Issuu on Google+

Belinda Simon’s great expectations ❖ Justifying Experience Tax ❖ Branding: a work in progress

FEBRUARY 2012

1

And when it does you want QBE on your side Worse things can happen at sea….. When moving goods from place to place – or around the world – you are exposed to risk. The risk of delays, damage or loss.

It might be the difference between your business sinking or staying afloat. Talk to your insurance broker today about QBE Insurance. www.qbe.co.nz

QBE-054 Rapport NZB • Photo courtesy of Mark Alen

At QBE Insurance, we’ve been helping traders manage their risks for 125 years. In addition to trade credit, property, and liability solutions, we can provide worldwide coverage of goods in transit by sea, land and air.

The girl who likes shoes

If your goods arrive too late for a specific market they may become worthless, or you may have to discount them heavily. Your customer may no longer accept them, leaving you high and dry. All of which have a drastic effect on your bottom line.

The girl who likes shoes Kathryn Wilson’s global ambitions

8.20

$

February 2012

LESSONS ON UPSKILLING Short courSeS for buSineSS ownerS

PAYROLL’S CLOUD MIGRATION + our 2012 Payroll systems guide!

MVnos: BUSINESS-fRIENDLY PhONE COMPANIES


“Accredo is seamless to operate and its front end functionality is very savvy.” The smart automation functionality available in Accredo makes life a lot easier for Southland electrical contracting company Nind Electrical Services. // General Manager Steve Winter says without the work in progress reports it generates from Accredo his staff would be faced with the laborious task of tracking down all the information pertaining to each job. // “Accredo does this for us. Each work in progress report shows all the labour and material for work underway. It also allows us to add purchase orders against each job which means we can track costs very accurately. // “This type of automation removes administration bottlenecks and lets me assess which jobs provide the best margin. The information we extract from Accredo improves our quotation accuracy and our client service.”

50%

Lower printing cost vs coLour Laser*

Go to www.accredo.co.nz to get the full story on Nind Electrical Services. While you’re there, subscribe to our online newsletter and see how Accredo can help you do more. Or if you would prefer, call us toll-free on 0508 ACCREDO. 65773


CONTENTS

12

16

ACHIEVERS 12 GREAT ExpECTATIOnS Belinda Simon has always had great ambitions for her online maternity and children’s boutique Pregoli. Now those ambitions are fast becoming reality.

16 SERvICE wITh A SMIlE North Shore Dental is a classic example of how sticking to the basics of customer service encourages consistent business growth.

COVER STORY 24 ThE GIRl whO lIkES ShOES It’s 2012 and Kathryn Wilson is living her dream. Attracted to the fashion shoe industry from a young age, Kathryn’s brand and business has developed quickly over the years and now more Asian markets are in her sights. She tells her story to editor Glenn Baker.

FEATURES 29 pApERlESS pRODuCTIvITy How intelligent business systems can create hundreds of extra hours a year for businesses.

20 SuRE TO GROw Four Blenheim alumni review the benefits of completing an ICEHOUSE Achieving Business Growth workshop.

22 A ShORTBREAD STORy From organic farming to exporting premium shortbread, David and Rita Bell have packed a lot into their business careers.

HELP DESK 48 why branding is always a work in progress 50 Justifying that ‘experience tax’ 52 Career care good for business Why investing in your employees’ career development positively impacts your bottom line.

30 lESSOnS On upSkIllInG Looking to grow your business? Aside from looking at the fundamental aspects such as marketing and sales, perhaps you should look in the mirror as well and work on yourself. Patricia Moore investigates the benefits of short courses for business owners.

38 pAyROll’S GREAT ClOuD MIGRATIOn SMEs are rushing to outsource payroll services in order to become more focused and productive. Kevin Kevany has been scanning the payroll horizon for other developments too. Includes our Bonus 2012 Payroll Systems Guide!

54 pACIFIC AID MEAnS BuSInESS A progress report on the BMNZ Pacific Mentoring Programme.

56 MvnOS ABOuT TO ShAkE ThE TREE Bill Bennett reports on a new breed of phone company that can be better for businesses.

48

50

REGULARS 4

Briefcase

65 Franchise File

10 Biz Diary

66 On Accounts

11 Soapbox

67 Export Report

34 Biz Revisited

69 Employment Matters

37 Speed Interview

70 Sustainable Business

59 Biz Tech

71 Marketing Maestro

61 Biz Books

72 Issues with Balls

64 Customer Excellence NZB feb 2012 nzbusiness.co.nz

1


Editor

From the editor

Glenn Baker. editor@nzbusiness.co.nz AdvErtising MAnAgEr Leanne Moss. leanne@nzbusiness.co.nz dEsign And ProdUCtion Margaret Murray margaret@adrenalin.co.nz CovEr PHoto Julius Margan: juliusm@xnet.co.nz Proof rEAding George Ward Joint PUBLisHErs Cathy Parker. cathy@adrenalin.co.nz Yvonne Carter. yvonnec@xtra.co.nz sUBsCriPtions EnqUiriEs Hilary Keen. subs@nzbusiness.co.nz CirCULAtion MAnAgEr Kim McIntosh. kim@adrenalin.co.nz ContriBUtors tHis issUE: Christine Arden, Ashley Balls, Colin Bass, Catherine Beard, Bill Bennett, Peter Boyes, Dr Ian Brooks, Rachel Brown, Joanne Douglas, Peter Enderwick, David Espiner, Kevin Kevany, Simon Lord, Brian Meredith,Patricia Moore, Reece Notton, Mike Rich, Alice Taylor, Amanda Watt Adrenalin Publishing Ltd. 14C Vega Place, Mairangi Bay. PO Box 65 092 Mairangi Bay, Auckland City 0754. Ph: 09-478 4771• Fax: 09-478 4779

sUBsCriPtions NZBusiness is an 11 issue magazine. Subscription in New Zealand is $75 (incl GST). Please call us for overseas rates. Copyright: NZBusiness is copyright and may not be reproduced in whole or in part without the written permission of the publisher. Neither editorial opinions expressed nor facts stated in advertisements are necessarily agreed to by the editor or publisher of NZBusiness and, whilst all efforts are made to ensure accuracy, no responsibility will be taken by the publishers for inaccurate information, or for any consequences of reliance on this information.

Printing: GEON distribution: Gordon and Gotch issn: 0113-4957.

vol. 26 no. 1 www.nzbusiness.co.nz follow us on

2 NZB feb 2012 nzbusiness.co.nz

A hong kong minute I was lucky enough to visit Hong Kong late last year as a guest of the Hong Kong Trade Development Council. It was an opportunity to attend the World SME Expo, Inno Design Tech Expo and Business of IP Asia Forum, as well as a chance to get up to speed on Hong Kong’s role in relation to the economic transformation of China. Spending a few days in-market and talking to local business people certainly helps you put things in perspective. You’ll have to read the March/April issue of our sister publication Exporter for my full report, but I can quickly pass on some observations from the five days I spent in Hong Kong. Firstly, the “one nation, two systems” economic model is very much alive and well. That is a major plus for New Zealand companies wanting to springboard off Hong Kong to access markets in China. Hong Kong is indeed ‘business-friendly’. English is widely spoken. It’s relatively easy to set up a company there and a number of Kiwi exporters are using it as a hub for their Asian operations. I lost count of how many times I was reminded of the fact that all of Asia’s key markets are within five hours flying time of the city. It’s ideally situated in more ways than one. My second observation came as a result of a chat with David Whitwam, chairman of the New Zealand Chamber of Commerce in Hong Kong. Basically he says the only way to appreciate the China and Hong Kong markets is to jump on a plane and spend some serious time there. Don’t expect to base decisions on just one or two days; spend a week or two

at least, he says, “and really sniff out the territory”. Kiwi companies that are successfully using Hong Kong as a resource hub include Comvita, Fisher & Paykel Healthcare, Fuel Espresso, Methven, Metra, Pingar, Seperex and Gallagher Security. I was able to catch up with the regional manager of Gallagher Security while there and that company’s story is a stunning example of how to adapt your offering to a changing market. Hong Kong is everything they say it is in the tourism brochures – vibrant, prosperous, surprising. It is also a compelling place to do business and to base your Asian operations. And if this sounds like an advert, then I make no apology. Exporters need to know about Hong Kong’s unique advantages – and if you’re going there, be sure to take along plenty of business cards! This month’s cover story has a small connection with Hong Kong. Kathryn Wilson now has her fashion shoes on sale in that city, and it’s a big step up in her export aspirations. Kathryn has an interesting background and a ton of ambition and I hope you enjoy reading her story. Indeed, I trust there is much to learn from this issue and right through 2012. Once again, I believe we’re in for an interesting and bumpy ride!

Glenn H Baker editor@nzbusiness.co.nz


$50 $45

Allow us to turn your view of insurance on its head. $40 $35 $30 $25

Growth, new toys and other good things.

$20

While insurance underpins a business’ ability to commence trading, it’s also a core component of its growth. After all, new or upgraded premises, plant and equipment involve additional finance – which in turn means additional cover to secure that finance.

Then there’s the flip-side to growth. Changing what you do, where and how you do it, or who you do it with, can all expose your business to new and unseen risks. But, with the right advice from an insurance professional – and the right cover – you can limit the ability of those risks to undo all your hard work.

$10

$15

E X P ORTS ( MI LLI ONS )

The truth is, insurance might be the last thing you think about, but it’s the first thing you need. After all, most Kiwi businesses need decent-sized helpings of finance for buildings, vehicles or equipment, but they usually won’t get the money for anything bigger than a photocopier until the lender’s satisfied it’s fully covered and their money’s safe.

Insurance is as much about growing a business as it is about protecting it. In fact, it’s pretty much impossible to start or expand a business without it. We’d even go so far as to say it’s inextricably linked with a business’ financial viability. And there you were thinking it was just about fires, floods and prangs.

Going global and making a buck.

2000

2001

2002

2003

projections. Floating on the stock market or selling a stake in your business involves rigorous due diligence processes that could really stuff things up if they unearth gaps in your cover.

2004

2005

2006

2007

2008

$40 $60

$50

and a few its, liability

irt. ness, lose your sh w you do busi ory where and ho other ways to cover, statut epending on

D blic liability elihoods might need pu er ’s liability cover, threats to liv u s yo ou vi ob e or the ploy Besides the m , there’s also bility cover, em ver, or professional d earthquake nsured lia co such as fire an tood and grossly underi ors’ liability ct re lp you decide di ders broker can he t. ve seen e’ ur w Yo g . in ty th ni much-misun e m ir y. If there’s on ’s this. inde u’ll need to keep your sh ss owners, it area of liabilit yo t ne si ha w bu de si indcompletely bl

Law su

$100

$90

$80

$70

R I SK ( MIL L ION S)

$30

$20

$10

$0

$5

Expanding or exporting into Aussie or the States (one of the most litigious nations on earth) means factoring ramped-up liability cover into your

n’t. ans she was aped me Oops, no things go pear-sh nce broker t. h ig r e ra insu when She’ll b ere your ht cover usiness e rig t’s wh our b Having th right advice. Tha re it ’s essential y ke more e e h ma th w n t g a c h gettin highlig d so you . They’ll protecte s. e y rl ic e o p can help ch ro is p informed

fo r cove red pen , e ’r u o y to hap e sure To mak s you do want n’t , g d in ou o t he t h t hings y o.nz now. e h t t s not ju heck.c icoverc visit nz

NZI − New Zealand’s risk management experts: with over 150 years of insurance experience

NZI0032A

• AA- S&P rating*, for a very strong claims paying ability • Backed by IAG, Australia’s largest insurer, but autonomous in New Zealand • Genuinely committed to sustainability.

*Rating awarded 3 November 2011 by Standard & Poor’s, an approved ratings agency. Please visit www.nzi.co.nz to view the rating scale.

2009

2010


BrieFcase

In business for independence kiwi entrepreneurs are inspired to run their own business by the desire to be the boss, outranking the desire for a better work/life balance, making more money and following one’s passion, according to American Express. American Express undertook the research in September 2011 to better understand how small business owners are motivated and some of the challenges they are currently facing. Confidence is also fair across the board – with 85 percent of small business owners anticipating profits to either increase or remain the same over the coming year. The large majority (91 percent) also anticipate staffing levels to increase or to remain the same. “Independence plays a significant role in the decision to open a business,” said Peter Newton, director partnerships, American Express New Zealand. “In fact, 45 percent of small business owners cited being their own boss as having influenced their decision to start a business.” Closer examination by region also

showed some unexpected responses. The desire for autonomy is the driving factor for Wellington’s small business owners. Almost one third started their business to be their own boss. The national average is 25 percent. “For Wellingtonians, starting a new business means being your own boss. It’s about having the independence to make your own business decisions. However, with this comes responsibility to the business and we see that entrepreneurs in the region are forgoing long holidays, with 32 percent taking a maximum of seven days leave last year,” said Newton. Wellington small business owners are also exercising the most caution in their outlook for the year ahead. “Fifty-eight percent anticipate profit levels to remain the same compared to the national average of 46 percent.” Auckland small business owners seem to have struck the right balance between work and play. The majority (36 percent) went into business to achieve a better work/ life balance and they are the most

hukafalls Jet celebrates 21st Taupo based Hukafalls Jet, one of New Zealand’s pioneer adventure tourism businesses, turned 21 late last year and has its millionth passenger in its sights. The business opened its doors in 1990 and has grown from a one-boat operation working from a small wooden shed on the banks of the Waikato River, to a four-boat business with a purpose-built base and 831,000 passengers through its doors. Hukafalls Jet regional GM Michelle Caldwell says they’re the only jet boat operator on the river offering a ride right up to the base of Huka Falls – one of New Zealand’s most visited natural attractions. Originally known as Huka Jet, the company began as a subsidiary of Ngai Tahu owned, and Queenstown based, Shotover Jet. It rebranded in December 2006 to Hukafalls Jet, at the same time launching four new state-of-the-art, twinengined jet boats designed by Shotover Jet and built by 3D Design in Queenstown.

4 NZB feb 2012 nzbusiness.co.nz

successful at it, reporting the highest level of fulfilment on this measure (66 percent) of all business owners surveyed. “Auckland business owners actually work the longest hours in New Zealand, with 56 percent working at least 40 hours a week. However, they make up for this by topping the survey for annual leave days with an average of 15 days taken,” said Newton. Despite the challenges, Canterbury small business owners’ passion for their business is the strongest in the country. “Loving what you do can get you through the tough times and this is sure to stand Canterbury business operators in good stead during the rebuild of Christchurch,” said Newton. Seventy-two percent of owners expect their businesses to be affected by Christchurch’s rebuild. With the Canterbury economy making steady positive progress, nearly one third expect to increase revenues as the city rebuilds.


BrieFcase

Auckland schools dominate enterprise awards Auckland secondary schools dominated the Lion Foundation Young Enterprise Scheme (YES) national awards in Wellington late last year, winning six top awards. Twenty-three teams competed at the national competition with Macleans College’s PLUS student company winning two awards; the supreme Company of the Year title and the Edge Mediaworks Award for Excellence in Communications. St Cuthbert’s College’s Le Lunch team finished third and three other teams from across Auckland won excellence awards. PLUS impressed the judges with its eco-friendly, all-natural soaps made from used coffee

beans, and Le Lunch dazzled with its reusable roll-up lunch bags. The YES programme encourages year 12 and 13 students to embrace innovation and business by forming a legal company to produce and sell reallife goods and services. Auckland Tourism, Events and Economic Development (ATEED) runs the programme in north, central and south Auckland and is thrilled with last night’s result. “These students not only learned essential skills, but have proven they can successfully launch and run an innovative and sustainable business. This can only have substantial benefits for them as individuals and the

future of Auckland’s business community,” says Yvette Hellyer, ATEED’s manager, business development south.

Bill Qiu and Teresa Wong from Maclean’s College with their awards and products.

More money for hi-tech start-ups wellington-based angel investment group Angel HQ has partnered with the New Zealand Venture Investment Fund to invest up to $8 million into start-up companies. Angel HQ has about 30 investors who invest in a range of start-up companies, mainly in the Wellington region. Current investments include companies like Green Button, a cloud computing platform which provides computer users with access to supercomputer power, and Kiwi Semiconductor, a semiconductor

manufacturing facility. The partnership means that when Angel HQ invests into a new company, NZVIF will match that investment. The latter is committing to invest up to $4 million through the partnership. Angel HQ chairman Bruno Bordignon said the partnership with NZVIF will bring more investment into innovative companies in Wellington. “We are seeing some very exciting companies emerging in the Wellington

region. We want to build on this, which is why Angel HQ earlier this year formed linkages with Victoria University’s commercialisation agency VicLink, the business incubator Creative HQ, and Industrial Research Limited, to help drive deal flow. But the missing factor for many start-ups is capital. “Our expectation is that the partnership will run for around four to five years, investing into around 15 to 20 young companies.”

Jack up your sales results In 2011 his workshop was a sellout. Attendees described the experience as the most entertaining and engaging workshop they’d ever attended. One even reports business growth of 56 percent from the knowledge gained. Now sales strategy guru Jack Daly is returning to New Zealand for a one-only seminar at the Ellerslie Convention Centre in Greenlane on Tuesday the 20th of March. The organisers say it’s a must for CEOs, business owners and managers who want to get the best from their sales team, and sales professionals that simply want to sell more.

Jack Daly brings more than 20 years of field proven experience. He has led sales forces numbering in the thousands, operating out of hundreds of offices. In the US he has built six businesses from scratch into national-sized firms, two of which were sold on Wall Street to First Boston and Salomon Brothers. Today he helps companies build their businesses. Jack Daly’s enthusiasm is contagious. He leaves his audiences both wanting more and fully committed to taking action. To register go to www.salesstar.com or call 09 524 0999.

NZB feb 2012 nzbusiness.co.nz

5


BrieFcase

pORSE founder wins hawke’s Bay award Jenny yule, the founder and managing director of PORSE, was recently judged Hawke’s Bay’s Business Person of the Year. From primary school teacher and nanny tutor to education entrepreneur, Yule has become a formidable figurehead in both influencing and leading a shift in perception about early childhood education and care across New Zealand. Accepting the award at the Westpac Hawke’s Bay Chamber of Commerce Business Awards late last year, she acknowledged the thousands of in-home educators working across the country helping to give children the best start in life. Yule founded PORSE 17 years ago based on a two-fold mission to give families the choice of a nanny in their home to support the vital role of parenting, and to offer nannies an organisation that supported and valued their career pathway.

Today PORSE is New Zealand’s largest provider of in-home childcare, education and training.

Jenny Yule accepting her award from Westpac’s general manager Business Banking Ian Blair.

Ten years up for business incubators last year marked the tenth anniversary of business incubators in New Zealand. “In ten years, New Zealand’s incubation network has gone from strength to strength. Our incubators are internationally recognised as some of the best in the world,” says Richard White, manager incubator development at New Zealand Trade and Enterprise (NZTE). “In 2001 we started with four incubators – The ICEHOUSE, AUT Business Innovation Centre and ecentre in Auckland and PowerHouse Ventures in Christchurch. All have been incredibly successful, with PowerHouse Ventures named the 2011 NBIA Incubation Innovation of the Year and the Asian Incubator of the Year in 2009 and The ICEHOUSE named as one of

6 NZB feb 2012 nzbusiness.co.nz

Forbes Magazine’s top 10 technology incubators in 2010. They have since been joined by Creative HQ in Wellington, Upstart in Dunedin, the Bio-Commerce Centre in Palmerston North and SODA in Hamilton.” Chair of Incubators New Zealand and CEO of ecentre, Steve Corbett, says incubators are important dynamos in the transformation of the New Zealand economy and the development and growth of technology-based ventures and entrepreneurs. “Over the past ten years, more than 250 ventures have graduated from an incubator; 69 percent of these have raised external investment, 71 percent are still trading, and 57 percent are exporting. Along the way over 1100 highvalue jobs have been created.”


Get first aid fit. Now in just one day!

WORKPLACE TRAINING

Get your first aid into shape. St John is now offering fully compliant one day first aid courses. St John top quality trainers will get your crew punching above their weight if there’s an accident or emergency in your workplace. We can also get your first aid back on track, no sweat, with our refresher workouts. You can even do part of the course online.

Go in the monthly draw to win an iPod nanoÂŽ! Simply book and pay for a St John First Aid Level One course or First Aid Refresher course by 30 April 2012 to go in the monthly draw. Use promo code nzbusiness when you book.

www.stjohn.org.nz/training/competition

0800 FIRST AID (0800 347 782)

Terms and conditions: By entering this promotion, entrants agree to all of these terms. Booking and payment for St John First Aid Level One course and First Aid Refresher course (online and class options) must be completed and received by St John no later than 5pm, Monday, 30 April 2012. Apple is not a participant in or sponsor of this promotion. Conditions apply, please visit www.stjohn.org.nz/training/competition for details.

*


BrieFcase

MyOB’S nEw pRODuCT GEnERATIOn late last year MYOB launched its next generation accounting solutions – part of a new vision for the company’s business management systems. The release includes the relaunch of MYOB AccountRight Standard and AccountRight Plus on an entirely new platform, and the introduction of new software for the Mac: MYOB AccountEdge, which includes free apps for the iPad and iPhone. “The releases mark the first stage in the establishment of the new MYOB Business Platform,” says MYOB general manager Julian Smith, “which aims to make cloud solutions more convenient, accessible, relevant and profitable for Kiwi businesses. “The MYOB solutions, including AccountRight Standard, AccountRight Plus and AccountEdge, are part of our focus on combining the speed and function-rich capability of a desktop application with the connectivity and mobility of the Internet.” MYOB AccountRight Plus and AccountRight Standard have been fully redeveloped on the .NET SQL codebase, using a development methodology that will allow MYOB to continue to make rapid improvements as customers request them. Smith says AccountRight Standard and AccountRight Plus include a range of new features designed to increase usability and help users become more productive, while giving them the flexibility to customise information and reports. “In particular, many of the new features are designed to make life easier for business owners while making it possible for them to manage their business, their way.” For more information and free product test drives, visit myob.co.nz.

8 NZB feb 2012 nzbusiness.co.nz

Gourmet desserts cross the Tasman

Country Culinaire, a Hawke’s Bay boutique dessert company, is a prime example of how to create a successful business out of a hobby. The company’s products were originally made on a farm by owner Trish Gibson, for the local farmers’ market. Handmade Pavlova Roulades, Christmas and Sticky Date Puddings quickly became popular, forcing Trish to purchase a bigger factory to keep up with demand. Word of these gourmet desserts spread to Australia, with Country Culinaire exporting

to Melbourne for the first time in July 2011. “It has been an exciting year of growth for our business”, says owner Trish Gibson. “We are now exporting to Australia, as well as being available all over New Zealand. Even with this expansion we still use only the freshest of ingredients, we don’t use preservatives, and our products are consistently sought after. We still hold the same philosophy and hand make all of Country Culinaire’s delights just as we did when we were in our small registered kitchen on the farm.”

nZ lags on social media uptake kiwi businesses lag behind the rest of the world in the use of social media, according to findings from Grant Thornton’s International Business Report (IBR). The research reveals that 38 percent of businesses use social media in some capacity compared with a global average of 43 percent. Greg Thompson, partner of Grant Thornton NZ said that New Zealand also trails neighbours Australia, where 44.9 percent of businesses use social media, and the US with 46 percent. “We are ahead of the UK, but surprisingly, well behind Latin America and the BRIC countries.” For New Zealand businesses the key reasons for using social media are advertising at 30 percent, 20 percent recruitment, six percent to communicate with suppliers, 24 percent to communicate

with customers and 12 percent for staff communications. “The results are a wake-up call to business leaders reluctant to embrace digital opportunities,” says Thompson. “A recent study by Cisco Systems Inc.’s Economics & Research Practice estimated that global e-commerce, including travel and auto purchases as well as online retail sales, will increase 13.5 percent annually for the next four years and reach an estimated USD1.4 trillion in 2015. “Social media is all about communicating and sharing information and building relationships with your key target audiences. The IBR results show businesses in emerging markets embracing social media much faster than their peers in mature markets. www.internationalbusinessreport.com


Advertising online is easier than you think.

Attract new customers to your website. Google AdWords is a powerful way to attract customers searching for what you have to offer. It’s simple to get started. We’ll set up your first campaign for you, credit your account with an obligation-free $75 advertising trial, and provide free phone support to answer all your questions. What is Google AdWords? Find out more at google.co.nz/adwords

Get started with

$

75

g in free advertisin

Accelerate your business today!

Call 0800 451 754

and quote ‘NZ BUSINESS’ now. Hurry, this offer expires 28 February 2012.

Terms and Conditions- Promotional credit must be applied to a new AdWords account within 15 days of creating the AdWords account and is valid only for new Google AdWords customers with self-managed signup accounts. Advertisers will be charged for all advertising that exceeds the promotional credit. Advertisers can suspend their ads anytime before the promotional credit amount is exhausted if they do not wish to receive additional advertising charges. Advertisers will not be notified once the promotional credit is exhausted. Offer subject to ad approval, valid registration, and acceptance of the Google AdWords Program standard terms and conditions. If you indicate that your Google AdWords account should be subject to a different currency to the one in which your promotional credit has been awarded, then the actual amount of the promotional credit may be subject to foreign currency fluctuations. Offer subject to ad approval, valid registration, and acceptance of the Google AdWords Program standard terms and conditions. The promotional credit is non-transferable and may not be sold or bartered. Offer may be revoked at any time for any reason by Google Inc. One promotional credit per customer. Offer valid only for sign ups through the URL provided for the promotion by customers with a billing address in New Zealand. Your use of this voucher and/or the promotional credit constitutes your acceptance of these terms and conditions. Offer void where prohibited by law. Expires 28 February 2012. © Copyright 2012. Google and AdWords are trademarks of Google Inc. and are registered in the U.S. and other countries.


BiZ diarY

FEB

2012

4

13-14

14-15

First Wednesday

Managing People

Brought to you by The ICEHOUSE and The Auckland City Council, this dynamic presentation and network opportunity is free for entrepreneurs with business ideas. For more go to www.theicehouse.co.nz

Nick Read. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

ICE Bridge: Achieving Business Growth Workshop Blenheim. Unlock the potential within your business. For more information visit www.theicehouse.co.nz

Do you have a business event coming up? Email the details to editor@ nzbusiness.co.nz

15-16

15-16

20-21

22-23

Sales Skills

2012 New Zealand Freight Summit  

Effective Communication Skills

2012 Business Intelligence Summit

The University of Auckland Business School, Owen G Glenn Building. A discussion and debate on the issues affecting our freight sector. Visit register@conferenz.co.nz

Roseann Gedye. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

Rendezvous Hotel, Auckland. Discusses challenges, triumphs and lessons learnt during BI application, use and reporting.  Visit www.conferenz.co.nz

Doug Robertson. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

22-23

24

27-28

28-29

29-01

Marketing Management

2011 RSVP and Nexus Awards

Business Writing Skills

Leadership for Women

Nick Read. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

With Robyn Wynn Lewis. Wellington. (Also Auckland March 29-30) To register phone 09 912 3616 or go to www.brightstar.co.nz

Building a Compelling Business Case

7-8

9

12-13

14-15

Leadership Behaviours That Make a Difference

TOxIC PEOPLE: What Every Leader Needs to Know and Do

Writing for the Web

Social Media and Online Strategies

Steve Bridges. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

MAR 2012

Langham Hotel, Auckland. New Zealand’s only awards that showcase the very best in insight-driven marketing initiatives. For more information: www.rsvpandnexusawards.co.nz

Dr Mitch Kusy. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

A half-day snapshot by Dr Mitch Kusy. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

With Helen Steemson, Auckland. (Also Wellington March 19-20) To register phone 09 912 3616 or go to www.brightstar.co.nz

Rob Verkerk. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

Hayden Sanders, Auckland. (Also Wellington March 21-22) To register phone 09 912 3616 or go to www.brightstar.co.nz

15

15

20

26-27

The 2012 CFO Summit

The Leader’s Guide to Storytelling

Driving Sales and Boosting Profits

Business Forecasting and Budgeting

Dr Lester Levy. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

A workshop with Jack Daly – the world’s foremost leader on sales strategies. Ellerslie Convention Centre, Greenlane, Auckland. Register at SalesStar.com or call 09 524 0999.

Susan Hansen. The University of Auckland Business School. P: 0800 800 875 www.shortcourses.ac.nz

SKYCITY Convention Centre, Auckland. Where the winners of the 2012 CFO Awards will be announced. For more information visit www.conferenz.co.nz

10 NZB feb 2012 nzbusiness.co.nz


soaPBoX

Peter Enderwick Professor of International Business AUT Business School

Food miles: a fridge too far? Just a few years ago the idea of food miles – the distance that food travels from production to consumption – struck fear into the hearts of New Zealand food producers, who saw the dangers of a new form of trade protectionism. The concept of food miles seemed highly relevant in an increasingly global world where food was transported further as production and supply became more concentrated, as levels of processing increased, and as shopping patterns changed. Greater travel implied greater environmental costs through energy-intensive transport, storage, distribution and retailing. Available evidence certainly suggested the globalisation of food chains. Between 1968 and 1998 global food production increased 84 percent while trade in food increased by 184 percent. Should New Zealand producers still be concerned about food miles? The answer is a guarded yes. Yes because it is a concept that strikes an accord with a number of distinct groups. It appeals to environmentalists lobbying for greater accountability and transparency of costs; to politicians concerned with food security because it seems to justify local production; to domestic food producers seeking to increase market share; and to socially responsible consumers concerned to do the ‘right thing’. Yes also because the concept has moved beyond food and has been applied to other products. Yes again, because some retailers such as Wal-Mart now incorporate these concepts into the development of environmentally-efficient supply chains and increasingly demand awareness and compliance from their suppliers. But it is a guarded yes. Credibility of the food miles concept has suffered badly as it has been subjected to increasingly sophisticated analysis. This has revealed several flaws. Measurement is extremely difficult, particularly for complex processed foods. It is now recognised that it is not just the distance travelled; the mode of transport matters. Road transport is more environmentally costly than air travel, which is more damaging than rail or sea transport. Empirical research suggests the most significant environmental costs in food transportation are domestic, not international, costs. Distance costs are also affected by the scale of production: larger scale production lowers environmental costs per kg of food. Perhaps most damaging is the recognition that at best, food miles are only a partial measure of costs.

What is needed is lifecycle analysis which assesses the full environmental costs of the food chain encompassing production as well as transportation. New Zealand’s strong comparative advantage in several areas of food production means that the overall environmental costs of its supply to distant markets may be lower than locally-grown produce. On balance, do we need to do anything in response to the idea of food miles? New Zealand producers cannot ignore the underlying concerns which propel such concepts. We can probably conclude that the main thrust of the food miles debate will not be an attempt to impose crude trade protectionism. Governments pursuing such policies would find themselves in conflict with multilateral and bilateral trade agreements; they would need to evaluate the massive agricultural subsidies that distort markets, and to justify the significant costs that would be imposed on some of the poorest suppliers in the world such as Malawi. Consumers in most of our major markets are concerned about choice, availability and price, and these factors are likely to determine purchasing decisions for the majority of buyers. However, New Zealand producers cannot afford to be complacent. The main drivers of greater transparency in the environmental costs of food are likely to be large food processing companies and retailers. Both are anxious to provide more information to buyers and to appeal to the growing interest in environmental costs. There are a number of things that New Zealand producers can do. One is to lobby for full lifecycle assessment of environmental costs; this can only be positive for efficient but geographically remote suppliers. Second, firms can become more environmentally proactive in the production stage, achieving greater economies of scale, developing more detailed country of origin labelling and highlighting related consumer concerns. Third, the possibility of carbon trading and other measures could enable more producers to move towards carbon neutrality. In the interim there is always the opportunity to supply to the large and rapidly-growing markets of Asia where environmental concerns are less acute. The idea of food miles should be seen as an early indicator of things to come. The acute protectionist dangers first associated with it are yielding to a more subtle but enduring debate. For New Zealand producers it would be unwise to ignore this debate.

NZB feb 2012 nzbusiness.co.nz

11


Great Expectations

12 NZB feb 2012 nzbusiness.co.nz


BiZ achieVers

Belinda Simon has always had great ambitions for her online maternity and children’s boutique Pregoli. Now with earthquakes and late nights behind her, those ambitions are fast becoming reality. By Glenn Baker. It could all have started so very differently. When Belinda Simon first looked into establishing her maternity wear business, she seriously considered investing in a babywear/ childrenswear retail store in Christchurch that happened to be for sale. The idea was to convert it into maternity wear. “The sale never went through in the end, but I got so far into the planning stages it seemed logical to carry on,” says Belinda. “I had just fallen pregnant with our second child at the time so a website was much more suited to my lifestyle. I thought it would take an hour or so per day to pack and send orders, and an hour a week for admin, most of which I planned to do when my boys slept. Oh how I was wrong!” Pregoli was launched in September 2009, catering for a gap in the market for stylish, quality maternity and children’s clothing and accessories. Right from the beginning, time would prove to be the biggest challenge for its ambitious owner. “I had always wanted a business I could run from home with my boys around me. The first 18 months I worked until two in the morning, and every chance I could get during the day,” recalls Belinda. “I’m lucky to have a very supportive husband! “Now things are running really smoothly and I have employed help in certain areas which allows me to focus on growing the business.” Another major challenge came as a result of the events of September 4, 2010 and February 22, 2011. Not surprisingly, being based in Canterbury and with many customers living in Christchurch, sales did decline. Belinda also noticed less planning by her customers as many were living day -to-day. “Previously we would have customers thinking ahead for clothing for special occasions. It became more of a last minute dash. “Luckily, rural areas and Auckland are also a big market for us so we were able to continue supplying our range to the rest of New Zealand.” Belinda says there was a lot of

support for Christchurch businesses including organisations such as Recover Canterbury and Hands Up Wellington. “Hands Up Wellington put on an amazing expo for Christchurch retailers to exhibit and sell to Wellington locals – who really opened their wallets for us!” Pregoli also gave back to the Christchurch community during this time by holding a community evening with a child psychologist, to help children and families deal with the trauma. “We also reached out to our database and had clothing, toys, nappies etc, donated from all over New Zealand for those in need – many of whom had lost their homes or belongings.” Inspired marketing Much of Pregoli’s success can be attributed to some well thought-out marketing and making the necessary investment. “I always say: start the way you mean to carry on,” says Belinda. “I invested in the best website I could afford, and spent money on packaging, flyers, cards, posters and any other promotional material I could think of. “First impressions are so important, and being online you don’t have smiling staff or the ‘feeling’ of the store. So it is crucial to get your branding right, and have an easy-to-use, inviting website that customers feel safe entering their card details into. “When a customer orders from us, we aim to send it that same day. When the parcel arrives overnight and the package is beautifully wrapped in tissue it provides another ‘wow’ factor.” Belinda says word of mouth is one of her best forms of advertising. “I’ve learnt over the last couple of years which forms of advertising work – and it’s about getting your target market right. Having good contacts always helps too! “Sales have recently grown by 200 percent so we’re right on track for our sales targets.” Belinda constantly looks for ways to

raise the profile of the Pregoli brand. The 2011 ‘Yummy Mummy’ Makeover Model Search was a big success, and there’re plans to run it again in 2012 to promote the new winter range. She regularly speaks at Christchurch ante-natal classes and assists with projects to help charities and quake victims. “I’m excited about the prospect of following my marketing plan through the next three to five years, and not only meet, but exceed our goals. “No doubt I’ll need to hire more staff along the way as we plan to increase sales by a further 423 percent within the next three to five years,” she says. I ask her to elaborate on her growth plans for Pregoli and it turns out they are indeed ambitious. “Initially I would have said the plan was to open a retail store, but at this stage the plan is still to grow the online business, and move to a warehousing facility in the near future. “I’d like to expand further into the North Island and lower South Island, as I know options are limited there,” she says. “If growth continues as it is currently tracking, in five years I’ll be managing the business with plenty of staff to continue the great customer service Pregoli is known for!” Glenn Baker is editor of NZBusiness.

Belinda’s lessons • You can’t do everything yourself. • ‘To Do’ lists will continue to grow but help you feel like you have some order! • Always start as you mean to go on. • Trust your instinct, you know your business and target market better than a salesperson! • To run your own business you must be truly passionate about what you do.

NZB feb 2012 nzbusiness.co.nz

13


FaceMe wins $100k Challenge Ten of New Zealand’s top entrepreneurial businesses made it through to the final of the BNZ/Virgin Business Challenge, but only one could win the prize package which included $100k in cash and one-on-one time with Sir Richard Branson. NZBusiness was at the announcement dinner. It doesn’t get any better than this if you’re an entrepreneur with global aspirations. The prize package in the BNZ/ Virgin Business Challenge included $100k in cash, one-on-one mentoring with Sir Richard Branson (no introductions necessary) plus a BNZ business education scholarship, mentoring from BNZ and Virgin executives, and flights around the world courtesy of Virgin Australia and Air New Zealand. To enter the Challenge you had to be a clever Kiwi company with passion and drive, creativity and innovation, and demonstrably the desire, plus the potential, to go global. As it turned out more than 260 businesses entered the competition – 20 percent of which came from the Internet and technology sector. They were whittled down to 15, who submitted business plans. Then, following a rigorous vetting process, the top ten finalists, nine of which are based in Auckland, went on to pitch live to a ‘Dragon’s Den’ style judging panel on December 15. One member of the judging panel, Bill Buckley, president of BSL Enterprises, candidly stated at the award dinner that “nobody came less than second” – an indication that picking a winner was indeed an extremely tough decision. This sentiment was echoed by Virgin’s head of strategy and corporate development and fellow judge Keith Roberts who stated that all ten finalists are

14 NZB feb 2012 nzbusiness.co.nz

Mark Christensen (left) and Danny Tomsett from FaceMe with the award.

already success stories. “We set out to find one business that was built around a strong creative original idea; a business that had strong management teams, had demonstrated that they could succeed, and were passionate and proud of what they were doing. Virgin has long looked to New Zealand as a source of talent and ideas so I knew we would unearth some good companies. I’ve been really very impressed by the depth of talent uncovered.” Another judge, Sarah

Kennedy, CEO of RD1, said they were impressed by the fact that all the finalists demonstrated true scalability and had an international focus right from the word go. “I came out of the judging process incredibly enthused and humbled – these businesses have been birthed as international companies, with big global plans. That’s really exciting to see.” BNZ director Partners and challenge judge, Anthony Healy, agreed that the high calibre of all entries was outstanding and an encouraging sign for New

Zealand’s economic future. The eventual winner FaceMe exemplifies everything the Challenge is about, he said. “FaceMe demonstrated it has what it takes to go global. It’s safe to say the entrepreneurial spirit is alive and well in New Zealand, with so many Kiwi companies ready to take the next big step. “FaceMe impressed the judges with its compelling business model, innovative technology, strong early success and momentum in their home market, and a management team with a clear vision and well articulated plan for success in international markets,” said Healy. FaceMe has developed a video conference system that is compatible with any device and allows anyone, anywhere to video conference with quality calls. Accepting the award, FaceMe’s Mark Christensen says the win is a great validation that their idea and the scale of opportunity that they possess has been recognised. Founder Danny Tomsett believes all ten finalists are destined for great success and said FaceMe came about through challenging traditional thinking. They’re already taking on the big market players, showing up the likes of Google and Microsoft in the video conference market space, he added. The other ten finalists in the Challenge were 1Above, Rocket Lab, MiniMonos, Konnect Net, PowerbyProxi, WilliamsWarn, Sonar6, KlickEx and The Collective.


Check out FIRST WEDNESDAYS at The ICEHOUSE On the First Wednesday of every month, The ICEHOUSE opens up to ambitious entrepreneurs who are hungry to understand the steps to start-up business success. Spend an afternoon with the experts at The ICEHOUSE Business Growth Centre, recognised by Forbes.com as one of the world’s Top 10 Technology Incubators. Access our knowledge, tools and contacts to discover how to turn your idea into a business success.

THE FIRST WEDNESDAY PROGRAMME 3 – 5pm

Attend a seminar to learn the Five Rules for Successful Start-Ups. These key lessons from 10 years of working alongside entrepreneurs will be presented by Ken Erskine, Director of Start Ups at The ICEHOUSE. Meet Andrew Hamilton, CEO of The ICEHOUSE and our Executives in Residence.

5 – 6pm

Stay and network - get matched up with ICEHOUSE experts and angel investors. Talk over a beer with current and past ICEHOUSE incubator residents and other members of the ICEHOUSE network.

It’s FREE, but there are only 25 spots per month Register online today www.theicehouse.co.nz/start-up

www.theicehouse.co.nz


ServiCe with a S M ile Auckland’s North Shore Dental is a classic example of how sticking to the basics of customer service encourages consistent business growth. Glenn Baker spoke to partners Mike Black and Dave Lovrich about the unique challenges of running a dentistry business. As I rocked up to North Shore Dental just prior to Christmas I must admit to feeling rather smug. After all, I was there to conduct an interview, not spend time in a ‘dreaded’ dentist’s chair. With a degree of sympathy I looked at the nervous souls in the waiting room cum reception area. OK that comment may have been slightly uncalled for – but the truth is I’ve always been a bit of a sooky when it comes to the dentist. And I’m not alone in that respect, I know. It comes from memories of stern-faced school dental nurses in the 60s and one

16 NZB feb 2012 nzbusiness.co.nz

grumpy dentist who snarled because I dared cry in his crusty old surgery. For a schoolboy that was scary! But thankfully those mental images of a bygone era were quickly thrust aside as North Shore Dental’s practice manager Christine Black showed me around their state-of-the-art practice in Brown’s Bay. Lots of smiling, friendly faces here – and I’m talking clients and staff. It does seem that trips to the dentist, dear reader, can nowadays almost be an enjoyable experience. Mike Black and Dave Lovrich soon

convinced me of that fact. I manage to collar both directors (Anthony van der Steeg is the third) in their lunch breaks. Their positive attitudes are immediately obvious (Dave tells me that Mike has been called the ‘Steve Irwin of dentistry’ by a customer), as is their respect for each other. It turns out that Mike and Dave have been in business together in Browns Bay since 1989. The practice originally had just four rooms above a coffee shop. In 2005 they moved to brand new premises just up the road and


(L-R) Anthony van der Steeg, Dave Lovrich and Mike Black

BiZ achieVers

today they have 29 staff including three dental hygienists. As the interview begins I suspect Mike and Dave are wondering why their dental practice is being targeted for a story in a business magazine. I quickly point out that they came highly recommended to me by one of their patients, who also happens to be one of NZBusiness magazine’s columnists. I am, of course, referring to Dr Ian Brooks who is an authority on customer excellence and speaks on the subject around New Zealand and overseas. “If you ever come across a good example of business success through excellent customer service let me know,” I once told him. North Shore Dental was his first suggestion. It quickly becomes apparent that service is indeed the operative word at this practice – and it’s all geared towards making clients happy and exceeding expectations. Service delivered in the form of easy payment plans, cutting-edge technologies and techniques (such as sedation dentistry), and, above all, friendly, caring staff who treat clients as acquaintances and friends, never strangers. And as Mike (who also does

population, and our success is based on providing top-quality dentistry with excellent customer service.” So why the preoccupation with customer service? “We’ve all been customers, so we know what it feels like,” says Mike. “My personal mantra is to treat someone as I would like to be treated. I’ll even show people my own teeth to help explain treatments.” (Yes even dentists don’t have perfect teeth!) Mike explains that people generally rate a dentist appointment on the whole general experience (around 90 percent) – clinical ability only accounts for around ten percent. “It’s about making them look good, feel good, and making it last. Quality has to start at the top and permeate right through an organisation. That’s our goal. Christine states, “We are aware that without happy customers, there is no business. So we’ve always actively sourced good customer service practices by regularly attending courses and seminars, listening to what our customers want (they have just completed a six-week customer survey), and listening to people like Ian.”

We’re aware of the stigma attached to seeing a dentist, so it’s a welcome challenge to make the experience comfortable and fun. orthodontics) points out – some of their customers have been with them since the 1980s and 90s. “We genuinely try to help our clients in more ways than one – right down to emotional support if necessary,” he says. Such is the reputation of these gentlemen and their practice, they pretty much just rely on word of mouth marketing to bring in new business. They even cancelled their Yellow Pages ad, and Christine is busy swotting up on social media marketing, because they acknowledge that this is where many of the next generation of customers are likely to come from. There’s no room for complacency though. Dave reminds me that New Zealand’s dental industry is extremely competitive. “There has been a dramatic increase in dentists per head of

She also emphasises that the whole team is behind this customer service mentality. “Our reception staff have been selected especially for their skills in this area. “We’re aware of the stigma attached to seeing a dentist, so it’s a welcome challenge to make the experience comfortable and fun. “Follow-up after treatment and first time experiences are also very important. We go out of our way to remember each of our customers and make them feel comfortable,” adds Christine. And there is no shortage of customers it seems. Dave informs me that there has been a steady nine to ten percent increase in turnover per year during the recession. “In November 2011 we inexplicably had the highest number of patients through in one

practice tips Mike and Dave’s advice for dentists looking to set up a practice could be applied to all business sectors: • Know the value of the service you provide and never undervalue it. • Your customer is your best advertisement and your repeat business. • Keep right up-to-date on education, equipment and market trends. • Always involve all of your staff. • Be prepared to put in the ‘hard yards’ to begin with.

single month – well in excess of 2000.” They’re clearly doing something right. Despite the growth in turnover, the current state of the financial market is still a concern. They see their biggest challenge as maintaining their integrity and success during a time when privately owned practices are becoming somewhat rare. And there’s the issue of having to constantly upgrade equipment and invest in new technology. It’s not about having the latest toys to play with – having the technology and the number of chairs means the practice becomes a one-stop shop for all treatments. “We basically refer patients within the practice and there’s no need to go elsewhere for treatment,” explains Dave. While Dave heads off to greet his first afternoon client, Mike tells me that the practice is about where they want it in terms of size. And while they’ve been hunted by franchisors in the past, they’re happy to stay independent. After 20-plus years they reckon they’ve got the business formula pretty sussed. I have to agree as I make my departure some time later. As dental practices go this is about as friendly and customer-driven as you’ll get. You could almost look forward to that trip to the dentist. Glenn Baker is editor of NZBusiness.

NZB feb 2012 nzbusiness.co.nz

17


BiZ achieVers

James Agnew (2nd from left), with the A.C.E. team. Photo courtesy of The Press.

Young and giFted NZ’s first Young Managing Director of the Year heads an exciting, sustainable energy company. Kiwis have always been innovators, a nation of back-yard ‘tinkerers’ with great ideas – yet it takes something extra to turn them into a commercial reality. Which is why James Agnew, aged 17, is a deserving winner of the first-ever New Zealand Institute of Chartered Accountants Young Managing Director of the Year Award – a new category in the Lion Foundation Young Enterprise Scheme (YES) Awards. James, the MD of Advanced Clean Energies (A.C.E) heads a team of six St Thomas of Canterbury College students who have turned their great idea – a sustainable energy based emergency power generator – into a profitable, commercial reality; the basis for their sustainable energy company. Indeed, their product, the Lion Emergency Power Generator, which uses waste heat from boiling water to power cell phones and charge batteries, has been picked up by retailers Kathmandu and Mitre 10. The Lion also forms the basis of the company’s strong strategic vision, to be a manufacturer of “sustainable energy devices intended to make a difference to communities in New Zealand and beyond”. As far as NZICA is concerned, James couldn’t be a better role model for this

18 NZB feb 2012 nzbusiness.co.nz

inaugural award, the whole purpose of which is to encourage and foster New Zealand’s future business leaders and entrepreneurs. “James has done an exemplary job as managing director of this extraordinary team of young entrepreneurs,” says NZICA chief executive Terry McLaughlin. “He’s provided strong strategic vision, robust managerial skills and a level of leadership that’s seen his team able to work to their full capacity, getting their idea from the drawing board to the shelves – domestically and internationally.” The idea came from Sam Mackwell, now A.C.E production design director, who was prompted by his first-hand experience of the Canterbury quakes’ impact. He saw a need for an emergency power source, started working on a prototype and A.C.E was born. In the weeks following the quakes, the team refined the generator, testing different production materials and designs, to a point where they could manufacture it within their budget without compromising performance. James chose a ‘shared leadership’ approach in his management structure, allocating tasks against individual skills, ensuring the team could work to full capacity.

This is backed by a strong shared vision to “make a difference in local and global communities”. A glance at the A.C.E Annual Report demonstrates stringent business practices from thorough market research and analysis identifying a clear need for their product, to accurate financial reporting and health and safety and performance monitoring. Financially, A.C.E has is showing remarkable success. From July to September 2011 sales have exceeded targets with the company boasting a healthy net profit of eight percent – which James says will be ploughed back into the business. A.C.E is currently pursuing new markets for the Lion including the tramping and camping sector along with developing countries where they see it as having great benefits. A village in Africa is currently trialing the ‘Lion’, dispatched with support from the company’s external partner DHL. Effectively, James and his team are role models not just for young entrepreneurs but all Kiwi innovators and business people. As Terry McLaughlin says: “Their achievements at just 17 years of age are extraordinary. I look forward to tracking this talented young man’s career.”


Kit Fail? Get kitted out with alsco All First Aid Kits are fully managed and stocked  by ALSCO using hospital grade supplies  Transparent clearly labeled, injury-specific modules - easy to find the right supplies in a hurry  Removable door liner inside each cabinet - replaced at each scheduled service/maintenance  Expired stock donated to NZ Charitable Organisations as well as Global Medical Aid charities  Meet OSH guidelines. Protect you, your staff and your customers

To find out how we can help you call 0800 4 alsco or visit www.alscofirstaid.co.nz


Sure to grow

Chris Godsiff

The ICEHOUSE runs Achieving Business Growth workshops throughout the country. Designed for owner-managers and senior leaders of SMEs, they aim to challenge thinking and turn ambition into action and opportunity. Shay Wright spoke to four Blenheim alumni for their take on the course.

Chris Godsiff set up Marlborough Travel 25 years ago. Now, with 15 staff, the business brings both domestic and international tourists to the Marlborough region for wine trails or local cruises. “We’re into boats and buses and holiday packages. Every year we have more customers and the vehicles and boats grow,” says Chris. While initially in two minds about attending the Growth workshop, Chris bit the bullet and booked himself and his business development manager on the course. Chris immediately connected with the content. “I have always been hands-on, but the course really brought it home to me that I have to spend more time working on the business and less time in it. It wasn’t easy to make that transition, but now I am much more diligent about generating more work which hopefully turns into income for the business.” The workshop also highlighted that they needed to place more emphasis on the amount and efficiency of marketing and business development. “The workshop taught me that businesses tend to undergo rapid growth and then plateau. We’re looking for that next growth phase because I’ve had that chance to actually spend time working on our business.” Marlborough Travel initially focused on tourists who were in New Zealand, but now they look internationally. Chris says this is where future growth is likely to come from. The Growth workshop also provided Chris with a refreshing perspective of his business. Having run it for so long he was in need of new motivation. “We thought we knew everything until we went on the course.” Chris says the Achieving Business Growth workshop is a course that many owner-managers would contemplate but may not utilise. “Acting on the wisdom that came out of it brought about growth. There really is some good stuff in there that will help you.”

20 NZB feb 2012 nzbusiness.co.nz

Bill Musgrove and partner Christina established CPR Distributors in 2003. Their business roasts coffee and distributes it throughout Marlborough and operates two café outlets – one at their roasting premises and one at Blenheim airport. Bill was aware of The ICEHOUSE programmes, but when the Growth workshop came to Blenheim he took a hard look at it. “It was brilliant to have the course in Blenheim. I think it is fantastic that The ICEHOUSE is responding to different regions. If we had to travel to Wellington the cost would effectively be double.” Like many of the other participants, Bill’s attendance costs were subsidised by an NZTE Capability Development Voucher. The Voucher covers half of the cost of services to improve management capabilities, and is available to businesses with less than 50 employees that demonstrate a desire to innovate and grow. “I hoped the workshop would give clarity about where our growth opportunities were. Being broadly based rather than focused on one particular area, I was able to take material from the course and apply it to the business. I really liked the level it was pitched at.” While a business plan wasn’t new to Bill, the workshop gave a clearer focus on some of its elements. “One thing I’ve recognised is that we chose a region with a relatively small population and a large geographical spread. It’s easy to underestimate the challenge this provides, especially for a business like ours which sells a low-priced product.” To combat this, Bill has used distributors to expand their coffee distribution outside the Marlborough region. CPR is also expanding the number of its own outlets by opening another café in the revamped Marlborough Stadium and Aquatic Centre. While this type of expansion was always on the cards, the drive to do it was reinforced by workshop.

Bill Musgrove


BIZ ACHIeVeRS

have laptops and can do all their paperwork and invoicing wirelessly. The electronic procedures have brought about huge cost savings.”

Hamish Scott Hamish Scott has been GM of Laser Electrical Blenheim since 2005. Due to the recession and the decline in building projects, Laser adopted a lean approach for the business and implemented a full system redesign. In early 2011 Hamish was looking to recharge his enthusiasm and signed up for the Growth workshop. “I’d heard pretty good things about The ICEHOUSE and I was hoping to find a new motivation to grow the business. You tend to get stuck in the day-to-day operations.” Hamish says he heard about the NZTE Voucher that helps subsidise the course through the Marlborough Chamber of Commerce, and it was a big factor in himself and owner Brendon Adams signing up for the course. “It is fantastic that there are these subsidies aimed at raising the skill level of managers throughout the country,” says Hamish. “We wanted to find the most effective methods of marketing the business to improve its growth rate. The course pointed out two main things relevant to us. The first was why some SMEs stay small – usually due to a lack of investment in people. I went into the course with the general mindset of ‘what if I invest in training staff and they leave?’ But now I have a completely different mindset – ‘what if you don’t invest in key people and they stay?’ “The second thing highlighted was the mistakes that businesses make. For example, your business must be in order before you focus on growth because you need the assured cashflow.” Hamish adds that, more than anything, the workshop enforced that they were doing the right things. “By using modern technology and having good systems and processes, then you are in a great place to grow. We’ve worked really hard to make sure our systems are robust and efficient. “Now all our vehicles are mobile offices. The technicians

Mandy and Sam Weaver’s business Churton Ltd has been exporting wine since 1997. Ninety percent of the wine is sold overseas in markets as distant as the US, Bermuda, Japan and Hong Kong. Like many other Marlborough participants, Mandy heard about The ICEHOUSE Growth workshop and NZTE Voucher through her insurance broker Crombie Lockwood. As is a common theme with owner-managers, Mandy saw the value in stepping back from the business and experiencing a refreshing learning environment outside of work. “I have implemented a few magic pointers,” says Mandy. She reviewed the business plan from the end goal working backwards and immediately invested in better software, making reporting more timely and easier to share. “The course underlined just how far we have come as a company,” Mandy adds. “Our future growth plans concentrate on servicing our markets better.” Mandy believes owner-managers should spend some time out of the office to open up their mind. “It lets you look at what you are doing from the outside, acknowledge your achievements and apply small changes.”

Mandy Weaver Shay Wright is the commuication intern at The ICEHOUSE Business Growth Centre.

Achieving Business Growth workshops 2012 Workshops are conducted in regions throughout New Zealand. In the first part of the year they’ll be hosted in Blenheim (14 and 15 February), Wellington (19 and 20 March), Christchurch (17 and 18 April) and Auckland (15 and 16 May). For remaining courses visit the Owner-Managed section of The ICEHOUSE website: www.theicehouse.co.nz. Not only do they provide valuable tools to assess and grow your business, they also provide the opportunity to network and share ideas with 20 other owner-managers and senior managers.

NZB feb 2012 nzbusiness.co.nz

21


22 NZB feb 2012 nzbusiness.co.nz


BiZ achieVers

a Shortbread StorY From organic farming to exporting premium shortbread, David and Rita Bell have packed a lot into their business careers. Colin Bass has their story. David and Rita Bell are your stereotypical entrepreneurs. “Qualified in nothing but can do anything,” as described by Rita. David is a self-professed technician, a mad scientist type with an incredibly varied career. Having arrived in New Zealand from Ohio in 1972, he spent a number of years with Skellerup, then Dunlop as technical manager, before being drawn back to the land that had been his family’s domain for seven generations.

It wasn’t long before David realised their pies were substandard. “Is this mince in our steak pies?” he asked a staff member. “Well we need some sort of meat don’t we?” came the reply. With disbelief David canned the relationship with the local butcher supplying the fillings and went about developing the dream pie. Based on his philosophy of reaching for the very highest standards in everything he does, David sourced the best local ingredients, increased the

Now rid of the 19-hour days, seven days a week routine, he’s free to focus on making the best shortbread in the world. Moving to idyllic Upper Moutere, the adventurous couple purchased 100 acres of paradise and established one of the region’s first organic farms. With their dairy herd, market garden, hens and breeding ewes, they fed themselves and sold the excess at the gate and the Nelson Flea Market. They were the first to gain MAF approval to sell unpasteurised milk, only to be ‘shut down’ by Tasman Milk, fearing its monopoly of Nelson’s town milk supply was under threat. One day a man walked up their driveway. “God has told me to buy your farm,” he professed. “Well he didn’t tell us that,” replied a somewhat shocked David. As it happened the conversation continued and the Bells sold the farm to pursue other interests: seven years co-ordinating projects for the Salvation Army in Zambia and Malawi. Having contributed a little to the alleviation of poverty in the third world, they returned ready for a new business challenge. David saw an opportunity in tourism. He saw another in mobility scooters. However, he ended up purchasing a bakery in Wakefield with a small export market for fine shortbread biscuits and set about becoming an expert baker.

pie size and produced the now iconic Wakefield Pie. At the 2011 Bakels NZ Supreme Pie Awards the Wakefield Steak and Cheese picked up a silver medal. This was the first time David and Rita had sought independent confirmation of their feats and it marked a milestone for the couple. But this story is not about pies, it’s about shortbread. Because after some time, with the main bakery under control, David focused on his fledgling shortbread export business. Around the same time a key Japanese client was insisting all his suppliers be HACCP accredited, a costly international food safety standard. David could see it was never going to be achievable at his main bakery. So spinning off the shortbread business into a standalone operation, he set up a purpose-built facility down the road to meet the standard – thus creating the Glendenings of New Zealand fine shortbread operation. At a succession planning workshop last year David learnt a scary statistic – 65,000 business owners are now

aged 60 to 65, himself included. But only around 13,000 people are willing and able to purchase those businesses once the owners are ready to retire. Not shy of making big calls, David consequently sold the main bakery business in July 2011. Now rid of the 19-hour days, seven days a week routine, he’s free to focus on making the best shortbread in the world. Attracted by the proximity and potential of the Asian market, the business was hit hard by the Japanese tsunami. David is now looking to building on existing business in Korea, Taiwan and Singapore. He’s also learning how to do business in China, resulting in a change of packaging to eliminate the black and red branding, colours offensive to the Chinese culture. He plans to leverage MED’s recent Food and Beverage Information Project – rich with information about potential offshore markets. And he’ll look for other prestigious, international awards to derive the immense value this will bring to his endeavours on the global stage. This export story is definitely to be continued. Colin Bass is a Nelson-based writer. Email colin.bizlab@gmail.com

Photo courtesy of the Nelson Mail.

NZB feb 2012 nzbusiness.co.nz

23


24 NZB feb 2012 nzbusiness.co.nz


COVER STORY

The girl who likes shoes It’s 2012 and Kathryn Wilson is living her dream. Attracted to the fashion shoe industry from a young age, her brand and business has developed quickly over the years and now more Asian markets are in her sights. She talks to editor Glenn Baker.

athryn Wilson’s love affair with footwear began as a child in the 80s. She recalls the ‘Kung Fu’ and ‘Commando M’ shoes – “the little six-dollar shoes from Para Rubber” – which first revealed her creative streak. “Mum would buy us three pairs each every season and I would ‘fluff-up pen’ them. That’s drawing on your shoes with a special pen and then puffing up the drawings with a hair-dryer. “I would customise all my shoes. Cut the backs out to convert them into sling-backs and turn shoes into sandals. Even Mum agrees with me now that this is where it all began.”

Fashion Technology at AUT. “I was interested in shoe design back then, but didn’t think I could make a career of it,” she recalls. The one-year certificate course was followed by a three-year Bachelor of Design at Wellington. “At the end of my first year I decided shoe design was my thing. Fortunately lecturers allowed me to base certain assignments around footwear rather than clothing and I became known as ‘the girl who likes shoes.” Year two of her degree included a six-month scholarship to the UK taking papers in subjects such as

I’m lucky that I design for a market catering to my own demographic. I’m designing for what I want to wear and that’s a real privilege in this industry. A job at Andrea Biani while she was still at high school further fuelled her love for fashion footwear. At school Kathryn had achieved in art. Once at university she realised she wanted to work in design and with her mum’s support completed a Certificate in

trend prediction and packaging design at Nottingham Trent University. That trip inspired her to return to New Zealand and give her fashion shoe design career a serious ‘nudge’. Kathryn completed her degree in 2001, then applied for and was granted a $5000 AMP Scholarship. The money was

used to start her first sample range. The high calibre of graduates from her class had impressed upon her the need to find a unique niche for herself in the design industry. She also recalled her work experience as an 18-year-old with local fashion designer Karen Walker and being inspired by her market success. Now aged 22, Kathryn saw the opportunity for innovative shoe design in the New Zealand market – a market characterised by bulk-buying vertical operators (chain stores) and a few small boutique labels that were winding down. “I was busting to get started before anyone else”, she remembers. The Kathryn Wilson brand was launched in October 2003. The company behind it was a 50/50 partnership between Kathryn and industry legends Caroline and Lloyd Sills. Kathryn had previously worked as head designer for Caroline’s fashion knitwear label, and the Sills were happy to help finance her start-up. Today Lloyd still oversees freight consignments coming out of China and Europe. KW Trading, which was legally

NZB feb 2012 nzbusiness.co.nz

25


formalised around 18 months ago, shares distribution and warehousing resources with the Sills’ business. “They’ve been so supportive right throughout my journey,” says Kathryn. “The set-up here (in Devonport) is like a really lovely family business.” Being able to ease into the business by starting the shoe business alongside her design work for the Sills was a major plus, she says. It spared her from many of the normal pressures and monetary risks of a fledgling business. Lloyd is an experienced, steadying voice to have around, Kathryn admits, especially when she comes up with her next “we should do that!” idea. “If I do manage to convince him that something is a good idea, it must indeed be good. If he approves it, then it really gives me the confidence going forward.”

26 NZB feb 2012 nzbusiness.co.nz

The shoebox After nine years as a wholesale business, Kathryn Wilson, the brand, dipped its toe into the retail world last September following Fashion Week with the opening of its distinctive ‘mobile shoebox’ store in Auckland’s downtown Britomart. (Yes, it can be picked up and trucked elsewhere!) Kathryn had been inspired by a Tokyo building she saw some years ago that was wrapped as a Louis Vuitton suitcase. She even has ideas to recreate shoebox stores in Australia within existing stores, negating the need to invest in buildings. Although they’d already made a big investment in Fashion Week, Kathryn believes the timing was perfect to open the retail store immediately afterwards. So far the retail project has proved to be an outstanding success – but there was another hugely successful milestone

in 2011, when the Miss Wilson shoe range was launched. While the Kathryn Wilson brand is a ‘protected’ high-end boutique label, the Miss Wilson ‘diffusion’ brand is all about creating sales volume – not just in New Zealand, but across the Tasman, where it is now into its second season of distribution through Platypus chain stores – which cover every Australian state. With the Kathryn Wilson label also selling strongly in Australian boutique stores, clearly export sales are an exciting and growing part of the business. “Miss Wilson is the younger sister of Kathryn Wilson. But quality is still a major focus as we use the same factories.” Kathryn goes on to explain the differences between the two brands, but I’m clearly getting out of my depth here and it’s time to ask a question about how she balances her design and management responsibilities. “To be honest, this business is primarily about marketing and sales,” Kathryn replies. “I only spend around four weeks out of an entire year ‘head down bum up’ putting pen to paper and designing. But I’m constantly collecting ideas and by the time I get to each design stage I’ve a folder full of pull-outs from the previous six months.” Most of her days are spent on admin tasks with Julia, her full-time operations manager. And they each spend one day a week at the retail store. Kathryn admits she loves the marketing side of the business. “I get a kick out of the advertising surrounding Fashion Week; building the brand and profile – that’s my strength. Also production issues – dealing with factories and monitoring quality control. A one-on-one relationship with the factories is so important – let that slip and you’re stuffed.” She’s also careful not to get distracted from the task at hand and is strict about her time usage. “I set specific time to be working on specific projects and have folders for each one.” As for the financial aspects of running the business, Kathryn’s upfront about


COVER STORY

the fact that it holds absolutely no interest for her. “I’m emailed balance sheets every week, but we have an accountant who looks after all that. I’m really fortunate to be surrounded by skilled people.” Balancing work with life can be a challenge too. Kathryn says there is yoga and time out with friends, but her life is full-on building her business. She can’t ever see herself taking her foot off the gas pedal. Last year’s Fashion Week is a good example of how hard Kathryn likes to work. “I was stocking our retail store on the day of my fashion show, while the stage was being built, so the store would be ready to open the next day. The week prior I had my Ernst & Young Entrepreneur of the Year finalist interview. One minute I was using a shoebox to show the builder where to put the shelves in the store, then I was racing to the interview with my ‘head in a blaze’, then racing to the Fashion Week venue to confirm the models. Luckily one of my strengths is making quick decisions.”

Career highlights 2011 was a stellar year for Kathryn. She describes her experience as an Entrepreneur of the Year finalist as “humbling, considering the business calibre of the other finalists”. Then there was putting together the shoe show at Fashion Week – which “pushed the boundaries” by, for the first time, including social media sites Facebook and Twitter. Opening the first retail store was “massive”; selling into Hong Kong was another major season milestone. “Hong Kong’s that first step for me to sell into Asia. We’ve been knocking on that particular door for four seasons [two years].” Employing an agent on the

ground in Hong Kong made the difference, says Kathryn. “She’s a friend, a Kiwi, loves the shoes and has the right connections.” There have been the scary moments too along her business journey. She relates the time when a shipment of shoes arrived from overseas in a contaminated container. To cut a long story short, the shoes had to be destroyed because of mould damage, “nobody wanted to claim responsibility” and insurance wasn’t paid out until some six months later. “We had no choice but to get another batch of shoes quickly made and airfreighted at a massive cost. Our customers never knew any different. “If I hadn’t had the cashflow and Lloyd as a business partner it could have folded us right back then. Now at that time of the year, with that specific delivery, we rely on airfreight, and we build it into our costs. So it was a good lesson to learn.”

What’s Next! in

March issue:

Debt Management/ Credit Control More tips on how to ensure ‘debtor days’ are kept to a minimum and credit control policies are effective.

Business Law/Tax Issues A timely look at legal compliance and tax issues for businesses. What new legislation should owner managers be getting their heads around?

Avoiding burnout There’s no doubting that Kathryn Wilson loves shoes – apart from the fact that she personally owns around 250 pairs. That’s why there’s no such thing as burnout for her. “I do truly get excited on the mornings I have something big on. I leap out of bed because it’s shoes.” Regular holidays are forced on her by her friends and her mum. “Mum has a holiday home in Pauanui where I can escape to and just do nothing,” says Kathryn. “I love travelling too. I frequently travelled to Europe or Asia when I was designing for Caroline. “I’m lucky that I design for a market catering to my own demographic. I’m designing for what I want to wear and that’s a real privilege in this industry. The philosophy of the Kathryn Wilson brand is ‘playfulness and colour’, she reminds me. So she relies on Julia, who is a ‘few’ years her junior to confirm the

April issue:

Financing Business Growth A market review for owner managers wanting to bankroll new initiatives. We report on what the financiers are looking for.

Choosing an Accountant Tips on selecting a good accountant for your business and building on that partnership.

Let’s talk Call Leanne Moss

09 477 0368

leanne@nzbusiness.co.nz NZB feb 2012 nzbusiness.co.nz

27


COVER STORY

cool factor with her shoe designs. “And if Caroline also approves of a particular design, then there’s a good chance we’ll make money off it,” she says.

Back to class Last year Kathryn was invited by Ernst & Young to the 10th birthday seminar of The ICEHOUSE Business Growth Centre, enjoyed the speakers’ inspirational stories (“you can’t help but feel fizzy”) and realised that their Owner-Managers Programme might be just the thing she needed to grow her business. The timing couldn’t have been better, because for the first time in eight years of business she actually had time to step back and work on the business. “I also knew that I wanted to grow our exports. That’s our primary goal for 2012. That’s why we invested in a Hong Kong agent and an Australian PR company.” Together with jewellery designer Kat Gee, Kathryn was awarded the NZBusiness ICEHOUSE OMP Scholarship for 2011, which she launched herself into during the third quarter of last year. In the first session she enjoyed “getting back to the basics”, learning how to put together a business plan, and “spreading your message across your team so that everybody wants to come with you”. Understanding human behaviour was another eye-opening course module for her. “None of it was rocket science but I loved putting it all down on paper,” she says. The second month of the OMP programme contained more valuable mind food for Kathryn, but she admits that the greatest benefit has come from the group environment. “There are 25 of us, people from a diverse range of industries, people whom I would not have met otherwise. They put us in focus groups and we share quite a lot of private or financial information about our brands.” Kathryn even found herself writing down ideas from the owner of a retirement village who’d never heard of her brand before. Two months into the six-month programme she is impressed by the calibre of the whole programme;

28 NZB feb 2012 nzbusiness.co.nz

the fact that it is forced time out to improve business performance; and that support is ongoing. “The biggest lesson I learnt from the first two sessions was the importance of putting a value around your brand. Everything you do in the public arena should resonate that value. “So if our brand value is playful, our fashion shows should be playful, as should our store environment, our marketing, staff and so on. Don’t confuse the market by doing anything different.”

Hand drawn, handmade Kathryn explains the process for getting her handmade shoes to market. She currently works with small factories in China, Italy, Spain and Portugal and visits them all once a year to strengthen the relationships – some of which now span up to eight years. The styles are hand drawn, them emailed to the factories which produce samples for further fine-tuning. The final consignments are then airfreighted – in Australia’s case, direct to the distributor there. This set-up, explains Kathryn, also means that the Australian company is responsible for the shipments’ handling from the moment they are shipped from Hong Kong. It’s common knowledge that distribution can be a major stumbling block for exporters – particularly for retail products. Kathryn was conscious of this when eyeing up the Hong Kong market, where her shoes are expected to be available at a leading department store from February 2012. “There were other lower-end opportunities but I refused to supply them and compromise our brand. “It was the same in New Zealand. We constantly have a waiting list of stores wanting to stock our Kathryn Wilson brand, but it has always been important to protect our exclusivity.”

Next steps It might still be early days but so far the first excursion into the challenging retail environment has been a success for Kathryn Wilson shoes. “Just two weeks after opening we had to order another summer shipment because we sold out of the popular

sizes – which is a good thing. But it was slightly embarrassing for people to try on a pair of shoes and then discover that we didn’t have their size. Kathryn says they organised a promotion through their Facebook site to celebrate the repeat order arriving and subsequently sold 27 pairs in just two hours. The Kathryn Wilson and Miss Wilson brands launched Facebook pages last August and promotions are based around major industry-related calendar events. Other subjects, such as charity events, magazine articles or celebrities spotted wearing Kathryn Wilson shoes are also peppered in as required. Her shoes have even starred on Shortland Street. Kathryn makes no secret of the fact that she’d love her name to become a global brand, and she’s keen to expand her product offering beyond handbags and belts. “I’d love to market homewares, swimwear, sunglasses and fragrances. Having a wider offering each season will encourage the continuity of the brand relationship even further. “And of course, having captured the 13-plus market with Miss Wilson, we want to give them a compelling reason to still associate with our brand when they turn 18.” Kathryn describes 2011 as “carnage”, with so much that had to happen no matter what. “2012 will be even worse. I’m feeling fizzy about Australia. We’ve got some real traction thanks to our media presence over there and the legacy of our Fashion Week profile here. It’s important that I stay in people’s faces and keep the energy levels up. “And what’s happening in Hong Kong is super-exciting for me. They’re trialling 250 pairs of shoes there, and if that goes well, there’s a total of 15 stores in Hong Kong and Mainland China. They’ve also asked to sell my product directly into China, which, when you consider the possibilities, absolutely blows my mind.” Glenn Baker is editor of NZBusiness.


FEATURE

Paperless productivity IT veteran Mike Rich believes his intelligent business system has “so far saved 12 times the height of the Sky Tower in paper, plus massively reduced debtors and created hundreds of extra hours a year for businesses”.

A

great place to start your carbon reduction strategies is with the lowhanging fruit – where you can tick both ‘green’ and ‘business improvement’ boxes. Information technology (IT) is playing a key role here and so it should as it produces as much carbon emissions as the aviation industry. Add to this the amount of paper that computer systems consume and the carbon reduction potential is huge. This article focuses on my experience at Attaché as an example of what can be achieved. Attaché was once a typical product distributor and service provider, with wall-to-wall filing cabinets. If you wanted to look up a past order you told the customer you’d call them back, wander down to accounts, find the file and document (if it was there), return to your desk and ring the customer back. Then if they asked about an earlier order you flicked the call to admin (when it’s actually a sales matter). If you wanted to chase an overdue invoice you had to jump on the phone after delaying the dreaded call for as long as you could. Fast forward a few years and the filing cabinets at Attaché have all gone. Admin staff have more space and no one wanders in trying to find paperwork anymore. Today rarely do we need to call a customer about an overdue invoice, we scan in correspondence and two people have moved from admin into customer sales and support roles.

Debtors dropped by $200K+ In the space of a few months, Attaché went ‘paperless’ and we reduced our debtors by more than $200,000. We implemented three things to help achieve this. An electronic document delivery system that made posting invoices, statements etc, a thing of the past. PDFs are too time-consuming for our volumes, plus we wanted to track documents to ensure they were actually opened. We introduced electronic document

filing with drill-down into past orders, invoices, etc. So now all enquiries are instantly handled by admin and sales staff. It now includes dashboards (so I don’t have to navigate through menus) and CRM (for conversation history, follow up reminders). We instituted due date ranges so overdue invoices could be automatically emailed or faxed, with appropriate words like ‘Please don’t let this invoice mature like a good red wine’. Statements now arrive within minutes of month end to be at the front of the payment process. Additional paperless options include handheld devices for sales reps in the field with a wireless link back to the office for checking their account status, stock situation and placing orders. There’re similar devices for stock takes and online web stores.

folding and posting documents (now spent more productively elsewhere in the business), plus a massive improvement in their debtors’ days outstanding.

Access to history important Inland Revenue will accept electronic records provided the record keeping system is secure with controls over processing and backups. Most records must be kept for five to seven years and be capable of being retrieved by tax officers at all times. This eliminates many small office systems that purge data files every so often to maintain speed or capacity, in the process wiping out essential transaction history needed for audits; not to mention the loss of customer, supplier, stock, expenses and payroll information.

Extra time to spend elsewhere We now include all these features into what we call Attaché All-In-One. This is an intelligent business system which we provide to medium businesses – typically with annual sales of between $1 million and $50 million. These are the businesses who have now saved 12 times the height of the Sky Tower in paper. Equally as important, we have given them back hundreds of extra hours a year previously spent printing,

Mike Rich is co-author of the Business Improvement Guide which contains 700 tactics. The Carbon Reduction section has over 40 tactics. Attaché also provides a business systems review service to identify which tactics could help improve your business. For more information phone 0800 288 224 email info@attache.co.nz or go to www.attachesoftware.com

NZB feb 2012 nzbusiness.co.nz

29


Lesso n s on upski lliNg

Looking to grow your business? Aside from looking at the fundamental aspects of your enterprise such as marketing and sales, perhaps you should look in the mirror as well and work on yourself. Patricia Moore investigates the benefits of short courses for business owners.

N

obody in business sets out to fail – but it happens, and poor or inexperienced management is one of the leading causes. For the owners of small enterprises, ongoing learning is essential. The problem is, many entrepreneurs get so involved in doing the work they forget the plan, says Alen Levis of Indus Recruitment (see separate box story). “Keep doing what you’re doing and you’ll never get different results. Get off the tools and actually be the manager rather than trying to be everything to everyone,” he advises. A series of short courses and ongoing mentoring, focusing on the areas he felt least equipped to handle, enabled Levis to achieve this and grow his business way beyond his early expectations. Lack of time is a frequent excuse for not upskilling. “[Business owners] are too busy to do the important but not urgent stuff,”

30 NZB feb 2012 nzbusiness.co.nz

says Chris Elphick. “Many small business owners are heads down and bums up – totally reactive. No time to think, reflect and learn. They all say they want to learn how to work on their business but most of them are hooked on working in it. The exceptions tend to be successful businesses!” Interestingly, the slowdown in business during the recession has seen more business owners recognising the necessity to upskill and finding the time to do so. “When things are quiet they have a little more time on their hands,” says ICEHOUSE Network Director and Growth business leader Liz Wotherspoon. But is it lack of time or scepticism about the value of training that’s holding them back? Is the Kiwi psyche – our ‘can-do’ attitude – stifling progress for many smaller enterprises? “They’ve learned by doing, grown up in their businesses, so they’re a little harder to convince in terms of the value of

taking time out for upskilling,” says Wotherspoon. “I certainly get lots of supervisors and managers on workshops who say ‘my boss should be here’,” adds Elphick. “There’s no doubt in my mind the best SMEs are lead by people who understand their role as leaders, are focused on doing it better, are committed to getting the best out of their people, take a strategic view to business development and strive to be as proactive as possible for as long as possible.” Darren Levy, director of short courses at The University of Auckland Business School, believes the majority of business owners are aware of areas where they need to improve. “I’m also aware that there is a perception the development available is not practical and accessible to them in terms of time and dollars.” It can take many shapes, he says, all of


SHORT COURSES

which are highly transferable into a business, can be customised to work around specific workflows, and vary in investment. “The question I would like to pose for business owners is what’s really creating the inertia around developing themselves and their team? Why do we acknowledge the importance of development but so rarely take it seriously as a mechanism for growth?” He points to research – including the NZTE report Management Matters in New Zealand: How Does Manufacturing Measure Up? – which shows the need for development in management and leadership. “This report demonstrated that effective management practices are very

Vouchers programme for small business, with training available from a number of approved providers across the country. “The change in government funding altered the market”, says Ian Skelton, WHK business growth consultant. Instead of opting for training as part of a group, business owners are now more likely to invest in specific training. “Rather than do a course over a number of weeks, they’re investing in a shortcut to gain expertise and get a payback in the business a lot quicker,” says Skelton. And while they’ve seen a tremendous increase in their oneon-one coaching and advisory support services, Wotherspoon says there’s no doubting the

They all say they want to learn how to work on their business but most of them are hooked on working in it. The exceptions tend to be successful businesses! closely related to productivity and output in New Zealand business. It also highlighted that leadership and general management are major opportunities for improvement.” Alen Levis is just one of many business owners who enjoyed fully-funded training through New Zealand Trade and Enterprise. Since mid-2010 this has been replaced by the partially subsidised NZTE Capability Development

benefit people get from being part of a group. “It’s the opportunity to learn from others’ experiences, including their mistakes, so you don’t have to make them yourself.” Elphick is also seeing less demand for open workshops and more for one-to-one coaching/ mentoring, “probably because of the time and cost.” So are the days of the traditional ‘short course’ numbered? Elphick

Tech-savvy Business owners may recognise the importance of adopting new technology, but too often they ignore the necessity for specialist training, says Pam Martin, who with business partner Jan Haine runs computer training company Positive Connexions. “Training is included in the cost of the roll-out for large companies buying new technology but many SMEs buy a new computer with the latest software and seem to think they will learn to use it by magic.” And, given that we use around just ten percent of the features available on our software, there are hidden possibilities even within existing systems, she says. “Training is essential if you want to get a good return on investment.” Martin finds it even more concerning that there are a large number of smaller enterprises running with little or no technology at all. She cites the number of tradespeople who still submit handwritten quotes. “Even professionals like dentists and lawyers are struggling on without technology.” Buying new technology and learning how to use it effectively creates an excitement in a business, she says. “As you start to understand what can be done you begin to see new possibilities, new ways to do things that not only save time but improve the experience for clients and suppliers.” Training on new systems also saves time. “Without training, people waste hours struggling to do tasks they have always done easily.” And time’s money. Martin says expertise gained from a course covering key computer skills can save something like 30 minutes a day – or around 120 hours a year. “If an employee is paid $17 an hour, that’s a saving of around $2040 a year. With a course costing less than $400, the return is clear.”

Chris Elphick 

Mentoring, coaching and training for small business owners, managers and employees

Innovative programmes for developing positive and productive workplace relationships

Down to earth support to help you build a better business Management Capability Provider - NZ Trade & Enterprise Capability Development Scheme Learning & Development Consultant - Employers’ Chamber of Commerce Central Associate –Department of Labour Partnership Resource Centre Trainer – Pacific Business Mentors Training Programme

021 411 243

chris@chriselphick.co.nz

www.chriselphick.co.nz

NZB feb 2012 nzbusiness.co.nz

31


SHORT COURSES

hooked oN upskilliNg Alen levis admits to being a short course junkie – something that’s obviously paid off when you consider his ‘one-man-band’ recruitment company has grown hugely in a few short years. It has survived a business environment that’s seen others in the sector disappear off the radar. “When it comes to turnover, we’re no longer just a small company. And the great thing is when times do get better we’re ready for it.” Levis started Indus Industrial Employment Specialists in 2004 when he recognised a niche in the market he believed was worth taking a crack at. Initially his philosophy was very much, “I can do this all myself. The typical Kiwi No eight wire mentality.” To a point it worked and the company started to grow. “But we grew too fast and the wheels started to come off and I realised I needed help. I needed mentoring, I needed training and guidance and advice.” Levis “stumbled across WHK” and took full advantage of the courses on offer. “They were free [through New Zealand Trade and Enterprise] but the quality was so good I thought it can’t last; I’m going for gold. I’ll get as much information as I can, learn as much as I can.” It’s paid off in spades for Indus

is working with colleagues on other ways to help SMEs learn including webinars and e-learning. “It’s going to be interesting to see if these other methods are more popular.” He’s of the opinion that one-off short courses deliver very little. “In-house programmes which might include a number of sessions over a few weeks are always more effective and can produce lasting results.” And, he says, business owners who are not involved themselves will never get the benefit of their investment. “I’ve seen great staff leave because their boss would not support them to implement things they had learned attending courses.” Recession provides incentive Training providers report that the recession stimulated short course activity. Ian Skelton: “Before the

32 NZB feb 2012 nzbusiness.co.nz

Recruitment. “The kind of advice we got from WHK has been invaluable; it gave us a really good insight into what we needed to do to remain viable. Without it we would probably have been closing the doors by now.” Marketing advice has lifted the image of the company. “We completely redesigned our website and marketing material. We needed to have all our ducks in a row to convince new customers to take us on. We really thought about our unique selling point and how we interact with customers. We looked at our accounting, our profit margins. That’s probably been our saving grace through a very difficult recessionary period. We’re still here and a lot of our competitors have gone. “We’ve done some cool things with technology, such as new scan technology for temps that I don’t think any of our competitors are doing. Exploring these ideas with WHK and talking through their viability has been invaluable.” Levis says one of the biggest lessons he’s learned is the necessity to step back from the day-to-day operation of the business. “For me that was a real struggle. It took me about a year but I’m big picture stuff now.”

recession there were a lot of businesses doing all right but there was a lot of organisational slack in there. I think the recession has caused those business owners to up their game to gain competitive advantage.” This has driven interest in two main areas. “One is around the financial aspects of the business. What drives profit? What drives cashflow? What can I do about it?” The other area is marketing, with business owners wanting to get a better return on investment. “They want more sales but don’t want to spend more getting them. People need to get a lot smarter in that area and that’s drawn a lot to our Improving Marketing Effectiveness programme,” says Skelton. Topics attracting business owners are in fact pretty diverse. Strategic planning, building and sustaining winning teams, delivering exceptional customer service and generational issues are all sought after. Chris Elphick says succession

“We grew too fast, the wheels started to come off and I realised I needed help.” Alen levis But, he says, it’s not just about getting the right advice, it’s also about using it. “Actually doing stuff. All too often people go on courses and they agree with everything and they nod and say all the right things then go back to what they’ve always done. Nothing changes.” It doesn’t have to happen overnight, he says. “Make a list and chip away at it.”

planning is “a huge issue for SMEs” but notes that he’s not convinced social media, “currently a trendy issue”, is linked in most instances to strategic business goals. 2012 promises to be another interesting one for business owners. What is certain in these uncertain times is that it’s more important than ever to upskill in the areas that will ensure an enterprise survives and thrives. Patricia Moore is an Auckland-based freelance writer. Email mch@xtra.co.nz

WeBsITes To vIsIT: www.business.auckland.ac.nz www.positiveconnexions.co.nz www.whk.co.nz www.chriselphick.co.nz www.theicehouse.co.nz


ADVERTISEMENT

Confidence from postgraduate study From the police force to marketing then consulting, Amanda Stevenson had multi-career success Ð a few years ago, sheÕ d done it all, except graduate from university. But the 51-year-old manager has now achieved her goal, completing the University of AucklandÕ s postgraduate diploma in business studies at the end of 2010, which she says has given her confidence and broadened her thinking. Stevenson and husband Paul own National Contract Services Limited (NCSL). They manage contracts in the telecommunications industry, and are enjoying strong growth with the national roll-out of high speed broadband. With two adult children also involved in the business and tertiary study, the Stevensons are a competitive and proactive bunch. So, itÕ s no wonder that Stevenson was motivated to study with the Graduate School of Enterprise when she found out Paul had plans to. Having not completed any tertiary study but with a lifetime of experience, she deliberately chose the diploma as a pathway into MBA study. Stevenson began her career in the police force before changing direction and getting involved with sales and marketing, eventually as a senior product manager for Nivea skincare. Then after becoming a mother and some part-time work, she began contracting in start-ups, manufacturing and business associations. Ò When I was doing that I realised I really had to have a reputable degree. Then I realised that if I wanted to do a higher level of contracting, I had to have a higher level of degree,Ó she says. Ò The postgraduate diploma has given me a broader education. I just think itÕ s a fantastic thing. You canÕ t go wrong having an education - and the latest education, too.Ó Stevenson says the postgraduate diploma covers a broad range of content. Ò I covered subjects I just havenÕ t encountered before, like quantitative analysis and detailed finance.Ó And while she found writing for university a challenge at first, Stevenson enjoyed the pace of study, spread over two years. Ò It gave me time to really work hard and it gave me time to gain more

confidence. To me, it was just a challenge after challenge.Ó Ò With a lot of my jobs, I was the manager in charge, and that was it. It was encouraging and good experience to be in a team, as part of group work. Ò It was even reassuring to hear everyone else was struggling at times. I found that very useful.Ó She says they learned from each otherÕ s strengths, for example, StevensonÕ s own from her career in marketing. She enjoyed passing on her knowledge so much, she is tinkering with the idea of pursuing yet another career, as a lecturer. Stevenson, who is Ò always analyticalÓ in her management approach, says her most dominant learning from the diploma was the use of research in business. ItÕ s something she has also applied when questioning statements and decisions made by her clients. Ò All the latest research was interesting and up-to-date. ItÕ s fresh. With that, you have more of an opinion Ð backing it up with research you can form a calculated opinion.Ó

Ò The diploma study has given me more confidenceÉ now, I question more.Ó There has also been a spin-off for Stevenson, personally Ð she says her confidence has increased in certain social situations as a result of her increase in business knowledge. She takes that confidence into 2012 with a fresh slate ready for more study as she begins her MBA study with the University of Auckland. Ò I just love the challenge,Ó she says. The University of Auckland Postgraduate Dipolma in Business (PGDipBus) has intakes in January and June each year, and welcomes applications from business professionals. Find out more at www.gse.auckland.ac.nz

NZB feb 2012 nzbusiness.co.nz

33


Biz REViSiTEd

Richard Poole:

GrownUps

I

t’s hard to believe that two years have flown by since NZBusiness last caught up with GrownUps co-founder Richard Poole. He admits that it’s been a tough couple of years, but is chuffed that they’ve kept their head above water during difficult economic times. In fact, there’ve been some real positives through it all and Poole is upbeat about the company’s future direction. In case you’re not one of the 65,000 members of the GrownUps online community, or one of the 170,000 monthly visits to the site, just briefly, GrownUps.co.nz is a website dedicated to the over-50s market (although there’s no hard and fast rule that you have to be over 50 to join). Poole got the idea for the site while observing his father struggling to get to grips with the

to get a really good response from marketing campaigns that utilise the database,” he says. “The membership is very loyal, they expect to get an emailed offer from us every week, which often gets passed on to friends and family members.” This makes GrownUps an effective vehicle for promoting brands and offers to a much broader age group than was perhaps originally intended, says Poole. He’s talking about the likes of banks seeking first home buyers through parents who want to help their children; insurance companies promoting life insurance; or even car companies wanting to target members for test drives. He says it’s an excellent return on investment for companies that get involved. The site is also ideal for conducting surveys and snap polls,

and ad agencies and getting them to influence each other, that’s definitely helping.” It’s not just the likes of retirement villages that are interested in utilising the site, he reminds me, but banks, travel companies, health providers and so on. Five years after launch, Poole says awareness of the GrownUps site is higher than ever. “Definitely more people have heard of it and seen it on Google – and in terms of ‘search engine optimisation’ we’re still performing strongly across a broad cross-section of categories.” Poole says a major focus for 2012 is to build more brand awareness for GrownUps through external marketing. He also hopes to revitalise its community oriented efforts such

...the spend on consumer goods by people 50-plus is much larger than ‘Gen X’ or ‘Gen Y’, even in the ‘tech’ category... Internet. He saw an opportunity for a ‘lifestyle magazine’ website specifically for the older age group – one that’s simple to use and a ‘safe haven’ for people to connect. The fact that people over 50 will soon make up almost 40 percent of the population and command around 70 percent of the nation’s disposable income was another good reason to be in this space. GrownUps was subsequently launched in June 2006 by Poole with fellow founder Shane Bradley (most recently of GrabOne fame). A third independent shareholder, Garth Hill, came on board in early 2010. The site figures quoted above are a significant improvement on those of two years ago, and Poole is especially happy with the progress in membership numbers. “That’s our focus. We’re out to provide more value and benefits to members. And, of course, that’s where the revenue comes from. We continue

34 NZB feb 2012 nzbusiness.co.nz

says Poole. “For example we had a survey that took half an hour for people to complete and received a thousand responses within a couple of weeks. That is hugely powerful.” Getting back to GrownUps’ performance, yes it’s been a tough two years, but Poole feels that its performance has gone up a notch or two over the past 12 months. One reason behind this was the cutting of staff numbers to three. “We had gone down the path of building a sales team. But that didn’t really work for us,” he says. Nowadays the team consists of Dave Ward, who handles the site’s content and its 25 contributors; Hill, who is focused on the ad agencies with larger, long-term ad campaigns; and Poole, in charge of strategy and direct sales. Poole says ad agencies are picking up on the potential of the older demographic. “It’s still not easy, but by getting in front of marketing managers

as partnering with community newspapers.

Tech-savvy Poole says the past two years has definitely seen greater recognition of the over-50s online market. “That was always the hurdle, the belief that the over-50s were in fact online. We’re seeing a lot more evidence now that the market is indeed tech-savvy. And the spend on consumer goods by people 50-plus is much larger than ‘Gen X’ or ‘Gen Y’, even in the ‘tech’ category. So advertisers are much freer about having a conversation with us.” Niche community websites are more popular and successful than ever, adds Poole. “They engender a real sense of loyalty and community spirit,” he says. “From day one our site has been for the audience to build themselves and that truly has come to fruition.”


Garth Hill (left) and Richard Poole.

He says they do have to strike a fine balance when making changes and improvements to the site – ensuring that they don’t upset members. But there’s no doubting the fact that members trust the site – even using it as a means to meet others for companionship (which in some instances, has even resulted in marriage). There are those who regard their contacts on the site as ‘family’, says Poole, who gets invited to many of the member ‘parties’.

Looking back, looking forward GrownUps’ majority shareholder since 2008 is Yellow Pages Group, which owns the Retirement Guide, a 60,000 print run magazine targeting the older age group and the primary link for the buy-in back in 2008 (along with Yellow’s marketing reach). Having a small entrepreneurial team collaborating with a large corporate, with the associated

differences in business cultures, does certainly make life interesting at times, admits Poole. But both teams can clearly see the ongoing potential of the GrownUps concept. Looking back over the past two years, Poole says there have been lessons on the best way to sell online and to keep costs down. “Employing people who didn’t have a stake in the business, in retrospect, was a learning experience for us,” he says. “You’ve got to have skin in the game to make it really work.” Looking forward, he’s planning to decrease the level of admin associated with the site (automating feedback for example) and “act like entrepreneurs again. Getting out there and re-establishing strategic partnerships and relationships.” In terms of what’s next, Poole says they have an eye on the Australian market and are regularly approached by interested advertisers across the Tasman. They’re looking at additional revenue streams that involve

transactional functionality and better utilisation of the database. On a personal note, Poole says he’s grateful for having a network of friends to work with in terms of ideas generation. “I’ve cleared a lot of the admin stuff out of my headspace and now my ‘book of ideas’ is open again. There are a lot of new avenues for GrownUps to explore and I’m excited at the prospects.” Have there been any overriding lessons through all this? “Have patience,” says Poole. “Whilst it is important to be able to change direction quickly, it’s not always about changing direction. Give things a bit of time. “And if you’re operating in the New Zealand space, be honest with yourself that we are tiny and realistically not many online businesses are going to make huge returns. You’ve got to think globally.”

NZB feb 2012 nzbusiness.co.nz

35


The book that backs our export drive

Newly updATed for 2012 The New Zealand Export and Trade Handbook continues to be a vital reference guide for Kiwi exporters and importers.

Available Now! As the world economy stumbles from one crisis to another, it has never been more important to ensure that you have the best information and help available when trading internationally. The 2012 Edition of the New Zealand Export & Trade Handbook has again

proved to be the best publication available to our exporters and includes a wealth of useful information as well as key contacts that can provide assistance. If you are going to buy one book on the practicalities of exporting, make it this one! Rom Rudzki, Founder New Zealand School of Export.

To order your copy call Hilary Keen (09) 478 4771 or email: Hilary@adrenalin.co.nz Purchase on-line at www.exportandtrade.co.nz


SPEEDINTERVIEW INTERVIEW

Brett Hancock is MD of iPhone app development company Born Digital. He fields 10 questions in 10 minutes and his time starts now:

Q1: Briefly describe your business background prior to Born Digital. BH: I started my career in IT support, and worked in network engineer and help-desk support roles in Auckland and the UK for four years. Then I began building websites back in 1996 and worked as a front-end developer for a few years before starting my first company. Q2: How did you get involved in the mobile apps market? BH: Mobile apps were a natural extension of what we were doing already. Most apps we build require a web-based database and use web services to talk to the data. This is how our CMS works already, so there was little effort required to get apps going with our existing technology. Q3: What do you like the most about the mobile apps industry? BH: It really is quite exciting because of how fast it’s moving. Smartphone penetration is growing exponentially. Predictions are that by 2013 around 80 percent of all mobile phones will be smartphones (so they can use apps!). Q4: As a business owner what has been your scariest moment with Born Digital? BH: We have been close to the bone financially a few times over the past few years, with a few clients taking more than 90 days to pay large amounts. That’s always a bit scary. Q5: What have been the most exciting moments in regards to milestones for the company? BH: Here at Born Digital we just hit ten people (in terms of our team size) which is a really nice milestone. So we feel more like a medium-sized company now, rather than a small one.

Q6: Did the marketing activity surrounding the RWC bring you new business? BH: It did, and business that we’re proud of. We developed a mobile app called Rugby2Go and designed touchscreen kiosks that hundreds of thousands of international visitors walked past and used on Queen Street and around the CBD. It was an exciting time for us. Q7: What is your favourite mobile app ? BH: I have two: Wordlens and Fancy. I just wish that I had thought of them both! Q8: How competitive is the mobile apps market and what do you put your business’s success down to so far? BH: It’s really heating up in terms of competition. For a while there were only a few companies in New Zealand that could produce mobile apps. But as demand grows, more and more are popping up. But it’s a bit like websites, there are hundreds of web design companies

I follow a lot of industry-related feeds and am constantly inspired by what else is happening around the world. in Auckland, and yet we are still always busy with demands to design websites. Q9: Where do you get all your business inspiration from? BH: Twitter mainly. I follow a lot of industry-related feeds and am constantly inspired by what else is happening around the world. Q10: Looking back – are there any decisions regarding Born Digital you made that you regret now? And where to from here for Born Digital? BH: Hmmm... I wish I had hired more staff earlier. For a long time I tried to make do with a smaller team than I actually needed. From here? Australia. Just watch this space!

NZB feb 2012 nzbusiness.co.nz

37


38 NZB feb 2012 nzbusiness.co.nz


PAYROLL SYSTEMS

Payroll’s great cloud migration SMEs are rushing to outsource payroll services in order to become more focused and productive, and ultimately more prosperous. Kevin Kevany has been scanning the payroll horizon for other new trends and developments too. The Christmas just past was another ‘season to be jolly’ for most of us. But for those in New Zealand’s (and we should probably make that Australasia’s) highly-competitive payroll industry, most of the companies we interviewed were busy adding two or three new customers each working day, while many were ‘kicking back’ after another tough year. Comments like “it’s high season,” “the best in a long while”, “I’m sorry, but I’m just too busy to talk right now”, flowed from the red-hot mobiles of the senior executives late in 2011 sensing “the best year-end market in a while”. The consensus is that SMEs, in particular, are increasingly recognising that they have no option in the current low-growth economy but to become more focused and productive if they are to succeed. And with the high levels of customer service and competitive

pricing being facilitated by smarter and smarter technology and software available to the payroll sector, “this is the moment to outsource time and resource distractions like payrolls, and be ready to hit 2012 running,” according to one highly-pressured executive. The outsourcing of payrolls to a multitude of companies offering a permutation of ‘off-the-peg’ solutions, SaaS and ‘cloud-based’ services has been a major feature of the last decade, as one person’s drudgery became others’ golden opportunity to provide a service which just keeps on growing. Speaking at a staff celebration at a Taupo resort to celebrate the tenth birthday of New Zealand-owned online payroll provider, iPayroll Ltd, MD and online industry pioneer Martin Gleeson recalled that when he and co-founder Cary Thomson launched the company

back in 2001, Amazon, Internet banking and services such as Trade Me and eBay were in their infancy. “We’ve seen a lot of action in our first ten years as we’ve had to keep innovating and delivering to stay ahead of the curve,” says Gleeson. “As more and more businesses migrate to the ‘cloud’ we have been well-positioned to take advantage of that business model’s development.” He also drew attention and “took pride in the fact” that ten people, a third of iPayroll’s current employees, had been with the company from the get-go. “I believe that must be some sort of record for the industry and I would like to think it is a reflection of the dynamism and the solid client relationships we have enjoyed over the period too. That was a highlight for me, as I don’t think many companies in the IT services

We make Internet payroll processing a breeze in New Zealand and Australia Using iPayroll you can process one or a few hundred employees in just a few simple steps. The benefits of using iPayroll (NZ) and CloudPayroll (AU):

Wellington Auckland Hamilton Christchurch Melbourne

(04) 472 2997 (09) 377 1517 (07) 839 7730 (03) 372 9468 +61 3 967 00422

• Saves time • Simplifies Banking • Manages payroll, PAYE (NZ) PAYG (AU) returns and other payments • Manages Superannuation (AU) • Manages KiwiSaver (NZ) • Payroll giving enabled (NZ)

• Secure online employee kiosk • Payslip history and tax summary online • Online leave requests • No backup or software upgrade • Integrates with all leading accounting software including Xero and MYOB

Cloud computing since 2001

Go to www.ipayroll.co.nz to find out more or set up a FREE trial • sales@ipayroll.co.nz • www.cloudpayroll.com.au

NZB feb 2012 nzbusiness.co.nz

39


Make timesheets a thing of the past... An iDt system can easily automate your staff time and attendance from ‘timesheet to payslip’.

+ Capture accurate + +

employee attendance Automatically calculate hours and overtime Easily interface with your existing payroll system

5% Plus Savings Save payroll costs in excess of 5%

80% Reduction Reduce payroll preparation by 80%

Your Partner in Workforce Solutions

Warning! Upgrade required Early-warning signs that a business needs to upgrade its payroll system include: • A lack of transparency and traceability of current payroll processes. • Repetitive and time-consuming manual steps that occur with every pay or period end procedure. • Your current system forces administrative tasks like leave management or Time and Attendance onto back-office staff.

industry could match that achievement,” Gleeson says, noting they are processing “upwards of $1.5 billion per year”. “That and the fact that we continue to be the country’s largest PAYE intermediary, with over $6.5 billion in client payrolls processed to date. On the back of that, we decided the time was right to open an office in Melbourne. CloudPayroll Pty Ltd is a fully-owned Australian subsidiary of iPayroll Ltd and has been trading since June. “In truth, we jumped the gun a little bit, quietly establishing our Australian base earlier this year, so that we could ensure it was up and running successfully by our tenth birthday. I’m particularly pleased to say we already have clients in all the Australian states, and a staff of four, trained in our systems and culture,” says Gleeson. Interestingly, the company was not intimidated by the move to ‘cross the ditch’. “Being conservative in our approach in whatever we do, we researched the market thoroughly and found iPayroll was a good four-to-five years ahead of the market, so we’ve slipped in without fuss or raising our profile. Obviously we’ve still got a long way to go before we can say we’ve cracked it,” Gleeson says.

competitive pricing

Contact us to discover how iDt can help you to reclaim control of your time.

0800 111 438 www.iDt.co.nz 40 NZB feb 2012 nzbusiness.co.nz

The consolidation of ‘cloud’ computing has caused others in the industry to challenge for a piece of the Aussie pie too. And that’s largely good news for local SMEs, with suppliers sharpening their pricing pencils. Privately-owned iDt Limited, with offices in Auckland, Sydney, Melbourne and Brisbane and employing over 50 staff, describes itself as ‘a leading

• Lack of new functionality being released for your existing system that adds real value (such as Business Intelligence capability). • Costly and/or time consuming upgrades (hosted solutions can provide reduced upgrade costs). • Growth in your business. Are you on a system that you have outgrown? Source: Stephen Canning, COO, payGlobal limited

Australasian provider of time and attendance solutions’ following its acquisition of Australian competitor Bio Recognition Systems (BRS). “We’ve had our own development team for a long time now,” says MD Geoff Burnett. “However the IP and existing code which came as part of the acquisition will provide a significant leap forward in that we will be able to bring a number of innovations to both the local and Australian markets in the coming months. “We will be putting major effort into not only bringing new solutions to market, but also changing the way they are delivered,” says Burnett on their plans for ‘cloud-based’ solutions.

2012 challenges Other than the cost and efficiency benefits which flow from the payroll industry’s move to be Australasian and ‘cloud-based’, what else can local SME owner/managers look forward to in 2012? MYOB general manager Julian Smith, as you’d expect, is right up with the play. “While 2011 did not see as many significant changes, businesses are still managing regular updates to legislation which have an impact on pay rates and compliance. “In 2012 several key changes to KiwiSaver established in the 2011 Budget will come into effect, including the removal of the employer superannuation contribution tax (ESCT) exemption threshold, which employers will need to manage.” The Budget also introduced changes to student loans, including new tax codes and reporting requirements. Employers and employees will have to go Continued page 42


PAYROLL SYSTEMS

CusTomer pAyroll experIeNCes Rhonda henderson, general manager of Manchester unity Credit union, based in hawke’s Bay and with offices in hastings, napier and new plymouth, believes IMS Online Express offers ‘the perfect online payroll solution, with new levels of efficiency’. “We have been using IMS Payroll since 2008 and since we moved to Online Express, the benefits have been noticeable both for our staff and for me.” The 11 MU Credit Union staff, full- time and part-time, are able to apply for leave online, check leave accrual, and print payslips, with a password linking them to a secure website. “Online Express builds a history of each staff member, so it is easy for them to see how their leave is tracking. It’s a much more interactive approach for our staff and it allows me to leave the hassles of staff leave calculation, forms and payslips to the online system. “When staff members apply for leave, I am sent a notification email and so is the staff member. The program stores all the correspondence between myself and staff, and for HR reasons this is really important to us.” Ross Maclennan of Trimate Industries ltd, has survived three types of management roles: SME, corporate takeover and buyout. “I was given the opportunity to purchase part of an existing international organisation I had worked with for 30 years. To go out and start your own business involves many functions that for most of us is a ‘behind the scenes operation’.

“I was lucky to have experienced staff to run the sales, workshops and store with me, but the office was an area that my wife would take on as a challenge. Without a lot of office experience, she had many new tasks to tackle and ‘the pay’ was one area that could be outsourced to experts. “KeyLink's professional approach was enough to convince us that they could manage the team’s salaries, tax, Kiwisaver, holidays, sick leave, and the rest. This eliminated any risk of getting monthly payments wrong for staff, or monies owed to the IRD incorrect, upsetting staff and wasting hours fixing errors. “This is one important task in the business that is taken care of by the professionals, with ease. We only need to supply employees’ hours and leave etc and everything from depositing into bank accounts, supplying payslips and the monthly pay reports is done. “Most importantly, the staff at KeyLink is always available to answer questions and explain systems in a totally professional and friendly manner. “I’d say, quite definitely, outsourcing has been a great option for us so that we can concentrate on growing our business.” Spencer on Byron hotel finance manager David Tremlett has more than 25 years of accounting and payroll administration experience. “Currently we have 150 staff, including fulltime, part-time and casuals. They work varying hours and shifts consistent with the industry. We also have a high turnover of casual and

part-time workers. Our Attaché Payroll system handles all this for us. “One person processes the payroll, along with accounts payable for two business units (also in Attaché). We are totally reliant on this efficient and easy-to-use software, which sits alongside our industry specific applications. “Importantly, we are able to keep track of the languages our staff speak, which is a great asset, when dealing with international guests. We are able, at a moment’s notice, to locate the correct employee, allowing us to provide personal and exceptional service to our guests. “We also track non-resident’s visa types and expiry dates. A large numbers of our staff are from overseas and we need a good reporting system monitoring their immigration status. To get it wrong can be very costly.” healthcare nZ is one of new Zealand’s largest privately-owned healthcare companies. It is a long-term client of Christchurch-based, payGlobal, and decided to upgrade for a number of reasons, says chief financial officer, Richard williams. “We knew the company and when we were shown PayGlobal, we could see that it was a good product. It was cost-effective and had strong basic functionality. “We were already using the company’s previous product so we knew that transferring new information would be relatively simple to do. And we were also reassured by the fact that PayGlobal Payroll could be integrated into other products, such as HR.”

For a free online demonstration call us now on

0800 600 110 or visit us at

NZB feb 2012 nzbusiness.co.nz

41


through the learning curve and management of student loan repayments based on pay period values, rather than an annual income – this according to PayGlobal COO Stephen Canning. “Groups likely to be affected will be students with student loans working during their holidays and employees in the lower income brackets with more than one job.” “Paying staff correctly is one of the most important measures for any business, and staff will quickly become dissatisfied – as potentially will the IRD – if their pays are inaccurate or running late. The two key measures of the effectiveness of a payroll system are the time it takes and accuracy,” says MYOB’s Smith. “Whether businesses elect to manage their payroll in-house or outsource – as is becoming increasingly popular – is a matter of resourcing and control. If SMEs don’t have the experience or time to manage a payroll, then an outsourced bureau can be worth considering. There are a large number of specialist bureau services and accounting practices

providing payroll services – often using MYOB Payroll to support their systems,” says Smith, adding that more than two million New Zealand IRD tax returns are filed annually using MYOB. He believes the big plus of an MYOB solution beyond “its powerful features and ease of use” is that it can take customers from a simple entry payroll through to an enterprise solution. This allows customers to expand their staff numbers or increase the complexity of their pay system, while being supported by an MYOB solution – right through the lifecycle of the business. In terms of recent developments, we have recently seen the innovation of the Payslip Kiosk, empowering employees to manage their own affairs, and Payroll Giving – a free service for clients and their employees, providing immediate tax credits for employees for donations to 24 registered charities. So what else is ‘in the works’ or an emerging trend? Well, extracting more value from your system is perhaps the big one.

Evan Lyon, director of Keylink Payroll Services has been in the payroll business for as long as he can remember. “This business is really all about the service and backup you provide. At all times, we aim to be ‘0800 Fix me up’; not ‘0800 P…me off’. “Customers are looking to get more value from their payroll system. One way of doing this is to use the payroll to generate job and/or cost centre ‘costing’ information – to help analyse profitability. “To facilitate this, time needs to be recorded by employees against jobs and/ or cost centres. This can be done by writing down time spent on job cards, or by the use of time clocks that allow employees to record the job they are clocking into when they arrive, and again when they change jobs during the day. The payroll system then processes this data to generate costing reports. “Using your payroll system in this way can be a very cost-effective method of generating costing information and so allowing businesses to identify where

Intelligent People Management PayGlobal Exolvo takes care of all your workforce management needs. It’s a workflow enabled, integrated payroll and HR solution that automates your people processes. Store all your valuable employee data in a central database and use our business reporting tools to view meaningful information, helping you to make the best people decisions. PAYROLL

BUSINESS INTELLIGENCE

TIME & ATTENDANCE

ONLINE SERVICES

ROSTERING

WORKFLOW

HUMAN RESOURCES

REPORTING

SELF-SERVICE

INTEGRATION SERVICES

www.payglobal.com 42 NZB feb 2012 nzbusiness.co.nz


PAYROLL SYSTEMS

improvement is required, and where time is being lost each day. “We have offered this on our existing system, and it is very cost-effective in our new payroll system, far more so than deploying a standalone-solution,” says Lyon, noting that the Keylink system remains flexible enough to capture faxed information, which is ‘still very much in demand’.

Where to start? With so many payroll platforms and options available, what is the best way for an SME to approach the market when considering an upgrade? “Companies of all sizes need to consider their return on investment by asking how a solution will increase efficiency in their business”, says PayGlobal’s Stephen Canning. “For example, how many staff carry out manual award interpretation that could be automated in a new system? “Do you do still do manual timesheet entry and how long does this take – one

FTE? Half an FTE? What does this salary equate to versus using a time capture device like a finger scanner or clock cards with an automatic T&A award interpreter? “How many different awards does your organisation have and are they compliant? And how much wage slippage occurs annually such as overpayments? Could these be reduced with a different system?” Canning says it’s important to identify your top three areas for process improvements, cost savings and risk mitigation (think business continuity). “Do not select a payroll and workforce management solution based on cost alone. Look at the value that can be added by optimising internal processes and reducing cost and errors. Look at the value that can be found in your payroll and HR data through analytics and business intelligence. Good decisions are made from good quality information. “Consider your future needs as well as current needs – for example, hosted solutions instead of infrastructure in-house and future markets for your business. You

might be expanding into Australia, so perhaps chose a system that is compliant in both countries.” Evaluate the provider, suggests Canning. Are they reliable and trusted? Do they have strong relationships with payroll professional bodies and government departments and are they used by businesses in your industry? “Ask for customer reference sites that you can speak to and have a checklist of areas that are important by rank. Not every solution can do everything,” says Canning.

Behind the times? Attache’s MD, Mike Rich is co-author of the ‘Business Improvement Guide’, which contains 700 tactics to improve your business. The Payroll Efficiency section has more than 140 tactics. “New Zealand is, I believe, behind the times when it comes to medium-sizedbusiness payrolls (typically $1 million to $50 million annual sales and the biggest future growth and employer sector in the economy).

Memo : Public Accountants

Business Have Your Clients Outgrown Improvement Small Business Software? Our Business Improvement Guide helps direct Guide the efficient, effective and acceptable use WeBsITes To vIsIT:

700 tactics spread over 7 self contained sections

www.attache.com.au www.idt.co.nz www.imspayroll.co.nz www.ipayroll.co.nz of IT within medium business clients today. www.keylink.co.nz We also provide a business systems review www.myob.co.nz to identify and quantify which tactics could www.payglobal.co.nz

help a particular client through upgrading to a locally developed intelligent business system – like the new Attaché with a money back guarantee on the outcome.

“Remote access to all data in real time.”

Our experience is up to 10% of annual Mike Rich, MD turnover is trapped within inefficient Attaché business systems – that could be $400,000 for a $4 million turnover client – cash to help fund your business advisory and financial planning services.

To discuss further phone 0800 288 224 or email info@attache.co.nz

NZB feb 2012 nzbusiness.co.nz

43


PAYROLL SYSTEMS

“The trend elsewhere in this space is to all-in-one systems where financial software – debtors, stock, etc – also includes CRM, dashboards, business intelligence etc, plus payroll in one totally integrated system,” he says. “For example, our Attaché All-In-One. “We charge a single licence fee; the product is quick and easy to master; ‘one price fits all’ irrespective of the number of employees, and while there

is a place for third-party add-ons, that should only be in specialist areas like rostering, electronic time clocks, etc.” Rich is disappointed that “many of the better New Zealand payroll companies still charge by the number of employees.” A final thought from Rich: “One of the greatest benefits of intelligent business systems is that staff become more productive, because they have tools

which make their job easier, faster and most importantly, more enjoyable. “This helps increase revenue per employee through increased productivity and improved customer satisfaction.” Kevin Kevany is an Auckland-based freelance writer. Email kevwrite@xtra.co.nz.

Time & Attendance software: THE MYTHS AND REALITIES If you believe Time & Attendance software will instantly solve all of your employee time management issues, or that there is no way a product could meet all of the unique complexities within your organisation, think again. Make sure you have a good understanding of the common myths, and realities, of Time & Attendance software.

Myth 1

“It’s only good for waged employees” “It’s

To a large degree, yes, Time & Attendance products are great for waged employees. You’ll know when employees are late to work, when they work late, and when they earn overtime. The system will work out their ordinary and overtime payments, as well as other allowance payments such as meals, weekend penalties, and on call. But these products are also beneficial for salaried employees, and can be used to allow them to apply for leave online, and to generate these payments for import into payroll. T&A systems can also be useful for salaried employees to enter job costing data, breaking down their day into client chargeable hours which can be integrated with accounting/billing software products.

Myth 2 “Too “Too expensive, too hard to deploy” Sure, for a quality Time & Attendance product there will be a cost to get the system up and running, plus licence fees. But this will quickly be offset by the many investment returns, for example: • Advance costing the roster will allow managers to minimise overtime payments. • No data entry costs will enable you to better utilise your payroll staff on more value-added tasks. • Accurate processing and reporting means no more subjectivity errors (especially at complex times of the year such as public holidays). Many modern T&A software products are online SaaS solutions; that is, the vendor hosts the software. All you need is a web browser and an Internet connection to use it. This means employees and managers can access the system from anywhere, and IT departments don’t have to worry about a thing.

44 NZB feb 2012 nzbusiness.co.nz

Myth 3 ““we’re unique – Time & Attendance software will be too inflexible” software will Some products are “out of the box” and cannot be customised – and there is a market for this type of product. However, for larger or more complex organisations, there are products where the system can be configured to meet every need. Be careful that your ‘customisation’ is within a standard product release, and that your system is fully vendor-supported. Customisations can be very expensive, so choose a supplier that doesn’t charge exorbitant fees, and a product designed to be configured simply and cost effectively.

Myth 4 “Just “Just another product where we have to maintain data” maintain data” Always avoid taking on a system where you have to maintain data manually in two separate systems, for it will come unstuck very quickly. The best T&A systems will integrate with your existing payroll and/or accounting systems. As you will want to continue maintaining data in the systems of record, key data such as employees, payment codes etc. should be automatically transferred to Time & Attendance. There are many more myths, and they often stem from the way such systems existed ten or more years ago. Bring your organisation into the 21st century, let go of the misperceptions and embrace the latest technology. You’ll not only save on the wage bill, you’ll also reduce data entry errors, and ensure your employees are paid correctly every time. Article supplied by Jo Smith, marketing and operations manager for TimeFiler. Visit www.timefiler.com


2012 sMall BusiNess

payRoll sysTeM & soFTWaRe guide

number of nZ customers: 800,000 people get an Attaché pay advice every payday. unique benefits: Flat monthly fee regardless number of staff, including helpline and updates. Easy to use and flexible. Standalone or integrated within Attaché All-In-One which includes accounts, CRM, business intelligence dashboards and more. Size of company targeted: Typically 20 or more FTEs. license cost: $140 per month Online (SaaS) delivery? Both Cloud employee services? Optional Operating platforms supported: Windows Customer Feedback: “Fastest payroll software I have ever used.” “Love the dashboards, especially the ‘to do’ lists.” “The electronic pay advice delivery and tracking is so much faster than PDFs.” “Great the way staff can access a past pay advice without needing to disturb me.” “Nice to have a payroll system that operates the same as my accounts system.” “The rostering option has reduced our payroll cost by eight percent.” Contact: info@attache.co.nz

number of nZ customers: N/A unique benefits: NZ’s most advanced cloud payroll and time management system. Combining timesheets with payroll saves you time on payday and improves accuracy. Keeps your employees informed with online access to rosters, time sheets and payslips. Size of company targeted: 1–200 license cost: $24 per month for up to 10 employees. Online (SaaS) delivery? Yes Cloud employee services? Yes, full employee rostering, time sheet recording and client approval. Operating platforms supported: All desktop browsers and O/S. Customer feedback: “I am seriously impressed with this software. It’s a very versatile and well put together product, covers all compliance and legal issues required by payroll legislation, and the fact that is on a web-based platform is a real plus. The Flexitime support is excellent, and their staff have been a pleasure to deal with. We will be recommending Flexitime to our clients where this product will save them both time and money.” – Leaine Jones, Jones Business Solutions. Contact: www.flexitime.co.nz, support@flexitime.co.nz or phone 0800 148 880

number of nZ customers: 1000 unique benefits: NZ-owned and operated, iDt has the most comprehensive range of time and attendance solutions – including Fingerscan, web-based software and a large team of dedicated support staff. Size of company targeted: 10 to 1000-plus license cost: From as little as $49 per week. Online (SaaS) delivery? Yes, iDt’s web based software can be hosted on customer servers or third-party servers (i.e. Datacom). Cloud employee services? Web-based employee kiosk. Employees can check their rosters, timecards and apply for leave. Operating platforms supported: Windows Customer Feedback: “The implementation and ongoing support we have received from the team at iDt has been excellent.” – Fletcher Building. “We are far more organised. The little extra ‘here and there’ 15 minutes from several staff have vanished.” – Mitre10 MEGA, Marlborough. “Bullet Freight is very happy with the service and would never go back to handwritten timesheets as the savings from people clocking in and out at the exact time has been amazing and the time saved from preparation.” – Bullet Freight Systems Ltd. Contact: www.idt.co.nz • Email: enquiries@idt.co.nz

Brand name: IMS Payroll number of nZ customers: 10,000 plus unique benefits: IMS are payroll specialists offering a highly- functional and cost-effective payroll solution that is proven in the market. 95 percent of our users rated IMS support as good or excellent. Size of company targeted: All sizes license cost: From $299. Based on a sliding scale depending on the number of employees. Online (SaaS) delivery? No Cloud employee services? Yes, IMS Online Express, Online Timesheets, Online Payslips, Leave Management, Manager Reports and Rostering. Operating platforms supported: Windows 32 and 64 Bit versions. Customer feedback: “We have been using IMS Payroll since 2008 and since we moved to Online Express the benefits have been extremely noticeable for both our staff and for me. IMS Express offers the perfect solution and has introduced new levels of efficiency. As we have three locations within the North Island, I am able to manage rostered staff with ease, run reports around upcoming staff leave and plan effectively.” – Rhonda Henderson, Manchester Unity Credit Union. Contact: www.imspayroll.co.nz Phone: 0800 600 110 Email: Payroll@ims.sales.co.nz

NZB feb 2012 nzbusiness.co.nz

45


Phone 0800 111 438 Brand name: iPayroll Number of NZ customers: Thousands Unique benefits: Established in 2001, iPayroll is New Zealand’s premier online cloud payroll provider and largest PAYE intermediary online payroll service with over $6.5 billion in client payrolls processed to date. iPayroll makes processing a breeze, anywhere, anytime, with services for both business owners and accounting professionals and free help desk support. Size of company targeted: SMEs 1 – 100’s License cost: N/A Online (SaaS) delivery? Yes, fully-supported cloud computing. Cloud employee services? Online Employee Payslip Kiosk, with Current Payslip; Payslip History; Tax Summary – Current Year; Tax Summary, Previous Years; Leave requests; Leave calendar; iPayroll Giving Donations. Operating platforms supported: PCs, Macs, Internet-enabled mobile phones, iPads. Customer Feedback: “I began using a different cloud-based payroll system about a year ago. After a few payrolls I realised that they were not geared towards tourism-based businesses operating full-time and part-time staff, 365 days of the year with staff on all sorts of hours. I was recommended iPayroll and changed. I can confidently say that it is the easiest payroll package I have used. I love the fact that I do not need to worry about PAYE payments, keeping up with changes in taxes or having to update the software. The fees are minimal for the benefits and time it saves. There really is no reason why everyone should not be using this software.” – Kris Barrs, manager, The Station Info Centre and Queenstown Info Centre, Queenstown Contact: www.ipayroll.co.nz • Email: sales@ipayroll.co.nz Auckland: 09 3771517, Hamilton: 07 839 7730, Wellington: 04 472 2997, Christchurch: 03 372 9468

Brand name: KeyLink Payroll Services Number of NZ customers: Over 100 Unique benefits: KeyLink provides your company with a fully-outsourced payroll solution. You will get personal attention from payroll professionals. We provide job costing information, integration with accounting systems and will deal with the IRD on your behalf. Size of company targeted: 1–200 employees License cost: N/A (We provide an Outsourced Payroll Processing Service.) Online (SaaS) delivery? No Cloud employee services? Coming soon Operating platforms supported: N/A Customer feedback: “When we originally outsourced our payroll to KeyLink we expected to get them to sort out our issues and for us then to take it back in-house. However, we found that they were very efficient and cost-effective. When we ring they are friendly and respond to our queries quickly. As a result we expect to continue using their services for the foreseeable future and recommend them to others.” – Bruce Bleakley, General Manager, Aotearoa Credit Union. Contact: www.keylink.co.nz • Email: enquiries@keylink.co.nz Phone 0800 4 Payroll

MYOB Products: MYOB Payroll (for small businesses) / MYOB EXO Employer Services (for growing businesses) Description: Fast, efficient, accurate payroll systems to manage employer obligations, calculate PAYE, and track leave. Provides direct filing to IRD’s irFile service. Contact: 0800 60 69 62 • www.myob.co.nz

Sick of processing your payroll? KeyLink Payroll Services will cure your payroll ills Keylink has been providing personalised, friendly and efficient payroll services to New Zealand small and medium businesses since 1985. “Over all the years we have used KeyLink our requests have always been answered with a positive attitude by all their staff” Jeeva Jeevananthan – Financial Controller – Jet Park Airport Hotel and Conference Centre

46 NZB feb 2012 nzbusiness.co.nz

Get your Free Quote Now Contact Evan 0800 4 Payroll 0800 473 976 www.keylink.co.nz enquiries@keylink.co.nz


2012 SMALL BUSiNESS PAYROLL SYSTEM & SOFTWARE GUidE

ace payroll

Brand name: PayGlobal Exolvo number of nZ customers: 200+ unique benefits: PayGlobal Exolvo is a proven, highlyscalable, integrated and trusted workforce management solution covering Payroll, T&A, Rostering, HR and workflow enabled Employee Self-Service. This allows you to automate and support your unique business processes. Exolvo Business Intelligence allows you to discover the true value of your payroll and HR information. Size of company targeted: 200 to 10,000-plus employees. license cost: To be provided after consultation with our business development manager. Online (SaaS) delivery? Yes, PayGlobal provides a highlyavailable and secure hosted online service with a proven Disaster Recovery capability. Cloud employee services? Yes, our Employee Self-Service module is a web-based module which can be deployed on-premise or via our hosted online services. Operating platforms supported: Windows Server 2003/2008/2008 R2, Windows XP, Vista and 7 (PayGlobal is Windows 7 approved from Microsoft for this Operating System). Note: 32 bit and 64 bit platforms are supported by PayGlobal Exolvo. Customer feedback: “Once the award rules and conditions are set up in PayGlobal, you don’t have to think; you can just run your reports and rely on the data being accurate.” – Star Retail Group, Australia. “Simply by being able to make employees’ payslips available online and eliminating paper-based leave requests has saved us $60,000 per annum in postage.” – Postie Plus Group “It was the only solution that could automate the award interpretation of our many awards.” – Compass Group. “Our building is in the cordoned-off areas of the Christchurch CBD and I have been able to continue to run our payroll – PayGlobal Online Services truly is an innovative service from PayGlobal.” – Blackbay. Contact: www.payglobal.com • Email: info@payglobal.com Phone (AU): 1800 129 181; (NZ) 0508 PAYGLOBAL

product: Ace Payroll Description: Ace Payroll is NZ’s easiest to use payroll system. No per-employee charges, great 0800 phone support. Try free for two months first. Contact: Phone 0800 223 729 • www.acepay.co.nz

actionstep product: Payroll Description: Boost efficiency with Payroll as part of a complete business system, along with time sheets, accounting, sales/CRM, marketing, workflow and more. Replace four to five pieces of software with one! Contact: www.ActionStep.com • Phone 09 379 3939 Email: sales@actionstep.com.

crystal payroll limited product: Crystal Payroll Description: Feature-rich online payroll system with four product options and lowest price guarantee. Designed for New Zealand and includes free NZ-based support since 2006. Contact: Tony Palm, phone 021 839 606, Email: sales@crystalpayroll.co.nz or t.palm@crystalpayroll.co.nz

datacom product: NetPay Description: NetPay is Datacom’s cost-effective cloud-based payroll solution for SMEs. Your one-touch payroll ensures ease of use, price certainty and speed. Contact: Steve Zhao, national business manager. SteveZ@datacom.co.nz • www.NetPay.co.nz NetPayAnswers@datacom.co.nz Phone 0800 111 414

Rocket payrolls limited product: Payroll Services Description: We provide outsource payroll services to businesses throughout New Zealand; a payroll solution which requires no in-house expertise or payroll software. Contact: Peter Steel, director 0800 4ROCKET (0800 476 253) Email: sales@payroll.co.nz • www.payroll.co.nz

NZB feb 2012 nzbusiness.co.nz

47


why branding is always a work in progress We all recognise strong brands, but how do you go about building one? Christine Arden has the answer.

I

t’s a frustrating paradox: the importance of branding is increasing at the same time as the difficulty of branding is rising. What makes it especially challenging is that the competitive environment is shifting faster than ever. There’s new and converging technology, competition on a global scale,

48 NZB feb 2012 nzbusiness.co.nz

and an increasingly fickle and cashstrapped customer. This means your brand can never afford to rest on its laurels. The good news is that smaller businesses do have some advantages over their larger counterparts when building their brands. Here are three ways to build your brand:


heLPdesK

1. Stand up to stand out! Successful brands stand out from the competition. Branding is how you go about differentiating your brand in a way that is relevant, memorable and compelling to your target audiences. Entrepreneurial businesses have a tendency to make the brave calls, and break new ground in taking on the establishment. They can stand for an idea that builds affinity and an experience that feels true to this. Think Hell Pizza (with its irreverent attitude), Mike Pero (a New Zealand company giving New Zealanders a choice) or Huffer (possessing ‘cult cool cred’ that everyone wants a piece of). All of these brands had a strong sense of their brand from inception, and it has fuelled their growth. Behind each of these brands was a visionary business owner who recognised their brand would be integral to their success. If you’re a business owner who has only recently come to this realisation then now’s the time to take stock. Ask yourself some hard questions. What does your brand currently stand for? Is this compelling, relevant and differentiated? If not, you need to think bigger. A good place to start is to: • Survey your customers to see how they perceive you, what’s important to them, and how you compare with other brands; • Review who you compete with (include technology and indirect competitors – not just the usual suspects!) and; • Appraise your businesse’s capability and strengths. • Use this knowledge base to begin exploring the big idea your brand could own. Remember, the essence of branding is about being different, so think laterally! 2. Stay consistent Successful brands possess a consistency that makes them feel authentic and trustworthy. Take Icebreaker as a case in point.

Icebreaker’s commitment to sustainability, which was central to the brand’s formation 15 years ago, is stronger than ever and its distinctive marketing campaign (man at one with nature) has become iconic.

they can provide customers with the personal touch – their brand feels very real when someone personally follows up to check on their service. Smaller business owners can look at new ways to connect using

Whilst it’s important to be consistent, you don’t want your brand to be bland. This constancy of positioning and promotion has been spearheaded by the company’s founder Jeremy Moon. It is a hallmark of every great brand and is a key driver of business growth. It is also an effective and cost – efficient approach to branding and makes managing the brand easier. Smaller businesses with small budgets know only too well how hard it is to achieve awareness and cut through. Those business owners who understand and commit to the fundamentals of their brand (how they look, what they say, how they act) are likely to enjoy its benefits in the longer term. 3. be progressive Whilst it’s important to be consistent, you don’t want your brand to be bland. Strong brands will remain true to their core purpose, values and signature look. But at the same time they appreciate the need to be innovative and flexible, to evolve with the times and take advantage of new opportunities. That’s essential because today brands exist in a dynamic, ‘realtime’ environment. The Internet now enables people to interact with your brand when and how they want to. They can ‘Google’, ‘like’ and review your brand 24/7. Your brand has to adapt to keep up. Smaller business owners share some common characteristics – they are driven, flexible, intuitive marketers and natural innovators. This can assist them in keeping their brand fresh. For example,

social media – such as using LinkedIn to tap into their personal network to promote their business. They can explore costefficient co-branding activities. For example, a group of small businesses, say a florist, caterer and interior design business, could connect and merge their customer base to co-host an evening hospitality event to generate new business. branding is a neverending story A brand builds over time, the result of a hundred small actions – a good word shared here, an Internet link there. Branding your business is an iterative process. For small business, Rutherford’s quote, “We haven’t got the money so we’ve got to think,” applies in spades when considering the brand. It is about proactively managing your brand, not leaving it to chance. Branding is a continual process of exploring what works and what needs to be reviewed and refreshed. It’s a thinking game. As a small business owner, your advantage is that no one cares as much about your brand as you do!

Christine Arden is a brand specialist and director of Snowball Marketing. www.snowballmarketing.co.nz

NZB feb 2012 nzbusiness.co.nz

49


JusTifying that experience tax Experience tax. What is it, and are you already charging it? Is it justified or are you charging too much? Customer experience expert David Espiner delves into the issue.

R

ecent surveys have shown that 80 percent of business owners say they give superior service and therefore charging more was justifiable. The concerning thing is that only 20 percent of their customers agreed that their service was superior and therefore higher prices were not so justifiable. How are your business prices perceived by your customers? If you are not the cheapest in town, what is the extra that you offer your customers to justify your price difference from your competitors? Could this be called your “experience tax”? Without realising, it most businesses are charging an experience tax. But can they justify it, or is it potentially driving their customers away?

50 NZB feb 2012 nzbusiness.co.nz

what is it? Experience tax explained simply is a premium that a business charges because they say they give better service; they are more professional; they build better relationships with their clients or customers; and overall they provide an experience rather than just a transaction. But what happens when they don’t provide that service or experience? Are they still charging full price and simply ripping their customers off? Let’s talk about John. He owns a day spa and hair salon business in a town which has more than its share of competition. John’s business is super-successful and known as one of the more expensive places to go, but where you get great service and good results as part of

the experience. John’s customers know they could go elsewhere and potentially save a substantial amount of money but they choose to stick with him. In the current tough economic times how is it that John can charge more than his competitors and still grow his business and operate so successfully? John’s customers are happy to pay an experience tax, because John and his staff are delivering on their promise of creating an experience for each and every customer every time. the best or the least expensive Let’s face it – people either want the very best or the cheapest. Unless you are already the cheapest, then you are expecting your customers


heLPdesK

How would your business fare if you added an experience tax to every invoice, and showed it separately – would your customers happily pay it or not? to pay an experience tax. Are you giving your customers ‘bang for their buck’? You may not list it on your invoice, but I can guarantee it’s there buried within the total. The big difference is the businesses that charge less than you, are not promising those things, and aren’t forcing their customers to pay for them. The problem arises when you don’t deliver that superior level of service or experience that you promised, yet you still charge full price. Why? Because effectively you are ripping your customers off. Your customers can, and will, go down the street to your competitor where they will pay less for the same product but without the expectation of receiving more. If a true experience is not received often enough, they will walk. Back to John’s day spa and hair salon again. He has a competitor down the road aptly named ‘Speedy Cuts’ who offers an average service at an average price, yet John is still getting more of their customers than the other way around. To top it off, a whopping 95 percent of John’s customers who decided to try ‘Speedy Cuts’ returned to John because they miss the experience and are happy to pay for it. Critical issues Please note, I am not saying you should discount your prices. In fact, I think the opposite. Every business should aim to have as high on experience tax as possible. It is a legitimate way to increase your

profits, cashflow and business value. That is why you see businesses being able to charge much more than their competitors for the same product or service. The critical thing is that because you aren’t giving your customers a choice to pay this tax or not, every owner, manager, employee, supplier and contractor must realise that if you are charging an experience tax (and nearly every business is), you must deliver on the promise that comes with it – the experience that comes with the higher price tag each and every single time. It’s also critical to remember that it is your customer, not you, who decides if your experience tax is justified. try this exercise How would your business fare if you added an experience tax to every invoice, and showed it separately? Would your customers happily pay it or not? Ask your staff these two questions: 1. Why would our customers spend more with us than go elsewhere and get a similar product cheaper? 2. What could we do differently that would justify our experience tax to our customers? Many of the ideas your staff will come up with when answering these questions can be easy to implement and at a relatively low cost to your business. This will enable you to justify your experience tax and in some cases, increase it.

how to make sure your experience tax is justified Like any good tax there needs to be guidelines supporting it. Your customers will constantly be putting you on trial so you need to determine very clear guidelines on what your experience tax is for. What exactly is it that you are charging extra for? Is it worth paying more? You need to develop these guidelines and standards to ensure you deliver this experience every time to every customer. They need to be non-negotiable standards for your staff, otherwise you are ripping your customers off and they won’t see the value in what you do and therefore won’t come back or refer others to you. We know being human, mistakes can always happen. You will never eliminate them. It is important to have protocols in place to address these immediately. We call these ‘service recovery systems’. Having these guidelines and standards in place in your business will greatly impact on the customer experience you deliver and your long-term profit and business growth.

David Espiner is a director of the CX Group – a company that specialises in growing business profits and value through the customer experiences they deliver. The CX Group is the exclusive NZ licensee for the Secret Service system developed in the US. Email david@cxgroup.co.nz or visit www.cxgroup.co.nz

How do you know your Experience Tax is justified? And if you are losing customers and profits because of this? Email or phone us today for a free Exp Tax Audit and learn how you could increase your Experience Tax and profits. Freephone 0800 967 532 (0800worldclass) Email: Juliet@cxgroup.co.nz www.cxgroup.co.nz

NZB feb 2012 nzbusiness.co.nz

51


Career care good for business Investing in your employees’ career development will positively impact your bottom line, according to career development specialist Reece Notton.

P

roviding opportunities for all employees to develop, whether it is career-wise or on a more personal level, positively impacts a business’s bottom line, says career development specialist Reece Notton from business advisory firm Grafton. “Taking the time to really understand what each employee’s aspirations and motivations are helps engender loyalty and can reignite the spark for a lessmotivated employee,” he says. Career development is often something that is seen as a ‘nice to have’ rather than a ‘need to have’. Interestingly, when it comes to identifying why employees choose to leave a job, ‘lack of development opportunities’ is frequently cited as a key driver. So why aren’t businesses doing more of it? Notton believes it is a combination of

52 NZB feb 2012 nzbusiness.co.nz

priorities for budgets and a lack of time and opportunity. Most HR practitioners understand the need for career development but the day-to-day realities can take over. “Career development needs a champion. Whilst the benefits of career development are often not well understood, what is not in doubt is the high cost of replacing a key staff member.” The cost of replacing a team member can have a huge impact on an organisation’s operating budget. It’s important to factor in not just the cost of recruitment but also the cost to the business of getting the new employee on board, inducting them into the company culture, vision and values, and ensuring they are fully prepared to undertake their role. “Lost productivity whilst you’re going

through the recruitment process and getting the new hire up to speed is also a very real cost. This can be particularly significant for smaller businesses where staffing numbers are limited and the ability for people to temporarily double up on responsibilities is less,” says Notton. Recruiting a new employee may cost two to three times that person’s salary when you factor in the actual dollar cost of the exiting employee’s lack of motivation, loss of productivity and performance, along with the actual cost of advertising, recruiting, then inducting the new hire. Notton believes that with the increased pressure on budgets and increased competition for skilled employees, career development offers businesses a practical solution to assist in retaining good staff, helping others move on to


heLPdesK

new challenges and developing others into new roles to benefit the organisation and themselves. In challenging times you need to make sure you retain your valued staff. The cost in terms of lost knowledge and experience, combined with the cost of replacing them, is too great for most businesses to ignore. Making an impact One HR manager Reece worked with, whilst not wanting to be identified, was happy to share thoughts on the impact career development had made to the company. “Introducing career development to our business has definitely had an impact on the way our staff view themselves and the role they can play in the business. They feel more connected to the business and are more aware of the value they offer. “Taking the time to put the focus on career development has given individuals the opportunity to take a good look at where they are now, where they want to be and how they are going to get there. Sometimes the conversations haven’t been easy but ultimately all involved have been able to take away something positive,” the HR manager commented. So what is career development? Notton explains it’s about aligning organisational talent management with the personal development aspirations of employees. Frequently companies believe they are covering off career development for all employees by providing leadership training. “Leadership training is definitely an important component of career development. However, not everyone is cut out, or even wants to be a leader. “Just because an employee doesn’t aspire to be a leader that doesn’t mean they don’t have a lot to offer the business and should be valued for their current contribution and how they can add value to the success of the organisation into the future. They may have other aspirations they would like to pursue, such as moving to another area within the company, which would also directly benefit the business, particularly in terms of increased loyalty and commitment. Individuals need to know they are valued and that they are listened to,” says Notton. Making time to talk through employees aspirations getting to know what drives and motivates them can be hugely

beneficial for a business. Notton recommends that provision is also made for employees to have these conversations with someone outside the organisation. “Having a conversation about your career development is quite different than negotiating conditions of employment. Specialist skills are required to get the best outcome for the business and the individual. Career development offers the most benefit when facilitated by professionals who have honed their skills working with a variety of organisations. “The environment for the career development conversation needs to be completely transparent and supportive. A one size fits all approach will not reap the desired benefits.” The career development conversation should include discussion around aligning personal and professional life with those of the organisation, gaining clarity around understanding self, career and development opportunities and then aligning these with the organisation. The individual needs to be encouraged and mentored to take a proactive approach to managing their career and to see their career as a business, thus creating a vision, developing a strategy and looking at how they are marketing themselves and building their career equity. empowering After participating in a career development programme, employees will be empowered to seek new professional development opportunities, which may include leadership training funded or at least partially funded by their organisation. Others may be keen to explore new career opportunities within the company which may or may not necessitate the need to receive additional training and or support. Some employees may be keen to pursue opportunities for self-development which may involve agreed time off during the working day. There may also be employees who, having clarified their aspirations and motivations, decide that their next step means moving outside their current role and organisation. This gives the company the opportunity to manage the individual’s departure in a positive and constructive way. Taking a proactive approach to career

development has numerous benefits for an organisation, not least of which is being seen both internally and externally as an employer than values and listens to their staff – definitely helpful when competing for the best talent. Organisations are seeing greater retention of valued employees and a lower overall staff turnover rate. Through having the conversations and aligning employee aspirations with the organisations aspirations, they see better use of individual employee’s skills. Without the conversation how would you know that employee X who works in admin actually aspires to move into marketing, but just needs some professional development to get there? An added benefit for organisations is increased effectiveness of their HR systems, procedures and initiatives and overall improved communication within and across the whole business. Managers report increased motivation from team members who participate in career development and increased willingness to take on new responsibilities. It also enables managers to build a talent database allowing employees from different parts of the business to collaborate on special projects. From an employee’s perspective, participation in a career development programme gives the individual increased job satisfaction and a greater sense of loyalty towards the organisation. They gain a greater sense of personal responsibility to proactively manage their career, and gain the ability to set realistic goals and expectations. Given all the benefits, it’s hard to see why more organisations aren’t making the commitment to career development. The financial commitment needed is not huge but the benefits for the organisation, managers and employees are invaluable.

Reece Notton heads the career team at Grafton where they work alongside businesses to get the best performance and outcome for individuals and organisations. Visit www.grafton.co.nz

NZB feb 2012 nzbusiness.co.nz

53


Pacific Aid means business Peter Boyes reports on the progress of the Business Mentors New Zealand Pacific Mentoring Programme.

B

usiness mentoring, where an experienced senior business person coaches a developing enterprise, is a well-established part of New Zealand’s commercial landscape, with thousands of owner-managed companies drawing on the programme for support. The model of a free service, manned by highly-skilled volunteer professionals, has been so successful that the government recently chose to use it as a vital centrepiece of its Pacific aid programme. Since May 2010, Business Mentors New Zealand (BMNZ) has operated a Pacific Mentoring Programme to provide practical support for businesses in 11 Pacific Island countries with funding from

54 NZB feb 2012 nzbusiness.co.nz

the Ministry of Foreign Affairs and Trade. Rod McKenzie, former Canterbury farmer and co-founder of Agrifax, the rural business information service, was one of the first to join the scheme as a mentor. Rod was awarded the Membership of the New Zealand Order of Merit for his services to agriculture. “Before joining the Pacific mentoring scheme I was involved in mentoring in Christchurch for two years,” comments Rod. “Mentors were asked to apply for the Pacific scheme about two years ago. I have done a lot of travel in the region over the last 30 years and have a high degree of empathy for the people. While I have a strong agricultural

background, I have also developed interests in tourism, car rentals and Internet marketing. “Around 120 mentors applied and 15 were accepted for the first intake. I was allocated to Samoa, one country I had not been to, so I was pleased with that. “I went up for the first visit in June 2010. There were five mentors as well as BMNZ Pacific Programme GM Ian Furlong. We were allocated five clients each, with businesses including hospitality, tourism, IT, real estate and agriculture.” Mentors visit the islands every six months, which means each client gets visits in June and November. “I’ve just been on my fourth visit,” says Rod. “It is quite challenging but very rewarding as you see


MENTORiNG

your clients begin to change and progress. For example, I introduced new marketing techniques and promotional initiatives to two tourism clients which have transformed their visibility. Although there are some similarities with small businesses in New Zealand, the issues are different. Many have basic capital inadequacy and profitability issues related to poor marketing, accounting and staffing.” At the first meeting Rod aims to develop a set of action points with his clients which they undertake to do before he returns six months later. In between he keeps in touch by email. “As you help them through the issues, the clients are able to go on their own and new ones come on the programme. I’ve now only got one client from my first visit.” It’s clear that the BMNZ Pacific Programme has earned a special place in the island business environment. “Although there are a lot of other agencies in the region and aid is offered from other countries, there is an excellent attitude towards our programme,” says Rod. “Confidentiality is very important and they are very reticent about talking to their own countrymen about business. But they are much happier talking to us.”

Teaching the ‘whys’ and ‘hows’ Tokoroa-based business adviser Dianne Turco has brought a lifetime of commercial experience to the people of Vanuatu through the Pacific mentoring programme. Dianne was born in New Zealand, has a background in teaching and 30 years in business in the US, where she held a variety of management and leadership roles. As general manager of the South Waikato Economic Development Trust she established and developed the Business Development Centre for South Waikato and has worked with over 900 businesses in that role. A special moment was winning the Vero Excellence Award for Small Business support with the implementation of the QLBS.com web-based Business Capability

Assessment for businesses. She was also involved in the facilitation of economic development projects in the South Waikato. Dianne started business mentoring in 2004 with Business Mentors New Zealand. When she left the Business Development Centre she was asked to be a capability assessor for the NZTE training programme and did so until the programme was restructured in 2011. She now works as a mobile business advisor and mentor with her consultancy Diversity. “I enjoy working one-to-one with my clients as it gives me the time to help them relate to their business,” says Dianne. “I am very focused on them understanding what the purpose of their business is and how important it is to carry that knowledge through all levels of the business. “As part of the five-member Vanuatu mentoring team, I thought it would require a very different approach, but it doesn’t. I listen, find out their needs and issues and how we can help, then together we put achievable action plans in place. The people are friendly, resourceful, enthusiastic and like sponges – very receptive and hungry for advice. “One thing a little different for the Pacific Island programme is that the Vanuatu businesses are not all at the level where you can go into a very deep assessment. Some are very basic. Others have been to university and are on the ball, moving quickly through the action plans. There is a wide cross-section of capability levels and issues. “I was interested to find that some of my Vanuatu clients have had a lot of help but indicated that it had been mostly theory or was ‘done for us’. There is a lack of understanding of the ‘whys’ and ‘hows’. “Getting people to realise that they do have the answers is such a thrill for me. That is what mentoring is all about. Assisting businesses to learn how to do things for themselves in a way that makes sense to them.” Dianne finds the five-member team approach works well, with mentors having a variety of

experience and skills to draw on. She is working with six Vanuatu businesses covering tourism, timber milling and furniture manufacture, food manufacturing and alternative energy. She will complete her third visit in March and has expectations that there will be closures during the next two visits. “Some clients I will see for two or three visits and then they’ll be ready to go on their own. Others only need a little encouragement or a sounding board. The skill with mentoring is to know when to jump in and then jump out again. Business principles are the same and people are the same. “I am literally pumped by the Pacific mentoring experience. The clients are so happy to see us.” The programme now covers six countries and 270 client businesses. In 2012 it will enter Fiji, Kiribati, Tuvalu, Niue and possibly Tokelau. Local mentors are also being trained so they can be a source of ongoing advice, knowledge and information. The programme aims to assist small and medium-sized businesses in the Pacific to manage and grow their businesses in a way that supports sustained increases in production and employment over time. It is hoped the programme will be a catalyst for identifying other business needs such as training, and create opportunities for partnerships and joint ventures, as well as increased exports. Business Mentors New Zealand is funded largely by patrons from the private sector, with additional support from New Zealand Trade and Enterprise. It provides a mentoring service to businesses that have been operating for at least six months and are the owner’s main source of income. A registration fee of $100+GST applies, which entitles you to use the mentoring service for two years. More details can be found at www. businessmentors.org.nz or by calling 0800 209 209. Peter Boyes is a volunteer business mentor as well as a PR and marketing communications advisor with BPR.

NZB feb 2012 nzbusiness.co.nz

55


ShAking thE PhonE tREE Bill Bennett reports on a new breed of phone company that can be better for businesses.

The MvNo BusiNess

V

odafone, Telecom and 2degrees dominate New Zealand’s cellular phone market, but they are not your only choices. Operating below the big names is a whole new class of phone company. In the telecommunications business these organisations are known as mobile virtual network operators or MVNOs. As the name suggests, MVNOs don’t own mobile phone networks – they piggyback off existing ones (see Box 1). If you choose an MVNO you’ll see all the advantages and disadvantages of the underlying network overlaid with a different kind of relationship – one that is often a better bet for small business owners than dealing with a mainstream cellular company.

personal service How different is the relationship? Jonathan Eele, managing director of Black + White, says the first thing you’ll notice when you sign an agreement with his company is the car pulling up in your driveway. He says your relationship with your telecoms company will be a face that you’ll come to know. Eele believes this approach is important to business owners. “After all, it’s how they do business.”

56 NZB feb 2012 nzbusiness.co.nz

Black + white’s Jonathan Eele:

“Value is the issue rather than price.”

Black + White’s personalised service approach is common in the MVNO world. Eele contrasts it to the relationship a small business account might have with a larger cellular operator. “You might feel loved when you are brought on board, but that might be the last you see of the salesperson.” From that point your relationship with the bigger phone company will be mainly through a remote contact centre he says. Shannon Fisher, CEO of Australian wholesaler Telcoinabox (see panel), has set up 22 MVNO franchises in New Zealand. He says customer relationships are the key to the business. “It’s a global trend that the SME space is neglected by large carriers. We see a need for tailored

when the first mobile companies appeared, they jealously guarded their networks. As new players entered the markets, giving countries their third, fourth or fifth mobile network, they needed to quickly recover their huge infrastructure investments – wholesaling mobile capacity to popular brands running MVNOs was one route to a faster ROI. More recently government competition policy has put pressure on carriers to offer wholesale cellular services. In some countries the carriers began to allow MVNOs on their networks to stave off regulation – IDC New Zealand senior market analyst Rosemary Spragg said this is what happened in New Zealand. In other countries governments forced carriers to allow MVNOs.


MVNOs

WhaT is aN MvNo?

services. Our people can go into a business and make valuable suggestions; helping them save money or be more effective from day one.”

What about the prices? What you won’t see from an MVNO is spectacularly lower call prices. Eele says while they can be cheaper in many circumstances, value is the issue rather than price. The nature of agreements between the smaller phone companies and the network operators doesn’t leave much room for heavy discounting. There are other advantages though; the operators have more motivation and opportunity to deliver value in other ways. Mark Callander, CEO of CallPlus, says his company has the ability to be far more innovative about pricing. For example, his company’s plans allow customers to hold over unused minutes from one month to another. He says CallPlus often bundles mobile with other services then adds in free calls to certain landlines or free calling between family members or company colleagues. Like many other MVNOs, CallPlus also has the ability to tailor plans to a customer’s specific needs. Eele says there’s flexibility in

Mark Callander, CEO of Callplus. His company’s plans allow customers to hold over unused minutes from one month to another.

Black + White’s billing system too. “We take time to understand a customer’s business then tailor packages to suit. For example, if a customer sells bucketloads to China, we can fix an attractive China call rate for them.” Fisher agrees flexibility is the key. He says his Telcoinabox franchisees have the ability to tailor rates for their customers’ specific needs. “They don’t have to have ten or so plans on their books then say which one do you want? We encourage them to make valuable suggestions that’ll save customers money. For example, some small businesses still have a fax line, they can get rid of this and we’ll give them a fax-to-email service. They can even get that on a smartphone if they want.”

Billing systems

Building a mobile phone network takes money and expertise. By the time 2degrees finishes its current expansion programme, New Zealand’s three cellular network owners will have invested well over $2 billion in the towers, antenna and fibre links needed to connect our cellphones to the world. Owning a network is no longer the only way to sell mobile phone services. Mobile virtual network operators (MVNOs) can enter the market simply by forming a partnership with an existing network operator. They piggyback off existing infrastructure, reselling services under their own brand. Elsewhere in the world supermarket chains and well-known brands like Virgin or Disney use their high profile and customer relations to sell phone services to consumers. New Zealand’s MVNOs mainly focus on SME customers. IDC New Zealand analyst Rosemary Spragg said here they mainly bundle their mobile offerings along with fixed line voice calling and Internet services. MVNOs tend to be price competitive, but not too price competitive. They have lower overheads than network operators, but lack the scale to seriously undercut their host networks on price. For the most part their appeal lies in their ability to get closer to customers or to tailor packages more relevant to users’ needs. Many SME customers feel underserved by the main networks. They also have the flexibility to innovate on price or billing arrangements in ways that better suit small business operators. Their big disadvantage is they don’t control their networks. This can make it harder to resolve service problems. On the other hand they are important customers for the big networks, so their complaints take priority over individual whinges. They also have less access to handsets – which is especially important with today’s smartphones.

Consumers may be uninterested

Want someone to buy back the mobile minutes you can’t use? CallPlus is about to introduce a clever new BuyBack Plan that gives your company real money for unused minutes and data. To find out more visit callplus.co.nz.* *Terms and conditions apply. Go to www.callplus.co.nz/buyback for further information.

NZB feb 2012 nzbusiness.co.nz

57


MVNOs

Be youR oWN MvNo If you work in a sales-focused business and have a strong customer support focus, you may be tempted to start your own micro-MvnO. Shannon Fisher runs an MvnO wholesale operation called Telcoinabox. his business provides ready-to-go MvnO businesses complete with product support and full-blown provisioning and billing systems. To date Fisher has 22 services running in new Zealand ranging from what he calls “mum and dad” operations to larger operations looking for additional revenue lines like the nZ Credit union. he says telecommunications is usually a volume business with high barriers to entry, but his company takes care of all the background matters and leaves his wholesale customers to get on with the business of selling and managing accounts. “Customer relationships are key,” he says. “you can get alongside your customers and tailor individual plans designed to meet their needs. let them know they are not just a number.” he says most of his successful franchisees sell by word of mouth or personal referral.

in phone company billing systems, but they are important for businesses – especially where costs need to be allocated against jobs and employees. It happens to be one area where MVNOs have a clear advantage over the mainstream carriers. Eele says offering customers clear-cut information about where they are spending money on phone services was the inspiration behind his company’s name. “It’s all there in black and white”. Eele says Black + White works hard to simplify its billing system. “How the bill is presented is important. Many customers need to break the numbers down, to slice and dice the figures. We give them that and we give them inviting-looking graphics. They can optimise their reports by function or department and, if they want, we can give them a spreadsheet version of the information.”

a low profile, for now Don’t worry if you haven’t heard of MVNOs yet. They are still a tiny sector in New Zealand and many operate in stealth mode. However, they are starting to gather momentum. If overseas experience is anything to go by, they will grow fast. Telcoinabox’s Fisher explains why MVNOs tend not to have a high profile and why operators chase the business market. He says his partners mainly sell by word of mouth and personal

relationship. “If you want to chase the broad market you have to pump in cash and become a brand. It takes a long time to get a return.” He says many of his franchisees target the industries and vertical markets they came from using specialist knowledge of how those people use communications. MVNOs aren’t set to stay small. CallPlus, which recently signed an MVNO agreement with the Telecom XT network, already has a substantial investment in broadband and fixed-line calling. CEO Callander says his company has already done a billion dollars worth of telecommunications business and expects over time to make a similar impact in mobile. According to the Telecommunications Carriers’ Forum there were 4.7 million mobile connections in 2010 – that’s 108 mobile phone accounts for every 100 New Zealanders. At the time the survey was carried out, MVNOs accounted for considerably less than one percent of the total. The latest figures from IDC suggest they are now about 1.1 percent. In parts of Europe MVNOs are approaching a 20 percent market share; ten percent seems to be the average. This means even if you’re not looking at shifting your business to a virtual network operator today, you may do in the future. Bill Bennett is an Auckland-based freelance IT writer.

Will the drop in Mobile Termination Rates save you money?

(and if so, how much?) Call 0800 020 020 and find out.

It’s easy with

Mobile

NZ Business 85mm x 180mm Ad.indd 1

58 NZB feb 2012 nzbusiness.co.nz

Landline

Internet

www.bw.co.nz/business 5/31/11 5:32 PM


BIZ TECH Bill Bennett reports on the latest technologies impacting on small and medium businesses.

Investing in keyboards and mice Why would anyone want to spend money on keyboards and mice when they come supplied with every new computer? There are two reasons: one positive, one negative. First, keyboards and mice are potential health hazards. They can inflict pain and, in extreme cases, cause long-term physical injury. Second, there’s evidence you get quick productivity gains from better-quality input devices. None of this matters if you only spend minutes each day at a computer. Investing in better input devices has a quick pay-off for those of us who spend most of our working life in front of a screen. While some suspect repetitive strain injuries (RSI) or occupational overuse syndrome (OOS) are workers’ compensation rorts, there’s evidence the problems are real. They affect thousands each year and small business owners – who have no incentive to fake injuries – are often among the most affected. Poorly-designed computer keyboards cause wrists to twist unnaturally. That leads to pain. Laptop keyboards are often worse than the desktop keyboards – which are easier to adjust. Of course posture, desk and seating height are all important – possibly more important than keyboard design – so it might pay to look at adjusting these before investing in an ergonomic keyboard. Ergonomics experts warn mice often cause more problems than keyboards. If you do a lot of typing, it’s a good idea to learn keyboard shortcuts in order to cut down on mouse use. Many desktops and all laptops come supplied with ‘straight’ keyboards. Manufacturers might describe these as ergonomic, but generally the term

is reserved for keyboards that better accommodate the human body. One ergonomic improvement is to split the conventional keyboard down the middle and then angle the two halves outward. This is particularly helpful for people with broad shoulders as it enables them to hold their wrists at a more comfortable angle. People with narrow shoulders often find a straight keyboard is preferable. Most split keyboards come with a fixed angle, but some are adjustable and others can even be broken apart. We tested the $130 Microsoft Natural Ergonomic Keyboard 4000 which has a fixed angle split keyboard. It certainly takes some getting used to – especially if you’re a touch typist. After a day or so of adjustment we found it to be more comfortable and slightly faster than a standard straight keyboard. It comes with a zoom control and a number of programmable extra buttons for opening applications and controlling audio. Microsoft’s $150 Wireless Comfort Keyboard 5000 has a less radical shape, but there’s still a gentle curve to a large wrist-rest at the front – along with an even wider selection of extra keys. Removable feet allow you to tilt the keyboard backwards or forwards depending on

your needs. Wireless keyboards and mice mean less desktop clutter and less dust to worry about, but there’s a price. They need batteries. When those batteries run low, they are less responsive. This is a frequent source of OOS trouble as people stress their arm and wrist muscles to compensate for the lack of response.

Five ergonomic tips • Wired keyboards and mice are less likely to cause problems than wireless devices although they have other disadvantages. • If you’re in real pain try voice recognition software. It’s not for everyone and it isn’t perfect, it’ll take some time to adjust. Once there, you can give those wrists a rest. • Don’t shy away from adding external mice and keyboards to laptops. • Take frequent breaks away from the keyboard, mouse and screen. Get up and walk about to make phone calls. • Invest in a good quality office chair. Take care of your work posture – problems in one part of the body can manifest as pains or aches elsewhere.

NZB feb 2012 nzbusiness.co.nz

59


BIZ TECH

Buying mobile data Mobile broadband data costs $50 for 2GB from both Telecom and Vodafone. That’s roughly what a medium to heavy user will get through in a month – which is just as well because you only have a month to use it at that price. On the other hand, the 2GB deals are much cheaper than the networks’ casual rates. Buying the same amount of data on Telecom’s casual rate could set you back over $1000. The same $50 buys 3GB on the 2degrees network. In this case you have 60 days to use the data. Spend $150 with 2degrees and you’ll get 12GB which you can use over six months. There is a catch: the price only applies within 2degrees’ “mobile broadband zones”. These are the places where the company operates its own 3G network. Move out of the zone and you’ll pay four times as much for data. Welcome to the sometimes tricky world of mobile broadband pricing. All three main carriers offer an array of rates, which can quickly get complicated. So here’s what you really need to know. Data is measured in bytes. It can come in kilobytes and megabytes. These days you need to think mainly in terms of gigabytes. If you stay away from downloading big files, avoid watching video or listening to streaming music and stick mainly to dealing with email and viewing web pages or PDFs – that is typical business applications – you will probably only need a few GB each month. Business smartphone users will struggle to go past 2GB. You may use a little more data if you mainly work with tablets or laptops – but as we will see there are often alternatives to downloading everything over the expensive mobile phone network. Mobile broadband is 3G. The name comes from the third generation mobile networks covering much of the country. Eventually these networks will be upgraded to a faster mobile data standard known as LTE. Phones can swallow data without you knowing. Smartphones can automatically connect to 3G networks and download emails, tweets or other items. While this is usually a good thing – those important emails are delivered directly to your pocket – it may pay to watch closely how much data your phone gets through when you’re not watching. Consider switching off your phone’s automatic updates. There are free alternatives. Cafés, airports and places like McDonalds offer free Wi-Fi to

60 NZB feb 2012 nzbusiness.co.nz

customers. Sometimes you have to navigate past advertising first. At the time of writing there are also free Wi-Fi services in city centres. Where you have to pay for Wi-Fi it is usually much cheaper than casual 3G rates. Wi-Fi uses a different technology to 3G and operates over shorter distances. One problem is that it is less secure, so be careful. If you are on the road. It may pay to wait until you get home before downloading or uploading large documents. This especially applies to video files. If you can’t wait until you’re home, find a free Wi-Fi service – but remember these often have limits on how much data you can send or receive.

Phones can swallow data without you knowing.

Hotel broadband is often ridiculously expensive and sometimes clunky. When I’m away from home I’ve found 3G mobile broadband is more reliable and a fraction of the cost. Prices for people travelling overseas are outrageous. You’ll pay many hundreds of times for what carriers call ‘roaming’ overseas. If you can do without incoming mobile calls, get a local prepaid SIM card when you arrive in a foreign city. The good news is that free Wi-Fi services are generally more common overseas than in New Zealand.


Biz Books

Maximising customer relationships There are valuable lessons for businesses of all sizes in this book dedicated to building winning customer relationships and maximising revenue from them. Author Lou Imbriano is the former vice-president and chief marketing officer for US football team the New England Patriots whose vision helped explode the team’s revenue and position them for repeat success in the Super Bowl. Now CEO of a strategic marketing firm,

Imbriano, in his book Winning the Customer, shows you that identifying your most valuable customers and building relationships with them are the most important things you can do to earn loyalty and blow out your company’s revenue. He’s learned that to maximise revenue, every business must both turn its customers into fans and coax those fans to spend freely. RRP $41 – Published by McGraw-Hill. ISBN: 978-00717-75267

Zigzag your way to success

This month’s classic: Speak to Win

The road to success is never a straight line. In The Zigzag Principle, Rich Christiansen, the brains behind numerous start-ups in the US, applies this foundational law of nature to business management, entrepreneurship, goalsetting and life in general as he explores why zigzagging toward intended outcomes is more effective than trying to bulldoze your way through whatever stands between you and your objectives. Christiansen documents everything he has learned in business, including how to identify your destination, create a defined set of values to help you as your business finds its way, add resources and hire the right people, replicate your successes to bring your product to the masses, and protect your resources, your family and your sanity. His goal-setting strategy could revolutionise your business and your personal life. RRP $46 – Published by McGraw-Hill. ISBN: 978-00717-74581

When called upon to give a speech or presentation, how many of us fail to perform powerfully and speak persuasively? In his timeless book Speak to Win, world-renowned success expert Brian Tracy uses his knowledge of the techniques of the world’s best speakers to reveal time-tested tricks you can use to present strongly and speak persuasively. Learn how to become confident, positive and relaxed in front of any audience; grab people’s attention; use body language, props and vocal techniques to keep listeners engaged; transition smoothly from one point to the next; use humour, stories, quotes and questions skillfully; deal with audience skepticism and wrap up a presentation or speech strongly and authoritatively. The book lets you in on the secrets to impressing as you present – allowing you to not only communicate effectively but also to masterfully change other people’s minds about subjects critical to your success. RRP $39 – Published by McGraw-Hill. ISBN: 978-08144-01576

Taking the offbeat path to success Zappos is an Internet merchandise company that began by offering shoes online and went from virtually no sales to $1 billion in annual gross sales over a ten-year period, despite minimal advertising. The company represents a new standard of customer service, a superior online shopping experience, a great work culture and is one of the most impressive transformational business success stories of our time. In The Zappos Experience, Joseph Michelli takes you through and beyond the offbeat company culture and reveals what occurs behind the scenes at Zappos. By breaking down the Zappos approach to business into five key elements, Michelli shows that when you enhance the customer experience, increase employee engagement and create an energetic culture, you simply can’t help but succeed. RRP $41 – Published by McGraw-Hill. ISBN: 978-00717-49589

NZB feb 2012 nzbusiness.co.nz

61


WheN accideN s happeN

Workplace injuries happen to 600 people every week, and kill one New Zealander a week. Apart from the significant human toll, the effect on a business can be terminal. But many companies are now better prepared for accidents thanks to ‘managed’ first aid systems. According to Gavin Smith, the designer of a tailor-made ‘managed’ first aid system, although New Zealand workplaces are getting safer, the requirements for businesses to comply with Occupational Safety and Health (OSH) are getting tighter and more robust. Smith, the New Zealand manager of ALSCO First Aid, says an increasing number of Australasian businesses are now opting for this type of system. They elect to contract their first aid kit management to an ‘allin-one rental service’ because the DIY approach doesn’t meet

62 NZB feb 2012 nzbusiness.co.nz

stringent OSH or Australian state requirements. “Most businesses will have a first aid box somewhere and usually they are completely disorganised and dysfunctional,” he says. “I visited a South Island engineering firm a month ago. They were prepared for a paper cut at best. If a major cut or injury occurred they wouldn’t have been able to deal with it.” Smith has summarised the five pages of OSH Guidelines for businesses to meet the requirements of the Health and Safety in Employment Act (1992) into eight points:

All practicable steps should be taken by employers (and others) to provide properly maintained first aid equipment. First aid equipment is suitably

Gavin Smith with First Aid service rep Annita Mason.


HEALTH & SAFETY

marked and easily available. Marking used should be a green cross on a white background. There is at least one kit on each floor of a multi-level workplace. An additional kit should be provided where there are more than 50 employees and every 50 employees thereafter. It is essential that first aid equipment be checked regularly. Items are to be replaced before the expiry date on the packets. Each work vehicle should be provided with a first aid kit. “Most people fall over at the first step,” says Smith. “Many businesses will have bought a kit a few years ago and forgotten all about it. Secondly, they will most likely have put it somewhere and in an emergency no one can find it. Thirdly, you’d be amazed at how many still have a red cross on them. But most significantly, when we do a first aid kit audit we find that most kits have not been checked recently. “The rules have changed too; everything in the kits needs to be single use. You can’t just have a bottle of eye wash for example. There has to be single, sealed, sterile packs.” Smith developed a managed first aid system after being told about an American version by ALSCO chief executive Tony Colenso. “Our CEO had seen the concept of a managed system in the US. Broadly speaking, ALSCO is a health, safety and image company, and it seemed to us that first aid would be a natural evolution and complementary to our overall service programs. We looked at how we could develop a scheme for our existing customer base and we started with a pilot service in Wellington in 2003.” Several other suppliers will sell businesses a first aid kit, but checking the contents and replacing used items is either not offered, too expensive, or is left to the client to manage by ordering supplies online. “A lot of businesses don’t realise how much they spend managing their kits overall,” says Smith. “It’s

a false economy just to consider supplies alone. They don’t know if their kit is being serviced to the correct standards if it has been allocated to a staff member, or how robust their internal auditing ability is. But many businesses now prefer to have it all done for them and know that they are meeting relevant OSH requirements. “A rental programme for around a dollar a day per kit removes the need to supply and check the kit yourself. Servicing of our kits onsite only takes a few minutes for one of our trained service team.” Smith designed the ALSCO kit mindful that contents need to be checked routinely and restocked regularly. Each kit includes an exchangeable liner with clear plastic pockets for supplies designed for day-to-day use. The entire liner is replaced every three months whether used or not. The contents are reprocessed off-site ready for the next service cycle. There are also modules in each kit for accidents and specific injuries, covering all the items for a reasonably sized incident, allowing anyone to quickly identify the appropriate module and ‘grab and run’ to the accident site with everything they may need. “We developed the kits in New Zealand with our own liner and modules,” explains Smith. “There is no prescriptive use in New Zealand but Australia has adapted the kit to suit the separate state compliance requirements. If the modules are opened or missing or the expiry date is exceeded we replace them. If a specific module has been used we will enquire and check that it has been logged in the accident book, which is part of OSH requirements. Very often we are the first to point out to the client that the accident book needs updating and this is a real bonus with our system. Inside the door of each kit is a call log which is signed at each service, and we have an online record.” With plenty of expired product available, ALSCO has established a network of organisations that are very happy make use of these

items. They include animal welfare organisations as well as Medical Aid Abroad and Rotary, who send supplies offshore for disaster relief and humanitarian reasons.

Four versions There are now more than 4,000 kits in use in New Zealand and the service has been operating in Australia for three years with around the same number signed up there. In New Zealand there are four versions of kit available: large – for up to 50 employees, small – for up to 15 employees, plus a food version of each (with upgraded product that is both ‘blue’ visible and metal detectable). There are supplementary kits for small off-sites, vehicles, and specialist workplaces. The company also offers additional equipment such as AEDs (defibrillators) and eyewash stations. Smith explains that even a small business never knows quite what it might need in the event of an accident. Last August a Mt Eden physio who had just taken delivery of an ALSCO defibrillator used the unit to save the life a man who had been electrocuted while erecting flagpoles on Normanby Ave outside the office where the physio worked. “He was at the man’s side within three minutes and without the defibrillator the man could have died,” says Smith. “He had only just rented the defibrillator from us and had just been trained in its use the month before.” In early 2012, ALSCO is offering free no-obligation audits to SMEs to see if they are compliant with OSH first aid requirements. “We have grown this Kiwideveloped service so that we are the only true national provider,” says Smith. “We have started to pick up regional and national organisations, as well as smaller owner operators, because of their need or desire to standardise systems. “We do offer peace of mind, but at the end of the day it’s about doing what’s right.”

NZB feb 2012 nzbusiness.co.nz

63


customer excellence

Customers as learners The concept of customers as learners is a critical part of the process of creating superior customer value. Dr Ian Brooks explains.

E

very now and then someone gets an idea that is so brilliant you think, “Gosh that idea is so simple, so true and so powerful!” Customers as learners is such an idea. The concept was developed by Lab Wilson, who in his long career has been in clinical practice as a vet, and in the corporate world, a technical advisor, marketer, salesman, trainer and facilitator. As you know, to succeed in business you need profitable customers who will stay with you a long time. The best way to do that is to make your customers successful. Lab’s brilliant idea is that to make our customers successful, we need to see customers as learners and make sharing our knowledge about our products and services a key part of the buying process. In his recently released book Customers as Learners (www.nahanni-publishing. com), Lab writes: “To get the most from your product or service, customers need to know how to use them. Most of your customers will not have the knowledge to fully achieve the success inherent in what you are providing and will need to learn more. You must be the provider of that learning.” Lab then explains how treating customers as learners can increase customer value in three ways: Firstly, an important source of customer value is in the product or service itself and that is why the manufacturers of products and providers of services work hard to build as much customer value into their offerings as they possibly can. “But what”, Lab asks, “if customers do not know enough to be able to unlock the value a supplier has worked so hard to create?” Very few of us, for example, got full value from our VCR because we did not know how to use all of its functions. How many

64 NZB feb 2012 nzbusiness.co.nz

of the functions in your car, computer or music system go unused? Lab argues that if value has been built into a product or service but the customer does not know enough to access it, that value does not exist as far as the customer is concerned. Teaching the customer how to get the most from what they have bought thus increases customer value. What further value could your customers get from your products and services if only they knew how? Lab also reminds us that customer value is created (or destroyed) by the customer experience and he explains how sharing your knowledge will improve the quality of that experience for your customers. Customers will get more value from the buying experience if they are not just ‘sold to’ but are also given the opportunity to learn information and acquire skills that increase their success. Conversely, one of the biggest causes of customer dissatisfaction and complaints is the inability to share knowledge. “Poor communication results in a lack of agreement about potential outcomes, failure to understand risks and unrealistic expectations. Ensuring your customers understand what it is you do or how to use your product successfully is essential.” How many of your customer complaints come because your customers did not understand? There is one more reason why you should help your customers learn. It will help you build a close and long-lasting relationship with them. Business is a social activity between human beings and that, as we all know, is why it is so important to build a relationship with your customers. The sales process is one opportunity to build a relationship with a customer particularly at the after-sales stage. Once the customer has bought, they will see anything you do

to help them learn how to get the most from their purchase as a sign of how much you are interested in them. This is what builds goodwill and strong relationships. Of course, many professionals, highlytrained technicians and people selling sophisticated products do understand the importance of sharing their knowledge with their customers. But realising you can create more value for your customers by showing them how to use the product or service you are offering is not enough. You have to know how to teach. As any educator can tell you, there is far more to teaching someone than simply talking to them. In Customers as Learners, Lab explains why so many people with a great deal of expertise have difficulty sharing their knowledge. “Most experts have difficulty sharing their knowledge with anyone who is not at a similar level to them. Because of the knowledge gap between themselves and their customers, they find it difficult to connect.” Lab shows how to teach customers quickly and effectively. You will quickly see the advantages in understanding the steps to customer learning, the different learning styles and the keys to technical communication. The concept of customers as learners is not a slick selling tool designed to con customers into buying. It is a critical part of the process of creating superior customer value. Customers as Learners is written by a man who understands that it’s about the customer always, and who has spent a lifetime understanding how people learn. Customers as Learners is such a simple, useful and, once it is explained to you, obvious idea that like me, you will wonder why you did not think of it yourself years ago. And isn’t that true of all great ideas? Dr Ian Brooks is a leading expert in customer care. Follow Ian’s blog at www.drianbrooks.blogspot. com. He welcomes your feedback at www. tellsimon.co.nz.


Franchise File

getting off to the right start Good franchises pay attention to how they attract and train their staff, says Simon Lord.

I

recently attended a business breakfast where the speaker, the CEO of a major restaurant chain, was asked at the end of his presentation, “How do you motivate the young people who come and work for you?” His reply was, “They don’t stay long enough to need motivating.” I wasn’t the only one who gasped at that response. He went on to explain that, for a lot of employees, working for his company was the first job they had ever had and that it didn’t suit everybody. So staff turnover was inevitably considerable. And he pointed out that if any of his audience had ever tried to get a teenager out of bed in the morning, they would know just how hard it is to motivate one. Any parent would sympathise with that – but it was that initial “we don’t bother” response that left a bad impression. To be fair, the presenter wasn’t expecting to have his remark quoted in a national magazine and for that reason I won’t name him. But I couldn’t help contrasting this CEO’s response with the one that I’m sure would have been forthcoming if somebody had asked Mark Hawthorne, the MD of McDonald’s New Zealand, the same question. I expect that he would have talked about the quality of training that McDonald’s provides and the fact that it is NZQA-accredited. I imagine he would have talked about the way young people learn about standards, teamwork and reliability, and how they gain self-esteem from working for one of the world’s top brands. He would have discussed the management opportunities within McDonald’s, and the availability of different shifts that make it possible to combine work and study. I’m certain he would have mentioned that he himself started as a crew member at

the age of 15. Finally, he might just have pointed out that most of McDonald’s franchisees started out as crew and many are now very wealthy indeed. It would have elicited a very different audience reaction from the one that the CEO I heard received. Believe me, I do understand that CEO’s frustrations. When I worked for a large food franchise almost 30 years ago, staff turnover was around 400 percent per year. There were five separate workstations in each restaurant and induction training consisted of watching a 20-minute video before your first day on each station. Sadly, there was no desire to change the way training was done. Operations managers right up to director level said, “That’s how we learned, and that’s how it is.” That’s how it was in 1983 – but I hoped it would have changed. Maybe it has in some companies, because McDonald’s aren’t the only ones making a difference when it comes to the training and motivation of new employees. I’ve recently been learning about the training provided by Columbus Coffee, which was named Supreme Franchise System of the Year in the Westpac New Zealand Franchise Awards in 2009/10 and 2010/11. Columbus recognises that training is important to maintaining and improving quality throughout the franchise. “Apart from ensuring a better product for our customers, providing top-quality training helps attract and retain good staff and franchisees,” Nathan Bonney of Columbus told me. Like McDonald’s, Columbus Coffee’s training is linked to NZQA unit standards – in fact, the franchise offers a Level 3 National Certificate in Hospitality which means that staff and franchisees can complete a nationally-recognised

qualification as part of their day-to-day workplace training. That’s impressive in a locally-founded company a fraction of the size of McDonald’s, but there’s more to it than that. Columbus has also launched an online learning management system, with trainees using an iPad in-store to receive and complete courses. The Hospitality Training Institute believes Columbus is the first hospitality organisation in the country to do this. “We see good training as a significant investment in the future of our staff, our franchisees and the business itself – a genuine win/win situation,” said Bonney. “It emphasises our commitment to having the best people and the best franchise system in New Zealand.” And it means that, like McDonald’s, Columbus will be making a real contribution to the ongoing development of the young people who start their working careers within its doors. And here I must declare a personal interest. My daughter left school recently and went for interviews with two companies that offered the possibility of ongoing work once she starts university. She was offered both jobs on the same day: one with a good retail chain, the other with Columbus Coffee. Having looked at her options, she chose Columbus. I’m delighted with that because, although the work will be harder, I’m confident that she’ll get the best possible start with the right guidance. I’d have been happy if she’d gone to work at McDonald’s too, but, as a father, I know one thing – if she’d come home with a job offer from that breakfast speaker’s company, I’d have been advising her to think twice! Simon Lord is publisher of Franchise New Zealand magazine and website, which provides franchise information and details of business opportunities and professional advisors nationwide. A free copy of the magazine is available from www.franchise.co.nz

NZB feb 2012 nzbusiness.co.nz

65


on accounts

what about the ‘what ifs’? Amanda Watt has some sound advice for those planning for the new business year.

A

s we begin the new year, there is a lot in the news suggesting that businesses will continue to struggle in 2012. This struggle is a combination of banks being more lenient during 2011 and holding off actioning possible ‘bad loans’. Some businesses were simply ‘holding on’ for last year’s RWC tournament and then the Christmas season. What we have found in our practice is that the businesses that are proactive, plan and take action sooner rather than later are in a far better position than businesses that are reactive and just wait for things to happen. So, with the New Year already upon us, now is a good time to be reviewing your strategy, your budgets and cashflow and preparing ‘what if scenarios’. Strategy You need to review your strategy annually and ensure it is still current in today’s environment. When forming a strategy, some important questions need to be considered. What is the market doing? What are your competitors doing? Where do you make your money? I had a client recently who a year ago decided to divest their strategy. They started focusing on another area of the business that was complementary to what

they were currently doing. This area has now become approximately 25 percent of their business and at a margin that is twice the other part of their business. They are also in a far better position if anything happened to the initial business. This wasn’t an accident. The directors reviewed the strategy a year ago and started looking for other opportunities. The old saying, “failing to plan is planning to fail” is especially true in today’s environment. Cashflow and budgets Your cashflow and budget plans need to be reviewed and compared to the actual situation on at least an annual basis. Cashflow and budgets show you a whole range of things – from your anticipated profit to when you will need cash in your business. Banks are far more likely to provide credit to your business when you don’t require it. One client recently was finding that they were approaching the bank almost monthly to increase their overdraft. The client was in a growth phase so was perplexed at why the bank wasn’t willing to constantly increase the overdraft or provide loans to them. When we prepared cashflow plans and budgets for the client for the next year, this clearly showed the growth in the

business, and when the extra cash would be required. The client was then able to approach the bank again with a clear picture of exactly how much they required and for how long they required it for. ‘What if’ scenarios Strategic planning, cashflow and budgets are all fantastic until things don’t go according to plan. Part of the planning process should include ‘what if’ scenarios and sensitivity analysis. For example, what if our sales drop? What if our debtors take 30 days longer to pay us? One client 18 months ago applied this ‘what if’ scenario and looked at what would happen if they lost 25 percent of their sales for the coming year. This drove several important decisions: they downsized their staff, examined their overheads and looked for other areas where they could reduce costs. They also focused on their sales and went out to ensure these were maintained. The end result was they actually did far better than anticipated and all the staff made redundant were re-employed as contractors within three months because they had more work than anticipated. This was a fantastic outcome and could have been quite different if they hadn’t looked at the worse case scenario.

For more information contact Amanda Watt, associate principal – business advisory at WHK on 09 300 5784.

Call us to find out how WHK can help you navigate the changes to the gifting regime. Free phone 0800 4 945 69 www.whk.co.nz

66 NZB feb 2012 nzbusiness.co.nz


export report

linking into aussie opportunities Catherine Beard highlights NZTE’s ProjectLink online tool and its role in securing leads for manufacturing exporters.

T

aking advantage of the large, robust economy that is right on our doorstep is a prospect that is potentially highly lucrative but also costly and tricky for many Kiwi companies. In these economically challenging times they need all the help they can get, so I’ve been looking at one tool designed to help manufacturing exporters in the engineering, marine, building and construction industries. What firms need is an efficient and targeted approach – ideally including some local knowledge, well-maintained relationships with Australian companies and someone actually in Australia to sniff out leads to upcoming contracts. NZTE’s ProjectLink team proactively chases opportunities and channels these via an online tool to help New Zealand manufacturing firms to use their time and money as efficiently as possible to access and grow opportunities in Australia. It has secured over a quarter of a billion dollars in business for New Zealand since its inception. Like any online tool, ProjectLink can work extremely well, but only if you are utilising it to its full potential and committed to visiting the market to follow up leads. ProjectLink is an investment of $1500 per year – considerably less than employing your own sales analyst in the market – but

to get the best value out of that investment, you must work it to your advantage. Colin Mitchell, GM of Q-West Boat Builders, has been using ProjectLink since mid-2011, and is already capturing jobs. “It’s like having a local sales rep in Australia,” he says. “The advantage lies in the relationships that ProjectLink staff in Australia have developed within the Australian companies. They regularly ring up procurement officers at companies in your industry and keep the website updated with all the information they have. ProjectLink staff can also follow up on tenders you’re involved in and get feedback for you.” Mitchell says ProjectLink is a valuable networking tool and information source that aids their marketing strategy, allowing Q-West to position itself like an Australian boatbuilder but with the benefit of the exchange rate. “Australian government departments are requiring a very high standard of documentation and financial guarantees. The benefit Kiwi firms can offer in our industry is quality and professionalism along with cheaper costs for jobs with a high dollar value. “It’s important to see ProjectLink as another tool to aid your decision making before you go into a tender. I devote half

an hour every Monday morning just to see what’s going on out there. You can search my industry and company. “It provides you with qualified contacts and takes you straight to the person you need to talk to. For example, a port authority was looking for a vessel I had no idea about. I just picked up the phone and spoke to the man who had just received approval to buy a new boat. I would have no idea that opportunity existed if it wasn’t for ProjectLink. “We really believe in the power of networking – we don’t spend much on marketing, so $1500 year is good value for money to know what’s going on in Australia.” Mitchell says he uses ProjectLink to hunt for jobs based on his industry and based on clients or companies he knows about. He also speaks with ProjectLink staff in Australia about jobs. ProjectLink delivers qualified leads to your inbox, but then it’s up to you to follow them up and add them into the mix with all the other information sources you have in your industry. Like many things in life, what you get out of it depends on what you put in. Using this tool effectively involves taking action like picking up the phone and getting on a plane. To find out more go to www.projectlink.co.nz. Catherine Beard is executive director at Export NZ.

NZB feb 2012 nzbusiness.co.nz

67


Subscribe to NZBusiness magazine in February and go in the draw to...

RRP

49.95

$

WIN a Sony CP-ELS portable smartphone charger! This portable charger from Sony has a battery capacity of 2,000mAh – providing enough juice to recharge any modern smartphone on-the-go, including the Xperia, IPhone and BlackBerry – as well as selected digital cameras, camcorders and music players. With a USB output of up to 5V, 1.0A, users can be assured of quick charging – and recharging the CP-ELS is as easy as plugging it into a computer’s USB port. A micro-USB cable for smartphones is also included.

1 year subscription $75 for 11 issues Subscribe online at: www.nzbusiness.co.nz/subs Email: subs@adrenalin.co.nz or phone 09 478 4771 or Fax 09 478 4779


employment matters

Justification the name of the game The test of a fair and reasonable employer has changed, as Joanne Douglas reports.

T

he Employment Relations Act 2000 was recently amended to introduce a new test of justification which the Employment Relations Authority (ERA) or Court need to consider when deciding if an employer’s actions were fair and reasonable. The test provides clarification of what the employer is required to do when, for example, carrying out an investigation which may lead to dismissal. The test of justification Section 103A of the Employment Relations Act now provides that the ERA must consider whether: • Having regard to the employer’s resources, the employer sufficiently investigated the allegations against the employee; • The employer raised their concerns with the employee before dismissing or taking other action; • The employer gave the employee a reasonable opportunity to respond to the allegations; • The employer genuinely considered the employee’s explanation (if any) in relation to the allegations. The ERA can also consider any other factors it thinks appropriate and ultimately is required to consider whether “the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occurred.” The Authority must also overlook any minor defects in the process if they were not material to the fairness of the employer’s decision. So does this change anything for an employer when carrying out an investigation? The ERA applied this new test in a

recent case, Sigglekow v WDHB. The case involved a registered nurse, Mr Sigglekow, who was dismissed for serious misconduct following an incident where it was alleged he was sleeping on duty, and another occasion when he had left work early leaving an unregistered care worker responsible for high-risk patients. Mr Sigglekow had previously experienced some very serious health problems and had returned to work on a gradual basis. His health problems affected his ability to perform his role. During the disciplinary process Mr Sigglekow claimed he was simply “resting” and not sleeping. He also argued that he needed to leave work because he was seriously unwell. The employer considered Mr Sigglekow had breached his duties as a registered nurse but the alleged breaches were not put to Mr Sigglekow to respond to. The employer simply concluded his actions compromised patient safety and that his conduct amounted to serious misconduct justifying instant dismissal. The ERA considered the new test in section 103A and decided the WDHB was an employer of considerable resources. Therefore the WDHB had sufficient time and resources to carry out a thorough investigation. The ERA found the employer’s investigation insufficient with some of the failings including: • The employer’s decision-maker had information available that indicated further inquiries and investigation were required; • No disciplinary action had been taken into similar previous allegations of sleeping at work; • There was no consideration as to whether this was a health issue or a performance issue;

Important findings about breaches of his nurse’s duties were not put to Mr Sigglekow for comment, nor were assessments as to his attitude, which prevented alternatives to dismissal being considered. The ERA listed 32 issues needed to be addressed by this well-resourced employer for it to have carried out a fair investigation. By omitting a number of important inquiries, the WDHB was found unable to properly evaluate all relevant information. The ERA decided the WDHB had disciplined and dismissed Mr Sigglekow without being aware of all the circumstances and therefore the dismissal was unjustified. Mr Sigglekow sought reinstatement to his former position, but in considering whether this was practicable the ERA concluded it was not due to Mr Sigglekow’s contribution to his situation. The concern was that in future Mr Sigglekow might not be open and communicative about his health problems. There were also practical issues for the WDHB and Mr Sigglekow no longer had a practising certificate. He was awarded six weeks lost earnings and compensation of $2000. This case demonstrates the new test for justification requires that the same steps must be taken by an employer before making any decision which will affect an employee’s ongoing employment. If medical issues are involved, employers should always stop and consider carefully whether disciplinary action is even appropriate. A different process which avoids attributing blame may be fairer. In addition, this case is a reminder that all relevant information must be put to an employee for their comment before a decision is made. Employers need to follow a thorough process to ensure their decisions are sound and will stand scrutiny before the ERA or the Employment Court. Joanne Douglas is managing solicitor at EMA Legal. Visit www.ema.co.nz

NZB feb 2012 nzbusiness.co.nz

69


sustainable Business

benchmarking: benefits and challenges Rachel Brown explains sustainability benchmarking and what it can do for businesses.

S

o, what is ‘sustainability benchmarking’? For SBN it’s about looking at your business with a wide sustainability lens, recognising that it has a local, domestic and global impact, signally assessing performance, and then comparing the performance of your business against others. SBN’s benchmarking process is also about taking the company’s pulse; providing information on where the business is sitting at present against emerging and existing business trends and practices, as well as giving insight into what today’s indicators mean for tomorrow’s world. It’s about signalling trends that are critical to future actions and managing risks and identifying opportunities through that. Sustainability benchmarking is a relatively new thing and, as with the advent of all new things, it comes with a range of benefits and challenges. Let’s start with the benefits. By setting goals, acting on these, and then measuring their effectiveness, you can see how your business is performing against others of a similar sort (whether that’s by sector, size or type) as well as against your strategic plans. You can use this information to decide what’s effective and what needs tweaking. All of a sudden, the business’s sustainability performance has more meaning and context, and starts to provide a comprehensive picture of ‘where-to next’. SBN developed a simple Get Sust Online tool to allow for easy introductory crossbusiness benchmarking – find out more by visiting our website. For a deeper understanding, this year’s Get Sustainable Challenge (GSC) benchmarking allows you to measure your business’s sustainability initiatives across a much broader set of indicators. Businesses undertaking the GSC have already made a commitment

70 NZB feb 2012 nzbusiness.co.nz

to better practices, whether they’re at the beginning of the process or at the cutting edge. That means that the benchmarking provided by the GSC is fairly unique – it essentially allows you to measure your business up against the leaders in the field, your ‘desirable peers’. By pitting yourself against the fastest runners, rather than the laggards in the space, you get some meaningful benchmarking information. What’s also unique is that in 2012, repeat participants will be able to develop annual internal benchmarking against a set of ‘hard data’ using our KPI measurement process. Reviewing the results of the 2011 Get Sustainable Challenge has been revealing but not surprising. The main points? Businesses with 20-plus employees have the most comprehensive information available on key resources like turnover, carbon emissions, electricity, travel, and waste-to-landfill. Not for Profits are measuring most aspects of business, while less than half of our leading SMEs can report on use of these resources. By undertaking a programme like the GSC annually, you get to set sustainability KPI benchmarks and evaluate what you’ve achieved against those year on year. After all, you can’t report on your successes if you don’t measure the effectiveness of your actions. By establishing goals, your business is indicating intent, which always comes before behaviour. It’s also worth mentioning the obvious: companies tend to take competitors’ actions into account when they set their goals. The fact that it gives you a handle on where you are in comparison to other progressive businesses is just another benefit of benchmarking.

Tahi Estate’s example I asked one of SBN’s members, Dr John Craig of Tahi Estate, an eco-destination in sunny Northland, his opinion on sustainability benchmarking. Tahi undertook SBN’s Get Sustainable Challenge in 2011. Here’s what he had to say: “Benchmarking helps Tahi in at least two important ways. It gives Tahi independent feedback that encourages us to keep moving forward on the sustainability journey and it allows us to tell customers what others say about us while avoiding hints of greenwash or unwarranted selfpromotion.” Tahi Estate was recently awarded the Trailblazer SME Award at the SBN Northern Regional Awards as well as taking out the same category in the NZI National SBN Awards last November. It was also an NZI Sustainable Business of the Year finalist and it’s a stunning location for anyone wanting a retreat-style break. As mentioned, benchmarking is not without its challenges. It relies on honest reporting by businesses: hypercritical or hyperpositive responses to questions can throw calculations out one way or the other which affects the overall benchmarking results. These can also be affected by how a respondent interprets questions, so clearly questionnaire design is fundamental to an effective benchmarking programme. SBN manages this through our interview processes which aim to avoid confusion and increase consistency – ideally all information would be verified, but that’s another matter. Lastly, another challenge is around participation – the more businesses that take part, the better the comparative figures. That’s why we’re keen to keep the GSC open to all businesses, not just to SBN members. Rachel Brown is CEO of the Sustainable Business Network.


marketing maestro

beware the marketing effect of your behaviour For Brian H Meredith, a recent Qantas grounding drags up painful memories of another bad airline experience.

I

was recently interviewed on TVNZ News at 8 concerning the effect that the Qantas grounding was likely to have on the Qantas brand. “It will be significant because Qantas have ridden roughshod over their customers’ needs,” I opined. But then airlines do that, don’t they? They’ve done that for several decades and it has got worse with the passage of time. An airline called Origin Pacific Airways once stole seven hours of my life and alienated me and 50 or so other passengers at great cost to them and their brand. This was a number of years ago but the characteristics of what happened are entirely replicable in today’s air travel environment. I won’t bore you with a tedious account of each tick of the clock for the time that passed between my 4.30pm Auckland airport arrival and my ultimate, almost 1am, arrival in Nelson on board my Origin flight. What I do want is to highlight how totally inadequate was the airline’s management of the entire experience. Flight delays happen. Passengers know that better than anyone else. What passengers don’t understand is why airlines are so incompetent at managing the passenger experience and relationship when it does happen. Origin’s management of a hapless bunch of delayed passengers showed a complete lack of understanding of the powerful reality that this is where marketing really does its work. Not with advertising and predatory pricing (the stocks in trade of airline marketing right now), but with the unplanned messages that constitute the entire passenger experience. We were not told of any delay to the flight until a few minutes before its

scheduled departure. We were not told anything other than there was a delay, despite the airline knowing at that time that the aircraft was not only not in Auckland but was unlikely to be in Auckland for a very long time. After about 90 minutes we were told that there would be a further delay. No more detail. However, where there is an information vacuum, someone will always move to fill it and, in this case, someone amongst the passenger group managed to establish (via intelligent use of a cellphone) that the aircraft was in Wellington, so those with School C Maths were able to work out that we would not be departing for at least another 90 minutes. At around this time we also became hostages of Origin Pacific. We were in what is laughingly called a gate ‘lounge’ (a spartan room with seating for around 12 passengers but acres of space) when it became clear that the door into and out of the ‘lounge’ had a one-way latch on it and was closed and therefore locked. After a while, a couple of blokes with gold stuff on their sleeves strolled nonchalantly through the ‘lounge’ in the company of a girl (sorry ladies, but she was a girl, still learning how to put lippie on and looking for all the world as if she was playing dress-up with her mum’s old uniform from TEAL days) who was clip-clopping along in the manner of female adolescents with loose court shoes whilst enjoying the sound of horses hooves that results. She was, I believe, a flight attendant. Anyway, enough bitching. I asked one of this flight crew if they would be kind enough to release us from our incarceration and whether they could arrange some sandwiches and coffee. Whilst a little shocked by the cheekiness of a passenger

addressing them on such matters, the man with most gold said “yes” and we waited with culinary anticipation. Some while later we were, as a group, paged and asked to return to the check-in counter. As 50 or so people gathered around the counter, the ground staff began distributing refreshment vouchers to the value of $6. It later became clear that a filled roll in the sparsely-stocked cafeteria was around $5, so an agonising choice of food or coffee, but certainly not both, had to be made. But that didn’t end up mattering much because the cafeteria quickly ran out of stock and closed. One of the other Customer Service highlights of the affair was a call my wife made to Origin in Nelson trying to find some information about the flight. “I don’t fly the planes so how would I know when it’s gonna get here?” she was told. Stunning. I wish there were space enough here to tell some of the stories of the other 50 passengers and the effects it had on their plans. But space does not permit. Nor is there space to do justice to some of the daft things that were said to us: “Hope we have not inconvenienced you.” – Captain. (7 hours?!) “Try to make up some time en route.” Captain (7 hours?!) “We’ve had a terrible day.” – Flight Attendant. Pardon? So here’s the out-take which everyone of us in any business should keep at the forefront of our minds: Don’t spend a fortune finding and attracting customers to your product or service only then to spend an even bigger fortune losing them to your competitors. It costs, on average, six times more to win a customer than to keep one, so the logic is surely inescapable. The leaky barrel syndrome is rampant in New Zealand businesses and it is costing them and the economy untold millions. Brian Meredith is CEO of The Marketing Bureau (www.themarketingbureau.co.nz).

NZB feb 2012 nzbusiness.co.nz

71


issues with Balls

half full or half empty? Ashley Balls offers up his prognosis for SMEs in 2012.

I

am not one for astrology or predictions, especially when it comes to the economic outlook, other than to say I have learned that having a glass half full is infinitely better than the alternative. However, we all have to face what 2012 brings, and my view for next year – especially for SMEs – is based on two events which occurred in late 2011. Neither is remotely related to the general election. In the penultimate weekend of November I attended an interesting two-day legal conference. The topics were built around looking at how the legal profession may operate in the future, what threats and opportunities there might be, who might prosper and much more besides. One speaker arrived direct from London on the Friday afternoon and made a profound influence on all of us – both speakers and delegates. Chrissie spoke passionately about social networking and how it can change the way we work and importantly, how it can deliver more business. The audience were interested but not overly impressed, as most lawyers/law firms have yet to embrace social networking and many still block its use. Chrissie started with her own experiences as a lawyer who came to the profession late, having in an earlier life owned and managed a marketing business. As a newly-admitted solicitor in a medium-size provincial English city, she used her persuasive powers to convince her boss to let her build new business using social networking. To say she was successful dramatically understates the results that delivered over $1 million of new business in 12 months – that equals little more than the average annual billings of four lawyers in New Zealand and all for ZERO cost. A partner in an Australian firm attending the conference confirmed that so far this financial year his team has generated A$600,000-plus of new revenue, confirming

72 NZB feb 2012 nzbusiness.co.nz

that the techniques are culturally transferable. It is a game-changing process that we all need to learn more about. So much so I am off to Leeds to learn more. I came away from the conference invigorated and optimistic about 2012. The second event that made me consider 2012 was a radio broadcast on the BBC World Service at 02:05 on the morning of 25 November. The programme, HARDtalk, was an interview with Australian economist, Steve Keen, and it made for sobering listening. Steve, like Nobel prize winning economist Paul Krugman, holds very serious concerns that late 2011 is scarily reminiscent of 1929 and will lead to another great depression. The only thing that separates the two is that Steve considers we are already in one. Both Krugman and Keen accurately predicted the Global Financial Crisis (GFC) of 2008. Whether or not you accept their opinions, Keen has compelling messages for the SME owner-manager sector, including: • Pay down, eliminate personal debt. • Nationalise the financial institutions, reorganise them and sell them off. • Start all over again. At a macro level his belief is that if the standard mechanisms are typically used for the elimination of excessive debt – bankruptcy – we may end up like Japan, where since 1991 its economy has effectively been stalled. In the West the outcome will be a jobless recovery which, if it extends over time, will severely test social order as a whole generation of young people fails to find work. The cause of all this mess? The financial sector that has generated far more debt than society needs. The financial sector is, in Keen’s view, now dominating the political agenda. Keen, a capitalist, believes in ‘good’ debt to finance investment leading to productivity increases and business development. Good debt is consumption-led and needs

to continue. ‘Bad’ debt is where money is borrowed to gamble on rising asset prices – houses, land, farms, shares, financial instruments (bundled securities and derivatives) all carried out at the behest of the banks who profit from it – massively. Good debt is, according to Keen, sustainable at rates around the rate of 50 to 70 percent of GDP. The trouble is, the gambling sector – investment banks – have blown this figure out to several times that amount. In Australia the securitisation of mortgages, like here, has fuelled a property boom driven by debts that equal 100 percent of GDP on their own. It used to be ten percent of GDP. Property prices are a classic ‘bubble’. The New Zealand figures are lower but not by much. The GFC solution, whereby governments printed money and gave it to the banks (who created the debt problem in the first place) is plainly wrong – printed money should go direct to debtors on the express understanding it is used to pay down debt. Left as it is, the banks are insolvent and running what amounts to Ponzi schemes where they lend money to finance asset purchases using money from the increased asset price. If the financial environment as described by Keen turns out to be correct we are all in for a torrid time. The situation in Europe is just a start and for those who think the Euro crisis is irrelevant to New Zealand business, think again: For every dollar of credit or cash in New Zealand, 40 cents comes from overseas. If the banks who hold toxic sovereign debts are called to account and go bust, trillions will be wiped from the world economy and credit will simply dry up. The message has to be ‘get smart in lowering the cost of sales and stop borrowing money to finance asset purchase’. Either way this is good advice. Have a good 2012. Ashley Balls is senior partner of LegalBestPractice. Visit www.legalbestpractice.com


“Accredo is seamless to operate and its front end functionality is very savvy.” The smart automation functionality available in Accredo makes life a lot easier for Southland electrical contracting company Nind Electrical Services. // General Manager Steve Winter says without the work in progress reports it generates from Accredo his staff would be faced with the laborious task of tracking down all the information pertaining to each job. // “Accredo does this for us. Each work in progress report shows all the labour and material for work underway. It also allows us to add purchase orders against each job which means we can track costs very accurately. // “This type of automation removes administration bottlenecks and lets me assess which jobs provide the best margin. The information we extract from Accredo improves our quotation accuracy and our client service.”

50%

Lower printing cost vs coLour Laser*

Go to www.accredo.co.nz to get the full story on Nind Electrical Services. While you’re there, subscribe to our online newsletter and see how Accredo can help you do more. Or if you would prefer, call us toll-free on 0508 ACCREDO. 65773


Belinda Simon’s great expectations ❖ Justifying Experience Tax ❖ Branding: a work in progress

FEBRUARY 2012

1

And when it does you want QBE on your side Worse things can happen at sea….. When moving goods from place to place – or around the world – you are exposed to risk. The risk of delays, damage or loss.

It might be the difference between your business sinking or staying afloat. Talk to your insurance broker today about QBE Insurance. www.qbe.co.nz

QBE-054 Rapport NZB • Photo courtesy of Mark Alen

At QBE Insurance, we’ve been helping traders manage their risks for 125 years. In addition to trade credit, property, and liability solutions, we can provide worldwide coverage of goods in transit by sea, land and air.

The girl who likes shoes

If your goods arrive too late for a specific market they may become worthless, or you may have to discount them heavily. Your customer may no longer accept them, leaving you high and dry. All of which have a drastic effect on your bottom line.

The girl who likes shoes Kathryn Wilson’s global ambitions

8.20

$

February 2012

LESSONS ON UPSKILLING Short courSeS for buSineSS ownerS

PAYROLL’S CLOUD MIGRATION + our 2012 Payroll systems guide!

MVnos: BUSINESS-fRIENDLY PhONE COMPANIES


NZBusiness February 2012