higher rate.

It is obviously useful if you can estimate in advance what the likely CGT consequences of your asset disposals it will be. You should get expert taxation advice on this and will help if you have kept your business records in an orderly fashion.

Customer perceptions and behaviour – what the customer wants and expects – are among the biggest influences on pricing. Successful pricing is based on a clear understanding of the needs and nature of the target market. The culture of the market affects pricing decisions. If there is an acceptance of a particular type of pricing structure or approach, strategies will often follow this. The maturity of the market is also important. If the market is mature with few new customers, pricing decisions should focus on taking customers from competitors as well as retaining market share. But if the market is new and growing, the aim is to build and gain market share as rapidly as possible.

These two approaches may or may not lead to the same result. Lastly, if the market is in decline, prices may need to be cut simply to compete for a dwindling number of customers.