NZ Entrepreneur - Issue 43 by Espire Media

NEW ZEALANDâ&#x20AC;&#x2122;S E-MAG FOR ENTREPRENEURS AND BUSINESS OWNERS

10 QUESTIONS July 2016

with

Chloe Van Dyke founder of CHIA

Kiwi Klips How to be assertive in meetings The 5 Minute DIY SEO review ... and more! www.nzentrepreneur.co.nz

CONTENTS

ABOUT / Short and sharp, New Zealand Entrepreneur is a free e-magazine delivering thought provoking and enlightening articles, industry news and information to forward-thinking entrepreneurs.

From the Editor

10 Questions with Chloe van Dyke of CHIA

Kiwi Developed App turns Mobile Phone Wallpapers into Prime Time

The 5 Minute SEO Review for Small Business Owners

Working on a Big Idea

Home Runs are the Exception not the Rule

How To Assert Yourself in a Stressful Meeting

Year in Review

Kiwi Klips Kickin’ It

How To Value and Sell a Customer List

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EDITOR / Richard Liew ART DIRECTOR / Jodi Olsson GROUP EDITOR / Colin Kennedy CHIEF FINANCIAL OFFICER / Alastair Noble CONTENT ENQUIRIES / Phone Richard on 021 994 136 or email richardl@espiremedia.com ADVERTISING ENQUIRIES / Jennifer on 0274 398 100 or email jenniferl@espiremedia.com WEBSITE / nzentrepreneur.co.nz

ISSN 2253-5683 NZ Entrepreneur is a GREEN MAG created and distributed without the use of paper so it’s environmentally friendly. Please think before you print. Thank you!

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EDITORIAL

WE HAD A GREAT response to last month’s issue which featured two husband and wife teams (Hamish & Hannah Acland and Matt & Kate Belcher) who have ventured not just down the aisle together but down the even more challenging entrepreneurial path together. This month we feature two Daughter and Dad teams Chloe and Ben Van Dyke of health drink company CHIA, and Inoka and Jude Benedict of Kiwi Klips, a classic garden shed Kiwi ingenuity story. The point of sharing these stories is twofold. One, there are no rules when it comes to entrepreneurship. There is no one ‘perfect’ way to be, or to do things. Don’t think for one second that because you’re not in a team of

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20-something, city dwelling, espresso swilling computer wizards (who says that these days?) you can’t be an entrepreneur in today’s techfocused world. And two, problems are not the end; they are the beginning. Even the most mundane of problems in your life (eg hanging out the washing) could be the start of your entrepreneurial journey. Some old guy once put it this way: “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” I thought it might have been Burt Munro but it turns out it was Winston Churchill. Speaking of which... Brexit anyone? (Cough, cough...).

Richard Liew

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INTERVIEW

10 QUESTIONS with

Chloe Van Dyke founderof

CHIA

WHEN EXPERIMENTATION with mass produced kombucha stalled, Chia founder Chloe Van Dyke and her dad Ben Van Dyke turned their attention to organic hydrated chia seeds, resulting in the highly nutritious purple and orange health drinks now available in supermarkets and cafes and simply known as CHIA. We asked Chloe to share some of the CHIA story so far and like so many #nzentrepreneur stories, we find that the genesis of this unique product was a problem. How to provide endurance athletes with both hydration and sustenance in a single convenient serving.

What’s the story behind CHIA, how did you come up with the idea and how did you get it started? I come from an athletic family who consider healthy foods, exercise and adventure a key part of good living. They were in need of a nutrientrich on-the-go food. With a science background and an interest in nutrition, I felt I could create something better than what was currently available in the New

Zealand beverage market. I started with Kombucha before there was anyone producing it commercially in New Zealand. Upscaling was a disaster but it was while I was experimenting with Kombucha that I found chia seeds. My dad and CHIA coowner Ben was hydrating chia seeds as part of his training with the local swim squad. It is rarely the first idea that ends up being the final result. In the process of pursuing one venture I was led to more ideas and was able to evolve. I researched chia seeds and found they were rich in many of the nutrients we tend to need more of in our diet; omega 3 for the heart and brain, magnesium for stress, electrolytes for sustained hydration and fibre which is taken out of other drinks is essential for the digestive system and blood sugar regulation. Historically chia seeds have been hydrated before being eaten because this increases the body’s ability to absorb the nutrients. I wanted to create a drink that not only didn’t include anything nasty

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like artificial ingredients or added sugar but also focused on being rich in absorbable nutrients that are essential to our health. For this reason it made sense to hydrate the seeds in a drink. It was important it tasted great so I looked to what was growing locally. In Nelson, we have an abundance of antioxidant-rich blackcurrants and apples so Blackcurrant & Apple CHIA became our first prototype. I then travelled to the Himalayas to test the formula. Each night I would sit in my tent and hydrate chia seeds for the next day and add blackcurrant powder. I found the formula increased my energy, kept me sustained throughout the day and prolonged hydration. I returned to New Zealand confident in the benefits of chia and in December 2012 I gathered family and friends around me to produce our first batch of CHIA.

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And what made you think you could build the idea into a successful business? I didn’t know if it would be a success or not. CHIA pushes the boundaries of preconceived ideas of what a drink is. When CHIA is hydrated is swells up to 10 times its volume and creates a gel around itself. I didn’t know if people would love it or hate it - would it be too weird for the New Zealand palate? But I knew that CHIA was one of the most nutrient-rich beverages derived from natural ingredients available in New Zealand and the timing was perfect – New Zealanders were beginning to become more interested in healthy eating. Some people love CHIA and some hate it but that is often the way when you dare to do something different.

Looking back, if you could go through the start-up process all over again, what three things would you do differently? I would be more selective and choose carefully the advice I took. When you start a business everyone wants to suggest something. This is great and I was overwhelmed with support but it is important to know that you know your business better than anyone else and for areas where you need help get your advice from the best. I would have grown a team quicker. Most of us start out having to do everything ourselves and this is a great way to really get to know your business. I learnt every part

of running a business from the manufacturing, accounts, sales, and marketing. But it wasn’t until I started to grow a team that I was able to step back from the day to day work and focus on where my business is going and the direction I want to take it. I wouldn’t care so much about the naysayers. When you start a business, particularly one that is a little bit different you will get people that think you are crazy. I think all entrepreneurs are a little bit crazy. Many ideas won’t work and it is important to acknowledge criticism and utilise it. But don’t let it get you down because you will need all the positivity you can muster to get over the hurdles ahead.

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The first supermarkets were independents. This allowed me to get data on sales to take to other supermarkets. CHIA was selling well so it made sense for more supermarkets to bring us on board.

I could clearly explain the benefits of including CHIA in their range. The key point is that CHIA is completely unique – there is no other beverage like it in New Zealand. Additionally, CHIA customers may not be someone who would usually buy juice, this means that Chia is not a replacement purchase but an added purchase, meaning the beverage category as a whole grows. I was also able to provide supermarkets with a product that fitted the growing demand for health food. Foodstuffs came on board in the first year and Progressives in our second year.

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CHIA is now stocked in most supermarkets - how did you get your product range into this notoriously difficult retail channel and how long did it take?

In my experience, New Zealand is a great place to start a business. New Zealanders support local businesses and this allows us to get a foot in the door.

Do you think New Zealanders have a healthy attitude towards business and the creation of wealth?

In my experience, New Zealand is a great place to start a business. New Zealanders support local businesses and this allows us to get a foot in the door. Consumers are interested in ethics and the story behind a business. Our goal is to create the most nutritious beverage on the market in the most sustainable way possible and with the smallest carbon footprint so this mindset suits our business model.

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What does success mean to you? Has what it means to you changed since you first started the business? In business success for me is creating a career where I am continually passionate about what I am doing; always learning and evolving; growing a stimulated team around me; and where I make a difference to the wider community. What I am trying to achieve is continually evolving, this means that what success means is evolving too. I donâ&#x20AC;&#x2122;t think I will ever get to the point where I will say I have succeeded because there is always more to do.

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Starting and building a business is one of the most stressful things most people are ever faced with - what do you do to cope with stress? I am passionate about what I do, if I wasnâ&#x20AC;&#x2122;t I would have given up. It is a rollercoaster and every week comes with peaks and troughs. The problem is that it is the troughs that take up all the time because they are the bottleneck. I need to remind myself to acknowledge the peaks. I also believe play is important. Creating a space for creativity and team building is crucial to a smooth functioning team is a priority. We have a slack line set up at work and mountain bike as a team once a week.

New Zealand’s international success and wealth to date has largely been built on the back of our agricultural sector. However, we’re finding it harder to compete in this arena. Apart from agriculture, where do you think our next best competitive advantage lies if we are to carve out a niche for ourselves in the years ahead? Innovation and added value. I think New Zealand should focus on creating products that have more value than the sum of their parts. Products that are New Zealand made, healthy, functional, and natural are gaining interest overseas. I think we could work more on collaborating to enter new markets together.

Do you believe anyone can be a successful entrepreneur? I think there are certain traits that can help. An ability to learn quickly and adapt is important because the way we do business is changing all the time. A large part of business is about communication and the way we are communicating is rapidly evolving. If something isn’t working you need to be able to see it quickly and change track. It is not like other professions where you learn how to do it - you need to be able to evolve with your environment while staying true to the underlying principles of your business. An ability to perceive luck is also important. I think that opportunities walk past us every day. Sometimes you have to be in the right place at the right time but often you have to know that you are in the right place at the right time to make use of it.

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What advice would you give to readers who might have an idea but aren’t sure how to go about turning it into a business? Ask yourself why you want to do or create this idea. Having a strong understanding of this

will allow you to focus your energy in the right direction. A business canvas can help give you a quick overview of how your business would work. They will often ask questions like the following. Keep your answers short.

Answer these questions: • Who is your customer? • What is the problem you are trying to solve for them? • What are they doing now to solve their problem? • What solution are you providing to your customer? • What makes you or your idea better than the alternatives currently available? • What is the message you will send to your customer? • How will your customer find out about you? • How are you going to get your product/ service to your customer (distribution)? • How are you going to make money? • What do you need to get started (time, money, people etc)? • What will be the ongoing costs (time money, people etc)? ■ Facebook: Chia New Zealand Instagram: @ChiaNewZealand Twitter: @ChiaDrink Web: www.chia.co.nz

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SPONSORED

THERE’S A NEW R&D LOSS TAX CREDIT THAT COULD HELP

WHAT HAPPENS WHEN you’ve got a great idea, but can’t turn it into reality through your day job? You create a startup company. It will take funds to keep your startup humming along. That’s where the new Research and Development Loss Tax Credit could help.

DEVELOPING YOUR BIG IDEA We’re all familiar with the stories of great innovators. People who thought outside the box and created things we had never seen before.

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Their first innovations didn’t necessarily come out of big companies with big budgets. Many of the big ideas that have changed our world began in garages, spare rooms or home offices. They started as scribbles on a bit of paper, a serviette or the back of a hand. What history has proven is that even without the support of an established company big ideas can become big successes. Achieving success as a startup takes a lot of hard work and dedication. It also takes a lot

of elements falling into place. Of course, first off, you need an amazing idea. You also need great timing and a team of talented and motivated people. Last, but not least, you need cash, so you can keep on creating. That’s just what the new Research and Development Loss Tax Credit could help you with.

CASH TO KEEP CREATING Government introduced the new Research and Development Loss Tax Credit to help give innovative companies access to some of their tax losses sooner. Eligible companies could get up to 28% of their tax losses from research and development returned to them. Having access to this money could be a real lifeline for businesses, making it that little bit easier to continue getting their big idea ready for the world.

DON’T MISS OUT, FIND OUT IF YOU’RE ELIGIBLE TODAY If your company meets the eligibility criteria, you can start claiming back tax losses from the 2015/16 tax year. To find out if your company is eligible, and apply online now, visit www.ird.govt.nz/rd-credit But don’t delay. To receive a Research and Development Loss Tax Credit, you must submit your application to Inland Revenue before your income tax filing due date for the 2015/2016 tax year. Make sure you don’t miss out. Go online now to find out if you’re eligible. ■

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ENTREPRENEURSHIP

Home Runs are the Exception not the Rule BY Richard Liew

NO DOUBT ABOUT IT, entrepreneurship has become a much cooler ‘career choice’ since the dotcom boom of the late 1990’s brought the glamorous and alluring ‘way of the entrepreneur’ back into the limelight. I say ‘career choice’ in inverted commas because it’s actually about as far from the industrial and information age’s standard career path as you can get. Rather than choosing one of the well-

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trodden paths to success in a solid trade or profession, an ‘entrepreneur’ was often what you were labelled (by yourself or others) if you didn’t quite fit into or qualify for any of the prescribed acceptable careers. For those who had no place as a ‘cog in the machine’, creating another machine was the only option! Where once great wealth took a lifetime to generate, thanks largely to the internet and the speed of business due

to the interconnectedness of our global economy, we are seeing huge wealth being generated seemingly overnight and with comparative ease. No need to spend a lifetime building a steel conglomerate like Carnegie, or half a lifetime acquiring an oil empire like Rockefeller. No need to spend even a few decades building an international brand like Branson, or to have to patiently bide your time until you’re in your sixties to launch an international fast food franchise like Messrs Crock and Sanders. These days our mainstream media tends to glamorise the stories of entrepreneurs becoming billionaires and multimillionaires ‘overnight’ and the younger the entrepreneur, the more sensational the story. Unsurprisingly, and somewhat fittingly, given the US’ powerhouse position over the last 100 years as the world’s largest economy and the epitome of capitalism, many of these entrepreneurial

success stories come from the USA, many from Silicon Valley. From Sean Parker and Napster to Jeff Bezos and Amazon; from Sergey Brin and Larry Page of Google to Mark Zuckerberg and Facebook... not to mention headline grabbing success stories like Instagram, Twitter, Tumblr and WhatsApp, and of course everyone’s favourite geek-chic antagonists, Bill Gates and Steve Jobs. Here in New Zealand we also hear plenty about our own tech entrepreneurs kicking butt and taking numbers: Sam Morgan and TradeMe, Rod Drury and Xero, Victoria Ransom and Wildfire, Shane Bradley and GrabOne, Derek Handley and The Hyperfactory, Luke Howard-Willis and Torpedo7, and Daniel Robertson and Fishpond. The average punter could well be forgiven for thinking that in order to get rich, all one has to do is create an online startup and within a couple of years, you’ll be rolling in it.

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“

Entrepreneurship is like learning to ride a bike. You can read about it, you can study it, you can watch others do it, you can plan for it and you can visualise it. But at some stage, you need to get on the bike and you will fall off the bike a few times.

Now I’m not saying it’s not possible - there may well be some entrepreneurs who are able to hit a home run there first time out in the park. But for most, this is certainly not the case. For success in entrepreneurship, like success in anything else worthwhile requires a mastery and understanding of the principles of entrepreneurship and the ‘rules of the game’ which can take years for the best (and lifetimes for the rest) to learn. In this respect, entrepreneurship is like learning to ride a bike. You can read about it, you can study it, you can watch others do it, you can plan for it and you can visualise it. But at some stage, you need to get on the bike and you will fall off the bike a few times. You

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will get a few scraped knees and close calls at the least. Many will sustain injuries bad enough to scare them away forever. But once you master the basic principles, you’re on your way and you can ride faster, longer and better each time you get on it.

You can even change bikes without much drama. This is exactly why it often takes entrepreneurs several business attempts before they ‘hit the big time’. And this is exactly why they say that to be a great entrepreneur you need to be prepared to fail more than others. Why is this understanding important for the entrepreneur in training? Well just as it would be important to set realistic expectations for your first attempt at a marathon, or your first go at driving a

car, or your first attempt at parenthood - it is important to have realistic expectations for your first attempt in business.

in your first innings. Just get started, with what you have right now and look to get to first base. Then take what you’ve learned (and maybe Is this being negative or pessimistic? No. By all means, earned) and build on that to aim to knock it out of the park. get to second base. Then to third, and then to as many Aim for a $100million plus exit. Aim to knock Google off other intermediary bases as you may need until you reach their perch. Aim to be retired home base - whatever that by the time you are 25. might mean to you. But promise yourself that you As one of New Zealand’s most will not be disheartened if successful tech entrepreneurs, that’s not what you achieve Rod’s advice was refreshing in your first business. Or your and accessible and as he second, or third, or fourth. acknowledged, while Xero is I remember being at an his most well-known business event where Rod Drury, success, there have been founder of Xero and 2013 close to half a dozen other NZ Entrepreneur of the businesses prior to Xero that Year, said that success as an he started and cut his teeth on entrepreneur is “a series of along the way. baby steps”. “As a founder, Whatever happens, don’t pin your business is not you,” all your hopes on hitting a he said. Indeed, “if it’s your home run in your first innings first business, you probably of the entrepreneurial ball don’t even deserve to own game, as the disappointment more than 25% of it!” So, if and fallout could be it’s your first time out as an enough to put you off entrepreneur, don’t worry about trying to hit a home run the game forever. ■ Richard Liew, founder of NZ Entrepreneur and Espire Media - www.espiremedia.com

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LEADERSHIP

How To Assert Yourself in a Stressful Meeting By Sally Mabelle

HAVE YOU EVER HELD in your feelings during a meeting, not wanting to offend by speaking your mind? Then, afterwards, you think of all the things you SHOULD have said? Have you ever felt angry when someone wasn’t giving you any space to express your point of view? Have you ever felt frustrated when someone was dominating the conversation and not seeming to be interested in what you might have to say? If you answer ‘yes’ to some or all of these questions, and would like some practical advice for overcoming your frustration, keep reading... Here’s an easy process you can use to help you feel more confident in changing the course of your meetings. It will assist you in transforming your frustration into constructive action. Rather than silently steaming or saying something

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in your impatience that you’ll later regret, follow this five-step process for assertive speaking: This process will increase your capacity to assertively speak up, so others will listen rather than get defensive. To remember the five steps, here’s a memory-enhancing phrase which you can use: Beware Or Feelings Will Really Rule! (BFWRR) Step 1: B is for Behaviour/ Observation Step 2: F is for Feelings Step 3: W is for Wants Step 4: R is for Request Step 5: R is for Result Let’s take an example of when stress might occur at your next meeting. Imagine the person leading the meeting is dominating the ‘air time’ and not giving you enough time and space to respond or contribute.

Step 1: B - The first step is to notice the behaviour that is triggering your discomfort. Summon up your courage to share your observation about that behaviour with the other person. Make an objective observation that is factual without any evaluation or interpretation added. For example, “I’m noticing the time and realising we only have a few minutes left in our meeting”

Step 2: F - Express the feeling that you have in response to that behaviour: “I’m feeling a sense of urgency,” (no blame… you are owning your own feelings).

Step 3: W - State what you Want “I would like to make sure that the whole team gets a chance to contribute their ideas before we leave.”

Step 4: R - Make a specific Request “Can we have a check-in now to see if anyone else has something to add?”

Step 5: R - Acknowledge the Result (and yourself for your courage OR begin the process again at noticing the behavioural response, the feelings and the wants/needs of you and the others. By using this process, you are more likely to get a positive response than if you either: a. held in your anger and felt resentful or b. blew up at the person in frustration I realise this process takes courage and practice, so be easy on yourself as you’re trying it out. As you get the feel for the five steps, you’ll feel more and more confident asserting yourself. ■

Sally Mabelle is a professional mentor/ coach and speaker empowering leaders to access and express their authentic “Voice of Leadership” for greater presence, confidence, and influence.http://www.sallymabelle.com

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Ecosystem

YearinReview

Young Enterprise has just released itsâ&#x20AC;&#x2122; 2015 annual report. CEO Terry Shubkin looks back on some of the highlights.

2015 WAS A BIG year for Young Enterprise as we focused on transitioning to a truly innovative organisation. Our aim was greater engagement, scale and reach. We identified two major initiatives we wanted to implement in order to achieve this: increasing the number of Roaming Teachers, and focusing on our digital strategy. Needless to say, it was a busy but rewarding year.

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Roaming Teachers a hit in the classroom Roaming Teachers act as a helping hand to all teachers wanting to teach students about enterprise. Roaming Teachers help classroom teachers to introduce enterprise programmes and resources into their classes. They also assist with assessments and support both schools that are new to Young Enterprise and our existing schools. The aim is

to have classroom teachers that are confident and knowledgeable in what they are teaching. The evidence and anecdotal feedback regarding our first Roaming Teacher was fantastic. Lucy Wymer was funded by the Ministry for Pacific Peoples and has worked with schools that have large numbers of Pasifika students. We

have seen an increase in the number of schools and students using Young Enterprise resources, and also an increase in the studentsâ&#x20AC;&#x2122; achievements in NCEA. Following that successful pilot, we were fortunate enough to receive funding from Minister Kaye and the Youth Enterprise Fund in 2015 to fund an additional three roaming teachers for 2016 and 2017.

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Young Enterprise goes digital The whole concept of digital engagement and e-learning has really taken off over the last few years and Young Enterprise wanted to be at the forefront of this movement. One of the biggest external changes we implemented in 2015 was our new website, which launched in December. The website comes as part of our larger digital strategy and is designed to align Young

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Enterprise with the changing needs of students and educators alike. The website allows teachers to access resources in real time, search our resources using filters and sign up for events in one centralised location. In addition, the website also provides information for members of the public who want to find out about Young Enterprise, sign up to events, and become a volunteer.

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Roaming Teachers and the digital strategy were not our only focus areas in 2015. Here are some more highlights:

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But that’s not all, folks

2015 was a great year for us, but we’re aiming for more in 2016.

We also quantified the impact we do through our • Overall we worked with YES student survey which 18% more teachers and measured not just the 14% more schools than we business skill learnt but did in 2014. We now have the life skills, confidence, 600+ schools and over 1000 impact on pathways and teachers using our resources. entrepreneurial spirit, and our • We ran a second, very students succeeded yet again successful, ‘It’s Business on the international stage, Time’ conference where winning the Asia Pacific 150 teachers came for two title at the FedEx/Junior days of inspiration and Achievement International professional development. Trade Challenge. • We introduced a new series of ‘Pick Up and Go’ resources for our primary and intermediate schools

2015 was a great year for us, but we’re aiming for more in 2016. It’s incredible to think we are already half • We strengthened the work way through the year, and our student companies we are doing in junior are starting to come to secondary schools with life – stay tuned for their our EPIC Challenge and exploits next month. ■ BizNinja programmes. Young Enterprise works with our next generation of entrepreneurs. Check out their work at www.youngenterprise.org.nz

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Entrepreneur Profile

KIWIKLIPSKICKIN’IT

What could be more #nzentrepreneur than a classic tale of garden shed DIY ingenuity? Wellington refrigeration engineer Jude Benedict and his daugher Inoka epitomise the kind of “Number 8 wire” innovation us Kiwis are renowned for and we reckon their Kiwi Klips are kickin’!

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I am Inoka Benedict and Jude Benedict is my father. He is the creator, designer and mastermind behind Kiwi Klips.

Kiwi Klips is a product designed and made in New Zealand – it is designed to help with hanging out the washing. Even though it is a mundane task, it requires effort and is a necessary job for a majority of individuals around in the world. Kiwi Klips was designed to make this task as easy and stress-free as possible, especially for those who find it difficult. You decide the perfect height for your Kiwi Klip to suit your comfort, it attaches to a pole, post, weatherboard, fence, gate... it attaches to them all. Kiwi Klips can take the weight of any size or shaped basket with piles of washing inside. It is built to last and withstand all conditions and is made with 5mm steel, and zinc chromed and plated.

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Inoka, to start with can you please tell our readers a bit about Kiwi Klips?

My father worked on Kiwi Klips in his personal garage, where all his masterpieces had begun. His life ambition is to create and to find ways where he can help people, and his goal is to build something that could benefit society. He started creating Kiwi Klips eight years ago and two and a half years ago he decided that this was a product he really felt would be useful. These main focus groups are the elderly, pregnant women, individuals with back injuries, and those who find it difficult to bend over. Although Kiwi Klips would be most beneficial to these target groups most people would get great use from it.

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What entrepreneurial experience, if any, did you and your Dad have prior to creating Kiwi Klips and how did the business come into being? My father has come up with many ideas, he is always trying to find a way to make everyday life easier and we think Kiwi Klips has been the first invention of his with a real gap in the market. This idea was created by doing the task itself, Dad was hanging the washing out and the ground was muddy and wet, he couldn’t leave the basket

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outside because it would probably blow away (living in Wellington), and he didn’t want to take it inside and clean all the mud off – who has time for that? My father also suffers from lower back issues and it is a big strain for him to have to bend down to every item of clothing to peg it up. He knew that he could not be the only one suffering and wanted to help those like him that require assistance without potentially injuring their back even more.

He thought it was important to understand how the body worked and moved – ergonomic studies were looked into, however, many would say hanging out your washing is not essentially a ‘working environment’ where you are continuously doing it, however, the task has certain factors that would suggest ergonomics would relate. Body position, how your hands and arms interact, neck and head position, the motion of going up and down to the basket uses a majority of the body. There is a certain impact that continuously bending down to the basket can subsequently create or add to strain and muscle ache. The back and hips are two of the first parts of the body that deteriorate as you get older. They weaken and become fragile and are more prone to injuries. Dad believes in protecting these key parts of the body for tasks even as ordinary as hanging your washing out.

Dad by trade is a refrigeration engineer, but is an all round handyman and has taught my sister and me everything we know, from survival skills, using tools, creative outlets, making and fixing items, I am constantly learning from him. I just recently graduated from Victoria University of Wellington in Interior Architecture and Design Environments in Architecture. We are a great team – Kiwi Klips is solely dad’s ingenuity and design, and with the skills I obtained from university was able to give it an image, create working drawings, instruction manuals, advertising and photographing of the product. Dad also worked alongside a very good friend of his who assisted him making prototypes and testing different materials in order to develop and strengthen it, he also helped with deciding on the best manufacturing process, simplifying fittings and introduced him to potential manufacturers.

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What have been your three biggest has been a tough process, challenges in getting the business including trying to find a manufacturer with a good to where it is now? The first challenge my father faced was the design. It was a challenge to decide what material will last, withstand weather conditions, have durability, be easily assembled by any individual, needed to be able to hold any basket (no matter what shape or size), easy to use and much more.

price. We went through multiple sources and with the help of a good friend mentioned above we were connected to someone who was able to help us get our first line of units made. It certainly was a ‘who you know’ situation.

The third and most recent challenge of ours has been The design had been the marketing, we are still in revised over and over, many the process of finding a way prototypes made in numerous to inform our target customers materials, the design altered and get Kiwi Klips to become many times in order to make a household name. From sure all those requirements this point, it is deciding the had been considered and met. appropriate outlets for people Once the design was well to find and get to know established the next step Kiwi Klips, how to target our was getting the units made, client base, where to sell the sourcing fittings, plus deciding product (whether it’s retail or on packaging form and design. online) and knowing where it This requires investment and best fits into the market.

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And what have been the achievements you’re most proud of so far? What we are most proud of with Kiwi Klips is that people are genuinely fascinated and absorbed by the product and that feels like a great achievement in itself.

What is your business goal for Kiwi Klips over the next few years? The business goal for Kiwi Klips for the next few years is getting an online customer database, creating a demo video that can help our customers understand and be more knowledgeable of the benefits of the product, marketing through effective mediums, obtaining customer reviews, and getting Kiwi Klips into New Zealand homes.

Given everything you’ve learnt so far, what would your top three pieces of advice be for others thinking of trying to turn an idea into a business? Firstly, always remember why - why you came up with the idea, why you think it’s special, why you think it will be

beneficial, why should people buy it, why do you believe in it? If your heart and mind aren’t in it and you don’t ask yourself these questions then you can’t expect others to become passionate about it. Secondly and most importantly – NEVER GIVE UP! There will always be challenges but that’s the best thing about it, you cannot expect your business to grow if nothing is challenging it. Take risks, don’t be afraid to talk to people and get their input, it’s not changing your idea; it’s allowing you to see your idea through a fresh perspective. Thirdly, always believe in your product/business. You came up with the idea for a reason and it is important to always go back to that idea and remember why you are doing it in the first place. Kiwi Klips is still in its early stages, we have many challenges to face before we will get to achieve everything we want for the business, but we will keep trying, keep moving forward with the resources we have at the moment and we wish luck to other entrepreneurs doing the same. ■

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Investment Corner

How To Value and Sell a Customer List By Nathan Rose

SELLING A VENTURE AS a going concern is one thing, but in some cases, an acquirer only wants a specific asset within your business. With land and buildings, a property valuer can provide a starting point for negotiations, but valuing other assets can be far trickier.

How do you determine a valuation for a customer list? I am reminded of a quote of Seth Godin’s: “People give you money because they think the value you can provide them with is worth more than it costs”.

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Now, Seth was talking about selling cups of coffee (he is a marketing guy, after all). But this concept is just as applicable to selling entire companies: the acquirer wants to gain more from the deal than the cash they spend. Simple, but worth bearing in mind in your negotiations. The best way to proceed, then, is to try to determine the value the acquirer may gain from your customer list, and work backwards from there to determine a valuation. Ideally, this will be a collaborative process where both you and the acquirer are open with one another.

2 Understand the long-term value of customers to the acquirer

Here are a few ways to put this into practice:

Understand the acquirer’s cost of customer acquisition Building a customer list is hard work - in many cases, years of advertising, negotiating, and building trust. By acquiring your customer list, the acquirer is hoping to skip all of this. If you can glean what the acquirer is paying in sales and marketing efforts for each customer they currently get, it will be a great starting point for valuing your list. A simple illustration: if the acquirer is happy to spend $100,000 to gain 100 customers, then they should also be happy to pay $50,000 if you can deliver 50 similar customers to them.

If the acquirer is happy to pay $100,000 to gain 100 customers, then they should be gaining some value in excess of this in order to be profitable. “Long-term value of customers” simply means the worth of a customer over the years (like a mini-discountedcash-flow for a customer) factoring in expected income from the customer over the years, the retention rate, and how long it takes to recover what was spent upfront in order to get that customer in the first place. Note, continuing the spirit of focusing on what the customer list is worth to the acquirer (rather than to you), try to use their long-term value numbers - these could be substantially different from your own, due to the acquirer having processes that retain customers for longer, allow them to provide the product at a better margin, and so on.

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Will your list transfer to the acquirer? Just because you have 50 customers doesn’t mean the acquirer will be able to keep them all. Some businesses will be easier than others to migrate customers from seller to acquirer. The more your business is processdriven and independent of specialised customer service, the better. The customers of a hairdresser are going to be harder to transfer to an acquirer than, say, garbage collection. Hairdressing clients are loyal to the person who cuts their hair, and such individual relationships are difficult to pass on to somebody new. As for garbage collection, as long as the acquirer keeps picking up the trash on time, most customers will likely stay (and probably not even notice the change in ownership).

very large customers who make up 50% of your income, 15 smaller customers who make up a further 40%, and 30 relatively inactive customers who make up the final 10%. Valuing the customers in more detail is much more rigorous, and hence credible. To conclude, I want to return to the Seth Godin quote: “People give you money because they think the value you can provide them with is worth more than it costs”.

Consider splitting your customers into several categories for valuation purposes

There are two messages embedded within this. The obvious message is to determine value based on what it is worth to the acquirer. The less obvious message is underlined: You must communicate and convince a buyer of the value before they will be willing to buy. When selling cups of coffee, value is communicated by branding and the quality of the brew.

Not all of your customers are equal. Selling all 50 customers at an ‘average’ price ignores their individual characteristics. Your list may consist of five

When selling companies, value is communicated by well-constructed financial analysis under reasonable assumptions. ■

Nathan Rose is an experienced investment banker, and offers services in financial modelling, building pitch decks, and capital raising analysis for entrepreneurs and small business. Find out more at www.assembleadvisory.com

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PARTING SHOT

“I run on the road long before I dance under the lights” -Muhammad Ali