Take the plunge

As I get longer in the tooth and my priorities change, I realize that although sometimes reality bites and compromise is essential, other times opportunities present themselves that we’d be crazy not to recognize as one-offs and jump in with both feet. Six weeks ago, I did exactly that, when I joined the great team at Bishop Collyer Leadbetter.

I have never shied away from a challenge – I am (was, to be exact as I am now a NZ citizen complete with ‘the tree’ in my back garden!) a self-proclaimed citizen of the world for many years, as my working and personal life has afforded me the opportunity of working and living in many countries. And for a huge variety of businesses – from IBM to Electronic Livestock Tracking Systems to Telecom to AJ Hackett Bungy! Small, medium, large business, and everywhere in between, the basic challenge is the same – how to be innovative, successful (whatever your personal criteria for that is!) and to roll out of bed in the morning with a smile as your feet hit the floor. The rest is detail – important, essential detail to be sure.

The great good fortune I’ve had to know and work with people who have inspired me, motivated me, challenged me, but most importantly BELIEVED in me has been the greatest gift in life. And for me, the manifestation of that, and the only real ‘good’ that will come of that is to have the opportunity to give it back. This is something we are able to do every day, in big ways and in small ways. A smile, a nod of approval, an affirmation or a clarification of intent – something to help someone else understand their own motivation, consequence of an action, or gifts. Someone to bounce ideas off of, to challenge an previously unchallenged way of working or belief or assumption, the sharing of experience.

If we don’t grow we die. Change is the only constant in the universe. I sometimes get overwhelmed with clichés, although in truth they are clichés for a reason – they tend to be true! Things like ‘if you always do what you have always done you will always get what you have always got’ etc. ad nauseum. Challenge, question, re-affirm, test, try.

And when opportunities present themselves, if you KNOW that it’s right, jump in. For many, that is preferable to jumping off…..which I had to do many times in my role as AJ Hackett’s MD 

Our clients may need extension and or increase of current creit facilities or, in terms of turnaround, they may need the bank to buy into a longer term strategy of parked or frozen debt.

In any case, the keys for banks right now are ;

1. Governance
2. People
3. Profit

Banks need to see solid leadership and quality in terms of financial and non financial reporting.

The business needs to demonstrate a clear ability to generate profits, if not now then as the output of their turnaround plan.

More important than anything else is the abiliyt of the business owner or leader to carry it off. This is not easy to assess but is critical going forward.

So remember – profit, people and governance are more important now than ever before. Businesses across New Zealand are looking to their leaders for a plan.

Looking for a leader - Dunkirk 1940

Form, function and design, applied to web sites

Philip Bidwell designs are the best marketing tools in the business. The web site is there to underwrite the credibility of the design team and the business.

PBAD have recently gone through the process of reinventing their web site and it’s working very well indeed

Clients who are referred to the practice are quickly able to put the practice and their ideas into context.

It is now becoming increasingly evident that more and more buying decisions are qualified through the web, more particularly through google.

Unless you’re in FMCG, there’s  a need to enhance your position in the market and a web strategy should be an integral budget line and part of your business plan.

We congratulate Philip on this piece of work.

sales pipelines are getting thinner and longer

We’ve seen a number of businesses lose their pipeline overnight. The smart business owner has worked through that fright and focused on -

• Who do we want to do business with?
• Who else wants that business and how do we become better than they are?
• What are these customers worth now and in the future?
• How do we keep them?

Now in reality, very business should operate this way all of the time. The current climate does focus the mind a wee bit. So think about your pipeline this way….

• It will get thinner and longer because there’s likely to be less business about and more hesitancy imaking buying decisions.
• If you take all comers you’ll end up moving away from your core business values at best and at worst your core competencies, which will leave your profitablity exposed.
• Always, always , always look at your clients future lifetime value. Unless you’re selling ice cream at the seaside, there’s lileky to be repeat sales opportunity. The cash, phone, fuel and shoeleather you expend now should pay dividends beyond that first sale – allow for that.
• After all that effort you have to keep the client! Those guys you’re competing with are getting hungry too – pre-empt their attack on your client list and work at turning your clients into loyal advocates.

I know, it all sounds easy. Fact is it is if you change some behaviors and habits you’ve gained when you were flat tack with customers everywhere.

1. Take some more of the equity from their home or securitise additonal borrowing against the 8-10% growth
2. Extend th overdraft to tide the business owner

We believe those days are long gone. Be prepared to forecast your revenue ahead at least twelve months and woe betide the business with red ink in the last set of annual accounts.

If you’re in this position right now you need to cast the cold hard light of reality on your business model and plan to change it accordingly. This has been a long time brewing and it’s now a case of dealing with it. If you read the situationsit blog on wordpress you’ll see that futurists were talking about the mess we’re in a couple of years back.

Patch the holes in the sieve and do it quick and don’t count on tea, biscuits and a loan document at the bank.

Get your accounts up to date – start with your accountant and involve your bank – they do not like surprises. If the future looks bleak then deal with what’s in front of you oiver the next 90 days – keep your horizon short and improve your forecasting.

Good luck

It’s be a tough one in Christchurch and I’m sure that there’s a background hum of scratching heads accentuated by deeply furrowed bankers brows.

Independent business owners  – if you’re not reviewing right now then you need to get going. Talk to your advisors and ask them for answers, if they have them , to the questions you need answered – better to be on the front foot.

nz-herald-management-column-6-feb-09

In a pivotal speech by the Prime Minister, Key unveiled a five part strategy aimed to make doing business easier for the important small business sector – 97 percent of New Zealand businesses employ under 20 staff.

The strategy includes:

* A suite of tax changes,

* An expansion to the Export Credit Scheme,

* An extended jurisdiction for the Disputes Tribunal,

* The expansion of business advice services, and

* A prompt-payment requirement for Government agencies.

But it is 11 separate tax changes that are the meat of the strategy and Key estimated it will take half a billion dollars out of government coffers and keep it in business’ bank accounts, where it can keep companies afloat and help with cashflow under pressure in the recession.

And the major changes small businesses will welcome are to provisional tax – at the moment small businesses have to estimate what they will earn in the next year and pay that to the Inland Revenue Department.

If businesses get it wrong, they then suffer penalty fines.

In a volatile climate where businesses are under pressure in a recession, that is a tough call for businesses to make and a harsh regime.

Key is promising to make it easier.

Key also promised a “series of fast-tracked Government building projects. These will keep more New Zealanders working as the international crisis hits home.”

Details will be announced next week.

“They are specific projects that were chosen because they are worthwhile and can be geared-up quickly. They will employ Kiwis with diggers, hammers and spades in regions throughout New Zealand. And in turn they will help keep suppliers and sub-contractors, shopkeepers and sales staff in business.”

Larger, longer-term infrastructure projects will also be announced in the coming months.

In the specific small business package, at least five of the tax changes will be fast-tracked to apply from April 1 this year.

Key also promised the changes will reduce the compliance and form-filling – a perennial source of complaint from small business owners, and an important area for Key to show some victories in.

Most significant, the Government will help cashflow by temporarily reducing the amount of provisional tax businesses are required to pay.

The standard method of calculating provisional tax payments is to assume that they will total 105 percent of last year’s income tax, or 110 percent of the year before that.

The Government will lower that formula to 100 percent of last year’s income tax, or 105 percent the year before – giving firms a positive cashflow boost by allowing them to delay some of their tax payments into future years.

The second major tax change is a reduction in what is called the ‘Use of Money Interest Rates’ – penalties businesses pay for not getting their tax payments quite right.

“We’ve listened to businesses who’ve pointed out that the taxman’s interest rate is out of whack with market interest rates,” Key said.

“We agree that these rates must come down. This is not a time for excessive penalties from the taxman. We will drop the underpayment penalty rate from 14.24 percent, to 9.73 percent. This change will be effective from the end of this month.”

The third change is a cutback on the number of times businesses have to file PAYE and Fringe Benefit Tax (FBT) returns.

Around 15,000 businesses will be able to move from paying PAYE twice a month to paying it only once a month, and from paying FBT four times a year to paying it only once a year.

GST also comes in for attention – impacting 47,000 businesses – by increasing the amount that a small business can turn over before it has to register for GST, up from $40,000 to $60,000.

“We will also allow more firms to account for GST when they actually get paid, rather than when they issue an invoice. We will do this by increasing the GST payments basis threshold from $1.3 million to $2 million, which will affect up to 14,000 firms.”

The other major plank to the announcements is a promise the government will lead by example as a prompt payer of its bills.

“All businesses who supply goods and services to government agencies should receive payments promptly. At the moment that does not always happen. That needs to change,” he says.

Amongst the remaining initiatives announced today:

Exporting businesses struggling to find short-term trade credit will have help from an expansion to the powers of the Export Credit Office so it can provide short-term trade credit insurance on export contracts with payment terms of less than 360 days.

The number of small claims that result in District Court action is reduced – what Key termed a trouble spot for small businesses – and the financial threshold at which cases can be heard at a tribunal is raised.

Lastly, the Government will expand an 0800 helpline to assist businesses who may want help.

The steps targeting small businesses come after sweeping changes to the Resource Management Act were unveiled yesterday, designed to help fast-track big projects with economic spinoffs.

It is all part of what Key has termed his ‘rolling maul’ of initiatives to lift New Zealand out of recession.

He said the combined effect of infrastructure spending, together with tax reductions and the small business package “will mean that New Zealand will experience a fiscal stimulus amongst the top five in the developed world, when compared on a relative basis.”

“That stimulus package will help keep our economy ticking over even as global demand falls, and it will help many businesses and families keep their heads above water. “

Taken from Stuff.co.nz:   http://www.stuff.co.nz/4837768a13.html

Tell us what you think here

Mike Johnson Essential HR

Mike Johnson, of Essential HR, provides the specialist HR expertise essential to any business that has employees.  In particular Essential HR is the #1 provider of “on demand” HR services to SMEs in and around Christchurch.  Essential HR helps small, growing companies take their people management to the next level, providing advice, mentoring, documentation and procedures as the company needs them. No request for help is too small!  Mike has been consulting for over 2 years now, building on his 15 years’ senior HR managerial experience and 12 years as a Chartered Accountant.

HR Handy Hint

“Old habits die hard” is as true today as it has ever been – and managers wishing to improve performance are often faced with habitual behaviour.  The key to making changes, though, is not to focus on the ‘old habit’ that needs to change but on the new one that needs to be encouraged.  Instead of telling people off for what they do wrong, get them to think of what would be right for them to do.  And reward that thinking.  The more someone thinks along a particular line the more ingrained it will become.  And don’t we all prefer to work in an environment where everyone is being positive and forward-looking!  (My thanks to David Rock, “Quiet Leadership” for this insight.)